What is PCI DSS compliance? A complete guide 

As we move past 2025, PCI DSS compliance has become a baseline requirement for any business handling credit or debit card transactions. With payment fraud reaching record highs globally and threat actors targeting even mid-sized merchants, the stakes have never been higher.

PCI DSS 4.0, now fully in effect, introduces a shift from compliance based on checkboxes to continuous, outcome-based security. It expands the scope of responsibility, especially around third-party service providers, introduces stricter authentication standards, and demands more frequent risk assessments.

Whether you’re an e-commerce startup, a retail chain, or a financial services provider, ignoring PCI compliance now translates to potential brand damage, customer attrition, and loss of partner trust. 

Let’s dive deeper into PCI-DSS compliance—exploring what it is, how it has evolved, and the practical steps your organization must take to stay compliant and secure in 2025 and beyond.

PCI DSS compliance: Defined 

The Payment Card Industry Data Security Standard (PCI DSS) is a comprehensive framework of security standards designed to protect cardholder data across industries. Created by the Payment Card Industry Security Standards Council (PCI SSC), this set of standards aims to reduce credit card fraud, data breaches, and other forms of cybercrime related to payment card transactions. PCI DSS establishes clear rules for businesses and organizations that store, process, or transmit payment card data.

Understanding PCI DSS compliance: Purpose, history, and importance

A. Purpose of PCI DSS compliance

The PCI DSS standards primarily protect cardholder data (CHD) and sensitive authentication data (SAD). These terms are key to understanding what needs protection.

a. Cardholder Data (CHD): Refers to the personal and financial information that is contained on a payment card. This includes:

• Primary Account Number (PAN): The unique number that identifies the cardholder’s account.
• Cardholder Name: The name of the individual to whom the card is issued.
• Expiration Date: The date the card is no longer valid.
• Service Code: Information related to the card’s usage restrictions (e.g., geographic restrictions, activation codes).

b. Sensitive Authentication Data (SAD):

• Full Track Data: Information from the magnetic stripe or chip, such as the data encoded on the card.
• CVV/CVC/CID: The Card Verification Value or Card Identification Code, typically found on the back of the card.
• PIN Data: Personal Identification Numbers (PINs) used to authenticate the cardholder.

PCI DSS mandates that organizations never store SAD after authorization, and any cardholder data stored must be encrypted and protected according to the strict standards.

As compliance is not just about data security, PCI DSS compliance also goes beyond just securing data. It is about creating a culture of security within an organization. The standard requires businesses to have security policies, employee training, and systems in place that ensure data protection on an ongoing basis.

B. History and evolution of PCI DSS compliance

The Payment Card Industry Data Security Standard (PCI DSS) did not appear in a vacuum but was born out of a growing need to address the increasing incidence of credit card fraud, data breaches, and cyberattacks in the financial sector. The early 2000s saw a rapid rise in electronic payments and online transactions, which, while revolutionary, introduced new vulnerabilities for cybercriminals to exploit.

Before the creation of PCI DSS, different card brands like Visa, MasterCard, and American Express each had their own security standards for merchants, which led to a fragmented and inconsistent approach to data protection. This lack of unified standards created significant gaps in security, contributing to a surge in breaches.

As incidents of cardholder data theft and fraudulent transactions soared, the card brands recognized the need for a standardized, global approach to data protection. This led to the founding of the Payment Card Industry Security Standards Council (PCI SSC) in 2006, which brought together the major credit card companies such as Visa, MasterCard, American Express, Discover, and JCB to create the PCI DSS.

C. Why PCI DSS compliance matters in 2025

In 2025, PCI DSS compliance is a strategic move. With the full enforcement of PCI DSS 4.0 as of March 31, 2025, the stakes for non-compliance have never been higher. Here’s why you should prioritize it:​

1. New requirements are now mandatory

PCI DSS 4.0 introduces over 50 new or updated controls, many of which were optional but are now compulsory. Key mandates include:​

• Annual scope definition for merchants and semi-annual for third-party service providers (TPSPs).​
• Automated detection of payment page scripts to prevent unauthorized changes.​
• Continuous monitoring of public-facing web applications to thwart web-based attacks.​
• Targeted risk analyses to identify and mitigate specific vulnerabilities.​
• Enhanced encryption standards, especially for full-disk encryption.

Failing to meet these requirements can lead to substantial fines, legal challenges, and reputational damage. ​

2. Third-party risk is under the microscope

Even if you’ve outsourced card processing, you’re not off the hook. You’re still responsible for ensuring your partners comply with PCI DSS 4.0. This involves:​

• Conducting due diligence on vendors.​
• Establishing contractual agreements that mandate compliance.​
• Obtaining third-party Attestations of Compliance (AOCs).​
• Regularly assessing third-party security practices. 

