Innovations in payment safety

As the technological frontier of financial and identity exchange accelerates for both fraudsters and legit operatives alike, it can be hard to keep track of what is available and, indeed, still safe. A payment system is a set of rules, procedures, and tools to facilitate the exchange of funds safely and effectively. For the sake of simplicity, we will not look at wholesale payment systems, that is to say, interbank transactions of huge proportions, as these work a little differently and require an article of their own.

From the first telegraph transaction in 1871 to the first home delivery in 1988 (through Teletext) to the first online order of goods (pepperoni pizza) in 1994 to the Western Union’s app launch in 2011, money has been at risk in transit for a long time. Perhaps you are an online shopper who has tried to accommodate your habit by downloading a retailer’s app only to find it is a phishing scam into which you are punching your details. Or maybe you are a cautious risk calculator in the extreme and place your bets exclusively at Paysafecard casinos. Or maybe you are part of a large company that is a constant target for infiltration and are trying to keep ahead of the curve before a deepfake robot of your boss comes into work demanding access to the safe lest you be terminated.

Either way, you are aware of the risks out there and are vigilant for updates in payment safety, so without further ado, here is a look at payment safety innovations.

End-to-end encryption

This innovation has been popularized over the past two decades, and with good reason. End-to-end encryption (or E2EE) is a method of protecting data (i.e., financial data) when it is being communicated between two parties. The cryptographic keys used to scramble and unscramble data are stored on endpoints. One key is private, and the other public, which, once shared, can be used to access and decrypt data. A development from one key encryption, which was prone to third parties being able to unscramble the data if they got hold of the key. Most credit cards issued usually come with fraud liability (a kind of free insurance, basically) that warrants equitable compensation for any successful breach of their E2EE system.

Voice, fingerprint, and facial recognition.

Many apps, including ones for online banking, use your body for authentication, which, unless Matt Reeves’ Riddler has been at your thumb (and thumb drive!), are pretty damn secure.

The Blockchain

This is a communal ledger that records transactions and assets without being tampered with or influenced by anyone. Many consider this to be the future of all financial transactions and, indeed, economies. This may sound far-fetched, but considering how advanced fraudsters are and will continue to be, it makes sense. So, we shall certainly see about the future. No one can beat a blockchain. That is why it is both a blessing and a curse – although your money would be as safe as possible (putting volatile market rates to one side!) It also makes illicit financial activities such as money laundering or purchasing illegal goods so much easier. 

Fraud monitoring

Each transaction made is compared to models and subsequently given a numerical risk value. This is done through a scanner that never one that monitors your account’s transactions. Have you ever made an unusually large payment that you know is legit but had your bank call you up to check? That’s because their monitoring system is up to date!

E-wallets

A trusted third-party company that acts as a middleman between your card and retailer. E-wallets save time, as the authorization process is merely a matter of logging in rather than logging your card details over and over. PayPal has popularized this method for online transactions over the past twenty years or so and is currently a payment option across most of the web. Neteller or Skrill are other versions of this, but with subtle pros and cons when compared to PayPal. If you take this route, be sure to look at each company’s specifications and whether or not they are an option at your most frequented sites of transaction. This method usually circumvents transaction fees, but that is not a guarantee, so be watch out for that too. Expenses are not always fraudulent!

Paysafecard

As referenced earlier, a Paysafecard is an extremely secure innovation in online payments. It requires the user to prepay for what is essentially a voucher and then enter a sixteen-digit code when it is time to redeem it. The security of these is twofold: obviously, the long code but also the fact that what is in jeopardy is only what you have topped up the card to.