Credit card companies must comply with Payment Card Industry (PCI) requirements to ensure the highest possible transaction security. PCI compliance reliably protects cardholder data from compromise or theft. A company is considered compliant if it meets the current set of requirements and policies outlined in the PCI Data Security Standard (PCI DSS).
Being PCI compliant is more than meeting standards. Protect customer data from potential cyber-attacks with PCI service providers. Here are some key points about PCI compliance: The Payment Card Industry Security Standards Council (PCI SSC) has developed the current PCI Data Security Standards (PCI DSS) to define PCI compliance, these solutions aim to ensure complete security by significantly reducing the risk of data leakage or theft. The current PCI DSS standard contains twelve basic requirements.
Business environments must implement them to ensure compliance of all processes that take place in their companies with these current standards. There are four key current levels of PCI compliance. These levels define the precise requirements that different business environments must meet to remain compatible. Companies rank by total credit, debit, and prepaid card transactions over 12 months.
About PCI compliance
Advances in payment technology have greatly simplified the transactions performed by numerous companies. However, executing these transactions involves critical risks and challenges existing security measures. Ensuring the appropriate level of security and protection matters more than ever. Especially for companies that handle important confidential information and customer data.
This is why compliance with current PCI DSS standards is so important to many companies and businesses, as it is a set of high-security standards and requirements that help the payment card industry reliably protect data from potential harm or theft. The PSI DSS glossary will provide you with an opportunity to better understand important terms related to compliance with current PCI DSS standards.
This, in turn, will enable you to create a secure payment environment that adheres to global security standards. In total, organizations must meet twelve applicable requirements that they must understand in detail to help them ensure PCI compliance.
The requirement to comply with applicable PSI DSS standards 1
Implement and maintain a firewall configuration to effectively protect cardholder data. An important requirement is the reliable protection of the system by a firewall. A firewall is a device that precisely monitors computer traffic. Carefully examine traffic between your organization’s network (internal) and untrusted networks (external) to determine outbound blocking based on rules and criteria configured by your business organization. Software and hardware firewalls can be installed for a more reliable first line of defense.
The requirement to comply with applicable PSI DSS standards 2
Do not use the manufacturer’s default settings for system passwords or other security settings. This includes usernames and passwords, which are provided as default settings. This is because, it is easy for cyber attackers to use these default passwords to gain access to your system and compromise your entire security. Organizations should also avoid passwords that are easy to crack or find. Remove all unnecessary default accounts when installing a networked system. Review and configure all the security settings of your system according to your needs.
The requirement to comply with applicable PSI DSS standards 3
Protect the confidential data of registered cardholders. Companies must use industry-recognized secure algorithms to encrypt stored cardholder data. Encrypted data cannot be read or used by a cyber attacker who has access to it unless it has the appropriate encryption key. Enterprises should implement encryption along with other security methods such as hashing and obfuscation.
The requirement to comply with applicable PSI DSS standards 4
Encrypt the transmission of cardholder data over open public networks. In most cases, the Primary Account Number (PAN) is sent to a backup server, central office, external system, or infrastructure manager. For security reasons, organizations must encrypt sensitive information when it is transmitted over open public networks. It is imperative to follow industry best practices for effectively implementing encryption for secure data transfer and authentication.
The requirement to comply with applicable PSI DSS standards 5
Use reliable antivirus software or programs and update them regularly. Malware is viruses, worms, and trojans that exploit system vulnerabilities. In most cases, malware enters networks during business activities. This can happen when employees are sending emails or browsing the web. Some people don’t notice a malicious malware attack until it’s too late. To avoid this, companies should ensure that their anti-virus software is always up-to-date against existing malware threats.
The requirement to comply with applicable PSI DSS standards 6
It is important to develop and maintain secure systems and applications. Vulnerabilities in security systems allow malicious software to gain access to valuable, confidential data. No program is perfect, but manufacturers and vendors often provide security patches to address vulnerabilities. Companies should install these updates as soon as possible to prevent hackers from breaking in and exploiting vulnerabilities. Key considerations include application software, databases, firewalls, web browsers, operating systems, merchant terminals, and more.
