The current global financial crisis involves major money losses and fraudulent transactions. This leads to an increasing level of uncertainty amongst stakeholders over the security of cardholder data and the integrity of payment card transactions. To that end, the Big Five of worldwide payment brands — Mastercard, Visa, Discovery, American Express, and JCB have created a compliance framework called the Payment Card Industry Data Security Standard (PCI DSS) that can combat these particular digital threats.
The PCI DSS is managed and overseen by the PCI Security Standards Council (PCI SSC), an independent organization established by the above organizations. This security standard was launched as a binding set of requirements for any company that processes or stores financial transaction data. It makes the widespread implementation of standardized data security procedures easier. Online businesses must adhere to the PCI DSS’s criteria, which involve a number of steps, including hosting data on a PCI-compliant server.
In this blog, we will provide you with a brief overview of what the PCI DSS compliance framework is, who should implement it, the levels and requirements of the standard, and its benefits and costs.
What is the PCI DSS Compliance Framework?
The PCI DSS security standard establishes global standards to safeguard cardholders’ personal information and ensure the security of credit card transactions. The primary objective of the PCI DSS guidelines is to cut down on attack opportunities. Organizations require a secure Card Data Environment (CDE) for this, and it doesn’t matter if you use a third-party safe payment option or your internal environment. For e-commerce websites, which only allow the transmission of credit card information online, this is particularly crucial.
There are many risks associated with e-commerce websites, such as:
- Credit card fraud: that occurs when thieves use credit card numbers or stolen credit cards to make purchases;
- Identity theft: that occurs when fraudsters use someone else’s identity to make purchases; and,
- Credit card hijacking: these attacks use various techniques to compromise credit card data, such as rerouting clients to a fraudulent shopping cart or hijacking their session.
Ensuring compliance with security protocols is an ongoing endeavor for any e-commerce enterprise. PCI compliance impacts not just retailers but also educational institutions, financial institutions, governmental bodies, and any other public or private entity that manages credit card information.
Although the PCI DSS applies to all parties within the payment card ecosystem, it is not a legal requirement. The majority of significant payment brands also need its compliance. Non-compliance may lead to penalties, fines, or limitations on card processing.
Version 4.0 of PCI is the most recent as of 2022. It offers several improvements over its predecessor, including:
- an increased focus on compliance as a continuous procedure, which suggests that in order to attain continuous compliance, monitoring must be ongoing; and,
- upgraded password requirements and multi-factor authentication.
If you want to look at an overview of the PCI DSS compliance framework, we recommend that you look at this blog that sums it up in a concise manner.
Now, let’s see who should be complying with the PCI guidelines.
Who Should Be Complying with the PCI DSS Guidelines?
Merchants, service providers, and any other entity participating in the payment card ecosystem must comply with PCI DSS. The PCI DSS guidelines define a merchant as “any entity that accepts payment cards bearing the logo of a PCI SSC participating payment brand as payment for goods and services.”
Thus, any organization “directly involved in the processing, storage, or transmission of cardholder data on behalf of another entity” is included in the broader category of service providers. A company may function as a service provider in addition to a merchant. For instance, an internet service provider is both a merchant and a service provider if it hosts other merchants as clients and takes credit cards for monthly fees.
Following this, we will quickly discuss the levels of the PCI DSS compliance framework and its requirements.
What are the Levels of the PCI DSS Compliance Framework?
There are differences in the criteria to which any organization that handles cardholder data must comply. The level of compliance required by the organization will depend on the specific cardholder data environment and the overall number of transactions, among other factors.
Merchants often fit into one of four categories, while each payment company has its compliance program and classifications. Here are the merchant levels:
- Level 1 Merchants: Process over 6 million credit and debit card transactions every year
- Level 2 Merchants: Process approximately one million to six million credit card transactions per year
- Level 3 Merchants: Handle between 20,000—1,000,000 payment transactions per year
- Level 4 Merchants: Handle less than 20,000 payment transactions each year
On the other hand, there are two levels for service providers:
- Level 1 Service Providers: Process over 300,000 credit card transactions annually
- Level 2 Service Providers: Handle less than 300,000 credit card transactions annually
What are the Requirements of the PCI DSS Standard?
There are 12 requirements and 6 goals outlined in the PCI DSS for entities to improve the security of cardholder data. These include:
Create and Maintain a Secure System and Network
1. Establish and uphold security measures on your network
2. Apply secure configuration to every component of the system
Save Account Information
3. Safeguard data from saved accounts.
4. Use robust cryptography to safeguard cardholder data when it’s being transmitted over open public networks.
Set Up and Continue a Vulnerability Management Program
5. Keep all networks and systems safe from dangerous malware
6. Create and manage safe software and systems
Install and Implement Robust Access Control Procedures
7. Limit system components and cardholder data access to those who have a business need-to-know
8. Determine user identities and verify access to system elements
9. Limit who can physically access cardholder information
Continually Observe and Evaluate Networks Over a Sustained Time Period
10. Keep track of and log all access to cardholder information and system components
11. Regularly check the security of networks and systems
Keep an Information Security Policy in Place
12. Use organizational policies and programs to support information security
If you want to go into the details of each of these requirements, we recommend you take a look at this blog highlighting the PCI DSS requirements.
