Frequently Asked Questions About Payment Processing

The digital payments market is projected to reach $16.62 trillion by 2028. All businesses should be familiar with the basics of payment processing to remain agile in a competitive industry and ever-expanding landscape. We’ve answered some frequently asked questions (FAQ) about payments and their processing to help you get started.

Payment Methods

Understanding the terms and systems that go into payment processing gives you the edge to offer your customers frictionless, secure and simple ways to pay. Here are answers to some common questions about payment methods.

1. What Goes Into a Transaction Flow?

The transaction flow consists of various participants and components, including:

  • Customer: The customer is the individual or organization paying for services or products.
  • Merchant: The merchant is the service provider or business receiving payment from the customer.
  • Payment method: The payment method is how the customer pays—via check, credit or debit card, cryptocurrency, or electronic wallet.
  • POS system: The point-of-sale (POS) system is a digital platform or physical device used for the transaction. The POS system can be on an e-commerce website, app or terminal point at a store.
  • Payment gateway: The payment gateway safely captures and sends information from the POS system to the acquiring bank or payment processor. This gateway encrypts and secures the data during the transaction.
  • Payment processors: The payment processor is a third-party company managing the technicalities of the transaction. These technicalities include validating information, receiving authorization, and facilitating communication between the acquirer and issuer.
  • Acquirer: The acquiring bank, or the acquirer, is the financial institution where the merchant’s account is. The acquirer receives payments on behalf of the merchant, processes transactions for the merchant and settles the funds in the account.
  • Issuer: The issuer or issuing bank is the financial institution that authorizes or declines the transaction on behalf of the customer. Issuers consider customer account status, the validity of the transaction and available funds.
  • Card network: The card network includes organizations like Mastercard, Visa and American Express. These organizations provide the infrastructure, rules and standards for processing transactions.
  • ACH network: The Automated Clearing House (ACH) network is used to move money between bank accounts in the United States electronically. Nacha, previously called the National Automated Clearinghouse Association, runs the ACH network and ensures the payment system is safe and efficient. Transaction types include business-to-business, consumer and government transactions.
  • Payment security: Payment security consists of a range of technologies and standards to ensure transactions are secure from breaches and unauthorized access. Security involves encryption, tokenization and compliance with the regulations set by the Payment Card Industry Data Security Standard (PCI DSS) Council or the ACH network for bank-based payments.
  • Settlement: Settlement and reconciliation are the processes of transferring funds from the issuer to the acquirer and updating the transaction records to reflect the funds transferred.

2. What Is Payment Authorization?

Payment authorization is when the issuer verifies that the customer has the available funds and confirms that money can be released from the customer’s account. The issuing bank conducts thorough checks before authorizing transactions.

3. What Are Payment Settlement and Operations?

Payment settlement starts with customer payment initiation and ends once the funds are deducted from the customer’s account and paid to the merchant.

During settlement, the issuing bank verifies the transaction details and authorizes money to be debited from the customer’s account and credited to the merchant’s account. This settlement communication operates through the payment network.

4. What Are the Needs and Considerations of E-Check and Credit Card Payments?

E-checks and credit card payments have a few key differences:

  • E-check payments: The Automated Clearing House (ACH) merchant network processes e-check payments between participating financial institutions. E-checks are categorized as electronic funds transfers (EFTs). They work like ACH transfers with routing and account numbers, facilitating funds transfer between accounts. Electronic checks can save your business on payment processing costs—they’re typically more affordable than card transactions.
  • Credit card payments: Card authorization occurs when the merchant accepts a card payment and the payment processor reaches the card issuer. The issuing bank ensures the credit card is valid, verifies the transaction amount and available funds, and does security checks. The issuer will deliver a two-digit code approving or declining the transaction. Credit card transactions are convenient for customers, especially those who prefer to have a range of payment options.

5. What Are the Top Digital Wallets and How Do They Work?

The top digital wallets in North America include:

  • Apple Pay
  • Google Pay
  • PayPal
  • Venmo

Digital payment wallets use software that links your payment details from your bank account to the vendor you’re paying. Some apps offer open wallets that allow contactless online and in-store payments.

Electronic wallets make payments easy for customers—there’s no need to keep card details on hand to pay, and the information is stored in one central, protected location.

6. What Does Accepting On-Site Payments With Devices and POS Entail?

If you want to accept on-site payment with POS systems and devices, you need the associated hardware and software. You’ll also need a payment solutions provider.

The necessary hardware includes a card acceptance machine, like a POS terminal. The hardware connects to software that processes transactions via the provider’s solution. POS terminals can accept several types of payments, including contactless payments, credit and debit cards. Customers can tap, swipe and insert cards depending on their preferences.

Processing Models

Processing models allow transactions to happen between the issuer and the acquirer. Here are the related questions answered.

1. What Is a Payment Gateway?

A payment gateway links all entities involved in a transaction and helps systems communicate with each other. Payment gateways establish secure connections to transmit data and process the transfer of funds from the customer’s account to the merchant’s to complete payment.

2. What Is an Enhanced Payment Gateway?

An enhanced payment gateway is a robust version of a standard payment gateway. This solution goes beyond processing payments, leveraging advanced fraud detection capabilities. Enhanced payment gateways may also feature subscription billing and customizable checkout options.

3. What Is an Acquired Payment Gateway?

An acquired payment gateway is a payment processing solution offered by a payment service provider. This solution lets you securely receive customer payments using online wallets, debit cards and credit cards. The gateway handles authorization, transaction processes and the transfer of secure funds into your account.

