It is strange to think that one of the most used methods of transacting online – through a credit card – is actually not designed for the purpose. Security features such as the hologram, PIN and magnetic strip have all evolved over the course of 30 years to make transacting in the real world safer, but credit card security has not progressed sufficiently for secure online purchasing.
This is the opinion of Thomas Pays, CEO and co-founder of i-Pay, a leading EFT payment gateway founded in South Africa which is now expanding to other countries.
A solution to combatting fraud more successfully in the payment industry is at hand: EFT (electronic funds transfer). “From day one, EFT was created to assist with the secure electronic transfer of funds – it is even in the name,” says Pays.
The fact that the i-Pay gateway allows payment using the banks’ own security measures, permits it to be extremely safe, and crucially, fraud free. Since the gateway’s launch in 2013, not a single transaction has been fraudulent, and this from a company who is looking to process R100 million worth of transactions during December 2016 alone.
Apart from combating credit card fraud by offering an alternative payment method, the i-Pay gateway offers companies further ways to combat other types of scams. Pays recounts two stories to illustrate the point.
The first deals with fraudsters who illegally photoshopped their banking details onto ratepayers’ bills. Unsuspectingly, money was paid into the fraudsters’ account, leaving both the municipality and the ratepayers out of pocket.
The other story relates to one of the largest property management companies in South Africa which collected rent on behalf of clients. The company was hit by fraudsters who sent out false invoices to clients, notifying them to pay in advance since the company’s banking details have changed, of course with the false details included. Before the fraud was picked up on, millions of rands were already deposited in the wrong bank account, leading to the collapse of the company.
Not your regular EFT
Pays believes that with an EFT system such i-Pay in place, this type of fraud can be eliminated, since the beneficiary of the payment has a specific bank account connected to the i-Pay gateway. The payment link sent to clients can only be generated through i-Pay itself, and EFT payments can only proceed through the i-Pay linked account of the business. Customers can pay merchants by following an i-Pay link sent via email, SMS or QR code, with payment taking place via the costumer’s smartphone or desktop browser.
Being a newer entry to the marketplace, it is understandable that customers might have questions regarding the security of the i-Pay system. Pays is quick to point out that the company meets all the international standards when it comes to payment security and encryption standards. Included here is the essential Payment Card Industry Data Security Standard (PCI DSS) certification, a global standard that banks and companies such as PayPal adheres to. i-Pay is also working closely with the four major banks in South Africa to establish a regulated environment around EFT payments.
The cost of fraud?
While there are costs involved for companies that would like to receive money through the i-Pay gateway, the transaction fees are far less than via credit card, with no hidden payments to banks. So as with any good business, the benefits of using the gateway far outweighs the cost.
“Apart from saving on salaries since i-Pay automatically takes care of reconciliation, the important fact to remember is nothing related to fraud will ever happen to your company through the i-Pay gateway. What is that type of peace of mind actually worth?” Pays asks. Indeed, with hundreds of customers already signed up to i-Pay, subjected to zero fraud as far as transactions processed is concerned, the value of this payment gateway is speaking for itself.