Are you worried about a consumer data breach?


If you type "data breach" into Google, you'll get thousands of results, including news stories about high-profile breaches at Target, Barnes and Noble, Home Depot, and Wendy’s. Data breaches are top of mind for consumers, but merchants are also concerned...with good reason. The 2014 JP Morgan Chase breach affected 76 million households and seven million businesses.

Consumers are worried.  

A recent Unisys study found 59% of consumers are afraid of having their credit card data stolen or abused.  While the EMV chip card technology has helped alleviate the risk of fraud with Card Present transactions in POS devices, the Card Not Present (CNP) fraud is skyrocketing. 

In Europe, the CNP fraud rate rose from 25% in pre-EMV 2004 to 64% in 2010, as reported by the European Central Bank.  This substantiates why 49% of consumers feel vulnerable to security risks when transacting online, as reported by Kaspersky Lab.

Merchants are worried. 

IBM’s 2016 Payments Merchant Study found that 92% of merchants are concerned about potential breaches and exposure of their customers’ data.  They understand the intuitive cost of breaches.  But what’s the actual cost?  According to the Ponemon Institute, the average is $3.79 million for the 350 breaches in 2015.

Is there a solution?

Merchants can significantly reduce their security risk by eliminating the on-premise storage of consumer payment data. IBM reports 71% of merchants are storing consumer data in their data centers.  Merchants should take a hard look at using a cloud-based payments service that tokenizes consumer data for the merchant, such as IBM Payments Gateway.  This also reduces the merchant’s cost of Payment Card Industry (PCI) compliance, which ranges from $100,000 to $750,000 a year or more, depending upon the merchant’s number of annual online transactions.

Technology with built-in security like IBM Sterling Secure Proxy can also protect your file transfers, network, and data from public internet threats. To learn more about how to improve the security, visibility, and performance of your B2B file transfers and protect your internal network, watch the on-demand webcast, Improving Security at the Edge of the Enterprise.

As technology advances, so do the opportunities for a major data breach.  Why wouldn’t you do what you can to reduce risk, including educating yourself, your colleagues, and your customers and implementing state-of-the-art security for your payments and customer data. 

Take into consideration how your customers are purchasing today. Are they buying from a laptop?  From a tablet?  From a smartphone?  From a kiosk?  This omnichannel world makes the cloud the optimum place for storage of personal credit information.  When you choose to go into the cloud, make sure your provider is PCI Level I compliant.

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About the Author

Mark Reinsager is Manager of Strategic Partnerships for Lightwell. In this role, he ensures that our business partners are successful and that we are working together optimally to ensure the most success for our clients. And when our partners and clients are successful, then everything else will take care of itself.