PCI DSS Explained for Online Businesses

Every day, more people buy things online. That means hackers have a higher chance of causing trouble. Keeping customer details safe helps protect trust in your store. Following clear rules can reduce dangers tied to payments. One requirement that matters worldwide is called PCI DSS. This standard focuses on handling payment card data safely.

What Is PCI DSS?

PCI DSS meaning and definition

PCS DSS is a global data security standard designed to protect payment cardholder information throughout the payment lifecycle, such as processing, storage, and transmission. The standard is built around 12 security requirements. Each one exists for a clear reason — keeping payment details safe from thieves. This information includes cardholder information such as card number, expiration date, and security code (CVV/CVC).

At its core, security rules known as PCI DSS come into effect via contracts between businesses, banks, and companies handling payments.

What does PCI DSS stand for?

The PCI DSS, formerly known as the Payment Card Industry Data Security Standard. Around since it first appeared, this set of requirements keeps credit info safe across different systems. These rules apply every time someone handles payment details.

Why PCI DSS exists

Security standards for credit card data did not always follow a unified system. Before the launch of PCI DSS, the security of payment card information was managed by the five major payment card brands: Visa, Mastercard, American Express, Discover, and JCB. These companies ran their own independent security program without central coordination. All of these programs have a similar goal — to create an additional level of protection for card issuers by ensuring that merchants meet minimum security standards when handling payment cards and related account information. 

Although existing standards initially diverged, shared challenges prompted major payment brands to unite. Their joint work led to the release of PCI DSS 1.0 in December 2004. Afterward, those companies formed a dedicated body — the Payment Card Industry Security Standards Council. This group helped standardize rules under one framework. Since then, many global organizations have adopted this security model.

Where Does PCI DSS Apply?

Who has to follow these rules?

When a business handles credit card info, sticking to PCI DSS is necessary. Handling, storing, or transmitting such data? The standards apply without exception. Size doesn’t matter — small sellers face the same requirements as large ones.

Examples of businesses that must comply:

• Merchants — companies that accept payment cards for goods or services

• Issuers — banks and financial institutions that issue payment cards

• Acquirers — banks that process card payments for merchants

• Payment processors — entities that handle transactions on behalf of merchants or banks

• SaaS companies — if their systems store, process, transmit, or affect card data

• Online stores and e-commerce platforms

• Marketplaces and platforms that facilitate user payments

  
  

In short, if your business touches card details, PCI DSS applies.

Not all merchants report compliance in the same way. How much they must report relies on how many transactions they handle. There are four merchant levels:

• Level 1 — more than 6 million card transactions per year

• Level 2 — 1 to 6 million transactions per year

• Level 3 — 20,000 to 1 million e-commerce transactions per year

• Level 4 — fewer than 20,000 transactions per year

Does PCI DSS apply if you use Stripe/PayPal?

Using Stripe or PayPal still means PCI DSS matters. Even though these services meet strict Level 1 security rules, responsibility does not vanish completely. 

Stripe and PayPal follow international protection norms when dealing with payment details. Encryption keeps data safe. Stripe uses full-path coding. PayPal relies on SSL. Both platforms offer two-step verification (2FA), which tightens account defences. 

PCI DSS rules stay relevant, no matter the tool chosen. Still using those tools, companies must stick to some requirements in the system. Protection duties split between sides, never fully handed over.

PCI DSS and third-party payment processors (shared responsibility)

When using outside companies for payment handling, rules do not disappear. Responsibility is split between the provider and the seller. Even with external help, businesses must follow security standards. Data protection remains partly their task. Compliance depends on cooperation, yet oversight stays with the seller.

PCI DSS Rules and Core Requirements

PCI DSS rules explained (high-level overview of key controls)

PCI DSS is built around 12 core requirements grouped into 6 security goals. Together, they protect payment card data across systems and networks.

Build and Maintain a Secure Network:

1. Install and maintain a firewall configuration to protect cardholder data

2. Do not use vendor supplied defaults for system passwords and other security parameters

   
   

Protect Cardholder Data:

3. Protect stored cardholder data

4. Encrypt transmission of cardholder data across open, public networks

   
   

Maintain a Vulnerability Management Program:

5. Use and regularly update anti-virus software or programs

6. Develop and maintain secure systems and applications 

   
   

Implement Strong Access Control Measures:

7. Restrict access to cardholder data by business need-to-know

8. Assign a unique ID to each person with computer access

9. Restrict physical access to cardholder data

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. Maintain a policy that addresses information security

    
    

Data protection basics (cardholder data, encryption, storage limits)

Some payment details matter more than others. PCI DSS focuses on two key categories: Cardholder Data (CHD) and Sensitive Authentication Data (SAD).

