5 Things Startups Need To Know About PCI Compliance

Have you ever thought about the possible outcomes of a data breach in your company? According to Norton, 38 percent of cybercrime aims at the United States, making the country the world’s top target. We shall discuss PCI compliance and explain why it matters.

PCI Compliance

PCI DSS (Payment Card Industry Data Security Standard) is a set of universal security standards developed by the leading credit card companies. Its objective is to protect sensitive consumer data such as credit card numbers from unauthorized access. Merchants who handle branded credit cards usually use the DSS protocol to achieve data protection.

Things You Should Know About PCI Compliance

Although it’s not a requirement by the federal law, some state-level rules have made PCI compliance mandatory. Banks and credit card companies also require businesses to be compliant. Below are five essential things startup owners should know regarding PCI standards.

1. You and Your Vendors Should Be Compliant

Your business is subject to PCI standards if it makes any financial transaction. You must learn and observe the compliance regulations.

Besides, you should only do business with compliant vendors. It’s your responsibility to ensure that your suppliers of software and services as well as entities you hire comply with the PCI standards.

If you outsource credit payment processing, for example, the company hired should meet PCI standards. If they are not, or the software used is non-compliant, you are responsible for any risks.

2. PCI Compliance Is Continuous

As new security controls come into place, cybercriminals strive to devise ways to bypass them. There is no assurance that the security measures working now will be foolproof tomorrow. New threats arise every day, making compliance an ongoing process.

For this reason, you must pay attention to the compliance status of your business all the time. Look out for changes in the PCI standards, update your systems, and employ other data security techniques.

Hiring a dedicated compliance officer is an ideal way of ensuring that your company meets compliance standards. The professional should stay abreast with the PCI-DSS regulations of the day and guide your business on remaining compliant.

3. Security Requirements Depend on Merchant Levels

PCI-DSS dictates the kind of security measures you must employ depending on the number of transactions you process per year. Your startup may fall under any of the following merchant levels:

Level 1: Six Million Transactions

If you process at least six million transactions annually, your business should go through a network scan by an approved scanning vendor (ASV) per quarter.

A qualified security assessor (QSA) must also process an Annual Report on Compliance (ROC). It should also undergo a penetration test and acquire an Attestation of Compliance Form (AOC).

Level 2: 1,000,000 to 6,000,000 Transactions

PCI standards require these businesses to take the Self-Assessment Quiz (SAQ) every year. A Qualified Security Assessor (QSA) must also perform an onsite assessment. Additionally, the merchants are subject to a quarterly network scan, AOC, an internal scan, and penetration testing.

Level 3 and 4: 20,000 to 1,000,000 Transactions

Level 4 comprises of e-commerce merchants who process up to 20,000 transactions while Level 3 are those in the 20,000 to 1,000,000 transactions range. These businesses have to undertake SAQ, network scans, and fill out the AOC, among other requirements.

There’s more involved in becoming PCI DSS certified besides your merchant level. However, you must complete a PCI DSS questionnaire every year, have your network scanned, and submit your annual AOC.

It comes as a list of yes or no questions asking you to tick appropriately. For every no answer, you have to indicate how and when you will implement the missing security controls.

4. Non-Compliance Is an Expensive Risk

If an audit finds your business non-compliant, you might have to pay hefty penalties. If you circumvent, your system remains with security loopholes which can lead to data breaches. The consequences of a cyber-attack include:

  • Fraud losses
  • Legal costs and judgment
  • Fines and penalties
  • Poor reputation and loss of customers
  • Reduced sales
  • Ban on accepting payment cards
  • Cost of reissuing new payment cards
  • High subsequent costs of compliance

The issues ensuing after the exploitation of stolen data are usually overwhelming. Studies have shown that at least 60 percent of small businesses close up shop six months after data loss.

5. Weak Passwords Are to Blame for Most Breaches

Verizon reports that most data breaches succeed due to weak or stolen passwords. PCI SSC advises merchants to replace vendor-supplied defaults with complex passwords and change them from time to time.

After a third-party installs hardware, software or POS system, be sure to change the passwords. Multi-factor authentication is an excellent way to deal with stolen credentials.

Bottom Line

A data breach can collapse a business within no time. PCI compliance can avert this risk. To protect your customer data, familiarize yourself with the latest releases of PCI DSS, and adhere to the regulations. Keep all hardware and software updated and implement various data security measures.


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