Cyberspace has become highly dynamic, and staying abreast with the latest vulnerabilities in the systems is essential to avert attacks. Failing to do so may lead to sensitive data exposure and financial losses.
Payment security will be a top priority in 2023. Threats are on the rise, not only in number but in sophistication. Subsequently, organizations of all kinds have greatly increased spending on information security (IS).
A contributor to the trend of security risks is consumer behavior itself. Consumers have become increasingly comfortable making purchases on mobile and IoT devices. And while the problem does not lie in the cloud technology itself, the core of the problem is the unsecured and unauthorized connections in the network that make it vulnerable to breach. The number of Internet of Things (IoT) devices worldwide is forecast to triple from 9.7 billion in 2020 to more than 29 billion IoT devices in 2030. Furthermore, the 2022 Data Breach Investigations Report by Verizon claims that the ways to monetize data have increased. While chip & PIN technology has successfully squashed in-store fraud, digital payments face more risks than ever.
Shadow IT Systems
While emerging technology to make payments more seamless and secure is advancing at the speed of light, hackers are in lockstep with these advancements. Shrewd bad actors continue to target POS systems in data breaches that cost merchants and other parties millions of dollars. POS systems need a way to protect customer information and remain PCI compliant. But the caveat is that many IoT home appliances are being used for payments.
Essentially, businesses have the ability to encrypt data immediately at the point of sale or interaction through the P2PE solution provider’s secure decryption environment. Should any nefarious characters gain access or attempt to steal it along the way, they would find the data indecipherable and, thus, without value. For merchants, this means that from the time a credit card is swiped or contactless payment is initiated and from the time the message is sent back from the issuing bank to the merchant to verify the purchase—the payment data is protected. This process has become much more robust by restricting the extent of data shared across parties, but there needs to be more rigorous use of MFA (multi-factor authentication) on the part of customers.
Arms Race in Cybersecurity
AI works phenomenally in dealing with cyber threats because it can scan millions of transactions for fraudulent behavior at lightning speed. The use of AI and ML technologies in modern times is only going to escalate, and there’s practically no comparison with human cybersecurity professionals. But the trade-off between speed and the threats that come with it is where the bone of contention lies. Building a ‘zero trust’ model is, therefore, imperative.
The threat of extensive AI use can be gauged by its capability to clone senior personnel’s voices and other authentication media, which could lead to costly errors. Suppose anyone manages to hack the AI engine used in a bank for cybersecurity—in that case, they may very well be able to authorize transactions worth a fortune. Given the proliferation of tokenization of data and the anonymity of user IDs, catching the culprits could be a deal-breaker. Going through the recent reports, the AI-based cybersecurity products market is expected to reach $133.8 billion by 2030, a massive jump from $14.9 billion in 2021.
While data breaches are not likely to disappear anytime soon, we hope to see the number of “secure breaches”—where encryption is in place and data is rendered useless to the criminals who stole it—be on the rise. But there is still much work to be done on the payments security front.
Piecemeal solutions and the “wait and see” game are not adequate for protecting financial data. Businesses that focus on creating and implementing a holistic payment security strategy will reap the greatest rewards. US merchants have already witnessed a 47% decline in customers as they lost trust in the company’s business practices.
Talk to our team of global payment experts to know how you can keep your payment systems secure and your digital records safe.