A Guide to PCI Compliance for Small Business Owners PCI compliance knowledge can help small business owners potentially avoid the detrimental consequences of data security issues. After all, you don't have the expensive data security resources big corporations have....

PCI compliance knowledge can help small business owners potentially avoid the detrimental consequences of data security issues. After all, you don't have the expensive data security resources big corporations have. Plus, you most likely don't have the necessary training to help you stop security breaches.

But even if you have some security training, there are some critical facts that you may not know. There have been many recent changes to compliance requirements. So, it's more important than ever to stay up-to-date on how to protect your customers' data.

Small business owners need to understand the requirements of PCI compliance because it affects how you handle and protect your customers' credit card information. The more you know about PCI compliance, the better prepared you are.

What Is PCI Compliance?

Did you know that over 80% of U.S. firms have been hacked successfully? Because of this daunting statistic, businesses that handle credit cards must adhere to several requirements. The Payment Card Industry Data Security Standard (PCI DSS) is an industry standard that requires merchants to protect their customers' credit card data.

PCI DSS aims to minimize the risk of data breaches involving credit card numbers. This has become possible by establishing rules for secure network design and software development practices, standards for access control management, vulnerability management, and penetration testing.

Requirements for PCI Compliance

The PCI DSS is a set of 12 requirements businesses must follow to keep their customers' credit card data safe. Failure to comply with these standards could result in fines and penalties.

Here's a quick rundown of how each requirement might affect your small business.

1. Install and maintain a firewall.

This requirement helps keep your business's firewall up-to-date and secure so that no one can access your systems without permission. If you're using a network firewall, you should configure it to deny all traffic except what you need to run day-to-day operations.

It's also helpful to ensure that firewalls or other security measures are configured to protect any other devices that use the same network as your system.

2. Do not use shared servers or services for storing credit card data.

If you're using shared hosting services or virtual private server (VPS) providers to host your website and e-commerce store, you can't store credit card data on those servers unless they're PCI-compliant.

Even if they're compliant with other industry standards, like HIPAA or FISMA (the Health Insurance Portability and Accountability Act and the Federal Information Security Management Act), they may still be vulnerable to attacks that could expose your customer data.

A better option is to use dedicated hardware like a managed server built specifically for e-commerce sites. These servers are designed with security in mind, so there are fewer entry points for hackers to exploit.

3. Protect stored cardholder data.

Cardholder data is any information you can use to identify a cardholder directly or indirectly. This can include the cardholder's name, address, account number, and expiration date. It also consists of the card-issuing bank's name, address, telephone number, and website.

You must protect your cardholder data by storing it in a secure location. This means you must keep it on a computer not accessible via the internet and ensure that only authorized employees can access it.

You should also destroy copies of this information as soon as possible when a customer no longer needs it to complete their order or transaction with you.

4. Encrypt cardholder data on open, public networks.

To comply with PCI DSS requirements, encrypt all sensitive data transmissions across open public networks. This includes wireless networks or internet connections at coffee shops or other public places where customers might be using insecure networks that don't use encryption technology to protect their information.

Hackers could lurk nearby, looking to easily steal personal information like passwords or credit card numbers without breaking into anything.

It means that even if someone could intercept the transmission of your customer's credit card information while ordering on a website, they would not be able to read it. This is because they would need a key to decrypt the algorithm that only your company can understand (and some others).

5. Use and regularly update anti-virus software.

There are many different types of malware, so it's essential to have good security software in place to protect your business. Ensure that you're using anti-virus software that's up to date and regularly updating itself.

Anti-virus software will help keep you safe from viruses and prevent them from spreading through your network.

6. Develop and maintain secure systems and applications.

In addition to using antivirus software on all your devices, a custom software development company helps you develop secure systems and applications so that hackers can't gain access in the first place.

One way to do this is by using "firewalls." These are essentially barriers between networks so that unauthorized users don't have access to them (or vice versa).

Another way is through encryption, where you convert data into code that only authorized parties can read. If someone tries to decode customer data without permission, they'll end up with gibberish text instead.

7. Assign an exclusive ID to each user with computer access.

The term "unique identifier" means a number, code, or other value that identifies each person in the organization. And, it is used to ensure that no two people have the same identifier. This applies to everyone in the organization that uses computers to process, store, or transmit cardholder data.

When you assign a unique ID to each person with computer access, you're ensuring there's a way to track them and their activities. It's imperative to do so if you have multiple employees working in the same area. This also applies if they work with contractors and temporary workers.

If an employee or contractor is terminated or leaves the company, you must remove their access privileges immediately so they can't cause any damage.

