Share this article
How to become PCI compliant in three steps
Be PCI compliant in three steps
The Payment Card Industry Data Security Standard (“PCI DSS”) is an industry-mandated set of requirements created by major credit card brands in order to protect customer cardholder data. Being PCI compliant is required for any entity that stores, processes, transmits, or impacts the security of cardholder data.
Becoming PCI compliant can be complex: there are different PCI compliance levels, reporting, and validation requirements for various types of PCI merchants and service providers (explained below) depending on how they interact with cardholder data and annual card transaction volumes. First of all, how do you know if you have to be PCI compliant?
Who has to be PCI compliant?
According to the PCI Compliance Security Standard Council, any organization that processes, stores, or transmits payment data like credit card information needs to be PCI compliant. This is done to protect consumers so their payment information isn’t trusted in an unsafe organization.
Is PCI compliance necessary?
The short answer is yes, if you fall within the categories that need to be PCI compliant, it is essential for your business. While PCI DSS isn’t a legal requirement, it is a requirement set by the major banks of the payment industry. If you aren’t PCI compliant, you may be charged thousands in recurring penalty fees.
While there is a cost to PCI compliance, it’s minimal compared to the potential cost of penalties, data breach lawsuits, and loss of business. If your company deals with cardholder data, refer to the following sections to learn more about what you need to do to determine your PCI compliance obligations and next steps.
1. PCI compliance starts with determining if your business is a merchant or service provider
Entities that deal with cardholder data fall into one of two categories: merchant or service provider. A merchant is a business that directly accepts customer payments for goods and services, like an eCommerce or brick and mortar retailer.
A service provider may not directly accept payments, but comes into contact with payment data (or could impact the security of another entity’s cardholder data or cardholder data environment). Payment data may include entities like:
- Hosting providers
- Managed security service providers
- Financial service companies
- Payment facilitators
Both service providers and merchants must be PCI compliant and formally validate their compliance status annually through a Self-Assessment Questionnaire (SAQ) or Report on Compliance (ROC). Both the SAQ and ROC assessments require the entity to complete a compliant Attestation of Compliance (AOC).
The major difference between the SAQ and ROC is the level of validation and evidence required for PCI compliance. A SAQ is typically performed “in-house” by a qualified internal resource or team, while the ROC must be performed by an external Qualified Security Assessor (QSA) or Internal Security Assessor (ISA).
Which level of PCI compliance and validation an entity is required to meet is determined primarily by annual transaction volume. A bank or the card brand may require an entity to complete a higher level based on perceived risk, a previous breach, or other factors.
2. Determine your required level of PCI compliance
PCI compliance for merchants
Both merchants and service providers are grouped into different PCI compliance levels that dictate how they must validate compliance. For merchants, there are PCI compliance levels one through four, primarily based on the number of transactions processed each year.
A merchant that processes over six million transactions annually is classified as “Level 1” and must complete a Report on Compliance. Merchants below this transaction threshold are classified as Level 2-4 and typically qualify to complete a Self-Assessment Questionnaire.
PCI compliance for service providers
For service providers, there are only two levels of PCI compliance: a PCI DSS Level 1 service provider processes over 300,000 transactions per year and is required to complete a Report on Compliance. A service provider that impacts fewer than 300,000 transactions is a Level 2 service provider and typically qualifies to complete a Self-Assessment.
Many merchants and service providers that qualify for Self-Assessment (based on transaction volume) often choose to perform the higher level of validation through a ROC. There are multiple reasons why an entity may choose to pursue the more stringent validation process. Compliance via ROC is often used to meet internal security requirements, customer requests, or as a sales/marketing differentiator.
3. Complete the requirements for your level of PCI compliance
Once you determine if you fall into the merchant or service-provider categories, and your PCI compliance level within, you can determine your compliance obligations and controls.
For Level 1 merchants and service providers: ROC and QSA/ISA
For both merchants and service providers, Level 1 entities are required to validate through an external third-party assessor (A QSA) or Internal Security Assessor (ISA, which is essentially a QSA employed at your company).
The QSA/ISA will assist the entity in validating the scope of the cardholder environment, and assess the adequacy of relevant controls through a combination of:
- Documentation review
- Technical validation
- Observation of processes
At the end of the assessment, the QSA/ISA will complete the Report on PCI Compliance and formally document the results in the Attestation of Compliance.
PCI compliance for non-Level 1 merchants and service providers (SAQ)
If you are a Level 2 service provider or a Level 2-4 merchant, the process to be PCI compliant is a bit simpler. Entities that qualify can complete a Self-Assessment Questionnaire and Attestation of Compliance. This process can be done by any qualified resource in your company, though many entities still choose to retain the services of an outside consultant to help them assess their compliance status.
For the SAQs that require it, you need to receive a scan from an ASV each quarter and you need to complete a SAQ to verify that you are adhering to all 12 standards. Most companies with less then six million annual transactions can use a SAQ to demonstrate PCI compliance. There are eight SAQs to choose from, determined by how your company interacts with cardholder data (eCommerce only vs. in person, for example).
