Pharmacies reside in a heavily regulated industry with good reason. They have a more difficult task than most when it comes to protecting their customers’ health – both physically and financially. Pharmacies must adhere to HIPAA regulations that protect patient health data; FDA, DEA, and OSHA regulations to protect customers’ physical health; and of course, PCI DSS requirements to protect their customers’ payment information.
Unfortunately, the repercussions for not maintaining PCI compliance can be severe. Any business that accepts payments can be hit with fines, legal actions, data breaches, and a loss of customer trust if they are not PCI compliant. But there’s a golden opportunity here! Your software’s payment integration can actually help simplify compliance for your pharmacy merchants.
Let’s take a deeper dive into what PCI DSS means for your customers, the risks of non-compliance, and how integrating secure payment technology into your platform can be a lifesaver for your customers.
What is PCI DSS and Why it Matters for Pharmacies
PCI DSS is a global standard for businesses that accept card payments. Like any business that stores, processes, or transmits cardholder data, pharmacies are required to comply.
Due to the nature of pharmacy business though, compliance is less straightforward than typical merchants. Pharmacies need to manage:
- High transaction volumes: Besides prescriptions, many pharmacies also carry retail items, which can account for thousands of transactions per month. And more transactions mean more exposure. Plus, high volume merchants such as pharmacies often have more physical locations, more POS devices, more payment channels (in-store, online, mobile, etc.), and more third-party integrations. Because there are more devices and systems in place, the cardholder data environment (CDE) is larger and there are more locations that cardholder data can be stored. This all creates more demanding PCI requirements, more frequent assessments, and greater operational complexity.
- Multiple payment types: For pharmacies, it’s not just about maintaining security for credit/debit cards or ACH. They also need to account for HSA/FSA cards and insurance co-pays. While these don’t change PCI requirements (these types of payments by themselves are treated the same as any other credit or debit card), they do change the complexity of the payment environment. For example, pharmacies use an IIAS (Inventory Information Approval System), a system required by the IRS that identifies eligible medical expenses in a transaction when a customer uses their FSA or HAS account. Therefore, the IIAS must also be handled in a PCI-compliant manner and ensure that no sensitive cardholder data is stored or transmitted insecurely during these eligibility checks.
- Staff turnover: Pharmacies tend to have higher turnover rates than other industries, and training new employees on PCI protocols is both time-consuming and prone to error. New, untrained employees are more likely to mishandle card data or fall for phishing scams. Additionally, the likelihood of failing to disable or remove old user accounts rises if turnover is high. These old accounts can be a vulnerability as former employees could access payment systems or cardholder data. Plus, it adds an operational burden as the pharmacy must dedicate more time and resources to compliance tasks, which increase the cost and risk of error.
PCI Challenges of Non-Integrated Payments
Pharmacies that use standalone payment terminals face several challenges that create pain points for both compliance and day-to-day operations, including:
- Manual reconciliation between systems
- Broader PCI scope, since card data touches multiple systems
- Lengthy self-assessment questionnaires (SAQs) that can include hundreds of individual requirements
- Increased risk of human error and data mishandling
How Integrated Payments Simplify PCI Compliance for Your Customers
By embedding secure payment technology directly into your platform, you can help your pharmacy customers significantly reduce the complexity of PCI compliance in several ways.
1. Point-to-Point Encryption (P2PE)
Card data is encrypted at the point of entry and stays protected until it reaches the processor. This significantly reduces PCI scope for pharmacies because they never see or store the data.
2. Tokenization
Card details are replaced with secure tokens, enabling recurring transactions without storing sensitive data. This is extremely beneficial since pharmacies have to manage recurring payments in the form of prescription refills.
3. Smaller PCI Scope
When card data is kept out of the pharmacy’s payment environment, they can qualify for an SAQ-A. This is the simplest PCI self-assessment and can have fewer than 20 questions. Compare this to a SAQ-D, which can have over 300 requirements.
4. Simplified Compliance Maintenance
Since the integrated payment provider your software works with typically handles any updates when PCI standards change, the burden is removed from your pharmacy customers. They’ll still need to validate compliance annually, but the challenge of manual upgrades and audits is reduced.
5. Unified Reporting
Reconciliation and compliance tracking becomes much easier due to payments and pharmacy transactions living in the same system.
Why This Matters for Your Software
Choosing a payment partner with robust PCI capabilities and a thorough understanding of the complexities of PCI compliance in the pharmacy industry is your first step. Then, by integrating payments into your platform with that partner, you are positioning your software as a vital PCI resource for your customers and a strategic evolution for your business. Here’s how:
- In the eyes your customers, you become a compliance partner, not a PCI tool.
- You will increase customer retention. Pharmacies are less likely to search for an alternative platform when your software aides in both operations and payments.
- You unlock new revenue streams through payment monetization models.
- You create a strategic selling advantage by offering increased peace of mind along with operational efficiency.
PCI DSS compliance doesn’t need to be complicated for your customers, and you have the power to ease that burden for them. By integrating payments into your platform with a PCI-forward processor, you can help reduce risk, simplify compliance, and provide a better payment experience. And the benefits aren’t just for your customers. Payment integration provides an opportunity to deliver lasting value, differentiate your platform, and grow your revenue.
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