Security of payments on the Internet: A central bank perspective

Abstract

While supporting the development of distant commerce, the Internet has also become an important media for associated payments. This expanding role of the Internet raises a number of challenges for the payments industry in the area of risks and security management. This paper presents the risk and security issues at stake with Internet payments, which range from user's identity misappropriation, to data interception or modification by an unauthorised third party, and reviews current fraud techniques in use (eg phishing, hacking of database). Against that background, it then provides an overview of current private initiatives addressing the security issues surrounding Internet payments, which have focused so far on two main areas — enhanced protection of payment data and improvement of techniques for identification and authentication — and describes the role played by central banks, given their broad interest in the efficiency and safety of retail payments.