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What is PCI compliance? A PCI DSS compliance overview
What is PCI compliance? A PCI DSS compliance overview
Every time a new data breach hits the news, business leaders feel a fresh sensation of stress in the pits of their stomachs: the fear that they could be next. Data breaches can destroy a company’s reputation and ultimately its future. How can you protect your customers’ payment data and protect your business from a breach?
One way to know if you’re secure is by maintaining PCI compliance. Let’s break down the details of what PCI compliance is, an overview of PCI DSS compliance, and how you can use it as an asset for your business.
What is PCI compliance?
You’ve probably heard the term “PCI compliance,” but the full name is PCI DSS compliance. PCI DSS compliance stands for payment card industry data security standard compliance. That name makes it much clearer: PCI compliance involves adhering to a specific set of standards and practices that are meant to protect payment data.
PCI DSS includes 12 specific requirements that a company needs to meet to be PCI compliant. These PCI DSS standards are developed and maintained by the PCI Security Standards Council. This independent council was formed by the major credit card companies such as:
- American Express
PCI DSS was created by these companies in an effort to better secure consumers’ payment data.
It’s important to note that PCI compliance is not a legal requirement. It’s more of a requirement throughout the payments industry. If you process payments or accept credit card payments in any way, PCI compliance is a way to ensure that major credit card companies and banks will continue working with you. PCI compliance also proves that you are maintaining trust with partners throughout the payment industry.
Who needs to be PCI compliant?
PCI compliance is considered to be a necessity within the business world for anyone who processes, stores, or transmits payment information. As we noted, PCI compliance isn't a legal requirement, so you won’t face direct legal or criminal consequences for skipping PCI compliance.
However, without PCI compliance, you may end up with fewer payment options. Without PCI DSS compliance you may even end up with fines of thousands of dollars per month from payment brands like Visa and Mastercard.
PCI compliance requirements
The PCI compliance requirements are designed to make your organization more secure, but before you dive in it’s helpful to get an understanding of the essentials.
What are the PCI compliance requirements?
The PCI DSS compliance requirements in their entirety are very detailed and complex, of course. At the core, there are 12 PCI DSS requirements, each with its own supporting details. Briefly, those requirements for PCI compliance include:
- Protecting cardholder data with a firewall
- Changing default passwords
- Protecting any stored cardholder data
- Encrypting cardholder data while it’s transmitted
- Maintain anti-virus software
- Keep applications and systems secure
- Grant the minimum required access to cardholder data
- Set up unique IDs for each person with computer access
- Limit physical access to cardholder data
- Monitor access to cardholder data
- Test security systems routinely
- Establish security policies for personnel
These 12 requirements give you a broad view of what PCI compliance covers.
Benefits of PCI DSS compliance
The idea of hefty fines from major banks could be enough of a reason to put PCI DSS compliance on your priority list. But you don’t just want to adhere to PCI DSS to avoid penalties. There are strong benefits of PCI compliance too.
Selling to the enterprise
One of the biggest motivations for PCI compliance is the ability to sell to large enterprise companies that require their vendors to be PCI DSS compliant. “Are you PCI compliant?” is one of the first questions that an enterprise asks before moving forward with a financial partnership. You’ll want to make sure you can confidently answer yes when asked if you’re PCI DSS compliant and make your partners confident.
Some organizations will require PCI compliance to even sign a contract or consider a vendor during the RFP process. Companies use PCI compliance to prove trust during the sales process and as a way of establishing security assurance throughout the partnership.
PCI compliance open options for payment processing
In any type of business, the easier you make your payment process, the more likely consumers will follow through with a purchase. One way to make your payment process easier is to give customers plenty of payment options and PCI DSS compliance is one of the most effective ways to offer more payment options. Being PCI compliant allows you to work with more payment brands so you can offer your customers all of their favorite payment options.
PCI compliance offers enhanced consumer trust
Data breaches are all over the news, and many of your customers have probably dealt with the hassle of a data breach personally. They know the frustration of:
- Canceling credit cards
- Disputing purchases
- Potentially sending evidence for disputed purchases
- Waiting for new credit cards
- Changing their payment information on online platforms
If you’re PCI compliant, you can ensure customers that you are adhering to the most respected standards to protect their data. PCI compliance builds more trust and may lead to more loyal customers.
PCI DSS compliance lowers risk for data breaches
PCI DSS exists for a reason: it’s protecting your customers’ payment data. If you fall victim to a data breach, it damages your company’s reputation and hurts your profits because you may be financially liable for any damages. If you adhere to the standards of PCI DSS, you’ll know that you have secured the safety of your consumers and your own business as much as you can.
PCI DSS compliance levels
PCI compliance isn’t just a “yes or no” situation. There are multiple levels of compliance you can accomplish. PCI DSS separates merchants into four levels based on the number of credit card transactions they process annually:
- Level 1: over six million transactions per year
- Level 2: one million to six million transactions per year
- Level 3: 20,000 to one million transactions per year
- Level 4: under 20,000 transactions per year
The most notable difference in PCI compliance is that level 1 merchants must have an audit performed by a third-party auditor, along with additional paperwork. Merchants in levels 2-4 fill out a self-assessment questionnaire instead of having an external audit.
