Cyber Security, Data Breach, and the Importance of PCI Compliance
Shannon MacDonald ● January 5, 2023 ● 6 min read
Addressing consumer concerns regarding cyber security is an important part of earning and keeping your customer’s trust and business. Data breaches and the fallout from these events can seriously hamper this trust. With the right PCI compliance practices and tools in place, your company can become one that consumers rely on for secure transactions every time.
The Modern Landscape of Cyber Security is Fraught with Risk
These days, it seems that nearly every news outlet features regular coverage of data breaches and newly-revealed risks to digital data security.
This makes sense when you examine the landscape of our modern markets. We do almost all of our shopping online – and most of our payment processing, too. Even brick-and-mortar retailers use digital forms of payment processing. Every time you swipe your card or enter your customer account information into a register, you are handing over your personal and financial data to that retailer, their payment processor, and others.
If that sounds concerning, you are not alone. Many consumers report worrying about the inherent risks of doing business this way. However, most of us are not in a position to stop using digital payment processing for our personal or business transactions. This means that nearly all of us are potentially at risk of experiencing data breach events during our lifetimes.
Data Breaches Expose Merchants and Consumers to Numerous Concerns
Hearing the phrase “data breach” may be frightening, but what do they really mean for those involved? More than just a consumer’s personal information being stolen, a breach also involves numerous risks to retailers, payment processors, and everyone else involved in the handling of this data.
Beyond consumers being really angry, and potentially losing not only their trust but their business – a business may also have to deal with:
- Hefty fines and fees. Should a breach occur, and you are non-compliant with the PCI DSS, your business could face large fines. Non-compliance for 1-3 months can cost anywhere between $5,000 - $10,000. 4-6 months can run you $25,000-$50,000 per month, while non-compliance for a period of greater than seven months can mean fines of up to $100,000 per month! These fines can spell certain death for an otherwise thriving business, so compliance is all the more important.
- Legal risks. Consumers can – and often do – bring legal action against businesses that allow their personal information to be stolen.
- Fraudulent chargebacks. If personal information is obtained and used to make purchases, these purchases can result in chargebacks. These chargebacks cost companies billions each year.
BIN Attacks and Card Testing and How to Avoid Attacks
The first six numbers of a credit card are known as the BIN, or Bank Identification Number. These are always linked to the entity that issued the card. A BIN attack is using a known BIN and systematically generating the remaining digits of a credit card number, usually by using BOTs. Scammers then visit a business’s e-commerce site and begin a process known as brute force card testing. This entails hundreds of rapid e-commerce transactions for small dollar amounts to confirm which card numbers work.
Small transactions of less than $1 are typically used in these tests. Small amounts are difficult for fraud detection systems to detect, and most consumers are unaware of them. The valid numbers are then used to conduct significantly larger transactions, resulting in losses for merchants and issuers.
BIN attack fraud is particularly dangerous because it involves no theft or data breaches—the victim's card number is chosen at random.
A PCI-compliant payment gateway is the first step in dealing with card testing and other types of e-commerce fraud. The system should contain AVS and CVV matching, as well as current fraud screening solutions. Protocols for preventing fraud, such as 3-D Secure, can also assist in avoiding card testing.
How Does PCI Compliance Protect Consumers and Merchants?
There are many reasons to minimize the risk of a data breach. Keeping this risk as low as possible is the primary goal of the Payment Card Industry Data Security Standard or PCI DSS. Ensuring that your payment platform and daily operations are PCI compliant is the first step in ensuring the safety of your customers – and your business.
What exactly is PCI compliance? While the PCI DSS is not a law, it is a sweeping mandate across the entirety of the credit card industry that works to keep consumers safe. Specifically, this mandate exists to safeguard consumer data. Given how much data changes hands every day during financial transactions, it only makes sense for a standard like this to be necessary.
In order to accept credit card payments of any type, you must demonstrate and maintain PCI compliance. This standard also applies to your business if it is involved with financial transactions in any way, such as through processing or other services.
A qualified security assessor or QSA will provide self-evaluation tools for your business to determine your level of PCI compliance. While 100% compliance is obviously the goal, less than 30% of businesses receive this 100% rate during the initial period of evaluation. These evaluations can help a company finetune its everyday operations and payment protocols to raise this compliance level.
PCI compliance protects consumers by ensuring that their data does not become part of a breach. This protection also boosts business by increasing consumer trust and satisfaction. Safer financial transactions and a higher consumer satisfaction rating make this standard a win-win for companies of all kinds.
Security Scans for PCI Compliance
One of the best ways to ensure PCI compliance is through a security scan by an Approved Scanning Vendor.
This involves scanning your business’s IP address and network to identify any unauthorized access to the network or security vulnerabilities that could allow for unlawful access to corporate or consumer data.
Business owners should also engage in regular physical inspections of their point-of-sale systems to look for any unusual changes or physical devices that could indicate data siphoning, duplication, or other suspicious activity.
All of this is done to ensure that the business and payment processors are not only PCI compliant, but operating in the most efficient way to serve their consumers.
How Can Merchants Increase Security for Consumers Beyond PCI Compliance?
PCI compliance is important, but it is not the only way that merchants can ensure their consumers’ safety and protect against data breaches. Partnering with a payment processing solution that is both focused on this compliance and on helping you achieve it is another great way to provide your customers with the best possible service.
Need to talk about breach protection products?
Paystri is a full-service payment acceptance and technology provider that provides omnichannel support. With payment solutions tailored to the needs of modern businesses and their consumers, your company will have all the support you need to achieve and maintain PCI compliance. For more information on how we can help, contact us today!