A Growing Move Toward PCI Compliance

PCI is becoming a default data security standard for creditors, merchants, and possibly debt purchasers and collectors. PCI, the Payment Card Industry Data Security Standard, was developed by the major card brands to ensure the security of consumer payment card information as it travels from the merchant point-of-sale to processors to the card issuing bank and back again.

Consider this: Visa reported that 77 percent of its so-called Level 1 merchants met PCI compliance at the end of 2007, up from 65 percent at the end of the third quarter. These are the big guys, merchants that conduct more than $6 million in Visa transactions annually. Visa also reported that 62 percent of Level 2 merchants met PCI requirements at the end of the year, up from 43 percent in the third quarter. Level 2 merchants conduct between $1 million and $6 million annually in Visa transactions.

In the second half of 2007, PCI compliance by these large merchants grew 33 percent, according to Visa.

This trend seems set to continue as Visa and other major card firms such as MasterCard and American Express enforce PCI compliance by levying monthly punitive fines on non-compliant merchants.

So what does this mean for the ARM industry? As more credit grantors require their service providers meet PCI standards, agencies servicing credit card debt will need to meet these demands of their clients.

A number of the larger collection agencies have already begun to use PCI compliance as a default standard for business.

In addition, legislative change may soon play a larger role in pushing the importance of PCI compliance for the financial service industry.  

Proof of this can be found with the introduction of bills at the state level that codify specific PCI requirements, with the Plastic Card Security Act (Minnesota Statute E356E.64), and Texas HB 322 as two examples.

Whether or not legislative action continues to proliferate among the states or action is taken to the federal level, PCI is certain to continue making headlines for 2008.