Payment hub security: Everything you need to know

Meet our security expert

Brian Hopkins, Chief Information Security Officer at Nomentia

Brian is responsible for internal operations and processes at Nomentia, including information security, data privacy and corporate ICT. Brian has over two decades of experience in payment automation including key roles in product delivery, product management, carve-out projects, HR and information security.   

Brian’s extensive experience and close customer co-operation has perfected his deep understanding of how cash management has evolved in organizations, from manual repetition to process automation and exception management. 

Security challenges in payment activities

The top security concerns regarding payments are tied to their sensitive nature. These activities involve a series of financial data, including account details, customer information, and transaction amounts. This makes payments an attractive target for cybercriminals. According to AFP’s 2024 report, 80% of organizations reported falling victim to payment fraud, with nearly 40% recovering less than 10% of stolen funds.  Any breach in security could result in compromised data, fraud, or disrupted financial operations.  

Based on the CIA model - Confidentiality, Integrity, and Availability, we can categorize the challenges related to payment activity security as follows: 

• Confidentiality: Breaches in confidentiality can occur when attackers intercept data, such as bank account details, during transmission. As payment systems handle high volumes of these transactions, any breach can expose not just one payment but entire networks of financial operations. 

• Integrity: Any alteration—whether accidental or malicious—can lead to major financial and operational consequences. For instance, unauthorized changes to payment instructions, such as altering the beneficiary's account number, can lead to misdirected payments and financial losses​ 

• Availability: The availability of payment services is crucial, particularly in real-time payment environments where even short downtimes can lead to significant operational disruptions. A denial-of-service (DoS) attack on a payment system could halt all outgoing transactions, leading to late payments, lost contracts, and reputational damage. 

These security issues are becoming more challenging because payment systems are getting more complex, often working with outside vendors and moving toward instant payments. 

Different payment security threats and their impacts 

Companies should be aware of several security threats when conducting payment activities. Some of the most common risks include: 

• Fraudulent transactions: Fraud can occur in many forms, but one of the most prevalent is altering payment details. Cybercriminals can intercept payment instructions and modify account numbers to redirect funds to fraudulent accounts. For instance, a business was defrauded of millions when hackers used compromised credentials to alter vendor payment details.
• Insider threats: Employees with access to payment systems can cause security breaches intentionally or unintentionally. Insider threats are often harder to detect, as they involve individuals who already have access to sensitive systems.
• Phishing and social engineering: Phishing attacks are increasingly sophisticated, often targeting employees through emails that appear to be from legitimate business contacts. For example, in phishing, known as CEO fraud, attackers impersonate a company executive and request urgent payments to fraudulent accounts.  

When any of the threats occurs, the most immediate impact of fraud is financial loss, which can vary significantly based on the transaction size. In cases where large sums are targeted, such as breaches involving banks with hundreds of millions at risk, the financial damage can be serious. There is also the risk of reputational harm, which can be just as damaging. Smaller fraud attempts may go unnoticed for long periods, gradually causing substantial cumulative losses although advancements in fraud detection systems have made these harder to execute. However, one-time, high-value frauds remain a significant concern despite these improvements. 

Why payment hubs are an ideal solution for secure payments

Due to the critical nature of payment activities, businesses must carefully evaluate the systems they use to manage payments. While ERP systems and bank portals have long been popular, these solutions can pose challenges, particularly as a company's financial infrastructure's complexity grows. Many ERP systems have built-in bank connectivity, but each system often operates differently. This lack of standardization can lead to complex processes, especially for organizations using multiple banks or systems. Bank portals, on the other hand, offer limited functionality and rely heavily on manual processes, which increases the risk of errors and fraud. 

Payment hubs come in the picture as secure places for payment activities, protecting them effectively from common frauds. One of the main advantages of using a payment hub is the ability to harmonize the payment process across multiple systems and banks. The payment hub ensures that all payments follow the specific approval processes, such as the "four-eye principle" for approvals and integrates fraud prevention features. These features can detect duplicate payments or unauthorized changes to bank account details. Additionally, payment hubs often come with robust security features like encryption and fraud detection. 

Payment hubs offer several security features as mentioned, but what exactly are they? And what companies should look for in a payment hub to ensure their payment activities are secure. We'll explore these aspects further in the next section.

Important security features of payment hubs

To safeguard payment hubs effectively, the platform must combine technical solutions with secure processes. When choosing a payment hub from security perspective, businesses need to make sure the providers secure these following features for their solutions: 

Technical security features 

A payment hub's technical security is foundational, ensuring that sensitive information is protected throughout the payment process. Usually, the technical features for security are covered in information security standards such as ISO/IEC 27001. Below are these must-have features: 

• Encryption: Data encryption is mandatory for payment hubs, both when data is stored (encryption at rest) and when it is transferred between systems (encryption in transit). This ensures that any sensitive payment information is protected from unauthorized access or tampering. All data processed within the payment hub should use up-to-date encryption algorithms and certificates. Point-to-point encryption must be used, particularly when payments are transferred between the customer's internal systems and external banking networks. 

