What Is PCI Compliance and Why Is It Critical For Ecommerce In 2020

by geobridge

What Is PCI Compliance and Why Is It Critical For Ecommerce In 2020

by geobridge

by geobridge

What Does PCI Compliance Mean for Your Business?

If your business accepts credit cards, you may have heard of PCI security standards. But what is PCI compliance, and how does it affect your business?

The Payment Card Industry (PCI) Data Security Standards (DSS) were developed in 2006 by major credit card companies, including Discover, American Express, MasterCard, and Visa. The goal is to secure private payment card information by requiring companies to implement security standards to protect data, reduce fraud, and avoid security breaches.

Any company that processes, stores, or transmits credit card data must follow PCI compliance guidelines. What is PCI compliance, and what does it mean for your business, exactly?

If You’re Not in Compliance, You May Be Fined

why businesses need pci compliance

It doesn’t matter if you have a small business or a large enterprise—any company that accepts credit cards as a form of payment must be PCI compliant.

If you’re not in compliance, you not only risk a data breach, but you’ll be subject to fines by your merchant bank. Generally, the larger your business is, or the greater the breach, the more you’ll end up paying in fines. Fines can range from a few thousand dollars to hundreds of thousands of dollars.

You may even be prevented from accepting credit cards as a form of payment, and there could be an investigation. The takeaway here is that compliance is always less expensive than non-compliance, and non-compliance comes with the added risks of security breaches and loss of reputation, something not every business can recover from.

You May Need to Complete a Self-Assessment and File Paperwork

pci explained article imageWhen considering “what is PCI compliance?”, be aware that your business may need to complete a questionnaire based on your merchant status. Eligible companies must fill out the Self-Assessment Questionnaire (SAQ) and an Attestation of Compliance annually, then file both of these with their acquiring bank.

Keep in mind that you must be qualified to take the questionnaire (the form will cover these qualifications). The form is not intended for every business. If you have questions on whether or not you can self-attest your compliance, or about what is PCI compliance in general, you must contact your merchant bank or payment brand to clarify.

Your Business Has to Implement PCI Security Requirements

What is PCI compliance, and what are its goals? PCI DSS outlines 12 requirements spread across six goal categories.

Goal: Build and Maintain a Secure Network

  • Install and maintain a firewall configuration to protect cardholder data
  • Never use vendor-supplied defaults for system passwords and other security parameters

Goal: Protect Cardholder Data

  • Keep saved cardholder data safe
  • Encrypt transmission of cardholder data across public networks
Goal: Maintain a Vulnerability Management Program
  • Use and update anti-virus software regularly
  • Create and maintain secure systems and applications
Goal: Implement Strong Access Control Measures
  • Restrict access to private cardholder data on a need-to-know basis
  • Assign a traceable and unique ID to each person who has computer access
  • Restrict physical access to cardholder data
Goal: Regularly Monitor and Test Networks

  • Track and monitor all access to network resources and cardholder data
  • Regularly test security systems and processes

Goal: Maintain an Information Security Policy

  • Create a policy that addresses information security for both employees and contractors, and keep it updated

If your business handles credit card data and you’re asking “what is PCI compliance?”, you must abide by these policies and implement the 12 requirements to avoid penalties!

A Secure Payment Processor or HSM Is Your Best Bet

what is pci compliance

When attempting to gain PCI compliance, businesses can consider using a secure payment processor that encrypts credit card information. This allows you to have secure transactions and means your business never has access to data in its unencrypted form, which reduces your liability and makes complying with PCI DSS easier.

You can also consider a payment processor that uses tokenization, which allows you to save credit card data for future use, yet prevents the data from being stored in its original form. A unique string of numbers and characters will be used as placeholders for the data, making the information unusable even in the event of a security breach.

A hardware security module (HSM) uses encryption and is one of the best ways to securely process data, and is considered the most secure way to protect information. PCI-approved payment processors can help you gain compliance and reduce risk!

So What is PCI Compliance? Hopefully We Answered The Question!

Remember, compliance isn’t a one-and-done deal. What is PCI compliance? It’s a consistent effort to maintain the security of sensitive credit card data. PCI compliance allows your business to conduct secure transactions and protect your business from security breaches and fees in the long run, not to mention your reputation. PCI compliance can also make it easier to comply with other data security standards. Is your business PCI compliant?