Securing Payment Card Data: A Comprehensive Overview of PCI DSS Compliance and Implementation

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Introduction

The advancing digital environment and growing interdependence of contemporary payment data has created the need for organisations to adhere to PCI DSS. The Payment Card Industry Data Security Standard (PCI DSS) is a set of security standards formed in 2004 by Visa, MasterCard, Discover Financial Services, JCB International and American Express. Governed by the Payment Card Industry Security Standards Council (PCI SSC), the compliance scheme aims to secure credit and debit card transactions against data theft and fraud. PCI DSS must be implemented by organisations that handle card payments, including merchants and processing companies. This is done to protect the clients and business associates trust. It is largely accepted that if PCI DSS is not adhered to, the financial fines, brand damage, and security breach of systems will follow.

This article therefore outlines the basic terms and components of PCI DSS with emphasis on its relevance as a good practice to ensure reliable transactions. It also examines the favourable and the unfavourable aspects of compliance with PCI DSS requirements while emphasising the changing nature of this standard with respect to cybersecurity.

PCI SSC and its Relation to PCI DSS

The PCI Security Standards Council (PCI SSC) is a global forum for the ongoing development, enhancement, storage, dissemination and implementation of security standards for account data protection. PCI SSC role is to enhance global payment account data security by developing standards and supporting services that drive education, awareness, and effective implementation by stakeholders. They achieve this with a strategic framework to guide their decision-making process and ensure that every initiative is aligned with our mission and supports the needs of the global payments industry.

Therefore, standards and regulations for the payment card industry data security are mostly governed by the PCI SSC through the PCI DSS, which is the comprehensive framework promoted by the PCI SSC, which was formed primarily to focus on the shoestring factors concerning the security of the payment card industry. Changes in the threat environment and new technology development are the drivers in institutional PCI DSS amendments, made by PCI SSC over time. Simply put, PCI DSS is prepared and enforced by PCI SSC, and PCI DSS is a standard which organisations put into place so that they comply with the PCI Security Standard and the guidelines provided regarding the security of payment data.

 Four Pillars of PCI SSC Strategic Framework      

1. Increase industry participation and knowledge

2. Evolve security standards and validation programs

3. Secure emerging payment channels

4. Increase standards alignment and consistency

   
   
   
   

Photo Credit: PCI SSC

PCI Compliance and PCI DSS Certification

Payment card industry (PCI) compliance is mandated by credit card companies to help ensure the security of credit card transactions in the payments industry. Payment card industry compliance refers to the technical and operational standards that businesses follow to secure and protect credit card data provided by cardholders and transmitted through card processing transactions. PCI standards for compliance are developed and managed by the PCI Security Standards Council.

The requirement for PCI compliance is included in the PCI DSS certification as it guarantees that any organisation dealing with cardholder data has the necessary provisions that will minimise the risk of data hacks and fraud. PCI DSS certification ensures the security of card data at your business through a set of requirements established by the PCI SSC. These standards include widely recognized best practices such as installing firewalls, encrypting data transmissions, and using anti-virus software.

Levels of PCI Compliance

PCI compliance is divided into four levels, based on the annual number of credit or debit card transactions a business processes. The classification level determines what an enterprise needs to do to remain compliant.

 Photo Credit: Imperva

·       Level 1: Applies to merchants processing more than six million real-world credit or debit card transactions annually. Conducted by an authorised PCI auditor, they must undergo an internal audit once a year. In addition, once a quarter they must submit to a PCI scan by an Approved Scanning Vendor (ASV).

It should be noted that almost all significant international retailers fall under this level, and Level 1 classification entails responsibilities unique to that level. Companies classified as Level 1 are required to engage external auditors who use a PCI-approved qualified security assessor (QSA).

The PCI audit will examine the company’s digital data security controls and physical access policies to ascertain compliance. Following the audit process, companies receive a Report on Compliance (ROC), which identifies areas for improvement and outlines the steps necessary to reach complete PCI-DSS compliance.

·       Level 2: Applies to merchants processing between one and six million real-world credit or debit card transactions annually. They’re required to complete an assessment once a year using a Self-Assessment Questionnaire (SAQ). Additionally, a quarterly PCI scan may be required.

Security requirements for a Level 2 merchant are generally less complex than Level 1. However, Level 2 organisations must still carry out the following :

1. Self-assessment questionnaire: Although external audits are typically not necessary,  Level 2 businesses are required to send the PCI-DSS Security Council a written self-assessment questionnaire (SAQ). The PCI SSC website offers SAQs, which differ based on the organisation’s compliance requirements.

2. Context-specific audits: In some cases, a Level 2 merchant may require an external audit. This is relevant if the company experienced a cyberattack or data breach within the last 12 months.

·       Level 3: Applies to merchants processing between 20,000 and one million e-commerce transactions annually. They must complete a yearly assessment using the relevant SAQ to indicate compliance with relevant PCI-DSS standards. A quarterly PCI scan may also be required while businesses are required to use authorised vendors to perform network scans on a quarterly basis. Additionally, they have to fix any security flaws the Approved Scanning Vendor (ASV) finds. Although it’s a smart security practice, Level 3 merchants are exempt from penetration testing requirements

·       Level 4: Applies to merchants processing fewer than 20,000 e-commerce transactions annually, or those that process up to one million real-world transactions. A yearly assessment using the relevant SAQ must be completed and a quarterly PCI scan may be required.

Specifically, It is not necessary for a Level 4 merchant to plan penetration tests or external audits. They are also exempt from submitting a Report on Compliance (ROC). Level 4 merchants’ duties are considerably less complicated as they consist of:

1. Quarterly network scans four times a year whereby Level 4 merchants are required to employ an ASV to scan their network.

