PCI Non-Compliance Fee: How to Avoid Them

Customers who purchase from your business expect their personal information to be protected. PCI sets security guidelines to safeguard credit card details and other sensitive data during online transactions. If you find a PCI non-compliance fee on your recent merchant services bill, your business fails to meet the required data security standards.

Avoiding these fees can lower your monthly merchant services charges by adhering to PCI standards. It also helps you avoid the expensive repercussions of non-compliance and shows your commitment to customer safety. Being PCI compliant might be easier than expected, especially if you begin with this easy step-by-step guide.

What Is PCI?

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The Payment Card Industry (PCI) developed the Data Security Standards (DSS) to safeguard credit and debit card transactions. These standards are mandatory for merchants and entities that process or store payment card information. Adopting PCI DSS means implementing security protocols to protect cardholder information and prevent data breaches. The PCI Security Standards Council, which includes major card companies such as Visa, MasterCard, and American Express, governs these standards.

The 12 primary requirements outlined by PCI DSS include securing systems, encrypting cardholder information, and routinely testing security protocols. Companies must also limit access to sensitive data, employ firewalls, and maintain robust authentication practices. PCI compliance is categorized into four levels, depending on the business’s annual transaction volume, and each level has its certification requirements.

Merchants must meet these standards to prevent penalties, data breaches, and other security issues. Payment processors and card networks regulate and enforce compliance, and non-compliance can lead to fines or restrictions on the ability to process card payments. Businesses must verify that their payment processors and systems comply with PCI standards to avoid fines and secure their customers’ information.

What Is PCI Non-Compliance Fee? Who Set These Charges?

Some payment processors or merchant service providers impose a PCI non-compliance fee on customers who do not adhere to the PCI DSS requirements. This fee serves as both an incentive for merchants to comply with PCI standards and a way to offset the potential costs and risks associated with non-compliance.

Businesses are required to comply with established PCI standards. Failure to do so may lead to PCI noncompliance fees, which typically vary from $10 to $30 per month or annually from $50 to $250, depending on the severity of the noncompliance and the terms set by the processor. Should a data breach occur due to non-compliance, the financial penalties can escalate dramatically, ranging from $5,000 to $500,000 per month until the compliance issues are resolved.

Common Reasons for PCI Non-Compliance Fees

PCI non-compliance fees are charges levied on businesses that do not adhere to the PCI DSS standards. Payment processors or acquiring banks usually impose these fees, and the amounts can differ based on the severity and length of the non-compliance.

Common causes for these fees include:

• Not Completing the SAQ: Businesses must regularly fill out the SAQ, which is a self-assessment of their adherence to PCI standards. Neglecting this can lead to non-compliance fees.
• Skipping Quarterly Security Scans: Regular network security scans are mandatory, particularly for businesses that process a lot of transactions. Missing these scans is a frequent reason for incurring fees.
• Lack of Proper Data Encryption: Failing to use correct encryption methods to safeguard cardholder data, whether stored or transmitted, breaches PCI standards. This often involves not encrypting sensitive data such as credit card numbers, raising the risk of security breaches.
• Weak Access Controls: Not setting up adequate access controls, like role-based access or multi-factor authentication, can result in non-compliance fees. These measures are crucial to block unauthorized access to sensitive data.
• Data Breaches and Incorrect Data Storage: Businesses that suffer data breaches while non-compliant may face steeper fines, with penalties from both the processor and card networks. Storing credit card data improperly, such as without encryption or in easily accessible locations, is also a frequent violation.
• Not Updating Security Patches: Neglecting to update systems with the latest security patches can create vulnerabilities and lead to non-compliance.

Are There Any Costs Related to PCI Compliance?

The cost of PCI compliance varies significantly depending on factors like business size, payment processor, and required security levels. Small businesses typically pay between $79 and $120 per year, although some providers may charge a monthly fee of around $9.99. Larger companies or those requiring more detailed audits may face higher costs, potentially several thousand dollars annually for comprehensive assessments.

Many providers also offer monthly payment options instead of annual fees for added flexibility, though these payments are usually non-refundable if you cancel mid-year.

Remember that paying the fee alone does not guarantee full PCI compliance. While the provider handles some technical tasks, the organization is still responsible for completing a Self Assessment Questionnaire (SAQ), conducting regular network scans, and meeting other PCI compliance obligations.

How Can Your Business Avoid PCI Non-Compliance Fees?

1. Choose a PCI-Compliant Payment Processor

Select a PCI-compliant payment processor that supports your business’s complete compliance with PCI standards. This step ensures that your business’s payment processing component meets PCI requirements, allowing you to focus on your specific compliance responsibilities. By choosing a provider that does not impose these fees, you can avoid both PCI compliance and non-compliance fees.

