A Guide to Secure Payment Services for Small to Medium Businesses in 2025

What You Will Discover

Introduction

As digital transactions become more widespread, ensuring secure payment services in the UK is crucial for small and medium-sized enterprises (SMEs). Customers expect financial transactions to be safe, and businesses must implement robust security measures to protect sensitive payment information.

Understanding what secure payment is involves recognizing the various technologies and protocols that safeguard payment data. Whether businesses use online payment gateways, card readers, or mobile transactions, maintaining secure payment processing is essential to prevent fraud and data breaches.

This guide explores the key aspects of secure payment systems, the risks businesses face, and how SMEs can implement secure payment transactions that comply with regulations while providing a seamless customer experience.

Features of Secure Payment Services

Secure payment services rely on several foundational security features that work together to keep transactions private and protected. Here’s a breakdown of the most important ones:

Security Feature	Description
Data Encryption	Encrypts sensitive information during transactions, ensuring only authorized users can access it. Even if intercepted, the data remains unreadable.
Tokenisation	Replaces sensitive payment data with a random code or “token,” preventing exposure of actual bank details during transactions. Commonly used for online payments to protect financial information.
Strong Customer Authentication (SCA)	Adds extra verification layers to confirm a user’s identity. Requires two or more steps, such as a password and biometric authentication, making unauthorized access difficult.
Secure APIs	Enables secure communication between banks and third-party financial services, ensuring protected data exchange. Helps maintain privacy while integrating financial tools.

These features work together to create secure payment services, giving customers and businesses peace of mind when sharing data or making payments.

Common Security Threats

Even with solid security features, it’s essential to be aware of potential threats that secure payment services help protect against. Understanding these risks helps businesses and consumers take proactive steps toward safer transactions.

• Data Breaches: A data breach occurs when unauthorised parties access sensitive data, often exposing personal and financial information. This could lead to issues like identity theft or fraud. Secure payment services in open banking minimise this risk by relying on encryption and secure APIs to protect data during transmission.
• Fraud and Identity Theft: Fraud is a significant risk in any online transaction. Identity theft, in particular, can occur if criminals manage to access personal information to impersonate the account holder. Secure payment services create barriers that protect against these threats by using strong customer authentication and tokenisation.
• Phishing Attacks: Phishing involves tricking individuals into sharing their personal information by posing as a trusted source, often through fake emails or websites. This tactic is commonly used to steal passwords or bank details. Secure payment services help combat this through multi-factor authentication, ensuring only verified users can complete transactions.

By understanding these common threats, customers and businesses can make informed decisions on when and how to share financial data.

📚 Understand How PSD2 and SCA Ensure Security in Open Banking

Best Practices for Business Owners

Adopting best practices helps ensure a high safety standard for users at banks, fintech companies, and third-party providers offering secure payment services through open banking.

• Choosing a Secure Payment Gateway: It is essential to select a payment gateway with strong security credentials. Look for providers who adhere to industry standards like PCI DSS (Payment Card Industry Data Security Standard), which outlines specific requirements for safeguarding data. This helps ensure the secure transmission of information during each transaction.
• Conducting Regular Security Audits: Regular security assessments help banks and fintechs identify any potential vulnerabilities in their systems. By proactively testing for weaknesses and making necessary updates, they can offer secure payment services that adapt to evolving security threats and meet industry standards.
• Working with Verified Third Parties: Collaborating only with verified, compliant third-party providers is crucial. Secure payment services in open banking rely on a trusted network where each provider follows strict security protocols. This ensures that any data shared or payment processed is done securely, building trust with customers.

These best practices reinforce the security of payment services, reducing the likelihood of breaches or fraudulent activities and keeping customers’ financial data safe.

Finexer Ltd is authorised by the Financial Conduct Authority under the Payment Services Regulations 2017, firm reference number 925695, as an Authorised Payment Institution to provide account information services and payment initiation services

Practical Tips for Consumers

Customers also play an essential role in ensuring secure payment services by following best practices that protect their accounts and personal information. Here are some tips for staying safe while using open banking services:

• Verify Providers Before Sharing Data: Only use trusted, authorised providers like Finexer when connecting financial accounts through open banking. Many countries have lists of verified providers, making it easier to check which services are safe to use.
• Regularly Monitor Account Activity: Keeping an eye on your bank statements and transaction history can help you spot any unusual activity early. This habit can quickly alert you to any unauthorised transactions, allowing you to report them to your bank or provider immediately.
• Use Trusted Networks and Devices: Avoid public Wi-Fi or shared devices when accessing financial accounts or making payments. These networks can be less secure, increasing the risk of data interception. Instead, opt for trusted, secure networks to protect your device with up-to-date security measures.

Following these practical steps helps consumers maintain secure payment services and reduces the risk of encountering security issues.

📚 Compare the most secure open banking providers in the UK

Emerging Technologies That Support Secure Payment Services

As open banking grows, so do the technologies that support secure payment services. Here are some emerging solutions that banks and fintech providers are using to create even safer transactions:

• Blockchain for Transparency and Security: Blockchain can enhance secure payment services by adding transparency and traceability to transactions. This technology provides a permanent, tamper-proof record of each transaction, which can help detect any suspicious activity and increase trust in open banking transactions.
• Artificial Intelligence (AI) for Fraud Detection: AI helps prevent fraud by analysing transaction patterns and identifying unusual activities in real-time. By using AI within secure payment services, banks and fintech can automatically flag and investigate potentially fraudulent activities, adding a layer of proactive security.
• Biometric Authentication: Biometrics, such as facial recognition and fingerprint scanning, make it easier and safer for users to authenticate their identity. Using biometric verification, open banking services add an extra layer of protection to secure payment services, ensuring that only the rightful account owner can complete transactions.

These technologies show how secure payment services in open banking are continuously advancing, with solutions that make detecting threats and protecting user data easier.

Winding Up

Secure payment services are a core component of open banking, providing the necessary tools to keep financial data safe while supporting fast, reliable transactions. Through a combination of features like encryption, tokenisation, strong customer authentication, and secure APIs, open banking providers help ensure that customers can share and transact safely in today’s connected financial ecosystem.

For banks and fintechs, adopting best practices, such as conducting regular audits and collaborating only with verified third parties, strengthens the security of these services. Meanwhile, consumers can play their part by monitoring their accounts, using trusted providers, and staying cautious with their data.

As open banking and secure payment services continue to evolve, these foundational practices and emerging technologies will provide ongoing support for safe, trusted transactions.