8. Restrict physical access to cardholder data.

You should ensure that only authorized employees are permitted to have access to your company's cardholder data. You must also restrict their access so they cannot copy or remove it from your premises.

Implement background checks on all personnel with direct access to cardholder data following the applicable laws and regulations (e.g., the Gramm-Leach-Bliley Act). In addition, ensure that only authorized personnel have physical access to your facility when you close.

In addition, ensure that these employees have enough training to handle sensitive information appropriately. Monitor their activities, report any suspicious activities promptly, and terminate employment for any staff member who does not follow the policies and procedures.

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

The most important part of your security program is monitoring who is accessing your network resources, systems, and cardholder data. To track your network access and monitor them effectively, you need a system that will allow you to do so.

The best way to do this is by setting up log files on all systems that store cardholder data. This would include the point-of-sale (POS) system and any other systems that process or store credit card data.

The log files should contain details about every transaction made on each system; including the time of day and IP address where the transaction took place. This enables you to reconstruct these transactions if necessary.

You should also set up an alert mechanism so that when new users log in to any system that stores cardholder data, they receive an email notification with instructions on how to access their training on safely and securely handling this information.

10. Restrict cardholder data to businesses to only what they need to know.

As a small business owner, you should be aware that the CARD Act requires you to restrict cardholder data to businesses. The law prevents sensitive information from being shared with anyone who doesn't need it to perform their job duties.

You must implement a written information security policy that defines cardholder data and how to access it in your company. You'll also want to set up a process for screening potential employees and vendors before they're allowed access to any cardholder data.

11. Regularly test security systems and processes.

Testing is an important step to help keep your data safe. It's also one of the most straightforward requirements to implement. You don't need a team of cybersecurity experts. But, you must ensure that your employees know how to use your security tools and do it correctly every time.

That means giving them regular training, ensuring they know how to access your system, and testing whether or not their passwords are strong enough. You should also ensure they understand what constitutes a breach and what they should do if they see something suspicious.

12. Maintain policies that address information security for all personnel.

You can't compromise on two things when it comes to security: the technical measures that ensure your systems are physically safe from attack and the policies that ensure your employees understand what they're doing and why.

Everyone in your company needs to know about information security policies, including how to protect sensitive data, handle security breaches, and what happens if they violate these policies. This includes employees who work directly with data. And, it includes people who manage your network or computers, make sales calls, or do anything else related to protecting customer information.

Who Needs to Become PCI Compliant?

Any business that processes, stores, or transmits credit card data must be PCI compliant. That includes all establishments that handle payments, even if they don't take credit cards as payment.

If your company doesn't accept credit cards directly, it might need to become PCI compliant. This would especially be the case if you sell products in person (or over the phone) and receive payments online through a third-party service like PayPal or Stripe.

PCI Compliance vs. HIPAA Compliance

A common misconception is that PCI and HIPAA compliance are the same, but they're not. They're two separate pieces of legislation that deal with different things and require different compliance steps.

When you think about it, the two are similar in their goals. Both aim to protect your customers' and business' data from unauthorized access. But there are some significant differences between PCI Compliance and HIPAA Compliance.

PCI Compliance is the Payment Card Industry Data Security Standard, a set of requirements for any company that accepts customers' payment cards (credit cards and debit cards). Visa and MasterCard created it to ensure companies safely track customer card information (and other sensitive data). The standard also includes requirements for how companies should report security breaches or failures and how they should handle customer complaints about potential fraud.

On the other hand, Congress passed HIPAA in 1996. This protects patients' privacy by requiring medical providers to safeguard their patients' personal health information (PHI). Additionally, this includes but is not limited to names, Social Security numbers, addresses, dates of birth, phone numbers—everything that would identify a person as part of a specific healthcare plan or insurance policy.

What Are the Consequences of Not Being PCI Compliant?

If you don't comply with PCI standards, your ability to accept credit cards could be revoked by the bank that provides them. It means customers would have trouble paying for goods or services using their cards at your place of business, resulting in lost revenue both in-person and online.

Moreover, you could face fines from banks, card companies, or even federal regulators who oversee compliance with these standards. You might also face lawsuits from customers who were victims of identity theft because you did not comply with these standards.

Stay Secure and PCI Compliant

Of course, PCI compliance is essential for any business dealing directly with customers' payment information. There are a few levels of compliance, depending on how much data you process and how many customers you have.

These standards are not final; there are updates every few years that add to the security protocols. But if you don't adopt them at all, you could be at risk of compromising your customer's sensitive financial data.

The above steps leading to PCI compliance are clear, and you should take them seriously. And as evidenced by the high-profile data breaches in recent years, it's a matter of when not if. You'll have to make the changes to comply with PCI standards—so it's better to get started sooner rather than later.

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