4. What Is a Payment Facilitator?

A payment facilitator (PayFac) simplifies the setup of payment processing for your business, allowing you to accept in-person and online payments. The PayFac has a master merchant account. Your business becomes a sub-merchant under the PayFac, eliminating the lengthy underwriting process. The PayFac enters a contract with the acquiring bank and manages the approval process on your behalf.

5. What Does It Mean to Be a Third-Party Sender?

A third-party sender (TPS) facilitates ACH transactions by having funds flow through its account. Third-party senders act as intermediaries, making payments on behalf of customers. This approach provides little protection in terms of risk management and adherence to safety standards. A TPS typically comes with higher transaction fees because of the higher involvement in the flow of funds.

6. What Is the Difference Between a Third-Party Sender and a Third-Party Service Provider?

A third-party sender directly receives and transmits funds through its bank account on behalf of a company. A third-party service provider does not hold funds and transfers funds to ACH network users.

When third-party senders pay on behalf of a client, the risk involved tends to raise the price. A TPS solution can also cause customer onboarding friction.

Leveraging a third-party service provider (TPSP) offers greater security, as these entities strictly adhere to regulations and don’t automatically move money. You’ll also benefit from faster processing times, better customer onboarding, flexible transaction limits and lower transaction fees.


Payment processing pricing is also an essential consideration for your business.

1. What Is an Interchange Fee?

Interchange fees make up the majority of payment processing fees. You pay interchange fees to financial institutions that manage the customer’s card payments. These are standard charges that come with the convenience of using a specific payment method.

2. What Is Pass-Through Pricing?

Pass-through pricing includes interchange, assessment and payment processor fees. These fees are typically itemized or combined monthly on a statement for a merchant to pay. Pricing structures differ, so it’s important that your business partners with a competitively priced payment solutions provider.

3. What Is a Flat- or Fixed-Rate Model?

A flat- or fixed-rate model charges your business the same processing fee percentage regardless of the card used. The flat-rate percentage is typically based on the cards with the highest interchange rates.

4. What Is a Convenience Fee?

A convenience fee is an additional credit card or online payment charge. It’s sometimes charged by a payment processor when a customer does not pay by cash, check or ACH. It can be applied as a split charge or split fund.

5. What Is a Split Charge?

With a split charge, the payer sees two entries on their statement—one for principal and another for convenience.

6. What Is a Split Fund?

Merchants can set up predefined splits to go to different bank accounts. Split funds come in handy when your business charges convenience fees that need to go to a separate account from the transaction amount. Debit and credit funding bank accounts are usually set up this way for merchants.

CSG Forte offers split funds and handles the setup to ensure hassle-free allocation.


Integrated payments connect your POS system to a payment processor, offering streamlined transactions.

How Does Integration Impact the Payment Experience?

Integrated solutions enable you to offer a better payment experience. Customers can pay using various methods without the need for different payment terminals or manual processes, making transactions frictionless.

With CSG Forte, integrated payments are an all-in-one solution that benefits your business and customers.

 Payment Security

No payment processing FAQ would be complete without info about payment security.

1. What Is Tokenization?

Payment tokenization is a security measure that uses unique tokens instead of transmitting sensitive payment data during transactions. These tokens protect information like banking details, primary account numbers (PANs) and credit card numbers.

2. What Is the Payment Card Industry Data Security Standard?

PCI DSS is a set of standards requiring all businesses that handle credit card or payment information to maintain a secure environment. These compliance standards apply to all organizations, no matter the size of your business or the amount of transactions it handles.

3. What Are the Top Considerations for Nacha Compliance?

Nacha offers rules and requirements for any organization leveraging ACH payments. Here’s a brief overview of what Nacha expects your business to do:

  • Secure payment transmission and storage of sensitive information.
  • Store hard copies of documents with customer information safely.
  • Validate customer routing numbers.
  • Guard against possible fraud.
  • Verify customer identities.
  • Outline and enforce an official security policy.

4. What Is End-to-End Encryption?

End-to-end encryption (E2EE) is a way to safeguard your customers’ data during transactions. This encryption prevents data breaches and unauthorized access to sensitive information like credit card or bank account details. Sensitive information is encrypted and securely transmitted from one point to the next, allowing your customers to pay you safely.

The payment gateway performs the encryption when the customer initiates the payment, and it decrypts the information when it reaches the acquirer.

5. What Is Point-to-Point Encryption?

Point-to-point encryption (P2PE) is an encryption method established by the PCI DSS Council. It offers excellent protection, using an algorithm to encrypt card information when the customer initiates payment. The unreadable code is transmitted to the payment processor with a decryption key. The decryption happens virtually, so your business never comes in contact with customer payment information.

While P2PE and E2EE are similar, the PCI DSS Council only accepts point-to-point encryption.

Ready to Streamline Your Payment Solutions?

CSG Forte will help you scale your business rapidly and make payments frictionless for you and your customers. Each year, we help process over $84 billion of payment transactions.

Contact us online to simplify and secure your payments.

ACH Fraud

The Automated Clearing House (ACH) is a network that clears funds moving from one bank account to another. When a payer transfers money via debit, credit card or EFT, the funds await authorization. Once clear, the ACH system moves the funds into the payee’s account.

The National Automated Clearinghouse Association (Nacha) oversees this network in the United States. Nacha employs rigorous security measures to guard users’ accounts. Outside its security nexus, bad actors who gain access to pertinent information can commit ACH fraud. This type of fraud is relatively common—a criminal only needs access to a few details to open the door to several opportunities for theft. Preventing access at the start is better than remedying a security breach.

