Stay informed about PCI Compliance with eMerchant!
Payment Card Industry (PCI) Compliance is an often discussed, yet rarely understood concept among businesses that accept credit card transactions. But understanding what it is, and how to become compliant, is essential to your long-term success as an online merchant.
In 2006, the major credit card brands–- MasterCard, Visa, Discover, JCB and American Express – joined together to create the Payment Card Industry Security Standards Council (PCI-SSC). Each company has previously their own standards for data security and protection, and the PCI-SSC was formed in response to a recognized need to create a common standard within the payment processing industry.
Although PCI Compliance is not a federal law, merchants must be PCI Compliant or follow the PCI Compliance requirements in order to accept credit cards as form of payment. Non-compliant merchants risk losing their ability to process credit cards, and could also end up being audited and/or fined. Thankfully, while there are several levels of compliance, most merchants qualify for a level that is inexpensive and easy to implement.
eMerchant is here to help you find the answers and resources you need to ensure your business is PCI Compliant. Read on for some helpful answers to frequently asked questions.
What is PCI compliance?
The Payment Card Industry Data Security Standard (PCI-DSS) is a set of requirements designed to ensure that ALL companies who process, store or transmit credit card information maintain a secure environment for customer data. This essentially applies to any merchant that has a Merchant ID (MID). The Payment Card Industry Security Standards Council (PCI-SSC) is an independent body created by the major credit card brands (Visa, MasterCard, American Express, Discover and JCB), and was launched on September 7, 2006 to manage the ongoing evolution of Payment Card Industry (PCI) security standards, with a focus on improving payment account security throughout the transaction process. The PCI-DSS is administered and managed by the PCI-SSC (www.pcisecuritystandards.org). It is important to note that the individual payment brands and acquirers are responsible for enforcing compliance, not the PCI council. A copy of the PCI-DSS is available here.
To whom does PCI apply?
PCI applies to ANY organization or merchant – regardless of their size or number of transactions – that accepts, transmits or stores any cardholder data. To put it another way: if any customer of that organization or merchant ever pays them directly using a credit or debit card, then the PCI-DSS requirements apply.
Where can I find the PCI-DSS?
The current PCI-DSS documents can be found on the PCI Security Standards Council Website.
What are the PCI compliance “levels” and how are they determined?
All merchants will fall into one of four merchant levels based on Visa transaction volume over a 12-month period. Transaction volume is based on the aggregate number of Visa transactions (inclusive of credit, debit and prepaid cards) from a merchant Doing Business As (DBA). In cases where a merchant corporation has more than one DBA, Visa acquirers must consider the aggregate volume of transactions stored, processed or transmitted by the corporate entity to determine the validation level. If data is not aggregated – i.e. the corporate entity does not store, process or transmit cardholder data on behalf of multiple DBAs – acquirers will continue to consider the DBA’s individual transaction volume to determine the validation level.
The merchant levels as defined by Visa are:
A.) Any merchant — regardless of acceptance channel — processing over 6 million Visa transactions per year.
B.) Any merchant that Visa, at its sole discretion, determines should meet the Level 1 merchant requirements to minimize risk to the Visa system.
|2||Any merchant — regardless of acceptance channel — processing 1 million to 6 million Visa transactions per year.|
|3||Any merchant processing 20,000 to 1 million Visa e-commerce transactions per year.|
|4||Any merchant processing less than 20,000 Visa e-commerce transactions per year, and all other merchants — regardless of acceptance channel — processing up to 1 million Visa transactions per year.|
If I only accept credit cards over the phone, does PCI still apply to me?
Yes. All business that store, process or transmit payment cardholder data must be PCI Compliant, regardless of how they acquire that data.
Do organizations using third-party processors have to be PCI Compliant?
Yes. Merely using a third-party company does not exclude a company from PCI Compliance. It may cut down on their risk exposure and consequently reduce the effort to validate compliance. However, it does not mean they can ignore PCI.
My business has multiple locations, is each location required to validate PCI Compliance?
If your business locations process transactions under the same Tax ID, then typically you are only required to validate once annually for all locations. You must also submit quarterly passing network scans by an PCI-SSC Approved Scanning Vendor (ASV), if applicable.
What is defined as “cardholder data”?
The PCI-SSC defines “cardholder data” as the full Primary Account Number (PAN) or the full PAN along with any of the following elements:
- Cardholder name
- Expiration date
- Service code
Sensitive Authentication Data (SAN), which must also be protected, includes full magnetic stripe data, CAV2, CVC2, CVV2, CID, PINs, PIN blocks and more.
What are the penalties for non-compliance?
The payment brands may, at their discretion, fine an acquiring bank $5,000 to $100,000 per month for PCI Compliance violations. The banks will most likely pass this fine along until it eventually hits the merchant. Furthermore, the bank will most likely either terminate your relationship or increase transaction fees. Penalties are not openly discussed nor widely publicized, but they can be catastrophic to a small business.
It is important to be familiar with your merchant account agreement, which should outline your exposure to violations.
It is YOUR responsibility, as a merchant accepting credit and debit card payments, to safeguard customer card data by becoming PCI compliant.
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