3. Compliance enhances customer trust

Data breaches can severely damage your brand’s reputation. By adhering to PCI DSS standards, you demonstrate a commitment to protecting customer data, which can enhance trust and loyalty. Companies like Amazon have leveraged PCI DSS compliance to build strong reputations for data security. 

4. Compliance is a competitive advantage

Achieving PCI DSS compliance can open doors to new business opportunities. Many large corporations and government entities require their vendors to be PCI DSS compliant. Compliance can be a differentiator that sets you apart in a crowded marketplace. 

5. Non-compliance has tangible costs

Beyond fines and legal repercussions, non-compliance can result in:​

• Higher transaction fees.​
• Termination of payment processing services.​
• Loss of customer trust and revenue.​

With the March 31, 2025, deadline behind us, it is now mandatory to ensure your organization meets all PCI DSS 4.0 requirements. Conduct a comprehensive gap analysis, update your security policies, implement necessary technical controls, and train your staff on new procedures. 

Remember: Compliance is not just about avoiding penalties, it is also about customers’ and your business’s safety. 

The 12 PCI DSS compliance requirements​

The PCI DSS standard includes 12 specific requirements that businesses must adhere to. These PCI DSS compliance requirements​ form the foundation for compliance and help ensure that organizations implement robust security measures.

1. Install and maintain a firewall configuration: Firewalls are essential to control incoming and outgoing network traffic, ensuring that unauthorized users cannot access sensitive data.
2. Do not use vendor-supplied defaults for system passwords and other security parameters: Default configurations are easily exploited by hackers, so systems must be configured with unique and secure settings.
3. Protect stored cardholder data: Businesses must employ strong encryption techniques to protect sensitive data stored in their systems.
4. Encrypt transmission of cardholder data across open, public networks: Data should always be encrypted during transmission, particularly over unsecured networks like the internet.
5. Use and regularly update anti-virus software: Anti-virus software helps prevent malware attacks. Organizations must ensure this software is updated regularly to defend against new threats.
6. Develop and maintain secure systems and applications: Secure coding practices should be followed during application development to prevent vulnerabilities that could be exploited.
7. Restrict access to cardholder data: Cardholder data should be accessed only by authorized personnel. This is often achieved through role-based access controls and authentication measures.
8. Identify and authenticate access to system components: Every individual accessing systems must be identified and authenticated to ensure accountability.
9. Restrict physical access to cardholder data: Physical barriers such as access-controlled areas and security monitoring must prevent unauthorized physical access to systems containing cardholder data.
10. Track and monitor all access to network resources and cardholder data: Businesses must maintain logs to track access to sensitive data and detect any suspicious activities.
11. Regularly test security systems and processes: Conduct regular vulnerability scans and penetration tests to identify potential weaknesses in the security infrastructure.
12. Maintain an information security policy: A clear and concise security policy is necessary to define data protection practices and employee responsibilities.

The core principles of PCI DSS compliance 

PCI DSS compliance revolves around a framework that involves maintaining secure networks, protecting cardholder data, and implementing robust security measures. Below are the core principles businesses must follow:

1. Build and maintain a secure network and systems

A secure network forms the foundation of data protection. This includes the use of firewalls, routers, and other security technologies to protect data from external threats. Additionally, businesses must ensure that default system passwords are changed and configurations are hardened to minimize vulnerabilities.

2. Protect cardholder data

PCI DSS mandates that organizations protect cardholder data both at rest and in transit. This requires encryption of data during transmission and the secure storage of sensitive data using technologies like tokenization or strong encryption methods.

3. Maintain a vulnerability management program

A vulnerability management program is critical to prevent attacks. This involves regularly patching security flaws, performing vulnerability scans, and using antivirus software to identify and block malicious threats.

4. Implement strong access control measures

Access to sensitive data must be restricted to authorized individuals only. This includes the use of multi-factor authentication (MFA) and limiting user access based on roles and responsibilities to prevent unauthorized access.

5. Regularly monitor and test networks

Continuous monitoring of systems is vital for identifying potential security breaches. Regular network tests and vulnerability assessments help ensure that potential vulnerabilities are detected early and resolved promptly.

6. Maintain an information security policy

A comprehensive information security policy that addresses security roles, responsibilities, and measures for data protection is essential. This policy should be updated regularly to stay aligned with emerging security threats and regulatory updates.

