Cardholder Data

What Is Cardholder Data and What Is Its Role in PCI?


The payment card industry has developed a set of processes and policies around data security standards. PCI DSS, or the Payment Card Industry Data Security Standard, is a combination of extensive guidelines to improve the overall security of debitand credit card transactions. Most importantly, dedicated policies are in place to protect customers from potential identity theft. 

After all, compromised security over transaction information tarnishes reputation. Remember that even well-equipped organizations are vulnerable to security fraud. The best course of action for firms is to minimize their security risk and follow changing payment card standards.

Perspective: Cardholder Data and PCI

Typically, cardholders assume that financial solutions and merchants will handle their data with transparency and will take measures to prevent unauthorized access and fraud. PCI DSS requirements are developed by the PCI Security Standards Council.

So, how does it work with PCI? Security standards have the support of world-renowned brands, organizations, and financial institutions. Despite the transaction volume or size, these security standards apply to any organization that collects, stores, and shares cardholder data.

Let’s break down the basics of cardholder data and how it ties together with PCI compliance:

Cardholder Data Fundamentals

Every credit and debit card transaction contains a lot of embedded data. It is the main reason PCI SSC rolls out security standards for PCI compliance to improve payment data security. PCI SSC also supports services that raise awareness and educate enterprise stakeholders about effective implementation.

The aim of this council is to put in place security guidelines for payment data and avoid fraud. When it comes to handling sensitive transaction information, merchant service providers and companies have to follow PCI standards. PCI SSC sees cardholder data as the primary account number or PAN.

Technically, cardholder data is any type of PII or personally identifiable information. It also refers to SAD, or sensitive authentication data, which relates to the payment card. It includes PAN or primary account number, service code, expiration date, cardholder name, and magnetic stripe data that work as a card verification code to authorize payments.

In the context of data security, companies that accept card payments often don’t understand the mechanics and technicalities of payment processing. But the fact is that it has become crucial for businesses to comply with the PCI DSS (Payment Card Industry Data Security Standards).

Expand Your Understanding of Cardholder Data and PCI

Cardholder data involves many terms, like PAN, PIN, CHD, and service codes. CHD simply refers to cardholder data, whereas PAN is the primary account number. Remember, it’s the account number that identifies the cardholder and the issuer.

On the other hand, PIN refers to Personal Identification Number. This number is saved in the system and reserved for a specific user to validate ATM and other debit card transactions. Conversely, service codes consist of 3-4 digit codes with a specific expiration date.

All service codes are unique in their own right and interconnect with PAN. Service codes have many use cases, like identifying usage limitations and differentiating between international and local transactions. The most common codes related to magnetic stripe data include:

  • PAN CVC, or Card Validation Code (for MasterCard payments)
  • CVV, or Card Verification Value (for Discover and Visa cards)
  • CSC, or Card Security Code (for American Express cards)
  • CAV, or Card Authentication Value (for JCB-issued cards)

Other PCI compliance terms include CDE or Cardholder Data Environment. It focuses on processes, technology, and individuals that store or share cardholder data. SAQ refers to Self-Assessment Questionnaire and works as a reporting tool to collect outcomes of a PCI DSS evaluation.

Usually, QSAs or Qualified Security Assessors are responsible for conducting an on-site review to determine whether or not a merchant is compliant with PCI DSS requirements. Now, safeguarding cardholder data and maintaining PCI-compliant status requires using approved and trusted payment processors that can implement security standards when dealing with cardholder data.

Role of Cardholder Data in PCI

Cardholder data plays a vital role in PCI – it highlights the main target of fraudulent activities and cyber attacks. PCI DSS compliance requirements make sure that companies roll out updated security practices and controls to protect cardholder data, prevent unauthorized access and misuse of data, and mitigate potential data breaches.

When it comes to protecting cardholder data, PCI DSS is central. After all, it maintains the trust and integrity of the payment card industry and supports a secure environment for merchants, financial institutions, and cardholders.

