This paper focuses on the major issues and challenges involved in handling and implementing security in web services. Like any software or web application, web services are also prone to security issues related to authentication, availability and integrity. New and challenging problems related to security arise due to the distributed nature of the web services and their cross platform access and also during service composition. As the web services provide access to the data in an autonomous way, the confidentiality and authenticity of the data transmitted through them attains more importance. In the recent years, many technologies and standards have emerged in order to handle the security issues related to web services. However new threats and attacks related to web services are also coming to forefront. Therefore, a study on the existing standards and protocols for security is carried out. The challenges that arise are also discussed.