Exploring Payment Security: Pay-by-bank vs. Credit Cards

Exploring Payment Security: Pay-by-bank vs. Credit Cards cover

Exploring Payment Security: Pay-by-bank vs. Credit Cards

June 18, 2024

Online businesses across various sectors are tasked with understanding and finding the best payment solution that protects transactions and customer data. To understand the security features of pay-by-bank solutions, let’s compare them with traditional payment methods such as credit cards. We’ll explore their impact on various industries such as iGaming and sports betting, cryptocurrency, and e-commerce. 

A High-Level View

Pay-by-bank solutions, such as Interac e-Transfer in Canada, leverage bank transfers for online transactions. These solutions are known to have robust security protocols, including encryption, multi-factor authentication, and real-time fraud detection. By tapping into the security infrastructure of financial institutions, pay-by-bank solutions provide a strong barrier against fraudulent activities, ensuring greater peace of mind for businesses and consumers alike.

In comparison, credit cards come with their own set of security measures, including CVV codes, tokenisation, and fraud monitoring systems. While credit card networks invest heavily in security, incidents of fraud and data breaches still occur, posing significant risks to businesses and consumers. According to a report by Finder, credit card fraud made up 6.5% of global digital fraud in 2022. In Canada, it is the most commonly reported type of fraud, accounting for 21% of cases. Debit card fraud and online phishing scams are also significant issues, each representing 8% of reported fraud incidents. Despite technological advancements, credit card transactions remain susceptible to hacking, phishing, and other cyber threats.

Industry Impact

The security landscape has profound implications for industries reliant on digital transactions. In sectors like iGaming and sports betting, where large sums of money change hands daily, the integrity of payment systems is important. Pay-by-bank solutions offer a level of security that aligns with the strict regulatory requirements of these industries, fostering trust among players and operators alike.

Similarly, the cryptocurrency market relies heavily on secure payment channels. While blockchain technology inherently provides a decentralised and secure framework, integrating pay-by-bank solutions adds an extra layer of security, mitigating risks and reducing fraud in the initial deposit journey to buy cryptocurrencies.

In the realm of e-commerce, where convenience and security are equally valued, the choice between pay-by-bank solutions and credit cards often boils down to consumer preference. However, with concerns around security, debt, and hidden fees, businesses are more likely to embrace alternative payment methods such as pay-by-bank solutions that prioritise security and transparency without compromising user experience.

Innovative Approaches: Paramount Commerce Leading the Charge

Payment partners such as Paramount Commerce are leading the innovation of pay-by-bank solutions. With two decades of data, robust risk management system, and machine learning capabilities, Paramount Commerce strengthens payment security and improves conversion rates. By analysing transaction patterns and user behaviour, Paramount Commerce identifies high-risk customers in real-time, flagging suspicious activities and preventing fraudulent transactions before they occur. This proactive approach not only safeguards businesses from financial losses but also enhances the overall customer experience, fostering long-term loyalty and trust.

While both pay-by-bank solutions and credit cards offer their own set of security measures, pay-by-bank methods hold a distinct advantage in terms of leveraging bank infrastructure. As industries continue to grapple with evolving security threats, forward-thinking payment partners such as Paramount Commerce will play a pivotal role in shaping the future of digital commerce, driving innovation and security hand in hand.

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