There are some additional PCI DSS requirements contained in Appendix A, which are given as follows:
- Appendix A1: contains additional PCI DSS Requirements for Multi-Tenant Service Providers.
- Appendix A2: contains extra PCI DSS Standards for Organizations Connecting Card-Present POS POI Terminals over SSL or Early TLS
- Appendix A3: contains supplemental Validation for Designated Entities (DESV)
In this next section, we will look at the benefits and costs of complying with the PCI DSS standard.
What are the Benefits of Complying with the PCI DSS Compliance Standard?
Here is how adhering to the PCI DSS guidelines can benefit your company:
- Reduction in Risk of Security Breaches: Decreasing the likelihood of security breaches is the main benefit of PCI DSS compliance and the main reason its controls are in place. Organizations strengthen the most frequent vulnerabilities that attackers exploit when implementing its standards, which include building firewalls, encrypting data, constructing an information security management system, and more.
- Boost in Customer Confidence in Your Company: Your customers will know that you take the responsibility of securing their sensitive data seriously if you are PCI DSS compliant. Customers will feel much more comfortable sharing sensitive cardholder data with you if they can see that the information is secure with you.
- Creation of a Foundation for Building a Security Program: Adhering to PCI DSS guidelines can help businesses compare their security to a recognized standard.
PCI DSS compliance enables a robust security posture for your company because it necessitates such a solid security foundation, which includes firewalls, encryption, anti-virus software, malware, and security rules, all configured correctly.
Due to these security requirements, you must have a comprehensive IT security strategy that can assist you in meeting PCI DSS compliance as well as other national and international security standards such as GDPR, HIPAA, and SOC 2.
- Empowerment for Business Growth: Since third-party networks are seen by cybercriminals as potentially vulnerable access points, more businesses are checking the security of their suppliers, partners, and vendors and frequently imposing strict security standards before doing business with them. Being PCI compliant boosts your chances of forming business relationships tenfold because it’s typically one of the prerequisites for obtaining company partnerships.
- Safeguarding from Fines and Penalties: The acquiring bank is subject to sanctions under the PCI DSS, which are often transferred to the concerned organization. Penalties under the PCI DSS accumulate on a monthly basis until the business achieves compliance. As a result, they can pile up fast or compel the business to implement its requirements as soon as possible.
What are the Costs of PCI DSS Compliance?
For small to midsize businesses that need to be PCI DSS compliant, the approximate expenses of the Assessment and Certification phases for merchants and service providers can be summed up as follows and may still vary according to the size of the organization.
|Level 1||$22,000 to $50,000||$25,000 to $75,000|
|Level 2||$15,000 to $40,000||$15,000 to $50,000|
|Level 3||$10,000 to $30,000||N/A|
|Level 4||$5,000 to $10,000||N/A|
If you have any more questions about the PCI DSS compliance framework, we recommend that you check out these two FAQ blogs linked below:
PCI DSS Compliance Readiness with Akitra!
Establishing trust is a crucial competitive differentiator when courting new SaaS businesses in today’s era of data breaches and compromised privacy. Customers and partners want assurances that their organizations are doing everything possible to prevent disclosing sensitive data and putting them at risk, and compliance certification fills that need.
Akitra offers an industry-leading, AI-powered Compliance Automation platform for SaaS companies. Using automated evidence collection and continuous monitoring, together with a full suite of customizable policies and controls as a compliance foundation, our compliance automation platform and services help our customers become compliance-ready for security standards like SOC 1, SOC 2, HIPAA, GDPR, PCI DSS, ISO 27001, ISO 27701, ISO 27017, ISO 27018, NIST CSF, NIST 800-53, NIST 800-171, FedRAMP, CCPA, CMMC, SOX ITGC, and more such as CIS AWS Foundations Benchmark, Australian ISM and Essential Eight etc. In addition, companies can use Akitra’s Risk Management product for overall risk management using quantitative methodologies such as Factorial Analysis of Information Risks (FAIR) and qualitative methods, including NIST-based for your company, Vulnerability Assessment and Pen Testing services, Trust Center, and AI-based Automated Questionnaire Response product to streamline and expedite security questionnaire response processes, delivering huge cost savings. Our compliance and security experts will provide customized guidance to navigate the end-to-end compliance process confidently. Akitra Academy provides easy-to-learn short video courses on security, compliance, and related topics of immense significance for today’s fast-growing companies.
The benefits of our solution include enormous savings in time, human resources, and cost savings, including discounted audit fees with our audit firm partners. Customers achieve compliance certification fast and cost-effectively, stay continuously compliant as they grow, and can become certified under additional frameworks using a single compliance automation platform.
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