What Is ACH Fraud?

ACH fraud occurs when criminals use account and routing numbers to impersonate victims and manipulate the movement of funds. Criminals can obtain routing numbers at the bottom of their targets’ checks. They might use this information to impersonate someone and steal funds through various methods:

  • Internal fraud: When an employee of a company uses legitimate credentials to make unauthorized ACH withdrawals and payments, the fraud is considered internal.
  • ACH kiting: Kiting occurs when fraudsters move funds from one company account or financial institution to another.
  • Fraudulent authorized push payments (APPs): When a customer attempts to pay you, criminals trick them into making ACH transactions prompted by scams, and the funds never reach your account.
  • Unauthorized access to personal accounts: ACH transactions render you and your clients vulnerable to unauthorized persons having access to sensitive accounts.
  • Unauthorized ACH withdrawals: Merchants and clients risk having funds withdrawn from bank accounts without authorization.

Within the ACH network, there are several steps between a payer sending funds to an account and the payee receiving the funds. This process is not impenetrable to criminals, who are using more sophisticated means of defrauding unsuspecting users. Traditional ACH systems lack proper security mechanisms, leaving you and your end users vulnerable.

ACH Fraud and Concerns

Concern is mounting over the rate at which ACH fraud is increasing, highlighting the need for more vigorous security methods. Criminals only need two data sets to successfully steal money through the ACH network—a bank account number and a bank routing number. Businesses and enterprises accepting payments need to address increasing ACH fraud to protect themselves and end users.

ACH fraud can occur from external means or inside a company. Employees don’t need to know complicated data sets or complex codes to hack a business or another person. Staff are also at risk of social engineering and phishing attacks.

How ACH Fraud Can Effect Your Business

A U.S. District Court recently found a credit union liable for not acting on several suspicious ACH transactions. If you’re a business accepting payments or overseeing financial transactions, it’s critical to be proactive in preventing ACH fraud. Nacha and the Federal Reserve Regulation E have policies that state the consumer is not responsible for ACH fraud unless they fail to report an incident within 60 days.

Financial institutions can be held liable, with the bank returning the funds to the consumer and claiming them back from the original enterprise. Successful fraud protection can keep your end users safe and protect you from the costs of fraudulent ACH activity.

CSG Forte’s Approach to ACH Fraud Prevention

CSG Forte has extensive experience in ACH fraud prevention and detection, and our robust payment platform provides reliable, secure solutions. For your convenience and safety, we adapt to the evolving digital economy to provide a unified payment solution with built-in fraud-prevention protocols using the latest technology.

Furthering your peace of mind that your funds are handled safely, we’ve partnered with Nacha, the body overseeing all ACH transactions. You’ll also benefit from:

  • Advanced security protocols: Your data stays protected with our advanced security solutions, such as Forte.js and compliance with major card brands.
  • Real-time alerts: You can remain in control of your funds by monitoring transactions in real time and receiving alerts for every activity connected to your funds.
  • Comprehensive evaluation: We thoroughly evaluate merchant accounts to prevent delays down the line and help you accept payments seamlessly. Evaluation helps ensure your payment system will have adequate ACH fraud protection, mitigating loss in the long run.

We bring you reliable, safe payment processing solutions. Our approach to fraud prevention is comprehensive, as we’ve partnered with several leading software providers to prevent money laundering and several types of sophisticated financial crimes.

Key Features of Our ACH Fraud Prevention

To secure every payment and keep your data safe, CSG Forte develops every software platform and application tool with security as the cornerstone. The key features of our ACH fraud prevention include:

  • Multifactor authentication: For your safety and privacy, we protect your data with layers of security.
  • Software to detect behavioral anomalies: You can have peace of mind knowing our behavioral analytics software detects discrepancies from your usual activity and alerts you in case of an anomaly.
  • End-to-end encryption: We use end-to-end encryption technology to safeguard all data and prevent your information from leaking to a third party.
  • Tokenization: We limit the exposure of your sensitive information through tokenization, ensuring your data remains hidden in the system throughout the payment process.

We are committed to providing you with rigorous, up-to-date security systems for your enterprise, as evidenced by our compliance with several security programs. You can rest assured your funds are protected during every transaction.

Protect Against ACH Fraud With CSG Forte

ACH is a vital payment method to offer your customers. However, its attainability makes it vulnerable to breaches. Protecting your funds and your customers takes a proactive stance. Take action by integrating an advanced, robust platform from CSG Forte.

To take the next steps with our secure platform, fill out the online form and a payment expert will be in touch. You can also contact our team if you have any questions before you get started.

Payment Fraud

Payment fraud has become more prominent and more damaging as online transactions have grown in popularity. Cybercriminals are using advanced and evolving tactics to access payment information and avoid detection. It’s more important than ever for businesses to recognize the realities of payment fraud and implement prevention strategies.

Understanding Payment Fraud

Payment fraud is the illegal process of making a purchase using forged or fabricated payment information. Most payment fraud involves some sort of identity theft. Identity thieves might steal a target’s personal information as a direct or indirect way to access their funds. Vulnerable information can include the consumer’s name, Social Security number, credit card information, bank account information and account passwords.

