Cashless is the new currency of the country and a fully cashless society is soon to be a reality.

Predictions are that the UAE will become fully cashless by 2030.

While digital payments are clearly convenient, there are some cons consumers and businesses both need to be wary about - especially, frauds and scams.

Over 50% increase in fraud reports for the year just proves the intensity. It gives us all the reasons why it is important to implement robust fraud detection in payment. And that’s where you can call AI or Artificial Intelligence to the rescue.

The machine learning algorithms, predictive analytics, natural language processing, and other capabilities that AI brings do not just solve the efficiency, accuracy, and user experience challenges, but also help identify malicious activities.

This article will walk you through the transformation of AI in fraud detection.

Challenges of Fraud Detection

Advancement is everywhere. While your payment systems have evolved, so have the fraud techniques become sophisticated.

Here’s the thing with the traditional fraud detection systems, they are built to work on fixed patterns and rules. They are rigid with the capability to identify just the existing trends. This is why your current detection system might fail to determine the onset of new fraud trends.

Secondly, such a system reports anything that goes beyond the fixed rules. Result? False alarms. It also blocks genuine customers out and reports them leading to business loss. This is why your business needs a system that can adapt to evolving business needs and AI in fraud detection comes into play.

How is AI Used for Fraud Detection

Artificial Intelligence uses a set of machine learning algorithms with the capability to analyze and identify abnormal behaviors or patterns. The first step in the process is - learning the normal behaviors and what’s considered standard user behaviors while making payments. For the next steps, this technology scans through all the data to find any behaviors that are off the track. It doesn’t end here, where the traditional fraud detection systems do, i.e. detect and report anything abnormal.

AI now takes a step ahead of the curve to analyze this new pattern or new behavior to understand the intention behind it. It has the capacity to alter its parameters to make sense of the new detection and understand if it is genuine or suspicious.

Based on the hypothesis, it takes immediate action by either blocking the transactions or giving access to them.

Here are some of the common AI mechanisms:

• Data collection
• Model training
• Alerting and reporting
• Feature engineering and detection
• Self-learning

Benefits of AI for Fraud Detection

Now’s the right time to be a step ahead and safeguard your business from online threats. Learn about the benefits of machine learning and AI for fraud detection:

Enhanced Accuracy

AI algorithms are taught to pick recurring fraud instances or patterns that might miss the human eye. This meticulous scanning and detection function contributes to enhanced detection and accuracy. AI can scan through heaps of data and pick up malicious activities in no time.

Real-time Results

AI algorithms work on a real-time basis. They have the power to block suspicious activity as and when it occurs, cutting off any negative implications immediately. This keeps businesses safe from threats in all capacities.

Reduced Manual Workload

Employees would no longer spend time on manual fraud detection, monitoring, or analytics. This gives them a lot of time to focus on innovative and strategic activities to grow your business. Save your employees some time and give your business some innovative wings.

Self-learning Capacity

The technology is built to think like humans. This means it is on the quest to improve its knowledge, and the more data it gathers, the more it learns. The technology keeps growing, making better analyses and predictions. Plus, the AI systems of the world also exchange knowledge among themselves. Hence, better predictions are always evident.

Easy to Scale

No data is too much data for AI models. They have the capacity to go through tons of data, and they can do it in seconds if not milliseconds. This is extremely helpful when businesses grow. They can enjoy high accuracy and speed without having to upgrade their AI-deployed fraud detection system.

Highly Cost Effective

While there are some initial investments connected with deploying AI in fraud detection, they are cost-effective in the long run. They automate a lot of fraud detection and rectification processes and also eliminate mundane manual tasks. Not to forget, they stop fraud which can otherwise lead to heavy monetary losses. Plus, there are no additional costs during scaling.

Customer Satisfaction

Security is given with AI in fraud detection which increases customer trust and retention. Additionally, traditional limitations such as false positives are put at bay. This increases customer satisfaction and business revenue. With these benefits, business owners can enjoy a competitive advantage and massive business gains.

Common Frauds That AI Can Detect

There is no stopping new fraud scams from emerging. But, here are some of the common AI frauds you are highly likely to encounter:

Card Fraud

Scammers do not sit down to find cards with loopholes or weak security. They leverage bots to find these gaps and detect them at large to conduct a brute-force attack on payment gateways. They are extremely common and because they are done using bots, AI has the power to detect them.

AI goes beyond just reading IPs and the IP reputation of a source and into the behavior to detect what’s a bot and a real person. Based on the analysis, AI takes immediate action to block any malicious bots. CAPTCHA is another form of AI technique used to distinguish people from bots.

Fake Account Creation

The biggest prey to fake account creation is social media. There are just so many accounts creating havoc at large, and it is a bot art. They can create tons of accounts at a go to skew your, say, product reviews, spread misleading information, create malware, and more.

Heightened sign-up security is the solution you say, incorrect! Increasing the standard sign-up security process would only increase user friction, leading to an increased user drop-off rate. AI however can detect and catch bots and fraudsters from the existing signup flow.

Account Takeover (ATO)

Fraudsters cannot just create fake accounts, they can also take over your existing business accounts. This can put a strain on your business reputation and financial health.

You sure can deploy a multi-factor authentication but its effectiveness relies on users too. It doesn’t work for the ones who don’t toggle it. AI, on the other hand, has what it takes to detect the tiny clues that scream of attempted ATO, and immediately block it.

Credential Stuffing

Another method of attempted scams is credential stuffing. Well, scamsters use bots to find and fill in common usernames and passwords to crack access. They even leverage previously stolen data to detect reused passwords of users to gain access and steal.

AI is always on the lookout for accounts with multiple login failures or other such abnormal behaviors. It can find, report, and block such attempted credential stuffing breaches.

Where is AI Headed 

AI and machine learning for fraud will continue to evolve forever. This makes us confident that it can preserve your business’s security. These systems are trained to think like humans and analyze all data points like customer behaviors, device functionality, and more besides the mainstream financial data.

The result? Detection accuracy and it will just get better.

Regarding what the future holds, AI models can be trained to adapt to any possible future onsets. They will continue to be the driving security force for your business and your customers, acting as the shield of protection. We cannot emphasize their ability to self-learn and act on a real-time basis enough, which is an asset for business owners such as you. You must leverage AI in fraud detection for your payment infrastructure and reap security benefits.

Ending on this note, if you use AI for bank fraud prevention, you cannot just protect your customers from fraud but also enhance their experience transacting with you. Yes, it provides smarter detection, hypothesis, and resolution in real time. But it can also analyze customer behavior and data points that can help you make critical product enhancements and innovations.

It’s time to provide your customers with a frictionless and safe payment experience without the workload. And PayBy is here for you.

We leverage AI-based fraud monitoring, 3D secure authentication, and transaction risk analysis to provide the utmost safety. Get started with Payby to know more.

Businesses across industries have embraced online payments to improve their payment infrastructures.

We have witnessed a sharp digital shift in payments, but what remains constant is theft.

Around 4 in 10 UAE customers reported experiencing fraud attempts, and it doesn't just end there.

Identity theft is another threat shadowing the UAE when it comes to online transactions.

But this does not stop consumers from using online payment modes to transact.

In fact, customers are now more informed than ever before. They proactively choose brands offering secure payment gateways and practices.

In this article, we share the must-have online payment security methods and practices that customers using Payby follow.

Recap: What is Online Payment Security?

Online payment security consists of the methods, practices, processes, or measures that business owners adapt to save all transactions from malicious activities, fraud, data breaches, and other similar unauthorized access.

This instills customer confidence and also makes businesses immune to financial losses or legal constraints.

What are common threats to online payment security?

As a business owner, it is your responsibility to keep your company’s and customer’s data safe. Here are the most commonly reported threats to payment security and how you can avoid them:

Phishing Attacks

This is one of the most common forms of cyberattack, where scammers pose as legitimate sources with emails, websites, and messages having a close resemblance. They appear to be very convincing, tricking unaware people into making dubious payments and transfers.

