Avoid the Risks of Outdated Credit Card Processing (Part 2)
Continued from Part 1
The Merchant Bill of Rights includes:
#7 The right to encrypted card numbers and secure transactions
“Obviously, you would never want the credit, debit and PIN numbers of your customers stolen by hackers. Large payments processors prevent hundreds of thousands of attempted hacks every day with layers of state-of-the-art security, technology and techniques to safeguard sensitive account information.
Data security solutions are quickly evolving, yet, not all processors guarantee encrypted card numbers throughout the transaction lifecycle and secure payments. Many have not implemented the most advanced technology, and if they have, may not have made the financial investment required to completely protect their systems. This puts every merchant at risk ― especially small and mid-sized businesses that don’t have the internal resources to ensure their customers are protected … unlike their larger counterparts. It also puts the millions of consumers who use credit and debit cards at risk … with possibly devastating consequences. Robust security and data encryption is a must ― not an option.”
#8 The right to real-time fraud and transaction monitoring
“Credit and debit card fraud costs American businesses billions of dollars every year. Thieves work overtime to find ways to steal from merchants. Often disgruntled or dishonest employees ― even some customers ― are masters at making money the illegal way … and not getting caught.
As such, real-time fraud and transaction monitoring are critical to your business’ success. That’s why large merchants have entire departments and controls devoted to detecting and preventing fraud. They analyze patterns and transaction types in real time, identify suspicious activity and take quick action to counter it. On the other hand, you probably need to rely on your processor to provide these services. Yet, many processors don’t provide them, leaving you exposed and vulnerable. You must recognize this risk and protect yourself against it.”
In an article entitled “Protecting Your Small Business Against Data Theft,” the National Federation of Independent Business (NFIB) said, “Most business owners fail to grasp the scope, costs and risks of these frauds when it comes to their businesses,” McDowall says. “The US Department of Treasury concluded over a year ago that online fraud was as profitable as the global illegal narcotics trade—estimated in the hundreds of billions to low trillions of dollars annually. A recent FBI study concluded that 90 percent of all businesses are vulnerable to identity-related frauds and the overwhelming majority of these result in significant non-budgeted expenses.”
One key to avoiding the fraud fallout is finding an insurance policy that covers it. If you haven’t already, contact your insurance carrier to determine their level of credit card fraud coverage.
Practicalecommerce.com notes that “A few insurance companies provide policies for credit card fraud and data breaches, covering both a merchant’s hard cost of fraudulent sales and any liability for data breaches. AIG, the publicly-traded insurance company, was one of the first,” and Insure.com discusses a policy covering online credit card fraud.
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