What is PCI Compliance in Magento Hosting?
Customers are generally skeptical of using their credit cards on unfamiliar payment gateways.
E-commerce stores often aim for a frictionless payment process to help reduce cart abandonment rates.
Any payment failures, glitches, or complicated checkout processes can risk in loss of customers.
Thus, merchants opt for a trusted payment gateway, showcasing getaway logos and a clean website layout during checkout.
A seamless checkout process would offer easy payment methods and options such as PayPal Express Checkout or Instant purchase.
However, if you accept credit cards, you need to ensure that the consumer data is 100% secured from malicious intruders.
Even a small loophole can enable cyber thieves to steal valuable credit card information and make fraudulent transactions.
Unsecured networks, systems, and payment databases allow fraudsters to easily steal credit card numbers, security codes, CVV, and PIN codes.
A secure payment process is necessary to build consumer trust and avoid data breaches.
PCI compliance is mandatory for e-commerce merchants that process, store and transmit cardholder data.
Here, we look at PCI compliance, its requirements, and best practices for Magento store owners.
What is PCI Compliance?
Payment Card Industry Data Security Standards (PCI DSS) is a minimum set of standards and regulations that help enhance payment data security globally.
These regulations include policies, security management, network architecture, software design, and more.
Every merchant dealing with cardholder data must comply with these standards to eliminate financial harm and data vulnerabilities.
A rise in online retailers in the 1990s also led to information security issues and frequent payment frauds by malicious attackers.
To combat these issues, leading credit card providers such as American Express, Visa, Discover, JCB, and MasterCard had created individual data security policies to protect their organizations.
After noticing that their mission was the same, these five companies combined their efforts to form a unified payment security standard called PCI DSS.
The PCI Security Standards Council helps merchants worldwide to secure their payment processes and build a trustworthy online store.
Why is PCI compliance essential?
Technology keeps developing at a rapid pace with new upgrades, features, and challenges for e-commerce stores.
PCI compliance is also updated accordingly so that payment security standards are aligned with the latest technological changes.
PCI Compliance is essential to gain consumer’s confidence, eliminate security risks, and keep sensitive data protected.
If you have a global consumer reach, PCI compliance will help secure international transactions.
There are four PCI compliance levels:
- Level 1: If your store conducts more than 6 million transactions per year.
- Level 2: For stores that conduct 1 to 6 million transactions per year.
- Level 3: For stores that conduct 20,000 to 1 million transactions per year.
- Level 4: If your store has fewer than 20,000 transactions per year.
The compliance regulation is more difficult for Level 1 and Level 2 merchants while it is moderate for the lower level e-commerce stores.
PCI Compliance for Magento store
Magento offers PCI compliance support to regulate cardholder data security.
The compliance services are available for Magento Commerce users to integrate payment gateways via direct API methods.
Merchants can also create payment forms for the checkout process.
The Direct Post method offered by Magento Commerce transmits cardholder information directly to the integrated payment gateway.
Sensitive data is stored directly on the payment provider’s servers and not on your Magento application servers.
Since your servers do not hold any cardholder data, you can update your Magento platform without going through PCI re-assessments.
You might still have to conduct PCI self-assessment tests, but they are less complex than completing the full PCI compliance hosting for Magento.
To get the least amount of compliance workloads, merchants choose a third-party payment service such as PayPal or AmazonPay.
What Happens If Your Magento Store Is Not PCI Compliant?
1. Data breaches
Even with well-maintained compliance, your Magento store is susceptible to threats and malicious attacks.
According to IBM’s Security 2020 report, the average time it takes to identify and contain a data breach is 280 days.
In the same study, 80% of breached organizations stated that customer’s Personal Identifiable Information (PII) was the most frequently compromised data in the breach.
The average cost of a data breach in 2020 was 150 dollars per compromised record.
Without PCI compliance, your store is highly vulnerable to data breaches, leaks, and hacks which can cause significant loss in revenue.