Here’s how you can avoid such attacks:

• Train your employees to help them identify and fight against such attacks when encountered. Also, plan out customer awareness drives to educate your customers.
• Deploy authentication protocols, email filtering solutions, and Multi-Factor authentication (MFA).
• Choose the right security solutions that successfully create the firewall required to save your stakeholders from malicious activities.
• And, keep their solutions and software security up to date. This includes client emails, browsers, and operating systems.

Data Breaches

Access granted to anyone outside of your organization is a data breach. Weak payment gateway security or hacking can lead to unauthorized access, followed by business loss.

The first step to fighting data breaches is complying with data privacy laws and careful access management of sensitive data.

• You must then set up an incident management system with adequate response time for when a breach occurs.
• Figure out a process for identifying and containing the breach immediately, as well as other protocols like informing the stakeholders and communicating.
• Devise a thorough follow-up plan for examining and finding the root cause of the breach to prevent them in the future and rectify any weak touchpoints.

Malware and Ransomware

Malware is software designed to cause harm or gain unauthorized access to systems. It can be a computer, a server, or a mobile device. Ransomware, on the other hand, aims to encrypt or disrupt a system’s data, cutting off the administrator’s access. The fraudster then asks for a ransom to give access back or help decrypt the data.

These online payment security issues can cause real harm, and this is how you can prevent them:

• Their common sources are emails, compromised websites, and downloads. Train your employees to steer clear of them.
• Have security measures in place for any new app or software downloads, as well as links.
• Implement security solutions that can detect any potential malware during the download and automatically remove it.

Identity Theft

Scammers can try to steal your identity by finding your business or personal details to create new ones or gain access to existing accounts and systems. They can steal your money or even impersonate you to steal your customer’s money. Here’s what can be done to avoid it:

• Advise your employees not to use public wi-fi networks to access your company data.
• Deploy strong passwords to secure access, and scan systems for suspicious emails, phone calls, or text messages.
• Monitor your business transactions and reports to identify any suspicious activity.

But, you can never be too careful with the rise in types of threats. Multiple new threats keep hitting the news, so you must follow the common best practices and safeguard your business.

Best Online Payment Security Practices to Follow 

As a business owner, you must be aware of and ready with the best payment gateway security methods. This not only enhances your customer’s trust and confidence but also keeps your business up and running. Here are all the online payment security best practices you need to know apart from using solutions such as Payby to create transactional interfaces:

1. Data Encryption (TLS & SSL Protocols)

Data encryption is one of the best security practices businesses can adopt. This process encodes payment data to provide end-to-end protection. No one else but the person with the encryption key can read this encrypted data. TLS (Transport Layer Security) and SSL (Secure Sockets Layer) are the keys that can encrypt data. They ensure the security of data exchange on the internet.

One of the best examples of these keys is securing HTTPS. Websites with “https://” have an extra layer of SSL-certified protocol, as compared to “http://” which means insecure.

2. PCI-DSS Compliance

The PCI Security Standards Council sets the standards for recording and handling customers' data by a business. This global organization lays down ground rules, terms, and conditions through its Payment Card Industry Data Security Standards (PCI-DSS) policy. Businesses must be PCI-DSS compliant to avoid security breaches and legal implications.

3. 3D Secure

This system is put in place to double-check your customer’s identity while making a payment. Banks and financial institutions generally handle this layer to verify an identity via biometric scans or PIN codes.

4. Payment Gateway Security

Embed the right payment gateway to enjoy high security. The security of your chosen payment gateway dictates your security, so you must ensure that you choose the right provider. The success of payments also depends on the provider you choose because customers go through the payment when they see a provider they know and trust.

5. Payment Tokenization

This process replaces the original payment details, like card numbers, with a digital identifier called a ‘token’. These tokens help process payments without storing customer’s data, enhancing the security of a website. This ensures security even when a website is compromised.

6. Up to Date Operating Systems

Computer systems are frequently enhanced to improve security measures. To enjoy these security measures, you must keep all your operating systems updated. It is as simple as that.

7. Prevention and Monitoring Systems

These systems are customized based on a business’s personal needs and preferences. At PayBy, we have deployed an advanced fraud detection and prevention mechanism integrated into the payment gateway to keep you secure.

8. Robust verification process

You must also have a verification process for your customer’s data to ensure no unauthorized payments are made. This includes verifying a customer’s card details, address, contact details, and more.

9. Employee Training

Train your employees to make them aware of online payment security issues. They must be able to recognize a threat and know what action to take. Such understanding on all levels is very important. Create guidelines, training sessions, and more to emphasize it.

10. Customer awareness

Not just your employees but your customers should also be informed. Plan out communications campaigns around awareness of any ongoing or potential online threats. You can also use such campaigns to drive trust among your customers and help them understand that making payments with your business is safe and secure.

11. Two-Factor Authentication

This method uses two verification steps to identify and verify a user. This additional step can prevent a lot of mishaps and enhance security. A popular example of this process is OTP confirmation, where customers must enter an OTP sent to their registered mobile number besides typing in the PIN or password.

Conclusion

Online payment security is as critical as your business solution because one small mistake can lead to monetary loss and legal implications. Not just your business and its success, but its reputation is also linked to your online payment security.

A customer data breach leads to serious legal implications, fines, negative news coverage, and a loss of reputation.

But not with PayBy.

PayBy uses AI-based fraud monitoring, 3D secure authentication, and transaction risk analysis to ensure your security as well as approval rates. We follow the best online payment security methods and practices to keep your business and customers safe.

Want to boost the online security you offer on payments? Get started with PayBy today.

Dreaming big and running into a cash flow crunch is not ideal for a small business. 

Still, 82% of small businesses that go out of business mention cash flow as the main reason. 

Keeping track of your incoming and outgoing money will help you build a sustainable and profitable business in the long run. 

With proper cash flow management, you can hire people, buy raw materials, invest money in your business, and still pay your bills and make a profit. 

But it's easier said than done, especially if you manage things the old way in sheets.

Some small businesses also use bookkeeping software to track their cash flow. 

Although it's better than managing cash flow in sheets, it often fails to keep track, especially when customer transactions are increasing and your business is growing. 

Then what’s the solution?

The short answer is digital payment systems.

In this article, we’ll discuss what it is and how your business can benefit from using it. 

But before that, let’s quickly understand what a digital payment system is. 

Recap: What is a digital payment system?

A digital payment system, also known as the electronic payment system, allows businesses and individuals to transact through electronic devices like smartphones or computers.

Digital payment systems have become super popular over the years because of their convenience, security, and efficiency. 

Smart payment solutions like Payby enable you to integrate a digital payment system for your business. 

So, whether your customer prefers to pay via a QR code, mobile wallet, or more traditional credit/debit card, you have it all on your checkout page.  

What are the benefits of using a digital payment system? 

The digital payment system has multiple benefits for small businesses. These are:

1. It’s convenient 

Digital payment systems are convenient and, hence, widely preferred by customers.

In the UAE, 88% of consumers mentioned that they have used at least one emerging digital payment method, as Mastercard mentions in one of their surveys. 

The same report mentions that consumers are turning towards digital finance options for their everyday needs because of their speed, convenience, and transparency. 

Moreover, a digital payment system can securely store a customer’s preferred payment options and card details, which means repeat customers don't have to enter the same information again. 

Offering such convenience to customers boosts repeat sales for your business. 

Recommended read: How do payment gateways impact user experience

2. Improves cash flow management

Digital transactions also help small businesses manage their cash flow effectively, enabling you to keep track of the inflow and outflow of funds. 

The transaction history gives you insight into spending trends, cash management, and sales. 

This insight can help you more accurately predict future income and expenses. 

As a business owner, you don't need to wait for checks to clear. You can receive instant payments for products/ services sold. 

Many digital payment systems integrate with accounting software, recording all incoming and outgoing transactions. 

This streamlines the reconciliation process and provides real-time visibility into your cash flow, enabling you to make informed decisions at the right time. 

Moreover, by automating the whole process, you remove the scope of manual error that would have happened if you were keeping track of the cash flow manually. 

3. Enhanced security

Digital payment systems are secured and reduce the risk of fraud as every transaction can be tracked in real-time.

With the help of secure gateways, you can enhance the security of every transaction. 

You can also safeguard customers' sensitive personal data and banking information through advanced security measures. 

