For over 40 years, Futurex has been providing hardened enterprise-class data security solutions. Over 15,000 business and financial organizations use the company’s innovative cryptography and tokenization solutions to address mission-critical data encryption and key-management needs. Futurex serves Indian customers across BFSI, E-Governance, Retail, Telco, and Automobile sectors, securing high-value transactions. In India, Futurex has its data centers in Mumbai and Hyderabad. During an interaction with Nitisha; Ruchin Kumar, VP South Asia, Futurex elaborates on the cloud payment HSMs and their role in securing the fintech industry and payment organizations.
Kindly elaborate Cloud Payment HSMs and their role in securing the fintech industry and payment organizations.
Cloud payment HSMs encrypt and decrypt cardholder data and manage encryption keys. However, their full range of use cases includes such diverse functions as acquiring payment transactions, issuing payment cards and PINs, validating payment card data, generating payment keys, and performing point-to-point encryption (P2PE). In short, cloud HSMs do the same things as on-premises HSMs. The difference is in how the HSM is managed. Cloud payment HSMs are usually based in data centers and managed through web interfaces.
Kindly highlight the advantages of Cloud Payment HSMs over on-premise payment HSM.
Cloud payment HSMs share the same functionality as their on-premises counterparts, but they have several advantages. Cloud HSMs can be deployed immediately, integrated quickly, and operated easily. Once a user signs up for a cloud HSM license, they can spin up their HSM through a web interface. Taking Futurex’s VirtuCrypt cloud platform as an example, the user then inputs information about their host applications to integrate them with the HSM via an API. After this is done, they can begin setting up encryption and key management use cases with their cloud payment HSM. This simplifies the process for the user while giving them a full range of payment HSM functionality.
Throw some light on adoption scenario of Cloud Payment HSM in India and factors driving it.
While India’s robust payments industry is moving in the direction of cloud payment HSMs, the rate of adoption is slower among larger organizations and faster among smaller ones. The organizations relying most on cloud HSMs are fintech organizations. Within India, thousands of these organizations are developing innovative solutions that benefit from the versatility and cost-effectiveness of cloud payment HSMs.
Level of Cloud Payment HSM adoption in India vis-à-vis the rest of the world.
India’s payment sector is growing quickly, making the country a hub for payment processing and financial technology. However, Indian payments organizations are somewhat slower to adopt cloud payment HSM solutions compared to payments organizations in other market regions. Larger organizations tend to have invested more in their on-premises cryptographic infrastructure, making it harder to quickly adopt new cloud-based solutions. A challenge for both large and small organizations has been finding a cloud payment HSM provider that complies with India’s data localization laws, which state that customer payment data must be processed and stored within India. This requires foreign cloud HSM providers to establish data centers within India.
Which sectors have taken the lead in embracing Cloud Payment HSMs?
India is well known for its fast-growing fintech industry. This sector is by far the fastest adopter of cloud payment HSMs. Cloud cryptographic solutions are fast to deploy and easy to use, making them a good option for smaller organizations that want to get their products to market quickly, without compromising on security.
Regulatory environment that is supporting adoption of Cloud Payment HSMs in the country.
The Central Government has enacted comprehensive policies to protect user data. Some of the most well-known of these policies are the IT Act, 2000, a piece of legislation that requires digital signatures to authenticate messages and other types of user information. Digital signing is a common use case of cloud HSMs and cloud key management, where a certificate authority is established in the cloud to issue the asymmetric key pairs that form digital certificates.
Challenges in the adoption of Cloud Payment HSMs in India and possible solutions.
The biggest challenge organizations face when considering a cloud payment HSM are 1.) their existing cryptography investments, and 2.) finding the right cloud HSM provider. Larger organizations tend to have more invested in their on-premises cryptographic infrastructure, making it harder for them to migrate to the cloud. Both large and small organizations must first find a trusted cloud payment HSM provider that complies with India’s data localization policies. Fortunately, Futurex has established data centers throughout India to resolve compliance issues. Futurex, as well as its many distributors and resellers across India, consults with organizations to help them find the right HSM solution, be it migrating on-premises infrastructure to the cloud, adopting cloud solutions from the start, or upgrading on-premises HSMs.