Payment Fraud Across Industries

Payment fraud impacts businesses across multiple sectors. A 2022 report shows that many industries saw numerous instances of payment fraud costing hundreds of thousands of dollars over the year:

Industry Number of cases Median loss
Banking and financial services 351 $100,000 
Government and public administration 198  $150,000
Healthcare 130 $100,000
Energy 97  $100,000
Insurance 88  $130,000
Transportation and warehousing 82 $250,000
Construction 78 $203,000
Telecommunications, publishing, media and other information 60 $58,000
Real estate 41 $435,000
Arts, entertainment and recreation 41 $73,000

Types of Payment Fraud

Perpetrators use numerous tactics to commit payment fraud. A few common payment fraud types include:

  1. Credit card fraud
  2. Phishing attacks
  3. Friendly fraud
  4. Skimming
  5. Triangulation fraud
  6. Card testing

1. Credit Card Fraud

Credit card fraud is a type of theft that occurs when a person steals another’s credit card information and uses it to make fraudulent purchases. Credit cards are common targets for scammers because they have become so prominent in commerce. Credit cards are also vulnerable because few authentication factors are in place—if a person possesses the credit card or the information on it, they can use the card to purchase anything within the holder’s limit.

Consequently, credit card fraud has risen steadily over the past decade. Reports find that credit card fraud occurrences increased by 10% between 2020 and 2021, amounting to over $30 billion lost worldwide and over $12 billion lost in the United States.

Fortunately, credit card companies can combat fraud by flagging suspicious activity, such as abnormally large charges or purchases made in an atypical geographical location.

2. Phishing Attacks

Phishing occurs when a thief poses as a reputable company to deceive the victim into sending account or payment information. Phishing attackers use fake emails, text messages, phone calls and websites that look close enough to those of a recognizable business to trick their victims.

During a phishing attack, the victim will receive a website link that often appears safe at first glance. However, the link directs the user to a fake version of the site and asks for login credentials. Submitting the login form will hand account information to the scammer, leading to an account takeover. A phishing link may also contain malware that infects the user’s device to access more information.

Phishing scammers target consumers to access their personal information, especially login and payment information on financial accounts. These scams also frequently target employees through business channels to access company data.

Phishing is one of the most common and dangerous types of fraud in digital payment. One study found that over 80% of employees fell for a malicious email scam and provided sensitive information. Another shows that phishing is among the most common types of cybercrime, doubling in frequency between 2019 and 2020.

3. Friendly Fraud

Friendly fraud, also known as chargeback fraud, occurs when a customer falsely disputes a legitimate transaction. The fraud claim causes the merchant to refund the customer after providing the product or service.

Friendly fraud can also occur when a dispute is legitimate, but the merchant isn’t at fault. If a thief steals a customer’s card information, the customer will rightfully flag the fraudulent purchase. Their credit card provider will likely pass the burden onto the merchant unless they find the person who’s truly behind the fraud.

Friendly fraud is a delicate subject for businesses striving for customer satisfaction. Helping legitimate customers avoid fraud is essential, but businesses must implement measures to verify online purchases. One study found that 23% of consumers admitted to falsely disputing charges. Fraud prevention efforts can mitigate the harm that friendly fraud and chargebacks cause.

4. Skimming

Skimming is a tactic that involves stealing a cardholder’s information from their physical credit card. Here, a criminal uses an inconspicuous device to read a customer’s credit card information as they complete an in-person transaction. Some skimming devices have cameras that sneak a peek at the card number, while others are installed inside the scanner and read the card’s magnetic strip.

Criminals used skimming to compromise upwards of 120,000 cards in the first half of 2023. This type of fraud is most likely to occur at a gas station or automated teller machine (ATM).

5. Triangulation Fraud

Triangulation fraud is a scam involving two separate consumers and a merchant. These attacks are complex and difficult to track and quantify.

This type of fraud begins with a cybercriminal posing as a merchant by using a similar web or email address. The first consumer doesn’t notice the discrepancy and completes a purchase. As a result, the cybercriminal steals the consumer’s financial information.

After stealing the first consumer’s information, the cybercriminal visits the legitimate merchant’s website and places the intended purchase in the consumer’s name—but they use a second consumer’s stolen payment information for the transaction.

The merchant accepts and fulfills the order, only later recognizing that the shipping information and billing information do not match. The initial consumer receives illegally purchased items, often without realizing it. Meanwhile, the cybercriminal has their payment information to use in a future scam, and the second consumer loses money to the fraudulent transaction.

The second consumer can report the event and receive a refund when they notice the attack. The merchant will need to forfeit their payment despite delivering the product or service. The cycle continues with another victim, another merchant and the initial victim’s payment information.

6. Card Testing

Card testing is a tactic that cybercriminals use to verify stolen credit card information before they sell it off. The crime is harmful to customers and merchants alike.

During a card scam, the perpetrator submits numerous small transactions to an e-commerce site. The card number may be the same each time, but other information, like the CVC or expiration date, will change as the scammer attempts to find the right combination.

When the scammer sees that the transactions are processing, they launch a full-scale attack. The e-commerce system may receive thousands of small transactions at once, all using stolen payment information. The scammer automates their guessing processes using a bot or another technological tool.

As payment requests roll in, the fraud victims will recognize fraudulent transactions on their accounts. They’ll submit chargeback requests to retrieve their money. The business will experience a sudden influx of transaction fees and chargeback fees that can amount to thousands of dollars. The scam may also lead to a freeze of the business’s merchant account.

