What Is PCI Compliance and Why It’s Required: Complete Guide

Payment Card Industry (PCI) compliance are requirements that companies are expected to follow. This set of regulations ensures that businesses involved in keeping, processing, or transmitting credit card data maintain safe practices. PCI DSS was officially launched in 2006, but its current version — PCI DSS 4.0 — came into effect on March 31, 2024, replacing version 3.2.1. All businesses must now align their systems with this updated standard. The regulatory body has ensured that companies practice PCI safety standards to protect their customer’s transaction process. The PCI DSS is an independent body created by a collaborative effort between Visa, MasterCard, JCB, American Express and Discover. The council controls and manages the PCI DSS; however, the payment processors are responsible for complying with the set of regulations imposed by the PCI DSS.

PCI Compliance Rules: Requirements of the PCI DSS Standard

The PCI DSS framework includes 12 core requirements, but version 4.0 introduces over 500 detailed security controls. Organizations are now expected to adopt risk-based, customized approaches alongside baseline controls, especially for evolving environments like cloud and API-based systems.

Use And Maintain Firewalls

The regulatory body insists on using firewalls to block any foreign threats or entities that try to hack into people’s private data. The firewall system is the first line of defence against malicious programs or activities of hackers. They are very effective, and that is why the PCI insists on this compliance.

Proper Password Protections

You may have noticed that all point of sale (POS) systems, routers, modems, and similar products come with generic passwords. Anyone can easily access these passwords, and most times, businesses don’t bother securing this data, leaving them vulnerable. Following this compliance will ensure that your data is safe on all company devices. It is best to comply by keeping a list of all devices and software that uses passwords. Apart from keeping an inventory of the software or devices, companies need to also take additional safety precautions by configuring the passwords or changing them from the default ones.

Protect Cardholder Data

The PCI DSS also has compliance for cardholder protection. All cards should be encrypted using algorithms. This usually contains encryption keys to protect the data on the card. One common approach to secure card data is card-on-file tokenization, which replaces sensitive card numbers with non-exploitable tokens. It is also important to conduct regular maintenance by scanning primary account numbers to ensure no unencrypted data is present.

Encrypt Transmitted Data

The cardholder data usually passes through various channels like payment processors or home offices from the local stores. The data must be encrypted when going through any of those locations. Also, the account numbers should not be sent to unknown locations.

Use and Maintain Anti-Malware Solutions

To comply with PCI DSS 4.0, companies must deploy anti-malware solutions appropriate to each system’s function and threat profile. These tools go beyond traditional antivirus software and may include advanced threat detection technologies like Endpoint Detection and Response (EDR) or managed detection services. All anti-malware tools must be regularly updated, actively monitored, and properly configured to respond to evolving threats. For systems such as POS terminals where traditional antivirus cannot be installed, businesses must implement compensating controls and verify that their service providers follow PCI-compliant threat protection practices.

Properly Updated Software

PCI DSS 4.0 introduces Requirement 6.4.3, which mandates that critical vulnerabilities must be patched within one month. This establishes a formal SLA for updates and risk response, requiring businesses to document and track patching activities to remain compliant.

Restrict Data Access

The cardholder information should be strictly on a need-to-know basis. No third parties or even staff and executives of the company must be privy to this data. However, individuals who are designated to handle sensitive data should be documented appropriately, and also their data should be updated according to the PCI DSS requirements.

Unique IDs For Access

For the individuals trusted to handle cardholder-sensitive data, it is required that they provide credentials and identification. There should not be any login attempt initiated by multiple employees having access to cardholders’ usernames and passwords. Unique IDs should be created to reduce any exposure to private data and make it easy to track any crime committed if a breach occurs.

Restrict Physical Access

The cardholder’s data should be kept in a very secure location, which should be done in a physical location. Whether the data is typed or digitally stored on hardware, it should be kept securely in either a cabinet or a secure room. Access to the information should also be strictly limited.

Create And Maintain Access Logs

Under PCI DSS 4.0, logging and monitoring requirements are expanded. Businesses must implement centralized logging with automated alerting and ensure log integrity, especially for systems storing or processing cardholder data. Logs must capture all access to system components and cardholder data environments (CDEs), and be retained for at least 12 months, with the most recent three months readily available for analysis. Use of SIEM tools or logging services with tamper-proof storage is recommended to meet compliance and enhance breach detection.

Scan And Test For Vulnerabilities

PCI DSS 4.0 mandates continuous vulnerability management rather than periodic scans only. Organizations must implement automated change-detection mechanisms and conduct authenticated scanning of internal systems. External and internal vulnerability scans must be performed at least quarterly and after any significant change, using ASV-approved tools. These scans help detect outdated software, misconfigurations, and exploitable weaknesses before they become attack vectors.

Document Policies

All data should be documented, whether of software or employees. The logs also containing access to cardholder data should also be properly documented. This way, companies can monitor how information flows within its structure. Also, it will prevent any breach in unauthorised access to sensitive data.

Benefits of PCI Compliance

The benefits of compliance are limitless as the PCI regulatory body has ensured that they are set in place to protect both the company and its customers. The standards should be followed strictly, and it is not always as difficult as most would imagine.

PCI DSS 4.0 compliance offers a modernized security baseline that improves customer trust and brand credibility. In addition, businesses gain access to:

• Favorable processing terms and reduced risk-based transaction fees.
• Simplified integrations with global payment acquirers.
• Stronger positioning in regulated industries such as fintech, healthcare, and digital education.
• A proactive risk management framework that aligns with cybersecurity best practices and evolving data protection laws.

Penalties for PCI Compliance Violations

Just as there are benefits attached to the compliance, the PCI also mentions penalties for defaulters. There are fines for violations that are not publicly published or reported. However, the banks are empowered to pass these fines to companies that breach the regulations. Also, the company’s business relationships may suffer termination in case of violations. The fines could vary between $5,000 to $100,000 per month until compliance is reached. This fine may be manageable for large banks, but small businesses may suffer bankruptcy in the process. PCI DSS does not compromise on its compliance and will ensure that all companies abide by these regulations.

How to Achieve PCI Compliance and Stay Secure

Companies should maintain PCI compliance by engaging with PCI-compliant credit card processors or banking institutions. If you're accepting card payments online, this step-by-step guide can help you do it securely and in compliance with PCI rules. The protection of data keeps your business up with PCI DSS requirements. You can also explore online payment security best practices to strengthen your compliance strategy. It is important that you ensure your business adopts good data security practices and conduct regular internal audits.