My Merchant Account Blog

PCI Compliance - A Review of Consumer Benefits

Wednesday, November 30, 2011

Credit cards are a must have for small and medium sized businesses today. Without them, businesses will lose out on higher revenue, improved customer service and overall faster growth. Unfortunately, with all these merchant account benefits comes the increased risk of fraud, which if not addressed properly, can negatively affect the financial position of your business.

Seven years ago, in 2004, MasterCard, Visa, Amex, Discover and JCB International developed a security council for implementing standardized security measures to reduce credit card processing fraud. The standards included the Data Security Standard, PIN Transaction Security Requirements, and the Payment Application Data Security Standard. This post will address the council’s successes and what the benefits have been for consumers and merchants since the council’s inception in 2004.

Procedures for Supporting a Secure Network

The security standards were one of the first changes that was made when the PCI council was created. The driving force behind the security standards was to protect credit card data from thieves and hackers. Some of the action items that were implemented was a more robust firewall for protecting data on the cloud and improving procedures for accessing password-protected information on private accounts. Testing is another procedure the PCI Council has implemented. They constantly examine their network for liabilities and look for ways to improve their protection over consumer data. The network is also monitored for weaknesses that may lead to a breach in the future. Overall, the council has successfully implemented new procedures and monitoring protocol.

New Security Measures for Protecting Credit Card Data

The transmission and storage of credit card data has been improved by the PCI council. The way they improved the transfer of data was by encryption so third parties cannot access the information. Over the last year, the number of online hackings have increased. If these procedures were not implemented when they were, credit card data would be at the mercy of organized crime.

Controlling the Way Data Flows

Business owners no longer have the same kind of access to credit card information as they used to. Data is now accessed on a need-to-know basis, which means there are processes the merchant must follow to access the information. Only employees who have permission will be able to pull data from the system. This measure was put in place to reduced employee fraud. After mentioning all these standards and procedures that the PCI council developed and implemented, it is important to examine what the real benefits are for the merchants. Below are a few examples of direct benefits that were incurred since the inception of the council.

Improved Consumer Trust Results in More Revenue

Plainly put, it is proven that consumer trust will result in higher revenue for a merchant. For this reason, it is important that all measures are taken to reduce fraud. This trust is most critical for e-commerce businesses, where fraud is most prevalent. Since the e-commerce industry is very competitive, it is important that a business owner take advantage of each opportunity to save money and build a customer base. With the security measures put in place today, credit card fraud should not jeopardize the success of a business.

Zero Merchant Risk

Without an EMV terminal (a terminal that complies with the PCI council) merchants are at risk of paying expensive fines if fraud occurs. Merchants may also be liable to pay investigators to identify the source of the breach. To avoid this unnecessary cost, merchants must become PCI compliant, or in other words, process with a chip and PIN terminal, and all the liability is eliminated. Unfortunately, many merchants believe they are PCI compliant but in fact are not. For example, 77% of hospitality merchants think they are compliant but in fact are not. This article should serve as a reminder why merchants should be PCI compliant and how much good the council has been for the credit card processing industry.

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