The PCI Security Standards Council (governing body responsible for maintaining various PCI programs) has released detailed guidance for determining your SAQ type. The last page of this document includes a useful flowchart to quickly help you determine your type.
PCI DSS compliance can be a confusing and daunting task at first glance. If you are a current Vanta customer, contact your Customer Success Manager or our team of PCI compliance experts to help guide you through the PCI process. Interested in pursuing PCI compliance with Vanta? Learn more here.
Learn more about PCI compliance
Determine whether the GDPR applies to you and if so, if you are a processor or controller (or both)
Do you sell goods or service in the EU or UK?
Do you sell goods or services to EU businesses, consumers, or both?
Do you have employees in the EU or UK?
Do persons from the EU or UK visit your website?
Do you monitor the behavior of persons within the EU?
Create a Data Map by taking the following actions
Identify and document every system (i.e. database, application, or vendor) which stores or processes EU or UK based personally identifiable information (PII)
Document the retention periods for PII in each system
Determine whether you collect, store, or process “special categories” of data
Determine whether your Data Map meets the requirements for Records of Processing Activities (Art. 30)
Determine whether your Data Map includes the following information about processing activities carried out by vendors on your behalf
Determine your grounds for processing data
For each category of data and system/application have you determined the lawful basis for processing based on one of the following conditions?
Take inventory of current customer and vendor contracts to confirm new GDPR-required flow-down provisions are included
Review all customer contracts to determine that they have appropriate contract language (i.e. Data Protection Addendums with Standard Contractual Clauses)
Review all in-scope vendor contracts to determine that they have appropriate contract language (i.e. Data Protection Addendums with Standard Contractual Clauses)
Have you performed a risk assessment on vendors who are processing your PII?
Determine if you need to do a Data Protection Impact Assessment
Is your data processing taking into account the nature, scope, context, and purposes of the processing, likely to result in a high risk to the rights and freedoms of natural persons?
Review product and service design (including your website or app) to ensure privacy notice links, marketing consents, and other requirements are integrated
Does the notice to the data subject include the following items?
Does the notice also include the following items?
Do you have a mechanism for persons to change or withdraw consent?
Update internal privacy policies to comply with notification obligations
Update internal privacy notices for EU employees
Determine if you need to appoint a Data Protection Officer, and appoint one if needed
Have you determined whether or not you must designate a Data Protection Officer (DPO) based on one of the following conditions (Art. 37)?
If you export data from the EU, consider if you need a compliance mechanism to cover the data transfer, such as model clauses
If you transfer, store, or process data outside the EU or UK, have you identified your legal basis for the data transfer (note: most likely covered by the Standard Contractual Clauses)
Have you performed and documented a Transfer Impact Assessment (TIA)?
Confirm you are complying with other data subject rights (i.e. aside from notification)
Do you have a defined process for timely response to Data Subject Access Requests (DSAR) (i.e. requests for information, modification or deletion of PII)?
Are you able to provide the subject information in a concise, transparent, intelligible and easily accessible form, using clear and plain language?
Do you have a process for correcting or deleting data when requested?
Do you have an internal policy regarding a Compelled Disclosure from Law Enforcement?
Determine if you need to appoint an EU-based representative, and appoint one if needed
Have you appointed an EU Representative or determined that an EU Representative is not needed based on one of the following conditions?
If operating in more than one EU state, identify a lead Data Protection Authority (DPA)
Do you operate in more than one EU state?
If so, have you designated the Supervisory Authority of the main establishment to act as your Lead Supervisory Authority?
Implement Employee Trainings to Demonstrate Compliance with GDPR Principles and Data Subject Rights
Have you provided appropriate Security Awareness and Privacy training to your staff?
Update internal procedures and policies to ensure you can comply with data breach response requirements
Have you created and implemented an Incident Response Plan which included procedures for reporting a breach to EU and UK Data Subjects as well as appropriate Data Authorities?
Do breach reporting policies comply with all prescribed timelines and include all recipients i.e. authorities, controllers, and data subjects?
Implement appropriate technical and organizational measures to ensure a level of security appropriate to the risk
Have you implemented encryption of PII at rest and in transit?
Have you implemented pseudonymization?
Have you implemented appropriate physical security controls?
Have you implemented information security policies and procedures?
Can you access EU or UK PII data in the clear?
Do your technical and organizational measure ensure that, by default, only personal data which are necessary for each specific purpose of the processing are processed?
