Electronic payment processors usually require several layers of security and authentication methods, and access to centralized servers. A shift to a cloud-based system can help improve transaction times and reduce the risk of exposing sensitive user data to theft or loss. With Akamai's (news, site) planned cloud-based e-payment service, token-based payments can reduce the security risk and improve performance of online payments, and will help reduce the cost of security compliance for businesses.
Akamai has recently announced the Akamai Edge Tokenization, a system that combines the concept of hosted payment acceptance mechanisms and payment tokenization through a cloud-based setup. This enables merchants -- such as online retailers -- to convert credit card information into tokens in the Akamai cloud, which makes it more secure from being stolen or intercepted. While the system had been introduced in the US market a few months prior, Akamai plans to establish its e-payment facility in the Asia Pacific region with a Singapore hub in early 2011.
According to Akamai's vice president for international marketing, Martin Haring, the system will not run on Akamai's data centers, but on Akamai servers embedded within ISPs and telecom providers worldwide. "We run 77,000 servers in 90 countries that optimize web content, boost online delivery of data, cut latency and enable high quality of online service," Haring says. He adds that Akamai servers work with all three telecom providers in Singapore, which is an advantage given the company's plans to setup its regional base in the country.
Cost, Performance and Security Benefits
The system automatically provides compliance with the Payment Card Industry Data Security Standard (PCI DSS), which makes it easier and less expensive for merchants to comply with industry standards. PCI DSS costs reportedly run into six figures just to establish compliance, and Edge Tokenization can reduce these costs while still providing protection against security breaches.
Edge Tokenization does away with the need to route customers' credit card information through a provider's infrastructure, and this gives both security and performance benefits. For one, merchants no longer need to store credit card data on their local data centers, which can be at risk of data theft. Secondly, the cloud-based solution can reduce the time it takes to complete a transaction.
For example, Standard Chartered Bank, one of Akamai's clients, has been able to reduce transaction times for a five-step process from 70 to 20 seconds with Edge Tokenization. The same has led to a 25% improvement in online performance for its Straight2Bank application and a 20% increase in wholesale banking transactions worldwide.
Cloud Computing and Telecom Services in APAC
In its top predictions for the Asia Pacific region in 2011, IDC (news, site) says telecom providers will start offering cloud computing services to consumers and enterprises. Given that telcos have an advantage in terms of facilities and infrastructure, these companies can use cloud-based solutions and services as an added revenue source. For the Asia Pacific market, though, IDC predicts cloud services to lean more toward private cloud models rather than public.
Akamai's planned launch of its e-payment solution is in line with industry trends in the Asia Pacific region. With services going mobile and with telcos warming up to cloud-based business models, Akamai can take advantage of these trends in establishing a cheaper and more efficient way to secure financial transactions for end-users and enterprises.