Payment authentication is something that you definitely need to befamiliar with if you are in the ecommerce business. Ecommerce has been goingthrough a boom and the security challenges that come with online transactions have also increased. There are different payment authentication methods, and it is important to know them in order to determine which one is suitable for your business.
Payment authentication refers to the process of confirming a customer’s identity through knowledge, inherence, ownership, and user location. Knowledge is the most common category used for transaction authentication. The knowledge factor refers to the information that only the cardholder possesses, such as a personal password, PIN, a secret word like your mother’s maiden name or the name of your hometown, your favorite vacation spot, and so on. A knowledge-based authentication factor is commonly referred to as the Challenge-Handshake Authentication Protocol (CHAP).
So, how does the Challenge-Handshake Authentication Protocol work? Once the payment request is made, the server sends a challenging question to the customer. The customer then responds with sensitive data that only he/she possesses. The server checks the response, and if the answer matches the expected hash value, the authentication is acknowledged. Otherwise, the transaction is declined.
Similar to the knowledge factor, the ownership authentication factor makes use of a piece of information that only the user possesses. But, unlike the previous factor that can only be passed on to a friend or a relative, the ownership factor cannot be shared. Good examples of ownership authentication include a key, a token, a signature, or a certificate.
Last but not least, we have the inherence factor. This is the most sophisticated of the mall. Inherence authentication includes biodata confirmation, like voice recognition, face recognition, or iris recognition.
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