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How Payments Tech Helps with Compliance

As digital payments evolve, so has regulation to protect users and businesses. Technology can help you improve payments compliance and avoid heavy fines. Read on to know how.

Digital payments have evolved in leaps and bounds. Consumers today have more choice and flexibility in how they shop and pay, but they also face newer threats. Digital payments use data, which is valuable and needs to be kept safe from unlawful access and misuse. To reduce risk and keep businesses and consumers in Europe safe, various regulations exist. And these have evolved along with digital payments and changing consumer behaviour. Hence, the law requires merchants in Europe to achieve payments compliance. Failing to do so can attract costly penalties and fines, not to mention getting debarred from conducting business. Compliance can seem quite tricky to navigate, but newer payments technology can help. Here’s how:

AI and Machine Learning tools

AI and machine learning tools help you to monitor payments data in real-time. You can co-relate this info with data from other company functions, such as sales or customer support, to draw finer, data-driven insights. This helps you flag and report any suspicious activity and prevent fraud. You can access these insights from a single dashboard, thus improving efficiency in your accounts reporting.
Higher transparency (of your customer data and transactions) helps you stay compliant with the Anti-Money Laundering Directive (AMLD) in Europe. This directive aims to combat money laundering and terror financing in the EU. Using KYC and KYB tools help you improve user verification and reduce anonymity, which is required as per the AMLD.

You might like: Payments Fraud and Brand Loyalty: Why CXOs cannot pass up AI Risk Management in 2022

3D Secure 2 and Strong Customer Authentication

The revised Payment Services Directive (PSD2) in Europe requires all online payments to be processed using Strong Customer Authentication (SCA). SCA uses two or more factors in the authentication process – a password or PIN, a smartphone, and a biometric scan (fingerprint/ iris/ voice).
Not applying SCA can leave your customers vulnerable to fraud and theft. And this can have long-term impact on your brand loyalty and reputation.
To apply SCA, merchants need to run the latest versions of 3DS 2, which offers added protection and liability guarantees. 3DS 2 enhance fraud protection while keeping the user experience as seamless as possible. A specialized payment services provider like Novalnet can easily help you set up SCA for all your payments.

Know more: What is 3D Secure 2.3 And Why Do Merchants in Europe Need to Use It?

PCI DSS-compliant payment gateway & Tokenization

A PCI DSS certified payment gateway is essential to process card payments in Europe. PCI DSS is a global security standard to ensure that all companies process card payments in a secure environment. It is governed by the PCI Security Standards Council.
If you store or handle customer card data in any way, you must be PCI DSS-compliant. Non-compliance can compromise your data security, leading to huge fines and long-term reputation damage from data hacks.
You could also opt for tokenization – a method that converts sensitive card details into tokens or digital aliases. When you use tokenization, you do not have to process or store the payment data. Rather, you use a token. A token keeps the card data safe by encrypting it, making it useless to hackers. This minimizes the risk of data breaches and protects you and your customers. You also save on costs related to PCI audits.
Choose a payment service provider that is PCI DSS-certified and offers tokenization.

Also read: 4 Ways How Tokenization Makes E-commerce Checkouts Smoother

How Can Novalnet Help?

We are a global PSP with decades of experience in helping Europe’s leading brands process their payments. Our AI-based payment solutions help you process payments easily and securely in a PCI DSS-compliant environment. Wherever you are in Europe, we ensure that your payments are running smoothly at all times, round the clock.
Reach out to us today to know more about how we can help.

Accept payments globally in 125+ currencies through 150+ payment methods in a highly secure, state-of-the-art environment supported by AI-powered risk management, built for SMEs and large enterprises.

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