by Grace Barone
Imagine waking up to headlines screaming about a massive data breach, exposing thousands of customers' credit card information to malicious hackers. The aftermath: shattered trust, financial penalties, and a tarnished reputation. As businesses increasingly rely on electronic payments, the need to protect sensitive cardholder data has never been more critical. Enter PCI compliance—the ultimate fortress safeguarding the realm of payment transactions. In this blog, we unveil the mysteries surrounding PCI compliance. Empowering you with the knowledge to protect your customers' data and fortify your small business against the ever-looming threat of cybercrime.
What does PCI Mean?
The full acronym is PCI DSS. This stands for Payment Card Industry Data Security Standard (PCI DSS). PCI compliance is following a set of security standards designed to protect credit card holder data and ensure secure payment transactions. Major credit card companies, including Visa, Mastercard, American Express, Discover and JCB developed PCI DSS in 2004. They wanted to have some sort of cohesive framework for securing sensitive cardholder information.
Before the PCI DSS was introduced, the card payment industry was experiencing weaknesses and inconsistent security protocols. There were different security measures for each brand of credit card. This means businesses had to remember which card had what security protocol and hope they were following each correctly. This made it difficult to guarantee consistent protection of sensitive cardholder data and created a lot of security holes. Credit card fraud and data breaches were prevalent because of the lack of consistency and caused businesses and consumers great financial losses.
PCI DSS Today
The need for a unified security standard became very apparent to address the growing threat of unauthorized access, breaches and misuse of cardholder data. Recognizing the need for a more robust security framework, the major credit card companies collaborated to establish the PCI DSS. The first version of the standard, PCI DSS 1.0, was released in December 2004. It provided a unified set of requirements and guidelines for organizations involved in payment card transactions.
Since its creation, there has been great technology advancements and new security threats. So, the PCI DSS has continued to evolve through updates and revisions to keep up with the current and ever changing landscape of cybersecurity. Regular updates and new versions of the PCI DSS are released to address emerging vulnerabilities, clarify requirements, and align with industry best practices. Version 4.0 of the PCI DSS was published on March 31st, 2022. This version is valid until March 2024.
How Businesses Can Stay Compliant
To stay PCI compliant, businesses can follow these essential steps:
1. Determine Compliance Level:
A business's compliance level is based on the number of transactions processed annually. There are 4 levels. The compliance level determines the specific requirements and validation procedures you need to follow. The higher the level, the more rigorous a business must implement defenses and audit its compliance practices.
- Level 1: Over 6 million processed card transactions annually
- Level 2: 1-6 million card transactions processed annually
- Level 3: 20,000-1 million card transactions processed annually
- Level 4: Merchants that process fewer than 20,000-1 million card transactions annually
Other factors may also change a business's compliance level. As an example, businesses that have recently suffered a cyber attack or pose an information security risk. Things like this may elevate a business to a higher compliance level.
2. Understand the PCI DSS Requirements:
Familiarize yourself with the PCI DSS requirements outlined in the current version of the standard. The requirements cover various areas such as network security, cardholder data protection, access control, security policies, vulnerability management, and more.
3. Conduct a Self-Assessment:
If your business qualifies for self-assessment, complete the appropriate Self-Assessment Questionnaire (SAQ) based on your compliance level. There are 9 different SAQs a merchant can choose from. How you process credit cards and handle cardholder data determines which SAQ your business needs to fill out. For example, SAQ C is for any merchant with a payment application connected to the internet, but with no electronic cardholder data storage. If you don't have a storefront and all your products are sold online through a third party, you probably qualify for SAQ A or SAQ A-EP. The SAQ helps evaluate your security controls and identify any gaps that need to be addressed. You can find the list of all the SAQs and what merchants qualify for each, here.
4. Engage a Qualified Security Assessor:
Also known as QSA. A Qualified Security Assessor needs to conduct an on-site audit and verify your compliance if you work for a larger organization or if you need an external review. A QSA is a licensed expert who can evaluate your security procedures and offer recommendations for improvement.
5. Implement Security Controls:
Implement the essential security controls and procedures in accordance with the PCI DSS requirements and any gaps found during the self-assessment or QSA audit. Implementing firewalls, encryption, access restrictions, network segmentation, secure coding standards, and frequent security testing are a few examples of what may fall under this category. Maintain strong measures to protect cardholder data. This includes encryption of cardholder data in transit and at rest, restricting access to cardholder data on a need-to-know basis and securely disposing of data when it's no longer needed.
6. Train Employees:
To ensure that staff members are aware of their roles and responsibilities in ensuring PCI compliance, offer regular security awareness training. Inform them about safe cardholder data handling, avoiding phishing scams, managing passwords, and other security best practices.
7. Keep Records:
Lastly, document all of your compliance activities, including policies, practices, assessments, and any corrective measures you may have taken. These documents might be necessary for continuing compliance monitoring, validation, and audits.
Make Sure Your Business is PCI Compliant
Maintaining PCI compliance is crucial for the security, goodwill, and survival of your small business. It is also a legal necessity. To ensure that the fortress of PCI compliance stays impenetrable and to earn the trust of your valued customers, take the appropriate actions, train your team, and exercise continual vigilance.