How to boost transaction security for payment acceptance

Contactless payments, ecommerce purchases, digital wallets – the popularity of digital transactions is booming with both businesses and their customers. As organizations offer more digital payment options, there are also new security risks to look out for. From phishing schemes to account takeover fraud, bad actors are continually evolving their tactics for stealing organizational data and cardholder information. Fallout from these types of tactics can range from fraudulent purchases to complex card testing attacks that cripple ecommerce websites to full-scale data breaches. In fact, the 2025 IBM Cost of a Data Breach Report* shows that large companies and organizations currently lose an average of $4.4 million to a data breach event – showing tension between improved security practices and emerging cybersecurity threats.

Online transaction security: protect customer data, brand reputation and the bottom line

You don’t have to navigate data security challenges alone – equipped with the right tools, your organization has the power to prevent fraud and mitigate vulnerabilities in your systems and processes. Ultimately, it is your responsibility to protect customer data from bad actors – failure to do so can result in loss of customer trust, tarnished brand reputation and massive financial losses. Of the companies that participated in the IBM Cost of a Data Breach survey, 23% reported financial losses and 17% reported reputational damage as a result of security incidents* in which attackers accessed sensitive data. That’s why it is critical for organizations to continually review and update their security practices, particularly related to payment acceptance and access to operational systems.

The best defense is a multi-layer security strategy

Protecting customer data requires a complex web of security solutions and processes that ensure customer transaction legitimacy and verify that only authorized users can access critical systems. Large organizations must regularly review and update threat detection processes, as well as invest in best-in-class digital solutions, to prevent fraud attempts from breaking through. High-impact fraud prevention tools include:

• Two-factor authentication: Users can only access accounts after they provide two different authentication methods* to verify identity. This typically requires users to enter a code from a text message, phone call, or authentication app in addition to their username and password. Two-factor authentication is an effective tactic for both validating customers prior to transactions, as well as controlling employee access to critical systems – ultimately, reducing phishing, social engineering, and brute force attacks.


• Tokenization: When a cardholder makes a payment, a unique token value* replaces the cardholder’s primary account number (PAN) and is used in transactions instead of sensitive payment data.  Tokens can be comprised of letters, numbers or both – ultimately, it only matters that fraudsters cannot figure out the original PAN from the token values.  Tokenization is a powerful tool for secure online checkouts,* since your business server or environment never stores actual cardholder data; in fact, strong multi-use tokens can allow customers to make multiple purchases from the same online store without having to re-enter their card information – boosting both security practices and customer satisfaction with the checkout process.


• Encryption: When cardholder data is encrypted, it becomes unreadable without having the corresponding decryption key, which means the data is useless to a potential thief and adds an additional safeguard to customer transactions. A combination of secure devices, applications and gateways encrypts credit card data* immediately upon purchase – online or in-person – which cannot be cracked without secure decryption keys that are stored elsewhere.


• EMV: In 1999, Visa and Mastercard created new payment security specifications, using microchips, encryption and tokenization innovations to reduce credit card fraud. From 2015 to 2021, the responsibility for setting up and maintaining EMV-compliant practices* shifted from the card issuers to merchants and payment acquirers. This means that if a fraudulent transaction takes place (e.g., allowing a fraudster to swipe a stolen chip card), Visa, Mastercard or issuing banks are not responsible for reimbursing cardholders. Instead, either the merchant or the payment processor is liable for fraud costs and impacts, depending on where the security breakdown took place. 


• EMV 3-D Secure: In 2016, EMV technology has included additional layers of security to protect online payments. Now, after completing an in-person or online purchase, cardholders verify transactions via a password or one-time PIN sent from the issuing bank. One of the biggest benefits of EMV 3-D Secure is the chargeback liability shift; merchants don’t have to pay for fraudulent chargebacks if the transaction was successfully authenticated using EMV 3-D Secure. Instead, the card issuer is liable.

Partner with your payment processor to enhance fraud prevention and data security practices

Beyond payments acceptance technology, you need a dedicated payments partner who can provide additional services and back-end processes to bolster payments security. AI tools are becoming a critical part of the fraud-prevention ecosystem; your payments provider can offer add-on services that use machine-learning driven algorithms to determine a fraud score at the time of the transaction to predict fraud likelihood. This real-time fraud check occurs preauthorization so if the transaction is declined, the business avoids authorization fees. Further, all organizations that acceptance card payments must adhere to PCI DSS requirements. The latest version of these standards includes updated requirements for ecommerce transactions and cybersecurity practices. Your payments provider can consult on PCI DSS best practices and provide additional solutions and guidance for compliance.

As payment methods continue to evolve and diversify, companies must invest in multi-layer security practices to protect customer data. A dedicated payments partner can help identify and implement the right mix of solutions and processes to prevent fraud incidents, bolster transaction security and protect the bottom line.