Do I Need To Be PCI Compliant?

It’s complicated, but nevertheless if your business (be it sole trader, small business, national or a global entity) is processing, storing and/or transmitting credit card information I would recommend you continue reading.

But first off I am going to make a promise to you.

I promise that this post will not contain any nerdy technical terms or go into detail on the standard’s requirements or any debates about the interpretation of said requirements. This post is for business owners seeking to understand if they need to be “PCI compliant” and if so what to do next.

And before I continue I need to mention that this post is for merchants only. If you believe your business is a “service provider” (for example, your customers are other merchants that you store, process, or transmit cardholder data for) then wait for my next post which will cover PCI DSS service providers.

So, What is PCI DSS?

So, let’s begin with first making sure that we are on the same page with the term “PCI”. The Payment Card Industry Security Standards Council (PCI SSC) is tasked with managing the Payment Card Industry Data Security Standard (PCI DSS) which is commonly referred to as “PCI”. There is in fact more than just the PCI DSS standard that the PCI SSC is required to manage but at a guess you would not be reading this post if you were looking for information on those standards.

The PCI DSS standard is comprised of 12 high-level requirements. Each requirement addresses a component of securing credit card data. For example, Requirement 1 addresses the requirement to have a firewall installed within certain parts of your computer network, Requirement 2 looks at ensuring any vendor defaults for accounts or configurations are changed and Requirement 12 deals with policy and standards among other things. Each of the 12 requirements are then broken down into sub-requirements which address specific items for compliance.

At the time of writing this post there are over 240+ requirements in total for PCI DSS 3.2! Don’t be worried yet. Depending on your business, not all requirements may be applicable to you.

The table below lists out the 12 high-level requirements.

Requirement 1Install and maintain a firewall configuration to protect cardholder data
Requirement 2Do not use vendor-supplied defaults for system passwords and other security parameters
Requirement 3Protect stored cardholder data
Requirement 4Encrypt transmission of cardholder data across open, public networks
Requirement 5Use and regularly update anti-virus software on all systems commonly affected by malware
Requirement 6Develop and maintain secure systems and applications
Requirement 7Restrict access to cardholder data by business need-to-know
Requirement 8Assign a unique ID to each person with computer access
Requirement 9Restrict physical access to cardholder data
Requirement 10Track and monitor all access to network resources and cardholder data
Requirement 11Regularly test security systems and processes
Requirement 12Maintain a policy that addresses information security

To reach PCI DSS compliance you must meet each of the requirement’s objectives that are applicable to your scope of compliance, which I will cover later in this post.

PCI DSS is an annual reporting process. Even though you only have to report on your compliance annually, you’re expected to stay compliant throughout the year.

Why Do I have to be “PCI DSS Compliant”?

In short, PCI DSS is here to help reduce the chances of credit card data being stolen and that includes your credit cards!

PCI DSS is important and much needed in helping businesses improve their IT security. Almost every day there is a major breach of personal information including credit card data reported in the news. I would not be surprised that many of you have had your personal information including bank details and credit card data stolen due to the failure of a business’s IT security. When your business becomes PCI DSS compliant you are helping reduce the changes of your customers’ data being stolen – that’s good for business right?
Also, it’s important to note that if you do suffer a breach that results in credit card data being stolen, you could face a number of consequences, such as:

  1. Your acquiring bank may pass on any fines it receives from the credit card brands and other interested parties and/or
  2. Your acquiring bank may stop processing credit card transactions from you and/or
  3. Your acquiring bank may demand that you undertake a very costly forensic examination to determine how the breach occurred.

Often the cost imposed on your business if you suffer a breach without being PCI DSS compliant is far more than the cost to become PCI compliant in the first place.

Being PCI DSS compliant will not make your business become 100% secure but it will help reduce your risk to a breach.

Who or What is Enforcing PCI DSS Compliance?

The PCI SSC has no power to enforce a business to become PCI DSS compliant – that’s not their mandate. However, if you accept credit cards as payment, be it accepting a physical credit card at your shop, over the phone, via email, via snail-mail, online such as your ecommerce site or any other channel, your bank that processes the credit card transaction on your behalf (called an “acquiring bank”) will often include a contractual requirement for you to be PCI DSS compliant. If you refuse to become compliant the acquiring bank will often show you the door.

Why does the acquiring bank care so much about my PCI DSS compliance?

Great question!

The acquiring bank carries the risk of being fined by the credit card brands that formed the PCI SSC if your business suffers a breach of credit card data. So, in more cases than not your acquiring bank will expect that you become PCI DSS compliant.

How do I know what PCI DSS requirements I need to meet?

As a QSA my advice is to contact your acquiring bank and ask them. As mentioned above it’s your acquiring bank that is fined by the payment card brands if your business suffers a breach resulting in credit card data being stolen so they are accepting the risk.

I could cover the difference between a Report on Compliance “RoC” and the different Self-Assessment Questionnaires “SAQ” but I do not want to lead you up the wrong path.

One thing I will say is unless your business is considered a “Level 1” (which means your business processes more than 6 million card transactions per annum, or you’re a global merchant, or if under mastercard, a merchant that has suffered a hack / attack that resulted in account data compromise), then your acquiring bank will more than likely ask you to complete one or more Self-Assessment Questionnaires.

Again, contact your acquiring bank and ask them.

