Transport Layer Security 101: What Is TLS and Why Does It Matter?

Read Time: 7 min

A phone with a lock and a checkmark on it to represent being secured by transport layer security.

Experts suggest that cybercrime will cost the world $10.5 trillion annually by 2025, making it extremely important for business owners to implement security protocols like Transport Layer Security (TLS).[1]Cybercrime Magazine.”Cybercrime To Cost The World $10.5 Trillion Annually By 2025“. April 26, 2023. While the internet allows businesses to sell products with a few clicks of a mouse, it also creates golden opportunities for scammers and hackers to access private data. Transport Layer Security (TLS) is one of the most effective web-based tools available to keep data and communication secure online.

If your business has a website, there’s a good chance you already use TLS to keep data secure. Without it, Google and other search engines would demote your page and prevent it from receiving organic internet traffic. It’s also important to use TLS within your payment gateway while processing transactions, as not doing so could leave your business and its customers prone to data leaks and fraud.

So, what exactly is Transport Layer Security? Below, we explore what TLS is, how it works, how it differs from SSL, and how you can use it to protect your payments. Keep reading to find out how the protocol can provide secure data transfers for your business!

What Is the Transport Layer Security (TLS) Protocol?

The Transport Layer Security protocol is a web security protocol designed to protect data communication between web servers and applications. TLS encrypts and communicates data through online channels, making it challenging for hackers and other nefarious criminals to intercept transmissions between web users and hosts. Obtaining a TLS is now standard practice for website owners, app creators, and other individuals or organizations utilizing internet communications.

TLS protocol is also helpful for payment processing. If you’re a merchant overseeing eCommerce operations, you should strive to protect your customers’ payment data at all costs. Encrypting sensitive data before it is communicated to servers can help protect against data leaks, which is why many merchants utilize TLS within their payment gateways.

How Does Transport Layer Security Work?

The process TLS uses to encrypt and communicate data is very technical. It involves public keys, private keys, and various other forms of security technology. A “session” begins with a client-server handshake, allowing the participants to verify that the communication channel is authentic. Let’s explore the process in detail below:

  1. The devices communicate the available encryption capabilities. Then, the client’s device displays the accessible Transport Layer Security versions and recommends a cipher suite.
  2. If possible, the client and server will use the TLS 1.3 protocol as it is the most efficient form of communication (1.2 is also valid).
  3. The client generates a random number for later use.
  4. The server communicates which TLS version and cipher suite it will use to communicate.
  5. The server uses certificates to authenticate that it is a genuine participant in the exchange, preventing impersonation.
  6. After certificate validation, the client generates and transfers a pre-master key (a public key encrypts the pre-master key, and a private key decrypts the pre-master key).
  7. The server and client create session keys by using the pre-master key and previously created random numbers.
  8. The handshake process is complete, allowing encrypted communication to occur.
  9. The system uses hash-based message authentication (HMAC) to verify the authenticity of the data.

The Development of TLS Encryption 

A woman studying TLS encryption with a checklist

The development of TLS encryption can be traced back to the SSL protocol. Originally developed by Netscape in the mid-1990s, SSL certificates are the predecessor of TLS, so web hosts often use the terms interchangeably. While SSL 1.0 was never published, the following version, SSL 2.0, was published in 1995, and in 1996, Netscape released SSL 3.0.

TLS 1.0 was first brought to market in 1999, and it was built on the back of 1996’s SSL 3.0 system. Simply put, SSL walked so TLS could run.

Since its initial release, TLS has continually been updated and developed, ensuring it protects web users from current online risks. Multiple iterations of TLS are available; TLS 1.0, 1.1, and 1.2, with the most recent version, TLS 1.3, published in 2018. While the release of 1.3 is an upgrade, more than 95% of websites still support TLS 1.2.[2]ClickSSL. “18 Top SSL Statistics Which Shows Why Website Security Matters in 2022“. Accessed on April 26, 2023. TLS 1.0 and 1.1 were deprecated in 2021, meaning they are no longer supported online.


As you know, SSL and TLS are often used interchangeably, but there are slight differences between the two. Firstly, SSL certificates are outdated—the last version of SSL was released in 1996, whereas the most recent version of TLS was published in 2018.

SSL is the precursor to Transport Layer Security, the latter of which has experienced continual development over the past two decades. TLS’s close link with the SSL protocol has led to the two terms being used interchangeably, confusing many web users and business owners. (For example, “SSL certificate” and “TLS certificate” often refer to the same protocol.) However, TLS is more effective at fighting security threats than SSL. Likewise, it’s more efficient, allowing quicker communication and improving web application performance.

