Category: Security

ACH Fraud

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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  • Unauthorized ACH withdrawals: Merchants and clients risk having funds withdrawn from bank accounts without authorization.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 Affect 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.

Layering Login Security: The Power of Multifactor Authentication

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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.

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

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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 uses 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 the government agencies that use them. Read on to understand the differences between E2EE and P2PE and why choosing P2PE could be in your department’s best interest.

 

What Is P2PE?

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

Here’s why: Payment card industry (PCI)-validated P2PE is a set of standards defined by the PCI Security Standards Council (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 an agency’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 government entity never sees any of the cardholder’s information. If hackers manage to intercept the data while it’s in transit, they will not be able to read the data because only the processor possesses the key—there’s no chance someone can steal the key from the government agency or any other transactional 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 your department 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 agencies to manage, leaving more time and scarce resources to spend on the purpose and passion at the forefront of your day-to-day dealings rather than the processes behind each transaction.

 

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 governments:

  • Remove liability issues: 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 your agency PCI-related costs by reducing PCI scope. This is because the number of questions from the self-assessment questionnaire (SAQ) 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 constituents’ 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 constituent 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 the Health Insurance Portability and Accountability Act (HIPAA). Whatever your agency needs, we can help you protect constituents from data breaches.

 

What Is E2EE?

Many government transactions rely on 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 cardholder data (CHD) during transit.

Unfortunately, the indirect link means card present transactions—where the user 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 must ensure the payment terminals themselves are secure. By intercepting POS devices or using insiders, malware loaded to a device can scrape and transfer cardholder data available in its 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 agencies using E2EE claim that using doing so 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 PCI guidance, E2EE requires intensive documentation and additional ongoing costs associated with PCI compliance. Agencies often hold the encryption keys, so merchants relying on E2EE will typically need to complete an annual PCI DSS SAQ with over 300 questions.

Even though local and regional governments are used to wearing many hats, assuming responsibility for PCI compliance may be more than many can handle. If government agencies choose to have someone else manage PCI compliance on their behalf, like processors or outside consultants, 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 government agencies that are 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 providers to clear. Only a select few 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 government solution can relieve the security and compliance pressures from you and your agency employees. For that reason, CSG Forte Protect was created with you in mind to give you peace of mind.

We know you have more pressing issues to worry about than transactions and payments operations. That’s why our team at CSG Forte created safe and secure payment processing solutions. Learn more about CSG Forte’s secure in-person payments processing solutions, or contact us to get started.