With features like data encryption and fraud protection, tokenization of websites, and biometric payment methods, consumers' sensitive information can be kept safe.

For example, PayBy, which enables business growth with cashless payments, is trusted by some of the leading brands in the UAE. 

The brand is also licensed by The Central Bank of the UAE, which helps them earn trust and a good reputation.

It has been given the highest levels of financial service approvals to conduct Stored Value Facility (SVF) and Retail Payment Services (RPS) operations. 

Recommended read: Cybersecurity in digital payments

4. Broader customer base access

Digital payments allow small businesses to increase their customer base. 

With digital payment solutions, small businesses can offer their products/services to non-local customers and all those who prefer online shopping. 

Anyone with internet access can visit your website and make a purchase. 

Digital payments like Payby also empower you to run subscription-based businesses. 

You can simply integrate gateways with your existing website so you can host the payment page and customize it according to your needs. 

Plus, multiple payment options encourage customers worldwide to view and purchase from your website. 

5. Data and insights for better decision-making

Digital payment solutions generate tons of data that can give you a lot of insights.

For example, look into the transaction history to understand what time your sales peak, what are the most preferred payment methods, which is your most selling product, the purchase behavior of the customers, spending trends over the years, and where your funds are used most. 

Scrutinize these data, and you will be able to make a better business strategy that's backed by data. 

6. Shop on the go

The biggest benefit of a digital payment system is that it enables you to do a transaction anytime and anywhere. 

It’s instant, and there’s never a delay due to a nearby ATM running out of cash or you need to wait for a long time in the queue. 

You can continue to do business as usual, even if there's a holiday or a time zone difference for cross-country transactions.

7. Reduce transaction cost

Paper-based payments are a hassle for small business owners and suppliers. 

Besides the hassle, the entire transaction process is slow. 

The entire process of collecting and processing a paper check may take almost two weeks. 

Additionally, collecting and processing paper checks is a costly affair. 

Data says it costs almost $13 to send an invoice and $5 to process a single invoice check. 

Digital payments are easy, hassle-free, fast, and less expensive for businesses. Plus, it’s environmentally friendly too!

Ready to transition to a digital payment system?

If you’re a small business owner, implementing a digital payment solution can be really beneficial to grow your business. 

Payby offers various payment solutions that are perfect for small businesses to scale their business. 

Whether you want to set up QR code payments, payment gateway, virtual accounts, wallets, or recurring payments and auto-debits, Payby has got you covered. 

It also offers the lowest transaction/ payment processing rates, which means you have more control over the revenue you get from each sale. 

Ready to explore?

‍Get started with Payby today.

As the world embraces a digital future, user experience remains the make-or-break moment for online payments. 

A poorly designed payment process is frustrating for the customer and can cause a big headache when completing the payment process. 

Result? 

You miss out on sales no matter how good a deal or the product/ service is. 

As data says, 88% of online consumers are less likely to return to a site after a bad user experience. 

On the flip side, a well-crafted payment processing system builds customer trust. 

This not only helps to close the transaction but increases your repeat sales.

As data says, companies see $100 ROI per $1 investment in user experience.

In this article, we’ll see how to improve user experience in payment processing. 

But before that, here is a quick recap to understand why you should be concerned about the payment processing user experience. 

Why is a good payment processing user experience important? 

A good payment processing user experience not just delights a customer but also sets the foundation for customer loyalty. 

As a result, you will see a boost in your repeat sales. 

Additionally, satisfied customers will always talk about their experience with acquaintances. 

And, any brand will admit that word-of-mouth marketing is the best marketing option any day.

Clarity and transparency

 A well-designed payment processing system instills trust through transparency. 

Offering clarity in payment processing means customers are aware of all the payment options available so that they can choose their preferred payment option. 

Additionally, maintaining transparency gives them a clear picture of the total cost of the product/service, taxes, delivery cost ( if any), or any other additional cost. 

Ensure that all the payment-related information is presented in a clear and straightforward manner. 

Convenience and speed

Today, customers are tech-savvy and prefer speed and convenience. 

Having a payment processing system that’s quick and convenient boosts the overall customer experience. 

On the other hand, a slow and floppy payment processing system turns off the customer and drives them away. 

Security

While digital payment is convenient and faster, it also comes with security concerns. 

Customers want to feel confident that the transaction process is genuine and that their sensitive personal data is handled carefully. 

Designing a payment process with PCI-level compliance is a must for businesses that ensure the highest customer security standards. 

Responsiveness

Customers value payment processing systems that demonstrate responsiveness. 

Sites that quickly resolve payment issues, disputed transactions, and 24/7 support are always preferred over transaction systems that are slow and unresponsive. 

Mobile optimization

Mobile transactions are extremely popular in the UAE.

As a survey suggests, 94% of the customers in the UAE used at least one digital feature during their last purchase.

The same survey suggests that 43% of the users suggested that an easy checkout experience is one of the reasons for online shopping. 

So, focus on mobile optimization and responsive UX designs that offer mobile users the same convenience and efficiency as desktop users.

Now, let’s understand how you can improve the payment processing experience. 

Ways to improve payment processing experience 

While each business is different and their needs vary, here are a few ways many businesses have improved their payment processing experience, and you can do too. 

Simplifying the Checkout Process

A simplified checkout process helps customers complete the transaction and creates a better customer experience. 

Customers who have a positive experience during the checkout process are more likely to return for future purchases. 

Here are a few things that you can do to streamline the checkout process.

• Minimize the number of steps by offering guest checkout.
• Filling out unnecessary details like birthdays and anniversaries is time-consuming and often quickly turns buyers off. Instead, gather only the necessary data that are compulsory to complete the payment.
• Provide clear instructions for each step so there’s no confusion.
• Use trust signals like a secure payment logo.
• Offer one-click payments for quick transactions.
• Keep the checkout process to a single page. Scrolling from page to page can distract a customer, causing a loss in sales. Further, it will also factor in if there are any internet issues. 

Optimizing for Mobile

Optimize your payment processing system for mobile users. A few things to consider:

• Pay attention to responsive design that can adapt to any screen size.
• Offer in-app payments by integrating the payment gateway into the app for a quicker payment experience instead of directing the customer to the website payment page, which may disrupt the payment flow.
• One of the biggest inconveniences for buyers is signing up and providing login details before they can checkout. So, keep that in mind. 
• Look for a payment gateway that offers QR code payment, mobile wallets, or displays the bank account details where you can asynchronously process the payment without logging in.

Enhancing Payment Security

Consumers need to be comfortable doing a transaction on your website. 

For this, they must ensure that your payment processing system is secure. Things that you can do:

• You must comply with PCI DSS regulations. If you adhere to this guideline, convey this information to the consumer. That way, they’ll be assured that your system protects credit/debit card details by utilizing tokenization and multifactor authentication. 

• Display the PCI DSS logo on your checkout page to show customers you care about their data safety. 

Offering Multiple Payment Options

Choose payment gateways that allow users to choose from diverse payment modes. 

• While multiple payment modes are available to integrate into your website, some popular methods include credit/debit cards, mobile wallets, UPI payments, etc. 

• Solutions like PayBy can enable cashless transactions and online payments via various international and domestic credit cards, debit cards, and over 1.5 billion wallets.

• It easily integrates with your existing website, so you can host the payment page and customize it according to your needs. 

Improving Payment Gateway Speed

The speed and efficiency of the payment gateway can be a game-changer for your business. 

Here are some ways to improve the payment gateway speed:

• Streamline the checkout process with minimal steps. 
• Partner with a third-party payment processing platform that can handle multiple transactions at once. 

Providing Clear Error Messages 

After completing each transaction, send a clear communication to the customer so that they know their payment has gone through.

But if there is a transaction failure, ensure to communicate it as well. 

Few things to consider:

• If there’s an error from the issuing bank, have the customer check the card details. If the problem persists, have the customer contact the issuing bank. 
• Meanwhile, you can prompt the customer to use another payment option to complete the transaction.
• If there are technical issues with the payment gateway, inform the customer immediately with a clear message, along with the details of the transaction if it has already been initiated. For example, your message may read, “Any deducted funds will be credited back to the original source in 48 hours.” 