The Impact of Payment Fraud on Businesses

Payment fraud can have a widespread impact on a business, affecting everything from its revenue to its reputation:

  • Financial losses: Payment fraud can bring significant financial consequences for merchants. In 2022, online payment fraud caused $41 billion in e-commerce losses worldwide.
  • Customer trust and loyalty implications: Consumers trust merchants to facilitate secure transactions, and breaches of this trust could cause them to take their business elsewhere. One survey found that 87% of consumers will choose a competitor after a data breach.
  • Legal consequences: Payment fraud leaves businesses liable. Merchants often must repay the cardholder’s financial institution after a breach. Additionally, the Federal Trade Commission (FTC) details legal guidelines for protecting customers’ personal and payment information.
  • Reputational damage: The reputational damage that payment fraud causes extends beyond lost revenue. As consumers turn to different businesses, prospective employees, investors and partners may do the same.

Common Warning Signs of Payment Fraud

While payment fraud is common and detrimental, your business can mitigate its harm. Monitor transactions for these warning signs that indicate payment fraud:

  • Unusual transactions or spending patterns
  • Multiple failed payment attempts
  • Inconsistencies in consumer information
  • Sudden changes in consumer behavior
  • High-risk transactions or unusual activity spikes

Payment Fraud Protection Strategies

Explore some of the top fraudulent payment prevention strategies and practices your business can adopt today.

Secure Payment Processing Systems

You can implement an advanced payment platform to protect customers and your business while meeting Payment Card Industry Data Security Standards (PCI DSS) requirements. A cloud-based payment platform can provide a seamless customer experience while bolstering your business’s fraud prevention strategy.

Identity Verification

Methods like two-factor authentication and Know Your Customer (KYC) procedures can help verify purchasers’ identities to prevent fraud. Two-factor authentication requires customers to confirm their identity after submitting their password by responding to a text message, phone call or email. KYC procedures are internal measures your business can take to identify customers and qualify leads.


Tokenization is a data security method that replaces raw payment information with a digital placeholder.

When a customer completes a purchase, their payment information enters your payment portal. There, tokenization software can create a nonsensitive version of the payment data. The nonsensitive version of the data, or the token, travels onward for payment processing. The original sensitive information remains in the payment portal.

Payment processing systems have the credentials or tools necessary to decipher the token and view the sensitive information in the payment portal.

Real-Time Fraud Detection

The most secure payment processing systems include real-time fraud detection. Fraud detection systems use behavioral analysis to separate legitimate customer behavior from fraudulent activity. Behavioral analysis can prevent fraudulent purchases and help your business resolve claims faster.

Education and Training

Employees are often the target of phishing and other scams. Train your personnel to use secure practices and recognize attempts at data theft. Cybersecurity training should be a part of onboarding and ongoing learning to ensure employees build strong fraud detection skills and keep them current as tactics evolve.

Regular System Audits and Updates

Cyberattackers constantly adapt, so it’s important to update your infrastructure and protection on a regular basis. Analyze your fraud prevention system as a part of annual or semiannual risk assessments.

Protect Your Business Against Payment Fraud

Payment fraud is prominent and takes many forms. Understanding the possibilities and implementing prevention strategies can save your business countless hours and thousands of dollars.

At CSG Forte, we develop cloud-based payment systems with payment fraud security integration. Our systems and resources will give you peace of mind as you accept payments online, in person and over the phone. We encourage you to request access to our payment security whitepaper to learn more about effective payment security strategies.

We’re also available to discuss your situation, so contact us online to learn more about our secure, scalable payment solutions.

Layering Login Security: The Power of Multifactor Authentication

It used to be that passwords were enough to protect your accounts. Those days are gone, and you can blame the ever-growing sophistication of cybercriminals. Organizations now need an extra layer of defense against unauthorized access and fraud. That’s where multifactor authentication comes in.

It’s a good idea to require multifactor authentication in many of the systems your organization uses every day—especially critical systems like payments operations. Read on to learn what it is, how it works and why it matters.

What is multifactor authentication?

Multifactor authentication (MFA) is a security measure that requires users to provide two or more pieces of evidence to verify their identity before they can access their account or perform a transaction. Single-factor authentication methods often rely on the traditional username-plus-password combination. MFA goes further and requires additional factors—often something the user knows (e.g., the answer to a security question), something they have (e.g., a smartphone) or something they are (e.g., biometric data like a fingerprint).

How does MFA work in payment solutions?

Payment solutions can apply MFA in various ways depending on the level of security and convenience they offer users. Common examples of MFA in payment solutions include:

  • One-time password (OTP): The user gets a code via text, email or an automated phone call, and they have to enter it along with their username and password to access their account or perform a transaction. The code expires after a short period of time and can be used only once.
  • Push notification: The user receives a notification on their smartphone or a similar device though a secure app that’s linked to their account. With that device, they have to either approve or decline the transaction or account access.
  • Biometric authentication: The user must have their fingerprint, face or iris scanned. This biometric data is usually stored on the user’s device or on a secure server, and it’s matched with the user’s account.

When might payment solutions require MFA? Those scenarios can include when you or other users in your organization log in to their accounts, add a new payment method or change settings. MFA can also be complemented with other security features such as encryption, tokenization or fraud detection to create a more robust risk management practice.

Why is multifactor authentication critical for payments operations security?

Payment fraud incidents are on the rise, increasing 88% since 2021, according to PYMNTS Intelligence research. It’s making organizations and consumers more wary about how payment accounts data is kept (the same study found that 30% of consumers don’t trust having their personal information stored on a connected platform).

