Blog > PCI Compliance: Safeguarding Cardholder Data in the Digital Age

PCI Compliance: Safeguarding Cardholder Data in the Digital Age

By |Published On: June 6th, 2023|

In the modern era of digital transactions, ensuring cardholder data security has become a paramount concern for businesses and consumers alike. As the frequency and sophistication of cyber threats continue to rise, organizations must adopt stringent measures to protect sensitive cardholder data.

By understanding the significance of cardholder data and its relationship to PCI compliance, businesses can establish robust security frameworks, mitigate risks, and build customer trust.

This article will explore the crucial role of cardholder data in PCI compliance and answer frequently asked questions like what is primary account number (PAN) data, what is the cardholder name, and what is cardholder data?

What is cardholder data?

Cardholder data (CHD) refers to the data associated with credit and debit cards, consisting of information required to access funds on the payment cards such as the cardholder name, primary account number, expiration date, and service codes. Without this data, users can’t access funds on their cards.

Like stealing the key to a locked safe, cybercriminals often try to acquire cardholder data to make fraudulent purchases, create counterfeit cards, and engage in identity theft. This is why organizations must implement robust security measures to safeguard cardholder data.

The role of cardholder data in PCI compliance

Cardholder data and PCI compliance have a very close relationship, as PCI DSS guidelines are used to protect cardholder data. Without PCI compliance, cardholder data is susceptible to data breaches.

The Role of cardholder data in PCI compliance

What is PCI compliance?

Payment Card Industry (PCI) compliance refers to a comprehensive framework of security requirements and best practices businesses must follow to safeguard cardholder data, maintain secure payment environments, and reduce the risk of data breaches and fraud.

Merchants accepting payments from their customers should know what PCI compliance entails and the requirements it enforces to ensure they meet these standards.

What is PCI DSS?

Payment Card Industry Data Security Standard (PCI DSS) is the set of security standards established by the Payment Card Industry Security Standards Council (PCI SSC) to protect cardholder data and ensure secure payment card transactions.

PCI standards consist of a list of 12 high-level requirements covering various security aspects:

  1. Install and maintain a secure network
  2. Protect cardholder information
  3. Maintain a vulnerability management program
  4. Implement strong access control measures
  5. Regularly monitor and test networks
  6. Maintain an information security policy
  7. Restrict access to cardholder data
  8. Assign a unique ID to each person with computer access
  9. Restrict physical access to cardholder data
  10. Track and monitor all access to network resources and cardholder data
  11. Regularly test security systems and processes
  12. Maintain a policy that addresses information security for employees and contractors

Now that you know the requirements of PCI compliance, you should also familiarize yourself with the terms and codes associated with cardholder data.

8 terms and codes associated with cardholder data

Cardholder data includes numerous terms and codes that are important for businesses to understand since they typically relate to security measures that protect sensitive authentication data.

Here are 8 of the most commonly used terms associated with cardholder data:

  1. Cardholder: A cardholder is an individual or entity that a financial institution issues a credit, debit, or prepaid card for to make purchases and withdrawals. This individual is the card’s authorized user and is responsible for making purchases, conducting transactions, and managing the associated account. The cardholder’s name is printed on the card to help identify the authorized user.
  2. Primary account number (PAN): This number is a unique identifier assigned to each payment card and can be found on the front of the card. This series of numbers is meant to identify the cardholder and the financial institution that issued the card.
  3. Personal identification number (PIN): This numeric code is another unique identifier primary account holders use to verify their identity to access specific systems, devices, or accounts. The PIN is a confidential and unique combination of numbers, usually four to six digits in length, chosen by the cardholder or assigned by the card issuer. When making a transaction or accessing a system, the cardholder enters the PIN into a keypad or terminal to verify their identity and authorize the action.
  4. Service codes: These codes go by many names, including card validation code (CVC), card authentication value (CAV), card validation code (PAN CVC), card verification value (CVV), and card security code (CSC). Service codes are three- to four-digit codes following the card’s expiration date that typically indicate the types of services and transactions that can be performed with the card.
  5. Cardholder data environment (CDE): The cardholder data environment is responsible for storing, processing, and transmitting cardholder data. This network includes databases, servers, applications, and network devices for handling CHD and carries stringent security measures to protect sensitive information from unauthorized access.
  6. Self-assessment questionnaire (SAQ): The SAQ allows merchants to assess their PCI compliance by asking questions about their operations, policies, and security controls concerning cardholder data. Organizations can then determine their level of PCI compliance and adjust areas that don’t meet these standards.
  7. Truncation: Truncation shortens or removes sensitive cardholder information during transactions to enhance security by only storing or displaying a portion of this data and hiding the whole card number or the expiration date.
  8. Qualified security assessor (QSA): A QSA is an individual authorized to assess the PCI compliance of businesses. QSAs perform on-site audits, review documentation, and conduct interviews with relevant personnel to determine the effectiveness of security controls and identify any vulnerabilities or non-compliance issues.

Since cardholder data includes various terminology, it’s essential to clear up any confusion and understand the roles and codes associated with this data.

Common misconceptions about cardholder data

As cyber threats continue to evolve, cybersecurity must adapt to changing environments, and users rely on reliable sources to stay updated on new standards and avoid any misconceptions about cardholder data.

To help your business make more informed decisions to protect customers’ cardholder data, there are three common misconceptions to be aware of:

  • Storing cardholder data is safe as long as it’s encrypted. Although encryption is an essential security measure, it’s not bulletproof. With threats constantly advancing, even encrypted data runs the risk of being breached. Implementing a data minimization approach when storing sensitive cardholder information to retain only necessary information can help.
  • PCI compliance guarantees cardholder data is fully secure. When it comes to cardholder data, PCI compliance is an absolute necessity. That said, it doesn’t ensure complete protection. PCI compliance is essentially the baseline of security measures — additional security is recommended.
  • Cardholder data is not at risk if a website has a padlock symbol. A padlock symbol means a secure sockets layer (SSL) and transport layer security (TLS) encrypt the connection and provide secure data transmission. However, this doesn’t guarantee total website security or the protection of cardholder data on the server. Although SSL and TLS are essential, websites should add other security measures and remain PCI-compliant for comprehensive data protection.

Clearing up misconceptions about cardholder data is only one step. Merchants can also implement other measures and protocols to enhance their payment security.