There is an exchange of trust every time a customer hands his or her credit card to a retailer. Recent cyber attacks on Target and Neiman Marcus have raised concerns about the overall security of the transaction system.
Consumers and retailers can mitigate the risks by re-evaluating risky behavior. But for back-office operations, a trusted BPO provider can make a huge difference.
Malicious software, installed at Target card-swiping equipment in stores around the country, captured sensitive credit card and debit card information. It affected millions of customers during the prime holiday shopping season. The massive cyber security breach has prompted banks to reissue credit cards. JPMorgan has already sent 2 million new cards to customers affected by the attacks.
Target recently sent an email to many of its customers with an update on the situation:
“As you may have heard or read, Target learned in mid-December that criminals forced their way into our systems and took guest information, including debit and credit card data. Late last week, as part of our ongoing investigation, we learned that additional information, including name, mailing address, phone number or email address, was also taken. I am writing to make you aware that your name, mailing address, phone number or email address may have been taken during the intrusion.”
As a way to make amends, Target is offering one year of free credit monitoring to all Target guests who shopped in U.S. stores.
How far are we from the fraud-proof credit card?
Soon after the Target data breach, Neiman Marcus also confirmed a cyber attack that compromised its customer information. These breaches may be part of a growing trend, as hacking becomes more sophisticated and payment transactions refuse to evolve. Wes Moss on CNN suggested that it’s currently cheaper for large retailers to insure against fraud than to upgrade their entire technology system. Encrypted card technologies exist that create a brand new encoded number every single time. It would make transaction far more secure. Other countries use this technology, but the United States has not made the switch from the magnetic strip.
What can consumers do?
Consumers must be proactive in protecting their information. ProtectMyId.com suggests:
- Carrying your Social Security card in your purse or wallet is not a good idea.
- Staying on top of your financial statements is a great way to verify any charges as well as catch potential identity theft sooner.
- Not having checks delivered to your home address can reduce your risk of identity theft.
- Reviewing all three national credit reports is a great way to spot unauthorized activity, including new accounts, new inquiries and address changes.
- Don’t let sneaky eyes see your Personal Identification Number (PIN). Be sure to cover the number pad on the ATM with your free hand and make sure that no one is watching you.
- Losing your purse/wallet or having it stolen is an easy way for thieves to get a hold of your personal information. Keep important personal information in a safe place.
- Credit Alerts help notify you of potentially suspicious activity, which could be an early sign of account fraud or identity theft. Make sure you review your Alerts right away after you receive one.
- Paperless statements are a great way to reduce your chances of becoming a victim of identity theft.
- It’s important to remember to not give out your personal or financial information over the telephone or Internet unless you’re 100 percent confident with whom you’re doing business with.
- Consider shredding your sensitive personal or financial information on a monthly basis to help reduce your risk of identity theft.
But how about for retail organizations? It’s critical for retailers to process payments efficiently and safely, open new card accounts quickly, instigate price changes fast and conduct store audits without compromising customer service.
Optimizing back-office operations with BPO solutions
An experienced, ever-evolving business process outsourcing company can help manage the accounts payable process, provide more efficient store card account opening, automate the mailroom, and effectively manage payment processing in a secure fashion. A BPO company can also convert all past paper documents to easily accessible, secure electronic files.
BPO solutions will allow a store to:
- Better manage cash flow — accounts payable and receivables
- Centralize and monitor merchandising and sales data
- Scan current and old paper documents into electronic records
- Track damaged goods and shrinkage
- Monitor order fulfillment
Even if the U.S. updates its card system, fraud may always be a concern whenever payment transactions are made. Companies will always need to be mindful of the risks and work with a trusted outsourcing company to increase the efficiency of back-office operations.