Offshore Software Development Archives - Page 5 of 9

Executing payments via digital wallets/ Mobile payments solutions have become the order of the day owing to the emerging digital technologies and an increasing dependency on smartphones.

According to a research report published by the online portal, Mordor Intelligence, “ The market value of mobile payment systems was 1449.56 Billion USD in the year 2020. The mobile wallet market is expected to grow at a CAGR of 24.5% during the next few years and the market value is predicted to reach 5399.6 Billion USD by the year 2026 ”.

Digital wallets have transformed the manner of making payments altogether. The two major categories under this type of payment methodology are open loop and closed loop mobile payments. The open-loop payment system involves using a single digital wallet via smartphones for making payments at several locations. Closed-loop mobile payments, on the other hand, requires prepaying a certain amount of money to one specific merchant or business brand just like using loyalty/gift cards at an apparel store or an eatery.

Out of these two mobile payment categories, the closed-loop approach is more preferable by merchants as well as consumers. In fact, the closed-loop payment model has revolutionized mobile payment one step further and elevated it to the next level! Let’s gather some quick insights on closed-loop mobile payments and the business benefits of adopting this approach.

What is Closed-Loop Mobile Payment?

A closed-loop payment refers to the payment transaction wherein a customer uploads money into a spending account linked to a payment device, just like the functioning of a gift card. This kind of payment happens between a spending account and a particular business brand. The mobile equivalent of this payment system is termed closed loop mobile payment. A closed-loop payment system uses mobile apps for managing gift cards and accounts via smartphone devices. Closed-loop mobile payment solutions allow users to check their balance within the system, make purchases using a mobile app instead of a physical card, and top up their account balance effortlessly. Customers can make payments using mobile devices/tablets to a specific retailer against an established account balance. Some of these solutions even provide the option of automatic balance top-up.

Any branded mobile payment or loyalty solution falls under this category. The TimmyMe app by Tim Hortons and the Starbucks smartphone app are popular examples of the closed-loop mobile payment model.

What is meant by a Closed-Loop Card?

A closed-loop card, also known as a single-purpose card, is an electronic payment card which the cardholder can use for executing purchases from a specific brand. Such cards usually bear the logo of the company where it can be used instead of bearing the logo of a primary payment processor such as American Express, MasterCard, Visa, etc.

Benefits of Closed-Loop Mobile Payments

Identifying Customer Behavior for Creating Effective Marketing Campaigns

This mobile payment processing model helps entrepreneurs to capture big data based on millions of customer transactions and then, analyze this data for gaining deeper insights into the buying habits of consumers. Once, the businesses get a thorough understanding of their target market and identify the purchasing habits of their customers, they can create customized promotions/offers and deliver the same to customers’ mobile devices.

Greater Customer Outreach

Mobile technology simplifies sending out purchase reminders to customers via notifications. Moreover, businesses can even set up geo-targeted notifications which get triggered whenever potential consumers are close to their store.

Enhanced Customer Loyalty

The ability to send customized promotional offers and loyalty incentives to customers via smartphone devices not only helps in retaining consumers but also enhances their loyalty quotient.

Competitive Advantage

Using the closed-loop mobile payment model, customers enjoy several benefits like smartphone friendliness, automatic balance top-up, the option of pre-ordering for avoiding line-ups, being able to consolidate several gift cards, and many more. This makes your brand the obvious choice for customers.

The exclusive nature of a closed-loop mobile payment system enables business brands to monopolize customers’ smartphone devices concerning services and products within their niche.

The aforementioned advantages help businesses gain a competitive edge over peers.

Higher Profits

When users add money to fund their mobile wallet apps or e-gift cards, it implies that they have technically spent money within your store. Furthermore, if customers fail to use up their remaining balance, you gain extra profit.

Why should Business Brands Adopt the Closed-Loop Mobile Payment Approach?

It’s high time businesses should adopt the closed-loop mobile payment strategy. Take a look at the reasons!

Billions of individuals across the globe own smartphones. As such, your targeted audience is more likely to possess a smartphone device than your firm’s gift/loyalty card. Besides, modern tech-savvy consumers are on the lookout for ways and means that will allow them to link their payment wallets with mobile devices. And, the closed-loop approach perfectly befits this requirement.
Consumers express interest in this system due to the bar code scanning abilities of modern mobile devices.
Such systems promise improved security. This is because they are not tied into carrier networks, users’ credit cards, or bank accounts, thereby adding an extra security layer between the merchant and the bank account.
Closed-loop mobile payments are less complicated and easy to execute.
This approach proves profitable for vendors as it involves lower purchase fees in comparison to direct credit card transactions.

Concluding Thoughts:

A closed-loop mobile payment system proves profitable for the merchant as well as their consumers. Therefore, if you possess the necessary resources, commence the mobile app development process by partnering with reliable developers and a merchant service provider for architecting an impeccable closed-loop payment system.

Are you on the lookout for a dependable software firm for building a closed-loop mobile payment system for your business? Contact Biz4Solutions, a renowned Offshore Software Development Company in India, with 10+ years of experience in serving global clientele!

An Application Programming Interface, commonly known as API, refers to an intermediary that enables the exchange of information between two independent software components/platforms and ensures that the information reaches the right place. An API acts as a mediator between the external and internal software functions; making the information exchange process as seamless as possible. It not only offers protocols, tools, and routines to software app developers but also allows one to extract and share data in an accessible way.

APIs are indispensable in the realm of software development, but at the same time are highly vulnerable to attacks by hackers who exploit them for malicious gains. External APIs have public-facing endpoints and are susceptible to hacking; while internal APIs can be improperly accessed or misused. Since APIs interact with your web or mobile apps, securing them should be your priority.