Clearly, bolstering security to the systems that house consumers’ payment account data is a priority for any organization. Here’s how MFA in payments operations supports that:

  1. Better Protection: MFA makes it harder for hackers or fraudsters to access your customers’ data, even if they have your username and password. It adds an extra layer of security that deters or delays attackers, giving your organization more time to detect and respond to the breach.
  2. Fraud Risk Mitigation: MFA can decrease the likelihood of fraudulent transactions when the additional authentication requirements thwart bad actors.
  3. Brand Reputation Preservation: A data breach resulting in compromised payment accounts is a major blow to an organization’s reputation that erodes customer trust. Implementing MFA shows you’re committed to keeping customers’ information secure, and it helps safeguard your organization’s integrity.
  4. Satisfying Security Standards: MFA complies with the latest security standards and regulations, such as the Payment Card Industry Data Security Standard (PCI DSS) or the Payment Services Directive 2 (PSD2). MFA helps you meet the requirements and expectations of your customers, partners and regulators, not to mention help you avoid penalties or fines.

The new standard in payments operations security

MFA is no longer just a security best practice—it’s an expectation. A growing share of SaaS platform users consider MFA a must-have capability of the SaaS platforms they use, regardless of segment or industry. In payments operations, it can make a big difference in safeguarding payment accounts and protecting your organization from the potentially devastating consequences of data breaches and payment fraud.

This is part of what’s known as the Zero Trust strategy for information security programs, based on the principle of ”never trust, always verify.” It’s aligned with the latest industry standards, such as PCI DSS version 4.0. And it’s part of CSG Forte’s commitment to the rigorous safeguarding and protection of all customer data.

Want to learn more about how CSG Forte incorporates MFA into its solutions? Just ask us.

‘Tis the Season for Secure Payments: Protecting Your Business from Holiday Fraud

The holiday season is here, bringing with it the hustle and bustle of surging online transactions. Consumer spend is expected to rebound above pre-pandemic levels for the first time, even as 72% of shoppers anticipate higher prices.

Inflation dread isn’t enough to deter cash-strapped consumers. Credit options, such as Buy Now Pay Later short-term financing, will cover an estimated 13% of holiday purchases this year.

With the uptick of consumers embracing the holiday splurge, it’s essential to ensure that your store is safeguarded from the Grinches of the online world—fraudsters. Here are three tips to keep your e-commerce business merry and bright:


1. Hosted Payment Pages: A Trusted Haven for Transactions

Picture a secure fortress for your customers’ payment data—one that’s not on your servers. This is where securely hosted payment pages with a reliable payments provider come into play. By directing your online payments through these secure pages, you’re ensuring that sensitive payment data doesn’t linger in your system like a misplaced ornament.

The beauty of securely hosted payment pages lies in their ability to provide a seamless and secure transaction experience. Customers enter their payment details on a page hosted by the payments provider, keeping the crucial data away from your servers and reducing your PCI (Payment Card Industry) Data Security Standard scope. This ensures a worry-free experience for both you and your customers that leaves fraudsters out in the cold.


2. Digital Wallets: Security Wrapped in Convenience

‘Tis the season for giving, and what better gift to offer your customers than secure and convenient digital payment methods? Enter digital wallets. With enhanced security features, they provide a hassle-free and speedy checkout experience.

By offering popular digital wallets at your checkout, you’re not just embracing the holiday spirit—you’re also aligning with what consumers trust. Digital wallets safely store payment credentials and employ advanced encryption techniques to keep them protected. It’s a win-win—customers get a seamless payment experience, and you get the peace of mind that their data is protected.


3. Tokenization: Turning the Tables on Fraudsters

If you want to take your holiday defenses up a notch, consider the power of tokenization.

Tokenization involves replacing actual card and ACH payment data with generated tokens. These tokens have no intrinsic value and provide no value to fraudsters. It’s the equivalent of leaving fake presents under the tree for anyone attempting to snatch them. A reputable payments provider can assist you in implementing this robust layer of security, ensuring that even if a Grinch manages to sneak into your system, they leave empty-handed.

In the midst of the holiday season excitement, don’t let the fear of fraud steal your joy. By following these three tips—utilizing hosted payment pages, offering secure digital payment methods, and embracing tokenization—you can ensure your online business stays secure while shoppers stuff their carts.


CSG Forte is here to protect your payments this holiday season. Contact us to get started today.

P2PE vs. E2EE: What’s the Best Payment Security Option?

If end-to-end encryption (E2EE) and point-to-point encryption (P2PE) sound like they could be the same thing, you’re not wrong. Technically speaking, P2PE is a specific type of E2EE, and the objective in both cases is to secure cardholder data from the time it’s captured until it reaches its intended destination.

However, only one of these methods offers significant time savings and cost benefits to merchants. Read on to understand the differences and why choosing P2PE could be in your company’s best interest.


What Is P2PE?

As the ongoing threat of data breaches continues to menace businesses (and government agencies) of all sizes, securing cardholder data remains a top priority for merchants. In recent years, P2PE has become the gold standard for credit card payment security compliance.

Here’s why. PCI-validated P2PE is a set of standards defined by the Payment Card Industry Security Standards Council (PCI-SSC) that outlines a comprehensive set of best practices spanning the device supply chain, encryption key loading, configuration, encryption and application security.

The P2PE process creates a secure connection between devices, or components within devices, which prevents possible sensitive data from being exposed at any point while moving across a network. It effectively removes cardholder data from a merchant’s environment, providing better protection for the cardholder.


How Does P2PE Work?

P2PE encrypts cardholder data immediately upon receiving a card payment. It sends this encrypted code directly from the payment terminal to the payment processing system, where the information gets decrypted using a secure key.

