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  • Alyssa Alford

Transactional security: defense and compliance



In an online world full of hacking and fraud, all personal information is vulnerable. Card information is one of the most sought-after items in data breaches, and a simple transaction could put someone’s private details in the wrong hands. Buying and selling can be risky without taking the proper precautions to safeguard all parties involved. Transactional security is vital in ensuring that you and your customers are safe throughout the lifecycle of a purchase and beyond!


Transaction fraud

What makes a transaction so dangerous? Online sales involve sensitive customer data such as contact information and card information. This personal information can be stolen by hackers, who will use or sell it for various purposes. To read more about where hacked data goes, check out our article on password safety.


Hackers have various means of collecting transactional data from a less-than-secure site. Stolen passwords and weak passwords are two of the most common causes of a data breach. Our article covering password safety sheds light on how this information can be stolen or compromised and includes advice to help strengthen the integrity of your passwords.


Malware is a term for malicious software that can be silently installed on your computer. A malware-infected device can be used to spy on you, collect your data, or even use your computer and personal information to wage attacks against others.


Data breaches yield widespread consequences for their victims. On the side of the seller, the recovery period can involve multiple business and legal setbacks. A breach can put you at risk of:


  • Weakened security

  • Noncompliance fines

  • Compensating victimized clients

  • Loss of clients/revenue

  • Endangering customer trust and reputation

  • Audits

  • Lawsuits from involved parties including cardholders and banks

  • Going out of business


According to IBM, the average cost of a data breach in the United States is $9.44 million as of 2022, weighing in at over half the global average. Small businesses spend an average of $690,000 in the aftermath of a hacking event, and middle-market companies spend over $1 million in these situations, the Ponemon Institute reports. The costs and effects of a breach can be detrimental; implementing strong security can prevent major losses in money, time, and clientele.


Ecommerce security defense measures

In order to better protect your sellers from fraud, there are multiple ways to strengthen your defense against hackers. Locate the weaknesses in your infrastructure through vulnerability assessments or audits. Checking up on your cybersecurity in this way can help identify risks and weak points before they become an issue.


1. Training, training, and more training Training your employees in proper cybersecurity can also make a significant difference in your overall security risk, as employees are often targeted in attempts to gain information. As TechRadar says, human error is the first step in 90% of all data breaches. Our team uses and recommends frequent and continual KnowBe4 training to keep us informed.


2. Password and login security

If your website requires a login, it’s important to make sure that your clients’ passwords are safe. Enforce using a unique, complex string of letters and numbers when prompting your customers to create a password. These passwords should ideally be unique to the site at hand. Tools like reCAPTCHA and multi-factor authentication (MFA) can add an additional layer of security to what’s behind your walls. Limiting login attempts and locking accounts after a number of failed attempts are excellent ways to defend against attacks as well.


3. Utilize your payment gateway’s AVS settings

Further secure your transactions by implementing the use of an Address Verification Service, or AVS. AVS matches a given billing address with the same credentials filed with a card by double-checking with the credit card company. This can put a barrier between hackers without access to the address-level information attached to stolen card numbers.


4. Implement malware protection

Anti-malware software offers a strong defense. In April, PCMag tested over a hundred applications and reported back their favorite anti-malware findings for 2022. Their top recommendations were Bitdefender, Avast, Norton, and Webroot.


5. HTTPS over HTTP, always

PCI compliance rules mandate SSL (Secure Sockets Layer) for all ecommerce businesses. SSL certificates encrypt any data submitted to your records in order to render the information difficult for an intruder to read. This certification will also change the “http” in your URL to “https,” with the “s” as a marker of security. When visiting a new website, it’s a good idea to look for the locked padlock in the address bar, which many browsers use as a symbol for SSL-certified sites. Some of the browsers that have adopted this are Safari, Chrome, Edge, and Firefox.


6. Obtain and maintain compliance

Aside from monitoring your internal security, it’s integral to keep up to date with regulations and standards! There are multiple compliance mandates in place to help stave off data breaches. Compliance can make or break your company, as noncompliance can result in fines and immense damage. If facing a cyberattack, these consequences can escalate in severity. We’ll touch on two to look out for (SOC 2 and PCI DSS compliance), but you can find other examples of what you need to know in this article from Hostinger Tutorials. Security needs are constantly evolving and require consistent research and regular updates to maintain a strong defense system. Compulsory regulations like these exist to protect everyone involved in the giving and handling of sensitive information.


