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PCI Compliance in Ecommerce: What is it And Why Your Store Needs It

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As internet sales continue to grow and become more popular each day, the benefits provided by selling on the web leads many business owners to take their businesses online. But, if these entrepreneurs are not well-informed, they can suffer significant losses.

According to a report conducted by Javelin Strategy & Research, the number of fraudulent online transactions in retail grew by 40% from 2015 to 2016, as the use of stolen data on the Internet increased by 31%. In all, fraudsters stole 16 billion dollars in 2016, leading to huge financial and reputational impacts for e-commerce stores around the globe.

You may be wondering if this damage falls on shopkeepers or on the consumers who have had their data stolen. What we have to say is that the negative reflection falls on both.

If on the one hand the consumer has their data violated, on the other hand, there was an online platform – maybe an e-commerce store – that did not take care of their virtual security properly.

Hackers launch viruses, spyware, and other virtual threats on a daily basis aiming to corrupt systems and gain access to restricted data to avail themselves of such information in criminal transactions.

Your duty as a digital entrepreneur is to promote your visitors’ safety by implementing compliance strategies in your online store and applying the best available online security features such as PCI DSS certification.

But how to do this in your e-commerce? Keep reading to learn more. 

What is compliance, anyway?

The term compliance means “in compliance” and arose from the concern of financial institutions with the security of online transactions, which grow every day.

To give you an idea, in the United States alone, more than 4 trillion dollars are spent with credit cards per year, with the main flags being Visa, Mastercard, American Express and Discover.

As the number of fraud cases increases, it is not surprising that these companies seek to ensure more and more security in online transactions, in order to avoid financial and image losses and increase customer loyalty.

That’s how the PCI Security Standards Council emerged, an entity formed by Visa, Mastercard, American Express, Discover and JCB International.

Together, these companies have developed a set of best practices to ensure the security of electronic transactions, in other words, they have implemented compliance rules for all shopkeepers – on and offline – who want to use electronic payment facilities in their establishments. These best practices led to the PCI-DSS Certification.

What is PCI-DSS?

PCI-DSS stands for Payment Card Industry Data Security Standards.

Those who wish to securely process electronic transactions should follow PCI-DSS recommendations to prevent data theft and credit and debit card fraud.

More than that, entepreneurs who care about maintaining high quality standards in data security avoid paying fines imposed by the purchasers, as well as strengthen their brands’ relationship with the consumer public, which leads to more sales.

How to achieve PCI certification?

To be in compliance with the PCI-DSS you must meet the 12 main requirements:

  • Install and maintain a secure firewall network;
  • Change the default passwords given by vendors to reduce the risk of intrusion;
  • Use data encryption;
  • Encode the transmission of user data and confidential information on public networks;
  • Use and update anti-virus software frequently;
  • Develop and maintain secure applications;
  • Restrict access to data by companies;
  • Assign unique identification for each user;
  • Limit physical access to each user’s data;
  • Monitor user data regularly;
  • Apply security tests to technological resources;
  • Develop and maintain an information security policy.

And what are the reasons to invest in a security system for your e-commerce that is aligned with PCI-DSS?

Why should you be in compliance with PCI-DSS?

Now that you know what compliance is and what PCI-DSS stands for, you’ve already made the main connection: ensuring your customers’ data security is essential, and the best way to do this is by following the best practices set by those who know the most about the subject.

But we have other reasons that will convince you that this certification is important for your online store:

Reduction of chargebacks

Chargebacks happens when you make a sale but it is not realized by the card company, or when the charge is questioned by the consumer.

This situation is much more common than it looks and creates enormous damages for any shopkeeper, because you may be forced to reverse the value to the customer and still run out of the merchandise.

Here is an hypothetical situation:

Let’s say a hacker has stolen a consumer’s data and uses it to make purchases in your e-commerce. You send the product to the fraudster and charge the consumer. When (or if) they identify the charge on their card, they suspend the payment. You are left without the product and without the corresponding amount due for the sale. In addition, if your chargeback rate is high, credit card purchasers can raise transactions fees to cover business risks. The effects are felt for a long time.

Increase trust

It is not just companies that are aware of information security requirements in electronic transactions.

Companies certified with PCI-DSS have greater credibility, attracting more consumers and  consequently more sales.

Today’s consumers pay attention to their e-commerce efforts to provide a secure sales platform and look at details such as secure connections (https), data encryption, and security seals.

Reduction of legal costs

Many e-commerce stores trust that the consumer will never sue them for the leakage of sensitive data, which is a misnomer. Once the source of information is proven, you can be civilly and criminally liable for failure.

The costs of a legal process arising from security breaches in electronic transactions may mean closing your venture. That’s why many banking and financial institutions invest heavily in methods to protect their customers’ data.

Faced with this, the cost of ensuring that your e-commerce is compliant with PCI-DSS is minor compared to any negative reaction concerning lack of sensitivity to protecting consumers’ data.

Higher profitability for the business

Implementing PCI-DSS compliant measures in e-commerce can also bring greater profitability to your enterprise as you pay reduced fees to card buyers for being concerned about the secrecy of transactions.

In addition, the trust developed by consumers makes them buy more often from you, increasing their sales.

Best security practices to implement in your e-commerce

Security in electronic transactions requires a series of protective layers, from the simplest to the most complex. Here are some best practices you can (and should) adopt:

Secure Connections

The famous https code that precedes your e-commerce URL is a minimal detail, but it can make all the difference in your store’s trust, starting with the fact that Google favors sites with secure connections.

Some antivirus programs, such as Kaspersky, indicate in SERP which sites are safe for the user, which can also be a selective filter for new customers to enter their virtual store.

Basically, the “s” in https means that the moment the user accesses your site, any information exchanged between the user and the e-commerce platform will be encrypted, preventing third party access.

Double opt in

Another way to make your e-commerce more secure and comply with PCI-DSS is to adopt the double opt in. When registering in your e-commerce, the consumer must receive an email or SMS, with a link or a password, to validate the registration. This type of measure is easy to implement and prevents fraud.

Token

This feature is widely used by banking institutions to validate purchases made with credit cards. To confirm the transaction, the user must access a virtual token (device that generates a new password every minute) and enter the current password to complete the transaction.

Continued code change prevents hackers or viruses from having time to discover the consumer’s password and misuse their data.

Payment Intermediaries

If you consider the cost of high PCI certification, you can opt for a payment intermediary.

Payment intermediaries are platforms that specialize in offering payment solutions and invest in both the PCI-DSS certification process and other virtual security features to prevent their customers’ data from being accessed by third parties.

That way, you care about your core business and leave the safe side of the deal with those who understand the subject.

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