Cardholder data (CHD) refers to any information printed, processed, transmitted, or stored in any form on a payment card. CHD contains data like the primary account number (PAN), the cardholder’s name, and the payment card’s expiration date. Stored CHD needs strong safeguards after authorization. Encryption is required because this data still carries a security risk.

Sensitive Authentication Data (SAD) includes the PIN, track data from the magnetic stripe or EMV chip, and the card verification code/value (CVC, CVV, or CID). SAD must never be stored after authorization. Even encrypted storage is not allowed.

Encryption is the process of transforming information so that only someone with the correct key can decode it. If a system gets breached, encryption keeps data safe. Even when hackers take it, the info can’t be used without the right key.

How long you keep customer card details isn’t capped by PCI DSS rules. What matters is matching storage time to actual company requirements, while watching for potential risks.

Access control and monitoring (who can access what, logging)

Only certain people can reach payment systems under PCI DSS rules. Access to the Cardholder Data Environment is limited to verified personnel who require it for their role.

Anyone entering the system gets an individual identifier — no duplicates permitted. Group logins are not approved under any circumstances.

Monitoring is when someone opens a file and time stamps that moment clearly. Entries show exactly which person viewed or changed data. Protection stops anyone from altering those details later. Keeping logs safe means holding them as long as rules demand. A routine check can spot odd behaviour before harm spreads. What matters gets written down, nothing erased.

PCI DSS Certification and Compliance Paths

PCI DSS certification vs compliance (what’s the difference?)

PCI DSS compliance means that a business follows the required security rules. Most companies confirm this through self-assessment.

PCI DSS Certification is assessed by a Qualified Security Assessor (QSA). This process can take up to 6 months for a full audit. The result is a proof of compliance.

To sum up, compliance is the ongoing state of following rules, whereas certification is a formal proof demonstrating robust controls beyond basic adherence, especially for higher-risk merchants.

SAQ types explained (A, A-EP, B, C, D)

PCI SAQ stands for Payment Card Industry Self-Assessment Questionnaire. Self-assessment is a requirement for merchants and service providers that do not need a full Report on Compliance (RoC).

The SAQ has two parts: 

1. A set of self-guided questions designed to assess your level of compliance

2. An Attestation of Compliance (AoC), which requires either your organization or a Qualified Assessor firm (QSA) to attest to your PCI DSS compliance

   
   

Common SAQ types include:

• SAQ A — merchants that fully outsource payment processing

• SAQ A-EP — e-commerce merchants that host payment pages but outsource processing

• SAQ B — merchants using standalone, dial-out terminals

• SAQ B-IP — merchants using IP-connected payment terminals

• SAQ C — merchants using internet-connected payment applications

• SAQ C-VT — merchants using third-party virtual terminals

• SAQ P2PE — merchants using validated point-to-point encryption solutions

• SAQ D — merchants and service providers that do not fit other SAQ types

When you need a QSA and when you don’t

A QSA may be needed depending on the situation

• You process more than 6 million Visa or Mastercard transactions per year

• You process 2.5 million or more American Express transactions per year

• You are classified as a Level 1 merchant

• Your business experienced a data breach

• Your environment is considered high risk

• You are a service provider to merchants and have access to a large volume of transactions annually.

  
  

A few small companies fill out the SAQ by themselves. Others bring in a QSA just to check things, spot gaps, or make sure it is done right.

PCI DSS Cost: What to Expect

Typical PCI DSS cost drivers (volume, scope, integrations, hosting)

According to recent industry reports from 2024 and 2025, audit costs now range from $50,000 to $150,000. Key cost drivers include:

• Basic data encryption

• Sales activity shifts alongside the shop tier

• Size and complexity of your infrastructure

• What falls within the cardholder data space

• How many outside tools connect here instead

• What add-ons work alongside it now anyway

• Hosting model (on-premises, cloud, hybrid)

  
  

Fewer layers in a company's structure often mean lower costs. 

