Why Businesses Should Become Credit Card PCI Compliant
While today's consumers are very comfortable making purchases with their credit cards online and offline, they have also become quite savvy when it comes to protecting their personal and payment card information.
They look for merchants that have the systems in place to protect their data and won't hesitate to abandon their online shopping carts if they don't trust the seller.
To ensure the security of consumers' information, there's a need for a set of standards to regulate the payment industry while reducing the cost of security breaches and credit card fraud.
What Is Credit Card PCI Compliance?
The Payment Card Industry Data Security Standard, known as PCI DSS, is a set of security protocols created by the five major credit card companies (Visa, MasterCard, Discover, American Express, JCB) to help reduce costly consumer and bank data breaches.
Although there's no official certification process, all sellers, service providers, banks, and organizations that process credit card information need to prove that they're compliant with the PCI security standards or they could risk being penalized in the event of a data breach.
There are four levels of PCI compliance, each with unique requirements that businesses need to follow in order to validate their compliance. The level a business falls under is determined by its annual transaction volume.
Why Is Credit Card PCI Compliance Important?
PCI compliance is a key component in regulating the security of the credit card payment industry.
The PCI standards set the requirements for businesses and sellers to securely accept, store, process, and transmit cardholder data during credit card transactions to prevent fraud and data breaches. E.g., by establishing data security policies, as well as removing card data from the processing system and payment terminals when a transaction is completed.
If a company accepts credit card payments, it's important for it to adhere to the standards. Otherwise, if a data breach occurs, its customers could be vulnerable and the organization could be held liable, incurring hefty fines from the PCI Security Standards Council, card replacement costs, and forensic audit costs. Not to mention, the business could be investigated while the brand's reputation is damaged and the company may lose customers' trust.
How To Become Credit Card PCI Compliant
Any business that accepts credit cards should become PCI compliant, regardless of the size or volume of its transactions. Here are the steps to meeting PCI credit card standards and staying compliant:
- Analyze compliant level: There are different security standards based on how a business handles transactions and customer data, which credit card companies and banks it works with, and the annual transaction volume. A company can define where it falls in PCI's general standards by using the self-assessment questionnaire (SAQ) issued by PCI.
- Make security improvement: if the assessment indicates that the company falls short on some of the criteria, it should make the necessary changes and take the assessment again to ensure that all the requirements are met.
- Find a provider for data tokenization: Credit card tokenization allows businesses to keep credit card information in a secure, web-based portal instead of a local server. In addition to keeping the customer data safe, it also reduces a business's liability in case there's a data breach.
- Submit a formal attestation of compliance (AOC): This process declares that a business is fully compliant with all PCI standards that are relevant to its size and nature. Once the attestation is completed, a company can have a qualified security assessor review and validate the information.
- File the paperwork: The last step is to file the paperwork with the credit card companies and banks by submitting the SAQ, AOC, and other required documentation required by the individual organizations, such as external vulnerability scan.
- Annual renewal: There's a fee involved to become PCI compliant and maintain the standing. The annual fee can range from $1,000 to $50,000 annually, depending on the size of the business.
Maintaining Security While Becoming Compliant
It's important for businesses to become PCI compliant so they can protect both customers' data and their own interest.
By staying PCI compliant, an organization can ensure that its systems are up-to-date in its security standards to process credit card payments safely.
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