When companies are using credit card processing systems, they may be charged a PCI compliance fee. These fees are based on the security that is needed for the merchant. Some companies charge non-compliance fees if their merchants do not use the security procedures that are required. Use these tips to learn about compliance fees, and remember that every processor is different.

What Do Credit Card Processing Companies Do When Merchants Sign A Contract?

Merchant accounts are set up for the client when they sign their contract. These merchants are asked to use security procedures to protect themselves, and a fee may be charged to provide security. The fees vary across the industry, and no fee schedule can be used to accurately determine how much it costs from one credit card processor to another.

Once the merchant has signed their contract, they may be charged a non-compliance fee if they do not put in place the appropriate amount of security. Again, every company has a different fee schedule when it comes to PCI fees. If the merchant chooses not to make best efforts to be PCI compliant, they could pay more every month to their processor.

If the merchant is using the security system from the processor, they might pay a flat fee for the entire year.

Why Do Merchant Accounts Need Security?

Merchant accounts need security because they use phone and Internet lines to process payments. Every merchant processes a certain amount of money per year, and they should invest in security that matches the amount of money they process. The credit card processor uses tiers to charge for PCI compliance, and they expect more security if the merchant processes more transactions every year.

Plus, merchants need to upgrade their security if they are selling more every year. The merchant might move up to a new tier, and they should pay for a higher level of security. If the merchant is not willing to upgrade their security, they could be charged a non-compliance fee.

A business should calculate the number of transactions they process during the year. When the company realizes that they have moved up to another tier, they should invest extra money in security. When the company processes more transactions, they put more data out there that could be hacked.

How Do Companies Lose Data Or Get Hacked?

Companies could lose data through their WiFi connection (if not secure), and they might lose data because they have viruses or malware on every machine. Endpoint security is needed for every machine that a company uses. Plus, that security can be used to prevent a hacker from accessing the credit card processing software.

In addition, credit card machines might sit in front of a register in a store. These machines can be hacked if there is not any security. This makes it very difficult for companies to protect their customers, and they put their credit card processor at risk. This is why credit card processors charge these fees.

Is the Merchant Testing Their System?

When merchants sign their contracts, they are required to complete security testing for each location. The merchant must list all the locations where they need to process credit cards and complete the tests that are required, or they should pay the non-compliance fee.

When merchants are not testing their system properly, they could be charged the non-compliance fee at any time. Because all credit card processors are different, they could demand that the merchant do more testing. Plus, the credit card processor could change its rules at any time. This might happen because there are new viruses and hacking threats online.

How Long Are Credit Card Processing Contracts?

Most companies require their merchants to sign a one-year contract. If the merchant finds a processor that they like, they can sign a longer contract. Merchants should ask if they can get a discount on their compliance fees when they sign a long contract. Plus, the contract must be reviewed every time it is renewed. The merchant might see major changes in the contract, and they should not sign until they are comfortable with the contract.

What About eCommerce Stores?

When a credit card processor signs a contract with an eCommerce store, they will list all the security requirements for that website. Hackers can access a website to steal customer information, and they could steal information without being detected. This is why credit card processors will require that their clients pass vulnerability tests. The merchant must submit proof that they passed the tests. Plus, the store should upgrade their security when asked to.

The software package for some eCommerce processing programs includes security, but some companies require their clients to get their own security program. Again, the merchant will be charged a non-compliance fee if they are not using the right type of security.

Can The Contract Be Cancelled?

The credit card processor can cancel the contract at any time if they believe that their merchants are not using secure methods to process transactions. The processor might send a notification letter to the merchant, and they will have a certain amount of time to upgrade their system.

Conclusion

Every company that processes credit card payments needs to invest in a processor that can handle any payment. However, the processor will require the merchant to use the right level of security. If the merchant does not process secure transactions, they could be charged a fee for non-compliance. Plus, their contract could be canceled because they are not using safe business practices.