How to stop credit and debit card fraud at the POS terminal

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How to stop credit and debit card fraud at the POS terminal
Posted on: February 24, 2022, 07:37:10 AM
There has never been a more dangerous time in history to start and run a successful business due to the increasing trend of data breaches that continues to rise. If we want to avoid mistakes that lead to data breaches in the future, we need to remain on top of new methods that hackers use to steal our credit and debit card information.

According to IBM's latest data breach report, there was a 6.4% increase in the cost of a data breach in 2018. The cost of a data breach grew dramatically from the 2020 report to the 2021 report, rising from $3.86 million to $4.24 million (an increase of $380,000, or 9.8 percent). Each lost or stolen record containing sensitive and private information costs $161, increasing $146 in the 2020 report year. This is a decline of 1.5% from the previous year's report to 2019.


Point-of-sale Customers may lose faith in a company's products or services if their personal information is compromised, resulting in a costly repair bill. By altering the magnetism of iron-based particles on a band of magnetic material on a magnetic stripe card, it is possible to store data. Credit cards, identification cards, and transit tickets employ magnetic stripe cards.

Hardware systems for processing credit and debit card payments at retail establishments are called point of sale (POS) or point of purchase terminals (POP). Hardware includes software for reading magnetic stripes on credit and debit cards. A traditional POS terminal first scans the magnetic stripe on a credit card to determine whether there are sufficient funds to make the purchase, and then the transaction is completed.

Upon the sale, a receipt is generated and delivered to the customer through email or text message. POS terminals can be purchased or leased, depending on the merchant's preference for managing their cash flow. As soon as the consumer pays, the merchant computes the total amount due and displays it on an invoice to review and make payment. Because it serves as both a point of sale and a point of return for consumer orders, the point of sale is sometimes referred to as the "point of service." There may also be tools for inventory management, CRM, financials, or warehousing in the POS terminal software you use.

Several instances of data breaches affecting millions of customers have appeared recently. A company's point of sale is often the source of these data breaches. Point-of-sale hacking is primarily concerned with obtaining unsuspecting customers' 16-digit credit card information.

Cybercriminals may make a lot of money selling credit cards on the dark web, accounting for 60% of all POS transactions. Individual credit cards can sell for up to $100 on the black web. Restaurants, retail establishments, grocery stores, and hotels are frequently the targets of POS data breaches.

READ: How to Get Opay POS Machine for Business

In today's cashless society, POS services are becoming more and more common, and one of the most evident convincing reasons is that they eliminate the need for price tags. When an item is added to stock, the selling price is generally connected to the product code, so the cashier has to scan and complete the sale of the goods.

The inventory window also makes it simple to make a price adjustment. The opportunity to provide numerous discounts, customer loyalty programs, and improved inventory management are all advantages of using an ePOS system.

To take advantage of the growing popularity of POS electronic transactions, fraudsters have also constructed gateways to do so. In December 2021, bleep computers released research showing that 1.8 million people's credit card information was taken from sports gear websites.

An attack on a POS system can be likened to a computer hack. Installing a monitoring device called BlackPOS allows cybercriminals to access the system. To steal credit and debit card information from the point of sale, BlackPOS was developed as a piece of spyware. Using stealthy means, the BlackPOS infiltrates the PC and takes data to a remote server.

It is easier for thieves to infiltrate small and medium-sized firms than large ones, making them prime targets for cybercriminals. POS systems are just PCs that operate on Windows and are prone to the same dangers as a typical Windows-based computer. The credit card information is first kept in an unencrypted form on the system for processing. When malware infects a computer, it tries to access the unencrypted payment information stored on it. A distant server receives the data that the virus has collected.

It's difficult to keep data safe with so many POS systems at risk and so much new malware being generated all the time. Therefore, merchants and company owners need to take extra care while using credit and debit cards in their point-of-sale systems.

The gadgets might be manipulated in one of two ways by attackers. There are two ways to obtain access to the POS terminal: physically or remotely. If they acquire physical access, they can run arbitrary code, exploit buffer overflows. Other commonly used techniques are to access the POS terminal, view what data is being sent over it, and steal it.

To get remote access to the point of sale, an attacker must first gain network access via phishing or another attack and then go to the POS terminal in whichever direction they like. Hackers can access and control the POS system like any other unsecured computer connected to a network or the internet.

READ: How To Start POS Business In Nigeria | 5 Steps on how to get started

Retailers who use these devices should keep them patched and up-to-date and avoid using the default passwords wherever feasible as a defense against attacks that make use of POS vulnerabilities.

POS devices should be on a separate network from other systems if possible. An attacker who gains access to the network via a Windows PC will have more difficulty pivoting to the POS devices.

Computers running the POS systems are vulnerable to attack since they operate on a customized version of Windows. Windows PCs on a network should receive frequent security updates, but the POS terminal can slip through the net's cracks.

The Information Commissioner's Office found "chronic failings" in the retailer's protection of personal data and network security management, including the failure to patch systems against known vulnerabilities. According to Verizon's 2015 Data Breach Investigations Report, 28.5 percent of all breaches in 2014 were POS-related.


It is quite easy for hackers to obtain all the data they need with a single swipe because of the usual mistakes made by small company owners when it comes to securing their customers' user data—for example, keeping it in the same area as the encryption information is kept. Separating the encryption data from the user data would be a straightforward solution to this problem.

Another blunder is to deliver security and system upgrades to all POS machines across the corporate network. Many businesses are at risk because of this prevalent behavior. In the absence of professional security measures, hackers can easily access computers, networks, and point-of-sale systems.

READ: How to Start A POS business in Nigeria (Requirements)

Multifactor authentication methods are an excellent choice for small businesses, as is never using a POS system on a public WiFi network. It is recommended that you regularly use antivirus software to scan your system for viruses and malicious files, use encryption, and monitor your POS terminals with video surveillance to make surveillance more effective if payment-stealing malware is installed on your POS system by cyber thieves. Prevent POS attacks by securing your network ensure that a strong password protects all networks; moreover, consider creating a segmented connection.

To catch transgressions by cashiers in real-time, set up a POS monitoring service that can send out videos and data about transactions that meet certain criteria, such as a cashier entering or leaving the store or the drawer being opened without a sale being made. Maintaining an up-to-date POS system and instructing your personnel on how to recognize suspicious activity are the best ways to keep your business safe and secure.


 

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