On the other hand, the Hypertext Transfer Protocol (HTTP) is a protocol that facilitates online file transfers. It provides the framework for encoding and communicating information across the World Wide Web. Hypertext Transfer Protocol Secure (HTTPS) works the same way as HTTP, except it has a TLS certificate attached, making the protocol more secure via data encryption. In essence, HTTP employs TLS to provide data encryption, creating the HTTPS protocol.

Why Should Businesses Use TLS?

With a 74% year-over-year increase in the number of DDoS attacks in 2022, it’s more important than ever for businesses to invest in security protocols to protect their online assets from hackers.[3]Infosecurity Group. “2022: DDoS Year-in-Review“. Accessed on April 26, 2022. It’s no wonder that employing Transport Layer Security has become a widely recognized fraud prevention procedure among merchants aiming to implement safe eCommerce practices within their operations.

As Transport Layer Security offers advantages over the traditional SSL protocol, it is often the number one choice for many businesses in terms of their payment gateway security features. Not using TLS can expose your customers to fraud, data leaks, and other potential issues. It may also open up your business to man-in-the-middle attacks (when a perpetrator intercepts a communication channel) and other cyber security problems, resulting in downtime for your website, payment portals, and other web applications.

TLS has four core functions that it provides to businesses and other users:

  1. Authentication: Authentication verifies each person involved in the communication is who they say they are. This prevents external parties from online impersonation in which they pose as legitimate participants in an internet data exchange.
  2. Encryption: TLS encrypts data transferred between servers and web applications. In doing so, TLS helps prevent external parties from intercepting communications and gaining access to sensitive information.
  3. Replay Prevention: This form of protection defends against man-in-the-middle attacks and other types of cyber threats.
  4. Integrity: TLS assures that data communicated between parties hasn’t suffered from interference during its journey.

The Pros and Cons of a TLS Certificate

As with any additional security measure, TLS certificates have a range of associated pros and cons. Let’s explore the full list of advantages and disadvantages below:

TLS Certificate Pros

  • Encryption: TLS provides encryption, ensuring your website can securely transmit data away from the eyes of hackers.
  • Protection: TLS helps protect your business from man-in-the-middle attacks and online scams.
  • Access to Search Engines: Many leading search engines like Google, don’t prioritize websites without TLS certificates. This protects web users from non-secure online stores. If you want your business to rank well in search results, having TLS is necessary.
  • Reputation Gain: Without a TLS certificate, it can negatively impact your relationship with web users. Browsers, search engines, and other parties often indicate to online shoppers that a website doesn’t have a TLS certificate.

TLS Certificate Cons

  • Additional Registration: Obtaining a TLS certificate requires additional work. You’ll need to confirm that your web builder includes TLS, or you will need to purchase it separately.
  • Reduced Performance: In some cases, TLS-protected web pages and apps can have slower performance due to the “TLS handshake.” However, this performance reduction is hard to notice as developers have significantly reduced its impact.
  • Specified Target for Hackers: As TLS grows in popularity as a security protocol, its enemies have increased focus on exploiting its weaknesses. With hackers from around the globe focused on cracking TLS communication, issues can arise without warning.

Implementing TLS to Protect Payments

A laptop with a lock on it to represent transport layer security.

Over 1.2 billion websites are online, and more than 96% of them have a TLS/SSL certificate.[4]Abdalslam. “SSL & TLS Certificates Statistics, Trends And Facts 2023“. Accessed on April 26, 2023. With the majority of websites already using TLS/SSL certificates, it’s obvious that obtaining one to protect payments is a necessary step for starting an eCommerce business. Ensuring the integrity of data exchanged through internet communications will allow businesses to establish more trust from their customers.

While implementing a TLS certificate is usually straightforward, it’s important to work with secure payment gateways that utilize TLS. By securing an eCommerce merchant account at PaymentCloud, businesses can reap the benefits of TLS while simplifying their payment operations. If you’re looking to enhance your online presence and safeguard sensitive information, add Transport Layer Security to your priority list!

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A cloud with credit cards in it to represent Transport Layer Security.

Article Sources

  1. Cybercrime Magazine.”Cybercrime To Cost The World $10.5 Trillion Annually By 2025“. April 26, 2023.
  2. ClickSSL. “18 Top SSL Statistics Which Shows Why Website Security Matters in 2022“. Accessed on April 26, 2023.
  3. Infosecurity Group. “2022: DDoS Year-in-Review“. Accessed on April 26, 2022.
  4. Abdalslam. “SSL & TLS Certificates Statistics, Trends And Facts 2023“. Accessed on April 26, 2023.

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