How Safe Are Online Payment Gateways? What Every eCommerce Brand Should Know

India’s digital payments surged past Rs. 200 trillion in FY24. With growth came greater risk. As your e-commerce business scales, fast checkouts aren’t enough. Customers expect security, which they don’t have to think about.

A single breach can wipe out revenue and damage your reputation. Recovery is costly, and regaining trust is harder. According to IBM, the typical cost of a data breach in India reached Rs. 195 million in 2024. That’s a price no business wants to pay.

Payment gateways aren’t just tech. They’re your frontline defence. Choosing the right one is a strategic decision. The ideal features—fraud detection, encryption, secure APIs—can be the difference between scaling and stalling.

This blog explains what makes a gateway secure, the types of payment gateway available, and how to pick wisely. We’ll also share best practices to keep customer data safe and business risks low. Let’s get ahead of threats and build smarter.

Why payment security matters now more than ever

The global e-commerce boom has transformed how businesses operate. However, it has also opened the floodgates to sophisticated cyber risks.

Here’s why your platform must double down on payment security now:

• Explosion of digital transactions: In FY 2024, digital transactions hit over 208 billion, a sharp rise from 131 billion. Could climb to 439 billion by FY 2028–29.
• Rising cyber-attacks: 80% of retailers encountered threats; 50% saw growing vulnerability.
• Costly data breaches: IBM reports 2024 breach cost averaged Rs. 415.76 million.
• Strict compliance mandates: PCI-DSS, GDPR, and India’s Digital Data Protection laws demand rigorous security.

Today, securing payments goes beyond transaction safety. It’s about protecting your brand’s credibility, customer loyalty, and long-term business growth.

What makes an online payment gateway secure?

Payment gateways act as your first touchpoint of trust in the customer journey. A single vulnerability can put your entire platform at risk. Here’s what truly keeps your payment infrastructure secure:

• End-to-end encryption & tokenisation: Data is encrypted during transmission and replaced with tokens. That means no sensitive card info is stored or shared.
• SSL certificates & HTTPS protocols: All secure platforms must use HTTPS, which encrypts communication between browsers and servers. SSL certificates validate your identity and protect transactions.
• 3D Secure protocols: Use OTP-based authentication to verify users instantly, helping prevent fraud and minimise chargebacks.
• PCI-DSS compliance: This is essential for any digital business handling card payments. It ensures you’re storing, processing and transmitting payment data in a secure environment.
• AI-powered fraud detection: Modern systems track behavioural patterns in real time. AI tools flag suspicious activity, helping you act before fraud happens.

You need to look beyond surface-level compliance. True security is proactive. The goal is to stay ahead of threats before they impact your users. The best types of payment gateway combine performance with protection. But only if you choose platforms that are built for scale, flexibility and real-world security challenges.

Types of payment gateways and their security layers

Not all types of payment gateway are created equal. The choice you make will directly impact user experience, fraud risk and compliance efforts.

Let’s break down the most common types and their security frameworks:

1. Hosted gateways (e.g., Razorpay, PayPal)

These redirect users to a third-party checkout page.

• Security benefits: Handled entirely by the provider.
• Trade-off: Less control over the experience and limited data visibility.
• Ideal for smaller e-commerce players scaling fast.

2. Self-hosted gateways

Customer information is gathered and securely transferred to the payment gateway for processing.

• Security benefits: Full control over checkout flow.
• Responsibility: Requires you to ensure PCI-DSS compliance, strong encryption, and server security.
• Best for platforms needing deep branding and custom flows.

3. API/direct gateways

These integrate directly with your website or app using APIs.

• Security benefits: Flexible, scalable, and seamless.
• Caution: You must secure APIs, authenticate endpoints, and deploy fraud prevention tools.
• Ideal for mid-to-large e-commerce platforms with dev resources.

4. Mobile-specific gateways

Built for in-app transactions with secure SDKs.

• Security benefits: Encrypted SDKs, biometric support, and in-built tokenisation.
• Use case: Perfect for mobile-first platforms needing native UX.

At Pine Labs, we offer flexible, secure online gateway solutions across all these models. Whether you need hosted ease or API-level control, we’ve got you covered. Secure infrastructure, paired with the right gateway type, gives your platform the confidence to grow without compromise.

Benefits of using a trusted payment gateway

• Boosts customer trust and brand reputation: Shoppers trust platforms that offer smooth, secure transactions. It reflects your credibility and reliability.
• Reduces chargebacks and fraud: Built-in risk monitoring tools detect unusual behaviour instantly, helping prevent disputes before they escalate.
• Simplifies compliance for businesses: A reliable gateway is already PCI-DSS compliant, easing your burden and keeping you audit-ready.
• Faster dispute resolution: Timely support and automation tools allow you to resolve transaction issues quickly, keeping customers happy.
• Delivers seamless user experience: Frictionless checkouts with advanced authentication ensure security without slowing the buyer journey.

With Pine Labs Online, each transaction becomes an opportunity to earn lasting customer trust. Our platform delivers security, speed, and an effortless experience with every checkout.

With payment fraud projected to reach Rs. 8,520.47 billion globally by 2029, it’s critical to adopt systems that prevent rather than react. The right online payment gateway lays the foundation for smooth growth and customer satisfaction.

How to choose a secure payment gateway for your store

1. Red flags to watch out for

• No SSL certification: If the site doesn’t use HTTPS, walk away.
• Unclear pricing: Hidden fees often signal shady practices.
• No PCI-DSS compliance: This is the minimum security baseline. If it’s missing, it’s a deal-breaker.

2. Must-have security features

• AI-powered fraud detection: Stops suspicious transactions in real time.
• Multi-layer security protocols: Includes tokenisation, 3D Secure, and device fingerprinting.
• 24/7 customer support: A secure system means nothing without responsive help.

3. Evaluate vendor performance

• Read user reviews on reliability, support, and service quality.
• Check uptime guarantees—99.9% or higher is ideal.
• Assess integration flexibility across your tech stack, app, or web store.

4. Always test in sandbox

• Don’t go live without trial runs.
• Sandbox testing reveals bugs, checkout delays, and UX issues before your customers experience them.

At Pine Labs, we encourage robust sandbox testing and offer end-to-end support from onboarding to integration. We’re not just another gateway—we’re your growth partner. Select a secure payment gateway that protects your platform, your customers, and your peace of mind.

Wrapping up

Your payment gateway is your frontline against fraud, chargebacks, and trust issues. Every time a customer transacts, they’re evaluating your platform’s safety. That’s why regular audits, security updates, and informed provider choices are vital.

When you invest in a secure system, you protect not just revenue but reputation. Choose the right type of payment gateway today—because trust is your most valuable currency.

At Pine Labs Online, we deliver 360° digital payment solutions across in-store, online, and omnichannel journeys. Want to elevate your e-commerce security? Talk to our experts to learn how we can help protect and power your platform.