Adopt best data protection norms: Visa tells merchants

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Mumbai, July 10: There is more than one reason to worry the next time you swap your credit card in any merchant establishment. The number of merchants practicing international best practices to protect your data are abysmally low in India.

Research data released at the Visa Asia Pacific’s Risk Management Conference 2006 shows only 26% of the merchants studied in the survey follow international standards on payment security.

This standard has been promoted by the payment card schemes such as Visa and MasterCard for some years. "Although merchants are eager to protect customer data, their level of awareness of the international standard on payment security, known as the Payment Card Industry Data Security Standard, was surprisingly low at just 46%. More disappointing was the finding that only 26% are actually following the programme’s standards," the study noted.

The study has found that, in India, 79% of the merchants surveyed were concerned about protecting their customer data; 54% were concerned about payment card fraud and 61% were concerned about identity theft.

The data also revealed that 93% of the merchants were concerned about a loss of reputation, 96% were concerned about loss of customers and business revenue and 74% about legal action if a security breach occurred.

"Merchants seem to realise the significant risks to their businesses and reputation that they face if customer data is mishandled. The latest research tells us that banks have a long way to go to educate their merchants on what is required to protect cardholder data. There is much work to be done in this area," said Visa Asia Pacific’s executive vice president, risk management, Peter Maher.

The research also showed that around 30% of the merchants were familiar with the payments schemes’ tools for demonstrating compliance with the standard, with only half that number using them.

These results match the previous research findings among consumers, released in January 2006 by Visa International, which showed that theft or loss of personal or financial information is the number one concern among consumers worldwide, even when compared with terrorism, pandemics and natural disasters.

The research was conducted among 279 merchants in 11 markets across Asia Pacific, including India, between April and May. "The vast majority of the respondents are willing to comply with global data security standards once they understand the benefits," said Maher.