The Payment Card Industry Data Security Standard (PCI DSS)  is a set of requirements to increase the security of financial transactions to protect cardholders from cyber threats. PCI DSS is not a law or regulatory requirement, but it is a part of the contractual obligation between businesses and customers.

PCI DSS was formulated in 2004 by five major credit card companies -Visa, Mastercard, JCB, Discover, and American Express. PCI DSS should be enforced regardless of transaction size or volume. Whether you are a small e-commerce store or a large retail chain, you must comply with PCI DSS.

Why It’s Crucial for Payment Security

1. Prevent Data Breaches and Fraud 

Data breaches and fraud are the major problems for both consumers and businesses in the FinTech industry. PCI DSS compliance helps organizations to protect against data breaches by setting clear requirements. For instance, encryption ensures that even if data gets dumped in the underground forums, it is unreadable without a decryption key.

2. Protects Customer Trust

For businesses that rely on customer transactions, maintaining trust and reputation is essential. If a business experiences a data breach, it can lead to a decrease in customers along with negative media coverage. Being PCI DSS compliant shows the business’s commitment to safeguarding customers’ private data. This can instill confidence in customers, leading to higher satisfaction.

3. Avoiding Fines

Non-compliance with PCI DSS can result in fines and penalties. Payment card companies can impose if the organization fails to meet PCI DSS standards. These fines can range from a thousand dollars to millions depending on the violations and duration. Moreover, payment card companies charge $50 to $90 per exposed customer record.

4. Building Trust

Consumers now want a more safe and secure environment while making online transactions and are increasingly concerned about the security of their personal and financial records. Organizations that are PCI DSS are seen as trustworthy and can enhance the reputation of the brand.

Requirements For PCI DSS

PCI DSS comprises 12 core requirements consolidated into six main categories. These guidelines safeguard the entire payment data lifecycle, from initial capture to disposal. Let’s take a closer look at these requirements. 

1. Build and Maintain a Secure Network and Systems

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

Firewalls act as a first line of defense against threat actors. A firewall is essential for protecting the network from unauthorized access. Organizations should configure firewalls to prevent threat actors from accessing the cardholder data environment. Moreover, there should be strict access control for the cardholder data environment.

Requirement 2: Do not use vendor-supplied defaults for system passwords and other security parameters.

Many systems shipped with default passwords that are easily available on the internet. Threat actors could easily bypass the security of the systems or pose as authorized individuals.

2. Protect Cardholder Data

Requirement 3: Protect stored cardholder data.

Organizations must encrypt all the cardholder data using industry-accepted algorithms like AES-254, RSA 2048, etc. In simple, cardholder data must be stored in an unreadable format. Sensitive authentication data(SAD) such as CVV and PIN should not stored after authorization. Moreover, organizations should store the cardholder data unless there is a need in terms of legal, regulatory, or business.

Requirement 4: Encrypt transmission of cardholder data across open, public networks.

Cardholder data sent over public networks must be encrypted using strong protocols to prevent interception by attackers.

3.Maintain a Vulnerability Management Program

Requirement 5: Use and regularly update anti-virus software or programs.

To protect against malware and various threats from cyber criminals, organizations must deploy anti-virus solutions on all systems, including mobile devices. These anti-virus software must be updated regularly to avoid viruses being slipped through it.

Requirement 6: Develop and maintain secure systems and applications

Organizations should keep all their systems and applications secure to defend against threat actors exploiting vulnerabilities. This includes patching the software and applications promptly, reviewing source code for flaws, etc.

4.Implement Strong Access Control Measures

Requirement 7: Restrict access to cardholder data by business need to know.

Accessing cardholder data should be based on role-based access control(RBAC), which gives access to cardholder data and systems based on the needs. Every access to cardholder data must be verified thoroughly.

Requirement 8: Identify and authenticate access to system components

Users with access to cardholder data and the system should have a unique ID, and their activities and login events should be tracked and monitored. The user must also use strong passwords and two-factor authentication(2FA).

Requirement 9: Restrict physical access to cardholder data.

Physical access to cardholder data must be tightly controlled. This includes restricting access to data centers and server rooms that house cardholder data. Organizations are required to use video cameras and electronic access control to monitor the entry and exit doors of the data center. The recordings and access logs should be maintained for a minimum of 90 days.

5.Regularly Monitor and Test Networks

Requirement 10: Track and monitor all access to network resources and cardholder data.

Cardholder access points are connected to physical and wireless networks, making it easier for cybercriminals to intercept the data. PCI DSS prevents this by requiring organizations to regularly monitor their networks for any security gaps. This requirement also asks organizations to implement real-time monitoring.

Requirement 11: Regularly test security systems and processes.

To ensure the effectiveness of the security measures implemented, organizations must conduct regular security testing.This includes

  • Scanning all external IPs and domains exposed to the cardholder environment by a PCI-approved scanning vendor at least every quarter.
  • Conducting internal vulnerability scans at least every quarter.
  • Identify all authorized and unauthorized wireless access points for every quarter at the latest.

6.Maintain an Information Security Policy

Requirement 12: Maintain a policy that addresses information security for all personnel.

The final requirement for PCI DSS compliance is to develop and enforce a strong information security policy. This policy should be updated or reviewed yearly and sent to all employees. Moreover, as per the 12th requirement, organizations need to 

  • Perform annual risk assessment
  • Conduct user awareness training
  • Employee background checks while hiring
  • Incident and response management

Related Reading:10 Reasons to Update Your Oudated Data Security Policy

How to Achieve PCI DSS Compliance

Achieving PCI DSS compliance can be challenging, but the benefits are worth it.The steps involved include:

1. Determining Organization’s Compliance Level

PCI DSS compliance is asses based on the volume of transactions organizations perform annually. Larger businesses might face stringent assessments like on-site audits.

There are four compliance level

  • Level 1:6 Million Plus Transactions per Year.
  • Level 2:1-6 Million Transactions per Year
  • Level 3:20 thousand – 1 Million Transactions per Year.
  • Level 4:Less than 20 thousand Transactions per Year.

2. Conduct a Self-Assessment or Audit

Depending on the level, organizations need to complete a self-assessment questionnaire (SAQ). The self-assessment helps to map areas where organizations may not meet PCI DSS standards, while a formal audit provides an in-depth review of organizations’ payment systems.

3. Address Security Gaps

Once the gaps in PCI DSS compliance are addressed, organizations need to implement changes in networks, systems, and processes based on PCI DSS requirements. This might involve configuring firewalls, upgrading security software, encrypting data, or deploying access control like RBAC, as mentioned earlier.

4. Submit Compliance

Once Compliance measures are in place, organizations need to submit appropriate documentation to the card banks. This includes submitting an SAQ, attestation of compliance, or providing evidence for an on-site audit.

Conclusion

PCI DSS compliance is critical for payment security, as the sophistication of cyberattacks and the rising frequency of data breaches in the financial sector. By being PCI DSS compliant, organizations can protect sensitive information, mitigate the risk of massive fines from governments, and safeguard their reputation. While achieving compliance is costly, the benefits outweigh the costs.