Personalizing the Payment Experience 

Personalization is a clear winner in today’s hyper-competitive market. 

So why not bring it into your payment processing system to WOW your customers? 

Here are a few things to consider:

• Make your customers feel valued by showing them their preferred payment options.
• Use localization and customization features to offer your payment process in different regional languages, currencies, and markets. 
• Combine each transaction with a loyalty or reward program to recognize repeat customers while up-selling and cross-selling your products. 
• Once the transaction is completed, direct your customers to a thank you page to offer your gratitude. 

Continually measure and improve 

Once you have implemented the payment processing system successfully, remember to measure and track its performance continually. 

Tons of data are produced whenever a purchase is made—for example, the products purchased, when the product was sold, what payment method was used, and so on. 

Analyzing this information through a payment analytics lens can help you make a lot of data-driven decisions.

For example, whether your existing payment processing system is working or needs improvement, whether your customer is new or repeat, what their purchasing habits are, whether you need to expand on certain product offerings, and so on.

Some of the metrics that you can measure:

• Payment types and methods to understand customer preferences.
• Chargeback rates so that you can reduce any unnecessary chargeback rates and improve customer experience.
• Transaction volume and velocity to understand your peak sales time.
• Transaction amounts and values to understand how much people are spending and how you can improve that.

Time to improve your payment processing user experience

If you’re ready to improve your payment processing user experience, it’s time to partner with a payment solution that builds solutions with user-first intent and does not compromise on business needs. 

Payby enables business growth with cashless payments so that you can increase your revenue while prioritizing customer experience. 

Payby offers complete online payment solutions for businesses across all industries. 

Solutions range from payment gateways and QR code payments to virtual accounts, mobile wallets, recurring payments, and more. 

Ready to explore more?

Get started here. 

Digital payments have been around for over a decade, but the pandemic has catalyzed its adoption across countries and virtually all categories. 

As McKinsey reports in a 2023 survey, for the first time, more than nine out of ten consumers mentioned that they had used some form of digital payment during the year. 

The scene is no different in the UAE region. 

Statista mentions that the total transaction value in the digital payments market is projected to reach US$29.75bn in 2024.

Digital payments have been gaining popularity and quick adoption as a convenient and secure way of transacting. 

They’re fast, hassle-free, and can be done on the go. 

But have you ever thought digital payments can also help you build loyalty? 

In this article, we will discuss how you can leverage digital payments to enhance your customer loyalty. 

But before that, let's do a quick recap to understand why digital payments are getting so popular. 

Why is the demand for digital payments increasing? 

There’s not one but multiple reasons behind the growing appetite for digital payments: 

1. Convenience

As customers are becoming more tech-savvy, they prefer quick solutions and convenience. 

Digital payments offer convenience as a digital transaction doesn't take more than a couple of minutes.

Moreover, it can be done anytime and anywhere. 

2. Personalization

Digital payments offer a variety of payment modes.

So, brands can offer various modes of digital transaction, such as credit/debit cards, UPI, mobile wallets, internet banking, mobile banking, etc., to facilitate a smooth transaction.

Brands can analyze customer behavior, preferences, and buying patterns to personalize these options. 

3. Digital transformation

The past decade has been an era of digital transformation. 

The years between 2011 and 2020 have witnessed how digital technologies have reshaped the business world. 

The digital transformation journey is still on. 

According to the IMD World Digital Competitiveness Ranking 2023 report, the UAE was ranked 12th among 64 countries reviewed globally and 6th among 40 countries in the European and MENA group in terms of digital competitiveness.

As businesses undergo a digital transformation, digital payments become a natural part of the process. 

4. Better security and trust 

Digital payments are safe and secure.

Some of the key security measures behind digital systems include two-factor authentication, encryption, authorization, biometrics, tokenization, email validation and authentication, and secure socket layer (SSL) and transport layer security (TLS). 

This is one of the main reasons consumers today trust digital transactions and rely on it. 

How do digital payments build loyalty? 

We all will agree that building customer loyalty is paramount today for every brand, irrespective of its size and nature of business. 

Today, every brand strives to meet and exceed customer expectations, so the shift is now towards creating a seamless experience for the customer.

Digital payments powered by BaaS are at the forefront of this journey and play a crucial role in building customer loyalty. 

Let’s understand how:

1. Creating a seamless checkout experience

The checkout process is the final touchpoint between a consumer and a brand, and the ease or difficulty determines if the consumer will close the transaction.

A seamless and hassle-free checkout process can be a game-changer. As a study mentions, 88% of customers are less likely to return to a brand if they had a bad previous experience. 

So, focus on creating a seamless checkout experience to build your base of loyal customers. 

2. Frictionless experience

Frictionless experiences have become an industry benchmark in the digital landscape, and BaaS products play a pivotal role in creating a frictionless experience for the consumer. 

Integrating a BaaS layer in their product not only works as a payment gateway for the brand but also creates a frictional experience for the customer's entire checkout journey. 

By optimizing the transaction process and minimizing redirects, the entire checkout journey becomes faster and more intuitive for the customer.

Customers who value their time and prefer convenience are likely to incline towards platforms that offer frictionless experiences, making them likely to return to you for future purchases. 

Remember that a frictionless experience can be your most significant differentiator in a hyper-competitive market. 

3. Personalized experience

Digital payments can be customized based on the user preference and previous purchase behavior.

For example, if a consumer has previously used digital wallets to make a payment, brands can display the same digital wallet at the top of the payment options on the checkout page to help close the transaction faster. 

Similarly, offering loyalty rewards with their preferred digital payment options can make them feel valued and understood, which works as the foundation for building strong brand loyalty. 

The different embedded payment systems can give businesses essential insights into customer behavior, preferences, and spending habits. 

Using these data, brands can send personalized discounts, recommendations, and loyalty rewards that will help strengthen brand loyalty further. 

4. Diverse payment options

Embedded digital payment solutions are revolutionizing how businesses manage transactions. 

One of the biggest advantages of digital payments is its versatility to offer different payment modes. 

From the good old credit/debit cards to the modern digital wallets, these integrated payment options ensure businesses can meet consumers' diverse preferences. 

This flexibility to choose the preferred payment method not only improves the transaction process but also offers a great customer experience. 

And we all know how continued good customer experience helps foster loyalty in the long run. 

5. Better security 

As Statista mentions, from July 2022 to June 2023, around 38 percent of cyberattacks and network intrusions occurred in the MENA region, with the UAE in second place among the most targeted countries in the region. 

The topmost priority for the BaaS platforms is to enhance their security measures and make them a fundamental part of their services. 

Some measures the BaaS providers take include a multi-layered approach to safeguard crucial data. 

This is achieved by multi-layered encryption techniques where all transactions are encoded. 

Such strong measures not only stop cyberattacks from happening but also instill confidence and trust among brands and their customers, reinforcing the fact that digital transactions are secured. 

Foster customer loyalty with digital payments

In this digital era, businesses are revolutionizing their payment solutions with digital payments, thus reshaping the customer-business relationship. 

Businesses are streamlining their transactions by seamlessly integrating different digital payment solutions into their platforms and enhancing user experience and customer loyalty. 

You, too, can tap into the potential of digital payment systems to build loyalty. 

But this is only possible when you have the right systems in place. 

PayBy can help you get started. 

PayBy enables businesses to make cashless payments and increases their revenue with customer-first, innovative, and secure omnichannel digital payment solutions. 

You can integrate PayBy with your website to set up a payment gateway. 

PayBy also lets you enable cashless transactions, online payments via domestic and international debit and credit cards, and over 1.5 billion wallets. 

Want to enable in-app payments? 

Worry not! 

Integrate with PayBy to offer in-app payment solutions with an optimized mobile pay page and secure transaction interface.

And did we tell you that PayBy is trusted by leading brands in the UAE and licensed by The Central Bank of the UAE, which demonstrates its highest level of financial service approvals to conduct Stored Value Facility and Retail Payment Service Operations? 

Sign up today. 

Various industries have seen rapid growth in subscription-based business models over the last few years.

