How To Become PCI Compliant For Free
If you are a merchant, have an online or offline business, and deal with customer credit card payments, then you must ensure that the systems in place meet the PCI DSS requirements. PCI DSS stands for (Payment Card Industry Data Security Standard). This standard protects cardholders' sensitive information from data and other security breaches. These standards were created by the PCI Security Standards Council (PCI SSC). Although it's not a legal requirement to comply with PCI standards, failing to comply with them may result in fines and penalties by the processing banks.
Thus, if you want to become PCI compliant, you are at the right place. This article includes comprehensive information about how to comply with PCI DSS and the benefits of becoming one.
Why does it matter?
Merchants deal with customer's sensitive payment data, and PCI compliance ensures that such data, such as credit card numbers, are stored securely; this protects against customer identity theft.
However, if merchants do not comply with PCI standards, it could lead to fines and penalties from regulatory bodies and card issuers. Due to customer data breaches, merchants could also face legal action and litigation costs. This could also damage the merchant's reputation and remove the customer's trust; the merchant may lose revenue, and their business continuity will be compromised.
If merchants comply with PCI standards, it will increase customer’s trust in merchants and enhance the merchant's reputation among customers. Financial institutions and payment processors rely on PCI compliance as a condition to do business with merchants. It may also be necessary to be PCI compliant when getting merchant accounts and processing payments.
Factors to consider
- Before complying with PCI standards, you should understand its scope. You should know which systems, networks, and procedures that carry sensitive cardholder information fall within the scope of PCI compliance.
- You should also identify the merchant level or level of PCI as stated in the table below so that you can get an idea of specific compliance requirements that apply to your entity.
- Your organization's technical structure, which includes hardware, software, networks, and payment processing systems, should not be vulnerable, and there should be no gaps in their security so that your organization can adhere to PCI DSS requirements.
- Make sure you have taken adequate security measures to protect cardholder information. It would be beneficial to incorporate security protocols like access restrictions, firewalls, and encryption.
- You must create policies and protocols that adhere to PCI standards.You should also train your staff so that they can understand their responsibilities relating to PCI compliance.
PCI standards
There are twelve PCI compliance requirements organized into six related groups:
Maintaining and building a Secure Network and systems:
- Configure firewall to protect cardholder information.
- Not using vendor-supplied defaults for passwords and other security parameters.
Protection of Cardholder Information:
- PCI standards require the protection of stored cardholder information.
- Transmission of cardholder's data should be encrypted on open or public networks.
Maintaining a management program for vulnerability:
- All the systems, programs, or software should be protected against malware, and the anti-virus programs or software should be updated.
- Systems and applications should be developed and maintained with security measures in place.
Implementation of access-control measures:
- Restrict access to cardholder data by business need to know.
- System components must undergo identification and authentication for access.
- Access to cardholder data physically should be limited.
Regular testing and monitoring of networks:
- Monitoring and tracking access to network resources and cardholder data is essential.
- Regular testing of security systems and procedures is necessary.
Information Security Policy:
- An ongoing information security policy should be upheld, covering information security for all staff members.
Steps to become PCI compliant
Determine Transactions Volume:
According to PCI standards, merchants are classified into four levels based on annual transaction volumes. See the table below to know your level of PCI.
| Level1 | Merchants with over 6 million annual transactions across all channels (e-commerce and in-store) are classified as Level 1. |
| Level2 | Merchants with annual transactions between 1 million and 6 million are classified as Level 2. |
| Level3 | Merchants with an annual volume of 20,000 to 1 million transactions are classified as Level 3. |
| Level4 | All merchants having less than 20,000 annual transactions are classified as Level 4. |
Know PCI Requirements:
After determining your level, you should find out the requirements in the PCI DSS that apply to your level of PCI. These requirements include network security, data protection, vulnerability management, control measures, maintaining security policy, etc.
