Many consumers recall being affected by, or at least hearing about, thieves hacking into credit and debit card data of millions of Target customers this past holiday season.
But, as David Elkins points out, a data breach can be much more devastating to a small business than to a large corporation such as Target.
“It’ll cripple you,” Elkins, the co-owner of Omega Bank Card Services, said at the Effingham County Chamber of Commerce’s most recent Lunch ‘n Learn program.
A data breach can shut down a business for three days to two weeks, Elkins told the audience assembled at the Mars Theatre. He added that, if a breach is suspected, a business will be charged thousands — between $8,000 and $20,000 — for a forensic exam.
The costs continue to add up if a breach is confirmed. Along with the forensic exam and legal fees, businesses can be ordered to pay fines for every card breached.
That could ultimately add up to costing a small merchant $35,000 to $50,000, according to Elkins.
“If you don’t think that’ll put you out of business, it will,” he said. “I’ve seen it put a small florist out of business. I’ve seen it put a tire shop out of business.”
A measure to prevent fraud, Elkins pointed out, is the evolution from typical magnetic-stripe cards to “smart” cards embedded with a chip. Known as EMV — which stands for Europay, MasterCard and Visa — the chip technology makes account data hard to steal or compromise.
Though the U.S. has been slower than some other areas of the world to adopt the technology, businesses will be required by law to have EMV terminals by October 2015. Liability for fraudulent transactions will shift from banks/card issuers to merchants, if they do not support EMV.
You are going to be liable because you did not run (the transaction) as an EMV,” Elkins said. “It’s kind of forcing both institutions to get on the same page.”
Elkins encouraged business owners and consumers to adopt EMV technology.
“From a cardholder perspective, request one, because it protects you,” he said. “The security is better for both the cardholder and the merchant.”
More than 2,000 data breaches were reported in 2013, with nearly half of them occurring in the U.S., according to a study by Risk Based Security, Inc. With that in mind, the Chamber of Commerce considered electronic security an ideal topic for Lunch ‘n Learn.
“We want all of our businesses to be safe,” said Chamber Executive Director Rick Lott. “It’s getting so easy for people these days to rip off companies and individuals, and we all need to get a little smarter about how we do business electronically.”
In addition to Elkins’ presentation, Lily Chiang of Georgia Power discussed commercial energy efficiency.
Additional Lunch ‘n Learn programs are being planned for the rest of the year, according to Lott. Dates and topics will be announced as the schedule is finalized, he said.
Having Lunch ‘n Learn at the Mars gave people a chance to see the renovated, recently-opened facility, Lott said. Tommy Deadwyler, Springfield’s director of cultural affairs, welcomed the audience to begin the program.
“We know the Mars is here for concerts and films, but the Mars is available also for meetings like this,” Lott said. “For those who haven’t been able to make it to a show yet, they get to see what a fantastic job Tommy and the city of Springfield have done.”