What Is PCI Compliance?

PCI compliance is a set of established security procedures that merchants must follow in order to avoid fraudulent credit card transactions. These security procedures have been established by the PCI DSS, or Payment Card Industry Data Security Standard. A merchant who follows these procedures is PCI compliant, and they will protect themselves against data breaches, one of the greatest threats that online merchants face today.

What are Data Breaches?

A data breach is a scenario where an unauthorized user gains access to the network or database of a merchant, giving them access to the credit card data of their customers. Data breaches come in many forms, such as hacking, skimming, spyware or malware. Sometimes the credit cards themselves are stolen, by those that break into the company’s facilities or even by employees working for the organization. This is a dangerous scenario; because not only can the company suffer huge losses as a direct result of the theft, they can also be held liable for negligence.

To deal with data breaches, merchants must have two measures in place: one to prevent the breach from happening in the first place, and another to deal with the situation if a breach is successful. By following PCI standards, merchants will dramatically reduce the chances of data breaches occurring, because they will properly secure the transmission of their credit card data, as well as its storage and processing.

Additional tools that should be used are Address Verification System and confirming the CCV number. The best security tools offer multiple options for interfaces that allow the merchant to select their preferred method for safely transmitting payments.

Tokenization is quite popular among many businesses because it lowers the PCI burden by reducing the need for holding sensitive credit card data. It does this by only returning the minimal data needed, such as the transaction ID, the authorization code or the reference ID.

How Merchants Can Become PCI Compliant

Merchants that want to know how to become PCI compliant must first contact their acquiring bank or payment processor, as they will be able to list the exact requirements that the merchant must follow. Generally, there are three ways of becoming PCI compliant, and this is to assess, remediate and report. Assess simply means that the merchant will always verify the customer’s credit card. Remediate means that the merchant should fix any vulnerability that they discover, and they should never store their customer’s credit card unless it is necessary.

The report, which is the final step, means that merchants should collect and send the necessary remediation records for validation, if they are applicable. They must also send compliance reports to their acquiring bank and the card associations they work with. No merchant can afford to do business today without implementing security measures, particularly if they’re operating a business over the web. While the costs involved with setting up an effective security system may be high initially, they are much lower than the losses than will occur if the credit card data of your customers is compromised.