Answer By law4u team
Online transactions have revolutionized the way we shop, pay bills, and manage finances. However, the convenience of digital payments also introduces risks like identity theft, data breaches, phishing, and financial fraud. To ensure security, both service providers and consumers must adopt best practices and security technologies. Understanding these measures empowers users to transact safely in the digital world.
Measures That Ensure Security of Online Transactions
SSL/TLS Encryption
Secure Sockets Layer (SSL) and its successor, Transport Layer Security (TLS), encrypt the data exchanged between the user's browser and the server. Always ensure the website begins with https:// and displays a padlock icon in the address bar.
Secure Payment Gateways
Reputed online merchants integrate secure payment gateways (e.g., Razorpay, Stripe, PayPal) that comply with Payment Card Industry Data Security Standard (PCI DSS) protocols. These gateways encrypt card details and authenticate payments to prevent interception.
Two-Factor Authentication (2FA)
2FA adds a second layer of protection, requiring users to verify their identity using an OTP (One-Time Password), fingerprint, or authentication app. Even if passwords are compromised, attackers cannot access accounts without the second factor.
Tokenization and Digital Wallets
Digital wallets (like Google Pay, PhonePe, Apple Pay) use tokenization, which replaces sensitive card details with random codes (tokens). These tokens are useless to hackers even if intercepted.
Fraud Detection Systems
Banks and payment services deploy machine learning and AI systems to monitor for suspicious activities such as unusual spending patterns or transactions from unknown devices or locations.
Device and Browser Security
Keeping devices updated with the latest security patches, using strong passwords, enabling firewalls, and installing anti-malware software reduces the chances of unauthorized access or data theft.
Verified Merchant Systems
Consumers should shop only from verified and reputed websites. Look for trust seals like Norton Secured, McAfee Secure, or Verified by Visa.
Common Threats to Online Transactions
Phishing Attacks
Cybercriminals may send fake emails, SMS, or websites to trick users into revealing login credentials or card details.
Man-in-the-Middle Attacks
Attackers intercept communication between the user and the website if the connection is not properly encrypted.
Data Breaches
In case of poor server security, hackers may gain access to databases containing user information.
Malware and Spyware
Malicious software can record keystrokes (keyloggers) or steal information stored in browsers and apps.
Legal Protections and Consumer Actions
Know Your Consumer Rights
Most countries, including India (under the Consumer Protection Act 2019), the USA (FTC laws), and the EU (GDPR, PSD2), have frameworks to protect consumers in case of online fraud or data misuse.
Prompt Reporting of Unauthorized Transactions
If a fraudulent transaction occurs, report it immediately to your bank or payment platform. Most banks have a time window (usually 3-7 days) during which you can dispute a charge and get a refund.
Use of RBI-Approved Apps and Platforms (India Specific)
Use UPI apps and payment services that are licensed or regulated by RBI for safety and quick resolution in case of fraud.
Register for Transaction Alerts
Activate SMS and email alerts to monitor account activity in real-time and spot unauthorized transactions.
Avoid Public Wi-Fi for Transactions
Public Wi-Fi networks are vulnerable to eavesdropping. Use mobile data or a secure private network when making online payments.
Consumer Safety Tips
- Don’t save card details on websites unnecessarily.
- Use strong, unique passwords for each financial account.
- Regularly check your bank statements and credit reports.
- Enable biometric or PIN locks on your payment apps.
- Log out after completing an online transaction.
- Educate yourself and family members about common scams.
Example
Scenario:
Suppose a consumer purchases a smartphone from an online store using their credit card. A few days later, they notice several unauthorized international transactions.
Steps the consumer should take:
- Immediately block the credit card through mobile banking or a helpline.
- Inform the bank and raise a fraud complaint with the transaction details.
- Check browser history and scan the device for malware or phishing sites.
- File a cybercrime report on India’s cybercrime.gov.in or equivalent national portals in other countries.
- Enable 2FA and change passwords for online accounts.
- Switch to using a digital wallet for future purchases with biometric authentication enabled for added safety.