10 Tips for Improving Your Chances at PCI DSS Compliance

I have provided below a few tips that should help your business on the road to PCI DSS compliance. These tips are general IT security tips so regardless of where you are with your PCI DSS compliance the tips below will help improve your IT security regardless. NOTE! These tips do not guarantee PCI DSS compliance on their own!

  1. Respect credit card data. Have a long-hard think about the reasons why you need to store credit card data after using it for a transaction. The key recommendation of PCI SSC is if you don’t need to kept credit card data then don’t! Not storing credit card data after a transaction will reduce your PCI DSS compliance requirements by quite a bit.
    1. If you store credit card data electronically make 100% sure that only people who need to have access to that data do and that the systems storing the credit card data are well protected from un-authorized access. There are strict requirements around storing credit card data which includes the use of encryption-at-rest. If this sounds too hard then consider having your payment gateway provider store the credit card data and your business uses a payment token instead. For more information on reducing your PCI DSS scope read this post-> How Can I Reduce My PCI DSS Scope?
    2. If credit card details are written down on paper and need to be stored for a period of time ensure that the storage container can be locked and the key to unlock the container is only accessible to authorized users. Do not leave credit card details unprotected at any time such as lying around on post-it notes.
    3. If any of your systems are transmitting credit card data for example from your ecommerce site to your payment gateway ensure the transmission is encrypted. For the ecommerce site that normally means using only HTTPS protocol. Ensure that “TLS 1.2” protocol is used not “SSL” or “TLS 1.0” or “TLS “1.1”. Use this free and very helpful tool to understand what protocols is currently used by your systems.
  2. Record all systems and users that process, store or transmit credit card data. Once all systems and users have been recorded see where you can reduce how many users and systems need to “touch” the credit card data. The less systems and users that “touch” credit card data the better for you reaching PCI DSS compliance.
  3. Implement a patching schedule for your IT systems to ensure the latest patches are installed in a timely manner. For critical patches ensure the patch is applied less than one month from the patches release. If you have any operating systems that are end-of-life such as Windows XP or Windows 2003 Server focus on upgrading or replacing the operating systems ASAP. No patches are available to the general public which means these systems are at a much higher risk of being attacked.
  4. Only grant local admin access to operating systems to users who really-really need it.
  5. Ensure all computers have anti-virus installed and a local firewall. Ensure that the anti-virus signatures are kept up-to-date, and that the anti-virus software and firewall cannot be turned off or configured without authorization.
  6. Ensure all users have strong passwords and that they don’t share their computer accounts with others. Stop any use of computer accounts that are used by more than one user (normally called “shared account”). Every user should have their own computer accounts which allows you to better track the actions of users within your environment.
  7. Change all vendor supplied default accounts/passwords and any configurations that could make the device vulnerable to attack. Search in google for “default password for ” and add the devices name. You will be surprised at the number of devices which are Internet facing that have the default username and password active!
  8. Look at placing a firewall at the perimeter of your business environment to control what traffic flows in and out of your business. Only allow traffic that you consider a business need to flow in and out of your business. You may also need additional firewall(s) between the “perimeter” firewall and where card data is transmitted, process and stored – you may need help with this from a network IT professional.
  9. Record all service providers that have access to your IT systems including what level of permissions they have, what user accounts they use to access your environment, why they have access to your environment. It’s very important that you have awareness and control over all service providers who have access to your IT systems. The number of IT security breaches caused by service providers is staggering.
  10. Implement a basic IT security education program for your users to be conducted when a person starts and annually. The program should cover IT security basics such as how to create strong passwords, how to identify phishing/social engineering, how to protect credit card data, thinking before clicking on an email attachment, watching out for tail-gating etc. Write a IT Security policy that your users can refer to when required. The policy should cover all things IT security within your business from patching schedule, approved software, security configurations for computers such as anti-virus/local firewall, remote access, Internet usage, enforcement etc.

So let’s recap.

  1. PCI DSS is a standard that comprises of 12 high-level requirements addressing the security of credit card data. Each of the 12 requirements is then broken down into sub-requirements addressing a particular security objective.
  2. If you’re a merchant that accepts as payment credit card data be-it physically accepting cards at your shop, over the phone, via email, via snail-mail, via ecommerce or any other channel, more than likely your acquiring bank will expect you to be PCI DSS compliant.
  3. Depending on how you accept credit cards and your level of credit card transactions, not all of the 240+ requirements will apply to your business to reach PCI DSS compliance.
  4. To become “PCI DSS” compliant you must meet the “testing procedures” for each requirement that is applicable to you. For example, if the requirement to have a firewall installed within your network is applicable to your business then to meet that requirement you need to install a firewall in the way required by PCI DSS.
  5. Reporting on PCI DSS compliance is an annual process. But compliance should be part of the way you run your business every day.
  6. Contact your acquiring bank and ask them what they require you to provide to demonstrate your compliance. They’ll likely be able to tell you what forms to submit and whether you can fill it in yourself or need to get a QSA to help.
  7. If you accept credit cards, do not ignore PCI DSS! If you do and your business suffers a breach resulting in credit card data being stolen, there is a very high likelihood that your acquiring bank will be knocking on your door and it won’t be an enjoyable experience!

PCI DSS Resources

PCI DSS Website ->
PCI DSS Official Document Library->

Author Details

Marc is a PCI QSA at Confide and has been working with the company since May of 2016. Confide is New Zealand’s Premier Security Assessment Company for the Payment Card Industry.

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