What is PCI Compliance?

To remain competitive in the market, companies today need to accept credit cards. Maintaining a secure environment for charge card transactions is crucial given the rise in credit card fraud, identity theft, and fraud detection. Customers will lose trust in merchants and financial institutions as a whole if this information is handled improperly.

Payment card industry (PCI) compliance aids in ensuring the security of each credit card transaction made by your company. No matter how big or small your business is, it must adhere to 12 operational and technical standards in order to safeguard cardholder data and maintain a solid reputation. Here is all the information you require regarding PCI compliance and its significance.

What is PCI Compliance?

The PCI Security Standards Council (PCI SSC) introduced a set of guidelines in 2006 to make sure all businesses that process, store, or transmit credit card information maintain a secure environment. This helped reduce card payment fraud. The SSC offers a thorough framework, resources, and assistance to help businesses securely accept payment card data.

Although the standards were later expanded to cover encrypted internet transactions, they initially applied to merchant processing. These specifications, known as the Payment Card Industry Data Security Standard (PCI DSS), form the basis of any security protocol used by credit card companies.

By protecting the cardholder's private financial data, PCI compliance standards help prevent fraud and lessen data breaches. Credit card data that is not encrypted is more vulnerable to hacking. The cardholder's sensitive information can then be used by hackers for a variety of fraudulent schemes, including identity fraud.

PCI Compliance Benefits

It can be challenging to bring a company, especially a small business, up to PCI compliance. The seemingly never-ending list of rules and regulations is intimidating at first. However, the advantages of protecting cardholder data far outweigh the expense of setting up and maintaining compliance requirements.

To begin with, PCI compliance is a requirement of the industry, and those who fail to comply risk fines for negligence and agreement violations. Furthermore, those who lack it are more susceptible to data breaches that could lead to theft or fraud. Your systems are secure thanks to PCI compliance, which lowers the possibility of data breaches. One high-profile security breach is all it takes to lose the loyalty of your clientele, ruin your brand's reputation, and undermine public confidence in your ability to safeguard confidential credit card information. Data breaches can lead to lawsuits, insurance claims, account cancellations, fines from payment card issuers, and even government fines in addition to harming the company's reputation.

The worldwide payment card data security solution is also made safer by PCI compliance. Future security breaches can be avoided with the help of this ongoing process. There were 36 billion records exposed due to data breaches in the first half of 2020. The majority of breaches were driven primarily by financial considerations. Constant protection of cardholder data aids in preventing consumer financial loss.

The 12 Requirements for PCI Compliance

The Payment Card Industry Data Security Standard (PCI DSS), established by the PCI Standards Council, is a requirement of PCI compliance standards that merchants must consistently follow. These recommendations include more than 400 test procedures, 78 base requirements, and 12 key requirements.

The first requirement is that merchants maintain a secure firewall configuration because securely configured firewalls are very effective at keeping private information secure.

The factory default username and password that come with the majority of routers, modems, point-of-sale (POS) systems, and other third-party products are easy to guess or are available online. Businesses must not only alter password settings but also keep track of every piece of hardware and software that needs a password and change those passwords frequently in order to comply with the second requirement.

The most crucial requirement on the list is the dual protection of cardholder data. Cardholder data must be encrypted by merchants using specific algorithms, and they must then run routine scans to make sure no unencrypted data is present. 

Similar to requirement three, merchants must protect cardholder data when it is transmitted over open networks by encrypting it.

All computers, laptops, and mobile devices that interact with primary account numbers (PANs) must be running antivirus software. The antivirus software must be updated on a regular basis to detect known malware.

To fix security flaws, firewalls, antivirus software, databases, POS terminals, and other systems need to be updated frequently. By promptly updating systems and applications, merchants can reduce the risk of exploits.

Access to cardholder data should only be permitted by "need to know" circumstances. Personnel, managers, and other parties who don't need access to this information shouldn't have it.

Each authorised user of a computer requires a unique user ID and password. This expedites response times in the event of a data breach in addition to ensuring accountability for those granted access to sensitive information.

Cardholder information must be stored in a place that is physically secure, like a locked cabinet or a secure room. Access to private information ought to be restricted.

All activities involving cardholder information and primary account numbers (PANs) must be recorded in logs. All systems must have a proper audit policy in place, where logs are continually checked for questionable activity.

To maintain security and to help spot any potential weak points along the security system, all systems and processes must be tested frequently. Even the most effective security measures can fail due to human error, aging vulnerabilities, or system malfunction. These restrictions can be found through continuous testing.

There must be documentation for all systems, programs, and authorised employee logs involving PCI DSS requirements.

Although PCI compliance is typically assessed and validated once a year, it is actually a continuous and significant effort of assessment and remediation. The fundamental business principles and procedures will change as a company expands, which means that compliance standards will too. For instance, an online business might choose to start a customer support centre, open physical stores, or explore new markets. It's a good idea to check ahead of time whether anything new involving payment card data will have an impact on your PCI validation method and, if so, re-validate PCI compliance.

Following the PCI DSS regulations is essential for your company's security, but it's not enough. Although PCI DSS establishes significant guidelines for the handling and storage of cardholder data, it does not by itself offer adequate security in all payment environments. A much better way to safeguard your business is to switch to a safer card acceptance method (like Stripe Checkout, Elements, or mobile SDKs). You no longer have to rely on industry baseline standards or be concerned about the possibility that security controls will fail, which is a significant advantage. This strategy offers agile businesses a way to reduce the risk of a data breach and steer clear of the sentimental, time-consuming, and expensive traditional approach to PCI validation. Additionally, a safer integration technique is dependable every day of the year.