2. Self-assessment questionnaires. All Level 4 companies must complete the self-assessment compliance form.

3. The Attestation of Compliance (AOC) gives the PCI-DSS council details about the merchant’s compliance plan and any prior data breaches.\

Levels of PCI Compliance (For Service Providers)

There are just two PCI levels for service providers, compared to four levels for merchants. Additionally, understanding their differences is a crucial component of PCI compliance.

 Photo Credit: Nordlayer

Level 1 Service Provider: Level 1 service providers process more than 300,000 credit card transactions annually. This category also applies to all providers processing more than 2.5 million American Express transactions. Requirements for Level 1 service providers include:

a.       External audits: A certified security assessor must be employed by providers to conduct an annual data security audit. A Report of Compliance must be used to present the findings.

b.      Scanning a network. ASVs are required to perform quarterly network scans for Level 1 organisations.

c.        Tests for penetration: Penetration testing must be done every year.

d.     Confirmation of compliance with PCI: An annual AOC must be completed by all Level 1 entities and submitted to the PCI SSC.

Level 2 Service Provider: Level 2 service providers process fewer than 300,000 credit card transactions every year (for Visa, Mastercard, and Discovery). This category also applies to companies processing fewer than 2.5 million American Express cardholder data transactions.

Level 2 service providers have the following duties:

a.     Surveys for self-evaluation: Each year, an internal security assessor is required to complete a self-assessment form. No outside input is necessary.

b.    Testing the network. Networks must be scanned by ASVs four times annually. Local network vulnerability scans are part of this. Additionally, yearly penetration tests are required.

c.      Certification of Attestation. Level 2 service providers are required to finish both an AOC and ROC. This gives authorities comprehensive knowledge about the data security posture of the company.

It should be noted that many Level 2 service providers actually decide to implement Level 1 controls. This is due to the fact that significant trading partners frequently require more stringent security protocols and certification.

PCI DSS Requirements: The PCI SSC has lined out twelve requirements for handling cardholder data and maintaining a secure network. The requirements set forth by the PCI SSC are both operational and technical, and the core focus of these rules is always to protect cardholder data.

Photo Credit: Imperva

• Secure Network

• Install and maintain a firewall configuration to protect cardholder data.

• Do not use vendor-supplied defaults for system passwords and other security parameters.

  
  

•  Secure Cardholder Data

• Stored cardholder data must be protected.

• Transmissions of cardholder data across public networks must be encrypted.

  
  

•  Vulnerability Management

•   Anti-virus software must be used and regularly updated

•  Secure systems and applications must be developed and maintained

  
  

• Access control

• Cardholder data access must be restricted to a business need-to-know basis

• Every person with computer access must be assigned a unique ID

• Physical access to cardholder data must be restricted

  
  

• Network monitoring and testing

• Access to cardholder data and network resources must be tracked and monitored

• Security systems and processes must be regularly tested.

  
  

• Information Security

• A policy dealing with information security must be maintained.

  
  

It should be noted that In order to adapt to the evolving online threat landscape, PCI DSS has undergone multiple versions since its inception. New regulations are added on a regular basis, but the fundamental guidelines for compliance have not changed.

Consequences of PCI DSS Non-compliance

1. Financial Penalties: Noncompliant organisations may face fines from credit card companies. The monetary amount may vary depending on the severity of noncompliance.

2. Loss of Cardholder Trust: Customers may no longer trust the organisation or provide them with sensitive data if non-compliance results in a security breach.

3. Legal Consequences: In countries where PCI DSS compliance is required by law, government agencies and regulatory authorities can prosecute organisations that violate PCI DSS requirements, resulting in complex legal consequences.

4. Data Breach Expenses: In the event of a data breach, the expenses of identifying and addressing a data breach, informing the individuals impacted, and the resolution process can increase costs.

5. Increased Transaction Costs: Transaction costs may rise due to non-compliance since non-compliant organisations may be subject to higher transaction fees or rates from credit card companies.

6. Loss of Merchant Account: A non-compliant organisation may have its merchant account suspended by acquiring banks or payment processors, significantly impacting the ability to accept credit card payments.

Benefits of PCI DSS Compliance

1. Prevention of Data Breach: The reduction of security incident risk is the most evident advantage of PCI DSS compliance and the main justification for its measures. Organisations strengthen the most frequent vulnerabilities that attackers exploit when they implement its standards, which include building firewalls, encrypting data, implementing an information security management system, and so on.

2. Enhancing Customer Trust and Loyalty: The public will be more comfortable utilising a company’s services if it can show that it takes information security seriously, which PCI DSS compliance may provide. A company’s reputation may even be enhanced if it reacts to an attack in a suitable manner, especially if it complies with PCI DSS Requirement 12, which outlines what needs to be done in the event of a security incident.

3. Avoiding Fines and Penalties: Penalties under the PCI DSS, in contrast to the GDPR (General Data Protection Regulation), mount up each month until the company complies. As a result, they can accumulate rapidly or else compel the organisation to implement its requirements in a hurry.

4. Fulfilling International and Security Requirements: PCI DSS compliance can show that your security procedures adhere to international requirements. Five of the largest payment card companies in the world developed the Standard’s requirements, and by complying with them, you join other reliable, global merchants.

In summary, PCI DSS is a vital framework for protecting payment card information, safeguarding customers and businesses from fraudulent activities and data leaks.; PCI DSS compliance not only reduces security risks but also increases confidence in online transactions, highlighting its continued importance in the constantly evolving cybersecurity landscape.