Online Payments- A Major Security Concern Today!

– Tarun Wig, Co-Founder, Innefu Labs

Over the last 5 years, there has been a massive increase in the online payment industry. With the rapid growth of internet, billions of transactions are processed each year generating enormous amounts of electronic data and digital currency flow through the online payment ecosystem. E-Payment insures smooth, fast and efficient transactions in e-business but it is no secret the payment ecosystem is vulnerable. Much like the Internet, the payment infrastructure was developed for fast and easy transactions, not for security.

Tarun Wig Co-Founder, Innefu Labs

E-Commerce sector in India is still largely based upon online payment systems implemented in India. For a full fledged e-commerce infrastructure to operate we need a strong and secure online payment mechanism. The present internet banking system and online payment mechanism are not up to the mark.

Further, the present banking, financial and regulatory environment of India needs to be streamlined. Most of the online payment frauds are conducted either through phishing, Viruses, Trojans, cloning of credit/debit cards or through denial-of-service attacks (DoS). Most practised by fraudsters is Phishing; the practice of sending millions of spam emails trying to convince people to click on a link from the email that takes them to the bogus bank website. Cyber criminals are tricking people into disclosing their personal details or parting with their money.

Cyber crimes and financial frauds have shaken confidence of customers in online payment methods. ATM frauds, credit card frauds, internet banking frauds, etc are flourishing as Indian banks and financial intermediaries are not paying enough attention to cyber security. Now, in the face of serious threats and too many popular instances of hackers exploiting the vulnerabilities of the system, there is a need to formulate strong cyber security policies to protect against these attacks.

Can a strong authentication mechanism secure online payment?
Yes, a strong authentication mechanism can prevent online payment frauds upto a large extent. The payment industry and online payment methods have evolved a lot over the past few years and authentication plays a major role as the transaction happens without the physical presence of the payment card. Therefore, authentication mechanisms such as 3D Secure and two factor authentication came into existence for online payments with bank cards. These mechanisms guarantee payments to merchants as and protect the consumers from potential frauds. Authentication using two factor authentication is done directly by smartphone using one-touch authentication, fingerprint scanning or by entering a code.

Indeed, with such authentication mechanism in place for online payments frauds will be harder to achieve and the losses will be lower.