Government agency credit card programs and PCI compliance

August 28, 2023

Organizations that process card payments must comply with the Payment Card Industry (PCI) Data Security Standard (DSS). Learn more about PCI DSS.

The Payment Card Industry (PCI) Data Security Standard (DSS) Council is responsible for the global requirements governing the security of cardholder data. Card brands are responsible for enforcement. All merchant services providers, also known as “acquirers,” have the responsibility to report PCI DSS compliance to the data security programs of the card brands.

All organizations that accept and process card payments must comply with the PCI DSS. This includes government agencies that take credit card payments for constituent services. The cost of noncompliance can be high, so it pays to comply with the PCI DSS.

"PCI DSS applies to all entities that process, transmit and/or store cardholder data,” explains Michael Hodge, regional director of payment solutions at U.S. Bank. “If a government agency is processing card payments, then it’s clearly in scope for PCI compliance.”

Major card associations worked together to develop the PCI DSS because of escalating risks related to credit card fraud.

 

PCI DSS includes requirements that address:

  • Security management
  • Policies
  • Procedures
  • Network architecture
  • Software design
  • Other critical protective measures

 

Consequences of noncompliance

PCI DSS compliance requirements and validation apply to government agencies the same as they do for other businesses.

“If an organization, such as a government agency, fails to adhere to PCI DSS, they may be assessed fines for noncompliance, and/or may no longer be able to process cards for payment,” Hodge says. Fines vary by card brand and an agency’s assigned PCI level, but they can be as high as hundreds of thousands of dollars.

“Beyond fines, government agencies also need to comply with the standard to maintain constituent trust,” Hodge says. “They should consider it a best practice to protect cardholder data and information.”

“At U.S. Bank, our government agency clients consistently adhere to their PCI DSS compliance, and validate it annually,” Hodge says.

However, Hodge notes the configuration of card processing networks for government agencies — and how these networks speak to one another — can affect how agencies manage and conduct their PCI DSS audit duties. They may be subject to multiple audits and validations, or just one.

“Given that we’re reminded of security breaches daily, it’s imperative that agencies accepting cards recognize and address annual compliance,” Hodge says.

“As long as an agency is the merchant of record, it has compliance responsibility. Once it begins accepting card payments, its compliance duties begin. The agency should be diligent to discuss with its payment acquirer the steps necessary to reach compliance responsibility.”

 

Some government entities may find they have bureaucratic challenges with PCI DSS compliance

Government entities work across agencies and with management to understand their responsibilities, which include the need to examine, establish and maintain a strong data security posture. They also need to understand the costs of annual validation. “As a result, it’s important that they develop a best practices policy for card payment acceptance,” Hodge says.

The PCI DSS Council provides a list of approved companies that can assist you with an audit. Acquirers often recommend a PCI Approved Qualified Security Assessor, but government agencies aren’t required to follow this recommendation.

For more information about PCI DSS compliance, talk to your merchant services provider and visit www.pcisecuritystandards.org. Card brands also offer data security program help:

Related content

Myth vs. truth: What affects your credit score?

More payment options create checkout success

Want AP automation to pay both businesses and consumers?

Risk management strategies for foreign exchange hedging

Access, flexibility and simplicity: How governments can modernize payments to help their citizens

ABCs of APIs: Drive treasury efficiency with real-time connectivity

The latest on cybersecurity: Mobile fraud and privacy concerns

Rule 18f-4: The limited use exception

Liquidity management: A renewed focus for European funds

Administrator accountability: 5 questions to evaluate outsourcing risks

IRC Section 305(c): Deemed distributions and related regulations

A first look at the new fund of funds rule

Depositary services: A brief overview

Colleges respond to student needs by offering digital payments

Maximizing your deductions: Section 179 and Bonus Depreciation

6 timely reasons to integrate your receivables

Benefits of billing foreign customers in their own currency

Improve government payments with electronic billing platforms

Best practices on securing cardholder data

Turn risk into opportunity with supply chain finance

Hospitals face cybersecurity risks in surprising new ways

Authenticating cardholder data reduce e-commerce fraud

Post-pandemic fraud prevention lessons for local governments

Webinar: Robotic process automation

What is CSDR, and how will you be affected?

Proactive ways to fight vendor fraud

Webinar: CRE technology trends

5 Ways to protect your government agency from payment fraud

Avoiding the pitfalls of warehouse lending

Fight the battle against payments fraud

Fraud prevention checklist

Complying with changes in fund regulations

Why Know Your Customer (KYC) — for organizations

The password: Enhancing security and usability

How to improve your business network security

Government agency credit card programs and PCI compliance

Cybersecurity – Protecting client data through industry best practices

Business risk management for owners of small companies

BEC: Recognize a scam

Evaluating interest rate risk creating risk management strategy

Navigate changing consumer behavior with service fees

Modernizing fare payment without leaving any riders behind

Tap-to-pay: Modernizing fare payments pays off for transit agencies and riders

How real-time inventory visibility can boost retail margins

Escheatment resources: Reporting deadlines for all 50 states

Payment industry trends that are the future of POS

White Castle optimizes payment transactions

Managing the rising costs of payment acceptance with service fees

Three healthcare payment trends that will continue to matter in 2022

Webinar: CSM corporation re-thinks AP

Increase working capital with Commercial Card Optimization

3 benefits of integrated payments in healthcare

Top 3 ways digital payments can transform the patient experience

Automate accounts payable to optimize revenue and payments

Automate escheatment for accounts payable to save time and money

Ways prepaid cards disburse government funds to the unbanked

3 reasons governments and educational institutions should implement service fees

Webinar: AP automation for commercial real estate

Understanding and preparing for the new payment experience

Safeguarding the payment experience through contactless

COVID-19 safety recommendations: Are you ready to reopen?

Higher education and the cashless society: Latest trends

3 ways to make practical use of real-time payments

4 benefits to paying foreign suppliers in their own currency

Restaurant surveys show changing customer payment preferences

Unexpected cost savings may be hiding in your payment strategy

Digital trends poised to reshape hotel payments

Enhancing the patient experience through people-centered payments

Work flexibility crucial as municipalities return to office

Overcoming the 3 key challenges of a lump sum relocation program

Streamline operations with all-in-one small business financial support

How mobile point of sale (mPOS) can benefit your side gig

Rethinking common time management tips

How to apply for a business credit card

How jumbo loans can help home buyers and your builder business

How to accept credit cards online

How Everyday Funding can improve cash flow

Tips for navigating a medical hardship when you’re unable to work

When your spouse has passed away: A three-month financial checklist

How to save money in college: easy ways to spend less

3 awkward situations Zelle can help avoid

Dear Money Mentor: How do I set and track financial goals?

P2P payments make it easier to split the tab

Dear Money Mentor: How do I begin paying off credit card debt?

Disclosures

Start of disclosure content

Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rate and program terms are subject to change without notice. Mortgage, Home Equity and Credit products are offered through U.S. Bank National Association. Deposit products are offered through U.S. Bank National Association. Member FDIC.