Business Credit Card Merchant Accounts – PCI compliance is an important part of accepting debit and credit cards from consumers. Here’s what your business needs to know.
Recent breaches by major merchants have brought Payment Card Industry (PCI) regulations into focus. However, compliance with these regulations is not limited to large companies, commonly known as the Payment Card Industry Data Security Standard (PCI DSS); they work for all businesses that rely on credit and debit cards to make money. Even if your business only employs a few people and processes one credit card per month, your company must be PCI DSS compliant.
Business Credit Card Merchant Accounts
It’s easier said than done. Verizon’s 2020 Payment Security Report found that only 27.9% of companies achieved full compliance in 2019, down 8.8% from last year. In other words, companies are going about it the wrong way when it comes to PCI DSS compliance.
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“It’s not a good practice,” Siske Van Osten, Verizon’s senior manager of global intelligence, told eWeek. “We know that organizations that do not maintain PCI DSS compliance will be breached.”
This article explains what PCI compliance is and what it means, and answers frequently asked questions from vendors about PCI compliance for small businesses.
The payment card industry includes all companies that issue or use credit and debit cards. This includes using commercial and retail establishments, ATMs, and establishments that issue any type of credit, debit or prepaid card for cash transactions. In the context of compliance, the payment card industry often refers to the Payment Card Industry Security Standards Council (PCI SSC), the organization that sets standards and regulations for the payment card industry.
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Every company that accepts credit and debit cards must comply with PCI DSS, regardless of the number of transactions or the size of the business (the PCI SSC offers assistance to small businesses). However, there are four levels of compliance. These standards define the actions that the organization must perform; the more things are done, the more actions are required. These are the four levels and their requirements:
Many high-profile data breaches have involved stolen credit and debit card information in the retail and service industries, so consumers want to know they’re doing business safely. PCI compliance doesn’t guarantee that a data breach won’t happen, but it does add protection.
If your business is found to be non-compliant, you could be fined between $5,000 and $100,000 per month. If non-compliance continues, your business may lose payment processing services.
Did you know: PCI DSS compliance can help your business protect customer data and avoid large, punishing fines for non-compliance.
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If you accept credit and debit cards, PCI compliance is a no-brainer, but preparing for a PCI audit and ensuring your company meets credit card compliance standards can be challenging.
Jeff VanSickel, senior consultant at IT compliance consulting firm SystemExperts, offered some tips for preparing for a PCI audit and keeping standards at a safe level at all times:
Key takeaway: PCI compliance involves having an incident response plan in place, including proper tracking of relevant data and security procedures to follow in the event of a breach.
PCI compliance – or, more formally, Payment Card Industry Data Security Standard (PCI DSS) compliance – is a consortium of major credit card companies (Visa, Mastercard). , American Express and Discover) and Japan Credit Bureau was established in 2006. Regardless of the number of credit card transactions, merchants must meet these standards. Violators can be fined heavily.
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Data subject to PCI compliance includes “cardholder data,” which may include the following information:
Credit card companies can charge you several thousand dollars a month or more, regardless of the size of your business. These fees can hurt small businesses, making compliance important. [Get tips on negotiating lower credit card fees for your company]
You may also face non-financial penalties. For example, card issuers may choose to stop doing business with your business, leaving you with fewer payment options to offer your customers. Or you could be facing a public relations nightmare because many people are afraid to share their sensitive information with your company after learning about a security breach. You may also be subject to a federal audit or legal action.
Your business can receive PCI certification after a thorough PCI DSS audit. A qualified safety inspector conducts this inspection and the process can take several months. Although PCI certification is not required for your business to be PCI compliant, you may choose to obtain PCI certification to increase credibility with customers.
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When a customer transfers a credit or debit card, you are responsible for keeping the data associated with that card secure. Although the above steps are meant to prepare you for the PCI exam, they also provide a safety net between exams.
Sue Marquette Poremba is a freelance writer at State College, Pennsylvania. It mainly integrates cybersecurity and emerging technologies, emphasizing the overlap between emerging technologies and cybersecurity. Read everything you need to know about credit card processing, merchant account services, and how to find the right card for your small business!
Simply put, this account temporarily stores funds from your transactions after they are approved and processed and before they are paid into your regular bank account. A merchant account is an intermediary between swiping a card and transferring money to a business account. Instead of waiting for customers to pay their credit card bills, this allows businesses to get cash for purchases faster.
The payment gateway contacts the credit card company to ensure that cardholders have sufficient funds to complete the transaction. You can configure your payment gateway when setting up your merchant account.
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When the transaction is approved, the customer’s bank account or credit card is used to debit the transaction amount. In addition, it charges a transaction fee of 3-5 percent of the total amount.
The money is then transferred to your company’s bank account via a merchant account. This does not happen immediately after clearing the job; rather, it occurs in batches at the end of the workday or at later intervals.
Once you get your business license, you will need a business bank account. The merchant account provider processes your credit card sales and deducts any charges from this bank account. Many businesses prefer to open a business bank account at a local bank because these institutions often offer a level of convenience and customer service that online accounts can’t match. To open a business bank account, you will need to provide an EIN (Employer Identification Number) and a business license.
Depending on the type of payments you want to accept, it may be beneficial to hire two different processors. Consider whether you want to accept credit cards and ACH payments. You can use one to process credit card payments and the other to process ACH and eCheck payments. This way you can save money.
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Another advantage of doing this is the advantages each processor offers. If one has advanced POS terminals in your store and the other has the integration and security you need for your online business, using both can be beneficial.
However, this may not be the best course of action for a fledgling business. New businesses often find it convenient to manage a single processor because they may not need ACH transactions (which can delay processing) and only debit/credit cards. Test your skills and decide for yourself if this is the best course of action.
Merchants are responsible for protecting credit card merchant accounts and customer information, which can sometimes seem overwhelming. However, some concerns can be alleviated by choosing a merchant account provider that is PCI compliant with strong security measures. Knowing that your merchant account provider is proactively protecting your customers’ confidential data leads to peace of mind and customer satisfaction.
The application is the most important step in getting a merchant account. While many payment processors offer digital applications, some may require you to print and sign them.
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Make sure you do your homework on the provider you are applying to. They should support your business type while providing the functionality you need. Since you need a long-term trading account, researching your options is your best bet.
The process is not complete once you submit an application for a seller account. The time it takes to complete the underwriting process can range from a few hours to a few days. The bank supporting the transaction now assesses your risks and looks for ways to reduce them. As a result, you may be given conditions to perform in advance
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