The purpose of this article is to familiarize different merchant services industry players with the four levels of PCI compliance, and briefly describe some solutions available for level 4 merchants (the most common category), allowing them to go through PCI certification procedure as smoothly as possible.
As we mentioned in one of the previous articles, any business dealing with cardholder data in some way, has to meet PCI compliance requirements and go through some sort of PCI audit procedure. Depending on volumes of transactions processed (including online transactions) a business is classified as belonging to one of the four PCI compliance levels. Beside processed transaction volumes, a company’s PCI compliance level also depends on predominant card entry mode the company utilizes. There are several card entry modes (determining card industry types), but in terms of PCI compliance levels card entry modes (or card industries) can be divided into two basic categories: e-commerce and other transactions.
Let us briefly review the levels of PCI compliance (as they are defined by Visa), moving from 4 to 1.
How PCI compliance levels are defined
A level 4 merchant is a business processing less than 20 thousand Visa e-commerce transactions a year, or any merchant processing less than a million Visa transactions a year, regardless of card entry mode.
A level 3 merchant is a business processing between 20 thousand and one million Visa e-commerce transactions a year.
A level 2 merchant is a business processing between 1 and 6 million Visa e-commerce transactions a year.
A level 1 merchant is a business processing more than 6 million Visa e-commerce transactions a year, or a business, considered a level 1 merchant by Visa association itself (based on cardholder data security and risk related considerations).
The complexity of PCI compliance certification and PCI audit for a given business are determined according to the level this business belongs to.
In order to meet PCI compliance requirements, merchants, belonging to PCI compliance levels 1,2 and 3 can utilize various solutions (such as tokenization, profiling and others), enabling them to store credit card data and manage cardholder data flow in the most effective way.
Many online businesses, web-sites, and small size merchants, fall into level 4 category, and often look for the most suitable solutions for PCI certification. In this post we focus on this (most common) type of merchants – level 4 merchants, which, according to some sources, handle about one third of the total volume of credit card transactions processed.
In order to meet PCI requirements, level 4 merchants have to fill out the so-called SAQ (self-assessment questionnaire). The type of a SAQ (ranging from A to D) that a given merchant has to fill out, depends on this merchant’s validation type. Basically, the validation type depends on how the merchant handles cardholder data (and whether the merchant stores it or not). More information on merchant validation types can be found here.
Level 4 merchants often utilize the services of other companies (level 1 service providers acting as PSPs in this case) to process credit cards. Particularly, they often rely on payment pages and tokenization services of the PSPs. In most cases the PSP itself would have a special mechanism for level 4 merchants, simplifying the process of filling out the SAQ significantly.
For example, most companies, performing PCI audit (such as Trustwave, Security metrics, CoalFire) have special software packages (or web-based offerings) designed to help level 1 providers that use them for PCI audits to simplify the completion of the self-assessment questionnaires for their level 4 customers.
Basically, an SAQ is a simple *.pdf document. PCI audit companies create special web-portals for level 4 merchants. An authorized level 4 merchant can enter such a portal, submit its SAQ, and identify its payment service provider. After that the fields related to the PSP are auto-filled. These can be the fields denoting particular features (which level 4 merchants might not even be aware of), provided by the PSP itself and not by level 4 merchants from the PSP’s portfolio.
The described arrangement (solution) greatly simplifies the process of PCI compliance certification for both PSPs and their level 4 clients, as well as for PCI auditors themselves.
Before starting to worry about PCI compliance, a level 4 merchant should reach out to its PSP and enquire about the respective automated solution, that the PSP might already have in pace.