By Jonathan Franke, Senior Tech, Media and Cyber Broker at New Dawn Risk

Globally, we are moving at rapid pace to a “cashless” society in the pursuit of enhanced security, efficiency, and convenience in everyday transactions. The Covid-19 Pandemic has proven to be a catalyst to this transition and the landscape is changing.

Even less economically developed territories such as Africa and South America are relying on online and computerized payments. The well-coined phrase, cash is king, is being dethroned.

A survey conducted by Pew Research Center in 2022 found that 59% of American consumers don’t use cash in a typical week. Because this transformation is so widespread, the demand for payment processing services, merchant providers, and similar transaction facilitators is growing exponentially.

This surge in reliance on payment processing service companies, merchant providers, and other similar entities comes with heightened scrutiny from regulatory bodies, particularly the Payment Card Industry Security Standards Council. This organisation oversees global payment and data security standards to ensure the integrity of transactions worldwide.

When payment card data is breached, the impacts are quickly felt. Customers, either consumers or businesses, will inevitably lose trust in one’s ability to protect their personal information and potential financial penalties and damages from lawsuits will swiftly follow. The results can be catastrophic.

This challenging and ever-evolving regulatory environment will put more strain on SME Payment Processors who must adhere to the same global standards as their much larger siblings. These companies will need a Cyber and Technology Insurance policy that extends to indemnify damage to, loss of, theft of, or disclosure to unauthorized Third Parties, of Credit Card Data which can lead to a potential breach of PCI standards.

Cyber and Technology brokers and insurance carriers must comprehend and mitigate these risks, focusing on third-party liability, which is increasingly overshadowing ransomware events.

For tailored solutions addressing the evolving needs of payment processors, please reach out to jonathan.franke@newdawnrisk.com.