What Is PCI Compliance – Definition and 12 Key Prerequisites

Being a modern merchant means facing numerous offline and online business regulations. 

Some of them are easily fulfilled while others require in-depth knowledge and experience. 

PCI Compliance is one of the prerequisites for handling consumers’ payment data in a secure and reliable manner. 

This explains the meaning of this concept and how it came to be, including the 12 requirements that every business needs to meet to be called PCI-compliant. 

PCI Compliance Defined

First, let’s clarify the origins of the PCI acronym. PCI stands for Payment Card Industry, and DSS means Data Security Standard. So, the full name of this digital payment security protocol is Payment Card Industry Data Security Standard, hence PCI DSS. 

It’s basically a collection of prerequisites and security procedures that merchants dealing with cardholders’ payment data need to meet. 

In a world without PCI DSS, consumer payment data wouldn’t be properly secured. This standard forces banks, merchants, and all other parties involved in digital transactions to impose adequate security measures. 

Once a company fulfills the PCI DSS principles and gets verified thereof, it receives a PCI DSS certificate, issued by the PCI Security Standards Council

Businesses must meet PCI DSS requirements to pass a PCI audit and become compliant. 

Merchants can prove their PCI compliance in two different ways. They either submit a Report of Compliance (ROC), provided by a Qualified Security Assessor (QSA), or fill out a Self-Assessment Questionnaire. 

The acquiring bank, i.e., the merchant’s bank, inspects the delivered report or questionnaire, communicates with the card companies whose cards the merchant wants to accept, and allows the business in question to receive bank card transactions. 

Who Prescribes the PCI DSS Rules?

International payment compliance rules are regulated and adopted by the aforementioned PCI Security Standard Council and major credit card organizations (Mastercard, VISA, Discovery, American Express).

External compliance audits are carried out by QSA-organs, certified by the Council. Every payment service provider (PSP), commercial merchant, startup or financial institution that cares about their customers and reputation will follow all the guidelines to become fully compliant. 

But where are the state-prescribed directives, one might ask? Every government and parliament in this world adopts its own payment regulations. Depending on their local business preferences and law, this legislation might differ from country to country. It’s important to know that national compliance-regulating acts take priority over PCI security principles. 

The 12 Crucial Requirements for PCI Compliance

The end goal of PCI DSS regulations is to make every organization dealing with financial operations as secure as possible. This includes establishing and maintaining a threat-proof network, determining strict access policies, and identifying potential vulnerabilities. 

Hence, the PCI DSS Council underlines the 12 ultimate requirements to achieve the security factors highlighted above, grouped into six main categories:

Build and Maintain a Secure Network and Systems

  1. Install and maintain a firewall configuration to protect cardholder data.

Every organization dealing with payment data must use firewalls to keep internal networks safe from hacker attacks. It’s a software solution that tracks and controls network traffic, ensuring that no unauthorized persons access that information. In addition to the internal software systems in such organizations, all the company laptops and smartphones that employees use to handle cardholder data also must have updated and powerful firewalls. 

  1. Do not use vendor-supplied defaults for system passwords and other security parameters. 

Merchants using any third-party solutions that come with default passwords should change those parameters as soon as they start using such tools. They might be already compromised or protected with weak or inadequate passwords. 

Protect Cardholder Data

  1. Protect Stored Cardholder Data.

Whenever possible, merchants should store no cardholder data than necessary to carry out a transaction. If they already need to save some cardholder information, such data should be protected via encryption and multifactor authentication. Encryption bans hackers from accessing and scanning consumers’ data. 

Also, don’t store your customers’ CVV numbers, card chip data or PINs. In the case you need to display a user’s PAN number, never show the entire string numbers but mask it partially. 

Every merchant needs to adopt their internal cardholder data policy, in accordance with the effective law and PCI regulations. 

TPP Intel: PCI Vault from the Services section on the website.

  1. Encrypt transmission of cardholder data across open, public networks.

Being aware that personal identifiable information shouldn’t be sent via open networks has become part of general knowledge. Still, it’s necessary to point out that data transferred that way are extremely prone to getting tampered with, hacked, and stolen by harmful adversaries. 

Hence, merchants need effective encryption and updated secure transfer protocols to completely insulate such information. Moreover, they also need in-house regulations that prescribe safe cardholder data handling by their employees in emails, chats, and other communication channels. 

Maintain a Vulnerability Management Program

  1. Protect all systems against malware and regularly update antivirus software or programs.

Merchants are responsible for installing, maintaining, and updating all the necessary antimalware and antivirus software tools. The use of reliable, cutting-edge solutions, tailor-made for the fintech industry minimizes the risk of data theft and financial damage. 

Professional software-protection experts should also regularly inspect the threats recorded by the antivirus software and report other relevant employees about certain regularities and patterns, if any. 

  1. Develop and maintain secure systems and applications.

Apart from nurturing an internal cybersecurity squad, fintech merchants should work with other niche-specific companies to keep improving their security. Where necessary, order special protection or user-experience-enhancing apps and tools, to provide a completely safe and comfortable environment for your consumers.

Implement Strong Access Control Measures

  1. Restrict access to cardholder data by business need to know. 

We’ve already pointed out that card payment data shouldn’t be stored longer than necessary for a transaction to be completed successfully. Even if you have to hold such information on your website for some time, restrict the access rights to only a handful of privileged employees. For instance, a system administrator and compliance officer might get access rights to the PCI vault, while a copywriter and a videographer don’t need such credentials. If we know that human error still causes significant damage in digital transactions and payment processing, act accordingly.

  1. Identify and authenticate access to system components.

A step further from the previous point, allocate a special ID to each privileged user that’s allowed to access cardholder data. When a business owner knows exactly which persons can get inside the payment information, under which ID, it’s easier to track misbehaviors and mistakes. A separate ID per authorized user enables merchants to restrict account access in the case of failed login attempts, void access to inactive accounts, and prescribe re-authentication for idle users. 

Multi-factor authentication is also a standard for such an individualized, safe-access policy. 

  1. Restrict physical access to cardholder data.

Back to human error: no computer, server, or gadget with access rights to cardholder data should remain unattended within the business premises. What’s more, fintech companies must bring strict internal rulebooks regarding non-employees who are allowed to get into the office. 

From the C-suite and middle managers to remote workers, everybody should know what they can and what they mustn’t do.

Regularly Monitor and Test Networks

  1. Track and monitor all access to network resources and cardholder data.

Everybody working with some kind of software should do everything they can to avoid mistakes. However, issues happen in every field and company. What distinguishes a strong business from a weak one is the reaction to a mishap. 

This PCI DSS requirement insists that the merchant reacts swiftly and immediately analyzes how data breach or any other error has happened. Having a built-in system that monitors each operation in terms of cardholder data is a vital prerequisite for successfully monitoring these events and people. The post-event audit should reveal the user accounts that acted strangely or illegally, which is a good start to understand how the incident occurred. 

  1. Regularly test security systems and processes.

There’s no full protection without regular testing and scanning. The two key methods to maintain security here are vulnerability scans and penetration tests. These operations are meant to identify the weak spots in the network architecture and suggest improvements. The PCI SSD Council certifies certain cybersec businesses as Approved Scanning Vendors (ASV). Merchants can use their services to check their level of protection. 

Maintain an Information Security Policy

  1. Maintain a policy that addresses information security for all personnel.

Every merchant dealing with credit card payers and information – which is almost every business these days – must create, adopt, and maintain a policy that refers to keeping information secure. Employees must undergo training sessions, pass tests, and get certificates to prove they fully understand how to protect consumer data within the company. Also, such knowledge will help them alert the responsible persons in the case of security issues.

PCI Compliance Benefits and Obstacles

Let’s highlight the main benefits and issues of full PCI DSS Compliance. 

The major benefits are increased overall security, meaning that organizations that are PCI compliant can collaborate with all the mainstream bank card companies. Compliant merchants also receive various certifications that prove their business reliability, which can be displayed both online and offline. Online customers are more likely to trust such businesses. Also, fully compliant merchants easily collaborate with banks, card companies, and other financial institutions. It’s no wonder we often see companies large and small announcing publicly they’ve become PCI compliant.

As for the issues, it takes time, knowledge, and assets to qualify for the PCI-compliant label. You need educated and experienced professionals in the house and externally to get you there. Also, the 12 PCI principles explained above are valuable in asset protection but they don’t a guarantee that your consumers’ data will remain intact. 

Conclusion

Every merchant who wants to experience business growth, attract new consumers, and avoid legal complications must meet the PCI DSS compliance requirements. While it’s not a simple procedure and there are always some updates, it is still a proven path for reaching business proficiency. 

Ask ThePayPortal if you’d like to know more about PCI compliance and we’ll get back to you as soon as possible.