The 4 PCI DSS compliance levels​

The PCI DSS compliance levels​ are determined by the volume of transactions processed annually by each organization. Based on this volume, there are 4 levels: 

Level 1: Organizations processing over 6 million transactions annually. These entities must undergo a formal, on-site assessment by a Qualified Security Assessor (QSA), have an Approved Scanning Vendor (ASV) do a quarterly network visibility scan and submit an Attestation of Compliance (AOC).

Level 2: Organizations processing between 1 million and 6 million transactions annually. These businesses must complete an Annual Self-Assessment Questionnaire (SAQ) and may also require a vulnerability scan conducted by an Approved Scanning Vendor (ASV).

Level 3: Organizations processing between 20,000 and 1 million e-commerce transactions annually. Similar to Level 2, they must complete an SAQ and conduct vulnerability scans.

Level 4: Organizations processing fewer than 20,000 transactions annually. These organizations typically complete a simplified SAQ and may not need a full audit unless required by their acquirer.

Who needs to be PCI DSS compliant?

PCI DSS compliance applies to any organization, regardless of its size, that processes, stores, or transmits cardholder data. This includes:

• Merchants: Any business or organization (small, medium, or large) that accepts payment cards for goods or services.
• Service providers: These are companies that store, process, or transmit cardholder data on behalf of merchants. Service providers include payment gateways, third-party processors, cloud providers, and data centers that manage sensitive data for merchants.
• Acquirers: Acquiring banks or financial institutions that process payment card transactions on behalf of merchants. Acquirers have an indirect role in PCI DSS compliance, as they are responsible for ensuring that their merchants comply with the standards.
• Issuers: Issuing banks or institutions that provide credit and debit cards to consumers. While issuers are not required to comply directly, they are responsible for ensuring that the cardholders’ data is protected by the merchants and service providers they interact with.
• Third-party vendors: Any entity that provides technology or software used in processing or securing payment card transactions, such as POS (Point of Sale) vendors, payment application providers, or IT security consultants.

How to become PCI DSS compliant: PCI DSS compliance checklist

Achieving PCI DSS compliance is about establishing a sustainable framework for protecting cardholder data across your systems, processes, and teams. Follow this PCI DSS compliance checklist to become compliant: 

Step 1: Determine your compliance level

Your first move is to identify your merchant level, which dictates your validation requirements. The PCI Security Standards Council classifies merchants into four levels based on annual transaction volume:

• Level 1: Over 6 million transactions annually
• Level 2: 1 to 6 million
• Level 3: 20,000 to 1 million (e-commerce)
• Level 4: Fewer than 20,000 (e-commerce) or up to 1 million (all channels)

Why it matters: Your level defines whether you’ll need a formal Report on Compliance (RoC) by a Qualified Security Assessor (QSA) or a Self-Assessment Questionnaire (SAQ).

Step 2: Define your cardholder data environment (CDE)

You need to map out where cardholder data is stored, processed, or transmitted. This includes identifying all connected systems and applications, including servers, firewalls, databases, endpoints, and APIs.

What to do:

• Conduct a full data discovery and network segmentation analysis
• Identify data flows and storage touchpoints
• Document all system components within the CDE scope

Pro tip: Use network segmentation to isolate the CDE and reduce the number of systems in scope, simplifying your compliance footprint.

Step 3: Perform a gap assessment

Compare your existing controls against the 12 PCI DSS requirements to identify gaps. These requirements are grouped into six logical control objectives, covering areas such as:

• Network security
  Data protection
• Access control
• Vulnerability management
• Monitoring and testing
• Information security policies

Action items:

• Review firewall configurations
• Check for default passwords and insecure protocols
• Evaluate anti-malware tools, patching practices, and logging systems
• Assess how access is managed, especially around privileged accounts

Output: A comprehensive gap analysis report that outlines current deficiencies and proposed remediation efforts.

Step 4: Remediate non-compliant areas once you’ve pinpointed your gaps, prioritize and address them. This is often the most resource-intensive phase.

Typical remediation steps include:

• Encrypting cardholder data at rest and in transit (using AES-256, TLS 1.2+)
• Implementing strong access controls and MFA for administrative users
• Installing updated firewalls and IDS/IPS solutions
• Configuring secure logging and centralized monitoring
• Purging unnecessary data and disabling unused services

Document every change. PCI DSS compliance requires clear evidence of how and when controls were implemented.

