Is PCI Compliance Required by Law and Its Compliance Process

PCI compliance is a requirement for any business that handles credit card transactions. This includes merchants, service providers, and anyone else who stores, processes, or transmits cardholder data.

In the US, the Payment Card Industry Data Security Standard (PCI DSS) is mandated by law. The PCI DSS is a set of security standards designed to ensure that all companies that accept, process, store, or transmit credit card information maintain a secure environment.

The PCI DSS is enforced by the major credit card brands, including Visa, Mastercard, and American Express. These brands have established a common set of standards to ensure the security of credit card transactions.

To achieve PCI compliance, businesses must undergo a regular compliance process. This process involves a series of steps, including a risk assessment, vulnerability scanning, and penetration testing.

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PCI compliance is a must for businesses that store and save customer credit card data. According to the 2018 Verizon Payment Security Report, only 52.5% of all organizations are 100% PCI compliant, and just 39.7% of companies in the Americas.

Your merchant account provider will likely offer PCI compliance services, which can take some of the headache out of managing things yourself. However, you can also do it yourself by completing and filing a self-assessment questionnaire each year, along with records of required payment network scans.

Here are the key steps to become PCI compliant:

Regularly monitoring and testing security systems, processes, and controls can help detect and address potential vulnerabilities and threats. This includes assigning responsibilities and roles for compliance to knowledgeable, qualified, and capable employees.

If your business locations process under the same Tax ID, then typically you are only required to validate once annually for all locations.

Each location may still need to submit quarterly passing network scans by a PCI SSC Approved Scanning Vendor (ASV) if applicable.

For businesses with multiple locations, it's essential to understand how PCI compliance applies to each site.

You'll need to review your Tax ID to determine if you're considered a single entity or multiple entities for PCI compliance purposes.

If your business locations are under the same Tax ID, you can simplify your PCI compliance process by validating once annually for all locations.

However, you'll still need to ensure each location submits quarterly passing network scans by an ASV if required.

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A payment application is anything that stores, processes, or transmits card data electronically.

In the context of PCI compliance, this broad definition means that even the simplest software can be considered a payment application. A Point of Sale system, for example, is classified as a payment application because it touches credit card data.

Anything from a restaurant's Verifone swipe terminal to a Website e-commerce shopping cart, such as CreLoaded, is considered a payment application. This is because they all have been designed to handle credit card data.

A payment application can be a software that is specifically designed to process payments, or it can be a piece of software that touches credit card data as part of its normal operation.

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PCI DSS compliance requirements are divided into four merchant levels, based on the annual volume of credit or debit card transactions processed by a business.

These levels are determined by the number of card transactions a business handles each year. For example, Level 1 includes organizations that handle more than 6 million card transactions a year.

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Level 2 includes organizations that handle from 1 million annual card transactions up to 6 million. They must complete an annual Self-Assessment Questionnaire (SAQ) and might be required to submit quarterly ASV network vulnerability scans.

Businesses that handle more than 20,000 annual card transactions up to 1 million fall under Level 3. They too must complete an annual SAQ and might have to submit a quarterly network vulnerability scan.

Level 4 includes organizations that handle fewer than 20,000 annual card transactions. Like levels 2 and 3, these businesses must complete an annual SAQ and might have to submit a quarterly network vulnerability scan.

Here's a breakdown of the four levels:

Don't guess, especially when it comes to PCI compliance. Only 52.5% of all organizations are 100% PCI compliant, according to the 2018 Verizon Payment Security Report.

Your payment processor should have robust reporting tools to track transactions. You need a firm understanding of this number to avoid fines for being too low or overpaying for unnecessary services.

Being too low can result in fines, so make sure you're processing the right number of transactions. This is especially important since companies that experienced a data breach often had missing PCI DSS controls.

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To achieve PCI compliance, businesses should only store cardholder data and other information that is critical to their functions. This means being mindful of what data they collect and store, and only keeping what's necessary.

Developing a robust compliance program is also essential. This includes setting strategic objectives, defining roles and responsibilities, and establishing policies and procedures for completing compliance tasks. Strong password requirements, for example, can help prevent unauthorized access to sensitive data.

Regular monitoring and testing of security systems, processes, and controls is crucial to detecting and addressing potential vulnerabilities and threats. This involves staying up-to-date with the latest cybersecurity threats and adapting compliance programs accordingly.

Businesses should also assign responsibilities and roles for compliance to knowledgeable, qualified, and capable employees. This ensures that everyone understands their role in maintaining PCI compliance and protecting cardholder data.

