The ecommerce industry continues to see explosive growth, with global sales expected to surpass $8 trillion by 2026. But this rapid expansion has also attracted the attention of cybercriminals looking to exploit vulnerabilities and steal sensitive customer data.
According to the latest IBM Security report, the average cost of a data breach in the retail industry hit $3.28 million in 2022, a 10% increase from the previous year. Ecommerce sites are prime targets, with Feedvisor reporting that 49% of brands experienced rising online fraud attempts last year.
For any business that accepts credit card payments online, meeting the Payment Card Industry Data Security Standard (PCI DSS) is a non-negotiable requirement. This comprehensive set of controls is designed to ensure the security of cardholder data at every step of the transaction process.
However, achieving and maintaining PCI compliance can be a complex and ongoing challenge, especially for fast-growing ecommerce brands. With over 300 individual requirements across 12 main categories, it‘s easy for things to fall through the cracks.
That‘s why we‘ve put together this essential checklist to help you navigate the world of PCI compliance in 2024 and beyond. Whether you‘re a small boutique or an enterprise retailer, these best practices will provide a strong foundation for securing your customers‘ trust and protecting your business from costly breaches.
Understanding the PCI DSS Requirements
Image Source: 1Tech Corporation
The PCI DSS encompasses 12 high-level requirements, each with its own set of granular sub-requirements. As of version 4.0 released in 2022, these include:
- Install and maintain network security controls
- Apply secure configurations to all system components
- Protect stored account data
- Protect cardholder data with strong cryptography during transmission over open, public networks
- Protect all systems and networks from malicious software
- Develop and maintain secure systems and software
- Restrict access to system components and cardholder data by need to know
- Identify users and authenticate access to system components
- Restrict physical access to cardholder data
- Log and monitor all access to system components and cardholder data
- Test security of systems and networks regularly
- Support information security with organizational policies and programs
The specific actions you need to take to comply with each requirement will vary based on your business size, technology stack, and payment processing environment. But in general, all merchants must implement baseline security controls like firewalls, encryption, access controls, logging and monitoring, and security testing.
Know Your PCI Compliance Level
PCI DSS defines four levels of compliance based on the volume of card transactions processed annually. Knowing your level is critical, as it determines the depth of validation you must undergo to prove compliance.
| Compliance Level | Transactions Per Year | Validation Requirements |
|---|---|---|
| 1 | Over 6 million | Annual on-site assessment by Qualified Security Assessor (QSA) or internal audit if signed by officer of the company. Quarterly network scan by Approved Scan Vendor (ASV). |
| 2 | 1 to 6 million | Annual Self-Assessment Questionnaire (SAQ). Quarterly network scan by ASV. |
| 3 | 20,000 to 1 million ecommerce transactions | Annual SAQ. Quarterly network scan by ASV. |
| 4 | Fewer than 20,000 ecommerce transactions | Annual SAQ recommended. Quarterly network scan by ASV if applicable. |
Source: Visa‘s What is PCI Compliance
The High Cost of Non-Compliance
Average total cost of a data breach from 2014 to 2022 (in million U.S. dollars). Source: Statista
Failing to meet PCI DSS standards can result in hefty non-compliance fines, typically ranging from $5,000 to $100,000 per month until compliance is achieved. And that‘s just the start. In the event of an actual data breach, you could face:
- Mandatory forensic examination costs
- Increased transaction fees or account termination from your bank
- Regulatory audits and government fines
- Class-action lawsuits and legal fees
- Customer notification and credit monitoring expenses
- Brand reputation damage and loss of sales
Big brands are not immune. In 2013, Target suffered a massive data breach impacting over 41 million customer payment card accounts. The retailer ended up paying $18.5 million in settlement claims, plus over $100 million in legal fees and other associated costs.
More recently, Macy‘s was hit with a $192,000 PCI non-compliance fine in 2018 after a months-long data breach exposed customer credit card numbers and personally identifiable information. The brand also suffered incalculable damage to its reputation and consumer trust.
