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Compliance and Starting a Business
Starting a business can be overwhelming, especially if you are a first-time entrepreneur. There’s a lot to worry about, from attracting financing to marketing your services and products.
One of the items that should on top of your checklist is PCI compliance.
If your startup handles credit or debit card payments, it means that you collect data from clients. You should ensure that you safeguard clients’ data from breaches.
This is what PCI compliance is all about.
Often, PCI compliance feels like a heavy load to startup entrepreneurs since it addresses everything about the business. Nonetheless, complying with all laws and regulations sets up your business for success.
Why Is Compliance Important To Startups?
PCI compliance is both an external and an internal requirement. Externally, the industry that you operate in decides the laws and regulations that you must comply with.
Often, these laws are enacted and enforced at the local, state, or federal level by the Payment Card Industry Data Security Standard.
Your startup can face fees and penalties when you fail to comply with industry standards as well as relevant laws and regulations. Internally, compliance enables your startup to operate with integrity.
Typically, failure to adhere to internal compliance attracts penalties that are determined by board members or other high-ranking company executives.
As a startup entrepreneur, you must keep in mind that your business can only grow if it has good standing. PCI compliance goes a long way in enhancing your reputation.
It shows clients you care about them, and that is why your customers will always thank you when you include them in your compliance strategy.
Ramifications Of Non-Compliance
Generally, the cost of PCI compliance is low compared to the penalties that accrue from non-compliance. New laws and regulations keep cropping up.
Complying with them may seem like a nuisance. Likewise, it may drain the already-strained resources that you may have at your disposal. Nonetheless, you should not fall prey to the temptation of sidestepping some legal and regulatory requirements since the cost of non-compliance can be steep.
To get an idea about the cost of not being PCI compliant, you should consider the financial implications of non-compliance.
A recent study by the Ponemon Institute established that on average, the annual cost of non-compliance is $10 million. On the other hand, the annual cost of compliance is $2.5 million.
This indicates that non-compliance costs more than compliance.
Generally, non-compliance costs arise from expenses that are associated with productivity loss, business corruption, fines and penalties, and other related settlement costs.
Besides the financial implications of non-compliance, your business can also lose its reputation or have it’s business licenses revoked.
How To Become PCI Compliant
There is a lot to do if you want your business to become PCI compliant. Initially, the process may seem daunting, but once you get to grips with it, everything else will be easy for you.
There are different compliance categories. Generally, these categories are determined by the number of payments that you handle. You should first determine the type that you belong to.
After determining your compliance level, fill out a self-assessment questionnaire, which is a guidebook that helps you assess your compliance level.
Filling out the questionnaire will help you pinpoint areas where your business falls short so that you make necessary changes.
Once this is done, you can complete the attestation of compliance form, which proves that your business complies with relevant PCI standards.
Generally, the PCI compliance process is straightforward.
Therefore, startup entrepreneurs should ensure that their businesses are compliant. Working with a qualified compliance auditor or a qualified security assessor is advisable since it helps you stay compliant as your business scales.