Here are some key best practices to keep in mind:

The Self-Assessment Questionnaire is a straightforward way to determine your level of compliance with the PCI DSS. It's a series of yes or no questions that you'll need to answer.

You can complete the SAQ on your own, and it's free. The SAQ is a great option for small businesses that want to take control of their PCI compliance.

To complete the SAQ, you'll need to submit your quarterly reports to the required organizations. This will help you stay on top of your compliance and ensure you're meeting the necessary requirements.

Each organization performs the SAQ differently, but the end result is the same: determining your level of compliance with the PCI DSS.

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Becoming PCI compliant is a straightforward process. You can hire a consultant to assist you or do it yourself at no cost.

To get started, you'll need to complete and file a self-assessment questionnaire each year along with records of the required scans. You may also need to submit additional paperwork, but it's generally relatively straightforward for small businesses to complete.

For small businesses, this is often sufficient, and as long as you continue meeting requirements, you won't have any issues.

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To ensure PCI compliance, there are specific steps you need to take. Implementing firewalls to protect data is a crucial first step.

You'll also need to use appropriate password protection, such as two-factor authentication (2FA). This adds an extra layer of security to prevent unauthorized access to your data.

Protecting cardholder data is a top priority. This includes encrypting transmitted cardholder data to prevent it from being intercepted by hackers.

You'll also need to utilize antivirus and anti-malware software to detect and prevent malware from infecting your system. Regularly updating software and maintaining security systems is also essential.

Restricting access to cardholder data is another important step. This includes assigning unique IDs to those who need access to the data.

You should also restrict physical access to data storage and create and monitor access logs to track who has accessed the data. Testing security systems regularly is also a must.

Finally, creating a documented policy that outlines your security measures is essential. This policy should be easily followed by all employees handling payment card information.

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You'll need to run a vulnerability scan every 90 days or once per quarter if you're required to submit a passing scan. Merchants and service providers should submit compliance documentation according to their acquirer's timetable.

Scans must be conducted by a PCI SSC Approved Scanning Vendor, such as ControlScan, to be considered valid. Home users are particularly vulnerable due to their lack of protection and typical use of always-on broadband connections.

Intruders often target home users, exploiting their use of chat, internet games, and P2P file sharing applications. ControlScan's scanning service can help identify and fix security vulnerabilities on desktop or laptop computers.

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Compliance costs and penalties can be a significant burden for businesses, especially small ones. Fines for PCI compliance violations can range from $5,000 to $100,000 per month.

These fines can be passed along to merchants as increased transaction fees or termination of business relationships. For a small business, this kind of fine can easily put them into bankruptcy.

The total cost of PCI compliance can range from $1,000 to $50,000+ annually, depending on the size of your business. This includes ongoing fees for maintaining compliance.

The total cost of PCI compliance can range from $1,000 to $50,000+ annually.

For large enterprises, the cost can be even higher.

Businesses need to budget for these costs to stay compliant and avoid penalties.

Investing in PCI compliance is crucial to protect your business from data breaches and financial losses.

Swipesum offers PCI compliance services at no extra charge, which can be a huge cost savings for businesses.

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Fines for PCI compliance violations can be steep, ranging from $5,000 to $100,000 per month until merchants achieve compliance.

These fines are usually passed on to merchants by banks, who may increase transaction fees or terminate business relationships.

The total cost of a massive breach, like the one Target experienced, can be staggering, with a total cost of over $200 million, including an $18.5 million legal settlement with 47 state attorneys general.

Credit monitoring fees, lawsuits, and actions by state and federal governments can also result from non-compliance.

To become PCI compliant, you'll need to follow the PCI DSS, which is the roadmap to compliance. Each credit card company has its own compliance validation levels that you need to adhere to.

You can perform your own PCI Compliance Self-Assessment Questionnaire (SAQ) or contract with a certified PCI Quality Security Assessor (QSA) to validate your compliance. Your merchant account provider will likely offer PCI compliance services, which can take some of the headache out of managing things yourself.

For most small businesses, completing and filing a self-assessment questionnaire each year along with records of the required scans is sufficient. You'll then sign an attestation form agreeing to remain compliant and receive a nice certificate.

To maintain PCI compliance, you must engage with PCI compliant credit card processors and banks. You need to employ good data security practices inside your organization and have regular internal audits and quality monitoring of your PCI compliant data.

Here are some specific controls you can implement to protect your PCI data: