$5,000 Per Card Breached: Data Security is Every Merchant's Responsibility

There are threats every day

Equifax. Target. These companies have become shorthand for data breaches. If you or anyone you know has been hacked or simply had their credit card stolen, you know what a pain it can be. Unfortunately for merchants, the pain and the penalty are much worse. Every day there are threats from hackers, criminals and nation-states attempting to figure out a way to steal customer payment data. The challenge for merchants is to stay one step ahead.

Many merchants are PCI non-compliant (even if they think they are)

PCI compliance is all too often an afterthought for businesses accepting credit card payments. Every business with a merchant account must both attest to and comply with Payment Card Industry (PCI) standards. Unfortunately, too many processors see PCI compliance as another way to charge an extra fee and the result is merchants aren’t educated or taking PCI compliance seriously. This can have major consequences like...

Fines are no joke

The last thing any business wants is to have their name in the headlines with the word “breach”. The PR hit alone can be insurmountable. On top of that, fines for violating PCI compliance start at $5,000 per record breached. That means if you have a single card stolen, and it is used for 5 fraudulent transactions, you could be facing $25,000 in fines (5X$5,000 Per Record Breached)! Most breaches involve hundreds, if not thousands, of cards and the fines can be astronomical.

EMV is not the gold standard, P2PE is

Chip cards have been around for years in Europe and the rest of the world, but do they make you any safer? The truth is, they are an upgrade from the old swipe technology (which is the same tech as cassette tapes and 8-tracks). Ultimately, the only way to really protect sensitive payment data for in person and over the phone/mail order transactions is with Point to Point Encryption (P2PE). Point to Point encryption means that sensitive data is secured from the second it is dipped, swiped or keyed, using encrypted hardware and software.

Follow the golden rule

You wouldn’t want your own credit card information written down and stored, or saved on a someone’s computer, would you? Then you shouldn’t do that with your customer’s information either!. Treat your customers payment card data the way you would want your own data treated.  There are several cost effective solutions that can provide peace of mind to know that you are not just PCI compliant, but as secure as possible with their sensitive data. Running a business is enough stress, the last thing anybody needs is a breach.

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Credit Card Fees (Interchange Explained)

What is Interchange?

Interchange is the fixed cost for each card type issued by Visa, Mastercard, Discover, American Express and other credit cards for US merchants. It is regulated by the Federal Reserve, and changes every April and October. There are hundreds of different rates, based on the type of card and issuing banks. Visa, Mastercard and the other credit card companies publish these rates on their websites and every processor in the US has these exact same fixed costs.

What/who gets paid interchange?

Interchange is paid to the card-issuing banks, credit card companies and processing networks to cover the cost of each transaction. When a card is authorized, both the card issuing bank and the processing network are called upon to authorize and accept or reject the transaction based on available funds/credit. Visa, Mastercard and the other credit card companies make up the bulk of the fees for interchange to cover the cost of accepting these payments as well as the risk.

Why do interchange fees vary?

Interchange is based on risk and rewards. A debit card with no credit associated with it, used in-person would qualify for an interchange rate of only 0.05% + $0.22, whereas an AMEX corporate rewards card taken over the phone could cost upwards of 2.89%. The more risk, the higher the interchange rate. Instances where a card is either swiped or dipped will cost less than a transaction processed during a phone call, or made through a website since these transactions are less prone to fraud.

Why do I have to pay a processor on top of interchange?

Visa and Mastercard won’t do business directly with the majority  of merchants unless they are the size of Costco. Since credit card transactions can be disputed for a fixed period of time, and since fraud exists, there is a risk associated with each transaction. Processors fill in that gap by accepting the risk for a small fee on top of the interchange rate. Fees above interchange are also completely unregulated, which is why two merchants with the exact same business type, volume and credit history could have two wildly different rates. Ultimately, the cost above interchange is whatever the processor and the merchant agree to.

IF YOU WOULD LIKE TO LEARN MORE OR TO SCHEDULE A TIME TO TALK, PLEASE CLICK HERE.