• Audit trails and immutability: A payment hub should include a detailed audit trail feature that records all actions taken within the system, such as who initiated, approved, or modified a payment. These logs must be immutable, meaning they cannot be changed or edited once recorded. Audit logs help businesses trace any issues back to their source and can be used as evidence in cases of fraud or errors. While audit logs don't prevent fraud, they provide transparency into what occurred. 

• Single Sign-On (SSO) and Multi-Factor Authentication (MFA): To further secure access to the system, the payment hub should support Single Sign-On (SSO), allowing employees to log in using their organization's identity management system. SSO ensures that only authorized users with verified credentials can access the hub. Coupled with Multi-Factor Authentication (MFA), this feature adds an additional layer of protection, ensuring that external threats cannot misuse login credentials to gain access. 

• Real-time monitoring and alerts: A well-secured payment hub will monitor transactions in real-time, immediately identifying any suspicious activities or discrepancies. This can include detecting changes in payment amounts, recipient bank accounts, or payment frequency. AI-driven monitoring tools can provide early warning of potential fraud or errors, giving businesses time to intervene before processing payments. 

Process-related security features

Beyond the technical aspects, payment hubs also require comprehensive processes to maintain security and operational efficiency. These process-related features ensure that all employees use the hub securely, especially in large organizations. 

• Approval processes and access control: One of the primary process-related features is ensuring that all payment information remains immutable within the system. This includes strict approval processes, such as the "four-eye principle," where two authorized individuals must approve high-value or high-risk payments. 

• User permissions and management: Managing user permissions is crucial in large organizations with many end users, such as shared service centers. A payment hub should allow for role-based access controls, ensuring that each user has the appropriate level of access for their role—whether full access to execute payments or read-only access for viewing data.

• Segregation of duties: To minimize the risk of internal fraud, the payment hub should enforce the separation of duties within the payment process. For example, one employee may initiate a payment while another approves it. This division of tasks ensures that no single individual has complete control over the payment process, adding an extra layer of security. 

Advanced fraud detection and prevention

Fraud detection features are vital for any payment hub. They ensure that potentially fraudulent activities are identified and halted before they escalate. 

• AI-driven fraud detection to analyze payment data and flag suspicious patterns. For instance, if a vendor's bank account details suddenly change or payments deviate from usual patterns, the system can automatically flag these as potentially fraudulent activities. AI and machine learning technologies improve over time, distinguishing between legitimate and fraudulent transactions more effectively. 
•  Reporting and analytics: Detailed reports based on payment logs and real-time monitoring allow businesses to identify issues quickly. Furthermore, these logs can be integrated into Security Operations Centers (SOCs), enabling real-time alerts and responses if any suspicious activity is detected. 

Business continuity and disaster recovery

In addition to day-to-day security features, payment hubs should have a business continuity and disaster recovery plan to ensure that payment operations can continue even in the event of an outage or cyberattack. 

• Secondary hosting and data centers: Payment hubs should be hosted across multiple data centers in different regions. This ensures that if one data center experiences downtime, payments can be rerouted through an alternative location, ensuring uninterrupted service. 

• Disaster recovery plans: A strong disaster recovery plan outlines the steps the provider will take to restore services in case of a failure, ensuring that businesses can continue to operate smoothly within their service level agreements (SLAs). 
  

Emerging challenges and best practices for securing payment hub

As payment hubs take on increasingly important roles in managing payments for growing businesses, they are encountering new challenges. Among them, Brian Hopkins highlights two key challenges: the rise of real-time payments and the growing complexity of financial systems. 

Growing challenges

With real-time payments, the need for stronger security becomes even more critical. Once a payment is initiated, there is very little time to detect and reverse any fraudulent activity. For example, if a fraudulent cross-border transaction is processed, it can be nearly impossible to recover the funds, especially if the payment goes to a country with less stringent financial regulations. 

Additionally, as payment hubs become more interconnected with external financial partners, suppliers, and customers, the potential attack surface expands. This interconnectedness introduces more entry points for cybercriminals. A cyberattack on a third-party payment vendor could have a ripple effect, impacting the primary company and its operations. 

These challenges are just a few of the emerging issues businesses need to address when using payment hubs. While payment hubs come equipped with robust security measures, it’s essential to continuously strengthen their protection. Brian emphasizes that technical security measures alone are not enough. Companies must also implement best practices focusing on operational processes and internal governance to secure their payment hubs effectively.  

