Card-on-File Policies Simplified: What Your Business Needs to Know
Keeping credit card information on file can do a lot of good for you and your business. It can simplify payments, improve revenue capture, and offer convenience for your business and customers. However, you must remember that this comes with managing this sensitive data responsibly and securely. We’ve created a guide with basics and essentials.
Why spend time and resources chasing payments every month when automation can do it for you? Auto-scheduled payments simplify payments, reduce the number of hands that need to touch them and improve cash flow. But do you understand the significant responsibilities of handling the data?
The Basics
Credit card data is highly sensitive and regulated by the Payment Card Industry Data Security Standards (PCI-DSS). Established by the PCI Security Standards Council, these guidelines require businesses to take proper precautions to safeguard customer data. Various state and federal laws further dictate how and when businesses can retain such information, given its value to hackers and cybercriminals.
Most merchant account providers offer PCI-DSS compliance services. While this typically comes with an additional fee, the benefits outweigh the costs. Compliance ensures that your business operates securely, avoids non-compliance penalties, and protects customer trust. Investing in PCI compliance is not just about meeting regulations—it's about securing your business for the long term.
Why Keep Credit Cards on File?
Streamlines Recurring Payments, making it Ideal for subscription services, gyms, utility providers, salons, studios, medical offices, and businesses with ongoing customer agreements or repeat services.
Saves Time and Money: Automated payments reduce the hassle of chasing customers for recurring charges, help avoid last-minute cancellations, and reduce internal workload. No more chasing accounts, calls, emails, letters, or postage—automation takes over.
Customer Convenience: Customers enjoy uninterrupted services and faster checkout experiences, which can help with retention.
Key Considerations for Credit Card on File Policies
Security & Compliance:
Adhere to PCI-DSS standards to safeguard customer information and data.
Use encryption, limited access controls, and secure storage solutions. Limit employee access.
Regularly test and monitor systems for vulnerabilities and work with your provider to ensure everything is in order.
Keep records of all of your security efforts.
Obtain Customer Consent:
Always get clear and explicit permission before storing their credit card information.
Clearly state the purpose and benefits of storing their credit card information and communicate clearly with the customer.
Retention Policies:
Store data only for legitimate business purposes.
Delete customer card details once the purpose expires.
Best Practices for Secure Data Storage
Tokenization: Replace sensitive card details with a unique token for added security.
Encryption: Protect stored data using encryption, which converts the data into unreadable formats.
Truncation: Reduce what you store by only storing the card number's first six and last four digits.
Cloud-Based Solutions: Opt for PCI-compliant cloud storage for ease and safety.
Benefits and Risks of
Credit Card-on-File Policies
Benefits:
Faster payments and improved customer experiences.
Steady revenue streams with recurring billing.
Reduced manual payment processing time.
Risks:
Data breaches and credit card fraud.
Legal penalties for non-compliance with security standards.
Businesses can minimize risks by implementing robust security measures, complying with PCI-DSS, and making credit card-on-file policies work for them.
Ready to Simplify Your Payment Processing?
PayStream only connects you with partners providing the most secure, compliant, cost-effective payment solutions.
Schedule your free consultation today and see how PayStream can help you increase your bottom line and transform your approach to payment processing.