Payment fraud in ecommerce has dramatically increased for the past years. It is any type of false or illegal transaction completed by a cybercriminal. After all, wherever there is money to be made, cybercriminals will follow. According to EMC’s security division, RSA, one out of every seven payment cards used in the United States in 2013 was exposed in a data breach. Fraudsters have come up with a lot of ways to obtain people’s personal information online. They often pose as a legitimate representative and contact credit card owners asking for sensitive information.
Today, though the new “chip-and-pin” cards will better protect ecommerce owners and consumers at the brick-and-mortar point-of-sale, fraudsters are increasing their use of stolen card numbers online. Canada, Australia and the UK have seen the increase of “card-not-present” fraud since they introduced the same laws in the past years.
Most security problems have the same root cause: fraudsters got access to raw credit card information from systems owned by merchants who saved this data with the legitimate objective to reuse it in later time. Tokenization eliminates a merchant’s need to store customers’ payment information directly. It is a way of protecting card data by substituting a card’s Primary Account Number (PAN) with a unique and randomly generated sequence of numbers, alphanumeric characters, or a combination of shortened PAN and a random alphanumeric order.
With Tokenization, credit card data is encrypted where it is captured and sent to the seller’s payment processor where the data is decrypted and the transaction is authorized. The processor then issues a token representing the whole transaction back to the seller while the actual card number is secured in a virtual vault. The advantage of tokenization is that it does not require the seller to make major changes to their current payment acceptance systems.
Is a PayPal company that helps online and mobile businesses around the world accept credit card payments by providing a merchant account, payment gateway, recurring bill and tokenized credit card storage. Braintree Payments extension connects your Braintree Gateway account with your Magento store, through this, your customers will easily and quickly begin accepting credit card payments.
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