How Can Companies Prevent Point-of-Sale (POS) Malware Attacks

Nowadays, many businesses rely on the convenience of a POS machine to collect payments from customers and streamline operations. Despite the numerous opportunities your POS system provides, it’s also associated with risk factors in the form of cyber threats. 

In the next sections, we explain what POS malware attacks are and explain how companies can prevent point-of-sale malware and protect their POS terminals. 

What are POS Malware Attacks

Point-of-sale (POS) malware attacks are attacks that target POS systems to steal sensitive customer data, such as payment card information. They do this through vulnerabilities in hardware, software, or network configurations. 

While malware attacks are most popular in retail stores that use POS terminals, they can be a risk factor for any business relying on a POS solution. Examples of such niches are tourism, hospitality, food service, and others.

For such companies, implementing robust security measures to protect POS systems from unauthorised access and data breaches is key. POS attacks often lead to significant financial losses, reputational damage, and compromised customer loyalty. 

How POS Malware Works

POS malware is software that has been specifically designed to steal customer payment information. In a lot of cases, the stolen data is then sold to other bad actors, who can exploit it in diverse ways.

This can happen via a range of techniques, including the following:

• Exploiting vulnerabilities – POS systems often run on default operating systems like Windows, Linux, or Android variants, which can contain built-in weaknesses if not properly secured. Vulnerabilities also arise from outdated software, unpatched third-party components, or poorly protected networks. Attackers frequently scan for unsecured IP addresses or compromise Wi-Fi connections to reach POS devices remotely. Once inside, they exploit OS or software flaws to plant malware, steal payment data, or even disrupt business operations.
  
• Install malware – attackers can also infect the system physically via infected USB devices to monitor, capture, and transmit sensitive data.
  
• Brute force attacks – they rely on automated programs that quickly cycle through countless username and password combinations, attempting to break in by sheer volume. Some of these tools can run through thousands of possibilities every second and work best where passwords are easy to guess or there are default settings.
  
• Compromised credentials – taking advantage of credentials that were stolen in earlier breaches, including those belonging to third-party vendors connected to a company’s POS infrastructure. These previously exposed credentials allow hackers to slip into networks unnoticed, pretend to be legitimate users, and move through the environment with little resistance.
  
• Insider threats – staff can be bribed to hand over POS terminals after business hours, allowing attackers to tamper with the devices and return them before reopening, all while enabling silent data theft. Similar threats can also come from disgruntled workers who misuse their access or knowledge of system weaknesses to install malware or manipulate data for personal gain.

After the breach has been made, attackers gain access to the POS system. They use the malicious software to collect sensitive data and usually prepare it for transfer to another site or remote servers controlled by them. 

Types of POS Malware

Not all POS malware designed to steal customer data is the same. As the cybercrime environment develops, new and more sophisticated malware solutions emerge.

Here are some of the most popular types of POS malware that businesses fall victim to:

• Network sniffers – intercept and log network traffic to identify sensitive information, making it a popular reason for concern for those relying on networked transactions.
  
• RAM scrapers – random-access memory scrapers concentrate on stealing data from the system’s RAM, as this is where data lives unencrypted during processing. This is a high risk where encryption is missing.
  
• Backdoor – works by creating a hidden entry point, giving long-term, undetected access to the system.
  
• Keyloggers – a type of malware that records keystrokes on POS systems and enables hackers to store card data and passwords.
  
• File injectors – a malware that embeds harmful code directly into genuine POS system files. Once compromised, these modified files act as a gateway, enabling data theft or triggering additional malicious actions.

Every type of POS malware operates with its own tactic and target, making each one effective in different situations. For example, RAM and memory scrapers take advantage of the short window when sensitive data appears in plain text, keyloggers capture keystrokes, while network sniffers capture network packets.

Best Practices to Prevent POS Malware Attacks

The good news is that businesses can adopt different strategies to minimise the risks of falling victim to POS malware attacks.

Here are the most effective options.

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1. Secure POS Network and Devices

Insecure networks are a common vulnerability that opens the doors to POS malware attacks.

To ensure protection, prioritise using encrypted connections, which will help you secure data in transit. You can rely on secure communication protocols like TLS for this purpose. 

Another way to secure your network device is to restrict network access. For example, one option to explore is to limit access to POS networks via the use of firewalls and VLANs. Also, don’t forget to update software and firmware and to regularly patch vulnerabilities in POS software and devices.

2. Implement Strong Authentication and Password Policies

One of the easiest ways for hackers to access sensitive data is by cracking passwords. And the truth is that many intrusions begin with weak or reused credentials, giving attackers an easy entry point before they start scraping random access memory, using keyloggers, or installing backdoors.

Start by replacing default passwords to ensure all POS devices have unique, strong passwords. Use multi-factor authentication (MFA) to add an extra layer of security for remote access. 

Most importantly, enforce complex passwords by using long, random passwords and update them periodically. 

3. Enhance Physical Security of POS Systems

As mentioned above, some of the frequently used POS malware attacks are directly linked to physical access to the POS system. 

To bring risks down to a minimum, block access and make it available only to authorised personnel. Make sure you’re consistently monitoring physical devices and conducting regular inspections for tampering or unauthorised modifications. 

Also, don’t neglect the importance of securing peripheral devices, like barcode scanners, receipt printers, and other accessories. 

