The upward trend in data breaches continues, and as a result, there has never been a more risky time in history to start and run a successful business. To avoid repeating mistakes that lead to data breaches, we must stay current on new strategies used by fraudsters to infect credit and debit cards.

According to the latest IBM data breach study, the global average cost of a data breach is $3.26 million, up 6.4% from 2017. Data breach costs climbed dramatically year-over-year from the 2020 report to the 2021 report, rising from $3.86 million in 2020 to $4.24 million in 2021 (an increase of $380,000 representing a 9.8% increase). The average cost of a lost or stolen record containing sensitive and private information is $161, up from $146 in the 2020 report year. This compares to a 1.5% decline between the 2019 and 2020 reporting years.

Point-of-sale Data breaches are a big risk for businesses because they can result in a loss of consumer trust and a crippled system that might cost millions of dollars to repair. A magnetic stripe card is a form of card that may store data by altering the magnetism of microscopic iron-based magnetic particles on a card’s magnetic material band. Magnetic stripe cards are often found on credit cards, identification cards, and transportation tickets.

In contrast, a point of sale or point of purchase terminal is a hardware system used to handle credit card payments at retail outlets. The device includes software that can read credit and debit card magnetic stripes. When a credit card is used to pay for something, a standard POS terminal first checks the magnetic stripe to ensure that there are enough money to transfer to the merchant, and then makes the transfer.

The sale transaction is documented, and the buyer receives a receipt via email or text. Merchants can purchase or lease a POS terminal, depending on how they choose to manage cash flows.

At the point of sale, the merchant calculates the amount owed by the consumer, displays that amount, prepares an invoice for the customer, and displays the option for the customer to pay. The point of sale is also known as the point of service since it serves as both a sales point and a return point for client orders. POS terminal software may also contain functions for inventory management, customer relationship management, financials, and warehousing.

In recent weeks, multiple reports have surfaced concerning data breaches that have affected millions of people. Many of these data breaches affect a company’s point of sale.

The primary goal of point-of-sale intrusions is to acquire your 16-digit credit card information. Credit cards account for 60% of all POS transactions, which means major business for cybercriminals, and individual credit cards can be sold on the dark web for up to $100 each. The industries most affected by POS data breaches are typically restaurants, retail businesses, grocery stores, and hotels.

As humans’ interactions with cash transactions become more widespread, the popularity of POS services grows, with one of the most evident convincing reasons being that POS systems eliminate the need for price tags.

When adding stock, selling prices are typically connected to the product code of the item, leaving the cashier with only a few tasks to complete: scan this code and process the sale of the product. If the price changes, this can also be done quickly via the inventory window. Other benefits include the capacity to incorporate various forms of discounts, customer loyalty programs, and more effective stock control; these features are common to almost all modern ePOS systems.

As the benefits of computerized POS transactions continue to grow, fraudsters have devised gateways to exploit this trend. According to a report issued by bleep computers in December 2021, credit card information for 1.8 million people was stolen from sports.

Exploiting a POS system is comparable to a vulnerable computer intrusion. Cybercriminals get access to the system by setting up a monitoring device called BlackPOS. BlackPOS is a spyware program designed to steal credit and debit card information from the POS system. The BlackPOS infiltrates the PC via stealth methods and takes information to transfer to an external server.

Small and medium-sized firms are ideal targets for cybercriminals since they are easier to access and typically have laxer security and regulations than larger corporations. The POS systems that these corporations use to ring up customers are essentially PCs that frequently run Windows and are vulnerable to the same dangers that any other Windows-based computer is.

The credit card information is first saved on the system, unencrypted, for processing purposes. When malware gains access to the machine, it seeks out the unencrypted payment information stored inside. The malware captures data and then transmits it to a remote server.

With so many risks to POS systems, as well as the proliferation of new malware, data protection becomes a challenge. That is why retailers and company owners must take extra measures while using credit and debit cards in POS systems.

Attackers could obtain access to the devices and alter them in one of two methods. They can either physically gain access to the POS terminal or gain remote access via the internet and then execute arbitrary code, buffer overflows, and other common techniques that allow attackers to escalate privileges and control the device, as well as see and steal data that passes through it.

Remote access is feasible if an attacker acquires network access through phishing or another assault and then moves freely throughout the network to reach the POS terminal.

Finally, the POS machine is a computer, and if it is connected to the network and the internet, attackers can try to get access and modify it just like any other unsecured equipment.

To protect against attacks that exploit POS vulnerabilities, retailers should keep the devices patched and up to date, and avoid using default passwords if possible.

It is also advised that, if possible, POS devices be on a separate network from other devices, so that if an attacker gains access to the network via a Windows system, they cannot easily pivot to the POS devices.

The POS systems run a customized version of Windows, so the computer, like other Windows devices, is subject to attack. And, while most Windows devices on a network should receive frequent security fixes to guarantee they are not vulnerable to attack, the POS terminal is all too easily overlooked.

The Information Commissioner’s Office reported “systematic failures” in how the store protected personal data and maintained network security, including a failure to patch systems against known vulnerabilities. (According to Verizon’s 2015 Data Breach Investigations Report, POS-related incidents accounted for 28.5% of all breaches in 2014.).

The usual mistakes that small business owners might make when it comes to protecting their customers’ personal data—for example, putting it in the same area as the encryption information—allow hackers to obtain all of the data that they require with a single swipe. A simple option would be to keep encryption data separate from user data.

Another mistake is using a corporate network to distribute security and system updates to all POS terminals. The mistake is to distribute security and system upgrades to all POS machines over a corporate network. This is a widespread practice that puts many businesses at risk.

Hackers can easily obtain access to computers, networks, and POS systems when corporate networks are not safeguarded by competent security setups. For small businesses, a good approach is to use multifactor authentication methods and never run POS systems on public WiFi networks.

Some of the best practices to secure your system and prevent a POS intrusion are to install antivirus software to constantly scan for viruses or malicious files; use encryption (if cyber thieves installed payment-stealing malware onto the retailer’s POS system, this tactic often disguises data as it’s shared across networks, making it extremely difficult to hack).

Monitor terminals using video surveillance to take surveillance over all POS terminals to avoid skimmers on your POS terminals; safeguard your network to prevent POS intrusions; Secure all networks with a strong password, and consider setting up a segmented connection for additional protection. Implement a POS monitoring service to detect cashier infractions as they occur by delivering video clips and POS data based on predefined exceptions, such as cashier in and out, drawer openings without a transaction, and so on. Physically safeguard your POS device to obtain quick warning in the event of a break-in; keep all POS software up to date; and train personnel to recognize unusual activity.