Cost of a Data Breach for a Small Business
Your patrons’ trust is one of the most valuable assets your business has. You invested a great deal of time to grow your clientele and you worked hard to make sure your product or service stands out among the competition. Stolen personal data can destroy trust and the good relationship that you built with your clients over the years. A data breach can seriously damage your brand reputation and there is a high cost associated with the breach.
According to the reports, the vast majority of credit card data breaches affect smaller companies. Very often the owners find out about a data breach when they get a call from law enforcement investigating a fraud case. If your business is suspected of a data breach, the investigation might interrupt your operations and even stop them altogether until the investigation is complete. While the investigation is being conducted, you would not be able to use your POS terminal and receive payments from your patrons, so your cash flow will be seriously impacted until the issue is rectified.
The PCI Compliance Guide suggests that fines for non-compliance at the time of breach could be anywhere from $5,000 to $100,000 depending on the level of the data exposure. These sums could become critical for a smaller company and force it to go out of business. Often a fixed amount per cardholder is applied as well.
There are many other expenses associated with the data breach besides the fine. Lost time, lost customers, legal fees, and damaged brand reputation would take hours of your valuable time that you would have to spend taking care of the issues unrelated to your day-to-day operations.
It is important to stay PCI compliant and create a culture of security awareness among your employees. It is much easier to take actions to prevent a breach from happening than to deal with costly consequences after.