News

SURVEY: Small businesses need to do more for data security

March 14, 2007

WASHINGTON - The National Federation of Independent Business, a Visa-sponsored card security summit, and Visa USA are announcing a partnership to help the nation's small businesses develop stronger security practices, as new survey results show that many smaller companies use a "common sense" approach to protecting customer and employee information.

According to a survey conducted by NFIB and Visa, 83 percent of small businesses say protecting information is extremely important to their customers. The survey defines small businesses as those companies with 250 or fewer employees.

At least 84 percent of the businesses surveyed protect customer information through encryption or passwords.

Although many small businesses are confident about their data-storage practices, their level of storing sensitive information may put them at increased risk.

37 percent of card-accepting businesses store customer card numbers

24 percent store customer Social Security Numbers

28 percent store customer bank account numbers or copies of their checks

52 percent of all small businesses keep at least one of those sensitive pieces of information

In some situations, business owners may not be fully aware their systems are storing highly sensitive information, Visa says.

Few small businesses have established data-security processes in place, the survey shows. Most small businesses (57 percent) do not see securing customer data as something that requires formal planning, and many (39 percent) say they rely on common sense to keep data safe.

Most small businesses (61 percent) have never sought information about how to properly handle and store customer information.

"Today's small businesses need to understand their data practices and make their systems more secure," said Dan Danner, executive vice president of public policy and political issues for NFIB.

To reach as many small businesses as possible, NFIB and Visa expect to launch a comprehensive data-security education program later this year.

Combining Internet technology, in-market events and turnkey materials, the effort will be designed to be as accessible as possible to small business owners and employees.

"Small business shares a responsibility to protect customer information and prevent fraud beyond what the credit card companies are already doing," Danner said. "NFIB is committed to working with Visa to provide them with the resources and information they need to take action."