Data losses and data breaches are always big news stories. In recent years, there have been a handful of notable cases where companies have stored customer information and then exposed these customers to potential damages by not keeping the information secure. These data losses almost always include the loss of customer credit card information. As a result of these losses, sales at these businesses usually drop as customers do not feel safe dealing with the business. However, a drop in sales immediately following a data breach is not the only risk that a business faces when the business stores the credit card information of customers.
Perhaps the biggest risk to a business that stores credit card numbers is liability risk. If the numbers are lost and used by criminals, the business could be held liable for the losses suffered by customers. In addition, government agencies that provide oversight of the financial markets could fine the business for the loss of data from their merchant accounts. In some cases, the data loss could represent a criminal offense that could result in business owners and others being incarcerated for not properly protecting the information.
In addition to the liability risks, businesses may lose sales due to storing credit card processing data, even without a data loss. This is due to many customers simply avoiding doing business with companies that store their credit card data. This is due to the very real risk that customers face from identity thieves. There are also numerous regulations that a business must follow regarding protecting customer information. Following these regulations can be costly and time consuming for a business, taking away time from the primary pursuits of the business.
For all of these reasons, it is important for businesses to use a credit card processing company that handles their credit transactions. By allowing another company that specializes in providing merchant accounts and other services to handle the processing of credit card transactions, a company can focus on their core business of providing goods and services without worrying about exposing themselves to the risks of storing credit card information.