Understanding PCI DSS and why it matters

Key takeaways:

• PCI DSS is a global standard for securing payment card information, preventing fraud, and reducing risks in transaction processes.

• Any business handling credit card data, whether online or in-store, must comply with PCI DSS. The requirements vary based on transaction volume.

• The 12 PCI DSS core standards include secure networks, data protection, access control, and regular testing to ensure compliance and security.

• Non-compliance can lead to heavy fines, business disruptions, and loss of customer trust, making PCI DSS adherence essential for long-term success.

• Airwallex simplifies PCI DSS compliance with certified solutions that protect customer data and reduce fraud.

Credit card payments drive the engine of modern eCommerce, yet every transaction carries a hidden risk. With cyber crimes on the rise, safeguarding sensitive customer information isn't only practical but also legally required.

In 2023, 25% of retail eCommerce involved stolen credit card details.¹ That means for every four breaches, one targets payment data. This statistic highlights the urgency of implementing robust security measures to prevent such breaches and protect your business’ reputation.

To keep your business and your customers safe, understanding and adhering to the Payment Card Industry Data Security Standard (PCI DSS) is a must. Here’s what you need to know.

What is PCI DSS?

PCI DSS  is a global security standard that ensures businesses accept, store, process, and transmit cardholder data in a secure environment. 

PCI DSS compliance requires businesses to implement various technical and operational measures to protect cardholder data, emphasizing encryption, access control, and ongoing security assessments.

Established in 2004 by Visa, Mastercard, American Express, Discover, and JCB, PCI DSS sets requirements that help businesses protect payment information, prevent data breaches, and reduce credit card fraud.

Why is PCI DSS important in digital finance?

PCI DSS compliance is mandated by credit card companies and the banks that manage credit card payment processing. Businesses are expected to follow PCI DSS standards proactively. Non-compliance can lead to costly fines, data breaches, and reputational damage.

Who must comply with PCI DSS?

Any merchant or business that accepts, stores, or processes credit or debit card information must be PCI DSS compliant. This requirement applies to physical retailers, online stores, service providers, and even nonprofits that handle payment data. Whether you're a local coffee shop, an eCommerce website, or a large hotel chain, compliance is critical if you process credit card transactions.

The level of compliance required depends on the volume of card transactions your business processes. For example, a small online business handling fewer than 20,000 card transactions annually may have different requirements than a large enterprise processing millions of yearly transactions.

Merchant PCI DSS security standards are often spelled out in a contractual obligation with major credit card providers, and the level of compliance required can vary based on the volume of card transactions processed.

Understanding these levels ensures businesses are not burdened with unnecessary requirements while maintaining a high-security standard.

What are the benefits of PCI PSS certification? 

PCI DSS compliance enhances information security, prepares your business for future changes, and increases your readiness for strategic partnerships.

First and foremost, PCI DSS certification shows your commitment to protecting your customers' card data with widely acceptable security standards. It shows you're serious about keeping sensitive info safe with practices like:

• Setting up firewalls to block unauthorized access

• Encrypting data sent over your network

• Using anti-virus software to catch malicious threats

• Limiting access to cardholder data

• Monitoring your network for suspicious activity

Maintaining PCI DSS compliance builds customer trust and confidence while shielding your business from potential cyber threats and liability.

Beyond the obvious, the security measures required for PCI DSS compliance can also help align your business with other standards, such as SOC 2 (an American standard for managing data security), ISO 27001 (an international standard for information security management), and GDPR (a European Union regulation focused on data protection and privacy). While each framework has specific requirements, the testing and improvements required to achieve PCI DSS compliance can support your efforts to meet key aspects of these other regulations and standards.

These certifications can unlock new opportunities for businesses looking to grow and scale and ensure your business stays competitive in a rapidly evolving market. Many companies also require proof of PCI compliance before entering into new business partnerships. Demonstrating your compliance improves your credibility and forges new alliances, which could fuel business growth.

What are the four levels of PCI DSS compliance?

The four levels of PCI DSS compliance are based on the volume of card transactions your business has processed in the past 52 weeks. 

Compliance requirements for Level 1 are the most rigorous due to the sheer volume of transactions and the high stakes involved. 

Other compliance level requirements vary based on how you process payments – online, offline, or both. 

While Level 4 may have similar requirements as higher levels, the compliance process is generally less complex due to the smaller number of handled transactions.

It’s important to note that Visa, Mastercard, American Express, Discover, and JCB have each established their own PCI DSS compliance programs. Below is a sample of Visa’s PCI DSS compliance standards:

*Requirement applies if you use an online payment gateway or store cardholder data digitally.

What are the 12 core requirements of PCI DSS?

