Online Payment Security – How to Maintain It

Featured article by Viktor Vangelov, Independent Technology Author

People have been exchanging goods and services for money ever since the dawn of civilization. The history of money is rather interesting and eventful. Initially people used to exchange goods for goods, then about 700 BC the Chinese introduced paper money, also known as banknotes and in the 20^th century several new innovative ways to make payments were introduced such as credit cards and online payments.

As you probably know, only coins might have a face-value, i.e. the material they were made from can match the value they are exchanged for, but even that is not the case nowadays. The metal a coin is minted from is worth a lot less than the coin value. In the Western World, the first official minted currency was introduced in Lydia, modern-day Turkey. The coins were minted from a naturally occurring mixture of gold and silver.

Bank notes and bank transfers

In 16^th century Europe and the European colonies, metal coins were still used but the amounts that were in circulation were constantly increasing, so to avoid carrying large bags full of coins, banks started issuing bank notes, hence the word banknote which is still in use. Bank notes were issued by banks, which were privately owned institutions, but nowadays it is governments and public institutions that are issuing banknotes and money in general.

Safety has always been a key issue when dealing with funds. Bank transfers and other forms of cashless transactions were introduced exactly for that reason, to secure transactions and funds in general. Carrying around a lot of cash comes at risk. Road robberies were quite common in the era when funds were transported as cash.

The early days of online payments

The rise of the internet and its widespread use enabled a new way of making payments – namely, it was possible to complete a transaction online, regardless whether we’re talking about a purchase, or a money transfer. Needless to say, people were sceptical at first and weren’t too keen to leave payment details like credit card numbers online. To be fair, there were cases when hackers managed to obtain payment details and steal money from people’s accounts. As a result, organisations that provide online money transfers introduced extra security measures to ensure that this sort of thing won’t be happening again. Nowadays, it is safer to transfer funds online than conventionally, and it is certainly safer than carrying cash around.

Encryption and other protocols

You may think that online security is down to the sites where you shop and the financial institutions that enable these sorts of payments, but there are certain things that you could do as an individual and you should always aim to make sure that you protect yourself and your account, regardless whether you’re playing bingo online or buying a Christmas present for your mother.

First, whenever you’re about to make for an online payment, check whether there’s a small lock icon next to the URL. That lock ensures that all information that will be transferred from that site, from the particular page will be encrypted which means protected and will not be readable and intelligible to third parties even if they manage to get hold of the information. Encryption means that the information is encrypted at the moment when it is sent and can only be deciphered by the party to which is sent. There are several encryption technologies that are currently used by websites, but in most cases it is SSL (secure sockets layer) a protocol which substituted transport layer security.

Transactions aren’t just regular transfer of data, there’s a lot at stake, literally. So financial service providers take extra measures to ensure that the transfer of financial data online is secure. Visa, for instance have their own Verified by Visa protocol, whereas MasterCard is using SecureCode.

Use strong passwords

If you’re using an e-Wallet, or another online payment system, make sure that it is tested, reliable and secure. Furthermore, when you are registered an account at an online retail site, financial institution, or any other site where you can make payments, make sure that you set a secure password – use different types of symbols and add more characters, it’s never bad to be safe.