This week via Chain Store Age:
By R.J. Carver, Corporate Development Associate, Plug and Play Tech Center
With major credit card breaches recently confirmed at a number of America’s largest retailers, payment security has become a serious problem almost overnight. Target, P.F. Chang’s, Home Depot, and multiple other household names have been added to the growing list of compromised operations. The root of the problem is the complex and outmoded process by which credit card transactions are completed at the point-of-sale, and there are a number of emerging financial technologies that have the potential to account for this inherent vulnerability.
To complete a credit transaction, a given merchant must communicate with an acquiring bank in order to confirm that the user has sufficient credit on a valid card. Doing so requires the vendor to store card owners’ personal data, which is then sent to the bank electronically.
Modern retailers use what is known as a point-of-sale (POS) system, which expedites the process by extracting information from a chip or magnetic stripe on the credit card to be communicated via a direct link to an acquiring bank. POS systems have been in use for the past few decades, and retailers are slow to replace ones that are already functioning. The storage and movement of card owners’ valuable personal data is often done using outdated software on machines that are decades old, making merchants easy targets for hackers that want to commit credit fraud.
This issue is compounded by the fact that said outmoded POS platforms are also often remotely administered with simple password protected accounts…
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