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The Top 5 Causes of Data Breaches in Merchant Card Processing

Ray Moorman

It's the responsibility of business owners to keep their consumers' sensitive information safe. When merchant credit card processing comes into play, this protection can become even more complicated, sometimes resulting in data breaches of varying sizes and scope. It's crucial for businesses to recognize common causes of these cyber security incidents to put the proper safety measures in place. Let's take a look at the top five:

1. POS threats
To process debit and credit cards, businesses put a point of sale system in place. Unfortunately, the top cause of data breaches is POS intrusions (1) or system intrusions that allow access to POS data. Fraudsters are expanding their efforts not only to steal customer data, but counterfeit  it for future use. Merchants must ensure their POS solutions meet security standards, including PCI compliance, to reduce their risk of cyber crime because of their merchant card processing technology.

2. Employees
While many business owners may not expect it or want to admit it, their workers could produce a data hack, whether on purpose or not. In fact, the majority of data leakage comes from internal sources (2). Employees should be trained on information privileges, mobile device use and access guidelines. Merchants should also devise a plan for terminated or former employees so their credentials can no longer access vital materials. By educating people and creating comprehensive policies, companies can avoid serious negative cyber situations. This includes how customers' personally identifiable information is handled in any form, whether digital or paper.  Education should include coverage of how information is stored, if it is, retained and/or destroyed. 

3. Outdated software
People commonly disregard messages from their software installations advising them to update their programs. However, this practice could be detrimental to businesses, as failure to upgrade software could lead to hackers gaining access to customer information. Merchants need to make sure their applications and hardware are as current as possible. These updates normally address identified vulnerabilities, including security, and can provide important fixes. Depending on your POS system contract, these alterations could be managed by a third-party provider, taking the pressure off business owners to regularly check the security of their solution.

4. Stolen passwords
It's common for people to use the same or similar credentials across various sites and membership platforms. This practice, however, is one of leading causes of data breaches. Hackers prey on weak passwords and once they find one identifier, they will use it in as many ways as possible (3). Whether fraudsters discover the credentials through phishing schemes or stolen password lists, external sources know how to find their targets and exploit them. It's important for merchants implementing card processing to ensure their employees are consistently updating their passwords and customers are required to provide a diverse credential for sign-in.

5. Lost or stolen hardware, devices
Businesses are now starting to turn to mobile devices to improve their processes, including payment processing. Smartphones and tablets often have a higher chance of being lost or stolen, leaving customer information available to potential fraudsters. To combat this issue, merchants should make sure they are encrypting every piece of data that comes through their system, according to Certification magazine.

  1. http://www.verizonenterprise.com/DBIR/2015/
  2. https://www.forrester.com/Despite+Scale+Of+Sony+Hack+Internal+Breaches+Most+Common/-/E-PRE7486
  3. http://www.darkreading.com/attacks-breaches/the-eight-most-common-causes-of-data-breaches/d/d-id/1139795
  4. http://certmag.com/avoid-five-common-causes-data-breaches/

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