PCI compliance strengthens your defenses against cyber crimes and helps reduce data breaches.
Without PCI compliance, your business will have to endure lawsuits, card replacement costs, and compensation costs for customers.
If a data breach is identified and your business is PCI compliant, the breach costs are reduced.
2. Penalties and hefty fines
Failure to comply with PCI standards could result in various penalties that can drain your finances entirely.
The penalties could range anywhere from 5000 to 100,000 dollars monthly, depending on the volume of transactions and period of non-compliance.
In addition to penalties imposed by payment providers, government compliance violations could also lead to hefty fines.
The fines can go up to € 20 million for severe infringements.
The company can also face fraud charges, mandatory forensic examination, and additional penalties for repeat infringements.
3. Loss of reputation and revenue
A recent Verizon survey noted that around 69% of customers would avoid a company that had suffered a data breach, even if they offered better deals than their competitors.
With growing awareness of consumer data privacy issues, consumers have high-security expectations and a low tolerance for data privacy concerns.
In a McKinsey 2020 survey report, around 87% of respondents said they would not do business with a company if they had concerns about its security practices.
Data breaches can have adverse effects on your brand reputation and also reduce consumer loyalty.
4. Suspending the use of credit cards on your Magento store
PCI compliance failure could revoke your privileges of accepting credit card payments after a data breach.
Card suspension is a more significant loss for your business because it prohibits your store from processing credit cards in the future.
To avoid such losses, you need a strict security policy that complies with PCI standards.
PCI Compliance Checklist
The PCI DSS consists of 12 requirements under six payment security goals.
Let's have a brief look at each of them, and you can see if your Magento store ticks off the requirements in this checklist.
Goal 1: Build and Maintain a Secure Network
- Requirement 1
Create a secure network by installing and maintaining a firewall configuration.
It controls your network traffic to protect cardholder data. To combat web attacks specifically, you will need a Web Application Firewall.
- Requirement 2
Don't use vendor-supplied default software passwords.
For a secure system, create unique passwords after you have purchased your software. Disable unnecessary default accounts and encrypt administrative access.
Goal 2: Protect Cardholder Data
- Requirement 3
Protect the stored cardholder data by applying several layers of security.
For this PCI compliance requirement, it is essential not to hold cardholder data longer than needed.
Allow consumers to add their card data using a payment gateway and never transmit payment data without solid encryption.
- Requirement 4
Encrypt transmission of cardholder data across open and public networks.
It is essential to encrypt sensitive card data before moving it to different systems. You can do that by using SSL and TLS technology.
Encrypting data is highly valuable during transits because even if the networks are breached, the consumer data is still protected during the transfer.
An SSL certificate helps you gain consumer trust while also allowing a secure data transfer.
Goal 3: Maintain a Vulnerability Management Program
- Requirement 5
Use and regularly update anti-virus software or programs.
It is essential to protect your systems against malware, and you can do this by maintaining your anti-virus software.
Cyber thieves are constantly using new techniques to break into weak networks and systems.
You need robust anti-virus software to detect and remove malware from your system.
- Requirement 6
Develop and maintain secure systems and applications.
To accomplish this requirement, you need to identify and eliminate system vulnerabilities from several components.
It requires system admins to install the latest security patches and run regular scans to monitor the system efficiently.
With a managed Magento hosting solution, you can delegate all server-related security workloads tasks to a hosting provider.
It is more cost-efficient to choose a Magento hosting provider that provides system security and compliance support.
Goal 4: Implement Strong Access Control Measures
- Requirement 7
Restrict the access to cardholder data on a business need-to-know basis.
You can reduce malpractices and data theft by limiting the access of cardholder data to very few individuals.
You can grant access to admins that have authorized credentials.
It also allows you to monitor and document access control to keep track of all system changes.
Restricted access helps categorize security processes on a need-to-know basis so that you have clear visibility of all admin activities.
- Requirement 8
Assign a unique ID to each person with computer access.
