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Importance of diligent electronic payments security

Apr 04, 2013 Dave King

Experts believe that the global economy is rapidly moving toward a more cashless landscape, where cards, checks and mobile payments take up the entirety of the transaction processing market. Companies that have taken the most proactive approach to the electronic payments trend, such as through the implementation of ACH cards for payroll, are likely to be at a competitive advantage in the coming years.

However, enterprises must take progressive steps when it comes to electronically stored information security, as hackers have been targeting all types of businesses with vulnerabilities in their data storage and transfer processes. While adherence to Payment Card Industry Data Security Standards is key for any business that handles consumer, employee or corporate financial information, simple compliance is often not enough to maintain complete control.

Advanced security software, progressive information governance and retention strategies are crucial in the modern era, especially for companies that are just now beginning to launch electronic payments initiatives. By implementing the necessary support structures and maintaining strict oversight of all accounts payable and receivable activity, enterprises of all sizes can avoid the various risks and capitalize on the increasing popularity of digital commerce.

Payment card fraud on the rise
CFO recently reported that a new study from the Association for Financial Professionals revealed that while check fraud remains the most prevalent threat to corporate data, card fraud is a persistent issue. ACH card and wire transfer fraud can lead to a variety of serious issues for any business, including hurt reputations, incurred financial losses and crippling sanctions from regulators.

According to the news provider, the AFP's Payments Fraud and Control Survey revealed that more than 60 percent of organizations were either targeted for victimized by card data thieves last year. The bright side was that this represented a slight decline from the 66 percent recorded in the 2011 version of the same report.

The source explained that 63 percent of respondents had experienced some form of check fraud, which illustrates the importance of keeping a close eye on all accounts payable and receivable activity. The most damaging attacks on ACH card systems and other automated payments are those that go on for long periods of time undetected.

CFO noted that the overwhelming majority of respondents said that they increased electronic payments activity in 2012, and intend to continue moving away from paper-based transactions in 2013. More than 80 percent of the respondents to the AFP survey stated that this trend has intensified in their businesses.

Finally, the news provider added that ACH card debits, as well as corporate cards, were more often targeted by cyber criminals in 2011. Nearly 30 percent of the respondents to the survey said that they had experienced some form of attack on ACH debit accounts.

Costliness of negligence
The Financial Post recently reported that Human Resources and Skills Development Canada lost the financial data of more than 500,000 individuals in the North American nation following an event in 2012. According to the news provider, this led to serious issues, including a severely damaged reputation among current and prospective clients, as well as monumental financial losses.

The source explained that the firm's defenses might not have been adequate, which led to the attack, while one expert asserted that the use of simple firewalls and haphazard policies will not be enough to stop the modern cyber criminal. The Financial Post suggested that all enterprises train employees in the best practices of handling personal, financial and corporate data, as this will improve the efficacy of policies in place.

Additionally, the news provider noted that one-fifth of U.S. and Canadian businesses that manage financial information will likely experience one event that leads to loss annually.