There are advantages to higher-level PCI compliance, like a stronger show of trust and security, but if you are a level 2-4 merchant, your “bare minimum” for PCI compliance is much lower.
Learn more about PCI DSS
Determine whether the GDPR applies to you and if so, if you are a processor or controller (or both)
Do you sell goods or service in the EU or UK?
Do you sell goods or services to EU businesses, consumers, or both?
Do you have employees in the EU or UK?
Do persons from the EU or UK visit your website?
Do you monitor the behavior of persons within the EU?
Create a Data Map by taking the following actions
Identify and document every system (i.e. database, application, or vendor) which stores or processes EU or UK based personally identifiable information (PII)
Document the retention periods for PII in each system
Determine whether you collect, store, or process “special categories” of data
Determine whether your Data Map meets the requirements for Records of Processing Activities (Art. 30)
Determine whether your Data Map includes the following information about processing activities carried out by vendors on your behalf
Determine your grounds for processing data
For each category of data and system/application have you determined the lawful basis for processing based on one of the following conditions?
Take inventory of current customer and vendor contracts to confirm new GDPR-required flow-down provisions are included
Review all customer contracts to determine that they have appropriate contract language (i.e. Data Protection Addendums with Standard Contractual Clauses)
Review all in-scope vendor contracts to determine that they have appropriate contract language (i.e. Data Protection Addendums with Standard Contractual Clauses)
Have you performed a risk assessment on vendors who are processing your PII?
Determine if you need to do a Data Protection Impact Assessment
Is your data processing taking into account the nature, scope, context, and purposes of the processing, likely to result in a high risk to the rights and freedoms of natural persons?
Review product and service design (including your website or app) to ensure privacy notice links, marketing consents, and other requirements are integrated
Does the notice to the data subject include the following items?
Does the notice also include the following items?
Do you have a mechanism for persons to change or withdraw consent?
Update internal privacy policies to comply with notification obligations
Update internal privacy notices for EU employees
Determine if you need to appoint a Data Protection Officer, and appoint one if needed
Have you determined whether or not you must designate a Data Protection Officer (DPO) based on one of the following conditions (Art. 37)?
If you export data from the EU, consider if you need a compliance mechanism to cover the data transfer, such as model clauses
If you transfer, store, or process data outside the EU or UK, have you identified your legal basis for the data transfer (note: most likely covered by the Standard Contractual Clauses)
Have you performed and documented a Transfer Impact Assessment (TIA)?
Confirm you are complying with other data subject rights (i.e. aside from notification)
Do you have a defined process for timely response to Data Subject Access Requests (DSAR) (i.e. requests for information, modification or deletion of PII)?
Are you able to provide the subject information in a concise, transparent, intelligible and easily accessible form, using clear and plain language?
Do you have a process for correcting or deleting data when requested?
Do you have an internal policy regarding a Compelled Disclosure from Law Enforcement?
Determine if you need to appoint an EU-based representative, and appoint one if needed
Have you appointed an EU Representative or determined that an EU Representative is not needed based on one of the following conditions?
If operating in more than one EU state, identify a lead Data Protection Authority (DPA)
Do you operate in more than one EU state?
If so, have you designated the Supervisory Authority of the main establishment to act as your Lead Supervisory Authority?
Implement Employee Trainings to Demonstrate Compliance with GDPR Principles and Data Subject Rights
Have you provided appropriate Security Awareness and Privacy training to your staff?
Update internal procedures and policies to ensure you can comply with data breach response requirements
Have you created and implemented an Incident Response Plan which included procedures for reporting a breach to EU and UK Data Subjects as well as appropriate Data Authorities?
Do breach reporting policies comply with all prescribed timelines and include all recipients i.e. authorities, controllers, and data subjects?
Implement appropriate technical and organizational measures to ensure a level of security appropriate to the risk
Have you implemented encryption of PII at rest and in transit?
Have you implemented pseudonymization?
Have you implemented appropriate physical security controls?
Have you implemented information security policies and procedures?
Can you access EU or UK PII data in the clear?
Do your technical and organizational measure ensure that, by default, only personal data which are necessary for each specific purpose of the processing are processed?
