The cost of data breaches for small businesses
The fallout for businesses that fail to protect data is clear. You've likely read about security breaches at retailers in the United States this past year, where attackers exploited weak point-of-sale terminals to access the information of millions of customers.
The economic damage from these incidents is rising. According to a joint Ponemon Institute and IBM study, the average cost of a data breach for businesses increased 15 percent year-over-year in 2014.
EMV deadline approaches
Security concerns for small businesses are constantly evolving, and a major change is coming Oct. 1, 2015. After that date, if your business doesn't use payment readers that accept cards with chips as opposed to the traditional (and far less secure) magnetic stripes, you could be responsible for fraud.
This is referred to as the Eurocard, Mastercard and Visa, or EMV, liability shift. After the shift, whichever party in the payment transaction (card issuer, acquiring bank, processor, or merchant) has the least secure system would cover costs of a breach.
If a customer comes in and swipes an old-style mag-stripe card in your reader, which you've upgraded to comply with new standards. If cyber thieves hijack that transaction, the card issuer (likely a bank) may be the party responsible for any loss.
It's worth noting that some believe U.S. companies may simply not be ready and the EMV liability shift might be postponed. But smart business owners are preparing for the shift regardless. Creating a more secure payment environment reduces your chance of being the victim of a data breach and builds trust with your customers.
Securing your business
If you'd like to tighten the security of your business' payment system, it can be daunting knowing where to start. One place is the Federal Communications Commission, which has a web tool you can use to make a custom cybersecurity plan for your small business.
The right payment service partner can also make a difference. A trusted vendor can ensure your business complies with the latest security requirements of the Payment Card Industry Security Standards Council.
Despite all your precautions, your business can still become a victim of cybercrime. You may want to make sure the payment service provider you pick offers breach assistance, which covers certain costs associated with fraud.