The requirement to comply with applicable PSI DSS standards 7
Restrict access to the cardholder data your business needs. It is important to limit access to confidential data. Identify authorized personnel for each system and process. Define work roles, their purpose, the data sources they can access, and their permission level. This effectively prevents unauthorized access and precisely ensures that users only have access to the data they need for their needs.
The requirement to comply with applicable PSI DSS standards 8
Assign a unique ID to each user. This important requirement for compliance with current PCI DSS standards establishes the need for unique user IDs and passwords. Each user must have a unique ID. Therefore, each person is responsible for the transactions made through their account. It is also not recommended to use a shared password. Systems must limit password attempts to fully protect data at the point of entry, in transit, and even at rest. Some companies require multi-factor authentication for added security.
The requirement to comply with applicable PSI DSS standards 9
Physical access to cardholder data allows attackers to gain access to company systems and devices. For example, some vendors may store hard copies of customer information along with payment card numbers. Therefore, these files can be targeted by cyber attackers for identity theft and other fraudulent activities. As such, you may restrict physical access and store these files in a secure location. Personnel must know the rules of physical security. Implementing timeout checks on workstations and performing checks on all devices can also help ensure proper security.
The requirement to comply with applicable PSI DSS standards 10
Carefully monitor all access to network resources and cardholder data. The logging mechanism is important to effectively prevent unauthorized access. Tracking activities and viewing system event logs are critical to business. This makes it easier to prevent, detect and minimize the impact of sensitive data leaks. Logs can also send alerts when something goes wrong. Additionally, the system activity log can determine the cause of a security breach.
The requirement to comply with applicable PSI DSS standards 11
Test security systems and processes regularly. A system vulnerability can occur at any time. This could be due to errors in your browser, web server, email, operating system, point-of-sale software, or server interface. As the software environment changes, regularly test processes and software to ensure that all security features are working properly. Organizations can get automated vulnerability scanning and penetration testing.
The requirement to comply with applicable PSI DSS standards 12
Adhere to applicable security policies that affect information security for all employees. The final key requirement for an organization to be PCI compliant is a strong security policy. Company employees must be aware of their responsibility for protecting confidential information.
Maintain all documentation related to your company’s security practices, including employee handbooks, incident response plans, policies, procedures, and agreements with third parties. This requirement also includes a formal annual risk assessment that identifies assets, threats, and vulnerabilities to help organizations prioritize and manage all possible risks.
For clearer and more detailed guidance on PCI DSS requirements, visit the PCI Security Standards Council website. You can also search for available training programs and certification courses.
Overview of current PCI compliance levels
Organizations that process credit cards with the five major credit card companies (American Express, Mastercard, VISA, Discover, and JCB International) must ensure compliance with applicable PCI standards. In general, there are 4 key levels of compliance. Each level corresponds to the number of transactions a merchant has processed across all channels in a year, or whether a business has been affected by a cyber attack that compromised cardholder data. Traders with higher trading volume have higher internal risks and are subject to more stringent standards than traders with lower trading volume.
- Compliance with PCI standards – level 1
This category includes merchants who process more than 6 million credit card transactions per year. - Compliance with PCI standards – level 2
The Tier 2 classification applies to merchants that process 1-6 million physical payment cards per year across all channels. - Compliance with PCI standards – level 3
Merchants with a total of 20,000 to 1 million transactions across all channels are classified as Level 3. - Compliance with PCI standards – level 4
Merchants that process less than 20,000 payment transactions per year are considered Tier 4 merchants.
How to be PCI compliant?
PCI compliance allows a variety of businesses that process payment cards, such as debit and credit cards, to securely store sensitive cardholder information to prevent data breaches. Organizations that do business with the top five credit card companies must conduct quarterly and annual PCI compliance reviews.
PCI compliance reviews
Depending on the level of compliance, companies must adhere to different standards and requirements. Find out your company’s PCI level, which is based on the total number of transactions processed in 12 months. The PCI level defines all the key requirements for PCI compliance. To reliably protect sensitive information, you need to know where it is and how it moves.
