Accepting credit card payments unlocks growth, but it also comes with risk. Whether you’re a neighborhood bakery or a scaling vertical SaaS product with embedded payments, if your systems handle credit card information, you’re required to comply with the Payment Card Industry Data Security Standard (PCI DSS).

Too often, PCI DSS is seen as something that only applies to large enterprises. But in reality, small and mid-sized businesses are just as responsible, and often at greater risk. From outdated point-of-sale systems to cloud misconfigurations, many of the most common cardholder data breaches happen at the SMB level.

This guide breaks down what PCI DSS compliance is, who it applies to, and what it takes to meet the requirements. We’ll also walk through common pitfalls, how PCI DSS overlaps with other frameworks, and where to begin if you’re tackling compliance for the first time. Whether you’re just getting started or tightening up an existing program, this guide will help you approach PCI DSS in a way that’s practical, scalable, and secure.

What is PCI DSS?

The Payment Card Industry Data Security Standard (PCI DSS) is a global security framework designed to protect credit and debit card information from theft and misuse. It was developed and is maintained by the PCI Security Standards Council (PCI SSC), a consortium founded by major card brands including Visa, Mastercard, American Express, Discover, and JCB.

The goal of PCI DSS is simple: to ensure that any organization that stores, processes, or transmits cardholder data does so securely. By setting consistent requirements across payment systems and providers, the standard aims to reduce credit card fraud and protect sensitive information from breaches.

Unlike HIPAA or GDPR, PCI DSS isn’t a law; it’s enforced through your contracts with banks and card processors. When businesses sign agreements with acquiring banks, payment processors, or card networks, they commit to complying with PCI DSS as part of those contracts. Failure to comply can lead to steep penalties, increased transaction fees, or even loss of the ability to process card payments altogether.

In short, PCI DSS is the backbone of payment security. The standard creates consistency across the payments ecosystem, giving businesses a clear benchmark for safeguarding cardholder data.

Who needs to comply with PCI DSS?

If your business stores, processes, or transmits payment card data, PCI DSS applies to you. This includes:

• Merchants of all sizes, from global retailers to local coffee shops
• Service providers who handle cardholder data on behalf of others, such as payment processors, point-of-sale vendors, managed service providers (MSPs), and cloud platforms supporting transactions
  

To account for the wide range of organizations in scope, the PCI Security Standards Council defines four merchant levels based on annual transaction volume. These levels determine the type and frequency of required compliance validation (e.g., self-assessment questionnaires vs. formal audits by a Qualified Security Assessor):

• Level 1: Over 6 million transactions/year
• Level 2: 1–6 million transactions/year
• Level 3: 20,000–1 million e-commerce transactions/year
• Level 4: Fewer than 20,000 e-commerce transactions or fewer than 1 million overall transactions/year
  

Even if you fall into Level 4, compliance isn’t optional. Smaller merchants may face fewer validation requirements, but the core security obligations remain the same.

What does PCI DSS compliance involve?

PCI DSS outlines 12 core requirements organized under six control objectives, all designed to ensure the safe handling of payment card data. Unlike broader frameworks like HIPAA, PCI DSS is highly prescriptive, laying out specific technical and operational safeguards that businesses must implement.

Here’s a look at what PCI compliance requires:

‍1. Build and maintain a secure network and systems

• Install and maintain a firewall to protect cardholder data
• Avoid using vendor-supplied defaults for system passwords and settings

‍2. Protect cardholder data

• Encrypt transmission of cardholder data across open or public networks
• Protect stored cardholder data using encryption or tokenization
  

3. Maintain a vulnerability management program

• Use and regularly update anti-virus software
• Develop and maintain secure systems and applications (e.g., apply security patches)
  

4. Implement strong access control measures

• Restrict access to cardholder data on a need-to-know basis
• Assign a unique ID to each person with system access
• Limit physical access to cardholder data
  

5. Regularly monitor and test networks

• Track and monitor all access to network resources and cardholder data
• Test security systems and processes regularly
  

6. Maintain an information security policy

• Establish, publish, and maintain a policy that addresses information security for all personnel
  

Compliance with PCI DSS is both risk-based and highly technical. Organizations are expected to tailor certain safeguards to their environments; but many controls (like anti-virus use and access logs) are non-negotiable. Even small merchants may need to:

• Configure firewalls and routers securely
• Use point-to-point encryption or tokenization for transactions
• Apply software updates and security patches promptly
• Maintain detailed audit logs and access controls
  

These requirements form the technical foundation of PCI DSS, but meeting them is only half the battle. The next step is proving you’ve done the work.

How PCI DSS compliance is validated

Not all merchants validate PCI DSS compliance the same way. The type of compliance validation required depends on your merchant level, which is determined by your annual transaction volume and payment environment.

Here are the most common validation methods:

• Self-Assessment Questionnaire (SAQ): A series of yes/no questions designed to evaluate your compliance posture. There are several SAQ types (A, B, C, D, etc.), tailored to different payment environments (e.g., fully outsourced e-commerce vs. on-premises systems). Most small and mid-sized merchants fall into this category.
• Quarterly External Vulnerability Scans: Conducted by an Approved Scanning Vendor (ASV), these scans check your internet-facing systems for known security weaknesses.
• Onsite Assessment by a Qualified Security Assessor (QSA): Required for Level 1 merchants and certain service providers. A formal audit performed by an independent assessor who reviews your controls, policies, and implementation details.
• Attestation of Compliance (AOC): A formal document signed by the organization (and sometimes the assessor) that confirms compliance with PCI DSS requirements.
  

