What Can a Merchant Do to Help Prevent Debit Machine Skimming?

Debit Machine Skimming

What is Debit Machine Skimming?

Put five Canadians in a room together and chances are, at least one of them has had to make a trip to the bank for a new debit card because their card may have been compromised.  Debit Machine skimming incidents are on the rise in Canada, growing exponetially every year.  And while affecting many Canadian cardholders, skimming is still a mystery to many merchants.

How Criminals Skim Off Debit Machines?

Skimming happens in phases.  First, the criminals will compromise the pinpad.  They typically chose merchant locations with high traffic in order to obtain the most card numbers.  They will take the pinpad, install rogue hardware and reinstall the pinpad without the merchant noticing.  All of this can now take as little as 20 minutes.  Then with each transaction processed, card information is transmitted via bluetooth directly to the criminal.   Low traffic locations can also be a target for stolen pinpads, as they will need parts to compromise units with.

Next comes the card manufacturing.  Gone are the days of programming generic cards with the data, the criminals now have sophicated print shops set up.  Counterfeit cards can look as real as authentic ones.  The reason for this is so they can use these cards at merchant locations for the final phase which is exploitation.

Exploitation is when the criminals purchase fenceable goods with the counterfeit cards or they go to non-chip ABM’s to withdraw money.  The proceeds made from the goods and withdrawals have been known to fund organized crime.

How Merchants Can Prevent Debit Machine Skimming in Their Business

So how do you protect yourself as a merchant and your customers?  Here are a couple of quick things you can do to immediately make yourself a less attractive target.

Treat your pinpad like cash.  You wouldn’t leave a 50 dollar bill sitting on the counter and walk away, do not leave your pinpad lying on the counter.  If it’s not in use, place it under the counter or out of sight.

Know your pinpad.  Each pinpad comes with a unique serial number on the back.  Write down the serial number and keep somewhere safe.  Check the serial number often and train your staff to also check at the beginning and at the end of every shift.  If the serial number has changed, and you have not ordered a replacement terminal, call your Acquirer.   Inspect the unit and look for attempts at tampering.  Most units come with tamperproof stickers on the back.  If the stickers are peeling or look worn, be mindful.  If you suspect that your pinpad has been tampered, call your Acquirer as soon as possible and request a replacement.

Secure your pinpad to a stand.  A stand not only makes it more difficult for a criminal to snip the cable and steal the pinpad, but it also props the unit up, making it easier for your customers to use.  Just be sure to pick a model that can be used by all your customers, even those with accessibility challenges.

Move to Chip and Pin.  A fully authenticated chip transaction cannot be compromised.  If criminals know that you are a chip enabled merchant, you are automatically less attractive to them because they know that there is no mag swipe data that can be captured.

Remember, criminals will always take the path of least resistance.  Every step that you can take to make it more difficult for them to target your debit machine for skimming, will help towards protecting you and your customers.

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Matthew Hunt has been helping small businesses get set-up with Canadian Merchant Account Services since 2007 and helped 1000's do so. Join Matthew on Google+.

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