Since the decryption takes place entirely in the payment processor, the merchant never sees any of the cardholder’s information. If a hacker manages to intercept the data while it’s in transit, they will not be able to read it because only the processor possesses the key—there’s no chance someone can steal the key from the merchant or any other party.

PCI P2PE Compliance Requirements

P2PE reduces the likelihood of PCI compliance breaches by directly connecting the payment terminal to the processing system—and correspondingly drops the number of self-assessment questionnaire questions from over 300 to around 30. This function means you can raise the bar on security without also increasing the compliance audit burden.

Some other key compliance requirements include:

  • The data must be encrypted at the payment terminal.
  • The payment terminal may only use P2PE-approved applications.
  • The merchant must conduct annual inventory checks on payment terminals.
  • The merchant must install cameras with a clear view of the terminal.

Ultimately, these requirements are fairly easy for most businesses to manage. That leaves you more time and resources to spend on the purpose and passion at the forefront of your business rather than the processes behind your business.


The Benefits of P2PE With CSG Forte Protect

CSG Forte Protect is a PCI-validated P2PE solution securing the V400C terminal for in-person payments. CSG Forte Protect helps merchants:

  • Remove liability issues for your business: Forte Protect merges processes, applications, and payment devices to securely encrypt and protect data during transit from the POI terminal/device or POS system
  • Protect cardholder data: Our solution has three parts—validated hardware, validated software, and validated solution providers to cover payment terminals, terminal application, deployment, key management, and decryption environments.
  • Save time and money: With a minimal per transaction cost, Forte Protect saves you PCI-related costs by reducing PCI scope as the number of questions from the self-assessment questionnaire drops from SAQ D (329 questions) to SAQ P2P3 (33 questions).
  • Fully integrate existing payment channels: Supported card input methods include tap, dip, swipe, keyed, Apple Pay, Samsung Pay and Google Pay. Your customer payment experience will be seamless without you lifting a finger!

We put data security at the core of all our payment solutions, so you can rely on Forte Protect to keep your data safe through every payment—every time. In addition to meeting PCI standards, we’re certified for compliance with ISO 27001:2013, SSAE SOC 1 and HIPAA. Whatever your industry and payment needs, we can help you protect your customers from data breaches.


What Is E2EE?

Many merchants’ transactions rely on end-to-end encryption (E2EE), a process that involves an indirect link between the payment terminal and processing network. During this operation, the processor or a third party is expected to encrypt the cardholder’s data (CHD) during transit.

Unfortunately, the indirect link means card present transactions—where the customer swipes, dips or taps their card—are a constant area of concern. Preventing fraud at the terminal isn’t just a matter of checking who is presenting the card. You also have to ensure the payment terminals themselves are secure. By intercepting point of sale devices, or using insiders, malware loaded to a device can scrape and transfer cardholder data available in its RAM and virtual memory.

That’s why rather than finding new ways to protect cardholder data, businesses are looking for ways to eliminate cardholder data from their environments.

E2EE and PCI Compliance

Some E2EE vendors claim that using E2EE makes adhering to PCI guidelines easier because it encrypts data throughout the entire process, but this claim isn’t entirely the case.

While this method is compliant with Payment Card Industry (PCI) guidance, E2EE requires intensive documentation and additional ongoing costs associated with PCI compliance. Merchants often hold the encryption keys, so merchants relying on E2EE will typically need to complete an annual PCI-DSS self-assessment questionnaire (SAQ) with over 300 questions.

Even though small business owners are used to wearing many hats, assuming responsibility for PCI compliance may be more than they can handle. If they choose to have someone else manage it for them, like processors or outside consultants, then they’ll also incur the added expense of outside help.


What’s the Difference Between P2PE and E2EE?

While they are similar in nature, some of the most significant differences between P2PE and E2EE include:

  • Security rules: P2PE and E2EE require different security checks on and around the payment terminal. For example, P2PE requires merchants to perform annual terminal inventory checks to ensure everything works properly.
  • Control: Because the scope for PCI compliance is much smaller with P2PE, merchants have greater control over their ability to adhere to the standard. E2EE, on the other hand, contains more endpoints, making compliance more complicated.
  • Liability: P2PE providers take complete liability for data breaches because they hold the keys. With E2EE, though, the merchant has control over decryption keys and can be held liable for stolen cardholder data.

Ultimately, these differences mean the best choice for most businesses planning to accept credit card payments is P2PE. It makes compliance more manageable and keeps cardholder data safer than E2EE—and it’s entirely possible with a reliable provider like CSG Forte. If you want to improve your payment processing technology, consider using our solutions to secure your card transactions.


Choose P2PE Payment Solutions From CSG Forte

The numerous controls and security implemented across this entire value chain make P2PE an extremely secure encryption method—but also a high bar for vendors to clear. Only a select few vendors offer PCI-validated P2PE today, and we’re proud to be one of those few.

At CSG Forte, we know securing a stable and safe merchant solution can relieve the security and compliance pressures from you and your business. For that reason, CSG Forte Protect was created with you in mind to give you peace of mind.

We know you didn’t open your business so you could worry about transactions and payments operations. But we did. Our team at CSG Forte has a passion for safe and secure payment processing solutions. Learn more about CSG Forte’s secure in-person payments processing solutions, or contact us to get started.

What Are NSF Payments?

Handling nonsufficient funds (NSF) payments accurately and efficiently helps businesses protect themselves from financial losses by minimizing the impact of unpaid transactions. Promptly addressing NSF payments through clear communication, compliant follow-up procedures and timely resolution enables recipients to recover funds and prevent further losses. Streamlined handling can also help businesses maintain strong customer relationships, reducing the likelihood of service disruptions due to incomplete payment.

