If you accept credit and debit card payments in your business, PCI-DSS compliance is a big deal. An even bigger deal is when your payment processor charges a PCI non-compliance fee. Being non-compliant with PCI-DSS protocols is not only expensive, but can cost your business sales, customers, and reputation. Keep reading to learn more about PCI compliance, PCI non-compliance fees, and what you can do to avoid them.
What is PCI Compliance?
Being PCI compliant means your business to the Payment Card Industry Data Security Standards (PCI DSS), which are a set of security standards created by major credit card companies to protect against credit card fraud. These standards apply to any organization that accepts, transmits, or stores credit card information.
PCI Non Compliance Fee Table of Contents
Compliance is mandatory for merchants and service providers that process credit card transactions. Failure to comply with these standards can result in fines or the loss of ability to accept credit and debit card payments. The PCI DSS includes requirements for things like network security, data encryption, and regular security assessments.
Who Created PCI Compliance?
PCI compliance was created and is monitored by the Payment Card Industry Security Standards Council (PCI SSC). The council comprises major credit card companies, including American Express, Discover Financial Services, JCB International, Mastercard, and Visa Inc. These companies created the PCI Data Security Standards (PCI DSS) to help protect against credit card fraud. Additionally, PCI compliance was created to ensure that merchants and service providers who process credit card transactions maintain a secure environment.
The first edition of PCI compliance was released in December of 2004, with an edited version released in 2006, and subsequent versions intermittently after that. The council was also formed in 2006 to manage the ongoing evolution of the Payment Card Industry Data Security Standards (PCI DSS) and related standards.
What is the Purpose of PCI Compliance?
PCI compliance aims to protect against credit card fraud by ensuring that merchants and service providers that process credit card transactions maintain a secure environment. PCI compliance requires businesses to follow the Payment Card Industry Data Security Standards (PCI DSS).
These standards provide a framework for protecting consumers’ sensitive credit card information, including requirements for network security, data encryption, and regular security assessments. By following these standards, businesses can help prevent credit card fraud and protect their customers’ sensitive information.
What is a PCI Non-Compliance Fee?
A PCI non-compliance fee is a penalty that may be imposed on a business that does not comply with PCI DSS. These fees can be imposed by credit card companies, payment processors, or acquiring banks.
They are often charged in addition to any fines or penalties imposed by regulatory bodies. The fees can vary depending on the company imposing the penalty and the severity of the non-compliance. For example, a company that can demonstrate it has taken steps to become compliant may face a lower fee than one found to be completely negligent and non-compliant.
Non-compliance fees can be costly, including monthly payments, chargeback fees, and fines. Some companies also charge assessment fees for performing the compliance check, and additional fees for any follow-up assessments that may be required. It is important for merchants and service providers that process credit card transactions to be aware of the potential for non-compliance fees and to ensure they comply with the PCI DSS to avoid these penalties.
How Much are PCI Non-Compliance Fees?
The amount of a PCI non-compliance fee can vary greatly depending on the company imposing the penalty and the severity of the non-compliance. The fees can be imposed by credit card companies, payment processors, and/or acquiring banks.
PCI non-compliance fees can range anywhere from $100 – $1,000 per year, depending on the level of non-compliance and the number of transactions processed by the business. For example, a small business that processes a low volume of transactions may face a lower fee than a large business that processes a high volume of transactions. This is typically based on the level of risk involved in the merchant’s card processing.
It is essential for merchants and service providers that process credit card transactions to be aware of the potential for non-compliance fees and to ensure that they comply with the PCI DSS to avoid these penalties. It’s also important to mention that the fines can be much higher if there is a data breach, and that will depend on the jurisdiction and the type of breach.
How Often is a PCI Non-Compliance Fee Charged?
The frequency of a PCI non-compliance fee can also vary depending on the company imposing the penalty and the severity of the non-compliance. For businesses that are found to be non-compliant with PCI DSS, fees may be charged on a monthly, quarterly, or annual basis until compliance is achieved.
Companies that are found to be non-compliant for the first time may be given a grace period to become compliant before the fees are imposed. Repeat offenders may face more frequent or higher fees.
It’s important to mention that in addition to the non-compliance fees, businesses may also face fines, penalties, and other costs associated with a data breach. These costs can be significant and will depend on the jurisdiction, type of breach, and the level of negligence.
How to Avoid PCI Non-Compliance Fees
To avoid PCI non-compliance fees, merchants and service providers that process credit card transactions should ensure they comply with the PCI DSS.
Here are some steps that can be taken to achieve compliance and avoid non-compliance fees:
- Understand the requirements: The first step in achieving compliance is to understand the requirements of the PCI DSS. The council provides merchants and service providers with detailed guidance on how to meet the standards.
- Self-Assessment Questionnaires: Use the appropriate Self-Assessment Questionnaires (SAQ) to assess the compliance of your environment. This will give you a clear understanding of what must be done to meet the standard.
- Implement security measures: Implement the necessary security measures to protect credit card data, such as firewalls, intrusion detection and prevention systems, and encryption. Your payment gateways, card terminals, and router must all be encrypted. You should also protect your network and hardware with firewalls.
- Regularly monitor and conduct penetration tests: Regularly monitor and test the security of your systems to detect and prevent any vulnerabilities or breaches. You should also monitor any PIN devices for skimming software and other concerns.
- Report compliance: As required, report your compliance status to your acquiring bank, payment processor, or other relevant parties.
- Maintain compliance: Maintain ongoing compliance by regularly reviewing and updating your security measures to ensure they are up-to-date and effective.
By following these steps, merchants and service providers can help ensure they comply with the PCI DSS and avoid non-compliance fees. Additionally, they can help prevent credit card fraud and protect their customers’ sensitive information.
Conclusion
PCI non-compliance fees are much bigger than just a series of payments your business must pay. They could also indicate a potential threat to all of your customers. Avoiding PCI non-compliance by remaining PCI DSS compliant will save you some cash and protect your customers and your business from bigger liabilities.
