There’s been a school of thought for some time now that credit card transactions are more secure when made offline than online. These days, however, that just isn’t true.
In fact, online transactions are more secure and more popular than ever, thanks to digital payments technology, an evolving cyber-security landscape, and demographic shifts.
In addition, offline payments appear more insecure than they’ve ever been. Security breaches at famous retailers have highlighted the fact that offline transactions are susceptible to attacks.
It’s easy to feel overwhelmed by the multitude of payment methods out there, which explains why an interest in finding a simple payment method is increasing. That’s besides the fact that security concerns are present both in online and offline transactions. Some of the high security breaches from the likes of Target and Home Depot in recent years haven’t eased these concerns regarding the latter. In fact, the lengthy list of high-profile breaches is enough to show that offline payments are at least every bit as risky as online payments.
Offline Payments and Insecure Environments
When you hand over your credit card in an offline store, your data is stored on a computer. These computers are typically Windows PCs running outdated Point-of-Sale software, storing your data in inherent inadequate and insecure environments. To process a transaction, the payment application should communicate with the payment processor, POS, and payment terminal, which means that sensitive data is constantly being circulated, making it vulnerable.
The purpose of security guidelines established by major credit card companies is to collect data while at rest. We no longer live in that world, and these standards today aren’t enough to ensure retailers are protecting consumers data.
These guidelines don’t impose a requirement that says credit card data should be encrypted when making its way through a private computer network, meaning that hackers can steal data while it moves.
Online Retailers Committed to Security
Big box retailers don’t generally commit to security to the same extent that online retailers do. Taking additional security precautions and overhauling an entire system is a time-consuming and expensive proposition, and they fail to take additional measures. Online retailers take a different approach, as they’re built from the ground-up with a strict security mindset because they know their business can be destroyed by a single hack.
Online retailers also have more security tools available to them. These tools are developed for today’s world, not the world from a decade ago. When you log on to PayPal, for example, they implement a second authentication requirement. An online transaction with any reputable vendor will use SLL certificates to protect customer data in transit, along with regular system scans and firewalls. Not only that, but customers can even provide additional security layers themeless, such as choosing strong passwords, ensuring their anti-virus software is up-to-date, and signing up for identity theft protection services.
Closing the Balance
Online payments are clearly the way things are going. Millennials are less concerned about security. They’re also more likely to purchase someone online than older buyers. Not only that, but offline security breaches making headlines has resulted in increased awareness of offline threats. These breaches will only accelerate the move towards online payments. Even older buyers, who were too wary of making payments online, will become less so. And millennials will have more and more spending power. These trends will combine to close the balance between offline and online payments.