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Discover Financial Services is defining merchants in the same way other card networks do for the purposes of Payment Card Industry data-security compliance, the issuer announced today. Discover places merchants in one of four levels, with the largest processing more than 6 million annual Discover transactions in Level 1 and the smallest–Level 4 merchants–processing fewer than 1 million annual Discover transactions. Level 2 merchants process 1 million to 6 million transactions, and Level 3 merchants process 20,000 to 1 million annual card-not-present transactions. Merchants use the levels to determine which compliance and auditing rules apply to them as part of the Payment Card Industry Security Standards Council security programs. Prior to adopting the four categories, Discover said it used a "risk-based approach to handling merchant PCI compliance validation and reporting," meaning it worked directly with companies and set specific requirements for them to validate and report their compliance to Discover. "This movement to merchant levels is the result of our research as well as our response to industry feedback," a Discover spokesperson tells CardLine. Discover's adoption of the merchant-level definitions will help merchants and acquirers by "creating a consistent framework for validating and reporting data-security compliance," the spokesperson adds.

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