For larger merchants, a full PCI DSS audit is often required. Based on recent industry estimates, typical costs look like this:

• Level 1 (Over 6 million transactions per year): $50,000 – $150,000

• Level 2 (1–6 million transactions per year): $10,000 – $50,000

• Level 3 & 4 (Fewer than 1 million transactions per year): $1,000 – $10,000

  
  

These amounts usually cover assessment work, reporting, and basic validation.

PCI DSS 4.0 places a stronger emphasis on modern security controls. As a result, many businesses need to invest in additional tools.

Common technology costs include:

• Advanced Firewalls and Network Security: $5,000 to $20,000.

• Encryption and Tokenization: $5,000 to $50,000

• Security Information and Event Management (SIEM) Systems: $10,000 and $100,000.

• Rigorous Penetration Testing and Vulnerability Scanning: $5,000 – $50,000 per year.

  
  

Most small online stores check their own work, then hire outside help now and then.

Typical expenses include:

• SAQ completion — around $200

• External RoC assessment (if required) — from $10,000

• Vulnerability scanning — $200–$300 per IP address

• Employee security training — from $50 per employee

• Data encryption — up to $5,000 plus maintenance

• Security software licences — from $1,000 per year

• Policy development (outsourced) — from $1,000

• Penetration testing — from $3,000 (when required)

• Remediation work — varies based on findings

  
  

How to reduce cost by reducing scope

Lowering PCI DSS scope is the most effective way to reduce costs. Practical steps include:

• Isolate cardholder data in a clearly defined environment.

• Implement tokenization and encryption technology to protect cardholder data during relaxation and transit.

• Scan systems regularly to identify hidden risks early.

• Run periodic penetration tests instead of waiting for audits.

• Invest in security awareness training for personnel to avoid human mistakes.

• Watch systems nonstop so issues show up fast, catching problems early without waiting for scheduled checks.

• Avoid over-documentation that could result in unnecessary information.

  
  

PCI DSS Companies: Who Helps and What They Do

QSAs, ASVs, penetration testers, compliance platforms

PCI DSS companies provide expert guidance, gap analysis, remediation support, vulnerability scanning, and formal assessments to protect cardholder data and prevent fraud.

QSAs (Qualified Security Assessors) approved by the PCI Security Standards Council.

These specialists handle official PCI DSS evaluations. A Report on Compliance (RoC) bears their signature once checks are complete. Help with identifying shortcomings and fixing them might come from them too.

ASV (Approved Scanning Vendors) is an organization with a set of security services and tools to conduct external vulnerability scanning services to validate adherence with the external scanning requirements.

Penetration Testers (Pen Testers) is an authorized simulated cyberattack on a computer system, performed to evaluate the security of the system.

PTaaS (Penetration Testing as a Service) is a modern delivery model for pentests that are continuous, on demand hacking rather than an annual check.

What to ask a PCI DSS company before hiring

Before choosing a PCI DSS provider, it is important to ask the right questions.

Key points to check:

• Do they hold valid QSA or ASV certification?

• Could they handle your setup like cloud systems, online software, phones, or digital stores? What about their background in these areas?

• How do they define and secure the Cardholder Data Environment (CDE)?

• Is solid encryption in place along with correct network separation?

• How is access to cardholder data controlled and monitored?

• What speed do they act at when issues come up?

  
  

Last but not least, staff knowledge plays a role — not every team trains people well. When things go wrong, their reaction plan must exist, not just sound good.

Common red flags and “cheap certification” scams

Weak login rules like simple passwords without multifactor checks stand out. Unprotected storage of private details, especially when encryption is missing, raises concerns fast.

Skipping routine scans or penetration tests leaves gaps unseen. Networks split poorly make it easier for threats to move around. When logs are incomplete or ignored, spotting issues gets harder. Wireless systems left unshielded add another opening. Each of these gaps feeds into bigger risks, sooner or later.

With 12 complex requirements, achieving PCI compliance is neither a quick nor a cheap process. A miser pays twice, so don’t expose your business to unnecessary risk and choose companies with excellent reputations that will work with you honestly and transparently.

Benefits of PCI DSS for Online Businesses

Achieving PCI DSS standards does more than check boxes. For internet sellers, lower exposure to threats comes through the implementation of structured safeguards. Guarding income becomes easier when systems are properly protected. When customers see consistent protection, their confidence in service grows.