SOC 2 compliance

The Systems and Organizations Controls 2, or SOC 2 report, is designed for technology-based companies to certify high-strength security. Vanta, a security compliance automation service, states that “securing a SOC 2 report is the most trusted way to show your customers and prospects that your security practices can protect their data.” Although not technically mandatory, SOC 2 reports have become an expectation for businesses and are a necessity.


There are two types of SOC 2 audits. Type I is the cheapest and fastest of the two and is constructed based on five Trust Services Criteria. However, a Type II audit will provide more information. A SOC 2 Type II report will examine both the structure of your systems and their efficacy, but the process may take up to a year to complete; by comparison, it takes a month or less to complete a Type I audit.


There are five categories judged by SOC 2, called the Trust Service Criteria: Security, Availability, Confidentiality, Privacy, and Processing Integrity. Every SOC 2 report is unique and built using a combination of Security and a selection of the other four Trust Services Criteria. By focusing on specific areas, you can learn more about where additional information security is needed. The more Trust Services Criteria included, the better the report will look to your clients! If you need help considering which categories would fit your needs best, consult this article from A-LIGN.


You will need to partner with an experienced CPA firm in order to conduct your SOC 2 audit.


PCI DSS compliance

In March of 2022, PCI DSS 4.0 was released with substantial changes. According to securitymetrics, this was done with these goals in mind:


  • Make sure the standard always meets the changing payment security needs

  • Promote taking continuous measures in security

  • Better, more secure methods of validation

  • Increase flexibility and support of new methods to reach peak security


Payment Card Industry Data Security Standard, or PCI DSS compliance, is structured in four levels based on the number of card transactions completed by a business in a year. This compliance is mandatory for any business or organization that obtains, stores, sends, or processes credit and debit card information. Each PCI DSS level provides a set of requirements to follow to avoid a hefty fine. Depending on your level and the circumstances of your noncompliance, this fine could range from $5,000 to $100,000 monthly. Ensure that your compliance is up to speed at all times by checking your guidelines:


  • Level 1

  • Greater than 6 million annual transactions

  • Requirements:

  • Fill out the Attestation of Compliance Form (AOC)

  • Annual PCI DSS audit

  • Quarterly network scans by the Approved Scanning Vendor (ASV)

  • Annual Report on Compliance (ROC) by a Qualified Security Assessor (QSA)

  • Level 2

  • 1-6 million annual transactions

  • Requirements:

  • Fill out the Attestation of Compliance Form (AOC)

  • Annual Self-Assessment Questionnaire (SAQ)

  • Quarterly network scans by the Approved Scanning Vendor (ASV)

  • Audits are not required; these occur by request of the business, or in response to a hacking event. Some merchants might request a PCI DSS audit as a means of double-checking their security or as a public image boost.

  • Level 3

  • 20,000-1 million annual transactions

  • Requirements:

  • Fill out the Attestation of Compliance Form (AOC)

  • Annual Self-Assessment Questionnaire (SAQ)

  • Quarterly network scans by the Approved Scanning Vendor (ASV)

  • No audit is performed unless upon request or in the event of a data breach.

  • Level 4

  • Less than 20,000 annual transactions

  • Requirements:

  • (Typically not required) Fill out the Attestation of Compliance Form (AOC)

  • Annual Self-Assessment Questionnaire (SAQ)

  • Quarterly network scans by the Approved Scanning Vendor (ASV)

  • Audits are not required.


For additional information on PCI DSS requirements and the updates that have been made in version 4.0, securitymetrics has compiled an excellent chart to break everything down.


Summary

Security in transactions is a must in this day and age. Don’t give hackers the opportunity to break down your walls; stay up to date on your defense systems! Compliance plays a key role in maintaining proper security and keeping your company running smoothly. By offering a safe space for sensitive consumer data, you aren’t just helping your clients; ultimately, you can save your business from hacking’s devastating impact.


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