Payment Card Industry Compliance: A Guide to Requirements and Costs

To become compliant with the Payment Card Industry Data Security Standard (PCI-DSS), you'll need to meet a set of specific requirements. These include installing and maintaining a firewall, encrypting sensitive data, and regularly updating antivirus software.

The PCI-DSS has 12 main requirements, which are outlined in the standard. These requirements cover everything from building and maintaining secure networks to monitoring and testing systems.

Compliance costs can be substantial, with annual fees ranging from $2,000 to $50,000 or more.

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To be PCI compliant, you need to meet the twelve requirements of the PCI DSS, which are divided into six related groups known as control objectives. These requirements are organized into three sections: PCI DSS requirements, testing, and guidance.

The twelve requirements are: Install and maintain network security controls, apply secure configurations to all system components, protect stored account data, protect cardholder data with strong cryptography during transmission over open, public networks, protect all systems and networks from malicious software, develop and maintain secure systems and software, restrict access to system components and cardholder data by business need to know, identify users and authenticate access to system components, restrict physical access to cardholder data, log and monitor all access to system components and cardholder data, and test security of systems and networks regularly.

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Here are the twelve requirements in a concise list:

The PCI DSS has twelve requirements for compliance, organized into six related groups known as control objectives. These requirements have remained unchanged since the inception of the standard.

The twelve requirements are divided into three sections: PCI DSS requirements, testing, and guidance. Each requirement and sub-requirement is further divided into these three sections.

The twelve requirements are:

Each of these requirements is aimed at protecting cardholder data, safeguarding the organization's cardholder data environment, preventing security breaches, and providing a common baseline and guidance for companies to adhere to.

The requirements are not optional, and organizations that process, store, or transmit cardholder data must implement them. Formal validation of PCI DSS compliance is not mandatory for all entities, but it is required for merchants and service providers to be validated according to the PCI DSS.

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In the United States, PCI DSS compliance is not required by federal law, but some states have laws that refer to PCI DSS or make equivalent provisions.

Compliance with PCI DSS is a cost-shifting strategy for card networks, as legal scholars Edward Morse and Vasant Raval have pointed out.

Minnesota enacted a law in 2007 prohibiting the retention of certain types of payment-card data for more than 48 hours after transaction authorization.

Nevada incorporated PCI DSS into state law in 2009, requiring merchants to comply with the standard and shielding them from liability if they do so.

Washington also incorporated PCI DSS into state law in 2010, but entities are not required to be compliant, only those that are will be shielded from liability in the event of a data breach.

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Reporting and validation are crucial steps in ensuring the security of payment card data. Companies subject to PCI DSS standards must be PCI-compliant, and their reporting level is determined by their annual number of transactions and how they are processed.

Merchant levels are categorized as follows:

Compliance validation involves evaluating and confirming that security controls and procedures have been implemented according to the PCI DSS. This can be done through an annual assessment by an external entity or self-assessment.

Reporting levels are determined by the annual number of transactions and how they're processed. Companies subject to PCI DSS standards must be PCI-compliant, and their reporting level is often manually placed by an acquirer or payment brand at their discretion.

There are four merchant levels, each with its own set of requirements. Here's a breakdown of the levels:

Each card issuer maintains a table of compliance levels and a table for service providers, which can help determine an organization's reporting level.

Validation is an essential part of the PCI DSS process, and it's required for entities that process, store, or transmit cardholder data. Formal validation of PCI DSS compliance is not mandatory for all entities, but it's required by Visa and Mastercard for merchants and service providers.

Validation occurs through an annual assessment, which can be performed by an external entity or through self-assessment. A Report on Compliance (ROC) is conducted by a PCI Qualified Security Assessor (QSA) and provides independent validation of an entity's compliance with the PCI DSS standard.

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The ROC results in two documents: a ROC Reporting Template populated with detailed explanations of the testing completed, and an Attestation of Compliance (AOC) documenting that a ROC has been completed and the overall conclusion of the ROC. This process helps ensure that entities are meeting the security requirements and access control measures mandated by the PCI DSS.

Entities that are not required to undergo PCI DSS validation, such as issuing banks, must still secure sensitive data in a PCI DSS-compliant manner. Acquiring banks, on the other hand, must comply with PCI DSS and have their compliance validated with an audit.

The PCI Security Standards Council maintains a program to certify companies and individuals to perform assessment activities.

A Qualified Security Assessor (QSA) is an individual certified by the PCI Security Standards Council to validate another entity's PCI DSS compliance. QSAs must be employed and sponsored by a QSA Company, which also must be certified by the PCI Security Standards Council.

Internal Security Assessors (ISAs) can conduct PCI self-assessments for their organization, empowering them to propose security solutions and controls for PCI DSS compliance.

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The Self-Assessment Questionnaire (SAQ) is a validation tool intended for small to medium sized merchants and service providers to assess their own PCI DSS compliance status.

There are multiple types of SAQ, each with a different length depending on the entity type and payment model used.

Each SAQ question has a yes-or-no answer, and any "no" response requires the entity to indicate its future implementation.

You'll need to complete the SAQ on an annual basis and retain it for your records.

Some organizations will not qualify for a self-assessment and instead need to use a third-party assessment to demonstrate PCI compliance.

ISA certification empowers an individual to conduct an appraisal of their association and propose security solutions and controls for PCI DSS compliance.

ISAs are in charge of cooperation and participation with QSAs.

