What Every CEO Should Know About PCI Compliance

Data is valuable to businesses, and it’s their role to safeguard customer information. However, cybercriminals also find data to be valuable. This means that customer data is a target or cybercriminals. Any business that processes credit and debit cards becomes a target for these criminals.

Small businesses and startups might think that they are too small of a target for cybercriminals to take note. In reality, they are a softer target compared to bigger companies, as the lack of preparation makes it easy to exploit their systems. 

As a startup, your priorities are to get your business running, and you might overlook some areas in your haste to break even. However, the best way to build and sustain a business is from the ground up. Achieving and maintaining PCI compliance should be among your priorities.

Here are several things you should know about PCI compliance

1. What is PCI compliance and how is it relevant to your business

PCI is a shorter version of PCI DSS, which represents the Payment Card Industry Data Security Standard. They are a set of standards developed by the Payment Card Industry Security Standard Council to safeguard payment systems. The standards ensure that any business that accepts, processes, transmits or stores credit card data maintains a secure credit cardholder environment.

How is PCI compliance relevant to your business? It applies to your business if it accepts credit card transactions regardless of the transaction numbers. If you get only a single credit card transaction per year, your business needs to achieve PCI compliance. The same applies if you process over 6 million credit card transactions per year.

While PCI compliance will not completely eliminate the exposure to data breaches, it will significantly reduce the risk.

2. Compliance is continuous

Cybercrime threats continue to evolve every day, and so do the PCI standards, which are regularly updated. You could have the most secure cardholder data environment today but succumb to arising threats.

Continuously monitor for any changes and update your systems to match the new PCI standards. Conduct regular vulnerability assessments to identify areas that need software patches to seal the vulnerabilities.

3. Know Your Merchant Level

PCI compliance differs depending on your merchant level and payment environment. Annual credit card transaction volumes influence the merchant levels. The levels are determined as follows:

• Level 1- merchants with over six million transactions annually
• Level 2- Annual transactions ranging from 1-6 million
• Level 3- Annual transactions ranging from 20,000- 1 million
• Level 4- under 20,000 transactions annually

While these levels seem easy to comprehend, you might want to consult card issuers to discern your specific category. Card issuers such as Discover, Mastercard, and Visa use the same guidelines while American Express and JCB have their own guidelines.

4. Risks For Non-Compliance

The top 3 levels have a lot of requirements and thus require resources to achieve compliance. Alternatively, level 4 has fewer compliance requirements and thus takes less effort to comply. Startups and small businesses might decide to ignore compliance until the business is large enough for such security measures.

However, the PCI Security Standards Council claims that level 4 merchants are the most vulnerable to cyberattacks. Over 71% of cyberattacks occurred in small businesses with less than 100 employees.

Aside from cyberattacks, your startup could face the following risks for non-compliance:

1. Non-compliance often results in data breaches which attract hefty regulatory fines.
2. Forensic audits- if your company is hit with a data breach, the organization is required to provide compliance documents. A forensic examiner will scrutinize your compliance documents and the system to determine vulnerabilities. The examiner will also assess your control measures to determine whether your business is PCI compliant or not. The cost of the audit is placed on your business.
3. Loss customers and brand reputation- once your business experiences a data breach, loyal customers are likely to shift camp to your competitors. As a startup, you need more customers, and losing loyal customers will reduce your chances of survival.

93% of data breaches occur under a minute, and it could take weeks for a business to realize that they were victims of cybercrime. However, you can mitigate these data breaches and other cybercrimes by achieving PCI compliance.