Online Payments in Hosting Business – What Can Go Wrong?

We recently published posts about online charitable donations and an article about accepting money on marketplace platforms.

Here they are:

• Charity and Online Donations

• Marketplaces and Online Payments

Today we'll look at another type of business – a hosting service. The complexities of managing an online payment gateway system in such entrepreneurship are slightly different, owing to a different set of risks involved in the process.

But does this mean that implementing online payments is impossible or especially difficult? Learn more by reading this blog post!

Web Hosting Makes the Internet Possible

There would be almost no pages on the internet if hosting companies and their services did not exist.

It would be similar to the old days when it was necessary to own all of the infrastructure required to run a website. Furthermore, you'd need to acquire the knowledge required to make the page available online. The Internet was primarily a domain for scientists and engineers at the time. There is no advertising or online shopping. There are no kitten videos. There are no memes. Nothing! It's dark, dark times.

Then hosting companies came along and simplified things for all of us.

Web hosting is a service that enables people (individuals, organizations, and businesses) to build websites. The page is accessible via the Internet thanks to the hosting provider.

Of course, in light of what I've said, web hosting companies are essentially what make the internet we know possible. As a result, they are perfectly normal (and necessary!) internet businesses. However, their activity may give them access to illegal practices and fraud, which automatically burdens them with risks. What are these dangers?

The Dangers of Offering Hosting Services

Unfortunately, the ability to upload various content online and make it publicly available can be a double-edged sword.

What should a hosting company owner be concerned about? The list isn't particularly long, but some issues must be addressed before things can move forward.

1. Shady content

Malicious software and viruses, but also, for example, various illegal materials or files from illegal sources (such as pirated movies and music) – all of this smells like trouble, doesn't it?

Malware and computer virus infections can pose a significant risk to system users and internet pages, as infected systems are capable of infecting other systems and launching DDoS attacks.

2. Spam messaging

Another spectacular branch of illegal activity, inundating millions of inboxes every day with unnecessary and/or dangerous material.

There was a time when this type of activity was used to promote a product. Today, it's a completely obsolete method of gaining attention, and it can cost the sender a lot of money. (The most common penalties for these practices include internet service provider blacklisting, fines, lawsuits, and... hate mail! Indeed, what is the Internet if not for hate mail?)

Unsolicited email messages are now primarily used as a gateway to numerous data breaches, scamming, phishing, and other forms of fraud.

Many web hosting companies refuse to provide their services to spammers. After all, sending massive amounts of mail is easily traceable.

3. DDoS attacks and break-ins

Another vexing problem for a hosting company.

DDoS (Distributed Denial of Service) attacks can make websites run very slowly or even impossible to access.

DDoS attacks come in a variety of forms, but in a nutshell, it is a traffic attacks. It occurs when, for example, a large number of compromised systems infected with a trojan virus flood the target site with hostile requests. As a result, the abnormally high volume of traffic from various sources – generated by systems controlled by the hacker – makes the page difficult to access or inaccessible at all.

A break-in to a hosting or e-mail account is another threat that a hosting service provider must be aware of. Forcible entry may result in, for example, leaked personal information (such as passwords, addresses, etc.). It could later be illegally used or distributed by the third party who broke into the account.

4. Service user complaints

Customers who are dissatisfied This is something that almost every type of business has in common.

Because of the possibility of hacker attacks, the provider can't really predict everything that can go wrong within the infrastructure, but still has to deal with the fallout when the end product fails to meet the client's expectations.

Sometimes it's just a single DDoS attack that can't be stopped in time. When this happens, a slew of user complaints follows, as the service is frequently rendered inoperable. Customers' websites do not work at all or work painfully slowly, and thus do not meet SLA requirements (service level agreement). This could result in a sudden surge in refund requests.

To Host or Not to Host?

Hosting companies are invariably more vulnerable to legal action. Even though our list is quite short, there are still a lot of things to consider.

The risk is not always completely tangible. Everything appears to be fine until one day, copyright claims appear out of nowhere. Or users start contacting you because the service isn't performing as expected. (Alternatively, they may simply slap you with a chargeback.)

Things like that make it a little more difficult, but online payments are still possible!

Your payment service provider may require you to fulfill additional conditions before processing, and these additional conditions help you balance out the majority of the potential risks. These extra guarantees and precautions could take the form of a larger rolling reserve.