At CSG Forte, our recovery solutions can help equip your business to handle NSF situations effectively. Our re-presentment options enable you to recover the funds for each NSF payment at no charge. More importantly, these automated solutions save significant time and resources, allowing you to focus more on the responsibilities that matter most for your business.

What Is an NSF Payment?

An NSF payment is a returned check or Automated Clearing House (ACH) network payment that was unable to be completed due to nonsufficient funds. This means the bank has refused to honor the payment because there isn’t enough money in the account to cover it. These are often referred to as bad or bounced checks.

When the recipient tries to take payment, the bank will return it due to insufficient funds in the account. This situation can result in fees for both the payer and the recipient trying to collect the funds.

The Differences Between Overdraft and NSF

Anyone who has tried spending more money than what’s available in their bank account has likely been issued an overdraft charge or an NSF fee. Although many believe the two terms are interchangeable, there are some critical differences between them:

  • Overdraft fee: Banks typically charge overdraft fees when they allow a transaction to process that would have otherwise overdrawn an account. Customers can view an overdraft as a temporary loan from the bank, with the expectation of paying back the amount the bank covered plus an overdraft fee.
  • NSF fee: Banks commonly charge an NSF fee when an account lacks the funds required to cover a transaction and the bank doesn’t permit the transaction to process, resulting in a bounced check or denied electronic bill payment. A bank could impose an NSF fee when the account holder opts out of overdraft protection, surpasses the bank’s limit for overdraft protection or issues a payment that exceeds the amount of money in their account.

What Triggers an NSF Charge?

Several common causes of an NSF payment include unpredictable cash flow, inadequate fund management, delayed or missed payments and unexpected expenses.

Specific situations that may incur an NSF fee include:

  • A check that bounces: A bounced check means there wasn’t enough money in an account to cover the amount written. The business that accepted the check could issue a fee to the check writer in addition to a fee charged by the bank or credit union.
  • An electronic ACH payment that a bank doesn’t cover: When a bank processes an ACH payment and the account has insufficient funds, it will decline the transaction and may impose an NSF fee for the unsuccessful payment attempt.
  • A debit card purchase: A bank or credit union could issue an NSF fee if it rejects an attempted debit card transaction that exceeds the available funds in an account. NSF fees for debit card transactions are highly uncommon because most technologies can identify the funds a purchaser has available.

What Happens When an NSF Payment Is Issued?

When an NSF payment occurs, a number of negative consequences may follow. The financial institution of the person issuing the payment makes one of two choices.

Allowing the Payment

The bank may decide to let the ACH payment or check push through. This, however, would put the account holder into an overdrawn status. For some banks, this means they will charge a fee simply for overdrawing, but may continue to charge for each day or certain amount that they are over. It can end up burning quite a hole in the wallet.

Refusing the Payment

The bank may refuse to honor the payment. The bank will not allow the funds to be processed, and the account holder will likely be charged a fee just for issuing the payment without having funds available.

Potentially, the returned item could sink the depositor’s account into overdrawn status, also initiating an overdraft fee. Banks consider both the depositors and the account holders as being responsible for the NSF payment, and they have no problem making it a very expensive mistake.


How do You Protect Your Business From NSF Payments?

NSF payments can be very frustrating and costly to businesses that need to process the transactions. Some businesses decide not to accept ACH payments or checks at all as a last resort. However, this choice limits payment options for your customers.

For many businesses, accepting paper and eChecks is a wise decision. This practice gives customers the flexibility of selecting a payment option that works for them—and many people just want to simply have a payment come right out of their bank account.

But how can businesses handle NSF payments? It’s wise to have a plan set into place so that when NSF payments appear, it isn’t a complete disaster. NSF re-presentment is your best option, as it allows you to recover the funds for each unsuccessful ACH transaction.


What is NSF Re-Presentment?

When an NSF payment occurs, re-presentment will simply re-present the payment at a later date. This way, the payment has another chance to clear. CSG Forte’s NSF re-presentment option lets you select the date you wish to re-present the payment, enabling you to choose a time when you think there is a stronger likelihood that the funds are available.

You may know, for instance, when your customer gets their paycheck. Scheduling NSF re-presentment on or directly after this date increases your chances of accessing the funds and clearing the payment.


The Benefits of Using Recovery Solutions From CSG Forte

Our Recovery Solutions allow businesses to automate the process of recovering NSF payments. We will attempt to re-collect NSF payments up to two times on your behalf for ACH payments, saving you significant time and hassle. Benefits you’ll enjoy with this service include:

  • Improved payment recovery: Our smart re-presentment functionality allows companies to re-present payment when they will most likely receive a recovered payment.
  • Boosted revenue: Besides receiving the complete value of recovered payment, your business will receive part of the collected NSF fee and experience a revenue share.
  • Easy implementation: With a quick and simple implementation, you’ll be up and running in no time.
  • FCRA and Nacha compliance: Recover NSF payments with peace of mind. Our Recovery Solutions meet Fair Credit Reporting Act (FCRA) and Nacha regulations.
  • Reduce service disruptions: Improve the customer experience by reducing service disruptions due to incomplete payment.

How It Works

At CSG Forte, we make collecting NSF payments simple. When you’re hit with an NSF payment, our solutions will automatically attempt to recollect the ACH or eCheck payment up to two times.

Get in Touch With Us Today

Contact us today to learn how one large enterprise organization recovered $78M in principle through CSG Forte’s Recovery Solutions.