Online Exclusive: 3 Strategies for Ensuring Your Payment Platforms Are Secure

Consumers may think data breaches are inevitable, but if a business can show them that such risks are avoidable, it’s sure to profit. Don’t get left behind by your competitors—invest in a robust payment-protection platform before it’s too late.

• By Michael Thorne
• Jan 27, 2016

In the lead-up to the big holiday shopping season, U.S. retailers saw two major data breaches. Scottrade announced in October that it suffered a breach that affected 4.6 million customers, and a month and a half later, iSight Partners discovered “the most sophisticated POS malware” seen to date.

These breaches are expensive for businesses. In the wake of Home Depot’s 2014 data breach, analysts pegged the cost to the company at a staggering $10 billion, including investigation, remediation, and lawsuits.

In addition to the financial cost, brands that suffer breaches risk losing consumer confidence. According to a 2014 publication by the Ponemon Institute, few respondents would discontinue relationships with companies that suffered breaches. The reason people gave was simple: Breaches are unavoidable. Perhaps then businesses don’t need to bother, right?

But if a company can offer the products and services people want (along with the data security they deserve), that’s a brand that will garner trust and consumer devotion — and one that will avoid Home Depot’s $10 billion price tag for its failings.

Hitting Breaches Where They Live

Here are the three potential avenues of attack your business needs to deal with (and a few tips on how to keep your data secure):

1. POS

Some of the highest profile data breaches seen since 2013 result from problems at the POS. The attack comes in two steps. First, the POS system is accessed through stolen administrative credentials or simple brute force, and then it is inspected for vulnerabilities. Malware is placed on the system and proceeds to gather and store data.

Dealing with this threat is relatively straightforward. POS systems must be regularly updated with the latest software and firmware updates. Many still operate on Windows XP, which has known security flaws and is no longer supported by Microsoft.

A modern-day system with built-in encryption is essential, and if you are using a third-party physical POS device, you must take note of the company’s security policies and protocols. Don’t just assume the company’s system is perfect because a data breach is your PR problem.

2. Data Transfer

The second potential vulnerability lies in the transfer of data post-payment. While industry standard best practices are to encrypt all payment and personally identifiable information, this is not rigorously enforced, and data is often left unencrypted.

This approach is akin to wearing a meat suit while scuba diving. There’s a chance no sharks are in the vicinity, but if you stay in the water long enough, eventually you’ll be torn to shreds.

Data traveling from your POS to its processing point must always be encrypted using industry-approved algorithms. Don’t waste time developing your own — mathematicians, computer scientists, and cryptographers spend decades developing algorithms. Trust that they know better.

3. Data Storage

The final threat is to data in storage. This is often the most difficult data source to breach, but it can also be the most dangerous because of the types of information gathered here. In addition to payment data, these databases will store all aspects of transactions, including addresses, phone numbers, email addresses, and sometimes such sensitive information as Social Security numbers.

To avoid a major leak, consider a combination of data-level encryption and full-disk encryption (FDE). Data-level encryption helps prevent software attacks when the disk is in use, while FDE prevents data lost when a physical disk is removed from a device.

Encrypting everything can compromise speed and performance, requiring companies to invest in new hardware. Some businesses aren’t prepared to stomach that cost, so it’s also possible to encrypt the individual columns within a database that contain the most important data. Choosing between full and partial encryption is ultimately the business’s decision.

Dealing With a Breach

Effective data security is essential for companies dealing with electronic payments, and so too is a proper disaster recovery policy. After a breach is discovered, affected machines must be switched off and cut off from the outside world to prevent any additional data loss.

Third-party forensics teams will also be needed, and depending on the severity, law enforcement may need to be notified as well. Once the cause of the breach has been discovered, businesses must ensure it won’t happen again.

Consumers may think data breaches are inevitable, but if a business can show them that such risks are avoidable, it’s sure to profit. Don’t get left behind by your competitors—invest in a robust payment-protection platform before it’s too late.