Every organization that handles credit card information, whether they store, process, or transmit it, is required to comply with the PCI Data Security Standard (PCI-DSS). This obligation extends to companies that offer payment services on behalf of clients who handle credit card information. Let's revisit the fundamental principles and explore why compliance with PCI-DSS is crucial for maintaining PCI DSS compliance. Essentially, it is the most effective means of reducing the likelihood and impact of a payment card data breach. Non-compliance can result in severe consequences for your organization, including loss of revenue, fines, revocation, damage to your brand reputation, and potential litigation.
Now, let's delve into the benefits of achieving PCI DSS compliance, which primarily involve avoiding the following:
Damaged reputation
One significant consequence to consider is reputational damage, which can have long-lasting and potentially irreparable effects. By jeopardizing your clients' payment card information, not only do you expose yourself to financial penalties, but you also put your brand at risk and undermine the trust that you have painstakingly built over the years. Once your security practices are compromised, it becomes incredibly challenging to regain the trust and confidence of your clients. Rebuilding that trust requires substantial effort and time.
Revenue loss
A significant breach can have a profound impact on your revenue, as it often leads to a loss of clients in the aftermath. To illustrate this point, consider the example of the Target Corporation, which experienced one of the largest breaches in 2013. As a consequence of the breach, Target was fined 18.5 million USD for the infringement, which affected over 41 million consumers. Furthermore, Target suffered a staggering loss of revenue amounting to 440 million USD in the first quarter following the breach. This example highlights how a breach can result in substantial financial repercussions and a decline in revenue for an organization.
Losing the ability to accept payment card transactions
In addition to the potential loss of revenue, organizations also face the risk of significant fines imposed by the payment card brands. However, even more detrimental than the financial penalties is the possibility of having the privilege to process payment card transactions revoked by the card brands. This action would have severe consequences and make it extremely challenging, if not impossible, for the organization to sustain its operations. Losing the ability to process payment card transactions can severely hinder business continuity and create significant obstacles for the organization's future viability.
Legal action
When cardholder information is compromised, it often leads to legal action and potential litigation. A notable example is the case of TJX in 2007, where they had to pay 40.9 million USD as a result of a data breach that exposed over 100 million bank cards to risk. Similarly, in 2014, approximately 1.1 million clients of Neiman Marcus were affected by another data breach, which was only discovered after a three-month delay. These instances demonstrate how data breaches can result in legal consequences, including lawsuits from affected individuals or regulatory bodies, further highlighting the importance of maintaining robust security measures to protect sensitive cardholder information.
Aftermath
Based on the 2018 Cost of a Data Breach Study conducted by Ponemon, the financial impact of a data breach can be substantial. The study reveals that a data breach involving less than 100,000 records carries an average cost of 3.86 million USD, indicating a 6.4 percent increase from the previous year (2017). Additionally, the cost escalates significantly for what is referred to as a "mega-breach," involving the loss of 1 million to 50 million records. In such cases, the estimated cost ranges between 40 million USD to 350 million USD. These statistics underscore the potential financial consequences an organization may face as a result of a data breach, further emphasizing the importance of robust data security measures.
Conclusion
It is evident that the investment in achieving and maintaining PCI compliance is relatively minimal compared to the potential costs, fines, and severe consequences of a data breach, especially if non-compliance with the PCI DSS is involved. Establishing and nurturing a PCI DSS culture within your organization can significantly reduce your exposure to risks. By prioritizing and adhering to the PCI DSS requirements, you can take substantial strides in mitigating the potential negative impacts associated with a data breach. The proactive approach of implementing and maintaining a PCI DSS culture demonstrates a commitment to protecting sensitive data and safeguarding your organization's reputation and financial well-being.
Want to Learn More?
For those who are new to PCI DSS and seeking to enhance their understanding of the standard's requirements, URM, through its PCI Security Insights initiative, offers a series of webinars. These webinars provide valuable insights based on real-world experiences, sharing practical knowledge on common pitfalls to avoid and offering top tips for achieving success with PCI DSS and passing the PCI DSS audit. The content of these webinars draws upon the collective expertise of URM's Qualified Security Assessors (QSAs) and consultants who have worked in PCI-compliant organizations and have assisted numerous organizations in attaining compliance with the PCI DSS and passing the PCI DSS audit. By participating in these webinars, individuals can gain valuable insights and guidance to navigate the complexities of the PCI DSS and ensure effective implementation within their organization