According to The Subscription Economy Index report, the subscription industry has grown by 435% in the past decade. And it’s expected to grow even bigger and reach a market size of $1.5 trillion by 2025. 

Seeing the data above, we can say safely that the subscription economy is here to stay. 

Be it a gym subscription, an OTT subscription, a subscription-based service, or a subscription to a SaaS tool — researchers say that eight in ten adults use some form of subscription product/ service and will continue to do so. 

But, what makes subscription business models so popular?

Subscription-based products/ services provide an affordable way for customers to access what they need. It has been proved that consumers won't mind paying for access to exclusive content/products/services. 

On the other hand, subscription commerce allows businesses to provide their services/products directly to customers, ensuring a better customer experience and a long-term relationship. 

Plus, the subscription model ensures a regular cash flow for businesses. 

However, retaining the customer long-term is not easy. While the success of the subscription business primarily depends on the continuous value added by the business, the ease of payment is equally important. 

In this article, we will discuss how subscription-based businesses can leverage digital payments to streamline recurring revenue, focusing on automation, reliability, and customer convenience.

Benefits of Digital Payments for Subscription Businesses 

From having complete control of your billing cycle and cash flow to improved customer experience through seamless transactions — there are not one but multiple benefits of digital payments for a subscription business. Let’s look at them. 

1. Improved Customer Experience

The most significant benefit of digital payment for subscription business is a seamless transaction experience for the consumers.

Digital payments make transactions faster. Consumers can set auto renewal mode with their preferred payment option to renew the subscription to the product/service. 

Consumers can even save the payment information details in a secure environment so that they don't have to enter all the details every time a transaction happens. 

They can simply set up the payment details once and enjoy the product/ service until they want to pause/cancel it. 

2. Enhanced Security Measures

Digital payments are safer than the traditional payment methods. 

With features like data encryption and fraud protection, tokenization of websites, and biometric payment methods, consumers trust digital payment methods. 

For example, PayBy, which enables business growth with cashless payments, is trusted by some of the leading brands in the UAE. 

The brand is also licensed by The Central Bank of the UAE, which helps them earn trust and a good reputation.

It has been given the highest levels of financial service approvals to conduct Stored Value Facility (SVF) and Retail Payment Services (RPS) operations. 

3. Diverse Payment Methods

Digital payment methods allow businesses to offer multiple payment methods, facilitating international transactions. 

The diverse payment methods enable customers to make cashless payments via 50+ payment modes. 

These include some of the popular customer choices like credit/debit cards, net banking, AliPay+, PayBy, Botim, and other digital wallets. 

Diverse payment options help subscription businesses reduce churn by offering various payment options for customers so that they can easily renew their subscriptions.

It also helps in global accessibility and currency support, which is essential for businesses that are operating globally. 

4. Streamlining Billing and Invoicing

Subscription businesses can automate their billing processes with digital payment methods. You can create a custom schedule to collect recurring payments from customers. 

All you need to do is set up a billing cycle of weekly, biweekly, monthly, or yearly payments for your subscription business.

With auto-debit on recurring payments, you can ensure continuous cash flow for your business. 

By leveraging digital payments, subscription business owners can create branded invoices and automate sharing via email or SMS with their recurring customers.

You can also provide customers with instant payment confirmation on recurring purchases with branded digital receipts. 

This helps build trust and reduce churn while minimizing failed transactions. 

Plus, digital payment methods empower you and the customer for a cashless transaction with a click-to-pay functionality on your invoices. 

Additionally, you can ensure further customer convenience by offering flexible payment plans, giving them full control. 

For example, you can offer options like buy now and pay later, pause payments when they don't want the subscription, change the payment mode, and so on.

5. Leveraging Subscription Management Platforms

Subscription management platforms like PayBy let you integrate payment gateways with your existing website so you can host the payment page and customize it according to your needs.  

And did you know that payment pages powered by PayBy are mobile-optimized, too?

PayBy also lets you offer customization and flexibility to your consumers. 

So, users can choose from diverse payment modes.

For example, you can enable cashless transactions and online payments via various international and domestic credit cards, debit cards, and over 1.5 billion wallets.

By leveraging subscription management platforms, subscription businesses can keep a tab of their recurring payment status on a real-time dashboard. 

Such real-time insights can help you identify inactive customers and payment failures so that you can make informed decisions to reduce customer churn. 

Improve recurring revenue with digital payments 

Payments are now an important part of the customer experience. 

Subscription businesses that rely on recurring payment, offering multiple payment options, directly address the customer's need for a seamless payment experience. 

Additionally, recurring payments help businesses to grow by ensuring continuous cash flow. 

PayBy helps subscription businesses to collect recurring payments easily. It offers everything a business needs to collect a payment on schedule. 

It gives complete control of the billing cycle and cash flow with auto debit on recurring payments. 

Get started with PayBy today. 

Irrespective of the industry your business is in, the checkout is often the make or break point. 

According to Baymard Institute, the average documented transaction abandonment rate is as high as 70-89% across industries. 

And one of the leading factors for abandonment is reported to be the payment gateway one offers. 

In this post, we look into how payment gateways impact your conversion rate and what you can do to improve it. 

How do payment gateways impact conversions 

Let’s take a quick look at why and how the payment gateway impacts how many consumers complete a transaction: 

1. Speed to checkout

A good payment gateway helps convert the consumer before they can change their mind about making the purchase. The lesser the time to think, the higher are conversion rates - enabling impulse and momentary interest in product/ service is key. 

A very long checkout process or technical glitches that slow down the same can create room for drop-offs of even the highest purchase intent buyers. 

Good payment gateways come with optimized checkout processes and a high uptime to ensure your business is always ready for transactions. 

2. Security and trust

One of the primary concerns of online shoppers is the security offered by payment gateways. And the concern is justified. 

Payment gateway breaches and fraud are common. 

A report by Stripe mentions that 71% of businesses have reported that they have been targeted by payment fraud at least once. 

An average payment gateway breach can cost USD 9.44 million - businesses don’t just need to secure themselves, but also ensure they give consumers a safe platform to make transactions. 

3. Global accessibility 

When selling globally, businesses need to adapt to consumer payment preferences rapidly. This is where the importance of a payment gateway that comes with currency support and multi-language capabilities becomes important. 

At the same time, it is also important for businesses to adapt to device preferences over which consumers engage with them, giving them a way to checkout faster without the back and forth between pages. 

Right from the currency, preferred payment modes, devices and more, a good payment gateway enables businesses to adapt to local preferences quickly. 

Best practices to follow to ensure higher conversions 

If your business has been experiencing lower conversion rates, here’s what you can do to improve the number: 

1. Streamline the checkout process

Since the checkout process is a crucial step toward conversion, it’s important to keep it simple and remove any friction that can lead to customer frustration. Here are a few steps to remember: 

• Keep the checkout process to a single page. Scrolling from page to page can distract a customer, causing a loss in sales. Further, it will also factor in if there are any internet issues. 
• Offer alternative payment methods so that your customers have one or two preferred payment methods included. This will also attract customers who don't have access to or don't prefer the traditional payment methods.
• Implement a one-click payment system that’s convenient and encourages on-the-go shopping. In this system, the sensitive data is secured with PCI and tokenized on the website.
• Filling out unnecessary details like birthdays and anniversaries is time-consuming and often turns off buyers who are in a hurry. Instead, gather only the necessary data that are compulsory to complete the payment.
• One of the biggest inconveniences for buyers is when they have to sign up and provide login details before they can checkout. Look for a payment gateway that offers QR code payment or displays the bank account details where you can asynchronously process the payment without having to log in. 

2. Offer diverse payment modes 

Choose payment gateways that allow users to choose from diverse payment modes. 

For example, with PayBy, you can enable cashless transactions and online payments via various international and domestic credit cards, debit cards, and over 1.5 billion wallets.

It easily integrates with your existing website, so you can host the payment page and customize it according to your needs. 

And did we say that payment pages powered by PayBy are optimized for mobile phones, too?

3. Ensure speed and reliability

One of the biggest turnoffs for consumers is a slow and unreliable transaction process. Irrespective of the products/ services in the equation, this can result in the consumer losing trust in your business. 

