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  • Writer's pictureAllen Lai

Ensuring Electronic Payment Security for Specialty Merchants

Article Author: Bob Jenisch is a partner at Boland Hill Media LLC

Most merchants are in business because of their passion about a product or service, and

because they are interested in making money. To succeed, business owners must be prepared for the many obstacles they can face. When it comes to electronic payment acceptance, security is one of the challenges that is best faced upfront to avoid even greater obstacles down the road.

Payment security boils down to the protection of personal data. Credit card numbers, bank account information and personal identities are some of elements that can become compromised in a data breach. That data is highly sensitive and consumers are keenly aware of existing threats, thanks in part to media coverage of major breaches. Because of this, merchants — especially those in ecommerce and specialty markets — must take measures to ensure data isn’t vulnerable and customers are put at ease.

Customer Protection

While any business that accepts electronic payments is a possible target, those in industries gathering a large amount of personally identifiable information require a hardened security environment. For example, an online dating merchant has the responsibility to not only protect customer data but also ensure total discretion by providing comprehensive security of all personal information, including names, addresses, email addresses and billing information.

How is this type of security ensured? Companies like Humboldt Merchant Services and gateway provider Inovio start with a rigid formula around PCI compliance.

“The objective is to make it so these merchants don’t have to touch a credit card,” explains Conal Cunningham, General Manager at Inovio. “In other words, tokenization happens even before a purchase gets made.”

Tokenization ensures that sensitive data elements are substituted with non-sensitive equivalents that have no exploitable value. However, Inovio and Humboldt go one step further to ensure ALL personally identifiable information is managed in a similar manner as credit card data. All customer information gets handled as an “entire identity” and is accessible only on a need-to-know basis by the payment support team, limiting risk exposure and the possibility of a breach.

Special Merchants Require Special Attention

Knowing that merchants in certain industries are in need of extra data security — and being able to provide it through a good payment gateway — allows for a merchant services company like Humboldt to focus on the management of risk and thereby offer greater risk tolerance. Whereas some merchant services providers may decline businesses simply based on industry, Humboldt draws on years of experience and a unique set of risk tools to assess the viability of a business.

“More risk tolerance equals more approvals,” says Cunningham. “With the right tools, a merchant account can be approved and stay active regardless of the level of heightened security they require.”

When there is complete understanding of risk, companies like Humboldt and Inovio can offer the special attention needed for specialty merchants. Handling security and risk factors the right way from the onset allows for sustained and confident business operations.

Key Partnership

Missteps made during the assessment or set up of merchant accounts in ecommerce and specialty industries can lead to costly errors down the road. Put simply, data breaches can cause reputation damage that will put a merchant out of business.

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