Most consumers, and perhaps some store owners, probably have only a vague notion of what happens when credit card numbers are co-opted. The basic idea (that someone else copies your information and uses it to make purchases) is frightening enough, but the details make this whole shadowy scene even scarier, and it should go without saying that the lack of security that leads to this situation is bad for business, too. Unsafe point of sale credit card processing has the potential to scare off customers in a way that could have damaging repercussions.

An article recently posted on the Michigan State University news site recounted the investigation of associate Criminal Justice professor Thomas Holt into the ways hackers sell stolen credit card information. Using skimming and other subtle methods, criminals can easily swipe valuable numbers that they then post on an "online marketplace" that the author of the article describes as akin to aboveground shopping staples like Amazon.com. Card data is given prices based on how valuable the accounts and credit ratings of the victims are, and many different steps exist with individuals playing different roles in the use of stolen information.

Recent data suggests that the rate of credit card identity theft incidents went up by half in the five years between 2005 and 2010, and this continues to be a major concern for POS credit card processing, as more means of thwarting existing systems emerge.

All of this underscores the necessity of hack-proofing a merchant's setup, no matter what that entails. It could mean shaking out potentially untrustworthy employees or regular checks for flaws and electronic devices that compromise security. A business has as much to lose as the customer in this kind of situation, and that's why processors with a strong industry reputation are worth seeking out in a dangerous world.