A good payment gateway enables you to offer speed and reliability to your consumers. They are also licensed to enable transactions by legal authorities, giving you and the consumer, further peace of mind. 

For instance, Payby is licensed by The Central Bank of the UAE. It has been given the highest levels of financial service approvals to conduct Stored Value Facility (SVF) and Retail Payment Services (RPS) operations. 

4. Ensure mobile responsiveness 

Data says that at least 79% of mobile users have made a purchase at least once using their mobile phones. 

So, ensure your payment gateway has mobile responsiveness for consumers who prefer to shop using their handheld devices. 

A good payment gateway offers an optimized mobile pay page along with secure mobile payment modes. 

5. A/B testing and analytics

Continuously A/B test different elements, designs, and functionalities of payment gateways to determine the best configuration that gives you maximum conversion. 

You can A/B test the payment gateway among a subset of customers to understand the preference for local payment methods. 

Track and analyze the data to understand how it’s impacting conversion and the average order value. 

Are you ready to improve your conversion rates?

While there are many options in the market that can help you set up a payment gateway, Payby is one of the leading solutions in the UAE and is trusted by leading brands across industries. 

PayBy’s solution caters to a vast array of industries, including fitness and wellness, insurance, travel and tourism, social products and services, restaurants and cafes, hospitals and healthcare, information technology and services, gaming betting and casinos, and more - alongwith the ability to scale with the size of your business.  

Its easy integration feature works seamlessly with your existing technology – be it your website or app. 

Payby comes with several other powerful features that go beyond improving your conversion rates, and boosting the experience you deliver to consumers. This includes the ability to generate digital receipts, invoices, payment links and more. 

Want to know more about how Payby payment gateways can improve your conversion rate? 

Get started with Payby today. 

As businesses grow, they need to integrate a secure payment processing system. While some companies may still prefer to invoice customers to reduce card transaction fees, a report mentions that “£23.4 billion worth of late invoices are owed to firms across Britain.”

Late invoices can significantly impact the cash flow of the business. Accepting multiple payment methods not only improves the situation for business but also offers a positive customer experience.

A payment process that is quick, easy, and tailored to the local business environment enhances overall customer experience and loyalty. 

Recap: What is a payment gateway?

Payment through a payment gateway is one of the many options that brands can integrate into their online stores for easy payment processing.

Payment gateways are a key component in electronic payment processing systems and work as the front-end technology that captures the customer payment information.

It then sends it to the merchant-acquiring bank, where the transaction is processed. A payment gateway is one of the popular modes of online payment today that is used across industries. 

How do payment gateways impact customer experience? 

Making a payment and checking out is the last mile in a buyer’s journey, and the transaction experience with the payment gateway can deeply impact the customer experience.

Here are some instances of how payment gateway impacts the customer experience: 

1. Ease of use

Customers continuously seek convenience and ease of use, and a seamless online transaction experience can impact the overall customer experience positively. 

For example, a user-friendly payment gateway interface makes it easy for customers to make a quick payment and checkout from the online store. 

On the other hand, a cumbersome interface can be a big turnoff for an impatient customer. 

2. Reduce friction

The payment gateway also helps to reduce the friction between the customer and the business by facilitating a hassle-free shopping experience.

Be it credit cards, debit cards, or digital wallets — payment getaways can offer a seamless transaction, boost sales, and reduce cart abandonment rates, especially for e-commerce stores. 

How to set up a payment gateway for positive customer experiences? 

If you’re introducing payment gateways for your website, here are some tips to help you achieve a positive customer experience: 

1. User-friendly interface and checkout experience

The checkout process is the most crucial step in a buyer’s journey, and this should be made as seamless as possible.

That’s why a user-friendly payment gateway interface is important to impart customer satisfaction.

A poorly designed payment gateway interface can frustrate a customer, resulting in cart abandonment. 

2. Mobile responsiveness and accessibility

Customers today prefer to shop on the go. With easy access to smartphones, brands need to make the shopping experience convenient for on-the-go shoppers.

Thus, they need to ensure that the payment gateways work smoothly across various devices, including smartphones.

Remember, the ability to facilitate mobile payment is no longer a luxury but a must for brands to stay ahead of the competition. 

3. Security for trust

Payment gateways with robust security features, including encryption and fraud prevention measures, play a big role in gaining customers' trust.

Customers need to feel safe with their banking information, so brands that want to build a positive user experience must pay attention to safeguarding their payment gateways.

Creating trust is not just meant to keep the customer payment information safe but also to build customer loyalty, which translates to repeat sales.

4. Personalization

Tailoring the payment gateways based on customer profiles creates a more relevant transaction experience for the customer.

In an era when customers expect everything to be personalized, a tailored payment gateway for the customer will definitely help you earn some brownie points. 

5. Transaction speed

Customers today prefer a fast and smooth transaction experience. Payment gateways that offer swift and smooth transaction experiences are surely going to earn some praise from customers.

Remember, a fast transaction speed not only satisfies the impatient customer but also helps improve the overall brand perception.

Payment gateway best practices

If you want your customers to have a great user experience while using your payment gateway, here are some tips for you: 

Keep customer convenience in mind

Make it simple and easy for your customers. For example, if you’re in a subscription business, offer recurring payment options that help them renew their subscriptions easily. 

You may also consider integrating various payment methods like payment through credit cards, debit cards, UPI, net banking, COD, cheque, etc., for your website so that customers can choose the best-suited option for payment. 

Minimize risks

Ensure your payment gateways are capable of encrypting sensitive customer payment information like account numbers. It should also offer various verification procedures and secure card information.

Always use SSL-certified payment gateways along with a secure logo.

Clear communication

Always maintain clear and transparent communication with customers. Keep them updated about any failed transactions, payment status, and due payments so that customers feel assured. 

Maintaining clear communication helps to build trust, which improves sales. 

How to choose a payment gateway for a better user experience

There are several options to consider while picking a payment gateway. Here are some pointers for you to consider: 

Know the preferences of your customers

To positively impact the user experience, it's important to know what payment gateway your customers are already using.

If you choose payment gateways your customers are already familiar with, then you'll see better adoption, and you'll run into lower risks.

Check for integrations

Check for the API integrations of the payment gateway and if it will work with your existing technology. 

Choosing a solution that doesn't integrate with your technology will be of no use and will slow down the entire process.

Look for robust security

Security and fraud prevention are of utmost importance, so you need to be vigilant with the security system of the payment gateway. 

Look for PCI-compliant companies that uphold security provisions for electronic transactions. 

With PCI compliance, you can be assured that your customer's payment information will be protected and secured from theft. 

Consider the fees

Compare the costs of the payment gateways and how they will affect the security cost.

For example, if the payment gateway has a low fee but you have to invest in its security and fraud detection, the overall cost can increase. 

Check their market worth

Invest in a payment gateway that is trusted by customers.

Avoid payment gateways that don't have a strong security history to prevent customers from abandoning their carts or, even worse, cases of fraudulence. 

Choose payment gateways that have a respectable clientele list. 

Opt for flexibility

Flexibility is one of the key attributes to look for when choosing your payment gateway. 

Remember, each customer is different and has different preferences, so offer them a solution where they can quickly switch between credit cards, debit cards, UPI, Android, and Apple Pay, etc., and have a smooth transaction experience. 

Picking the right payment gateway for your business

Now that you’re ready to set up your first payment gateway, try PayBy — it seamlessly integrates with your existing system, and you can set it up easily. Licensed by The Central Bank of UAE, PayBy is trusted by some of the leading brands in UAE. 

PayBy can manage all end-to-end transactions via domestic and international credit cards and integrates with your website and apps easily. 

Get started today. 

Like it or not, money is a crucial part of our life. It allows us to buy things that let us live a comfortable and decent life. However, money has been in existence in some form or another for just about 5000 years. 

Before that time, there was a barter system that ancient people used to trade. Slowly, as humankind evolved, money evolved, too. 

From printing the first currency note to cashless transactions and bitcoins, needless to say, technological advancements have revolutionized payment methods. 

We’re here to take a step back and deep dive into understanding the evolution of online payments.