Unique IDs allow you to monitor the activities of each authorized individual.
For more security, implement 2-factor authorization, change access passwords regularly and keep documented records.
Unique IDs also facilitate Identity and Access Management (IAM) and helps you manage user accounts and secure user access at all levels.
- Requirement 9
Restrict physical access to cardholder data.
Data security extends to physical data centers and servers.
The data needs to be stored in a secure environment, whether on-site or off-site, with authorized accessibility.
For in-house data centers, monitor incoming visitors and unauthorized personnel. You can also update security checks regularly before granting access to the data center.
If you are storing data off-site, evaluate the storage provider's security measures and opt for a trusted hosting solution for Magento.
Goal 5: Monitor and Test Networks Regularly
- Requirement 10
Track and monitor all access to network resources and cardholder data.
Continuous monitoring and log management are necessary to keep track of all the system processes.
The centralized system logs need to be checked every day for anomalies or suspicious activities.
- Requirement 11
Regularly test security systems and processes.
Testing security systems regularly helps maintain the health of your system and keeps your data secure.
By running regular scans and tests, you'll identify vulnerabilities and successfully patch them before it causes any damage.
You can also conduct penetration tests to identify loopholes in your system.
The testers will act as hackers and try to break into your network, thereby identifying potential vulnerabilities proactively.
Check out the new Magento Security Scan, a free tool from Magento Commerce.
Goal 6: Maintain an Information Security Policy
- Requirement 12:
Maintain a policy that addresses information security for employees and contractors.
Policies are highly beneficial to create a well-defined security framework.
You can design the requirements for each employee and contractors such as:
- Employee manuals
- Acceptable technologies
- Incident response plans
- Risk analysis and security procedures
- Third-party service agreements
Best Practices for PCI Compliance for Magento
1. Employee Training
PCI compliance is technical and requires in-depth knowledge and training before implementation.
Make sure you have a team of experts working on securing your Magento platform.
Invest in employee training or hire industry specialists to help you with Magento security and compliance.
2. Self Assessment Questionnaires (SAQs)
PCI DSS releases nine self-assessment questionnaires for small merchants.
SAQ is a simple yes/no assessment test to analyze your security and take effective remediation measures.
Once you identify which questionnaire fits your business, you can complete the assessment and add an Attestation of Compliance.
PCI SAQ acts as proof for compliance and better security. It is beneficial when you're working with third-party businesses.
3. Document policies and compliance reports
Keep track of security policies with regular documentation of changes and operational practices in your organization.
PCI Report on Compliance and Attestation of Compliance (RoC/AoC) is an assessment to validate your security compliance.
It helps determine whether your Magento store is secure to process cardholder data and is conducted by a Qualified Security Assessor (QSA) or a qualified internal evaluator.
4. Conduct regular maintenance
Magento PCI compliance is not a one-time assessment process and requires continuous management.
It is essential to perform vulnerability scans regularly, update security, and document compliance policies thoroughly.
Magento system configurations are constantly changing, and without maintenance, you will lose compliance controls and risk data security.
Securing your Magento store with PCI compliance is not an easy process. It requires a lot of time and expertise to create compliance attestations and reports.
Since Magento Commerce is certified with Level 1 PCI compliance, you can use their attestation to support your compliance processes.
Businesses that conduct high-volume transactions often want to skip the commission fees of the payment processor. Large e-commerce businesses accept credit cards directly.
Magento Commerce helps reduce compliance responsibilities for such companies.
However, for small and medium-sized Magento stores, we recommended that you choose trusted payment services such as PayPal, Braintree, Amazon Pay, etc.
A secure payment provider eliminates many hassles of PCI compliance processes.
To improve your Magento security, you need a hosting provider that constantly monitors and updates your system for high performance and security.
MGT-Commerce specializes in Magento security so that your store is protected from data breaches.
We use AWS cloud computing services for industry-leading compliance standards and security measures.
Contact us to get highly secure and personalized solutions for your Magento business!