What is a common method for preventing online fraud?

Implementing encryption and secure payment gateways is a widely accepted and effective method for preventing online fraud. This approach ensures that sensitive information, such as credit card details and personal data, is securely transmitted between the customer and the merchant. Encryption technology scrambles the data, making it nearly impossible for unauthorized parties to intercept and use it.

Secure payment gateways add an additional layer of protection by verifying transactions and providing authentication processes. This helps to ensure that the parties involved in a transaction are legitimate, thereby reducing the risk of fraud.

In the context of online financial transactions, where the risk of data breaches and identity theft is significant, these measures are crucial for both businesses and consumers. They foster trust in the online payment process and compliance with various regulatory requirements related to data protection and privacy.