Develop a roadmap for successful implementation of an ISMS and ISO 27001 certification
Implement Plan, Do, Check, Act (PDCA) process to recognize challenges and identify gaps for remediation
Consider ISO 27001 certification costs relative to org size and number of employees
Clearly define scope of work to plan certification time to completion
Select an ISO 27001 auditor
Set the scope of your organization’s ISMS
Decide which business areas are covered by the ISMS and which are out of scope
Consider additional security controls for business processes that are required to pass ISMS-protected information across the trust boundary
Inform stakeholders regarding scope of the ISMS
Establish an ISMS governing body
Build a governance team with management oversight
Incorporate key members of top management, e.g. senior leadership and executive management with responsibility for strategy and resource allocation
Conduct an inventory of information assets
Consider all assets where information is stored, processed, and accessible
- Record information assets: data and people
- Record physical assets: laptops, servers, and physical building locations
- Record intangible assets: intellectual property, brand, and reputation
Assign to each asset a classification and owner responsible for ensuring the asset is appropriately inventoried, classified, protected, and handled
Execute a risk assessment
Establish and document a risk-management framework to ensure consistency
Identify scenarios in which information, systems, or services could be compromised
Determine likelihood or frequency with which these scenarios could occur
Evaluate potential impact of each scenario on confidentiality, integrity, or availability of information, systems, and services
Rank risk scenarios based on overall risk to the organization’s objectives
Develop a risk register
Record and manage your organization’s risks
Summarize each identified risk
Indicate the impact and likelihood of each risk
Document a risk treatment plan
Design a response for each risk (Risk Treatment)
Assign an accountable owner to each identified risk
Assign risk mitigation activity owners
Establish target dates for completion of risk treatment activities
Complete the Statement of Applicability worksheet
Review 114 controls of Annex A of ISO 27001 standard
Select controls to address identified risks
Complete the Statement of Applicability listing all Annex A controls, justifying inclusion or exclusion of each control in the ISMS implementation
Continuously assess and manage risk
Build a framework for establishing, implementing, maintaining, and continually improving the ISMS
Include information or references to supporting documentation regarding:
- Information Security Objectives
- Leadership and Commitment
- Roles, Responsibilities, and Authorities
- Approach to Assessing and Treating Risk
- Control of Documented Information
- Internal Audit
- Management Review
- Corrective Action and Continual Improvement
- Policy Violations
Assemble required documents and records
Review ISO 27001 Required Documents and Records list
Customize policy templates with organization-specific policies, process, and language
Establish employee training and awareness programs
Conduct regular trainings to ensure awareness of new policies and procedures
Define expectations for personnel regarding their role in ISMS maintenance
Train personnel on common threats facing your organization and how to respond
Establish disciplinary or sanctions policies or processes for personnel found out of compliance with information security requirements
Perform an internal audit
Allocate internal resources with necessary competencies who are independent of ISMS development and maintenance, or engage an independent third party
Verify conformance with requirements from Annex A deemed applicable in your ISMS's Statement of Applicability
Share internal audit results, including nonconformities, with the ISMS governing body and senior management
Address identified issues before proceeding with the external audit
Undergo external audit of ISMS to obtain ISO 27001 certification
Engage an independent ISO 27001 auditor
Conduct Stage 1 Audit consisting of an extensive documentation review; obtain feedback regarding readiness to move to Stage 2 Audit
Conduct Stage 2 Audit consisting of tests performed on the ISMS to ensure proper design, implementation, and ongoing functionality; evaluate fairness, suitability, and effective implementation and operation of controls
Address any nonconformities
Ensure that all requirements of the ISO 27001 standard are being addressed
Ensure org is following processes that it has specified and documented
Ensure org is upholding contractual requirements with third parties
Address specific nonconformities identified by the ISO 27001 auditor
Receive auditor’s formal validation following resolution of nonconformities
Conduct regular management reviews
Plan reviews at least once per year; consider a quarterly review cycle
Ensure the ISMS and its objectives continue to remain appropriate and effective
Ensure that senior management remains informed
Ensure adjustments to address risks or deficiencies can be promptly implemented
Calendar ISO 27001 audit schedule and surveillance audit schedules
Perform a full ISO 27001 audit once every three years
Prepare to perform surveillance audits in the second and third years of the Certification Cycle
Consider streamlining ISO 27001 certification with automation
Transform manual data collection and observation processes into automated and continuous system monitoring
Identify and close any gaps in ISMS implementation in a timely manner
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Determine which annual audits and assessments are required for your company
Perform a readiness assessment and evaluate your security against HIPAA requirements
Review the U.S. Dept of Health and Human Services Office for Civil Rights Audit Protocol
Conduct required HIPAA compliance audits and assessments
Perform and document ongoing technical and non-technical evaluations, internally or in partnership with a third-party security and compliance team like Vanta
Document your plans and put them into action
Document every step of building, implementing, and assessing your compliance program
Vanta’s automated compliance reporting can streamline planning and documentation
Appoint a security and compliance point person in your company
Designate an employee as your HIPAA Compliance Officer
Schedule annual HIPAA training for all employees
Distribute HIPAA policies and procedures and ensure staff read and attest to their review
Document employee trainings and other compliance activities
Thoroughly document employee training processes, activities, and attestations
Establish and communicate clear breach report processes
to all employees
Ensure that staff understand what constitutes a HIPAA breach, and how to report a breach
Implement systems to track security incidents, and to document and report all breaches
Institute an annual review process
Annually assess compliance activities against theHIPAA Rules and updates to HIPAA
Continuously assess and manage risk
Build a year-round risk management program and integrate continuous monitoring
Understand the ins and outs of HIPAA compliance— and the costs of noncompliance
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