Your 2024 PCI Compliance Game Plan
With the threat landscape constantly evolving, ecommerce leaders must take a proactive, multi-layered approach to protect customer data and maintain PCI compliance. Here are some key strategies to focus on in the coming year:
Implement Multi-Factor Authentication Everywhere
Compromised passwords remain one of the top causes of data breaches. All accounts with access to payment processing systems or cardholder data should be protected with multi-factor authentication. This could include physical security keys, one-time SMS codes, biometric verification, or dedicated authenticator apps.
Segment & Isolate the Cardholder Data Environment
Flat networks make it easier for attackers to move laterally and escalate privileges after infiltrating your systems. Properly segmenting the cardholder data environment (CDE) from the rest of your corporate network through firewalls and access controls can contain the blast radius of a breach.
Automate Security Controls & Threat Response
With the growing scale and sophistication of attacks, manual processes can‘t keep pace. Automating critical security tasks like patching, configuration management, and log monitoring can improve your detection and response times while reducing the risk of human error.
Upgrade to EMV & Contactless Payments
As the sun sets on legacy payment methods, adopting EMV chip technology and contactless NFC payments not only provides a smoother checkout experience but also significantly reduces the risk of counterfeit fraud. Work with your payment processor to ensure you have the latest POS equipment and software.
Reduce Scope by Outsourcing
Every system that touches payment card data falls into scope for PCI compliance. Outsourcing payment processing to a PCI DSS certified Level 1 provider can dramatically reduce your compliance footprint and technical overhead.
Ecommerce platforms like Shopify and BigCommerce offer built-in PCI compliance, handling all the heavy lifting of securing transactions, encrypting cardholder data, and maintaining security controls. Just be sure to vet providers carefully and understand your responsibilities as a merchant.
Train & Engage Your Team
Data security is not just an IT problem. Every employee should understand the importance of protecting customer information and their role in maintaining PCI compliance. Implement mandatory security awareness training, enforce strong access controls, and regularly test your team with simulated phishing attacks.
Stay on Top of Industry Trends
The payment security landscape is always changing. Make a commitment to ongoing education and improvement. Follow PCI Security Council alerts, attend industry conferences, participate in webinars, and join relevant LinkedIn groups to stay plugged into the latest threats, technologies, and compliance mandates.
Key PCI DSS 4.0 Changes to Watch
PCI DSS version 4.0, released in March 2022, introduced some important updates that all ecommerce merchants need to be aware of. While many of the new requirements are "best practices" until March 2025, organizations should start planning now. Some of the most impactful changes include:
- Targeted risk analyses to manage PCI DSS compliance
- Stronger multi-factor authentication for all access into the CDE
- More stringent password requirements (12 character minimum length, restrictions on consecutive characters, etc.)
- Enhanced monitoring, logging and alerting requirements
- Increased frequency of security testing (penetration testing, vulnerability scanning, etc.)
For a complete overview of all changes in PCI DSS 4.0, consult the PCI Security Standards Council‘s Summary of Changes from PCI DSS Version 3.2.1 to 4.0.
Putting It All Together
PCI compliance is not a one-time event but an ongoing journey that requires continuous vigilance and improvement. By following this checklist and investing in robust security controls, you can protect your customers‘ data, preserve hard-earned brand trust, and focus on growing your ecommerce business.
But don‘t navigate PCI compliance alone. Partner with a trusted ecommerce platform, payment processor, and security provider to reduce your compliance scope and access expert guidance. Together, you can implement a strong defense-in-depth strategy to stay one step ahead of threats and meet the evolving requirements of PCI DSS.
Additional Resources
- Official PCI Security Standards Council Website
- Mastercard‘s PCI Merchant Levels & Compliance Requirements
- Visa‘s Guide to Safe Payments
- BigCommerce‘s Ecommerce PCI Compliance Guide