Consider using a payment service provider such as Host Merchant Services for quick and straightforward PCI compliance. Working with HMS offers your customers the advantage of Level 1 PCI DSS compliance, the highest standard available. Our support aims to help you meet and surpass the necessary compliance standards to prevent non-compliance fees, with no additional compliance fees as charged by other payment processors.

2. Implement Robust Access Controls

Setting strict access controls is vital for safeguarding sensitive data. Role-Based Access Control (RBAC) restricts access to data based on an employee’s job responsibilities, minimizing unnecessary data exposure.

Multi-factor authentication (MFA) provides an additional security layer by requiring more than a password to access systems, thereby decreasing the likelihood of unauthorized access even if passwords are compromised.

3. Perform Regular System Updates and Maintenance

Regular updates and maintenance are essential for protecting your technology infrastructure from evolving threats. Patch management is critical, as it addresses software vulnerabilities through vendor updates. Please install these patches promptly to avoid exposing your system to cyberattacks. By closing known vulnerabilities quickly, patching significantly reduces the risk of exploitation. Consider implementing automated patch management tools to ensure consistent update applications and minimize human error.

Keeping your anti-virus software up-to-date is also crucial, as it helps your system identify and counteract the latest malware and viruses. Anti-virus software that needs to be updated may fail to protect against new threats, making your organization more susceptible to attacks.

4. Establish Strong Security Measures

Firewalls and Intrusion Detection Systems (IDS) are essential for blocking unauthorized access and cyber threats. Firewalls filter incoming traffic to prevent potential threats, while IDS systems monitor for unusual activities. Network segmentation strengthens security by separating sensitive payment information from the rest of the network, which reduces potential damage from breaches.

Using Virtual Local Area Networks (VLANs) further divides network traffic by department, enhancing protection. Additionally, encrypting data both in transit and at rest with protocols like SSL/TLS is critical to secure sensitive payment data, following PCI DSS standards.

5. Ongoing Employee Training and Awareness

Human error is a common factor in data breaches. To help prevent these incidents, educating employees on cybersecurity practices is crucial. Training should cover topics such as identifying phishing attempts, understanding the significance of using strong passwords, and knowing how to report suspicious activities.

For instance, phishing attacks often use deceptive emails to lure users into disclosing sensitive information. Employees should learn to spot phishing indicators, like messages from unknown senders or unexpected requests for personal information. Regular training on these points can reduce the risks associated with social engineering attacks.

How Do Businesses Respond to Non-Compliance with PCI Standards?

When a business fails to meet PCI standards, prompt and careful action is necessary to reduce risk and avoid penalties. Here’s a step-by-step guide on how to handle such a situation:

• Immediate Remediation

Upon discovering non-compliance, immediately work to resolve the issues to lessen the chance of data breaches and minimize potential fines. Start by pinpointing the root causes of non-compliance, such as outdated software, inadequate security measures, or poor encryption.

Solutions might involve applying software updates, enhancing security infrastructure, or revising access protocols to comply with PCI DSS requirements. Continual system upkeep and security upgrades are essential for preventing future issues.

• Engage with Payment Processors and Banks

Keep your payment processors and banks informed about the non-compliance issue and your efforts to rectify it. Although processors might impose PCI noncompliance fees until the problem is resolved, maintaining open communication can sometimes result in more lenient terms during the rectification phase. Some processors also offer support to businesses working to meet compliance standards.

• Collaborate with the PCI Security Standards Council

Consult the PCI Security Standards Council for advice and to ensure your compliance efforts are on track. Their input can help expedite your remediation efforts and ensure your operations are up to date with current standards.

This might include completing SAQs, performing vulnerability scans, and adhering to compliance guidelines specific to your business level. You can also enlist a QSA to evaluate the extent of your non-compliance and advise on corrective actions. They can offer detailed guidance on bridging compliance gaps in line with PCI DSS.

• Conduct a Forensic Investigation

If a security breach has occurred as a result of non-compliance, hire a Payment Card Industry Forensic Investigator (PFI) to analyze the incident. This investigation will clarify how the breach happened and aid in preventing similar future events.

Conclusion

Avoiding PCI non-compliance fees is crucial for businesses that handle payment card transactions. By adhering to PCI DSS guidelines, you not only prevent additional charges but also protect your customers’ sensitive data, reducing the risk of costly data breaches. Choosing a PCI-compliant payment processor, maintaining robust security measures, and ensuring ongoing employee training are key steps in staying compliant.

Regular system updates and access controls further fortify your security framework. Ultimately, compliance reflects your commitment to protecting your customers and can save your business from the financial and reputational damage associated with non-compliance.

Frequently Asked Questions