Complete Self-Assessment Questionnaire:
Merchants should complete a Self-assessment Questionnaire to comply with PCI DSS requirements. Different Self-Assessment Questionnaires are available for various business models and processing methods, such as point-of-sale, e-commerce, etc. Merchant should select and complete the Self-Assessment Questionnaire that applies to their business model and processing methods
Find a Qualified Security Assessor:
As a merchant, you should find a qualified security assessor that fits your business needs and PCI level. Qualified Security Assessors are firms certified by the PCI Security Standards Council to assess an entity's compliance with PCI DSS.The employees of these companies are expert individuals who assess and ensure your compliance with PCI standards
Perform Remediation Actions:
It would help if you took remediation actions after completing the Self-assessment Questionnaire and consulting a Qualified Security Assessor. These actions include improving security measures, updating policies and procedures, and training staff for enhanced security.
Submit Compliance Reports:
After completing the steps above, you should submit a compliance report to your bank or payment processor.
Fines and Penalties
You should take PCI compliance seriously, as failing to be compliant with PCI can result in fines of hundreds or thousands of dollars. It could also lead to suspension of your merchant account, which will seriously affect your business. The following are the potential consequences that may arise as a result of failing to comply with PCI DSS requirements:
- Credit card brands such as Visa, Mastercard, American Express, etc., may incur fines for not complying with PCI DSS.
- Payment processors and banks may enforce higher transaction charges, resulting in higher payment processing costs and reduced profit.
- In case of a data breach, merchants may face financial and legal expenses and impaired business reputation due to fraudulent transactions while not complying with PCI standards.
- Customers, banks, or regulatory bodies can also take legal action against merchants not complying with PCI DSS.
- Non-compliance could also result in reputational damage for the merchant's organization. It will break customer trust and may affect loyalty and potential business opportunities.
Security of Customers
The primary goal of PCI DSS is to protect cardholder’s information.You need to understand the steps required to protect your customer's data.
- Data Breaches: Data breaches can result in theft of credit card numbers, expiry, and cardholder's names. Adhering to PCI DSS can reduce the likelihood of data breaches.
- Security Measures: As a Merchant, you should take security measures such as firewalls, access controls, security monitoring, etc, to protect cardholder's data. These measures are encouraged by PCI DSS. These measures defend against cyber attacks and unauthorized access to customer information, improving customer security.
- Customer's Trust: Complying with PCI DSS requirements will result in improved customer confidence in your organization. As customers prefer to do business with merchants who comply with PCI requirements.
- Mitigating Financial Losses: Enhanced customer security and compliance with PCI standards will avoid financial losses such as legal liabilities and regulatory fines.
Paperwork
The documentation that is required for PCI compliance includes but is not limited to the following:
- Based on the level of PCI stated above in the table, merchants are required to perform Self-Assessment Questionnaires (SAQs). These SAQs include a series of yes or no questions to determine an organization's compliance with PCI standards.
- A Qualified Security Assessor (QSA) must validate the Attestation of Compliance. This document confirms that an organization adheres to the PCI DSS requirements.
- Proper policies and procedures related to network, physical, and data security and access control should be documented by organizations.
- Network diagrams are required to show the flow of cardholder’s data through organization’s systems. They are helpful for QSAs in understanding the network architecture of an organization and the vulnerabilities involved.
- Records that demonstrate employee training related to PCI compliance are required.
Key Takeaway
As a merchant handling customer credit card payments, it is essential to adhere to PCI DSS regulations. These standards protect cardholder's data from data and security breaches. Failing to comply with PCI standards may result in fines and penalties by the processing banks. Before getting PCI compliant, you should consider some factors, such as the scope of PCI compliance, the level of PCI, the technical structure of your organization, security measures taken, and policies and procedures.
There are 12 PCI requirements outlined above, which you can comply with. The steps to comply with these PCI standards involve knowing your level of PCI, knowing PCI requirements, completing self-assessment questionnaires, finding a qualified security assessor, performing remediation actions, and submitting compliance reports.
Finally, you may get penalized for not complying with PCI. Getting PCI compliant will increase your customers' security. However, you need some paperwork outlined above to become compliant with PCI.We hope you find this article useful as it contains all the necessary information for getting PCI compliant. Have a nice day!
William Harrison
William is a consultant providing expertise in business management. He has successfully integrated POS systems into various businesses, demonstrating a passion for improving processes and offering financial advice. With a decade of experience in dealing with POS systems, payment gateways, and ATMs, he is also a passionate writer about finance and accounting.