Risk management has been a longstanding principle in payments and commerce. Identifying risks, and being able to avoid them, is key to accelerating growth.
And as businesses rely on digital payments, the role of the chief information security officer (CISO) has become central to protecting financial transactions and mitigating payments risk when integrating or developing payments innovations.
Digital payments, where transactions are often completed in seconds, depend on the rigorous testing of systems to uncover and address vulnerabilities before they can be exploited. Testing, whether it’s penetration testing, vulnerability assessments, scenario planning, or system resilience testing, helps reinforce trust by preemptively uncovering and addressing weaknesses.
That makes testing a critical component of risk management. And it is one where the expertise of the CISO can aid in securing sensitive financial data, preventing fraud, and ensuring compliance with industry regulations.
Since payment systems are prime targets for cybercriminals, CISOs are responsible for safeguarding these systems against fraud, data breaches and financial loss, often by implementing encryption, fraud detection tools, and tokenization.
Read more: Fraud Risk Management Delays Innovation as Fraud-Related Uncertainty Rises
As the reliance on digital payments grows, so too do the security challenges for CISOs. The financial, regulatory, and reputational stakes make payments security a top priority.
A CISO’s primary goal is to secure sensitive payment data as it moves through digital channels. Techniques like tokenization are fundamental for safeguarding data in transit and at rest.
Experts that PYMNTS has spoken to hold that tokenization, which replaces sensitive data with unique identifiers that hold no exploitable value outside the transaction, might be the future of cybersecurity.
PYMNTS Intelligence’s latest study, “The Tokenization Innovation Report: The Future of Security and Personalization,” a Mastercard collaboration, found that 77% of merchants not offering network tokens plan to roll them out, while 92% of payments service providers (PSPs) that already enable the technology plan to invest in further capability. Key areas that merchants and PSPs want to upgrade include digital wallet card payments, card-on-file payments and recurring payments.
These defenses not only make it harder for attackers to steal usable data but also demonstrate a commitment to security that builds consumer trust.
Among firms experiencing high uncertainty, 62% of heads of payment report frequently delaying or canceling new projects to manage fraud risk, according to PYMNTS Intelligence.
Read more: The Trust Factor: Why It’s Crucial for Business Continuity and Resilience
A CISO’s remit often extends beyond internal security to encompass third-party vendors and service providers. Payment processors, gateways and financial partners represent points of vulnerability that, if left unchecked, can expose a business to undue risk.
Testing is essential to managing these third-party risks, particularly given the dependence on outsourced and cloud-based solutions. As a result, CISOs are engaging in third-party risk management, conducting due diligence to ensure that external partners meet or exceed internal security standards. Vendor risk assessments, contract clauses around data protection, and security training for partner organizations have become standard tools for CISOs working to build more secure payments.
An often-overlooked responsibility of the CISO in payments security is educating employees and customers. Despite technological advancements, human error remains a vulnerability in payments security. CISOs are spearheading security awareness programs to teach employees how to recognize phishing attempts, manage credentials securely, and follow protocols for handling sensitive information. For customers, some companies are making strides in educating users on safe online shopping practices and secure payment methods, which can help reduce fraud and strengthen brand loyalty.
As payments become faster, more seamless, and more interconnected, the risks and responsibilities for CISOs continue to expand. Cybercriminals constantly adapt their techniques, and new threats emerge with each advancement in payments technology. For CISOs, staying ahead means continuously evolving the security playbook to cover every facet of the payments lifecycle — from transaction initiation to settlement and beyond. As organizations continue to prioritize digital payments, the CISO’s role will only grow in importance, making them not just gatekeepers of data but architects of trust in the digital economy.
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