Maintaining and Promoting PCI DSS Compliance

To maintain and promote PCI DSS compliance, focus on the four key areas to maintain and promote PCI security standards:

  1. Point-to-Point Encryption 

In P2P encryption, merchants encrypt their cardholder data transmission so that it becomes unreadable to parties that don’t have access. 

  1. PCI PTS Requirements

PCI Pin Transaction Security Requirements protect payment processing and PINs of cardholders. 

  1. PCI Data Security

It involves a combination of operational and technical security standards that maintain cardholder data. 

  1. PA-DSS Security

Payment Application Data Security Standards work for software vendors or companies that create payment applications to process, store, or transmit cardholder data. 

Storing Cardholder Data and PCI Requirements and Recommendations

PCI DSS requirements focus on safeguarding complex cardholder data. You can break down PCI DSS requirements into different sub-requirements. The main purpose of PCI requirements is to limit, delete, or ban stored cardholder data that may become a target of cyber attacks.

And merchants and vendors who don’t prioritize cardholder data safety are most likely to experience a time-consuming, damaging, and expensive data breach. A typical cardholder data consists of a 16-digit PAN, the cardholder’s name, and an expiration date.

Mostly, this data is printed on a credit card’s front. Most merchants now understand that they should only keep cardholder data to meet regulatory, business, and legal requirements. The basic recommendation for businesses is to never store sensitive authentication data.

Primary account numbers or card numbers should also be unreadable when processing and storing data. Similarly, organizations must delete data once the minimum retention timeframe is expired. But if a company needs cardholder information for more time, it can reorganize it and meet all PCI DSS requirements.

Organizations should also establish and record each stage of storing and maintaining payment transactions. It will make sure all employees are aware of the sensitive data that gets stored and deleted. Organizations can follow a dedicated process and consult with their employees who process, use, and receive cardholder data.

How You Can Protect Your Cardholder Data

It takes consistent efforts to maintain your PCI complaint status. Enterprises can use different ways to safeguard cardholders’ data. For starters, companies should only use hardware and software from trusted and reliable service providers that the PCI security standards council approves.

Ideally, you should choose the payment processor to strengthen the defense of your cardholder data and make sure the software is encrypted, secure, and compliant. Companies should also check their physical security payment terminals regularly.

Make sure there is no rogue software or skimming devices in place. In terms of a data breach, companies should be aware that POS systems can get compromised and require regular security review. One of the common guidelines for companies is to avoid storing any cardholder data on a piece of paper.

On the flip side, don’t restrict the capacity of payment information, which can lead to technical issues. And if you want to keep cardholder data, develop a security strategy to protect and store information. Merchants should also create and implement a proper information security program. It can include performing program audits, updating tech software, and running firewall checks regularly. 

Organizations should create a culture that focuses on maintaining high-security standards and following security policies. One of the common goals for organizations to meet PCI DSS requirements is to train staff about standard cybersecurity practices.

Cardholder Data that You Can Store

Yes, there are some exceptions where PCI allows vendors and organizations to store cardholder data. For instance, enterprises that validate and verify their data can store cardholders’ data, which includes the cardholder’s name, expiration date, service code, and 16-digit account number. But remember not to confuse EMV chip data with cardholder data. And companies cannot save this data after authorization.

Cardholder Data that You Cannot Store

Once a transaction is authorized, PCI doesn’t allow companies to store sensitive authentication data. This information includes the magnetic stripe data on the card’s back. SAD includes comparable data, PIN blocks, and PIN, all valuable information to cybercriminals.

Summing Up

The next time you wonder, “what is cardholder data” – you’ll have a much broader understanding. Remember that protecting the valuable data of cardholders and maintaining PCI DSS compliance ties together. A uniform procedure and policy for merchants and partnering with reliable payment processing providers have become essential to maintain compliance and protect cardholder data. Opt for the “right” payment platform that follows through with all PCI Security Standards Council guidelines.

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