Due to the increasing number of cyber security threats in connection with online payments and card transactions, the top five credit card brands, namely Visa, MasterCard, American Express, JCB International, and Discover Financial Services, proposed a mechanism for setting strong data security standards for the credit card providers, merchants, banks and other financial institutions.
This eventually led to the development of the PCI Security Standards Compliance. These standards were developed to ensure enforcement of stringent security controls over personal data used during card or online payments. In today’s article, we discuss the significance of PCI Compliance and the way it affects businesses across the industry. For better understanding, let us first learn the basics of what is PCI Compliance and then learn more about its impact on business.
What is PCI Compliance?
Payment Card Industry (PCI) Compliance is a set of standards that companies have to comply with if they process payment information online. They are industry best practices created by the PCI Security Standards Council (PCI SSC). Compliance with the standards is crucial for the security and success of one’s business.
It is a standard that protects cardholder data while preventing credit card fraud. The security standards provide a set of controls that needs to be enforced by merchants and other institutions dealing with the online credit card processes. These security standards include a list of crucial requirements that merchants and other institution need to implement and this would include-
- Build and maintain a secure network
- Protect cardholder data
- Maintain a vulnerability management program
- Implement strong access control measures
- Regularly monitor and test networks
- Maintain an information security policy
PCI Compliance Standards are very precise, and accurate, requirements for building a robust security measure. Though complying with the PCI compliance requirements is for the benefit of the business, most often it is overlooked by small and medium-sized businesses for the lack of resources or its tedious process. Although not a mandate by the law, it is strongly recommended that every organisation dealing with sensitive cardholder data comply with the standard to protect their customers with great vigilance.
Further, as per the PCI compliance standards, businesses must perform regular onsite reviews and periodical scans by a Qualified Security Assessor. Now that we have understood what PCI Compliance is, let us move on to understanding why exactly does the standard matter so much.
Why does PCI Compliance matter?
In the wake of growing cybercrimes, businesses would want to take necessary measures to secure their network comprising sensitive personal data of cardholders or they will have to deal with its devastating financial and reputational consequences. The primary goal behind developing these standards is to ensure complete security when processing credit card payments.
The PCI standards are today marked as a benchmark for quality security measures in the whole credit/debit card industry. They are today a norm in the card industry and is a symbol of good business practice. PCI Compliance helps build trust in customers over the security of their sensitive card information held with businesses.
PCI standard works in favour of protecting both cardholders and merchants as well. It reduces numerous risks connected with online money transactions. Cardholders feel safer transacting with businesses that comply with PCI standards. Complying with the standards builds trust as customers will be assured of companies taking appropriate measures to protect their personal information. It demonstrates the company’s efforts of implementing security measures in customer interest. This in turn also helps businesses build a good reputation in the industry.
As an interesting addition to events, legal frameworks in many countries have mandated the PCI Standards as can be seen from the Master Directions for Digital payments by the Reserve Bank of India which is the Central bank in fastest growing market – India.
How does PCI Compliance Affect Business?
Businesses that deal or accept credit card payments online are subject to an agreement with the card-issuing company that businesses must follow PCI security standards. The PCI Compliance is a standard required to be followed by organisations of all sizes, including small businesses that process cardholder data. Although not a mandate by law, if a merchant is found to be non-compliant they may be subjected to fines by the banks and other financial institutions, especially in case of a breach. On certain occasions, credit card providers and banks may stop giving their services or significantly raise the service charges for those organizations who do not comply with the standards.
So, to put it simply, compliant businesses are far less likely to be breached and with far lesser chances of facing financial and reputation losses. There are no exceptions when it comes to complying with the standards, be it a small-sized, medium-sized, or large-sized business.
All businesses that fall in the scope of PCI Compliance are required to abide by the 12 PCI Compliance requirements. While the size of your business does not matter, but based on your annual debit or credit card payment transactions, you need to be compliant with PCI Compliance Level 1, Level 2, Level 3, or Level 4.
How is PCI Compliance beneficial for business?
Compliance with PCI Standards unlocks a variety of new opportunities for businesses to grow and succeed. Complying with the Standards and ensuring customers’ credit card information is secure comes with several benefits which includes
- Builds trust among customers in the industry.
- Enhances your business reputation in the industry.
- Demonstrates your seriousness towards cybersecurity.
- Prevents incidents of breach and fines that come along with it.
- Minimize the impact of a potential sensitive data breach
- Working with payments processors will create new market opportunities.
- Makes Compliance journey with other frameworks, like HIPAA or SOC 2 more easy
PCI Compliance is definitely a good business practice that merchants and other payment card processors must follow. It is a Payment Security Standard that plays a significant role in online businesses. Although the Compliance Standard may seem to be a daunting process, it is surely worth your time and effort.
Investing your valuable resources into achieving PCI Compliance will definitely benefit your business. For those looking to gain the trust of their customers and improve their relations with banks, PCI Compliance will surely do the trick and help you maintain a good reputation in the market.