The majority of purchases that consumers make both online and in-person are done with credit or debit cards. When payments with credit cards are processed, it is possible for the personal and financial information of the cardholder to be exposed. That is why businesses are required to ensure secure payment processing and protect customer data.
There are two security standards that businesses should implement to secure credit and debit card transactions: PCI compliance and EMV. These standards serve different purposes but work together to reduce fraud and protect sensitive customer information when a transaction is made. Businesses must have these security measures in place to comply with regulatory requirements and protect against fraud and data breaches.
It is important for businesses to understand PCI compliance and EMV as well as how they are used to safeguard credit card transactions. In this guide, we explain what PCI compliance and EMV are, the benefits of each, and how they work together to protect against fraud and data breaches.
What is PCI Compliance?
PCI compliance, also known as Payment Card Industry Data Security Standard (PCI DSS), refers to requirements for businesses to maintain a secure environment for the acceptance, processing, storage, and transmission of credit card data. The goals of PCI compliance are to secure credit card transactions to prevent data breaches and to protect customer data to prevent financial loss and identity theft. Requirements for PCI compliance include securing the network, protecting sensitive customer data, addressing vulnerabilities, and implementing a process for access control.
It is mandatory for businesses to adhere to requirements for PCI compliance to safeguard sensitive information for in-store transactions as well as card not present (CNP) transactions made online or over the phone. Businesses that are not PCI compliant are subject to fines and penalties.
The following are the benefits of PCI compliance:
- Secure transactions: Having PCI compliance measures in place keeps credit card data secure during the transaction to prevent data breaches.
- Protect customer data: PCI compliant businesses can better protect sensitive customer data from theft.
- Build customer trust: Safeguarding transactions and customer data can build trust amongst your customers.
- Avoid penalties: Ensuring PCI compliance will help your business avoid fines and penalties.
What is EMV?
EMV, also known as Europay, MasterCard, and Visa, is authentication technology at the point of sale for in-person transactions that protects against fraud. This technology works by reading smart chips embedded in credit cards that generate unique codes that confirm that the credit card is real and belongs to the person making the purchase. This reduces the risk of businesses accepting counterfeit credit cards as well as cards that have been reported lost or stolen.
EMV is the global standard for securing credit and debit card transactions made using chip technology. This standard has made counterfeiting cards more difficult and helped combat magnetic stripe cloning. Chip-based credit card transactions also require the cardholder to be physically present, which adds another layer of security.
In October 2015, laws in the U.S. made merchants without EMV-enabled systems liable for fraudulent transactions to encourage merchants to use EMV technology. Unlike PCI compliance, which is required, EMV is optional. Merchants should strongly consider implementing EMV technology to prevent fraud and protect themselves from liability if fraud occurs.
The following are the main benefits of EMV:
- Protect your business from fraud: EMV technology greatly reduces the risk of your business accepting lost, stolen, or counterfeit credit or debit cards.
- Protect your customers: Preventing the acceptance of lost or stolen credit cards helps protect your customers from credit card fraud.
- Bolster transaction security: Requiring the physical presence of the cardholder for chip-based credit card transactions adds another layer of security to complement PCI standards.
- Protect your business from liability: While EMV technology is not required, your business can be held liable if fraud occurs while you are not using EMV technology. Having EMV technology in place protects your business from fraud liabilities.
How Do PCI Compliance and EMV Work Together?
The threat of data breaches and cyberattacks is continuously growing as fraudsters find new ways to disrupt transactions and steal sensitive data. Taking a layered approach by implementing EMV technology and security measures to ensure PCI compliance provides an effective defense against fraud and data theft.
It is very important for merchants to understand that PCI compliance and EMV are not substitutes for each other, instead they complement each other in securing payment processing. When a card is swiped or inserted at the point of sale, the chip technology generates a unique transaction code that authenticates the card. As the card is processed, the customer’s data immediately enters the system and is transmitted and stored on the merchant’s network. PCI standards ensure that this data is protected from unauthorized access and theft during and after the transaction by using access management, firewalls, and secure software.
It is legally required for businesses to be PCI compliant, but being PCI compliant does not eliminate the need for EMV nor does simply implementing EMV fulfill PCI compliance requirements. By implementing PCI compliance and EMV technology, your business can effectively reduce the risk of fraud and data breaches with a dual layer of security.
How to Implement PCI Compliance and EMV
Businesses must implement PCI compliance and EMV technology to ensure that their transactions are secured, and that customer data is protected. To implement PCI compliance, businesses must understand the requirements and take steps to ensure network security, protection of stored customer data, and data transmission encryption. Staff should be trained to understand these security policies and security measures must be updated regularly.
To implement EMV chip technology, businesses must upgrade their POS systems with equipment that can read credit card chips and allow for near field communication (NFC) payments that include contactless payments like tapping. Staff should be trained in how to use this technology.
Ensure PCI Compliance and EMV with First MCS
Implementing PCI compliance and EMV helps reduce the risk of fraud and data breaches by securing credit card transactions and protecting sensitive customer data. It also protects your business from fraud and liabilities and helps build trust among your customers.
If you are unsure of what steps to take to ensure that your business is PCI compliant and implement EMV, reach out to First MCS. We are a merchant service provider that offers payment solutions, including merchant accounts as well as POS and payment processing systems to ensure secure processing for all types of payments, including credit card processing. We will help make sure that your business implements PCI compliance and EMV to safeguard your transactions and protect customer data, and we can provide the equipment needed to accept chip-based credit card and NFC payments.
You can call First MCS at (866) 673-3099 for more about how our merchant services can help businesses in the St. Charles, IL area and nationwide!
