PCI Non-Compliance Fees: How to Avoid Paying Unnecessary Fines

Don’t feel too picked on. Everyone is subject to fines, from professional athletes to people who like to drive slow in the left lane.

The same goes for businesses that operate online. When companies process and collect payment details for credit and debit cards, they’re subject to Payment Card Industry Data Security Standards (PCI DSS).

As a business owner, understanding PCI compliance is crucial. Organizations that process and transmit credit card details must adhere to PCI compliance standards to avoid hefty PCI non-compliance fines and charges. These PCI non-compliance fees serve as a reminder to encourage companies to become PCI compliant and maintain that compliance over time.

Lucky for you, we’re here to help out. Let’s dive into PCI non-compliance fees and how to avoid them.

What is a PCI Non-Compliance Fee?

A PCI non-compliance fee is an amount charged by payment processing providers when a business fails to comply with the PCI DSS. The PCI Security Standards Council was introduced by the major credit card networks to implement data security policies across the industry. As a business, you must ensure that you meet these predefined PCI compliance standards. Failing to do so can result in PCI non-compliance fees that can range from $5,000 to $500,000, depending on the severity of the violation.

Now the question is – how can you avoid PCI non-compliance fees?

Analyze Your Current PCI Compliance Level

As mentioned, PCI non-compliance fees vary depending on the merchant services provider responsible for your account. Your service provider will charge a monthly non-compliance fee until your account becomes PCI compliant. To avoid these costly penalties, you need to evaluate your current compliance level.

The first step is determining your merchant level, which is based on the volume of transactions you process. Remember, merchant levels can vary between credit card providers like MasterCard and Visa, each having different PCI compliance criteria.

Once you've determined your merchant level, you can identify the specific PCI validation requirements that apply to your business. Compliance often involves establishing and optimizing a secure network, implementing a vulnerability management program, protecting cardholder data, and maintaining a robust information security policy.

Steps to PCI Compliance:

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1. Use approved payment devices.

Only use payment devices that are certified and meet PCI compliance standards to ensure secure transactions and protect against fraud.

2. Utilize validated payment software.

Use payment processing software that has been verified for security to help your business stay PCI compliant and protect sensitive cardholder data.

3. Avoid storing sensitive cardholder data.

Don’t keep credit card information on your systems unless absolutely necessary, as this increases the risk of data breaches and can lead to PCI non-compliance fees.

4. Implement and maintain firewalls on all systems.

Firewalls act as a barrier between your network and potential threats. Regularly update and monitor them to prevent unauthorized access and maintain PCI compliance.

5. Ensure your wireless networks are encrypted and password-protected.

Secure your Wi-Fi with strong encryption and passwords to protect payment data from being intercepted, which is essential for PCI compliance.

6. Use strong, unique passwords for all systems and devices.

Strong, unique passwords help protect against hackers who may try to access your systems and steal cardholder data, keeping your business PCI compliant.

7. Regularly inspect devices to prevent unauthorized access.

Frequently check your payment devices for signs of tampering or unauthorized access, which is crucial to avoid violations of PCI compliance.

8. Train staff on PCI compliance and data protection.

Educate your employees about the importance of PCI compliance and how to handle payment data securely to prevent breaches and avoid penalties.

9. Adhere to the PCI Data Security Standards.

Follow all the guidelines set by the PCI DSS to ensure your business is protecting payment information effectively and avoiding PCI non-compliance fees.

How to Avoid PCI Non-Compliance Fees

The goal of PCI non-compliance fees is to motivate businesses to achieve and maintain PCI compliance. If you see a non-compliance charge on your payment processing statement, contact your processor immediately and request removal.

Achieving PCI compliance is often simpler than it seems. For many retail businesses, it can be as straightforward as completing a Self-Assessment Questionnaire (SAQ). eCommerce businesses might need to conduct quarterly network scans in addition to the SAQ.

To eliminate non-compliance fees, consult with your merchant services provider to identify any compliance issues. They can guide you through the steps needed to validate your PCI compliance. If you believe you were not properly informed about PCI non-compliance penalties, you can request a refund.

Select Your Merchant Services Provider Wisely

To avoid PCI non-compliance fees, ensure that your merchant services provider is PCI compliant. Speak with your payment processor to confirm their PCI compliance status. Choosing the right provider can help you achieve and maintain full PCI compliance, preventing unnecessary fees and saving time.

If you are new to PCI compliance, educate yourself through online resources or consult with a professional. By selecting a PCI-compliant merchant services provider, you can protect your business, save money, and provide a secure experience for your customers.

Frequently Asked Questions (FAQ) About PCI Compliance

1. What does PCI compliance mean?

PCI compliance refers to adhering to the Payment Card Industry Data Security Standards (PCI DSS), which are designed to protect cardholder data and ensure secure transactions. All businesses that handle credit card information are required to follow these standards to prevent data breaches and fraud.

2. What does PCI stand for?

PCI stands for Payment Card Industry. The PCI DSS is a set of security standards established by major credit card companies to protect cardholder data.

3. What are the 4 levels of PCI compliance?

The four levels of PCI compliance are determined by the number of transactions a business processes annually:

• Level 1: Over 6 million transactions per year.

• Level 2: Between 1 and 6 million transactions per year.

• Level 3: Between 20,000 and 1 million transactions per year.

• Level 4: Fewer than 20,000 transactions per year.

4. Is PCI compliance required annually?

Yes, PCI compliance must be validated annually. Businesses need to complete a Self-Assessment Questionnaire (SAQ) and may be required to conduct quarterly network scans, depending on their merchant level.

5. What happens if not PCI compliant?

If a business is not PCI compliant, it may face significant fines, penalties, and higher transaction fees. Additionally, in the event of a data breach, non-compliant businesses are more likely to suffer legal and financial repercussions.

6. How do I know if I need to be PCI compliant?

If your business processes, stores, or transmits credit card information, you are required to be PCI compliant. This applies to all organizations, regardless of size or the number of transactions processed.

7. Is PCI a mandatory federal compliance?

No, PCI compliance is not mandated by federal law, but it is required by the major credit card companies (Visa, MasterCard, American Express, Discover, and JCB). Compliance is enforced through agreements with payment processors and acquiring banks.

8. Who enforces PCI compliance?

PCI compliance is enforced by the major credit card companies through the PCI Security Standards Council. Additionally, acquiring banks and payment processors may enforce compliance requirements on merchants.

9. How difficult is PCI compliance?

The difficulty of achieving PCI compliance depends on the size of your business and the complexity of your operations. Smaller businesses with fewer transactions may find it relatively straightforward, while larger businesses with complex systems may require more effort.

10. What violates PCI compliance?

Common violations of PCI compliance include storing unencrypted cardholder data, failing to implement strong access controls, and not regularly monitoring and testing security systems. Any failure to adhere to the PCI DSS can be considered a violation.

11. Do I need to pay for PCI compliance?

Yes, there are often costs associated with achieving and maintaining PCI compliance. These costs can include fees for network scans, purchasing secure payment processing software, and potentially hiring consultants to assist with compliance.

12. Why do companies need to be PCI compliant?

Companies need to be PCI compliant to protect sensitive cardholder data, reduce the risk of data breaches, and avoid fines and penalties. PCI compliance also helps maintain customer trust and ensures the business can continue to process credit card transactions.