You can find SAQ forms below, but you'll need to check with your unit leadership to see if you can use the SAQ as part of compliance with PCI DSS.

A Qualified Security Assessor (QSA) is an individual certified by the PCI Security Standards Council to validate another entity's PCI DSS compliance.

To become a QSA, you need to be employed and sponsored by a QSA Company, which must also be certified by the PCI Security Standards Council.

A QSA Company is responsible for sponsoring and employing QSAs, and they must be certified by the PCI Security Standards Council.

QSAs must be certified by the PCI Security Standards Council to perform their duties, which include validating another entity's PCI DSS compliance.

The PCI Security Standards Council maintains a program to certify companies and individuals to perform assessment activities, which includes the QSA certification program.

QSAs work closely with Internal Security Assessors (ISAs) to ensure that organizations meet PCI DSS compliance requirements.

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To ensure the security of your payment card industry, it's essential to implement robust security measures. A firewall is a crucial step in preventing data breaches, and it's the merchant's responsibility to ensure their own PCI compliance, even if their partners or service providers are compliant.

Implementing access controls is also vital, as only employees and partners who need to access credit card data should have it. Cardholder data should only be available through certain devices and user accounts, and all access should be properly authenticated. Employees should each have unique user IDs to log-in to your IT system.

To maintain PCI DSS compliance, develop a compliance program that includes strategic objectives and roles, policies such as strong password requirements, and procedures for completing compliance tasks. Regularly monitor and test the security systems, processes, and controls to detect and address potential vulnerabilities and threats.

Some key best practices to keep in mind include:

Encrypting cardholder data when it's being transmitted is also crucial, as this will ensure that card numbers cannot be identified when the data is in motion.

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Implementing a firewall is a crucial step to preventing data breaches. Installing a firewall and ensuring all card readers and third-party vendors have firewalls in place is essential for securing your organization's IT environment.

Only store cardholder data and other information that is critical to business functions. This will help reduce the risk of data breaches and make it easier to maintain PCI DSS compliance.

Develop a compliance program that includes strategic objectives, policies, and procedures. This program should also include roles and responsibilities for compliance, as well as performance metrics to evaluate compliance.

Assign responsibilities and roles for compliance to knowledgeable, qualified, and capable employees. This will ensure that everyone is aware of their role in maintaining PCI DSS compliance.

Regularly monitor and test the security systems, processes, and controls to detect and address potential vulnerabilities and threats. This will help identify and fix any security issues before they become major problems.

Cardholder data should always be encrypted when it is being transmitted, either internally or externally. This will ensure that card numbers cannot be identified when the data is in motion.

To protect stored data, take measures to protect access to physical devices and servers, regularly monitor firewalls, and keep close watch for any suspicious activity on network logs. This will help prevent unauthorized access to sensitive information.

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Here are some key best practices to maintain PCI DSS compliance:

EMV is a widely used standard in the payment industry. It's developed and maintained by EMVCo, a organization dedicated to ensuring secure transactions.

The EMV standard is implemented in various countries, including the UK, where it's run by the UK Payments Administration (UKPA). This central co-ordinating authority oversees the implementation of EMV in the UK.

Payment cards are a key part of the EMV system, using chip and PIN technology to verify transactions. This technology provides an additional layer of security compared to traditional magnetic stripe cards.

Information privacy is also a crucial aspect of EMV, as it helps protect sensitive financial information. This is particularly important in today's digital age, where data breaches can have serious consequences.

Financial services companies that implement EMV can benefit from increased security and reduced fraud risk. This can lead to cost savings and improved customer trust.

Here are some key areas where EMV is used:

The cost of maintaining PCI compliance is very little compared to the costs of being non-compliant, with annual fees ranging from $1000 to tens of thousands of dollars.

The cost of non-compliance can be significant, with some payment card brands charging fees not exceeding $100,000 a month. This can lead to substantial financial losses for organizations that fail to meet PCI standards.

In the worst-case scenario, a data breach can cost a company upwards of $3.86 million dollars, according to IBM estimates. This highlights the importance of prioritizing PCI compliance to avoid such costly consequences.

Non-compliance with PCI DSS can be costly, with the average cost of a data breach estimated to be $3.86 million dollars.

The costs of non-compliance can add up quickly, with American Express stating that data incidence non-compliance could cost a company a fee "not exceeding $100,000 a month."

You might think that's a one-time hit, but in reality, the costs of non-compliance can be ongoing, with banks passing the fine along to merchants until it becomes their responsibility.

The consequences of non-compliance can also extend beyond financial costs, with merchants losing trust in your company, leading to lost customers, partnerships, and profits.

In severe cases, non-compliance can even prevent your organization from processing card payments, and your acquiring bank may sever ties.

The costs of non-compliance are a small price to pay compared to the devastating consequences of a data breach, which can cost companies upwards of 1 trillion dollars in 2020.

The cost of maintaining PCI compliance is relatively low, with annual or monthly fees ranging from $10 to $120, depending on your organization's size and PCI level.

Smaller organizations can expect to pay as little as $1000 per year, while larger, more complex organizations with high credit card transaction volumes can face costs in the tens of thousands.

However, the costs of being non-compliant can be staggering, with some payment card brands imposing fines of up to $100,000 per month.

The average cost of a data breach is estimated to be $3.86 million, and can have severe consequences, including lost customers, partnerships, and profits.

Ultimately, the cost of PCI compliance is a small price to pay compared to the potential costs of a data breach or non-compliance penalties.

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