4. Deploy Advanced Anti-Malware Solutions

Another way to avoid POS malware is to invest in advanced, reliable anti-malware software solutions. 

Research the available products on the market, consider your budget, and make an informed decision on a tool that will help you detect and prevent malicious activities on POS systems. Ensure it offers real-time protection for maximum results. 

Also, use intrusion detection systems (IDS) to monitor for anomalous behaviour and identify any suspicious activities. 

Just like your POS systems need to be regularly updated, so do your anti-malware software solutions. Update the signature database and keep your tools up to date to enable them to detect the latest threats to your business. 

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5. Encrypt Sensitive Data

Data encryption is incredibly important in preventing POS malware. 

Sensitive information is the most vulnerable when shared across networks. Encryption ensures that data is hidden during storage and when being passed along.

Use PCI-validated Point-to-Point encryption solutions to secure payment data from capture to point of storage. You can also rely on tokenisation, which replaces sensitive card details with tokens for even more secure transactions. 

Finally, adhere to Payment Card Industry Data Security Standards (PCI DSS) when handling payment data. 

6. Strengthen Vendor and Third-Party Security

Sometimes, the problem may derive from your third-party vendors, even if you’re exploring every avenue to keep your data protected. 

Check whether your third-party partners follow strict security practices and choose wisely who you work with. Closely monitor vendor access and limit third-party access to POS systems. 

Most importantly, when starting a partnership with a new vendor, discuss their security obligations and include them in your contracts. This will help keep everyone on the same page and will set clear security expectations.

7. Conduct Regular Security Audits and Employee Training

As mentioned earlier, failing to properly train your employees to recognise anything suspicious can easily be a cause for identity theft and access to sensitive data. 

To prevent this scenario, perform employee training to educate your staff on recognising phishing attempts and secure POS handling. If possible, stimulate attack scenarios and run drills to test the response to potential malware attacks.

Moreover, performing penetration testing can make a big difference as it can help you and your employees identify and fix vulnerabilities before they turn into serious problems. 

8. Implement Continuous Monitoring and Response

Another strategic way to prevent POS malware is to focus efforts on regular monitoring and response tactics.

For example, keep an eye on network traffic and use tools to detect unusual data flows or unauthorised access attempts. Set up incident response plans by creating protocols for quickly addressing malware infections. This can help you act quickly in case of real-life situations.

Another recommendation is to log and review activities. Keep logs of all transactions and access and use them for forensic analysis. 

9. Hide Web Browsers

POS systems can also be exploited by manipulating employees to open malicious links or websites. This is often a result of poor employee training regarding security and can lead to significant losses. 

It’s highly recommended that internet access be limited on POS terminals by deleting web browser shortcuts from the desktop. You can also explore the options for “assigned access” mode and application allowlisting to technically prevent launching browsers or unapproved apps.

Tools and Technologies for POS Security

Although security, to some extent, is about training your employees and understanding the risks, it’s also about having the right security tools in place to protect valuable data and prevent POS hacking.

Earlier, we mentioned anti-malware and antivirus software solutions, but that’s not all.

It’s highly advisable to invest in reputable firewall products to block unauthorised access to your POS networks. In addition, setting up endpoint detection and response (EDR) can help you monitor device activities and detect malware early on. 

Encryption software is also a must, as it enables businesses to secure data both when it’s being stored and when in transit. Finally, security information and event management (SIEM) can aggregate and analyse security events for even more proactive detection.  

No matter the product you choose, make sure it’s legitimate software that guarantees results. Check the reviews of the provider, speak to their team, and ensure you can count on their services. 

Real-World Examples of POS Malware Attacks

There are numerous examples of POS malware being discovered worldwide. 

Here are a few examples:

• UDPoS - a malware attack first discovered in 2017, which relies on DNS tunnelling to exfiltrate stolen card data. It’s hard to detect and acts like a LogMeIn service pack, allowing it to evade detection. When installed, UDPoS goes through the POS system’s memory to access track data from credit cards.
  
• vSkimmer - malware discovered in 2013, which was thought to be an updated version of Dexter. It operates by sweeping the memory of an infected system to locate and extract payment details, which are then sent to an external server. vSkimmer can save stolen information on a USB device in case the system doesn’t have an internet connection.
  
• TreasureHunt - takes advantage of stolen or weak credentials, installs itself onto the device, and is especially risky for retailers that rely on older swipe systems. Once the data is extracted, it’s transmitted to the command and control server. 

Of course, the list of existing malware for POS attacks is much larger. However, these examples demonstrate some capabilities and features of such malware products. 

Key Metrics to Measure POS Security Success

Before we wrap up, there’s one more essential piece of information when it comes to POS malware attacks - the metrics that can help you measure how secure your systems are.

These include:

• Number of detected threats - Tracks how many potential attacks are intercepted.
  
• Time to detect and respond - Measures the speed of identifying and mitigating malware.
  
• PCI DSS compliance status - Ensures adherence to industry standards.
  
• Incidents of data breaches - Tracks the frequency and severity of breaches.

By monitoring these metrics, you can spot weak areas before they turn into serious risks. 

Conclusion

Overall, POS malware attacks are more popular than one would hope. The good news is that as a business, you can prevent them and protect your and your customers’ data via a comprehensive approach that merges technology, employee training, and security protocols in one. 

We hope that this guide on how to prevent POS malware attacks will come in handy, helping protect your company and enjoy uninterrupted operations. 

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