Test security protocols
Identify the points, the way data is processed in the company, and the technology or systems involved in the trade. The company’s IT and security teams must actively work together to complete this step. Create a secure network and test all available security protocols. After mapping data flows and interaction points, organizations must ensure that appropriate security protocols and controls are in place.
Self-Assessment Questionnaire
Complete the SAQ. The Self-Assessment Questionnaire (SAQ) that traders use depends on the type of business. The SAQ contains yes or no questions to help you determine whether your organization meets the requirements for compliance with current PCI DSS standards. To maintain PCI compliance, merchants must submit a Declaration of Conformity (AOC) form annually. This document validates the results of an SAQ-based assessment or compliance report.
A Level 1 Report of Supplier Compliance (ROC) must be completed by a Qualified Security Assessor (QSA). PCI SSC has a list of QSA companies. Run and pass a quarterly network scan, as a company must conduct a thorough quarterly network scan. Only an Authorized Scanning Provider (ASV) can do this.
Merchants can use the PCI SSC website to find companies that conduct ASVs. For some organizations, meeting the twelve current compliance requirements can be a costly and time-consuming process. This requires careful planning and preparation. Proper execution is mandatory, as PCI DSS compliance has many key benefits for both customers and businesses.
The benefits of compliance and the risks of non-compliance
Preventing security breaches
PCI compliance helps organizations strengthen their cybersecurity strategies and reduce the risk of a data breach. PCI DSS is more than a checklist to mark your organization as PCI compliant, it’s a proven method of blocking external attacks. Avoid fines: PCI compliance is not a legal requirement, but is mandatory in some states, such as Washington, Nevada, and Minnesota. Depending on the contract with the credit card company, compliance may also be required. In addition, severe penalties may apply if the security of data or confidential information is breached.
Increase customer confidence
Consumers may not know what it takes to be PCI compliant, but knowing that security protocols are in place can help merchants and build trust in your brand and business in general.
Improve your brand reputation
Your brand reputation can make or break your business. An impeccable reputation is crucial to gaining the trust of customers. Preventing any data leakage phenomenon helps in achieving these goals. Global Compliance: PCI DSS is considered a global security framework. This means that international organizations must comply with current PCI requirements and process card transactions worldwide without having to worry about different security standards in different countries.
Provide a baseline security standard
A variety of business organizations can use PCI DSS compliance as a foundation for building feature-rich, effective security programs. PCI DSS compliance provides a guide on where to start and what to do to effectively protect cardholder data. PCI compatibility gives you peace of mind. Vendors that adhere to PCI SSC guidelines can rest assured that the likelihood of data leakage is significantly lower.
Risks and Consequences of PCI Non-Compliance
You Are at Risk of Fines and Penalties
Credit card companies must ensure compliance with applicable PCI standards. This means that fines may be imposed for non-compliance. Amounts vary based on transaction and customer volume, length of non-compliance, and current PCI compliance level. Fines range from $5,000 to $100,000 per month.
Data Theft
Without the necessary security systems and protocols in place, customer data can fall into the wrong hands. Cybercriminals target cardholder information for identity theft and other fraudulent activities.
Potential Compensation Costs
Vendors and various business organizations that do not carefully follow all established regulations may have to reimburse their customers for the financial costs of identity theft insurance and credit card monitoring costs. This can lead to huge costs.
Damaged brand reputation
When a company suffers a data theft or breach, its reputation is irreparably damaged. Consumers are less inclined to trust companies in their transactions.
Loss of many sales
A damaged reputation of your business and brand can lead to reduced sales and profits. The client may decide to switch to using the services of another company. Organizations must provide certificates of compliance. If a data breach is due to non-compliance, regulators may impose fines. Your organization must meet the current requirements defined in the PCI Data Security Standard (PCI DSS).
In general, there are no federal laws mandating compliance with applicable PCI standards. However, some states, such as Washington, Nevada, and Minnesota, require PCI-DSS compliance. In addition, credit card companies may require compliance with agreements with organizations. Organizations that process credit card transactions must demonstrate that they are PCI DSS compliant. Network scanning for vulnerabilities should also be performed by a certified scanning provider.
