Avoid the Risks of Outdated Credit Card Processing (Part 1)
Business owners may not be aware of the liabilities they face if their credit card processing is not up to date and secured against hackers. Credit card companies may argue that outdated processing technology in effect broadcasts information negligently, and insurance carriers may not cover this, highlighting the importance of both secure card processing and a good insurance agent.
Compliance 101 says, “If your credit card processing terminal is out of regulatory compliance, you’re putting your customer information and possibly your entire business in jeopardy. Businesses that use noncompliant credit card processing equipment are at high risk for a data security breach. A data breach while out of compliance could result in:
- fines and penalties up to $500,000
- monthly noncompliance fees
- damage to your reputation
Even if you do not suffer a data breach, noncompliant credit card processing terminals can cause major headaches including
- slower payment transactions
- longer downtimes
- loss of service
- inability to find replacement parts
Here’s what they advise you to avoid:
Non-Class A terminals are no longer in production and do not have manufacturer support. Replacement parts and inventory are increasingly difficult to find, and performance steadily degrades.
Noncompliant terminals no longer meet the standards for regulatory compliance. Merchants using noncompliant equipment are at risk for data security breaches and subsequent penalties up to $100,000.
Unsupported terminals are noncompliant and are not supported by the manufacturer or your merchant services provider. These terminals may be supported by a third-party service provider, but still put you at risk for breaches and penalties.
Obsolete terminals are outdated, noncompliant and wholly unsupported, making them ineligible for updates, modifications, troubleshooting or repairs. These terminals pose the highest risk for security breaches and subsequent fines. Continued use of these terminals may lead to the inability to accept credit cards and the potential failure of your business.Chargify.com recommends only dealing with the most reputable payment gateways, saying, “Any company who does business online knows how important it is to protect customers’ data with the greatest effort. In addition to keeping customers’ trust, penalties for non-compliance with PCI standards can reach up to $500,000 along with your company facing legal charges.
Recent statistics from Verizon Business suggest that Payment Card Industry (PCI) “compliant companies are 50% less likely to suffer a data breach.” Check out what you need to know about PCI here.
Chargify says, “In order to be PCI compliant, there are certain rigorous requirements companies must adhere to when processing cardholder data. But if you think that the process to become PCI compliant is too overwhelming for you or your company, have a look at what happened in January of 2007 to TJX Companies, Inc when 45.6M card numbers were exposed.” Chargify lists some advice on protecting your customers’ credit card data here.
Resourcenation echoes the theme here.
See Avoid the Risks of Outdated Credit Card Processing (Part 2) for more information and excerpts from the Merchant Bill of Rights.
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