The Barter System: Trade in Ancient Times

Long before money was invented, ancient people used a barter system to exchange goods and services. This oldest form of commerce, which was practiced for centuries, involved two individuals negotiating their goods or services before they exchanged them in the form of trade. 

For example, a farmer may exchange his crops for a cow or salt. The quantity of rice to exchange used to depend on the perceived value of salt or cattle. 

It is believed that the first barter system was introduced by the Mesopotamians all the way back to 6000 BC. Later, it was adopted by the Phoenicians, who used it to barter goods with others across the oceans. 

With the rise of the Babylonians came a further improved bartering system when goods were exchanged for food, tea, weapons, and spices. 

Salt was another common and expensive merchandise that was exchanged. In fact, the Roman soldiers were paid their salaries with salt. 

In the Middle Ages, Europeans who traveled around the world started to barter crafts and furs in exchange for silk and perfume. 

Musket balls, deer skins, and wheat were some of the common barter items used by the colonial Americans. 

However, the barter system had its own limitations, too. 

The most common problem with the barter system was its inefficiency. 

For example, if a farmer wanted to exchange his rice for timber, he had to find someone who would have timber and wanted to exchange it for rice. The other problem was ensuring a fair exchange because the perceived value of goods and services varied.

The Introduction of Currency: Simplifying Trade

As we discussed, primitive societies used the barter system to exchange goods and services. Some ancient tribes also bartered goods in exchange for shells. However, the barter system had its own pitfalls, which slowly led to the invention of metal coins. 

The development of metal coins is estimated to date back to 700 to 500 BCE. Since the coins were standardized, trading became easy. The invention of gold and silver coins also made trade easy and convenient between countries. A country that had a surplus of any item could easily sell it to another country in exchange for coins.

The transition to paper notes happened in 1260 CE when the Yuan Dynasty of China switched to paper currency from coins. However, some parts of Europe continued to use metal coins until the 16th century. 

Introduction of banks

Later, once the banks became functional, they started to replace the coins using paper notes. People could take these notes to the bank to exchange for gold, silver, or coins. The paper money made it easy for everyone to buy goods and services.  

The shift to paper money simplified international trade. It enabled the movement of goods from one country to another, migration, and settlement, and created socioeconomic distinctions. 

The Advent of Electronic Payments

Although one may assume that electronic payment methods like credit and debit cards are modern payment methods, the earliest history of credit cards dates back to 5000 years ago in ancient Mesopotamia. Inscriptions bearing mutual agreements on clay tablets were used when people wanted to buy at the moment and pay later. 

Fast forward to modern times, and those ancient clay tablets paved the way for store cards when merchants issued cards to farmers as a receipt of loans. The farmers who didn't have money to pay upfront used to pay later once crops were harvested. 

In 1950, the Diner's Club became the most popular and widely accepted form of credit card when its founder left his wallet at home while out dining. Diner's Club users would charge their meals to the card, and the restaurant would send the bill directly to the Diner's Club. The cardholders had to pay the bill to the Diner's Club at the end of the month. 

In 1958, American Express, originally a freight company, came up with its first credit card that allowed its customers to pay bills via the credit card. 

In 1966, the first interbank card was released when a group of California-based banks came together into a partnership. This card eventually evolved into the present-day MasterCard in 1979.

Credit cards got a new dimension with the advancement of technology. In the 1960s, an IBM engineer affixed magnetic tape on the back of the card so that the user got the updates when their cards were swiped at a point-of-sale. 

The popularity of credit cards saw some marked differences in buyer behavior. Different research studies have proved that credit cards increase the pleasure of buying, and users are willing to pay higher prices when given a chance to pay through credit cards. 

One hypothesis suggests that since credit cards reduce the "pain" of payment, they remove the holds on expenditure. A neural mechanism study associated with credit card purchases showed that a strong activation at the striatum occurs on the onset of credit card cue. 

The Digital Revolution: Birth of Online Payments

Online payment is an irreplaceable part of our modern lifestyle. The origin of online payment can be traced back to 1871 when Western Union introduced online money transfer in the US.

For the first time, people could pay for goods without being physically present for the transaction. However, the online payment mode saw rapid growth only after 1960 when the US Advanced Research Projects Agency Network laid the foundation of the modern-day internet.

Since then, the online payment landscape has rapidly evolved. 

Key Milestones

In 1994, the Stanford Federal Credit Union became the first financial institution in North America to launch its online banking service for its customers. 

As the banking industry saw the digital transformation, more financial corporations started embracing this journey. 

In the late 90s, PayPal entered the market and became the first global payment service provider.

Starting from the early 2000s, different companies across Asia started adopting the online payment mode. 

The UAE's banking sector has been at the forefront of digital transformation. Banks like Emirates NBD and Abu Dhabi Commercial Bank have pioneered online banking services, significantly enhancing customer convenience and transaction efficiency in the region.

Alibaba was established in 1999 as the first ecommerce platform in China. 

The next in line was the rise of digital wallets, which came into existence in 2011 when Google Wallet was launched ( Now known as Google Pay).

Today, most digital wallets are powered by cloud technology that offers inbuilt security and on-demand scalability and comes with intense processing features.

As the global landscape shifted towards electronic and online payments, the UAE too made significant strides in embracing digital technology. The introduction of real-time payment systems in the UAE, as part of a broader Middle Eastern strategy, signifies a pivotal move towards digital adoption. 

Notably, initiatives like the GCC RTGS (Real Time Gross Settlement System) and the Arab Regional Payment System (BUNA) have been instrumental in standardizing and enhancing payment efficiency across the Gulf and Arab regions. 

These efforts reflect the UAE's commitment to modernizing its payment infrastructure, aligning with global trends while catering to regional needs.

The Rise of Mobile Payments and E-Wallets

As online payments and digital wallets gained prominence, we saw a sharp rise in mobile payments and e-wallets. As smartphones became affordable and accessible to all, mobile payments saw rapid adoption among the population. 

With e-wallets, carrying cash becomes unnecessary as your money is safely stored on your smartphone. Moreover, with mobile payment, you don't need to look around for ATMs to withdraw money— you can make a payment as long as you have a smartphone and internet connectivity. 

Consumer behavior also witnessed a stark difference with the change in technology. Businesses started to offer payment in digital mode to improve the customer experience, while the convenience of digital wallets paved the way for more online stores, the COVID-19 pandemic forced businesses to further adopt cashless and touchless payment modes. 

Consumers today prefer to shop from the convenience of their homes with just a few clicks. As predictions say, 21.2% of total retail sales will happen online by 2024. 

Reflecting global trends, the UAE has seen a surge in mobile payments and e-wallet adoption. Driven by a tech-savvy population and initiatives like Dubai's Smart City project, mobile payments have become a staple in the region's bustling commerce.

The Emergence of Cryptocurrencies and Blockchain

While digital wallets and online payment have now stayed for many years and continue to offer a safe and convenient mode of transaction, the development of new technology is making way for new payment options. Bitcoins and cryptocurrency are emerging as powerful financial currencies that merchants can transfer between one another without the involvement of banks. Such a decentralized transaction mode has both its pros and cons. Some of these include:

Advantage of cryptocurrency 

Since no banks or intermediaries are involved, it eliminates the possibility of a single point of failure.

Decentralized transactions are secured by public and private keys, along with different incentive systems.

Cryptocurrency transfer is faster than traditional systems as no intermediaries are involved.

Cryptocurrency investment can earn you profit as the market grows. It’s valued at USD 680 billion as of November 2023. 

Disadvantage of cryptocurrency

Though cryptocurrency claims to be an anonymous form of transaction, certain agencies like the FBI can follow the digital trail.

Cryptocurrency is often used for malpractices. For example, hackers prefer cryptocurrency for ransomware. 

Although its transaction is decentralized, in reality, the ownership is highly concentrated. There are roughly 100 addresses that circulate 15% of the total value of Bitcoin. 

The Future of Payments: Towards a Cashless Society

If we look back to the history of the evolution of online payments, it’s only logical to predict that we’re slowly heading toward a cashless society. Although it might take some time to become completely cashless, it’s a fact that we’re slowly progressing toward becoming a cashless society. As technologies like AI, biometrics, and contactless transactions evolve along with the changing customer behavior, a cashless society is what looks the most logical next step. 

