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PCI Compliance for Small Businesses: What You Need to Know

December 1, 2021

As a small business owner or operator, you have plenty on your mind - tracking and paying taxes, managing profits and losses, building and growing your product, maintaining the cash flow you need, protecting your business’s legal needs, and much more. In the flurry of regulations and best practices, PCI compliance often falls through the cracks, but this can be a costly mistake.

Chances are that your small business needs to be PCI compliant, but where do you begin? Consider this to be your crash course in PCI compliance for your small business.

What is PCI compliance? A brief introduction

Before we dive in, let’s make sure everyone is on the same page. PCI compliance refers to complying with the PCI DSS: the payment card industry data security standard. This is a set of 12 security measures you need to take to protect customers’ payment data when they make purchases with your business.

Do small businesses need PCI compliance?

There is a common misconception that some businesses are too small to need PCI compliance, but that isn’t the case. No business is too small for PCI compliance. It’s a matter of how your customers pay you.

Any company or individual that collects, processes, transmits, or stores payment data needs to be PCI compliant. In other words, if cardholder data passes through your system or your servers (including cloud servers) at any point, you need to follow the PCI standards. This includes businesses that implement third-party payment processing solutions like Stripe and Paypal.

Why does my business need PCI compliance?

PCI compliance can be a complicated, tricky, and expensive process, but it will seem like a cakewalk compared to the potential consequences of ignoring the PCI DSS.

At the most basic level, you want to be PCI compliant to avoid penalty fines. PCI compliance is collectively enforced by the major financial institutions in the payment card industry, like Visa, JP Morgan Chase, and other financial organizations. These institutions can impose serious fines of $5,000 to $100,000 per month on businesses until they reach compliance.

These organizations can also impose other penalties. If your business has a data breach as a result of your non-compliance, they can issue PCI compliance fines for small business breaches and specific incidents. They can also impose other penalties, like raising your transaction fees when you process payments from customers who use their cards or even refusing to do business with you altogether.

As daunting as those consequences can be, the most expensive consequence of skipping PCI compliance is a data breach. These standards are designed to protect cardholder data and secure you against data breaches. If you aren’t abiding by those security protocols and a breach happens, you can lose untold amounts of money in customer reimbursements, not to mention lost business because you’ve broken the trust that customers had in you.

What is the PCI compliance process for small businesses?

The process of becoming PCI compliant can vary from one business to the next. Reaching compliance will depend on the security measures you already have in place - you might only need to check a few tasks off your to-do list to reach compliance or you may need large-scale changes to your system.

Once you have satisfied all 12 requirements listed in the PCI DSS, you’ll need to verify your PCI compliance. For businesses that process 6 million transactions or more per year, that verification process involves hiring a third-party auditor to assess your system and perform an on-site investigation to ensure that you meet all the compliance criteria.

For businesses that process less than 6 million transactions per year (that is, most small businesses), verification is much simpler. You’ll need to complete a Self-Assessment Questionnaire (SAQ) to examine your compliance and you’ll need to sign an Attestation of Compliance (AoC). To verify your compliance with PCI for your small merchant’s website, you’ll submit those two documents along with any supporting documentation that your SAQ requires. This often includes a third-party vulnerability scan of your system.

Where do I begin with PCI compliance for my small business?

PCI compliance might feel like a daunting task ahead, but it doesn’t have to be. You can streamline the process if you know how to start on the right foot.

Try beginning with a PCI compliance software tool. This tool is specially designed to evaluate your PCI compliance. It goes through an in-depth scan of your system to determine which requirements you meet and which ones you don’t. The software gives you a detailed report of those requirements so you know exactly what needs to be done for your business to reach compliance.

From here, you can start addressing each of those missing pieces one by one. This could mean hiring contractors or engineers to put certain security measures in place so it may still be an expensive process, but a compliance platform will save you the time of doing your own examination and hoping you’ve covered all your bases.

More on PCI 

PCI DSS Checklist

How to Get PCI Compliant

Do Companies That Use Shopify Need to be PCI Compliant?