Hardly a week goes by that we don’t hear about some kind of credit card breach. While larger retail chains may be in a better position to deal with a drop in business after a breach, smaller stores are finding themselves on the short end of the cybercrime stick. But help is at hand.
For example, the massive Target data breach of 2013 resulted in thousands of consumers having their credit cards automatically canceled by issuing companies out of an abundance of caution. But if a small business owner who automatically bills customers tried to run cards that were affected by a breach, they weren’t able to collect funds in a timely manner, or maybe never. In some cases, this can even lead to smaller firms going out of business.
According to First Data, a global payment processing company, 90 percent of data breaches impact small businesses, costing them an average of $36,000. Besides the loss of revenue, small businesses are also faced with having to rebuild customers’ trust and get back their good name.
Heartland Payment Systems has come up with a novel approach to give smaller businesses back their confidence in payment schemes: offer a warranty in the event of a security breach. Merchants using Heartland Secure certified devices and processing payments through Heartland are eligible for the program, which will be free for the first year and then cost $8.33 per month per card entry device.
The idea is to give merchants some peace of mind when data breaches are looming over them. Heartland uses a combination of EMV technology (chip and PIN), encryption and tokenization to provide multiple layers of security for its customers. Should the encryption on a Heartland Secure device fail, the company will reimburse the retailer for any compliance fines, fees and assessments they incur to credit card companies and banks.
This doesn’t seem to address the cost of lost business, but it’s better than the nothing that merchants get today.
Heartland has made its name by establishing close relationships with smaller businesses, which are less likely to have fraud prevention and risk management departments than larger retailers. While data breaches involving credit cards and other customer information can still be a devastating blow to smaller merchants, this insurance policy – and the strong security technology behind Heartland’s payment products – can help them focus on their business and not on the danger lurking around the corner.