subject: Payment Card Industry And Its Functions [print this page] The one who oversees the transactions of all organizations that utilize credit card is the Payment Card Industry (PCI). It is a council that regulates as well as penalizes those found to deviate to what is considered standard and appropriate.
Payment Card Industry (PCI) is an entity that regulates the transactions of credit card companies. This was founded by various payment companies such as JCB, MasterCard, Visa Inc., and American Express for the purpose of adapting safety measures. It has a set of requirements whose objective is to maintain a secured transmission of client's information. All merchants and organizations accepting credit card as one of their mode of payments are obliged to follow such regulation to avoid penalty. Regardless of the type of processing, whether online or manual; the business must remain compliant as long as there is credit card use.
Requirements to all organizations
Those who accepts credit card such as online retailers, financial institutions, and merchants must strictly follow the PCI standards to be able to continue doing their respective businesses. At all times, the client's data must be safeguarded against e-hackers, so as not to jeopardize its well-being. In connection with this, they have come up with certain requirements that every service provider must meet, which are as follows:
* Installation of firewall
* Encryption of sensitive data
* Use of anti-virus software
* Restriction of physical access
* Tracking of network resources
* Testing security systems
Consequence for non-compliance
Since the use of this plastic card is an international concern, strict implementation of the protocol is extremely enforced. If any of the organizations disregard the guidelines, it can be subjected to punishment in accordance to the severity of its offense. There are several means of castigating a non-compliant institution; however the following are the most common namely:
Fines
A penalty ranging from $5,000 - $ 100,000 per month can be charged for the violations. This may affect the financial stability of those small entrepreneurs who are struggling to survive in the competitive world of business.
Termination of association
Once a business does not conform to the code of practice, PCI has the prerogative to terminate the existing relationship. You may be barred from conducting transactions, which involve the use of payment cards. Such disciplinary action will have an immense impact on the business per se.
Increase of transaction fees
If violation of a lesser degree has been found, the council has the authority to mandate an increase of fees as means of penalty instead of termination of function. The increase would consequently influence the percentage of clients who want to deal with the firm due to exorbitant fees. In effect, revenues will also lessen, which may bring about unfavorable consequences.
Whatever the nature of your business is, clients' interests must always be the priority. This can be made possible by conforming to certain standards set by the regulating bodies.
To cover imminent fines by PCI, some companies automatically pass the burden of paying additional fees to their customers by including it on their costing, which is certainly unreasonable.