This post outlines the adverse effects of API security breaches as well as the best practices to follow for ensuring API security.

What are the consequences of an API Security breach?

API security breaches often expose confidential data belonging to an Offshore Software Firm or their clients. As such, one such instance may result in the affected business enterprise losing credibility and encountering dire circumstances. Several such incidents have made headlines in recent years risking the reputation of firms and ushering in global security risks.

Take a look at some instances of API breaches and their repercussions.

The audio chat app, Clubhouse experienced an audio spill when an unauthorized user was successful in connecting to the API to enter multiple chat rooms, and then accessed audio files and thereafter, shared those files to a third-party platform. As a result, Agora, their API provider witnessed a sharp fall in their client shares.
British Airways encountered an API breach in the year 2018. Information belonging to 380,000 customers was stolen directly from payment forms and the airways had to pay a fine of more than 183 million pounds as a result of this hack.
In 2021, the Central Bank of Russia alerted firms about a scam where hackers stole information from mobile banking apps and then used it to execute fraudulent monetary transactions. The attackers debugged banking apps, examined the payment order, and studied the architecture of remote banking API calls to find out the victims’ bank account numbers.
Recently, an API exposure concerning Facebook photos resulted in a data breach affecting 6.8 million users. The attackers took advantage of a login bug to access users’ photos. This scam led to a fall in Facebook’s share prices.

Established Practices for ensuring API Security

Identifying API Vulnerabilities

For securing your API against security threats, you must first identify the parts of the API lifecycle that are vulnerable to security risks. But, this task becomes quite challenging as software companies may use thousands of APIs at a time. The best ways to detect the security loopholes are scanning for the incorrect code and conducting extensive testing.

Strategic Monitoring

Monitor consistently and be ready to troubleshoot whenever any error is detected. For this, you need to audit, log relevant information on the server, and maintain that history as long as it is logical in the matter of your production servers’ capacity. In case any issues crop up and you need to debug; your logs need to be turned into resources. Monitoring dashboards can also be used for tracking your API consumption. Remember to add the version in the paths of all APIs. This will allow the functioning of several APIs of various versions and also enable the retiring and deprecation of one version over the other.

Encrypting Data

All data should be encrypted employing TLS (Transport Layer Security) and signatures should be made mandatory; for ensuring that only authorized users can access, decrypt, and modify data.

The usage of Tokens, API Gateways, and Service Mesh Technology

The usage of tokens is a sound API security practice. Access tokens enable an application to access your API. An access token is provided after the completion of the processes of authentication and authorization. Using these tokens you can build trusted identities and then assign tokens to those identities for controlling access to the API.

An API gateway acts as a single point of entry for all API calls. A good gateway enables enterprises to not only authenticate API traffic but also analyze and control how APIs are used.

The service mesh technology employs yet another layer of control and management by routing requests from one service to the subsequent one. A service mesh optimizes the combined functioning of all these moving parts and also establishes proper access control, authentication, and other security measures.

Utilizing OAuth and OpenID Connect Mechanisms

It’s a good idea to delegate the task of authorization and authentication of your APIs utilizing OAuth and OpenID Connect.

Using OAuth you need not have to remember endless passwords and rather than opening an account on each website, you can connect via the credentials of a third-party provider. OAuth allows clients to get secured delegated access to the server resources on behalf of the resource owner. This mechanism is leveraged by biggies such as Google, Amazon, Facebook, Twitter, and Microsoft.

Coming to APIs, the API provider depends on a third-party server for managing authorizations. So, the consumer, instead of providing their credentials, provides a token obtained from the third-party server. This way the consumers’ credentials are not exposed thereby securing them, and the API providers need not worry about protecting the authorization data since they receive only tokens.

OAuth is used as a delegation protocol for conveying authorizations while OpenID Connect is an identity layer added on top of OAuth for offering additional API security and authentication.

Protocol for Authorization and Authentication

Several APIs are easily discoverable making them an easy target for hackers. This issue can be resolved by following the practices listed below.

Guard your API documentation via authorization credentials for controlling the number of API requests and the persons who can access them.
Try not to make APIs user-friendly because hackers often impersonate users and make use of descriptive error messages to intrude into the API.

Firewalling APIs

Firewalling works wonders in protecting APIs. API security is arranged into two layers as follows.

The first layer: This layer is in DMZ, with the API firewall for executing basic security mechanisms that include checking the size of messages, HTTP layer-related security, and SQL injections. This enables blocking intruders during the early stages. This message is then forwarded to the second layer.
The second layer: This layer is in LAN and contains advanced security mechanisms on the content of data.

Placing Rate Limits

The higher the popularity of an API, the greater are its chances to encounter malicious attacks like DDoS. DDoS attacks are executed by sending continuous calls until the server crashes. However, setting rate limits is an ingenious way to prevent such attacks on an API and to control the issues that adversely affect its performance. A rate limit controls how often an API can be called. Moreover, placing a rate limit throttles unauthorized connections as well.

Sharing Minimal Information

Check out the best practices on how to share minimal information.

Make sure that you display the minimum required information, particularly in error messages.
Lock content and email subjects to pre-defined messages which cannot be customized.
IP addresses may disclose locations and so it’s better to maintain their secrecy.
IP Blacklist and IP Whitelist can be used to restrict attackers from accessing your resources.
Separate access into various roles, limit the number of administrators, and hide sensitive information across all interfaces.

Bottom Line

I hope this post has conveyed how important it is for business organizations to incorporate API security practices. If you are looking for an IT firm for assistance concerning API security, picking an efficient and experienced Offshore Software Development agency would be a wise decision.

Offshore Software Development, Page 5 Category

Closed-Loop Mobile Payments: All You Need to Know!