How to Keep Credit Card Account Information Updated for Recurring Billing That’s the conclusion of a study by Card Hub, a credit card comparison website.
Why are consumer cards different cards How to Keep Credit Card Account Information Updated for Recurring Billing:
The Card Hub study measures the level of protection U.S. card issuers offer their small business customers, compared to the protection provided to consumers. As you may recall, the CARD Act of 2009 was designed to protect cardholders from a long list of “unfair” and “deceptive” practices used by credit card companies How to Keep Credit Card Account Information Updated for Recurring Billing.
Chase, Citibank, Discover and HSBC were also given zeroes. However, Bank of America and Wells Fargo managed to outdo their peers and claim the title of the absolute worst small business credit card companies by scoring “Poor” in the “Issuer Transparency” category How to Keep Credit Card Account Information Updated for Recurring Billing.
The CARD Act regulates a wide variety of credit card practices. For example, it limits penalty fees to $25 and prohibits issuers from charging inactivity fees and retroactive interest rate increases, while requiring them to provide better information to cardholders about the terms of their credit card agreements How to Keep Credit Card Account Information Updated for Recurring Billing.
Crucially, however, the provisions of the CARDS Act do not apply to small business credit cards. Why? Well, the Federal Reserve told Congress that limiting banks’ ability to raise rates could lead to potentially higher costs and reduced lending How to Keep Credit Card Account Information Updated for Recurring Billing:
Credit card issuers have more difficulty assessing the creditworthiness of small businesses than consumers. Therefore, issuers’ willingness to extend the relatively large credit card lines requested by small businesses may depend to a large extent on the issuer’s ability to adjust prices in the future as they learn from experience about businesses’ ability and willingness to pay How to Keep Credit Card Account Information Updated for Recurring Billing.
Limiting the ability of card issuers to adjust interest rates could lead to higher initial interest rates, which would hurt businesses that borrow on small business credit cards.
Card Hub Small Business Credit Card Study
However, some issuers have chosen to voluntarily extend CARD Act protections to small business card holders, and Card Hub ranked the 10 largest credit card companies in the US based on how well they performed in this area. This is how these issuers scored:
therefore, it is important to store credit card information correctly. In addition, the theft of credit cards and other sensitive data causes businesses to lose the trust of consumers and may lead to legal action How to Keep Credit Card Account Information Updated for Recurring Billing.
But in today’s increasingly contactless world, allowing customers to make purchases using a credit card is also a must. So if your business accepts credit cards, you need to protect your customer’s credit card information.
See also: Advantages of using a credit card vault for PCI
In your contract with your bank or processor, you have agreed to comply with industry data security standards such as PCI DSS. A competent payment provider will have the technologies and processes in place to comply with PCI DSS.
Likewise, you have a responsibility to ensure that your business properly protects your customers’ information. Issues such as how you store credit card information, the equipment you use to store it, and the service providers you work with should be thoroughly researched in credit card storage.
See our article for details on how your business can use best practices for storing credit card information How to Keep Credit Card Account Information Updated for Recurring Billing.
How should you store credit card information?
The major data breach incidents we’ve heard in the news remind us how important it is as a business to keep credit card information and other personal information safe. If you operate recurring or subscription-based payments, you should routinely store credit card information.
See also: How do I protect the stored data of payment card holders?
Storing credit card information online is most beneficial for businesses that deal with recurring accounts or have active account users who make frequent purchases. But if you’re not in that camp, you have to ask yourself why you should keep credit card information on your servers. If there is no clear benefit to you and your customers from storing credit card information, it is better not to store credit card information How to Keep Credit Card Account Information Updated for Recurring Billing.
You may work with a service provider to store credit card information. However, the service provider you work with should have services that can store your customer’s credit card information and sensitive data.
Can Merchant Store Credit Card Information?
To answer briefly, yes, merchants can store credit card information.
The long answer is that merchants must be PCI compliant in order to store their credit card information. However, some data you can keep and some you can’t ensure that you handle your customers’ credit card information securely How to Keep Credit Card Account Information Updated for Recurring Billing.
See also: PCI requirements for storing credit card information
It is essential that you know what you can and cannot store. It is also important that you understand the laws regarding customer credit retention, as you are legally entitled to withhold some details and not others.
You must ensure that your data is encrypted and merchants can retain the following details if your credit card details are properly encrypted How to Keep Credit Card Account Information Updated for Recurring Billing:
PAN (Primary Account Number) (16-digit number on the front of the card)
Service code (located on the magnetic strip of the card)
Here’s what you can’t save even if the data is encrypted:
SAD – sensitive authentication data (e.g. full magnetic stripe information)
PIN blocking (ie encrypted PIN)
CVV/CVC (three or four digit code on the back of the card)
Building a PCI compliant system is the next step in determining how to store credit card information. It is essential to think about who should have access to consumer credit card information and build a secure access system with clear guidelines How to Keep Credit Card Account Information Updated for Recurring Billing.
See also: What are the components of a debit or credit card and how do they work?
These should be related to your company’s access, password creation and maintenance, and data processing needs. Don’t forget to share all this in writing when hiring new employees How to Keep Credit Card Account Information Updated for Recurring Billing.
What are the issues related to the retention of credit card information?
It’s best to consider many different aspects of data security when you’re running your business. For example, when you store credit card information, you risk data breaches and fraudulent activity. While we’ll cover simple things you can do to keep your card information safe as a business owner, there are some precautions your processor will want you to take.
Once you have secured a merchant account, you must adhere to the payment card industry’s data security standards in order to securely process card payments. These standards are a security framework developed by the PCI SSC and updated as needed How to Keep Credit Card Account Information Updated for Recurring Billing.
The PCI DSS standard sets minimum requirements for the protection of cardholder information. For example, under PCI DSS, data can only be stored on devices and payment applications with PCI SSC-approved PINs. Additionally, businesses that opt out of PCI compliance are subject to penalties such as a PCI non-compliance fee.
PCI can seem confusing at first, but you don’t have to figure it out on your own. Contact a certified payment processor for more information How to Keep Credit Card Account Information Updated for Recurring Billing.
What are the legal requirements for retaining credit card information?
Of course, you must first ensure that you comply with all legal obligations. However, there is no single rule governing a client’s credit card information. Conversely, any business that has a merchant account should be aware of PCI DSS regulations. PCI compliance refers to a set of measures that all merchants must take to protect cardholder information by defining how the data is to be stored How to Keep Credit Card Account Information Updated for Recurring Billing.
When determining how to securely store credit card information, meeting PCI DSS requirements will greatly improve your security. PCI DSS requirements cover most of the credit card storage best practices listed below.
What are PCI compliant approaches to storing credit card information?
Storage of cardholder data should be limited to what the merchant needs to meet legal, regulatory or business needs. Below are the most trusted PCI-compliant practices and approaches for collecting and securely storing credit card information online How to Keep Credit Card Account Information Updated for Recurring Billing:
One-way hash: Hashing is suitable for situations where there is no need to obtain the original card number and it is an irreversible technique. The algorithm only displays index data that references confidential database entries.
Strong cryptography: Cryptography uses industry-recognized encryption protocols to render payment data unreadable.
Truncation: Truncation involves removing most of the PAN, with no more than the first six and last four digits displayed.
Directory Tokens and Blocks: It is a method that uses an encryption technique to hide the original digits using a random key or “pad” How to Keep Credit Card Account Information Updated for Recurring Billing.
Keeping credit card information on-site, on the other hand, is a complicated approach that requires a great deal of knowledge and effort. Many businesses therefore choose to outsource their data storage needs.
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