![]() ![]() Under the PCI standards, merchants are not supposed to store card data, but they may store some parts of the data if they have to, as long as it's encrypted. The controversial system, imposed on merchants by credit card companies like Visa and MasterCard, has been called a “near scam” by a spokesman for the National Retail Federation and others who say it’s designed less to secure card data than to profit credit card companies while giving them executive powers of punishment through a mandated compliance system that has no oversight. It’s the first known case to challenge card companies over the self-regulated PCI security standards - a system that requires businesses accepting credit and debit card payments to implement a series of technological steps to secure card data. It accuses Visa of levying legally unenforceable penalties that masquerade as fines and unsupported damages and also accuses Visa of breaching its own contracts with the banks, failing to follow its own rules and procedures for levying penalties and engaging in unfair business practices under California law, where Visa is based. ![]() The suit takes on the payment card industry’s powerful money-making system of punishing merchants and their banks for breaches, even without evidence that card data was stolen. A sports apparel retailer is fighting back against the arbitrary multi-million-dollar penalties that credit card companies impose on banks and merchants for data breaches by filing a first-of-its-kind $13 million lawsuit against Visa. ![]()
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March 2023
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