Being non-compliant can do significant damage to the reputation of any brand. On top of that, this damage is irreversible. As a general rule, all businesses that process credit card details must comply with the Payment Card Industry Data Security Standard (PCI – DSS). Not following PCI compliance can cost your business thousands of dollars.
In this post, you will come to know the adverse consequences of PCI non-compliance. So let’s take a quick look.
Even businesses in compliance with the PCI-DSS security standard can face data breaches. If your firm has suffered an information breach where sensitive card details of clients have been endangered, merchants can expect multiple penalties, such as:
- Adverse impact on the reputation of a company
- You have to pay an amount between $50 and $90
- The lawsuit by customers whose details have been breached
- People lose trust in you because of the lack of security
Monthly Penalties by Financial Entities
PCI non-compliance can also lead to penalties from $5,000 to $100,000 every month by credit card processors. The amount depends on client volume, transaction volume, the PCI-DSS level, and several other factors. All penalties that payment processors or financial institutes suffer due to non-compliance get transferred to the business in guilt, affecting the relationship between the company and the bank.
Legal Action Against Your Business
Legal action is a possible outcome if the details of bank cardholders get breached. For instance, in 2007, TJX Cos. Inc. had to pay around $40.9 million in a settlement with the bank and Visa Inc. for a massive breach of their clients’ card data. This was because of the PCI non-compliance.
Loss in business revenue is another negative impact of not following PCI compliance. A strong percussion on the reputation of your brand can drastically lower your overall income. This happens because of the loss of customers who go away from your business for security breaches.
PCI Non-Compliance Compensation Costs
If your business does not comply with PCI security standards, you have to compensate your customers with credit card monitoring and identity theft insurance. And it will be expensive for you.
Damage of Brand Reputation
PCI non-compliance can also put your business reputation at risk. Putting the confidential information (credit card details) of your customers at risk not just results in elevated costs but also leads to irreversible damage to your company’s reputation due to security mistrust. Once your clients’ security has been endangered, it becomes hard for consumers to start trusting you again. Unfortunately, they prefer choosing your competitors over you.
If your business operates with a large customer volume, the Federal Trade Commission (FTC) can consider performing frequent audits to ensure you comply with PCI-DSS. The FTC analyzes companies that do not comply with the PCI security standard. In addition to applying strict regulations, the Federal Trade Commission can also penalize your business for non-compliance. Complying with security standards for optimizing bank cards is critical to both companies as well as customers.
However, the expenses linked to the PCI-DSS standard are quite elevated for small organizations, making them operate with credit cardholders in non-compliance. Though it’s easy to fall into this temptation, the consequences can be a little destructive for your company.
Who is Responsible for PCI Compliance?
Every company is liable for their PCI compliance. Businesses that process card payments must have a data security assessment. It is always a perfect deal to invest some money in the internal security of your business. To always be PCI DSS compliant, your company requires to put in place proper internal controls on your processes and systems.
Costs of Achieving PCI Compliance
Becoming and optimizing a PCI-compliant company can be costly. The expenses vary from one business to another based on its size, type, and compliance level.
Level 1: You can expect costs up to $50,000 based on your business security systems.
Lever 2: Annual cost for level 2 businesses lies somewhere between $10,000 and $50,000.
Lever 3: The annual security cost is around $1,200 and can go up from there as per your business size.
Level 4: For these businesses, the cost could be $60 a month.
As discussed, not following PCI compliance can lead your business to a significant loss. Fortunately, there’s a solution to this problem. MerchantePay is a platform that can help you with online payments. This payment system provides businesses with a smooth, hassle-free payment experience in compliance with the PCI security standards. It will enable you to store and manage your customers’ bank details in a secure environment. For more information, feel free to talk to the professional team of MerchantePay.