Why PCI certification is important for all businesses
All businesses need to understand how the Payment Card Industry Data Security Standards apply to them, but these regulations can be confusing, especially for small merchants. The following is a breakdown of their key elements:
What is PCI DSS?
The Payment Card Industry Data Security Standards are a set of requirements that are meant to ensure all businesses conducting credit card-based transactions do so in a secure environment. Version 1 of the PCI DSS was released in 2004, but the PCI Security Standards Council was launched in 2006 to serve as the guiding agency behind the standards and improve them over time. While the council sets the standards, payment card companies and acquirers are responsible for enforcing compliance.
Any merchant that accepts credit cards is required to comply with the standards, whether they accept payments online, in person or over the phone.
What does PCI DSS cover?
The Payment Card Industry Security Standard Council developed the PCI Data Security Standard (PCI DSS) to encourage and enhance cardholder data security, and facilitate the broad adoption of consistent data security measures globally. PCI applies to all companies that accept credit or debit cards. It is crucial for businesses to follow these requirements and reach PCI certification, as non-compliance could have serious consequences.
Data breaches are becoming an increasing concern for merchants. Hacks of sensitive information can leave customers feeling vulnerable. If a business is breached, their customers are likely to look elsewhere for the same goods and services in the future. Customers who leave could spread their dissatisfaction with a company, hurting an enterprise's reputation for the long haul.On the other hand, PCI certification demonstrates that a business has taken the appropriate steps to protect their customers' data. Companies should not only make sure they're compliant with PCI standards, but post record of that status so clients are aware of the increased protection.
Consumers want to spend their money at businesses they have confidence in. Trustworthiness can go a long way in keeping a company's reputation positive. PCI certification helps ensure customers that their transactions are safe, allowing them to feel more at ease when sharing their credit card and other personal information. People who believe in an enterprise's dedication to consumer safety will continue to do business with that company. Furthermore, these customers may also refer the merchant and his or her services to their peers. PCI certification builds trust with a business' audience and ensures consumers are satisfied while their information remains safe.
Lack of PCI certification could have very negative consequences for businesses. On top of a loss of reputation and standing within the industry, companies could also face hefty fines from their acquiring banks. Since the penalties hit these financial institutions first, they usually try to pass violations down to merchants. These fees could cost anywhere from $5,000 to $100,000 per month as long as the enterprise is not compliant. Acquiring banks also have the option to terminate the relationship with business owners or increase transaction fees.
Companies with PCI certification, however, will not be fined if there is a security breach. The "safe harbor" rule will come into play if the business was compliant at the time of the hack. This guideline essentially keeps merchants safe from penalties as long as their acquiring banks find business owners meet all the necessary requirements.
At the end of the day, having PCI certification will actually save enterprises money. Compliance usually results in reduced or eliminated fines, as well as less opportunity for bank chargebacks. The penalty for non-adhering merchants usually includes expenses for the overall investigation, acquiring bank fees, the cost of an annual Quality Standard Assessment and the financial risks incurred from lost reputation and commercial value. With PCI certification and PCI compliance assistance, companies can feel comfortable knowing their own data and that of their customers is secure.
It's important to note that PCI compliance is an ongoing process, not a moment in time. Once a merchant has become PCI certified, it's crucial that the business maintain its compliance. The PCI releases new and updated versions of its DSS frequently and companies must be sure to adhere to these new requirements. Lack of compliance with even the smallest change can leave enterprises vulnerable to hefty penalties and dissatisfied customers.
PCI certification is an important requirement for all business owners processing credit and debit cards. While adherence is not mandatory by law, it benefits companies to maintain their compliance for a variety of reasons, including improved reputation, consumer trust and happiness, as well as fewer or reduced penalties. PCI certification ensures both merchants and their clients are safe and secure from potential data breaches and their consequences.