Many online business owners will be familiar with the Payment Card Industry Data Security Standard (PCI DSS). The PCI DSS is relevant if you collect and store credit card information through your website. You may store credit card information for a variety of reasons, including to charge late fees or cancellation fees. In this article, we look at what the PCI DSS is and what you can do to ensure your business is compliant.

What is the PCI DSS?

The PCI DSS came about in 2004 after major credit card providers (like Visa and Mastercard) grew concerned about the sophisticated methods people used to hack payment details. The PCI DSS is a central standard, which governs the safe storage of credit card details, and acts as a means to limit fraud. 

The standard is not contained in the law in Australia, nor in other countries. However, credit card providers, like Visa and Mastercard, enforce compliance through their contracts. 

For example, Visa might have a contract with Westpac. If Westpac wants to use Visa’s payment system for its credit cards, it will need to agree to Visa’s terms, which stipulates how Westpac needs to:

  • protect cardholder data; and
  • monitor networks for breaches of cardholder information. 

How to Comply With the PCI DSS

It is crucial to understand how to comply with the PCI DSS if you collect or store credit card information.

There are twelve standards, spread across the following six categories:

  1. building and maintaining a secure network;
  2. protecting cardholder data;
  3. maintaining a vulnerability management program;
  4. implementing strong access control measures;
  5. regularly monitoring and testing networks; and
  6. maintaining an information security policy.

Card providers enforce compliance through their contracts with banks.

For example, if Commbank (or one of Commbank’s business customers) did not protect cardholder data, the card provider may impose a fine on Commbank. Commbank may either absorb this fine or pass it on to their customer. This customer may be a small business that stores credit card information. 

To check for compliance, businesses and banks can: 

The method of checking compliance will depend on the volume of credit card transactions within your business. For a high volume of card transactions, regular audits and scans are appropriate. For a small volume of card transactions, the self-assessment questionnaire will be appropriate.

Penalties For Non-Compliance

If you breach the standard, the credit card provider may impose a penalty on you or the bank. This penalty may be financial, or it might be the termination of the contract.  

An example of breaching the standard might be not maintaining a secure network on which you store credit card information

If you want to avoid having to comply with PCI DSS, you can outsource your payment collection to a payment gateway, like PayPal, which is already compliant. This option is likely going to be appropriate if you have a small business and do not want to bear the burden of ensuring you are compliant with the PCI DSS. 

Payment gateways exist to facilitate payment collection, so they have the required procedures and insurances. Further, users will generally recognise and trust payment gateways like PayPal and Stripe, which may make them feel more confident about entering their card details to make purchases.

Key Takeaways

The PCI DSS is a standard by the major credit card providers to protect themselves from credit card fraud and scams. Credit card providers build the PCI DSS into their contracts with banks and other organisations to promote compliance. The scheme mainly applies to banks and large financial institutions, but the obligations may flow down to merchants who collect and store credit card information. If you require any assistance with complying with the PCI DSS, contact LegalVision’s e-commerce lawyers on 1300 544 755 or fill out the form on this page.

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