PCI DSS comprises 12 core technical and operational requirements grouped into six goals. The PCI Security Standards Council describes them as follows:

🔸Build and maintain a secure network and systems

1. Install and maintain network security controls.

2. Apply secure configurations to all system components.

🔸Protect account data

3. Safeguard all cardholder data.

4. Use strong cryptography to protect cardholder data during transmission over open public networks.

🔸Maintain a vulnerability management program

5. Safeguard all systems and networks from malicious software.

6. Develop and maintain secure systems and software.

🔸Implement strong access controls

7. Limit access to cardholder data and system components according to business need-to-know.

8. Control and monitor user access to system components by assigning unique IDs.

9. Restrict any physical access to cardholder details.

🔸Regularly monitor and test networks

10. Track and monitor all access to network resources and cardholder data.

11. Regularly test security systems and processes.

🔸Maintain an information security policy

12. Support information security by establishing organizational security policies and programs for employees and contractors.

Addressing these 12 requirements can help businesses create a more secure environment that mitigates risks and strengthens trust with customers and partners.

What happens in the event of PCI DSS non-compliance?

Ignoring PCI compliance can lead to significant problems – both financially and in terms of your reputation. Enforcement often happens retroactively after a data breach occurs. Merchants can face fines, mandatory security assessments (at their own expense), and even restrictions from their payment processors. You might have to stop accepting credit card payments or face higher processing fees, which could cost more than the security measures you skipped in the first place.

Security Magazine says fines can range from $20 to $5,000 monthly.² Beyond the immediate financial cost, what's the true price of lost consumer trust? According to Vercara Research, 75% of U.S. consumers would stop purchasing from a brand if it suffered a cyber incident.³ The fallout from a breach can permanently damage customer loyalty, making it difficult to recover even after implementing new security measures.

Even without a breach, large enterprises may be required to undergo regular third-party assessments to ensure continued compliance. This ongoing process can disrupt operations and incur additional costs as regulators and partners increase their scrutiny.

Overcoming the complexities of PCI DSS certification

Navigating PCI DSS certification can be challenging. The strict security standards and ongoing monitoring require expertise in network security, system administration, data protection, access control, risk management, and significant time and resources.

Compliance costs can vary, with businesses facing direct expenses like audit fees, training, and the implementation of security tools, as well as indirect costs such as operational disruptions. Level 1 merchants (processing the highest volume of transactions) incur the highest fees and pay $70,000+ or more to maintain compliance, while smaller Level 4 merchants may pay as little as $300 a year.⁴

Understanding the core principles of PCI DSS, building a culture of compliance, and using the right security tools can reduce the costs and challenges of achieving compliance.

Partnering with a PCI DSS-compliant payment processor like Airwallex simplifies secure payment processing, minimizes data exposure, and streamlines compliance reporting – helping businesses maintain the highest security standards while reducing the burden on internal teams.

Why businesses choose Airwallex to simplify payments and PCI DSS compliance

Airwallex offers a powerful global payments platform that enables businesses to send, receive, and manage funds across borders with multi-currency support, real-time transfers, and competitive exchange rates. This allows businesses to optimize payment operations while maintaining strong security and compliance standards.

With Airwallex, businesses of all sizes – from large enterprises to small companies and subscription services – gain a modern payments platform built for global growth, helping to:

• Expand into new markets – Accept payments in 180+ countries with various local payment methods to improve checkout conversion rates.

• Maximize revenue with higher acceptance rates – Use ML-powered optimization, 3DS logic, and local acquiring to boost approval rates and reduce friction at checkout.

• Eliminate unnecessary FX costs – Settle transactions in local currencies, avoiding costly conversions and hidden fees.

• Reduce fraud and chargebacks – Protect your business with AI-powered fraud detection and network tokenization for secure, frictionless transactions.

As a Level 1 PCI DSS-certified payments provider, Airwallex helps simplify the complexities of achieving and maintaining PCI DSS certification and compliance. By partnering with Airwallex for your payment solution, you gain access to our robust security infrastructure and experienced team.

With the Airwallex payments platform, you can:

• Safeguard customer data – Protect sensitive data in transit and at rest with cutting-edge encryption technologies.

• Secure personal and financial data – Use payment tokenization to maintain privacy and confidentiality.

• Protect against fraudulent activity in real-time – Add proactive monitoring while providing customers a seamless and secure experience.

Our security experts work around the clock to protect your business and customers. We regularly review and update our security systems to stay ahead of new risks and maintain safe and compliant payment processing.

By choosing Airwallex, you’re gaining a robust, secure payments solution and a dedicated support team – so you can focus on growth. At the same time, we handle the complexities of security and regulatory requirements.

Sources:

1. https://www.verizon.com/business/resources/reports/2024-dbir-executive-summary.pdf 

2. https://www.securitymagazine.com/blogs/14-security-blog/post/101259-how-businesses-can-protect-themselves-from-data-breaches 

3. https://vercara.com/news/vercara-research-75-of-u-s-consumers-would-stop-purchasing-from-a-brand-if-it-suffered-a-cyber-incident 

4. https://www.securitymetrics.com/blog/how-much-does-pci-compliance-cost