Methods companies adopt to ensure secure electronic payments over the Internet

by Susan Gardner

Security of electronic communications is a major control issue for companies engaged in electronic commerce. It is essential that the data of buyer and sellers be kept private and be protected against being altered.

The need for security of payments is a necessity as the public will be hesitant to provide their personal details should they feel they could be infringed in any way.

Special electronic payment systems have been developed for the Internet. The most popular method of electronic payment is by using a credit card, which adopts the Secure Socket Layer (SSL) protocol and the Secure Electronic Transaction (SET) protocol. SET is a protocol for encrypting credit card payment data over the Internet and other open networks. SSL is a protocol which allows customers to encrypt their order at their own PC. Even though it does provide security and privacy, SET is more secure as it includes a customer certificate requiring special software at the client’s site.

The second most popular method of electronic payment is by using Electronic Funds Transfer (EFT) and the debit card, also known as the cheque card. It is a method used to transfer money from one bank account to another.

Other methods of payment are listed below:

The Host Security Module (HSM) is a physically secure, tamper-resistant security server, which provides cryptographic functions to secure transactions in financial applications.

SafeDebit (a debit payment method) is a PIN-secured Internet payment product developed by NYCE, which can be used with any standard PC with a CD ROM drive.

Smart Cards are plastic cards the size of a credit card that replace cash, and be using it, the value of the card decreases. Similar card are used for public telephones, and buses.

Companies have applied various methods of electronic payments to ensure secure transactions over the Internet. By securing payment methods, both the consumers will benefit from the easy and safe-to-use purchase scheme, as well as the retailers, as their transaction volume from consumers will increase, resulting in greater profits. As technology improves with time, a higher level of security will be required, therefore more advanced methods of payments will be introduced. This will prove to be a challenging and complex procedure, but is a necessity.