What Is POS Security? 5 Ways To Protect Customer Data

Nov 14, 2023 • 7 min read

One breach of your point of sale (POS) system could damage your business and customer trust overnight. Your POS system handles sensitive details like payment card data, names, addresses, and more; protecting them at all costs is essential.

It’s a grim statistic, but it’s worth pointing out that nearly 60 percent of breached small businesses close permanently within six months of an attack, according to the National Cyber Security Alliance.

But with robust POS security measures, you can mitigate attacks and lock down your point of sale environment.

In this article, we’ll highlight how you can identify vulnerabilities, key areas of focus for your security efforts, and best practices to safeguard customer and point of sale data. With POS security, you can operate with confidence rather than fear, knowing your systems are secure.

What Is POS Security?

You rely on your POS system to process payments and manage daily operations. These systems handle extremely sensitive customer information like names, credit card numbers, addresses, phone numbers, and purchase history.

Unfortunately, POS systems have also become a prime target for hackers. But before we get into how you can protect your customers’ data, let’s touch on what POS security is. It refers to protecting your POS system, software, networks, and data from unauthorized access, viruses, and cyber threats.

You’ll need both physical and digital safeguards to protect everything from your checkout terminals and payment processing systems to your servers and cloud networks. Sounds like a complex job, right? It is! But it’s worth investing in robust security to keep your business and customers safe.

Without robust security:

A data breach can permanently damage customer trust and loyalty.
Fines and legal consequences have the potential to cripple your business. Major credit card companies like Visa impose steep penalties when PCI DSS compliance standards are not met.
A breach can lead to weeks of disrupted operations and lost revenue while systems are repaired. For small businesses, this can easily spell the end.

Retailers are switching from legacy on-premise POS systems to cloud-based ones for more flexibility and management. But without proper security, the cloud also poses new vulnerabilities. You need to vet cloud POS providers to make sure encryption, role-based access controls, and diligent backups are in place.

Cybercriminals use malware, skimmers, password crackers, unpatched software bugs, and more to get through POS defenses. Unfortunately, attacks get more sophisticated as security improves. To mitigate risks, you need to keep your systems updated, limit access, monitor activity logs, and consider cyber insurance.

Conduct a Risk Assessment First

Any great security plan starts with a risk assessment. Take a step back and look at your existing POS setup to identify weaknesses and gaps in your defenses. Start with areas that deal with sensitive customer data.

POS hardware and software: Look closely at your operating systems and applications to ensure they’re updated. Hackers can exploit flaws that you fail to fix with available updates. Make sure encryption is enabled where possible, and identify any internet-facing components and restrict access. Finally, are default passwords still in use? Make passwords harder for criminals to guess.

POS network configuration: Assess both your wired and wireless networks. Do you have firewalls in place and properly configured? For WiFi networks, are you using complex passphrases? Do you limit the signal range?

Physical retail space: You must also consider your physical retail space. Are your POS terminals visible from entry points? If they are in plain sight, it can be an invitation for tampering. Consider rearranging or shielding them to deter potential criminals. Additionally, consider physical security measures like security cameras to deter and record suspicious activity.

Data security practices: Analyze access controls and employee practices. Do you enforce the principle of least privilege access? Employees should only have access to the functions and data necessary for their roles. Additionally, ensure that sensitive data is properly protected through encryption, robust access logs, and regular backups.
Consider unexpected threats: Finally, consider potential vulnerabilities that might not be immediately obvious. This includes the threat of skimming devices attached to POS terminals, as well as the risk of hackers penetrating your system via third-party integrations or support tools.

Top Ways To Enhance POS Security & Protect Customer Data

In the modern age, safeguarding your POS data isn’t just best practice, it’s essential. Your POS system handles sensitive customer and payment card data, and if you want to maintain a positive reputation for your store, you must keep that data secure. Let’s take a look at some top processes you can use to secure your POS and customer data.

1. Use Dedicated Terminals

The first step to secure your POS data is using dedicated terminals. Unlike shared devices or computers, dedicated terminals are exclusively designed for transactions. This step is crucial because shared devices pose a larger target for threats. Dedicated terminals trim the attack surface, making it harder for cybercriminals to breach your system.

Investing in dedicated POS terminals helps you create a secure environment for processing transactions, giving you an edge in your efforts to bolster your defense against potential threats.

2. Install a Firewall

Another best practice is to install a firewall. Think of a firewall as the gatekeeper of your POS network. It's like the bouncer at a club, determining who gets in and who stays out. Here's what a firewall does:

Barrier against threats: A firewall creates a protective barrier between your POS network and external threats, including hackers. It decides who or what gets access and who gets denied.
Authorization control: Your firewall establishes permissions, ensuring only authorized personnel can access your POS system. You can also use your POS system to control which employees can access what data, giving you more control over who can access more sensitive information in your system.

