Businesses that receive subscriptions and recurring payments need regular access to their customers’ credit card information to be charged for services purchased. Therefore, the company may keep credit card data in a secure vault or by a third-party company.
Storing customer credit card data in-house is an expensive solution for any startup. That’s why the cons of initially building your own credit card data storage vault outweigh the pros. Consequently, the obvious choice for small businesses would be to store credit card information externally.
What is Credit Card Vault?
A credit card vault is a tool or tool that securely stores customer credit card numbers. In most cases where you use a credit card vault when you accept a card number from a customer, sensitive data does not enter your device, computer, or network.
This is because the software creates a protective barrier between financial data and your equipment and stores this information on your processor’s secure servers.
You only need to collect credit card information from a customer once and then store the card details at the checkout. Then, the next time you want to invoice a customer, you can use the stored card information.
This is why leading online platforms use a technique called credit card vault. The vault consists of storing your customers’ credit cards outside your payment provider with a unique credit card vault provider. Benefits include better management of data security issues, reduced PCI compliance coverage, and complete payment provider independence.
If you accept credit card payments, you can use a customer credit card vault to increase your sales, speed up your payments, and increase your security while reducing your PCI risk.
In essence, tokenization is the technology behind credit card vaults. Tokenization turns information such as a card number into an opaque symbol. The token, together with less sensitive data, can be kept anywhere.
When necessary, such as when processing a payment, is relevant card info searched. Without access to the vault, the token is useless in the case of data disclosure.
A data vault is a secure database consisting of linked tables used to store information. Typically, data remains in the vault until it is retrieved to make a payment, identify an individual, or serve various other purposes. Once the received data has functioned, it can be sent back to the vault for further secure storage.
In the tokenization example, data vaults are often called token vaults and can reside on-premises or in the cloud. Tokenization creates a link between sensitive data like credit card numbers and tokens stored in a vault. Tokens are utilized in payment transactions, and sensitive data is held in internal systems as placeholders until it is needed.
Where Should Credit Cards Be Stored?
Storage of credit cards is subject to three basic requirements: security, reliability, and PCI DSS compliance. But robust data protection and compliance with PCI DSS are vital concerns because data exposure leads to privacy breaches like GDPR or CCPA, and card networks can impose high fines in the event of a security incident.
With these restrictions in mind, there are three places where you can store card data:
- On your infrastructure: It is possible to set up and run your card data management infrastructure within your business. The flexibility to control payments is high, but the security liability, maintenance, and compliance costs will also be increased. This pattern is mainly seen in prominent players with legacy order processing infrastructure and associated PCI DSS certifications.
- At a payment service provider: Most payment service providers will take over PCI DSS requirements for you and reduce your compliance coverage. You’ll also benefit from their scale in terms of reliability and security. However, cards that have been tokenized with a provider are difficult to retrieve. Usually, there is no way to retrieve card data other than request a data export and exit the service altogether.
- With third-party vault: With this option, you get complete flexibility to work with any payment provider you want, combined with the security and cost-effectiveness of a large-scale service. But be aware that when you want to add another type of provider.
Vault cards with a third-party service make the most sense for large merchants or fast-growing companies. However, smaller e-commerce websites can also benefit from using a credit card vault to future-proof their payments. Still, it’s essential to remember that adding a provider is an added expense.
Today, modern payment infrastructures are consistently supported by a central credit card vault that distributes card data to other providers as needed.
How to Plan Scaling with Credit Card Vault?
Credit card vault allows you to collect card details from your customers with a single integration in your payment flow. Your credit card vault will likely support at least one of the following two models:
- Proxy model: This migration system allows you to use your existing integrations or write new ones. For example, requests to service providers go through the vault, which adds the card data for you and responds. This is perfect if you already have the connectors you need; nevertheless, new integrations may require you to construct them yourself.
- Model unification: An API comparable to PSP is available from Credit Card Vault. Internally, your requests are converted into the format preferred by the provider. Regardless of the third parties you work with, the data model is the same. This method greatly simplifies the integration and maintenance experience, but you must rely on the provider’s existing integrations.
