Point-of-sale (POS) systems are a necessary evil in the retail industry. You’re not going to find a way around using them, but you also need to remain extremely aware of the security risks they pose. POS systems are not only a huge target for hackers; these types of security breaches are quite difficult to recover from. We’re here to help you understand why POS system attacks pose such a large threat, how hackers get in, and — most importantly — how you can protect your retail company from a breach like this.
POS System Vulnerabilities
A POS attack on a retail company affects a wide range of people; including customers, card associations, and the company’s service providers. It’s also damaging to the company’s brand image, as these attacks typically go public immediately, usually by an outside source. These breaches are financially detrimental, and can lead to agonizingly long legal processes.
POS systems are gold mines for hackers, as they’re relatively easy to break into, and a hacker is unlikely to get caught. Vulnerabilities pop up in countless ways — such as when multiple people have access to POS terminal updates. Plus, the firmware and software of POS systems don’t always meet IT standards, which means there may be security holes in the programming that allow cybercriminals in.
How Do Hackers Get In?
Hacking into financial data is not a new concept. Criminals have been stealing card and PIN data for years, and using this information in fraudulent transactions. However, most methods require an insider to help steal the information. Criminals who use POS malware can get their hands on numerous live cards, without risking being caught on security cameras. That means retailers need to be vigilant — as hackers are more likely to target their POS systems, in hopes of getting away with the crime.
POS malware works by scanning certain parts of the POS terminal memory, finding card data, and then sending it back to the hacker. When a sale takes place, card data is stored by the retailer so they can charge the card. This data is usually encrypted, meaning it’s protected at the endpoint. However, there’s a split second — in which the data is processing — that it’s still left unencrypted; and that’s when hackers can attack and scrape that data.
So, how does the malware end up on POS systems? POS terminals are simply computers — and there are many windows of opportunity hackers can use to get into the computer system. Employees might use the terminals for browsing the internet, which opens a door for hackers. Criminals might try to get in while systems are being updated, or when a POS vendor hires tech support from a third-party.
How to Protect Your Retail Company
It’s unrealistic to get rid of POS systems completely in retail. However, there are several ways to add an extra layer of security to your systems:
- Ensure there are proper software and security policies in place, to mitigate the risk of malware ending up on your POS terminals.
- Encrypt your data. Though there is a tiny time gap between information being encrypted and unencrypted, having end-to-end encryption policies in place can reduce your risk of falling victim to an attack. Usually, criminals don’t pursue encrypted data from POS terminals because breaking the encryption is difficult and costly.
- Confirm that your POS vendor is reliable, and has its own security measures in place.
- Develop a solution in case an attack does occur. Be sure you have the technology to detect attacks, and a pre-determined plan to stop an attempt as soon as it happens.
While you can’t completely mitigate the risk of a security breach, you can reduce your chance of falling victim to POS malware crimes, by understanding the vulnerabilities of your POS system. Take proper measures to deter criminals, so they won’t see it as worthwhile to pursue your business. The best way to keep your customers and your business secure is to be aware of all of the risks and threats out there, implement high-quality security, and prepare for a quick reaction should a breach ever occur.