As with many forms of technology, payment processing is constantly evolving. And with that evolution, means the requirements for your point of sale (POS) system.
Staying ahead of these changes is crucial to avoid costly disruptions and maintain customer trust. There are two major regulatory updates on the horizon – the expansion of PSD2 and the new PCI DSS version in 2025. Both of which will significantly impact POS systems.
The revised Payment Services Directive (PSD2) aims to enhance security and consumer protection within the European Economic Area (EEA).
While the initial implementation focused on Strong Customer Authentication (SCA) for online transactions, future expansions are expected to further impact in-person payments and POS systems with increased SCA requirements, enhanced data sharing and open banking, and stricter fraud monitoring.
While contactless payments have seen exemptions, evolving regulations may mandate SCA for a broader range of transactions, regardless of the payment method. This will require your POS systems to support robust authentication methods like biometrics or PIN entry.
PSD2 promotes open banking, allowing third-party providers to access customer account information with the proper consent. This could lead to new payment methods integrated directly into your POS, requiring systems that can securely handle API integrations and data sharing.
Regulatory bodies are expected to reinforce fraud monitoring requirements, resulting in a significant emphasis on real-time transaction analysis and anomaly detection. Therefore, your POS system must integrate with advanced fraud prevention tools.
The Payment Card Industry Data Security Standard (PCI DSS) is undergoing a substantial update with version 4.0, set to fully take effect in 2025. This update reflects the evolving threat landscape and emphasizes a more tailored approach to security.
MFA will become less of a “should have” and more of a “must-have.” With the update, MFA implementation for access to the Cardholder Data Environment (CDE) will be required. Your POS system and its associated network infrastructure will need to support MFA solutions.
PCI DSS 4.0 strengthens requirements for cryptographic algorithms and key management. This will require your POS system to support updated encryption protocols, as well as monitor and manage certificates and keys through accurate inventory processes.
The new standard emphasizes a risk-based approach, allowing for more customized implementation of security controls. However, this also means you'll need to demonstrate a thorough understanding of your specific risks and implement appropriate safeguards within your POS environment.
At this point, adhering to these new updates may sound daunting and a bit overwhelming. This is why we came up with seven tactical steps you can follow that will help ensure your POS system remains compliant with these upcoming regulation changes.
By identifying potential vulnerabilities in your current POS system and network infrastructure, you can proactively close gaps, you may not have known existed.
Evaluate your current POS system to ensure it supports the latest authentication methods, encryption protocols, and software updates – if it’s time for a change, it’s better to know sooner rather than later!
Maintaining updated systems will close known security gaps often exploited by cybercriminals.
Implement robust network security controls, including firewalls, intrusion detection systems, and secure wireless access points.
Enforce strict access control policies, including MFA and role-based access.
Educate your employees on the new regulatory requirements and best practices for data security. 95% of cyber incidents are a result of human error – training and educating your staff can help your business from falling victim.
Choose a payment provider that prioritizes compliance and can assist you in navigating the regulatory landscape. You have enough to focus on – find a partner that will relieve the burden and provide complete assurance regulatory measures are being met.
Contact us today to take the complexities out of regulatory changes with compliance guidance, secure payment solutions, POS system integration, and fraud detection and prevention.
