The risks of processing a credit card payment online
Know the risks to processing credit card payments online. Vantiv can help your business increase security, manage costs, and maximize conversions.
Businesses of the 21st century increasingly find themselves in a post-cash world. The use of credit cards since 2000 has grown by $10 billion of transactions, while the use of debit cards has grown almost tenfold to $50 billion, according to the Federal Reserve. The increased use of debit and credit cards poses a series of challenges for any business due to the risks of processing a credit card payment online. A cash-based business has nothing to fear regarding identity theft or hacking, while a business relying on credit card processing for most or all of their transactions opens itself up to security threats. What are the biggest risks of online credit card payments?
One of the greatest issues with any type of online purchase lies in the connection security. PC World Magazine reminds all web users that it's crucial to secure a wireless connection or else an outside user will be able to read and download credit card data. A file transfer protocol (FTP) will show up as plain text, making it crucial to use encryption software in order to keep anyone from reading credit card information. The cost of a data breach shouldn't be underestimated. In addition to the negative press for a company that's hit by identity theft, Symantec reports that the average direct costs are $5 million on average. Your payment processor should provide online card data security protection that minimizes the risks from a data breach, leaving customers' information private and businesses' transactions secure.
Handling a credit card payment online requires compliance with legal guidelines. National and state compliance laws have created industry standards for all companies that store, process, or transmit credit card information. The biggest of those standards is PCI DSS. The cost of compliance can vary based on the size and scope of a business. Technology certifications have a range of costs depending on the size of the business, but all require quarterly scans that range from $150 to $2500 per IP address per year. The same report that outlines the costs also reports that a company storing 100,000 credit cards will pay a compliance cost of $6 per card, representing a major investment. Particularly for smaller online businesses, it's critical to understand what your payments provider offers to help you with understanding and complying with PCI standards.
Transactions and Volume
With more credit card payments come additional bottlenecks. The Chicago Tribune reported that chip-secured cards slowed down processing, leading to frustrated customers who may not even realize that their credit cards contain such chips. Roadblocks to a sale never make for online success; 25% of online sales report that they prefer to check out as a guest to avoid the complexities of log-ins; 50% of customers never return to a site once they leave to look for a discount code.
What does your company need to succeed in the e-commerce sphere? Vantiv offers a variety of solutions to the problems facing businesses transitioning into the digital sales world. Find out how to increase security, manage costs, and maximize conversion using our capabilities for both online credit card payments and brick-and-mortar stores.
Credit cards offer a fantastic point of sale solution for businesses, but they carry risks as well. What are the major credit card processing risks that businesses need to understand?