PCI Compliance for High-Risk Businesses Explained

The Payment Card Industry Data Security Standard (PCI DSS) is a globally recognized framework developed by the PCI Security Standards Council to protect payment card data. First issued in 2004, it consists of twelve core requirements covering areas like encryption, access control, network security, and policies to ensure that cardholder information is properly secured. Despite its importance, maintaining continuous compliance proves difficult for many organizations.

As reported in the Verizon Payment Security Report, only 43.4% of organizations maintained full PCI DSS compliance throughout 2020, even though that represented a marked improvement from 27.9% in the previous year. For high-risk businesses, such as e-commerce platforms, subscription services, online gambling sites, and financial service providers, the stakes are exceptionally high.

These industries face heightened cyber threats and fraud risks; non-compliance can lead to steep penalties, increased transaction costs, reputational damage, or even the loss of payment processing privileges. Conversely, strong and consistent compliance significantly lowers the chance of data breaches, reinforces contractual and legal obligations, and builds customer confidence in an era where security is paramount.

As the updated Verizon industry guide on PCI compliance explains, PCI DSS isn’t merely a checklist; it’s a dynamic, risk-based security standard that evolves, including with its latest version. Let’s break down what PCI DSS means in practice, explore its key requirements, and show how high-risk businesses can achieve and maintain compliance effectively.

What Is PCI DSS Compliance?

PCI DSS compliance refers to an organization’s adherence to the Payment Card Industry Data Security Standard (PCI DSS), a global set of technical and operational requirements designed to safeguard payment account data across all entities that store, process, or transmit it.

The standard was established when five prominent payment brands, Visa, Mastercard, American Express, Discover, and JCB, combined their individual security programs (like Visa’s CISP or Mastercard’s SDP) into a single unified framework to simplify and strengthen card data protection. This collaboration also led to the formation of the Payment Card Industry Security Standards Council (PCI SSC) in September 2006 to govern and evolve the standard.

Compliance isn’t voluntary; it’s a contractual requirement for any business accepting card payments. Depending on transaction volume and business type, organizations may need to complete Self-Assessment Questionnaires (SAQs), undergo external network vulnerability scanning, or be audited annually by a Qualified Security Assessor (QSA). Overall, PCI DSS compliance helps provide legal protection and customer assurance by ensuring sensitive payment data is handled securely and responsibly.

Why PCI Compliance Matters More in High-Risk Industries

Not all businesses face the same level of scrutiny when it comes to payment processing. High-risk industries, such as CBD and cannabis products, adult entertainment, online gambling, firearms, and nutraceuticals, carry significantly higher exposure to fraud, chargebacks, and regulatory challenges than traditional merchants. For companies in these sectors, PCI DSS compliance is not just a contractual requirement; it’s a survival strategy.

One of the primary reasons these industries are categorized as high-risk is their elevated fraud and chargeback rates. Online gambling platforms, for instance, attract a large volume of international transactions, which are more prone to fraudulent activity. Similarly, adult entertainment sites often process recurring subscription payments, a setup that tends to generate higher disputes.

CBD and nutraceutical businesses, while legal in many jurisdictions, operate in a regulatory gray area, making banks and payment processors more cautious about exposure. Firearms sales face not only higher fraud risks but also intense government oversight, meaning compliance failures can quickly trigger fines, investigations, or the termination of merchant accounts.

In addition to fraud risks, these industries must navigate greater regulatory scrutiny. Governments and financial institutions carefully monitor their payment activity, making non-compliance with PCI DSS far more damaging. A single data breach or compliance failure can result in lost processing privileges, crippling financial penalties, and irreparable reputational harm.

By maintaining strict PCI DSS compliance, high-risk businesses demonstrate to acquiring banks, regulators, and consumers that they take payment security seriously. This not only reduces the likelihood of costly breaches but also helps sustain long-term processing relationships in industries where stability is notoriously fragile.

PCI Compliance Requirements

The PCI DSS standard is built around 12 core requirements that every business handling payment card data must follow. To make them easier to understand, these requirements are grouped into six main categories, each focusing on a different layer of security.

They represent a holistic strategy for reducing fraud and protecting sensitive information. For high-risk businesses, consistently following these requirements can mean the difference between safe operations and crippling penalties.

Secure Network & Systems

Businesses must install and maintain strong firewalls to prevent unauthorized access and ensure that default system passwords are never used. Firewalls act as the first line of defense against external threats, while eliminating default vendor settings closes common backdoors that hackers exploit.

Protect Cardholder Data

Payment data must be secured through encryption and tokenization so that sensitive information like credit card numbers is unreadable if intercepted. Data should be encrypted both in transit (e.g., during online checkout) and at rest (when stored in databases).

Tokenization replaces card data with a random value, reducing the risk of exposure. The PCI DSS encryption and data security resources explain how these measures not only safeguard customer data but also reduce the scope of compliance audits.

Maintain a Vulnerability Management Program

Organizations are required to use anti-virus software and apply security patches regularly to close known vulnerabilities. Cybercriminals often exploit outdated systems, so patching and malware prevention are critical to PCI DSS compliance. The NIST Guide to Enterprise Patch Management emphasizes that timely updates can dramatically reduce the success rate of common cyberattacks. Businesses that neglect this area often become prime targets for automated malware.

Strong Access Controls

Access to payment data should be limited strictly on a need-to-know basis. This includes assigning unique IDs to each user, enforcing two-factor authentication (2FA), and revoking access promptly when employees leave. The PCI SSC multi-factor authentication guidance outlines how businesses can implement these controls effectively. Beyond compliance, access management helps build accountability by making it clear who has accessed sensitive data and when.