While we still can't predict where we will be in 2030 or 2060 in terms of cash, near-term projection sees a continuous decline in cash transactions. Cash projection in North America is only 8.7% by 2024. 

So, coming to the most pertaining question, if we are going to be a cashless society — the answer is a yes and a no. While many countries are heading fast towards embracing a cashless society, some countries will still be using cash transactions at least for the next few years. 

Conclusion

From barter systems to modern-day bitcoins, payment methods have been evolving steadily with the evolution of mankind. As new technology has come into existence, it has added new payment methods to the system, which has greatly influenced buyer behavior. 

The buyer who once couldn’t think of going out of the house without carrying their wallet can now comfortably go out with their smartphone, do shopping, and pay bills for their dinner. 

While we are steadily heading towards a cashless society, only time and technology will define what's in store for the future of payment and if we will ever become a completely cashless society.

According to JP Morgan, 30% of companies have reported an increase in digital payment frauds. 

With the internet, businesses have revolutionized the way they collect customer payments. But not far behind are hackers/ miscreants who have made the internet an unsafe place, with increasing fraud and security breaches. 

In this post, we look into why cybersecurity is important for businesses setting up online payments and the best practices we recommend following. 

Why is cybersecurity important for online payments? 

Whether you’re a business or a consumer, keeping your data secure is crucial. But here’s why cybersecurity measures in online payments are even more important: 

1. To protect sensitive information

A typical financial services employee has access to 11 million files. Unfortunately, online transactions are susceptible to hackers. They are highly motivated by money to acquire data, especially personal banking information. Vulnerable systems are at high risk, which can lead to disastrous consequences for businesses and individuals. To protect sensitive data, cybersecurity in digital payments become crucial. 

2. To prevent fraud 

Money laundering, identity theft, and fraud are common concerns in online transactions. With machine learning and fraud detection mechanisms, cybersecurity programs can analyse transaction patterns for suspicious activity. This helps prevent theft/fraud in real-time.

3. To prevent hefty fines and legal repercussions

With online transactions, customers trust businesses to keep their data (card/bank details) safe. All merchants need to comply with payment industry requirements, such as PCI DSS, to ensure customer protection. If your business operates in the European Union, you have to comply with PSD2 Strong Customer Authentication (SCA). Multi-factor authentication helps reduce theft or fraud. As a business, if you fail to comply with these legal requirements, it could put you at risk of:

• Compensating victims for damages, if necessary 

• Expenses related to litigation
• Hefty fines by governing authorities 

4. Reduce chargebacks 

Most chargebacks occur when a cardholder disputes a charge/ transaction on their account. They may not recognize the charge and believe it to be fraudulent, hence demand a refund from their bank. This is especially common in online transactions. 

Secure payment gateways can help reduce fraudulent chargebacks by verifying the identity of the cardholder, saving you from financial losses and chargeback fees. 

5. Positioning as a global business

There is the lack of uniformity in cross-border regulations. Different countries have different legal frameworks and security standards or regulations; that need to be catered to. By implementing secure payment gateways, compliant with multiple countries, businesses can have a worldwide target audience.

6. Protect your reputation

When Uber was hit by a data breach in 2016, the customer perception dropped by 141%. Data breaches lead to customer distrust and negative publicity. Brand reputation reigns supreme for all business. Enterprise organizations sometimes spend millions of dollars to build their brand image. If one single data breach could put all that effort down the drain, you begin to see the importance of cybersecurity for all payment infrastructure. 

What are the best practices for securing online transactions?

Here are some of the best practices we recommend to brands setting up cashless payment modes: 

1. Understand your PCI compliance requirements

In 2004, four major credit-card providers — American Express, Visa, MasterCard, and Discover, created The PCI Security Standards Council. Today, the PCI-DSS standard is a set of policies that govern how sensitive cardholder information should be handled

In the simplest of terms, no business must be able to see or access the customers’ card data. For this certain things need to be in place including: 

• Data encryption during transmission
• Restrictions on access to information 
• Robust firewalls and updated software and spyware. 
• Prevent default credentials and allow customers to change credentials easily. 

2. Data encryption with SSL and TLS protocols

Any online transaction requires the customer to share credit/debit card numbers, expiration dates, and CVV. Without proper data encryption, this data could easily be hacked. 

Data encryption protocols including TLS (Transport Layer Security) and SSL (Secure Sockets Layer) can be used to encrypt data. TLS is a cryptographic security protocol that emerged from SSL, but can be considered as an upgrade for data privacy, security and authentication. 

All SSL-certified websites have “https://” or a padlock icon which denotes a secure e-payment system. With the TLS encryption in place, the sensitive information is only transferred to the intended recipient. By authenticating the server, it prevents attackers from getting access to the data. 

3. Implement 3D Secure 2

3D Secure 2 (3DS2) is used to authenticate online transactions by verifying a customer’s identity. It serves as an additional layer of authentication to make sure that a legitimate cardholder is conducting a transaction.

Here, the cardholder needs a one-time password, or fingerprint or facial recognition. This helps to prevent fraud and unauthorized transactions.

While it creates extra steps during the checkout process, for the first time — subsequent transactions at the same merchant do not require extra authentication (if approved by the card holder) 

Additionally, 3DS2 prevents false declines by providing detailed data about the transaction. This helps both businesses and customers, preventing costly mistakes.

4. Deploy multi- or two-factor authentication

Multi-factor authentication (MFA) and two-factor authentication (2FA) are customer-facing authentication processes to verify the identity of users before processing payments. This is divided into two levels of authentication: 

1. What the user knows - Net banking or card details 
2. What the user has - OTP, PIN or CVV. 

Multi Factor Authentication requires three or more different authentication factors in order to authorize a payment. Apart from the two, the third authentication step could be something they are (biometric data). For example in a password, a one-time code generated by an app and a fingerprint scan. 

The more factors used makes it much harder for any miscreant to access an account, even with access to the user's password.

5. Ask for Card Verification Value (CVV) 

Card Verification Value (CVV) is a three/four digit code on the back of credit cards. It helps verify the identity of a card holder during online transactions. 

In a data breach, the CVV is unlikely to be stolen since it is not embossed or stored on the magnetic stripe or chip of the card. 

6. Incorporate payment tokenization

Tokenization replaces the 16-digit card number with a digital identifier known as a ‘token’. It helps to protect the original data, while letting payment gateways initiate secure payment.

Payment tokenization helps in: 

• Protecting sensitive payment information from being intercepted or stolen during a data breach. 
• Helps businesses comply with regulations and legal standards, like PCI DSS and the General Data Protection Regulation (GDPR). 
• Customers don’t need to repeatedly enter payment information for recurring payments or subscriptions, which improves the customer experience and lowers abandonment rates. 

7. Maintain security of the website 

To ensure customer safety, businesses need to keep the website, content management system (CMS), and online payments secure. Here’s how: 

• Regularly update your website, CMS software and plugins or extensions, to patch security vulnerabilities
• Only accept strong passwords from the customers with certain pre qualifications like capital letters, special characters, numbers etc. 
• Use a firewall to prevent unauthorized access and to block any suspicious traffic. Deploy monitoring and fraud detection tools to detect and respond to suspicious activity on your website. 

8. Train your employees

Take appropriate steps to train employees about potential threats and steps for action. Set up sessions on data protection guidelines, multiple security measures and protocols, phishing and more. Make sure your employees understand the importance of online payment security through audits; and encourage immediate reporting of any suspicious activities.

9. Inform your customers

Make an effort to promote the data protection procedures to your customers. It is not only about providing features, but ensuring that your customers know and implement on their end; to truly make the whole process secure. 

Conclusion 

Cybersecurity is a growing concern for all businesses. Hence it is important to choose an end-to-end payment solution built with features and compliances built for high security.

PayBy digital payment solutions come with robust fraud detection and prevention mechanisms integrated into the systems. The solutions leverage AI-based fraud monitoring, 3D secure authentication and transaction risk analysis to ensure your approval rates are not impacted by cyber threats. 

Want to know more? Book a demo of PayBy today.