Payment compliance involves adhering to a set of rules and standards designed to secure financial transactions and protect sensitive customer data. For any business that accepts online payments, understanding standards like PCI DSS and PSD2 isn’t just a technical requirement—it’s fundamental to building customer trust, avoiding hefty fines, and ensuring the stability of your revenue operations. These frameworks provide a blueprint for creating a secure payment environment.

Payment security standards are established by industry bodies and regulatory authorities to create a consistent, secure environment for processing payments. They work by defining a series of technical and operational requirements that businesses must implement and maintain. These requirements cover everything from how data is captured and encrypted to who can access it and how networks are secured.

Let’s break down the key players:

• Payment Card Industry Data Security Standard (PCI DSS): This is a global standard for any organization that accepts, transmits, or stores cardholder data. It was created by the major card brands (Visa, Mastercard, American Express, etc.) to reduce credit card fraud. Compliance involves meeting a series of requirements, including building a secure network, protecting cardholder data through encryption, and regularly monitoring and testing security systems.
• Payment Services Directive 2 (PSD2): A European regulation aimed at making payments more secure, increasing consumer protection, and fostering innovation and competition in the payment services industry. A key mandate of PSD2 is Strong Customer Authentication (SCA), which requires multi-factor authentication for many online transactions to verify the user’s identity.
• Other regulations: Depending on your location and industry, other standards like GDPR (for data privacy in the EU) and CCPA (for consumer privacy in California) also play a significant role in how you must handle customer payment and personal information.

Adherence is typically verified through self-assessments or formal audits by certified assessors, depending on the volume of transactions a business processes.

Ignoring payment security is a risk most businesses can’t afford to take. The consequences of a data breach extend far beyond immediate financial loss, potentially causing long-term damage to a company’s reputation and customer relationships.

Here’s why a proactive approach is critical:

• Building customer trust: Customers need to feel confident that their financial information is safe. A commitment to security is a powerful signal that you value their trust, which can improve conversion rates and customer loyalty.
• Avoiding financial penalties: Non-compliance can result in severe fines from payment card issuers and regulatory bodies. For PCI DSS, these can range from thousands to hundreds of thousands of dollars per month.
• Preventing data breaches: The average cost of a data breach is millions of dollars, factoring in everything from forensic investigations and legal fees to customer notifications and credit monitoring services.
• Maintaining business continuity: Following a breach, card brands can revoke your ability to accept payments, effectively shutting down your business. Compliance helps ensure you can continue to operate without interruption.

Achieving and maintaining compliance can be a complex and resource-intensive process, especially for startups and small businesses. Founders and developers often face several common hurdles on the path to building a secure payment infrastructure.

These challenges lead many businesses to adopt solutions that abstract away the complexity, allowing them to focus on their core product instead of building and maintaining a compliant payment system from the ground up.

Whether you’re building your own system or integrating with a third-party provider, following best practices is essential for protecting your customers and your business.

• Reduce your scope with tokenization: Never store raw credit card numbers on your servers. Use a payment gateway that provides tokenization. This process replaces sensitive card data with a unique, non-sensitive token that you can safely store and use for recurring billing without touching the actual card details.
• Use a third-party payment processor: Leverage a payment processor that is already PCI DSS compliant. This dramatically reduces your compliance burden, as the processor handles the direct interaction with sensitive cardholder data. Your primary responsibility shifts to ensuring your integration with their service is secure.
• Implement Strong Customer Authentication (SCA): For businesses serving European customers, SCA is a legal requirement under PSD2. It typically involves two of the three following factors: something the customer knows (password), something the customer has (phone), and something the customer is (fingerprint). Even outside the EU, implementing multi-factor authentication is a strong security practice.
• Secure your web forms: Ensure that payment pages use HTTPS (TLS encryption) to protect data in transit. Use tools and techniques to prevent cross-site scripting (XSS) and other common web vulnerabilities that could capture payment information.
• Regularly monitor and test: Continuously monitor your systems for suspicious activity. Conduct regular vulnerability scans and penetration tests to identify and remediate security weaknesses before they can be exploited.

Navigating the complexities of payment security and compliance is a significant undertaking, but you don’t have to do it alone. Kinde’s approach is to simplify security and compliance so you can focus on building your product.

Kinde’s billing features are built on top of Stripe, a certified PCI Level 1 Service Provider. This means that sensitive cardholder data is sent directly to Stripe and never touches Kinde’s servers. Kinde does not store payment details like credit card information; this is exclusively managed by Stripe, which dramatically reduces your PCI DSS compliance scope. By using Kinde, you inherit the security and compliance of a world-class payment infrastructure without the development and maintenance overhead.

Our platform is also built with a security-first mindset, holding certifications like ISO 27001 and SOC 2 Type 2 to demonstrate our commitment to protecting your data and your customers’ data.

• Compliance at Kinde
• Security at Kinde
• The Kinde billing model
• Connect payment processor (Stripe)