Having someone steal cash or inventory from your store is always a horrible experience. Not only do you feel violated, but you also might have to spend months talking to insurance companies, banks and law enforcement officials as you work to reverse the damage.
However, as bad as physical break-ins are, data breaches are often worse — much, much worse.
Yet what exactly is a data breach?
How Do Data Breaches Actually Work?
When a data breach occurs, criminals don't steal physical goods — they steal digital information. Phishing scams and Pin pad skimming are popular methods for obtaining data. However, the real danger happens when remote hackers successfully exploit vulnerabilities within your payment environment or data storage protocols. In most cases, these cyber attacks target credit cards and bank accounts — details that allow criminals to make unauthorized purchases down the road.
Nevertheless, data breaches aren't limited to sensitive financial information. Criminals can also steal:
- Addresses and emails
- Health records
- Social Security numbers
- Buying preferences
With enough of this information, cyber thieves can steal entire identities. Further compounding this problem is the ease with which hackers can sell your customers' data to other criminals.
Why Data Breaches Are so Serious
Pretty much everyone loses whenever a data breach occurs (except for the criminals, of course).
Your customers may end up spending years fighting fraudulent claims, rebuilding destroyed credit histories, or reclaiming their stolen identities — and the damage to your business is no less troubling:
- You could be on the hook for any fraudulent losses that occur. There aren’t many insurance companies that cover you for data theft.
- Even if the breach wasn't within your control, you can expect to lose countless hours drowning in paperwork and phone calls as you try to recover from the data breach.
- If the breach was within your control, be prepared for penalties, legal fees, expensive audits and card replacements (for every affected customer).
- Last but not least, data breaches quickly erode whatever trust you've already built up with your customers. You might never win them back.
How to Prevent a Data Breach From Killing Your Business
Data breach analysis and prevention aren’t easy. This is because criminals constantly improve their tactics, even as data breach best practices continue to evolve. Below are some commonsense strategies for reducing the frequency and severity of data breaches within your own business:
- Make sure that employees and vendors only have access to the information they need to do their jobs.
- Ensure that all of your IT platforms follow the latest protocols. This means investing in secure hosting and non-pirated software. You should also keep your systems up to date by installing virus protection and all relevant patches.
- Conduct periodic security assessments to isolate potential vulnerabilities within your payment and storage systems. You may have to hire outside help if you don’t have an in-house IT team.
- Only use PCI-compliant payment processing that adheres to the most current data security standards. Know that these PCI rules also apply to how you store payment data after the transaction is complete.
- Select a payment provider that specializes in advanced data security. Features to look for include point-to-point encryption (P2PE), tokenization and user-side fraud management tools.
If you’re really concerned about data breaches, you might consider using hosted payment pages that allow you to completely remove your business from the data collection and storage processes.
To learn how BluePay can limit your exposure to data breaches, contact our merchant support team today.