For many SMBs, PCI validation simply means completing the appropriate SAQ and quarterly scans, but don’t mistake “self-assessment” for “simple.” The SAQ still requires you to implement and maintain all relevant controls, and inaccurate answers can result in penalties or data exposure down the line.

If you’re unsure which SAQ applies to you, your payment processor or acquiring bank can help you determine the right one.

Common PCI DSS compliance challenges

PCI DSS is comprehensive; and for many organizations, that’s part of the challenge. Staying compliant requires more than a one-time checklist. It demands continuous attention to systems, vendors, and internal processes. Here are some of the most common pitfalls:

• Storing cardholder data unnecessarily. Many breaches happen because businesses retain sensitive cardholder data they don’t need. PCI DSS requires that data storage be limited to what’s essential—and when stored, it must be properly encrypted or tokenized.
• Insecure or outdated payment systems. Legacy point-of-sale systems, custom eCommerce platforms, or unsupported software can leave your payment environment wide open to attacks. Keeping these systems patched and properly segmented is critical.
• Poor network segmentation. When cardholder data environments (CDEs) aren’t clearly separated from the rest of your network, it expands the scope of PCI DSS—as well as the risk. Weak segmentation makes it harder to protect critical systems and limit the impact of a potential breach.
• Inconsistent patching and updates. Delays in applying security patches or updates to software and hardware can quickly create vulnerabilities. PCI DSS requires a formal process for managing and applying updates in a timely, controlled manner.
• Lack of documentation or oversight. Without centralized policies, audit logs, and oversight roles, even well-intentioned efforts can fall short. PCI DSS expects clear documentation, repeatable processes, and defined accountability.
• Third-party risk. Just because a vendor handles your payments doesn’t mean you’re off the hook. Businesses are responsible for verifying that service providers (e.g., processors, MSPs, SaaS platforms) maintain PCI compliance and meet their contractual obligations.
  

The good news? These challenges are manageable with the right structure and support. Plus, PCI DSS doesn’t exist in a vacuum. Many of its requirements mirror those in other well-known frameworks—so you may already be further along than you think.

How PCI DSS overlaps with other frameworks

PCI DSS is just one piece of the broader cybersecurity puzzle. Many of its requirements align closely with other well-established frameworks, which means that organizations pursuing broader security maturity can often integrate PCI into existing efforts.

Many PCI DSS controls map directly to other frameworks:

If your company already follows NIST, ISO, or SOC 2 guidelines, chances are you’ve laid some of the groundwork for PCI DSS. With the right adjustments, such as ensuring cardholder data is in scope and following PCI-specific validation steps, you can often build a unified, efficient compliance program.

Tips for getting started with PCI DSS compliance

If you’re new to PCI DSS—or revisiting your approach—it helps to start with a structured game plan. Whether you’re a small merchant or a service provider, these foundational steps can help you build a compliance program that’s efficient, defensible, and tailored to your risk profile:

1. Inventory systems in scope. Identify every system, application, and process that stores, processes, or transmits cardholder data. This defines your cardholder data environment (CDE) and helps scope your compliance effort.
2. Determine your merchant level. Your annual transaction volume determines which Self-Assessment Questionnaire (SAQ) or validation steps apply. Most SMBs fall into Level 3 or 4.
3. Eliminate unnecessary data storage. If you don’t need to store cardholder data, don’t. Reducing storage not only lowers your risk—it can significantly reduce your compliance scope and cost.
4. Use tokenization or a PCI-compliant processor. Outsourcing payment processing to a PCI-compliant provider or using tokenization technologies can shift much of the compliance burden off your systems.
5. Strengthen internal controls. Implement basic technical and administrative controls: restrict access to card data, use firewalls and encryption, and maintain policies for secure system configuration and incident response.
6. Schedule regular scans and training. Conduct external vulnerability scans (as required) and test systems for weaknesses. Train employees—especially those who handle payments—on secure practices and PCI requirements.
   

PCI DSS compliance takes time; but with a clear plan, it’s manageable. Focus on what’s in your control, document your efforts, and iterate as your business grows.

Final thoughts: Why PCI DSS compliance is good business

PCI DSS protects more than data—it protects your brand, revenue, and relationships. A single breach of cardholder data can result in fines, lost trust, chargebacks, and reputational damage that takes years to repair.

But it’s not all downside mitigation. A well-run PCI DSS program signals to customers, partners, and processors that your business takes security seriously. It builds credibility, smooths the path to partnerships, and reduces the friction that often slows down deals in payments-heavy industries.

Many of the same principles behind PCI DSS—like access control, continuous monitoring, and risk-based safeguards—are also central to other leading frameworks. Explore the NIST Cybersecurity Framework, learn how the CIS Controls can help SMBs reduce risk, or understand what HIPAA compliance means for protecting sensitive healthcare data. If your business handles multiple types of sensitive information, these resources can help you create a unified, scalable security strategy.

Need help getting started? We help SMBs simplify PCI DSS compliance, reduce unnecessary scope, and build defensible, scalable security programs. If you’re ready to make compliance work for your business—not the other way around—let’s talk.