When it comes to online payments or secure data storage, companies may face many demands from industry regulators. Some of these requirements can be easily done, while others may cause some difficulties. To avoid many troubles related to industry rules it is worth paying attention to different sides of rules and their specifics, which is useful for a better understanding of the regulatory process and also provides businesses with the best possible ways in matching requirements.
Companies often implement different solutions to make transaction processing more efficient and safe, and also to provide a better customer experience. Here tokenization is one of the commonly used solutions, as it provides a company with both a higher level of security and benefits of PCI compliance, which allows avoiding penalties and fines from regulators, and helps companies to feel free about the protection of their systems and customers’ confidential information.
Demands, which should be completed by businesses that accept payments, are set by the Payment Card Industry. Also, these rules determine punishments and fees, which may be applied to the company in the case it’s not meet requirements.
As compliance with obligations is about costs, a company can be ordered to pay, it is worth understanding the topic to avoid misconceptions. There are some popular misinterpretations about PCI which we are going to consider.
Misconception #1
The law and PCI are the same
PCI standards may at first look like government legislation, but it’s not the law, it’s more about self-regulation within the field. These standards were set by the main players in the payment industry. In 2006, major card issuers came up with rules that companies should be compliant with if they accept payments.
Thus, the main things you should know are that being non-compliant with PCI demands is not about being jailed, it’s about being penalized by the industry with possible loss of access to process payments.
Misconception #2
PCI standards don’t apply to me
The main thing you should know about the industry regulation is that if businesses accept payments, which also means users’ data storing and transferring, PCI standards will apply to them. The business may be represented by a local cafe, mobile app, or even a big retail service, which usually means different reporting methods about compliance, but the key thing here is that each of such types of businesses should meet PCI standards.
Misconception #3
Businesses are penalized by the government
As mentioned, PCI standards are not the same as the law. Thus, if the government is not involved, then who can fine a company for non-compliance with requirements? The answer is the company’s acquiring bank. Here we can see some sort of hierarchy when it comes to regulations.
An acquiring bank processes your payment flows, thus in case there are some security problems on your side, your bank would be the first one to be penalized by card issuers. That’s why acquiring banks always check reports and are interested in whether your business is following industry rules. The scheme looks the next way, fines and penalties from card issuers are passed to the acquiring bank and then these bills come to you to be paid.
Misconception #4
PCI is the security department’s responsibility only
Even though at first it might seem like a company’s IT department should be concerned about being compliant with standards, in reality, all company’s departments should have at least basic knowledge of regulatory requirements, especially those who have contacts with payment processes and cardholder information. Thus, meeting PCI demands is not only about the technical things, it is more about the whole concept a company should follow.
The reason behind this is that many frauds are possible not only through the system’s insecurities but human factors as well. For example, criminals can mislead customer service employees to get access to private information. Thus, it is necessary to ensure that each of the company’s departments has an understanding of how to keep and work with sensitive user data in a proper way.
Misconception #5
Following requirements only is enough to be compliant
Obviously, meeting PCI demands is mandatory for each type of business, which relates to the payment industry. However, implementing regulatory standards is only halfway. To be fully compliant with PCI requirements, a company should pay special attention to its documentary. This means having actual security reports, as well as making system tests and checks, which can be shared with the company’s acquirer bank to prove that your business matches standards, and meet up-to-date security demands.
By providing both standards implementation and official security reports, a company can feel free about the PCI compliance process, thus avoiding possible fines and penalties from industry regulators.
Misconception #6
The company can fully delegate its responsibility to third-parties vendors.
Among the most popular misconceptions is that companies may sometimes think that if they hire a vendor to come up with solutions they are no longer responsible for industry rules matching. But in reality, it works differently. In 2013, the industry regulator updated the terms, which set that businesses have their part of the responsibility to meet demands. Yet, this means that companies can hire vendors and work together as partners to fulfill all the demands.
Another important thing is that a company, before signing the contract, should define which part of the terms is its responsibility, and which of these can be accomplished by the third-party vendor. Also, it is worth avoiding vendors which claim to take all the responsibility from your side.
You may put all the efforts to meet requirements on your own or share these with a third party. The main thing to remember is that matching industry demands, first of all, is your responsibility, as you are the one who will pay if something goes wrong.
VGS is a tokenization vendor, which can provide you with quality solutions for your business, which can help you to reduce the cost to meet demands, thus allowing you to be on the list of PCI compliance companies.