Develop a roadmap for successful implementation of an ISMS and ISO 27001 certification
Implement Plan, Do, Check, Act (PDCA) process to recognize challenges and identify gaps for remediation
Consider ISO 27001 certification costs relative to org size and number of employees
Clearly define scope of work to plan certification time to completion
Select an ISO 27001 auditor
Set the scope of your organization’s ISMS
Decide which business areas are covered by the ISMS and which are out of scope
Consider additional security controls for business processes that are required to pass ISMS-protected information across the trust boundary
Inform stakeholders regarding scope of the ISMS
Establish an ISMS governing body
Build a governance team with management oversight
Incorporate key members of top management, e.g. senior leadership and executive management with responsibility for strategy and resource allocation
Conduct an inventory of information assets
Consider all assets where information is stored, processed, and accessible
- Record information assets: data and people
- Record physical assets: laptops, servers, and physical building locations
- Record intangible assets: intellectual property, brand, and reputation
Assign to each asset a classification and owner responsible for ensuring the asset is appropriately inventoried, classified, protected, and handled
Execute a risk assessment
Establish and document a risk-management framework to ensure consistency
Identify scenarios in which information, systems, or services could be compromised
Determine likelihood or frequency with which these scenarios could occur
Evaluate potential impact of each scenario on confidentiality, integrity, or availability of information, systems, and services
Rank risk scenarios based on overall risk to the organization’s objectives
Develop a risk register
Record and manage your organization’s risks
Summarize each identified risk
Indicate the impact and likelihood of each risk
Document a risk treatment plan
Design a response for each risk (Risk Treatment)
Assign an accountable owner to each identified risk
Assign risk mitigation activity owners
Establish target dates for completion of risk treatment activities
Complete the Statement of Applicability worksheet
Review 114 controls of Annex A of ISO 27001 standard
Select controls to address identified risks
Complete the Statement of Applicability listing all Annex A controls, justifying inclusion or exclusion of each control in the ISMS implementation
Continuously assess and manage risk
Build a framework for establishing, implementing, maintaining, and continually improving the ISMS
Include information or references to supporting documentation regarding:
- Information Security Objectives
- Leadership and Commitment
- Roles, Responsibilities, and Authorities
- Approach to Assessing and Treating Risk
- Control of Documented Information
- Internal Audit
- Management Review
- Corrective Action and Continual Improvement
- Policy Violations
Assemble required documents and records
Review ISO 27001 Required Documents and Records list
Customize policy templates with organization-specific policies, process, and language
Establish employee training and awareness programs
Conduct regular trainings to ensure awareness of new policies and procedures
Define expectations for personnel regarding their role in ISMS maintenance
Train personnel on common threats facing your organization and how to respond
Establish disciplinary or sanctions policies or processes for personnel found out of compliance with information security requirements
Perform an internal audit
Allocate internal resources with necessary competencies who are independent of ISMS development and maintenance, or engage an independent third party
Verify conformance with requirements from Annex A deemed applicable in your ISMS's Statement of Applicability
Share internal audit results, including nonconformities, with the ISMS governing body and senior management
Address identified issues before proceeding with the external audit
Undergo external audit of ISMS to obtain ISO 27001 certification
Engage an independent ISO 27001 auditor
Conduct Stage 1 Audit consisting of an extensive documentation review; obtain feedback regarding readiness to move to Stage 2 Audit
Conduct Stage 2 Audit consisting of tests performed on the ISMS to ensure proper design, implementation, and ongoing functionality; evaluate fairness, suitability, and effective implementation and operation of controls
Address any nonconformities
Ensure that all requirements of the ISO 27001 standard are being addressed
Ensure org is following processes that it has specified and documented
Ensure org is upholding contractual requirements with third parties
Address specific nonconformities identified by the ISO 27001 auditor
Receive auditor’s formal validation following resolution of nonconformities
Conduct regular management reviews
Plan reviews at least once per year; consider a quarterly review cycle
Ensure the ISMS and its objectives continue to remain appropriate and effective
Ensure that senior management remains informed
Ensure adjustments to address risks or deficiencies can be promptly implemented
Calendar ISO 27001 audit schedule and surveillance audit schedules
Perform a full ISO 27001 audit once every three years
Prepare to perform surveillance audits in the second and third years of the Certification Cycle
Consider streamlining ISO 27001 certification with automation
Transform manual data collection and observation processes into automated and continuous system monitoring
Identify and close any gaps in ISMS implementation in a timely manner
Download this checklist for easy referenceDownload Now
Determine which annual audits and assessments are required for your company
Perform a readiness assessment and evaluate your security against HIPAA requirements
Review the U.S. Dept of Health and Human Services Office for Civil Rights Audit Protocol
Conduct required HIPAA compliance audits and assessments
Perform and document ongoing technical and non-technical evaluations, internally or in partnership with a third-party security and compliance team like Vanta
Document your plans and put them into action
Document every step of building, implementing, and assessing your compliance program
Vanta’s automated compliance reporting can streamline planning and documentation
Appoint a security and compliance point person in your company
Designate an employee as your HIPAA Compliance Officer
Schedule annual HIPAA training for all employees
Distribute HIPAA policies and procedures and ensure staff read and attest to their review
Document employee trainings and other compliance activities
Thoroughly document employee training processes, activities, and attestations
Establish and communicate clear breach report processes
to all employees
Ensure that staff understand what constitutes a HIPAA breach, and how to report a breach
Implement systems to track security incidents, and to document and report all breaches
Institute an annual review process
Annually assess compliance activities against theHIPAA Rules and updates to HIPAA
Continuously assess and manage risk
Build a year-round risk management program and integrate continuous monitoring
Understand the ins and outs of HIPAA compliance— and the costs of noncompliance
Download this checklist for easy referenceDownload Now
FEATURED VANTA RESOURCE
The ultimate guide to scaling your compliance program
Learn how to scale, manage, and optimize alongside your business goals.