The ultimate guide to PCI DSS compliance

If your business handles debit or credit card data, you’ve probably heard of the PCI DSS (Payment Card Industry Data Security Standard).

It’s an information security framework designed to reduce payment card fraud by requiring organisations to implement technical and organisational defence measures.

We explain everything you need to know about the PCI DSS in this blog, including who it applies to, the benefits of compliance and what happens if you fail to meet its requirements.

Who needs PCI DSS compliance?

Any merchant or service provider that processes, transmits or stores cardholder state is subject to the PCI DSS.

  • Merchants are organisations that accept debit or credit card payments for goods or services.
  • Service providers are businesses that are directly involved in processing, storing or transmitting cardholder data on behalf of another entity.

Some organisations can be both a merchant and a service provider. For instance, an organisation that provides data processing services for other merchants will also be a merchant itself if it accepts card payments from them.

Benefits of PCI DSS compliance

The most obvious benefit of PCI DSS compliance is to reduce the risk of security incidents. When organisations implement its requirements, they shore up the most common weaknesses that attackers exploit.

According to the 2020 Trustwave Global Security Report, the majority of data breaches involving cardholder data were CNP (card-not-present) attacks. This indicates that e-commerce platforms are the most vulnerable, but this is only half the picture.

Data protection isn’t just about preventing cyber attacks; information can also be exposed by mistakes the organisation makes. Such errors can also result in violations of the GDPR (General Data Protection Regulation) and other data protection laws.

PCI DSS compliance can help organisations prevent regulatory errors and the effects associated with it.

Is PCI DSS compliance mandatory?

The PCI DSS is a standard not a law, and is enforced through contracts between merchants, acquiring banks that process payment card transactions and the payment brands.

Compliance is mandatory for all organisations that process, store or transmit cardholder data. Covered organisations that fail to meet their requirements could face strict penalties.

Notably, the Standard doesn’t simply levy a one-off fine for non-compliance. Instead, organisations can be penalised between $5,000 (about €4,300) and $100,000 (about €86,000) a month until they achieve compliance.

Organisations can also face other punitive measures from their acquiring bank. For example, the bank might increase its transaction fees or terminate the relationship with the merchant altogether.

How do I achieve PCI DSS compliance?

The PCI DSS contains 12 requirements that organisations must meet if they are to achieve compliance.

They are combination of technical solutions, such as data encryption and network monitoring, alongside processes and policies to ensure that employees manage sensitive data effectively.

Those processes include steps such as changing default passwords, restricting physical access to locations where cardholder data is stored and creating an information security policy.

How do you know if you are PCI compliant?

To demonstrate that your organisation is PCI DSS compliant, organisations must audit their CDE (cardholder data environment).

There are three types of audit:

The type of audit you must conduct, and your exact PCI DSS compliance requirements, will vary depending on your merchant or service provider level. This information is based on the number of card transactions processed per year.

Level 1 merchants are those process more than 6 million transactions per year, or those whose data has previously been compromised. They must complete the following each year:

  • RoC conducted by a QSA or ISA.
  • Quarterly scan by an ASV.

Level 2 merchants are those that process 1 million to 6 million transactions per year. They must complete the following each year:

  • RoC conducted by a QSA or ISA, or an SAQ (SAQ D) signed by a company officer (dependent on payment brand).
  • Quarterly scan by an ASV

Level 3 merchants are those that process 20,000 to 1 million transactions per year. They must complete the following each year:

  • SAQ signed by a company officer.
  • Quarterly scan by an ASV (dependent on SAQ completed).

Level 4 merchants are those that process fewer than 20,000 transactions per year. They must complete the following each year:

  • SAQ signed by a company officer.
  • Quarterly scan by an ASV (dependent on SAQ completed).

The audit requirements for service providers are more straightforward. Level 1 encompasses any organisation that process and/or store more than 300,000 transactions per year. They are required to conduct a RoC by a QSA or ISA and have an ASV conduct quarterly scans.

Service providers that transmit and/or store fewer than 300,000 transactions per year must complete either an RoC conducted by a QSA or an ISA, or an SAQ D signed by a company officer. They must also have an ASV conduct quarterly scans.

Get started with the PCI DSS

As a QSA company, IT Governance provides services to support organisations at each stage of each organisation’s PCI DSS compliance project. You can find out complete list of PCI DSS services and solutions on our website.

Organisations looking for help achieving compliance should take a look at our PCI DSS Documentation Toolkit.

It contains everything you need to implement the Standard’s requirements, including template documents and a document checker to ensure you select and amend the appropriate records.

The toolkit supports all self-assessment questionnaires, regardless of your specific payment scenario.

It’s fully aligned with the PCI DSS, so you can be sure that your policies are accurate and compliant. All you have to do is fill in the sections that are relevant to your organisation.

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