PCI compliance, or payment card industry compliance, refers to a set of 12 security standards that companies must use when receiving, transmitting, processing and storing credit card data. For small businesses, PCI compliance includes requirements such as encrypting cardholder data, managing firewalls, updating antivirus software, and assigning a unique identifier to each person who has access to a computer.
The Payment Card Industry Security Standards Council, an independent body created by Card Networks in 2006, governs PCI security standards, and compliance with those standards extends to card networks and payment processors. Regardless of the number of card transactions processed, all merchants must be PCI compliant. You can contact the payment card networks (Visa, Mastercard, American Express, etc.) directly for information on a specific PCI compliance program.
What is PCI Compliance?
To prevent card payment fraud, the PCI Security Standards Council (PCI SSC) issued a set of requirements in 2006 to ensure that all companies that process, store or transmit credit card information maintain a secure environment. The SSC provides a comprehensive framework, tools and support resources to help businesses securely accept payment card data.
The standard originally applied to merchant transaction processing, but was later extended to encrypted Internet transactions. This requirement, known as the Payment Card Industry Data Security Standard (PCI DSS), is a key component of all card companies’ security protocols.
PCI compliance standards help prevent fraud and mitigate data breaches by keeping important cardholder financial information secure. Unprotected credit card information is more likely to be compromised. Hackers can then use sensitive cardholder information to commit a number of fraudulent activities, including identity fraud.
What is Cardholder Data?
Cardholder data is personally identifiable information pertaining to a person with a credit or debit card. This type of data also includes additional data such as default user account number (PAN) and name, card expiration date, and/or card service code (three or four digit magnetic stripe card). The service code defines the allowable requirements and limitations for magnetic stripe read transactions.
If you store, process, or transmit the cardholder name, expiration date, and/or service code along with the PAN, you must protect it in accordance with PCI compliance rules.
PCI Compliance Requirements
PCI compliance standards require merchants and other businesses to process credit card information in a secure manner to help cardholders reduce the possibility of theft of important financial account information. If a merchant does not process credit card information according to PCI standards, card information can be compromised and used for a number of fraudulent activities. In addition, important cardholder information can be used for identity fraud.
PCI compliance means consistent adherence to a set of guidelines established by the PCI Standards Committee. PCI compliance is monitored by the PCI Standards Committee, an organization founded in 2006 to manage credit card security.
Is PCI compliance mandated by law?
No, merchant compliance is not defined or enforced by the government. In addition, the PCI Security Standards Council looks for ways to manage security standards and improve security, but does not enforce them. Instead, the steps companies must take to comply with PCI are agreements with merchant service providers or payment service providers and card networks.
The general purpose of these requirements is the same for each vendor, but the implementation details may differ. Failure to follow proper procedures can lead to serious problems, including tens of thousands of dollars in fines.
Benefits of PCI compliance.
Achieving PCI compliance in organizations, especially small businesses, can be a challenge. At first glance, the endless list of rules and regulations is overwhelming. However, the benefits of protecting cardholder data far outweigh the cost of implementing and maintaining compliance requirements.
First of all, PCI compliance is an industry obligation, and without PCI compliance you can be fined for breach of contract and negligence. More importantly, without data, you are vulnerable to data breaches that could lead to theft or fraud. PCI compliance means your system is secure, which reduces the likelihood of a data breach. It takes one notable security breach to reduce customer loyalty, undermine our reputation as a brand, and undermine public confidence in our ability to keep sensitive credit card information secure. A data breach not only negatively impacts a company’s reputation, but can also lead to lawsuits, insurance claims, account cancellation, payment card issuer fines and government overpayments.
PCI compliance also contributes to the security of payment card data protection solutions around the world. It’s an ongoing process that helps prevent future security breaches. In the first six months of 2020, 36 billion records were exposed due to data breaches. Most of the breaches were financially motivated. Continuous protection of cardholder data ensures that consumers do not suffer any financial loss.
What is a PCI-compliant method?
To be PCI compliant, you must first define a self-assessment questionnaire that you must complete. After completing the questionnaire, you must create and archive evidence that you have completed a vulnerability search through a PCI SSC-approved search provider. The search is only applicable to certain traders. You must then complete the proof of compliance. The last step is to provide all of the above information.