For software companies with subscribers, Embedded Payments or integrated credit card processing is an important piece of any overall business model and growth plan. To ensure the customer experience during payment acceptance is standardized and secure, there are, of course, rules to be followed. Any business that stores, processes, or transmits credit card information is beholden to the requirements imposed by the Payment Card Industry Security Standards Council (PCI SSC) to protect cardholder data.
The PCI Data Security Standard (DSS) is a set of mandatory technical and operational requirements established and enforced by the major payment card brands who founded the Council including Visa, Mastercard, American Express, Discover, and JCB.
If you accept credit card payments, managing PCI compliance is a nonnegotiable responsibility — but with expert guidance and helpful resources, it can become a natural part of your company’s operations.
In this blog we’ll cover:
- The importance of PCI compliance management
- The consequences of mismanaging compliance obligations
- Common PCI compliance mistakes
- Resources to help you and your customers manage compliance
The responsibility of PCI compliance and why it matters
Ensuring compliance with PCI DSS requirements can be tedious work but it’s absolutely necessary for any business with a connection to payment cardholder data. Specifically for software companies and integrators of applications that store, process, or transmit card data, the requirements include the Payment Application Data Security Standard (PA-DSS) to help minimize vulnerabilities.
It’s important to understand that as with commerce trends, the requirements of the PCI DSS are always evolving, which can add a challenging layer to the responsibility of achieving and maintaining compliance. In fact, in March 2022, the PCI SSC released DSS version 4.0, the latest edition, which will go into effect in March 2024.
Not only do these requirements help to identify areas of weakness in order to keep your business and customer information safe, your compliance also demonstrates to your important stakeholders a commitment to maintain security and prevent the harmful impact of breaches. According to a research report by IBM and Ponemon Institute, the average cost of a data breach is $4.35 million — and the financial impact isn’t the only concern.
The consequences of not taking PCI compliance seriously
For companies large or small that choose to neglect the standards set by the PCI SSC, there can be real consequences. And considering the notable prevalence of data breaches, the threat can be hard to ignore. A 2021 Thales Data Threat Report found that 45% of U.S. companies had suffered a breach within the previous year. Let’s take a look at the risks and potential impact of a data breach.
Financial loss and penalties
In addition to the potential direct loss of capital and proprietary assets stolen, the PCI SSC can also slap on hefty fees for companies who aren’t PCI compliant and expose their business and customers to a breach.
Downtime and operational disruption
Dealing with a data breach can really bring things to a halt. Diverting resources to remediation efforts can take a toll on your overall business operations and take time and attention from your roadmap and aspirations.
Brand and reputation damage
Once you’ve opened your customers up to vulnerability and the potential for data theft, it can be hard for them to maintain any trust with you. If you’re making headlines for a data breach, you can expect it to harm your business, impact customer retention, and make growth more difficult.
Common PCI compliance mistakes and how to avoid them
There are certainly intricacies of PCI compliance that can make it challenging for companies trying to manage it on their own. Let’s review several of the most common compliance management mistakes made and how they can be avoided.
Losing focus on PCI management after achieving compliance
The problem: A PCI compliance audit is a comprehensive assessment of your company’s process for handling credit card data. It’s based on 12 technical and operational requirements that test 400 controls or procedures established by the PCI SSC. Successfully completing an audit is a rewarding accomplishment, but after achieving it, companies will sometimes lose sight of ongoing management, which can lead to erosion of the strong infrastructure you worked so hard to build.
How to avoid it: Plan to conduct internal audits annually, and not just for the sake of documentation. If possible, use the support of outside professionals who can help you catch blindspots, prevent mistakes, and provide guidance along the way.
Improperly defining scoping and overlooking key systems
The problem: According to the PCI SSC, scoping is the “process of identifying all system components, people, and processes to be included in a PCI DSS assessment.” In other words, your scope includes every part of your business that has any involvement in the handling or storage of credit card data. Incorrectly assigning systems, individuals, or assets as ‘out of scope’ can put businesses at risk of missing a weak spot and letting vulnerabilities go unchecked.
How to avoid it: Any system with a connection or communication path to the cardholder data environment is considered ‘in scope’ and should be assessed accordingly. With the help of expert guidance and scoping resources from the PCI SSC, you can improve your understanding of how to segment and evaluate systems of your business. To help you assess what may and may not be in scope for your business, reference this list as a starting point.
Making significant changes without documenting them
The problem: Notable changes to an environment or system that aren’t folded into consideration of PCI compliance can weaken your security infrastructure. These can include product upgrades, security updates, and other architectural modifications.
How to avoid it: Ensure there is company-wide alignment on how to properly classify and document changes that are deemed ‘significant’. Whatever major changes you do make to your infrastructure need to be accounted for in your PCI compliance evaluation.
Ignoring business segments outside of IT
The problem: Often regarded as the sole responsibility of IT teams, PCI compliance can sometimes be neglected by other units of a business that are actually involved with payment data at some level.
How to avoid it: This again depends on alignment across your business. Engage with leaders of every segment of your organization to ensure comprehensive consideration and evaluation of all systems that may be considered ‘in scope’ and potentially vulnerable to infiltration.
Misunderstanding the requirements of the SAQ
The problem: There are three parts to the PCI audit: 1) the Self-Assessment Questionnaire (SAQ), 2) the Attestation of Compliance (AoC), and 3) the Report on Compliance (RoC). The SAQ is a survey to be completed by companies handling credit card data, based on the adherence to requirements. There are several versions of the SAQ and the edition you’re required to complete depends on your business type. The AoC and RoC are the documents granted by a Qualified Security Assessor (QSA) that certify your compliance. Businesses that complete the wrong SAQ waste time and resources tracking down and compiling information, only to have an assessment deemed inapplicable. What’s worse is that system components may be left out of review if they’re mis-identified as ‘out of scope’ for evaluation.
How to avoid it: Ensure you know about the differences between SAQs and consult with an expert if you need help making a decision before you begin the undertaking.
Resources to help you and your customers manage PCI compliance
When you assess the potential for the risk of data breaches in today’s world of digital commerce, and evaluate the complexities of successful compliance management, it’s easy to see that PCI compliance isn’t a responsibility to be taken lightly. To tread the path confidently, find a payments partner that can guide you through the process by helping you reduce your PCI scope, minimize the burden of compliance management, effectively fulfill the requirements, and ultimately keep your business and customers protected.
Payrix is an Embedded Payments solution of Worldpay from FIS that offers secure payment acceptance, expert consultation, and PCI compliance solutions that help software companies effectively reduce scope, maintain compliance, and safeguard the customer experience by keeping cardholder data protected. For software companies interested in implementing payment facilitation as part of their overall payments strategy, Payrix is a leading PayFac®-as-a-Service partner that takes on the risk, underwriting, fraud, and compliance responsibilities.
To help software companies keep their customers PCI compliant, Payrix and Worldpay from FIS now offer SaferPayments, payment protection solutions for businesses. Offered as basic or fully managed services, features include:
- Powerful security tools
- Breach assistance
- PCI compliance management support
- Reduced PCI scope (if using point-to-point encryption)
- Always-on, expert support
To learn more about the options for effective PCI compliance management for your business and your customers, connect with us and give our demo a try.
