Payment Data Security Lags, Dangerously

With acceptance of mobile and other new forms of payments expected to double in the next two years, a new global study shows a critical need for organizations to improve their payment data security practices.

According to research from Ponemon Institute on behalf of Gemalto, more than half (54%) of those surveyed said their company had a security or data breach involving payment data. Worse, the average was for such events to occur four times in the past two years.

The report pointed out that this isn’t surprising given the security investments, practices and procedures highlighted by the surveyed respondents.

For instance, about half (55%) said they did not know where all their payment data is stored or located. Similarly, oversight for payment data security is not centralized, with 28% of respondents saying responsibility is with the CIO, 26% saying it is with the business unit, 19% with the compliance department, 15% with the CISO, and 14% with other departments. Only one third (31%) said that they feel that their company allocates enough resources to protecting payment data.

And aside from confusion as to who has the data and what’s being done with it, the security practices themselves are not pretty: Only 34% utilize multi-factor authentication to secure access to payment data; less than half of respondents (44%) said their companies use end-to-end encryption to protect payment data from the point of sale to when it is stored and/or sent to the financial institution. And three-quarters (74%) said their companies are either not PCI DSS compliant or are only partially compliant.

Also, half (54%) said that payment data security is not a top five security priority for their company, while 59% said their company permits third-party access to payment data.

 “These independent research findings should be a wakeup call for business leaders,” said Jean-Francois Schreiber, senior vice president for Identity, Data and Software Services at Gemalto. “Given what was found with traditional payment methods and data security, companies involved with payment data must realize compliance is not enough and fully rethink their security practices, especially since a full one-third of those surveyed said compliance with PCI DSS is not sufficient for ensuring the security and integrity of payment data.”

According to the study, acceptance of new payment methods such as mobile, contactless and e-wallets will double over the next two years. While respondents say mobile payments account for just 9% of all payments today, in two years they expect this ratio to increase to 18% of all payments.

“The financial fallouts from data breaches, and the damages to corporate reputation and customer relationships will carry even greater potential risk as newer payment methods gain adoption,” added Schreiber.

Given the issues companies' IT professionals reported to face in securing payment data accepted today through traditional methods, companies are likely to face even more difficulties in securing new payment methods. In fact, the study found that nearly three quarters (72%) of those surveyed believe these new payment methods are putting payment data at risk and 54% do not believe or are unsure their organization’s existing security protocols are capable of supporting these platforms.

“Looking forward, as companies move to accept newer payment methods, their own confidence in their ability to protect that data is not strong,” Schreiber said. “The majority of respondents felt protection of payment data wasn’t a top priority at their companies, and that the resources, technologies and personnel in place are insufficient. Despite the trend to implement newer payment methods, those in the ‘IT security trenches don’t feel their organizations are ready. It is clearly critical for companies to look for and invest in solutions to close these data protection gaps, expeditiously.”

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