The Payment Card Industry Data Security Standard (PCI DSS) is a set of requirements businesses must meet to ensure payment card transactions and information are secure against theft and fraud. While there’s no legal obligation to comply with these requirements, it’s highly recommended for companies in Chicago and Tampa to acquire PCI certifications. This is because it provides a baseline standard companies must adhere to and build upon with additional fortifications to strengthen data security. 

However, those that choose not to comply with PCI standards leave their company open to very serious risks. Here are the six potential repercussions of PCI noncompliance: 

1. Monthly fines and penalties

If your organization is noncompliant with PCI requirements, you’ll have to pay fines ranging from $5,000 to $100,000 per month to credit card companies like Visa and Mastercard. Penalties can vary based on the credit card companies involved, number of months of noncompliance, client base size, and volume of transactions your company processes. For example, small companies that have been noncompliant for over seven months can be fined $50,000 per month. On the other hand, larger organizations with more clients that have not been compliant for the same period may receive heftier penalties of $100,000 per month. 

Here’s the general range of financial penalties your company may face for PCI noncompliance:

  • 1–3 months – $5,000–$10,000 per month
  • 4–6 months – $25,000–$50,000 per month
  • 7 months or more – $50,000–$100,000 per month

2. Increased risk of data breaches

Failure to comply with PCI security guidelines makes your company a prime target for cybercriminals. After all, it’s much easier to steal data from a company that doesn’t have advanced security measures and appropriate data handling procedures in place. For instance, credit card information was stolen from Warner Music Group because their website lacked sufficient protections. This made the company vulnerable to Magecart attacks, which use malicious code implanted on websites to steal sensitive information from online payment forms.  

More importantly, data breaches cause major setbacks for companies. The average cost of a breach is $150 per record, while banks may also charge additional fines on top of PCI noncompliance penalties, and you may incur increased rates by payment processors.

Related reading: Is your business data truly safe?

3. Compensation costs

When a data breach occurs, your business will have to compensate clients because you failed to uphold PCI requirements. This can be in the form of free credit card monitoring for the year, service fee reimbursement, and identity theft insurance. These complementary services are crucial for keeping your clients, but these can drive up costs for your business. 

4. Legal action 

Clients whose data is compromised as a result of your PCI noncompliance may file lawsuits against your organization. In fact, there are many cases where the theft of payment cards have led to major lawsuits. Back in 2014, Target was sued by consumers because their poorly secured computer networks and point of sale systems left financial information vulnerable to theft. Capital One also suffered a major data breach in 2019 that exposed over 100 million credit card applications, resulting in $80 million fines to settle federal charges. 

In addition to expensive class-action claims from customers, businesses may have to pay damages to payment card issuers that spent millions of dollars reissuing credit cards and reimbursing victims of fraud. While large corporations were able to pay and survive these lawsuits, small- and medium-sized businesses may not be so lucky. The overall cost of tackling a multi-front litigation case and seeking legal counsel is more than enough to put you out of business if you’re not careful. 

5. Reputational damage

PCI noncompliance doesn’t just mean crippling financial penalties; it can also inflict irreparable damage to your company’s reputation. Customers trust your company to protect their personal information, and falling short of this promise leaves a bad impression. In most cases, your once loyal customers will turn away from your business because you’ve endangered their privacy and financial data security. Word of this may also spread to prospective clients, which can lead to a loss of potential business opportunities. Overall, regaining the clients’ trust can be an uphill battle. 

In contrast, demonstrating strong compliance gives your business a competitive edge. If your business deploys cutting-edge security measures and commits to regular PCI compliance audits, customers will perceive your business to be more trustworthy. This can even have a positive effect on acquiring new business since your customers are more likely to vouch for your company’s commitment to data security. 

6. Slower cash flow

Costs incurred from financial penalties, data breaches, lawsuits, and reputational damage from PCI noncompliance can take a huge toll on your company’s cash flow. Since your business will be focused on paying for the damages caused to your operations and customers, there’s less money to invest in new projects and revenue-generating opportunities. 

Your overall revenue may also take a hit because your damaged brand reputation can result in a loss of clients. For many companies, the repercussions of noncompliance may be so high that they’re forced to play catch up for many years or go out of business for good.  

What can businesses do to stay PCI compliant?

Ultimately, implementing a comprehensive security framework will cost far less than the penalties and damaged brand reputation resulting from PCI violations. To establish a strong and PCI-compliant security framework, these best practices can help: 

  • Secure your network perimeter through next-generation firewalls and intrusion prevention systems.
  • Regularly monitor networks for suspicious behaviors like unusual file transfers.
  • Block the transfer of payment card information through data loss prevention policies.
  • Install the latest anti-malware software to defend against ransomware, spyware, and other malicious programs.
  • Protect cardholder data in storage and in transit using advanced encryption systems.
  • Back up multiple copies of your data in secure off-site servers and schedule data retention protocols. 
  • Limit access to cardholder data by using multifactor authentication and giving users minimal access privileges required to do their job.
  • Train employees on properly handling cardholder information, identifying and avoiding phishing scams, and setting unique passwords.

These requirements can be challenging for any business, but there’s no need to do it all alone. Dynamic Solutions Group is a leading managed IT services provider that can help you meet compliance. Our top security consultants can provide expert recommendations protecting payment card information and assist you with installing powerful security measures. Call us now to ensure PCI compliance.