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What is PCI Compliance, and Why is It Important?

Debit and credit card payments are widely used today, offering convenience for customers and enabling businesses to receive payments quickly. But the downside of card transactions is the opportunity for data theft.

There were nearly 4,000 data breaches reported in 2020, compromising more than 37 billion records. The total number of incidents continues to increase. In fact, the Identity Theft Resource Center found that data breaches in the United States increased by 38% in the Q2 2021 compared to Q1 2021. Whether via a card reader, paper system, hidden cameras, or taps on your wireless network, cybercriminals are out to steal card information.

In a world where information can be so readily stolen, businesses and organizations must take data security seriously. If your company processes, stores, or transmits card data of any kind, it must comply with the Payment Card Industry Data Security Standard (PCI DSS). Below, we’ll discuss what PCI compliance means and five reasons it’s beneficial for both your business and your customers.

What Does PCI Compliance Mean?

In 2004, Visa, Mastercard, American Express, Discover, and JCB created a set of written guidelines for protecting card data. In 2006, the card companies created the PCI SSC (Payment Card Industry Security Standards Council), a governing entity that maintains all of the PCI requirements.

PCI isn’t actually a law; it’s a set of guidelines put in place by card companies to protect consumer privacy and improve consumer confidence. PCI is a list of 12 requirements that are considered the bare minimum for safeguarding cardholder information.

If your company accepts card payments of any kind, you have to comply with PCI, regardless of the size of the business. Whether you accept payments online, at a physical location, or over the phone, PCI still applies to you.

5 Reasons PCI Compliance Matters

PCI gives businesses yet another layer of compliance to worry about, but it can’t be ignored. Your business should focus on PCI compliance for these five important reasons.

Preserve Customer Trust

81% of customers say they need to trust a business before making a purchase. Following PCI requirements can significantly increase customer confidence and trust, which makes it easier for businesses to convert prospects into buyers. 

As we’ve seen with the Target and Experian data breaches, a single security incident can lead to a PR firestorm and consumer fury. A breach can lead to identity theft, lower credit scores, and other significant harm to consumers.

When you’re compliant with PCI, you significantly reduce the odds of a data security issue. This means you can focus on forging deeper customer relationships that lead to long-term, sustainable revenue.

Protect Your Internal Data

Hackers also want your business’ internal information. Whether it’s employee data or sensitive R&D information, PCI helps you lock down critical internal data, too. Remember, security is a win for everyone: PCI gives you guidance on how to protect both your physical and digital presence to protect your sensitive data.

Avoid Fines, Fees, and Lawsuits

On average, a single data breach in the U.S. costs businesses over $8 million., while the worldwide average is a smaller but not insignificant $3.86 million. PCI isn’t a law, but you’re still accountable for:

  • Fees and fines from consumer protection agencies

  • Fees and fines from card companies

  • Legal settlements with customers, employees, or vendors

PCI might not be a law, but card companies will charge you for failing to comply with their rules. This means you might pay higher transaction fees, pay for required audits and scans, or even lose your processing rights. Card companies are serious about this, and a single incident can significantly increase your fees.

PCI compliance helps you avoid the costs associated with data breaches. That means your business keeps more of its money where it belongs: in your pocket.

Prevent Problems with Common-Sense Best Practices

PCI guidelines standardize security protocols for all businesses. With 12 clear-cut requirements and in-depth guides, PCI will help you take action to protect card information.

The great thing about PCI compliance is that all of the requirements are best practices anyway. When you put PCI guidelines in place, you’ll prevent issues before they even happen, helping your organization prevent the losses and headaches that come with data breaches.

Balance Security with Convenience

Cash payments are inefficient for most businesses. It’s more convenient to accept card payments, but it can be difficult to do this safely. Fortunately, PCI compliance helps you give customers the ease of card payments with fewer security risks.

PCI compliance might feel like yet another checklist for your business to complete, but it’s essential to protect your business, employees, vendors, and customers. Lock down your payment systems with PCI’s guidelines to prevent PR disasters, save money, and boost customer trust.