Best practices for payment hub security

Here are Brian's top recommendations for improving the security of payment hubs:

• Internal training: One of the most overlooked aspects of payment hub security is ensuring that employees are well-trained. Without adequate knowledge, even the best technical systems can be vulnerable to human error. All employees—particularly those responsible for managing payments—must be thoroughly trained in how to use the payment hub securely. Regular training sessions should be conducted to ensure users know how to navigate the system and avoid mistakes that could lead to security risks.

• Building information security culture and incident reporting: It is critical for companies to create a strong InfoSec culture. Employees should be encouraged to report incidents and unusual activity immediately. Clear reporting procedures help businesses identify and address potential security breaches before they escalate.

• Implement well-designed controls: Make sure payment hubs are equipped with controls that eliminate the possibility of mistakes or misuse. For instance, using role-based access controls or implementing data immutability.

• Regular access reviews: Companies should periodically review user access to ensure that employees only have the necessary permissions for their roles. By doing this regularly, organizations can minimize the risk of unauthorized access or misuse by individuals who no longer need certain permissions.

• Business continuity and planning for key personnel changes: Many companies must consider what happens when key users leave or are unavailable, which can result in significant delays or risks in payment processing. Companies should have backup staff trained and ready to take over in case a key user is unavailable. This avoids disruptions and ensures that payment activities can continue without interruption. In addition, a well-developed business continuity plan allows organizations to handle transitions smoothly. These plans should cover all aspects of the payment hub's operations, ensuring that there are no gaps in critical processes.

• Vendor due diligence and interconnected security: Payment hubs often integrate with external vendors, suppliers, and partners. This interconnectedness increases the potential attack surface. It’s essential for businesses to conduct strict vendor due diligence, ensuring that third-party vendors meet high-security standards. Failure to properly vet these external partners could result in a ripple effect if a breach occurs. 
  

The future of payment hub security

As the cyber threat landscape evolves, the security measures surrounding payment activities must do as well. AI and machine learning are set to play a pivotal role in the future of payment security, offering enhanced fraud detection capabilities that can analyze transaction patterns in real-time and flag suspicious activity before it becomes a significant issue. 

However, as AI-driven systems become more prevalent, cybercriminals are likely to adapt their tactics. Advanced AI could create more convincing phishing attempts or exploit vulnerabilities in automated payment systems. Treasury managers must remain vigilant, continuously updating security measures to stay ahead of these evolving threats. 

Behavioral analytics will also become more important, as these systems can learn what constitutes "normal" behavior for each user and detect deviations that may indicate compromised credentials or insider threats.

Advice for businesses using payment hubs 

For businesses adopting payment hubs, the most critical advice is to understand their security needs and select a provider that aligns with those needs. Security is not just about implementing the latest technologies—it's also about processes and people. Building a culture of security awareness, conducting regular employee training, and establishing clear protocols for handling payments are essential steps in minimizing risk. 

Additionally, businesses should thoroughly assess their provider's security capabilities, reviewing their compliance certifications, incident response protocols, and overall security architecture. By taking these proactive steps, companies can create a secure environment that protects their payment activities and supports long-term operational success​. 

If you're considering how best to navigate the challenges of payment security or need expert advice on setting up a payment hub that aligns with your business needs, exploring tailored solutions can provide the clarity you need. For those looking for further guidance or payment hub solutions, Nomentia is available to support you along the way. Feel free to contact our  team members to explore how we can support your needs.

Nomentia Payments is a global payment hub that offers centralized control over end-to-end payment cycles, optimizing cash management and minimizing financial fraud risks. By automating payment processes, businesses can improve day-to-day operations, whether processing payments locally or globally. 

Nomentia is a leading provider of payment hubs, highly esteemed by its customers for several critical reasons. Nomentia has delivered adaptability, speed, and a profound understanding of industry needs to cash management professionals and treasury teams.

Customers particularly value Nomentia's user-friendly interface and comprehensive functionality. As one reviewer noted:

"Nomentia's intuitive design makes it easy for our team to manage cash effectively." 

A key feature of Nomentia is its flexibility. Customers appreciate its ability to meet individual business requirements, whether by providing transparency in payment processes or offering custom solutions for payment approvals. 

Nomentia's modern interface and user-friendly design make it accessible to all users, regardless of their technical expertise. Additionally, its cloud-based solution ensures security and connectivity, enabling enterprises to manage their finances confidently. 

For large enterprises, Nomentia's payment hub is a transformative tool to centralize payment operations. It automates invoices, integrates seamlessly with ERP systems, and centralizes cash management, offering visibility and control over payments and bank accounts. By providing agile banking systems and secure payment processes, Nomentia empowers large enterprises to manage their finances efficiently, regardless of their size or complexity.

Read more customer reviews at G2

Read more about payment hubs:

• Payment Fraud: types of fraud & 4 best practices to fight it
  
• How to tackle payment fraud with a payment hub solution
• How AI and ML are used in payment fraud detection (16 use cases)
• How to choose the right payment hub solution