Either way, if you want to trust more than one payment provider, you must choose new PSPs and open merchant accounts. Having multiple providers will have to do with basic routing strategies like load balancing to ensure it has enough processing capacity or failing to switch to another provider while the primary provider is down.
Tight integration with a single payment provider creates a profound deadlock with the service provider’s proprietary API and data model. The deadlock situation contradicts modern payment strategies that use the best provider for each transaction profile.
Credit card vaults are an effective abstraction layer that enables payment infrastructures to grow, allowing you to scale from one provider to dozens of them seamlessly.
Should You Store Cards Internally in a Vault or Use an External Provider?
You do not need to use an external provider to store your credit cards. However, if you have the time and resources, you can apply for PCI compliance to be allowed to store your customer’s credit card data. The PCI Compliance Guide contains comprehensive information on PCI compliance issues, whom it applies to, and the requirements to achieve compliance.
However, achieving PCI compliance can be expensive and challenging for startups and small businesses. Installing and maintaining the high-security infrastructures required for PCI is costly and time-consuming.
Infrastructure must be maintained on an ongoing basis to ensure that it is secure from unauthorized access. In addition, with rapid changes in payment security technologies, companies seeking PCI compliance need to stay ahead of hackers looking to exploit any security vulnerabilities in their infrastructure.
Companies that fail to comply with PCI compliance standards risk significant per-incident fines and a possible ban on accepting credit card payments.
What Are the Benefits of Using a Credit Card Vault?
Credit card vaults store your customers’ credit card data in a secure database separate from your payment provider for making payments or identifying an individual. Vaulting credit card data is an essential part of the payment flow of any fast-growing business, allowing you to handle your credit card storage processes securely.
1. Credit card vaults securely store cardholder data.
The primary reason an organization would wish to store credit card information outside of its environment, aside from PCI DSS compliance, is to safeguard such data better. Using a token provider’s or other third-party service provider’s credit card vault services can improve the security of your credit card data and lessen the danger of credit card breaches and data theft.
2. Removing Credit Card data from your environment and storing it in credit card vaults reduces PCI compliance.
Another specific purpose for using credit card vaults as a data storage device is to reduce PCI DSS coverage. Consider keeping your cardholder data in a credit card vault to genuinely maximize security, reduce PCI DSS coverage, and eventually simplify PCI compliance.
3. Storing credit card data in a credit card vault ensures you always know where your data is held.
The most crucial step in ensuring the security of your credit card data and the compliance of your environment with PCI is to determine where your sensitive data resides. By storing your cardholder data in a credit card vault, you centralize your data collection in a secure environment that simplifies security and meets many regulatory compliance obligations.
4. Tokenized credit card vaults replace credit card data with placeholder tokens that retain most of the benefits of the original data.
Security can often, but not always, conflict with business processes at specific points. However, using tokens with a credit card vault allows you to continue with minimal disruption to your business operations and continuity.
5. Using a credit card vault as a service is less costly than on-premises storage.
In addition to better protection of data and more effortless fulfillment of compliance requirements for the storage of credit cards and other payment information, using a credit card vault as a service is more economical than its on-premises counterpart.
Credit card enclosures eliminate the need for expensive hardware, software, and internal controls to reduce PCI coverage through network segmentation.
6. Credit card vaults have nearly uninterrupted uptime.
Generally, credit card vaults are fully redundant, meaning data is constantly synchronized across facilities to ensure data availability. In this way, there is almost no delay in payment processes wherever your organization is.
7. Using a credit card vault service can relieve you of the responsibility of storing and protecting sensitive credit card data.
While it’s hard to exclude a company that handles payments from PCI compliance ultimately, you can reduce your risk by storing and protecting critical data in a credit card vault.
To put it another way, you might be able to decrease your compliance duties to SAQ-A, which has fewer requirements. You may escape many of the hassles of PCI compliance by delegating the majority of the work to a highly specialized security specialist in this manner.
8. Reliable credit card vaults are regularly audited and evaluated to ensure security and compliance.
Credit card vaults and service providers are subject to several regulatory and compliance frameworks, as well as ongoing audits and evaluations from independent third-party assessors. Continuous audits result in a fortified, verified infrastructure protecting your most sensitive data while lowering risk and assuring PCI DSS compliance.