Out of Pocket Expenses Add Up Quickly After a Data Breach

Have you ever thought about what it would mean for your business if a data breach were to happen? Even the suspicion of a data breach could turn your business upside down. While the financial costs of a data breach can be high, even the non-monetary consequences can be damaging.

It’s very rare for a small merchant to discover for itself that payment data has been stolen. Most events are detected by a law enforcement agency or a third party such as a bank or a card association that has noticed a rise in fraud that can be traced back to a specific merchant. When a breach of payment data is reported — or even suspected — it kicks off a series of unavoidable and costly actions that range from forensic analysis of the merchant’s payment system to mandatory reporting requirements.

If your business is unfortunate enough to have this happen, you can expect to incur significant expenses. According to one account, the average cost of a data breach for small businesses in $36,000. Your actual out-of-pocket cost will depend on several factors. 

  • A mandatory forensic examination
  • Notification of customers
  • Credit monitoring for affected customers
  • PCI compliance fines
  • Liability for fraud charges
  • Liability for fraud charges
  • Card replacements costs
  • Upgrade or replacement of POS system
  • Reassessment for PCI compliance

Those are just the direct costs of experiencing a data breach. There are indirect non-monetary consequences that can be even more damaging to your business.

You can read more in Small Merchants: The Cost of a Data Breach Is Higher Than You Think.