And while we're on security, don't forget about password protection. Implement robust password policies to add an extra layer of defense.

3. Set Employee Permissions

As we touched on in the last point, employees need access to some data in your system to do their jobs… but most of them won’t need access to everything. It's vital to grant access only to those who need it. Here's how you can do it:

Permission levels: Set different permission levels based on roles. For example, only employees who require access to handle transactions should have access to payment processing data.
Limit access: Restrict access to critical functions. Not everyone needs access to every aspect of the POS system.
Monitoring: Keep a close eye on login attempts and transaction logs. Doing so allows you to spot potential issues proactively, identifying any suspicious activity before it becomes a problem.

By implementing these measures, you're ensuring that your POS system is only in the hands of those who genuinely need it, reducing the risk of insider threats and employee theft.

4. Encrypt Sensitive Data

Encryption is an additional layer of security you can use to turn sensitive data into unreadable code while it’s being transmitted. This encrypted data is useless to cybercriminals in the event of a breach.

Use encryption processes to secure payment card data and other sensitive information stored within your POS system. Even if a cybercriminal manages to breach your defenses, the stolen card data will be nothing more than gibberish without the decryption key.

5. Maintain Updates

The last important piece to remember related to POS security is that security isn’t a destination: it’s a journey. Continuous updates and monitoring are needed to keep your system secure. Some areas to keep an eye on include:

Software updates: Regularly update your POS software, firewalls, antivirus programs, and operating systems. These updates often contain patches for known vulnerabilities.
Automation: Automate updates wherever possible and set policies to enforce compliance. Automation reduces the risk of human error and ensures that critical security updates are never missed.

Disaster recovery plans: Discuss and establish disaster recovery plans with your team. In case the worst happens, having a plan in place can minimize downtime and financial losses.
Backups: Consider both on-site and cloud backups. Having redundant copies of your data is an insurance policy against disruptions.

Remember, the security landscape is always evolving. By staying proactive and following these best practices, you can fortify your POS system, protect customer data, and keep your business running smoothly.

Choosing a Reputable and Transparent POS Provider

A critical consideration in point of sale security is your POS provider. Your POS system is the nerve center of your store’s operations, and an all-in-one POS solution will house all your inventory, customer, and transaction data.

Suppose you want to ensure your processes are as secure and efficient as possible. In that case, you need to select a reputable, transparent POS provider with the features you need for your business.

Start your selection process by delving into the provider's reputation. Customer reviews and testimonials can offer valuable insights. Look for reviews from businesses similar to yours –– their experiences can be telling. It's not just about the technology; it's also about the provider's track record in terms of reliability and customer satisfaction.

You should also ask the provider about their data security practices. How do they protect and store customer information? What measures do they have in place to prevent data breaches? Don't be afraid to dig deep; after all, your business' reputation is on the line.

Remember, transparency is non-negotiable. Your POS provider should be open and honest about their practices. Ask for clear explanations of their processes, from data handling to disaster recovery plans. A reputable provider will have nothing to hide and will gladly share the details you need for peace of mind.

Finally, ask one final question: do they offer 24/7 support? Chances are your store isn’t only open from nine to five, and issues can arise anytime. Having round-the-clock POS tech support can distinguish between a minor hiccup and a major problem. Ensure your POS provider is there for you when you need them most.

POS Security: Secure Customer Data

Your customers are at the heart of everything you do. In today's environment of ever-evolving cybersecurity threats, ensuring the security of customer data should be a top priority for any business with a POS system.

Your customers expect their data to be safe and secure when they engage with your business. Their trust is your most valuable asset, and protecting their data is a fundamental part of maintaining that trust.

Neglecting POS security can have dire consequences for your business. A customer data breach can result in heavy fines, reputational damage, and the disruption of business operations. It's not just about compliance: it's about protecting your customers and your business.

At first, POS security might seem intimidating, but it's totally manageable with a systematic approach. Start by identifying your weaknesses through comprehensive risk assessments, educate your staff to become security ambassadors, and implement layered defenses, including firewalls, access controls, encryption, and vigilant monitoring.

Lastly, ensure your POS provider is a strong partner in everything from operations to security. Partnering with a reputable provider, like POS Nation, can be a game-changer for your security efforts. As a trusted provider, POS Nation offers solutions to protect your business and customers.

To learn more, check out our Retail POS Buyers' Guide, a free resource designed to help you explore the hardware, software features, and tools you may need from your POS provider.

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What Is POS Security? 5 Ways To Protect Customer Data