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The Importance of PCI Compliance
January 11, 2020
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The Importance of PCI Compliance

If your business regularly accepts in-person payments or digital currency, then you’re likely familiar with the term data security standards (PCI compliance). Payment card industry (PCI) compliance refers to the standards a business must meet to ensure that they’re protecting their customers’ payment information.

PCI compliance may sound like another boring business hurdle to jump through, but it’s an important metric for protecting you and your customers. However, ensuring that you meet the requirements for protecting payment card industry data doesn’t have to be difficult or confusing.

This article will explain what PCI compliance is and why all businesses must meet this standard. In addition, it’ll also outline some key steps you can take to get started.

First Off, What Is PCI Compliance?

If you’re new to this topic then you may be wondering, what is PCI compliance? It’s a list of standards developed by the credit card industry. By meeting these standards, you ensure that you protect cardholder data.

PCI standards are managed and overseen by the Payment Card Industry Security Standards Council, which includes leading credit card providers such as Visa, MasterCard, and American Express. 

PCI compliance standards apply to online shopping carts, payment apps, POS systems, card readers, and more. There are four different PCI compliance levels, as outlined by Visa. Each of these levels comes with different requirements. Here is a brief overview of each of the PCI compliance levels:

  • Level 1: Any merchant that processes over six million Visa transactions per year.
  • Level 2: Any merchant that processes between one million and six million Visa transactions per year.
  • Level 3: Any merchant that processes between 20,000 and one million Visa transactions per year.
  • Level 4: Any merchant that processes fewer than 20,000 Visa transactions per year. 

Data Security Aspect of PCI Compliance

If you think that PCI compliance isn’t an important topic, then just briefly considering the following statistics about credit card fraud and data breaches:

Every time a customer hands you their credit card or processes a transaction on your website, they’re giving you access to cardholder data. The average business stores cardholder data, such as names, addresses, birthdates, and credit card numbers. 

Cybercriminals look for ways to access and exploit this data through security breaches. Although maintaining PCI compliance standards doesn’t ensure that your business won’t be the victim of a data breach, it does reduce your risk. 

Compliance Eliminates Risk

Maintaining PCI compliance will keep your customers’ personal data more secure and reduce your risk for a data breach. It also helps you avoid payment card fines, potential lawsuits, and government fines.

Listed below are a few of the biggest benefits of maintaining PCI compliance standards:

  • Protects your business’ reputation: Even if a data breach doesn’t put your company out of business, it’ll severely impact your reputation. Customers will distrust you and be less likely to do business with you if you don’t follow industry data security standards.

On the other hand, maintaining PCI compliance standards can actually help your company’s image. It will help build your reputation as a business that cares about protecting customer data. 

  • Improves customer relationships: Customers get a sense of what companies take data privacy seriously. When your customers feel confident that you’re doing everything you can to protect their personal information, this will strengthen their relationship with your company.
  • Increases profitability: Maintaining PCI compliance standards will actually help your company become more profitable in the long run. First of all, it’ll help you avoid the costly fines that come from PCI compliance breaches.

Your business can also be subject to lawsuits for failing to maintain PCI compliance standards. Plus, you’ll lose even more money due to your damaged reputation. So, PCI compliance is essential for the profitability of your company. 

Compliance Eliminates Risk: How to be PCI Compliant

How To Become PCI Compliant

According to a study from Verizon, only 52 percent of companies are completely PCI compliant. The study also demonstrated that companies that fail to maintain card industry data security standards are at higher risk for data breaches. 

Needless to say, it’s vital that your company is PCI compliant. Fortunately, meeting these standards is not as difficult as they may seem.

The first step to becoming PCI compliant is to find a payment processor that uses data encryption. Data encryption ensures that customer payments remain secure at each point of the payment process. 

Tokenization is another crucial piece of the PCI compliance puzzle. With tokenization, a customer’s credit card information is replaced with a unique token. Tokenization makes it nearly impossible for hackers to access and steal stored credit card data. 

You also need to maintain and update a firewall configuration. A firewall ensures that your system is safe from malware and that all anti-virus programs are up-to-date. 

You should also check out the full PCI compliance checklist

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Frequently Asked Questions

What is PCI compliance?

PCI compliance is a list of standards for how businesses can keep sensitive customer data secure. There are four different levels of PCI compliance, and each level comes with a different set of criteria. 

Failing to maintain PCI compliance can result in fines, lawsuits, and can damage your company’s reputation. So, maintaining PCI compliance should be a top priority for all businesses.

How does PCI compliance eliminate risk?

The majority of companies that were victims of a data breach failed to meet all of the PCI compliance standards. PCI compliance doesn’t ensure that your company won’t be the victim of a data breach, but it does eliminate some of your risk.

PCI compliance also protects your relationship with your customers. When your customers know that your business takes data security seriously, they’ll be more likely to want to do business with you. 

How do I become PCI compliant?

To start, you should review the full list of PCI compliance standards. To get started, there are a few important steps you can take.

The first is to choose a payment processor that uses data encryption. Data encryption ensures that all customer transactions remain secure. And by incorporating tokenization, you’ll ensure that all stored customer data is safe from hackers. 

It’s also a good idea to install and maintain a secure firewall. A firewall will keep your site safe from malware and ensure that all anti-virus software is up-to-date.

Fora Financial

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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Fora Financial is a working capital provider to small business owners nationwide. In addition, the Fora Financial team provides educational information to the small business community through their blog, which covers topics such as business financing, marketing, technology, and much more. If you’d like to see a topic covered on the Fora Financial blog, or want to submit a guest post, please email us at [email protected]afinancial.com.