Get fresh insights, pro tips, and thought starters–only the best of posts for you.
Apr 13, 2021
14 min read
Restaurants and retail stores can best be described as people’s destinations or people’s hubs. Considering this people-centric nature, industries have begun resorting to practices that their customers best prefer. With changing times, the way payments are made and logged have also undergone major transformations beginning with the initial manual registers to the most recent POS systems, a remarkable journey worth noting.
“When I was young, people lived from paycheck to paycheck. Today, it seems like they live from credit card payment to credit card payment.”
Recollects Robert Kiyosaki, the renowned American author and businessman, on the changing trends in the payment sector.
Nowadays, we often hear the term Point of sale (POS) linked with the payment sector. The term actually refers to the place where the customer pays for the availed services, inclusive of all the taxes. It includes collaborative payment tools and is often seen located at the end of the physical store. These tools can either be a POS terminal with systems or a virtual one with mobile or computer-based payments.
A POS system collectively refers to all the hardware and software components used for billing in a POS store. It usually consists of all the necessary devices for efficiently managing the sales and the related transactions. Some of the commonly seen components of a POS system are as follows:
It refers to the software running on the POS system, or in other terms, it comprises the terminal’s operating system. This software interface has simplified the process of inputting data regarding purchasing the various products and getting accurate cumulative data logs of the required products. It further helps in processing orders using the available hardware components.
Different firms may have different data collection requirements, and hence, POS software is often tailored to meet the respective industry’s needs.
It refers to the payment receiving section of the POS system. Here devices like a card reader or other payment accepting devices are found, which accepts payments for the orders made through the POS system. With integrations with the POS software, bill printing and card swiping can be carried out on a single hardware device. This simplifies the process of order management and makes the checkout process faster. These terminals accept a wide range of payment modes, from chip-based cards to detecting contactless cards and other online payment modes like Google pay, Apple pay etc.
POS system has eliminated the need for people to remember the price and details of various products in the store. Now all the person needs to do is scan the product’s barcode to fetch the required product data, making the process faster. Further, this system also helps keep track of employees and their checkout speeds and helps in taking appropriate measures to enhance the employees’ efficiency.
With a POS system in place, upon adding the existing stock level upon the system implementation, the inventory level is automatically adjusted by the software with each purchase. Further, it has also made it possible to get accurate sales reports and trend analysis to get a clear picture of your businesses’ status.
POS software helps in maintaining a digital catalog of data that can be accessed from any preferred location. This means that once a product price is set in one of the stores, there is no need to enter the same data again in the other stores.
Effective inventory management and buying behavior records of customers can help in creating personalized marketing campaigns. This helps increase the store’s profitability. Other practices like instant access and enabling selling and ordering from anywhere can further enhance customer satisfaction and hence profitability.
The greatest recorded data loss due to a POS system breach occurred in 2013, compromising nearly 70 million individuals’ data. This has served as an eye-opener to all the businesses that took POS security lightly. Some of the essential aspects necessitating POS management are as follows:
Taking precautions before an incident occurs is always better than paying the incident’s cost after its occurrence. Securing the data in these devices can be particularly demanding if left unattended or lost, or stolen. Hence, appropriate measures to prevent such instances are essential if you aim to build a stable customer base.
In industries where time is money, even a minute of POS device downtime can result in a tremendous loss. This has created a need to effectively manage these devices to avoid such incidents. Not just this, when POS devices are used alongside other applications, it can give rise to additional overhead costs making device management a necessity.
Even in organizations with the most trusted employees, a minor mishap can put the whole organizational data at risk. Hence, managing the devices and controlling the access levels so that only those employees who need them for their duties have access to them can make things easier and guarantee customer trust.
The changing technology and widespread internet connectivity have made it possible to remain connected, dissolving all regional barriers. Now managing the device in real-time, getting updated location information, monitoring device health and status, and security and compliance information have become integral components of POS devices. All these data can help ensure the judicious use of these devices.
POS malware is specially designed to steal payment card data from point-of-sale terminals. One of the most straightforward vulnerabilities hackers can exploit to access the card data is the connection between the POS workstation and the store server. All they need to do is introduce a malicious tool to the location of the terminal.
Once the hacker gains access to the network, the extent of the loss can be far beyond expectations. Some of these include:
Storing user data in the same place as encryption information can make things easier for hackers. In this case, gaining access to one of these automatically gives you access to the other. For this, a separate hardware security module can be used to store your encryption data. The POS data stored can be easily accessed by attaching the device directly onto the server or computer.
Enforcing strong password policies that ensure that the manufacturer’s password is scrapped before its use.
Using the same business network to push updates to your POS data environments and devices can potentially put your data at risk. Here access to your network allows direct access to all your POS data. However, creating small pathways from the business network to the POS data environment can be a complicated task for small businesses. Hence, it’s often seen that they resort to practices like multi-factor authentication (MFA) from the business network to the POS device. Similar is the case with coffee shops and restaurants that provide Wi-Fi to their customers. Separating the POS device network from this public network is vital for ensuring data security.
It’s a known fact that Microsoft only extends its support to its modern versions. So, if you are still running an old version of Windows that Microsoft no longer supports, you won’t receive frequent security patches to fix operating system issues. It means, once hackers are lucky enough to find an entry point into the software, your POS data will be compromised.
RAM scraping, also known as memory scraping, is a technology used for extracting sensitive payment card data from the memory of the payment application process. This is implemented in specially crafted malware attacking payment applications by stealing cardholder information from memory.
RAM scraping is a technique used by hackers to rip credit card data directly from the POS device’s memory before it gets encrypted on the network.
Some of the best practices to prevent a POS system compromise include: