Understanding PCI Compliance: What You Need To Know

Contributed By Ken Lynch, CEO / Co-Founder, Reciprocity Labs

E-commerce offers a multitude of advantages both to the business owners and customers. Some of the significant merits are the ease of use, convenience, and flexibility that allows a business to cope with the changing dynamics. However, e-commerce has its challenges as well. For instance, if the e-commerce owners are not well-informed, they could end up suffering significant losses. As the number of e-commerce transactions rises, so is the rate of use of stolen data. This has significantly affected the e-commerce sector, leaving a lot of online business owners wondering how they can protect their cash of data and other sensitive business information.

You are probably wondering if this issue affects the business owners or the customers who had their information stolen. The truth is that it hurts both parties. If a customer has their data violated, they will undoubtedly claim that the e-commerce store did not look after their virtual security properly. This in return affects the store’s reputation. Hackers, spyware, viruses, and other virtual security threats are always aiming to corrupt the systems so that they can access the restricted data and use it somewhere else to commit crimes.

It is your responsibility as a business owner to ensure your visitors’ safety and apply compliance strategies in the online store. PCI DSS certification is the most effective online security feature today that has seen a lot of e-commerce platforms safe from any crimes and theft.

What Is PCI?

PCI stands for Payment Card Industry, and DSS stands for Data Security Standards. It is a form of compliance that applies to all companies that accept payment via credit cards. It was developed in 2006 with the aim of protecting all parties involved in credit card payment transactions. These include financial institutions, payment networks, businesses, processors and customers. The PCI compliant standards have been progressing to keep up with the payment technology and the tricks used by cybercriminals to steal data.

If your e-commerce platform plans on accepting credit card payment, process, transmit and store cardholders’ information, you are required to keep your data secured with PCI compliant hosting provider.

Who Needs It?

PCI compliance is necessary for any business regardless of the size or sector. It is a requirement for any organization that accepts and stores cardholder data.

What Does Cardholder Data Mean?

This is any identifiable information that links a person to a credit or debit card. The data include the account number, the owners’ name, and service code among others.

Are There Penalties For Non-Compliance?

PCI DSS is not a law, but it is advisable for every business owner to invest in it. It is considered as a standard and not a regulation. This makes most merchants assume that it is optional and as something they can ignore but that is only because they do not look at the bigger picture and the risks. While lack of compliance may not lead you to jail, the consequences are something that can result in business failure.

If your business is involved in a breach of data or if you put your customers’ information at risk, you will be legally accountable for it. Based on the degree of the effect of the breach, you could be subject to monthly fines by the bank and potentially, a lawsuit. It is unfortunate that most small business owners do not understand the breaches and when they have been involved in cybercrimes until that point they have expanded in severity.

The acquiring banks and card brands could fine you for non-compliance at up to $5, 000 to $100,000 per month depending on the degree of the damage done. If you are a small online business owner, such amounts could lead to financial challenges that you cannot cope up with leading to the end of business operations. Even for the large organizations, although they can handle the fines, they will still suffer a financial backlash that affects their profitability.

What Are The Requirements Of PCI?

PCI compliance expects your business to protect its cardholders’ data, maintain a secured network, observe and maintain a flexible management program and apply strong access control measures. What’s more? It is required to have an information security policy and ensure that your networks are monitored and tested regularly.

How Do You Make Your E-Commerce PCI Compliant?

If you wish to make your business PCI compliant but you are feeling overwhelmed by what it entails and your capacity to adjust to the processes, worry not; the PCI compliance can only be achieved through hard-work and ensuring that the payment process you use complies with PCI. What are some steps that can help you with this?

Categorize your data assets

Before embarking on setting up policies and procedures, you need to understand and plan your PCI environment. This means that you have to know and establish the right networks. This includes wireless networks, cellular, router, point-of system service, and terminal systems.

Identify The Assets

You must identify what works for you and things that touch your information. Then you have to diagram how this data flows across your business environment. By doing this, you will be incorporating a reviewing network segmentation which is required for ensuring that information does not land on the wrong hands.

Come Up With Procedures, Policies, and Controls

PCI DSS is excellent as it is capable of identifying the necessary controls. It does so by not only identifying the need for encryption and firewalls but also shows you the right encryption methods to use in your system. It will tell you the specific encryption methods that can help you fulfill the compliance requirements.

You have to ensure that all your internal policies are well outlined and that they explain the processes of changing default passwords. They should also discuss the configurations on vendor-supplied hardware and software. PCI requires you to personalize your services since default password will only be a perfect entry path for hackers and cybercriminals to access your system and steal data.

Monitor Your Protections

You should regularly monitor your CDE incorporate which not only helps your controls’ review but also is essential for organizing and engaging in audits which are critical for improving the effectiveness of your controls. Also, to create an effective audit trail, you should be capable of engaging in both internal and external vulnerability monitoring which proves that internal and external threats cannot affect the integrity of your business data.

PCI DSS compliance can be overwhelming for any e-commerce business to implement, but you will be making the best choice for your business. They are a set of rules and precautions, meant to help in reducing risk and protect both you and your customers. After understanding more about the myths and frequently asked questions about PCI compliance, you will realize that implementing it into your business is worth the effort. Take your time today, understand how it works and what is required of you to get started. Before you ignore its contributions, remember that failure to comply does not only affect your finances in case of an attack but can also ruin your excellent reputation forcing you out of business.

Ken Lynch is an enterprise software startup veteran, who has always been fascinated about what drives workers to work and how to make work more engaging. Ken founded Reciprocity to pursue just that. He has propelled Reciprocity’s success with this mission-based goal of engaging employees with the governance, risk, and compliance goals of their company in order to create more socially minded corporate citizens. Ken earned his BS in Computer Science and Electrical Engineering from MIT.  Learn more at ReciprocityLabs.com.