8 Security Features a Business Accepting Crypto Needs to Have
Crypto adoption is at an all-time high, with ordinary users and businesses looking for ways to implement crypto in their daily operations. Allowing customers to pay with crypto is right for a business operating in almost any industry.
However, as soon as a business decides to implement a new payment method, it needs to implement cyber security measures that will protect both the business and its users that make crypto payments. In this article, we’ll review some of the measures customers expect and consider common.
Cold Storage
The first consideration a business needs to make is how to store the funds that the customers have deposited in crypto. Some businesses use online crypto wallets, but these are subject to hacking attacks, and there’s often a limit to how much crypto they can hold.
Cold storage refers to crypto wallet storage that’s not connected to the internet and, therefore, can’t be hacked. The storage comes with a password, and cryptocurrencies require keys to be activated for use as another level of security. Crypto wallets come with a variety of additional features a business can use once it’s ready for it.
Two-Step Authentication
Two-step authentication refers to a commonly used security measure that requires the user to authenticate a transaction using two different methods. In many cases, it also depends on the user doing so with two separate devices, such as a phone and a computer. That way, no transactions are made by accident or as a result of fraudulent activity.
This method is commonly used by crypto exchanges, which are a gold standard for cyber security and crypto payments. To compare additional measures used by crypto exchanges, you can study this list of trustworthy exchanges and find your ideal match.
Set up Security Audits
Smaller businesses often rely on their own efforts to provide the proper security measures and almost any other services they can muster. However, a good way to reassure crypto payment users is to provide proof of a third-party audit. It also addresses security threats as they appear and change.
Audits need to be done on a regular basis or when there’s a regulatory change that requires them. The best policy is to be open and transparent about who’s doing the audits and what kind of potential threats they’ve discovered. It shows that a business is actively working on improving its service, especially in addressing any vulnerabilities.
Encrypting Sensitive Data
Customers need to provide a variety of sensitive data when making an online purchase. Most of it can be used by a business to make the customer experience better and more streamlined. When it comes to making crypto payments, this data includes emails, security keys, and commonly used data such as login information or shopping history.
The best way to address such a potential security issue is to encrypt all the user data. The information should be encrypted both at rest and when in transit.
Whitelisting IP Addresses
Whitelisting IP Addresses is a security measure that involves allowing access to a network, system, or application only from pre-approved, trusted IP addresses. It’s a useful security measure for businesses accepting crypto payments, as they limit who can make such a payment in the first place.
The process relies on carefully choosing who can make crypto payments based on the level of trust the business has in them. These might include the IP addresses of your business’s servers, trusted third-party service providers, and key personnel who need to manage or monitor the crypto payment systems.
Measures Against Phishing
Since using cryptocurrencies doesn’t depend on any centralized institution, the users need to provide nothing more than an email to make transfers of funds. This is very convenient but makes phishing scams much more dangerous since having access to an email means having access to a cryptocurrency.
The most important measure a business can establish to prevent phishing isn’t any software or digital tool. It’s the proper education and training for employees, making sure that they know how to recognize a phishing scam when they encounter one. Anti Phishing software can also be used to detect potentially fraudulent patterns, but the employees are the last line of defense.
Limits and Alerts on Transactions
Alerts about suspicious transactions and limits on how many transactions a person can make are common cyber security measures that will work both on crypto transfers and payments made with fiat money. They are made to catch transactions that follow a strange pattern or are simply too large.
What constitutes such a transaction depends on the unique features of a business and its customer base. It’s upon a business to set up metrics that will trigger an alert, or that’s off the limits.
Backup and Recovery
Backup and recovery plans are essential components of a comprehensive security strategy for businesses accepting crypto payments. They are put in place so a business can quickly recover and continue its operations in case its security is breached.
Data backups must be frequent and automated to happen in the background. It’s also important to choose a few locations to store the data, some of which should be independent of the business and its day-to-day storage solutions. It also helps to have redundant copies so that the business isn’t dependent on a particular piece of hardware. The recovery plans are equally important as they allow the business to be up and running as soon as possible after a hack attempt.
To Sum Up
To sum up, businesses accepting crypto payments must prioritize security to protect both themselves and their customers. Implementing measures like cold storage, two-step authentication, and regular security audits are essential. Encrypting sensitive data, whitelisting IP addresses, and educating employees about phishing scams further strengthen security.
Additionally, setting transaction limits and maintaining a robust backup and recovery plan ensures that businesses can quickly respond to any threats. By taking these steps, businesses can safely integrate crypto payments into their operations and build trust with their customers.
