E-commerce businesses have become popular because of their convenient and cost-effective operations. With one click of a button, customers can order what they wish and receive it at their doorstep. But the popularity of e-commerce has also led to concerns with how customer data is handled. Most online transactions involve access to customer names, addresses, credit card numbers, and other sensitive information. If this data were to end up in the wrong hands, your business would suffer significant consequences. This is why keeping customer data safe should be a critical concern for your e-commerce company.
PCI DSS (Payment Card Industry Data Security Standards) is a set of data security standards that are put in place by major credit card companies. These standards govern multiple aspects of credit card payment processing- including network security, external audits, and credit card information storage. Remaining compliant will enable your e-commerce business to avoid numerous cybersecurity threats that target customer data.
Understanding PCI DSS
If your business handles any payment processing, you’ll need to understand PCI-DSS and comply with its requirements. You can think of PCI compliance as industry-wide regulations meant to protect customer payment data. Due to the sensitivity of credit card information, major credit card companies came together to establish basic rules for protecting their customers.
PCI compliance is about meeting a set of minimum standards when handling credit card payments. The framework that you’ll need to have in place will vary by the size of your business, nature of operations, and how many credit card payments you process in a year. As an e-commerce business, you’ll need to be aware of (and comply with) PCI DSS.
The volume of credit card payments is perhaps the most essential aspect of PCI compliance. There are four primary levels of PCI compliance guidelines, with Level 1 being the highest and Level IV being the lowest. The level of compliance that your e-commerce business falls under will depend on how many transactions you process in a year.
Level 1: Covers companies that process over 6 million transactions in a year. As the highest level of compliance, level 1 includes a combination of external audits, installing secure applications, and encrypting sensitive data.
Level 2: covers 1-6 million transactions in a year. Compliance requirements are mostly similar except for an external audit being required (a self-assessment questionnaire is used instead).
Level 3: Level III of compliance covers any business that’s handling $20,000- $1 million in digital transactions every year. Level III compliance guidelines typically include many mid-sized and small e-commerce businesses.
If your company falls under this category, make sure you’re compliant with PCI guidelines. For example, you can expect to have requirements in place for network security, controlling data access, and regularly monitoring your digital environment.
Level 4: And finally, Level IV of compliance covers businesses that process less than $20,000 in digital transactions annually. Level IV compliance includes having firewalls in place, secure software, and applications, vulnerability management, among other measures.
Why Is PCI DSS Important For eCommerce Businesses?
As an e-commerce company, you may find PCI compliance as an annoying step that reduces revenue. However, being non-compliant comes with many different risks. Hackers are increasingly targeting e-commerce businesses that don’t take data security seriously.
In fact, software bots can be used to scan your online store and take advantage of ineffective firewalls, unsecured networks, and unencrypted credit card data. Having customer data hacked could result in significant financial loss, reputational damages and costly fines from regulatory bodies.
But PCI compliance isn’t just about avoiding risks. This framework can also help you streamline your company’s operations, attract more customers, and generate more revenue. For example, having robust firewalls and secured networks will boost customer confidence in your store.
A recent PWC study revealed that customers hold much of the responsibility for securing data in the hands of businesses. Because 69% of consumers believe that businesses are vulnerable to data breaches, they now carefully pay attention to how their sensitive data is being handled. Being compliant with PCI guidelines can be used as a marketing tool to reassure customers that you’re taking data security seriously.
Compliance also makes your e-commerce business better prepared for emergent regulations such as California’s CCPA and the EU’s GDPR.
How To Implement A Plan For PCI DSS Compliance In Your eCommerce Business
Understanding all the specific requirements of PCI DSS can be frustrating- especially for small businesses. This is why you should develop a framework for compliance in advance. Such a framework should be based on your risk environment, which makes carrying out a thorough risk assessment necessary for your e-commerce company.
Understanding the specific risks you face will make breaking down compliance guidelines much easier.
As part of compliance, make sure you carry out the following steps:
Start with developing a secure network
The most common strategy that hackers use to access sensitive data is network hacking. This is why e-commerce businesses should ensure that they develop secure networks from the very beginning. A secure network involves many different components, including firewalls, secure passwords, and encrypted network access.
Furthermore, any equipment provided by vendors should have non-default passwords. When it comes to firewalls, make sure your business develops rules that filter out any unknown traffic sources.
Only authorized personnel should be allowed to access cardholder data.
To prevent breaches, make sure your physical devices, data storage equipment, and payment processing systems are only accessible by the right employees. Hackers often identify weak points to access and breach sensitive payment data.
Encrypt credit card data (and store as little as possible)
In addition to access control, make sure all cardholder data is encrypted during transit. PCI guidelines require encryption when any cardholder data is being sent across public, unsecured networks.
Furthermore, any company that stores such data is also required to encrypt it using the latest TLS standards. Storing cardholder data should be kept to a minimum.
Review your anti-virus program
All company systems should have anti-virus software running in the background. This helps you detect and repel hacks before they affect your operations.
And because hackers come up with new strategies for accessing sensitive cardholder data, you should regularly update your anti-virus and anti-malware tools.
Have PCI requirements engrained in company policy
By making data security a central aspect of your e-commerce business, you can take a proactive approach against breaches. PCI also has requirements in place for risk assessment, response, and policy development.
In a nutshell, you should establish and implement a data security policy in your e-commerce business. You should also have clearly defined roles for your team so as to establish accountability across your business.
Most levels of PCI compliance (Levels I-III) require you to fill out a self-assessment questionnaire with regards to cardholder data security. You can make this requirement easier to fulfill by testing your systems regularly.
Testing gives you a real-time overview of your data security procedures, which is critical to avoiding common risk factors.