Making Credit-Card Payments More Secure By Making Breaches More Expensive
from the aligning-incentives dept
It seems that hardly a month goes by without news of yet another credit-card data breach. Based on this, it seems fairly clear that the industry largely sees these breaches and the fallout from them as a cost of doing business, and one that’s preferable to the cost of securing and monitoring their systems effectively. The industry has come up with a security compliance framework, but such rules have a history of being ignored. Even if they aren’t ignored, though, they’re so full of loopholes that they’re fairly worthless. As the original poster, Andrew Conry-Murray, puts it, “It’s not about security. It’s about an industry covering its ass.” Basically, the compliance system exists not to truly protect data, but rather to ward off government intervention.
Conry-Murray’s contention is that the compliance system is far too easy to game, particularly because it only checks companies’ systems once per year. His suggestion is to force all merchants and processors to comply, and check their systems regularly. Companies could opt out, but by doing so, they would be agreeing to significantly higher fees and penalties in the case of a breach. As he notes, these fees would have to be high enough to where they would make devoting more resources to security a more desirable option. This idea, and indeed any that dramatically increases the cost of breaches, is worth mulling over as a way to encourage companies to increase their security. As long as the fallout from data breaches isn’t enough to make companies sit up and take notice — and change their behavior — there won’t be any real change.