Founder of credit card swipe machines and software, Robert Carr of Heartland Payment System continues to re-live the shock of being hacked. In late 2007 enterprising hackers made their way into Heartland’s servers and found access to what was estimated to be around 130 million credit card numbers. With that thought in mind Mr. Carr hopes to find a solution to fraudsters hacking into what was thought of as a secure network.
Heartland’s components and software, store and use the 15 digit credit card numbers to verify transactions. This transaction often takes mere seconds to complete but a breach of the system gives a foothold to skeptical investors. The breach that happened to Heartland sent the stock from a solid $18 to sink to around $3.60.
Acting as a virtual middleman, Heartland takes a small percentage of each transaction to process purchases. Depending on the card company, Visa, MasterCard, Amex or Discover, each have different deals and different percentages. If for example a customer buys a $100 item around $ 0.5 is put in Heartlands coffers. While this seems like a small amount if this is multiplied by hundreds of thousands of merchants and millions in spending dollars the amounts are astounding.
In attempts to avoid the credit card theft from happening again Heartland has begun instituting a new hardware/software package that randomizes the credit card numbers into unreadable code. It keeps the encrypted numbers as it sends the numbers along the network. Mr. Carr stands behind his product and guarantees the refund of any fines and the cost of any forensic investigations should his product security is breached.
Mr. Carr says that there will be no major equipment investment as merchants are charged around $270 for the point of sale machine that is usually located at the counter and about $60 for the magnetic card reader. The machines provided work solely with Heartland processing hardware and will offer the same daily routine of use for card users.
The weakest link in the security chain comes with the transfer of the data from the Heartland’s systems to the credit card companies such as Visa and MasterCard. Credit card companies accept only unencrypted data. This means that although Heartland has performed the transaction at the storefront securely, the data transferred from Heartland to the card company can be open for saboteurs.
Mr. Carr takes a further stand with other credit card processors and merchants to beef up their own security. The standard firewall and common antivirus software is of little consequence to the estimated $ 54 billions that is racked up in identity fraud. It is estimated by the National Retail Federation that merchants invested approximately $1 billion in security audits in 2009.
Credit card fraud continues to develop as new technologies become commonplace. Protecting credit card and personal information is crucial for governments, merchants and consumers alike. When swiping a card the time it takes for the purchase to be complete is enough time for a security system to be breached. Sensitive personal card information, such as banking numbers, PIN, and other information is venerable from the time the card is swiped to the time the transaction is completed. To promote card safety merchants are often charged hefty fines and pay costs of investigations, not to mention getting back customers that were frightened away by the breach of security.
Heartland Payment System is the fifth largest processor of credit cards in the United States. Although they understand that this will not stop the growth of fraud it is hoped to offer some hope that the information contained on and in credit cards remains secure and that the crime of credit card fraud is reduced as a result.
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Tags: Payment, Payment Processing