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New PCI 4.0 Compliance Rules are Coming for Hotels: What You Need to Know

Designed to address the ever-evolving threats facing the payment industry, PCI v4.0 upgrade includes new requirements that address issues like phishing and skimming. The PCI DSS has 12 key requirements, 78 base requirements, and 400 test procedures.
8/16/2023

More than 70% of travelers say that they are either somewhat or very concerned about the privacy and security of the data they provide to hotels. This is likely because fraud schemes have become increasingly sophisticated over time. Credit card fraud continues to burden hoteliers, at a staggering 5-6% of the annual revenue of the hospitality industry.

To combat this, the Payment Card Industry Data Security Standard (PCI DSS) has responded with an upgraded compliance standard, PCI v4.0, which has been in development since 2017. These requirements were put together by the PCI Security Standards Council, a global forum composed of MasterCard, Visa, JCB International, American Express, and Discover Financial Services.

With the former standard remaining active until March 2024, hotels have an opportunity now to adapt and reinforce their security measures. It’s critical for hoteliers to implement PCI v4.0 compliance effectively, addressing new and emerging threats while reaping the benefits of creating a competitive advantage in the market. Here’s how.

Understanding PCI v4.0 and Its Importance

PCI v4.0, the latest iteration of the PCI DSS, represents an essential step towards combating credit card fraud and protecting sensitive cardholder data. Designed to address the ever-evolving threats facing the payment industry, this upgrade includes new requirements that address issues like phishing and skimming, which have become more sophisticated in recent years. The PCI DSS has 12 key requirements, 78 base requirements, and 400 test procedures.

It’s not against the law to be non-compliant, but hoteliers can face financial penalties and be sued if a breach occurs while they are non-compliant. If a data breach occurs, hotels may be subject to fines, penalties, legal expenses, forensic investigations, and potential liability for fraudulent transactions.

Risks and Consequences of PCI Non-compliance

The primary risk of PCI non-compliance is data breaches. The risk of fraud and cybercrime is greater without the appropriate processes. The fines and penalties can range from $5,000 to $100,000 per month depending on the size of your company and the scope of noncompliance. Some hotels may have to pay increased transaction fees to their bank as a result of any breach. But importantly, a data breach resulting from non-compliance can severely damage a hotel’s reputation and customer trust.

Addressing non-compliance issues after a data breach can be costly. Remediation efforts may involve forensic investigations, breach notification requirements, customer communication, legal representation, credit monitoring services, and potential compensation to affected individuals. These costs are significantly higher than the investment requirements for maintaining PCI compliance from the get-go.

Lastly, payment card companies can revoke or suspend your hotel’s ability to process transactions if non-compliance is detected or repeated.

Where to Look for Noncompliance?

If you’re unsure of where to start, then bringing on a PCI compliance consultant may be the best place you want to start. They can help identify any gaps and help put together a plan and processes needed to stay in compliance.

For example, if your hotel is still using paper or PDF credit card authorization forms, then you’d be directed to use a Digital Authorizations tool, which enables hoteliers to collect credit card information securely through tokenization. Credit card information can also be put through fraud checks to drastically reduce fraud and chargebacks.

For some, upgrading to a Digital Authorization tool is all they need to become PCI 4.0 compliant. However, for others, a more extensive overhaul is needed.

Why Act Now?

Even though there is still time to adopt PCI 4.0 standards, hoteliers should take action now to become PCI v4.0 compliant. For one, if you’re unsure if you’re currently compliant, then there is a decent chance that you’re out of compliance with the current standards.

It could also take your property a significant amount of time to become compliant with the new standards. Becoming PCI compliant can be a challenging process.

Importantly, PCI compliance will help offer your customer and property the latest and greatest in data protection while maintaining customer trust. By adopting the best practices outlined in PCI v4.0, hoteliers can establish robust security measures that safeguard their guests' data and financial information, ensuring trust and loyalty among their clientele. Moreover, achieving PCI v4.0 compliance offers hoteliers a competitive advantage, as it demonstrates a commitment to data security and customer safety, setting them apart from non-compliant competitors.

In addition, adopting digital credit card authorization technology that is PCI compliant - instead of continuing to use non-compliant processes like paper or PDF credit card authorization forms - eases the burden on front desk staff and makes the guest experience more seamless.

Evolving Requirements

PCI v4.0 emphasizes the importance of encryption and tokenization, which play pivotal roles in protecting cardholder data. Encryption scrambles data during transmission and storage, making it unreadable to unauthorized parties. Tokenization, on the other hand, replaces sensitive data with unique tokens, ensuring that even if breached, the data holds no value to hackers.

As a powerful defense against unauthorized access, multi-factor authentication (MFA) will be implemented across all systems that handle cardholder data. MFA requires users to provide multiple forms of identification before accessing sensitive information, adding an extra layer of security against potential breaches.

How to Implement PCI v4.0

Here are a few steps for hotels to take as PCI v4.0 becomes the standard for all organizations that collect credit card data. First, determine the scope of your vulnerability while you get familiar with the PCI v4.0 requirements. Use the PCI DSS Summary of Changes, easily found and bookmarkable in the PCI DSS document library, to map the new requirements against your existing security controls and train your staff on the new iteration.

Perform gap assessments, like identifying whether you can ditch paper and PDF authorization forms for a digital authorization technology, or if your password policy isn’t as strong as it could be. Once you know where you need to strengthen your policies, plan your transition. A trusted security team can help.

You’ll want to create or update your standard operating procedures to help keep your workforce’s commitment to security consistent and help with training. Prioritize security as a continuous process.

That means that implementing PCI v4.0 compliance is a critical step for hoteliers to protect their guests' data, secure their reputation, and gain a competitive edge in the market. By building a dedicated compliance team, conducting a thorough data audit, and adopting encryption, tokenization, and multi-factor authentication, hotels can fortify their data security and create a safe environment for their guests. Regular security awareness training and assessments are vital in maintaining compliance over time. This can be done by partnering with a digital alternative for credit card authorization forms. Through concerted efforts, hoteliers can embrace PCI v4.0, safeguard their revenues, and bolster customer trust in an increasingly digital world.

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