PCI Compliance: Why It Matters To Small Businesses

No matter what the size of your business is, when customers pay using a credit or debit card, you’re responsible for ensuring their information remains safe. Data breaches that allow bad actors access to customer credit card information can be catastrophic and result in a lot of problems for businesses and their customers. Identity theft and fraud, damage to a business’s reputation, loss of business, vendors and financial institutions and even potential lawsuits and fines are just some of the implications of data breaches.

To protect customer data, businesses should ensure they are Payment Card Industry (PCI) compliant. Following PCI requirements means implementing effective security procedures that protect against common vulnerabilities and exploitation.

It doesn’t matter how you receive payments, whether it’s primarily through B2B transactions from accounts payable software, D2C credit card transactions, or another form of payment processing; if you accept customer credit card information, PCI is the baseline requirement you need to comply with.

What Is PCI Compliance?

PCI compliance refers to a series of operational and technical requirements businesses must follow to protect customer credit card data. This means processing, storing, and transmitting credit card information in a secure manner to reduce the likelihood of data being stolen.

While it is not a regulatory mandate, it is regarded as compulsory due to court precedent. Therefore, all organizations that accept, send, or hold cardholder information are subject to PCI compliance regardless of their size. Failing to comply can result in significant fines against your organization and without PCI-approved security policies in place, your customer’s sensitive financial information is highly vulnerable.

Compliance is developed and managed by the Payment Card Industry Security Standards Council (PCI SSC), an independent body created in 2006 by Visa, MasterCard, Discover, American Express and JCB. The council aims to enhance security practices related to credit card transactions by overseeing PCI compliance and providing organizations with a range of resources. These include:

• Self-assessment questionnaires, which help to validate compliance.
• PIN Transaction Security conditions for device vendors.
• Payment Application Data Security Standard and a register of validated payment applications for software developers.
• Lists for Qualified Security Assessors (QSAs), Payment Application Qualified Security Assessors (PA-QSAs), Approved Scanning Vendors (ASVs), and educational programs for Internal Security Assessors (ISAs).

The PCI SSC updates the requirements for compliance, with the most recent version released in March 2022.

PCI Requirements

12 major requirements define PCI compliance:

1. The implementation and maintenance of firewalls.
2. Effective password protections.
3. Protecting cardholder information through encryption.
4. Encrypting all transmitted cardholder data.
5. Implementation and maintenance of antivirus software.
6. Ensuring up-to-date software.
7. Restricted access to cardholder information.
8. Unique IDs for any individuals with access to cardholder information.
9. Restricted physical access to cardholder information.
10. The creation and monitoring of access logs.
11. Regular testing of security systems.
12. Documentation for security policies.

The Benefits Of PCI Compliance

Becoming PCI compliant may seem like a significant and time-consuming task, especially for smaller companies with fewer resources. However, it comes with clear benefits. Firstly, PCI compliance results in greater security for your customer’s credit card data, reducing the chances of data breaches that lead to identity theft or fraud. Also, PCI compliance can reduce potential fines if a data breach occurs.

Beyond security, PCI compliance also benefits your:

• Business’s reputation, with customers happier to hand over credit card information and work with you.
• Ongoing security strategy, as the PCI SSC updates its requirements, you can learn and adapt to new threats.
• Preparation for additional regulation, for example, if you want to comply with HIPAA, SOX, or others.
• Overall IT infrastructure, PCI requirements help develop best practices when it comes to information security.

Also, Check – How To Keep Your Suppliers Happy Today

Small Businesses Looking To Become PCI Compliant

PCI compliance is split into four different levels depending on the number of transactions businesses handle annually:

Level 1: Processing over 6 million card transactions a year.

Level 2: Processing between 1 and 6 million card transactions a year.

Level 3: Processing between 20 thousand and 6 million card transactions a year.

Level 4: Processing fewer than 20,000 transactions a year.

The level your business fits into affects how to approach becoming PCI compliant.

The requirements for smaller businesses looking at level 4 PCI compliance are less strict. For example, you do not need an onsite audit by a QSA (unlike levels 1, 2, or 3). To achieve level 4 PCI compliance, businesses must ensure the security of their credit card information and provide evidence about this environment to the PCI. This is generally done by completing an annual self-assessment questionnaire and performing quarterly network vulnerability scans performed by an ASV.

Some organizations (e.g., banks or other authorities) may also ask your business for an attestation of compliance (AOC) to confirm PCI compliance.

Many businesses may utilize merchant banks and third-party services that handle much of their PCI compliance requirements. However, it’s still the business’s responsibility to ensure any third parties they work with on credit card transactions are PCI compliant.

Securing Credit Card Data With PCI Compliance

While it may feel like a significant hurdle in order to handle credit card payments, the goal of PCI is to protect consumers and minimize the threat of data breaches. Proving PCI compliance also reassures customers, vendors, and other organizations that working with you is safe and that their financial information is treated securely.