Reducing fraud and chargebacks

Stopping scams starts with tighter rules. When systems encrypt card details, thieves struggle to get them. Tough protections block sneaky attacks on CHD. As a result, fraud attempts drop, chargebacks become less frequent, and revenue losses decrease.

With fewer problems popping up, sorting things out takes way less effort. That leaves more room to just move forward.

Trust and partnership benefits (banks, PSPs, marketplaces)

When businesses follow PCI DSS rules, their partners, such as banks and acquiring institutions, payment service providers, and marketplaces, feel more confident. That kind of security shows others you take protection seriously. Working together gets smoother when everyone believes data is safe. Being clear about safeguards helps relationships grow stronger over time. 

Peace of mind draws people back. Should a shopper believe their data is secure, their confidence builds over time. That steady sense shapes how they view the company later on.

Lower breach risk and smoother audits

When problems arise, firms that follow rules tend to bounce back more quickly while facing fewer breaches along the way. Following PCI DSS doesn’t just keep penalties away. Security gets tougher because of it. Payments run more smoothly when these rules are in place. For online stores aiming to last, that kind of setup helps them grow without any problems.

Common Mistakes and Practical Tips

Misunderstanding “we don’t store cards = no PCI”

This assumption is common and risky.

Not storing card data removes some requirements, but it does not eliminate PCI DSS obligations. PCI DSS covers the entire payment flow, including processing and transmission.

Even without storage, businesses must still: 

• Secure systems that process payments

• Protect limited card data, such as PAN or tokens

• Control access to payment-related systems

• Validate third-party providers

  
  

Processors reduce compliance scope, but responsibility never fully disappears.

Hidden scope (logs, backups, customer support tools)

Because of PCI DSS it is important to eliminate Unnecessary Cardholder Data Storage. You can conduct a Cardholder Data Discovery Scan. Use PCI data discovery tools (like ManageEngine, Forcepoint, ControlCase, and Netwrix) to find hidden CHD in databases, logs, and backups.

Basic compliance checklist for eCommerce teams

A business that handles card payments falls under PCI DSS rules, so do the companies they work with behind the scenes.

A basic checklist includes:

1. Install and maintain firewalls to protect cardholder data

2. Avoid default system passwords and settings

3. Protect stored cardholder data

4. Scrambling payment details happens when sent across open internet connections

5. Freshen up the antivirus. 

6. Limited access to card details.

7. Assign unique user IDs for system access

8. Restrict physical access to sensitive systems

9. Log and monitor access to networks and data

10. Test security controls regularly

    
    

A clear plan keeps everyone safe. This way, each person knows what to do. Rules help protect data every day. These steps prevent problems later. Everyone plays a part in staying secure.

FAQ

What is PCI DSS?

Imagine a rule book created by big credit card companies — Visa, Mastercard, American Express, Discover, and JCB. It goes by the name PCI DSS: Payment Card Industry Data Security Standard. The main purpose of the rules is to guard people's card details whenever payments happen across the world. Every business handling such data must follow these rules, whether storing it, moving it, or using it. The goal shows clearly — keep customer info safe, stop theft before it starts, using clear tech steps and daily practices.

Where does the PCI DSS apply?

Any organization that deals with credit card data falls under these requirements. Not just banks — retailers, online shops, even small service providers too. If cards are involved, the standards come into play. Location doesn’t remove the need. The size of the business makes no difference either. Whether processing happens locally or through third parties, responsibility stays. Rules apply as soon as card information is stored, sent, or received. Global operations have to meet the same conditions.

How much does PCI DSS certification cost?

PCI DSS certification costs range from low thousands ($1,000 – $10,000) for small businesses to tens of thousands ($50,000 – $150,000) for large merchants, for several reasons. Costs shift based on company size, infrastructure complexity, and compliance readiness level.

Do I need PCI DSS if I use Stripe/PayPal?

Even when utilising Stripe or PayPal, adherence to PCI DSS remains required. Responsibility shifts considerably due to their because they are Level 1 PCI providers, handling most of the heavy lifting.

What happens if my business is not PCI-compliant?

You will be fined and no longer be able to accept payment cards if you fail to comply with PCI DSS. This will, in turn, end your relationships with most financial institutions, tarnish your reputation with both them and your customers. A bad reputation will directly impact your business’s revenue. It will also be difficult and expensive to regain the favour and trust of the payment card industry and your customers.