Step 5: Select the right SAQ or prepare for RoC

If you qualify for self-assessment, choose the correct SAQ type based on your business model. For instance:

• SAQ A: For fully outsourced e-commerce merchants
• SAQ D: For merchants storing or processing cardholder data internally
• SAQ C-VT, SAQ B-IP, SAQ P2PE-HW, etc., for specific terminal-based environments

If you’re Level 1, a QSA-led onsite assessment will be required, culminating in a RoC and Attestation of Compliance (AoC).

Step 6: Complete and submit compliance documentation

Finalize the following documents:

• Self-Assessment Questionnaire (SAQ) or Report on Compliance (RoC)
• Attestation of Compliance (AoC)
• Evidence of controls and testing results

Submit this documentation to your acquiring bank or payment processor, depending on your contractual obligations.

Step 7: Maintain compliance year-round

PCI DSS compliance is not a once-a-year checkbox. Ongoing monitoring and reviewing this PCI DSS compliance checklist is essential to stay compliant.

Ongoing actions:

• Perform quarterly Approved Scanning Vendor (ASV) scans
• Run internal and external vulnerability scans
• Conduct penetration testing annually (or after significant changes)
• Review logs daily and monitor for anomalies
• Re-train employees on security best practices

Bonus tip:

Consider using a UEM integrated compliance automation tool like Veltar to centrally manage endpoint security, patching, access controls, and reporting across your infrastructure.

What are the consequences of non-compliance with PCI DSS?

If your organization handles cardholder data, compliance with PCI DSS becomes compulsory. Non-compliance doesn’t just increase your risk exposure; it can cost you financially, legally, and reputationally. Below are the consequences you might face: 

1. Hefty PCI DSS non compliance fines and penalties

Failure to meet PCI DSS requirements can trigger significant financial penalties. Payment card brands like Visa and Mastercard may levy fines on acquiring banks ranging from $5,000 to $100,000 per month for each merchant in violation. These costs are often passed down to you as the merchant.

Note: Fines are not publicized, but they are enforced, and can escalate with the severity and duration of the non-compliance.

2. Increased audit and remediation costs

Once you’re flagged as non-compliant, you’re no longer in control of your audit schedule. Payment brands may mandate frequent security assessments, forensic investigations, and third-party audits. These aren’t cheap. You could be looking at six-figure bills just to confirm what went wrong.

You may also be required to implement new controls under compressed timelines, further driving up compliance costs.

3. Data breach liabilities

If a breach occurs while you’re non-compliant, your liability skyrockets. You could be held financially responsible for:

• Reimbursement of fraudulent charges
• Replacement costs for compromised cards
• Breach notification and legal fees
• Credit monitoring services for affected customers
• Civil litigation or class-action lawsuits

According to Verizon’s Payment Security Report, in 2023 alone, the average total cost of a payment card breach for non-compliant merchants was $2.94 million, 

4. Loss of ability to process card payments

Non-compliance can lead to the termination of your merchant account, meaning you can no longer process credit or debit card payments. For most businesses, that’s an operational death sentence.

Acquiring banks and payment processors are required to report non-compliant entities to card brands. If you’re listed as a high-risk merchant, reapplying for card acceptance privileges becomes an uphill battle.

5. Brand and reputational damage

Data breaches tied to PCI DSS failures often make headlines. The fallout isn’t limited to IT, as it also affects customer trust, investor confidence, and business partnerships.

Even if fines are settled quietly, customers won’t forget that you didn’t protect their data. The reputational damage can linger long after the technical issues are resolved.

6. Regulatory overlap and legal consequences

While PCI DSS itself isn’t a law, non-compliance can lead to violations under broader privacy and data protection laws, such as:

• GDPR (in the EU): Failure to protect payment data could be classified as a data breach under Article 32, leading to fines up to 4% of annual global turnover.
• CCPA/CPRA (in California): Breaches involving cardholder data could result in statutory damages and enforcement actions.

This overlap creates a surge in legal consequences that extend far beyond PCI DSS. 

To sum up, PCI DSS is a foundational compliance you should adhere to

PCI DSS compliance is no longer just a checkbox for IT teams. It is a must for any organization that processes, stores, or transmits payment card data. As threats become more sophisticated and consumers more security-conscious, the latest version, namely PCI DSS 4.0, sets a higher bar for accountability, visibility, and continuous risk management.

Whether you’re managing compliance in-house or relying on third-party providers, the responsibility remains squarely on your shoulders. The PCI DSS non compliance fines, financially, reputationally, and operationally, is far greater than the investment required to meet the standard.

Security is not static and neither is compliance. Treat PCI DSS not as a one-time obligation, but as an ongoing commitment to protecting your customers, your partners, and your business integrity.

Because in 2025 and beyond, compliance isn’t just about staying out of trouble; rather it’s about staying in business.