Monitor & Test Networks

Businesses must log and monitor all system activity and perform regular security scans and penetration testing. These practices help detect suspicious activity early and ensure that controls remain effective. The PCI SSC logging and monitoring best practices recommend reviewing logs daily to identify anomalies quickly. Consistent testing not only proves compliance but also strengthens defenses against evolving threats.

Maintain Information Security Policies

Finally, companies are required to have documented policies and employee training programs in place. Human error is often the weakest link in security, so staff must understand and follow security practices consistently. When employees are trained effectively, they become an active layer of defense rather than a liability.

PCI Compliance Levels for Merchants

PCI DSS recognizes that not all merchants process the same number of transactions or face the same risks, so compliance requirements are divided into four levels. These levels are based primarily on annual Visa or Mastercard transaction volume, though acquiring banks may also adjust a merchant’s level due to risk factors such as fraud or a history of data breaches.

• Level 1: Over 6 million transactions annually across all channels (in-store, online, or both). Merchants at this level must undergo an annual on-site audit by a Qualified Security Assessor (QSA) and submit a Report on Compliance (ROC). High-risk industries such as online gambling, adult services, and firearms often fall here even if their transaction count is lower, due to heightened scrutiny.
• Level 2: 1 million to 6 million transactions annually. Merchants must complete an annual Self-Assessment Questionnaire (SAQ) and may be required to undergo quarterly network scans. Many CBD and nutraceutical companies processing large volumes online fall into this category.
• Level 3: 20,000 to 1 million e-commerce transactions annually. Typically applies to medium-sized online retailers, subscription services, or growing digital merchants.
• Level 4: Fewer than 20,000 e-commerce transactions annually, or up to 1 million total transactions across all channels. This usually covers small businesses, but acquiring banks can still escalate them to higher levels if unusual risks are detected.

High-risk merchants are frequently placed in Level 1 or Level 2, regardless of their size, because regulators and payment processors expect the highest standards of security. This ensures stronger oversight and minimizes the chance of large-scale fraud or data breaches.

Common PCI Compliance Challenges for High-Risk Merchants

For high-risk businesses, PCI DSS compliance is not just about meeting technical standards; it’s about managing the unique risks that come with their industries. Challenges often stem from the complexity of their operations, the sensitivity of the transactions, and the scrutiny from regulators and payment processors.

Managing Large Transaction Volumes

Merchants in sectors such as online gaming and adult entertainment often deal with millions of transactions monthly. With this scale, transaction logs, monitoring tools, and fraud detection systems must work flawlessly. Even small compliance gaps can quickly escalate into widespread breaches. The Verizon Data Breach Investigations Report highlights that payment card data remains one of the top targets for attackers, making vigilance crucial.

Handling Recurring Billing Models

Nutraceuticals, subscription boxes, and digital memberships rely on recurring payments to retain customers. PCI DSS requires merchants to safeguard stored payment credentials, but repeated billing increases the surface area for potential misuse.

Cross-Border Payment Complexities

CBD and other global merchants often operate across multiple jurisdictions with conflicting compliance requirements. For example, while PCI DSS is global, European merchants must also align with GDPR and PSD2, whereas U.S. businesses face federal and state data laws. The European Payments Council notes that cross-border processing often introduces additional data-handling challenges, making compliance more layered.

Complex Integrations with Third-Party Systems

High-risk merchants rarely run a simple payment setup. They depend on multiple gateways, CRM systems, fraud tools, and APIs, each of which must meet PCI DSS standards. This “integration sprawl” makes it harder to document, test, and certify compliance. The NIST Guide to Security Testing stresses continuous penetration testing to uncover risks in interconnected systems before they become liabilities.

The Cost of PCI Non-Compliance

High-risk businesses that fail to adhere to PCI DSS face consequences far beyond technical violations. The impact is often immediate, severe, and multifaceted, ranging from financial penalties and operational burdens to long-lasting reputational damage.

Fines and Monthly Penalties

Payment card brands and acquiring banks can impose monthly PCI non-compliance fines. These typically start around $5,000 to $100,000 per month for prolonged or severe lapses. These figures are based on industry averages and vary according to merchant size, transaction volume, and breach severity.

Investigation, Remediation & Credit Monitoring

Beyond direct fines, businesses may incur hefty costs for mandated forensic investigations, infrastructure upgrades, and issuing replacement cards (typically $3–$10 per card). These unforeseen expenses can quickly exceed the initial penalty amount.

Chargeback Fees and Escalation

Non-compliance often leads to higher chargeback rates. Mastercard’s guidelines warn that excessive disputes can trigger inclusion in their Excessive Chargeback Program, which levies additional fees and surcharges. Chargeback costs typically range from $20 to $100 per incident, depending on the bank and circumstance.

Reputational and Revenue Fallout

A single breach or compliance failure can erode customer trust. Some reports estimate the average breach cost, including lost business, legal fees, and recovery overhead, can run up to $1 million or more in extreme cases. According to a study, over 60% of consumers abandon a brand after a data breach, with affected businesses experiencing a 20–30% drop in sales.

Account Termination and Blacklisting

In egregious cases, acquiring banks may terminate merchant accounts outright, halting credit card processing entirely. Worse still, affected merchants may be placed on Mastercard’s MATCH list, effectively blacklisting them from securing future merchant accounts. For high-risk merchants, the stakes are clear: the cost of non-compliance far outweighs the investment in ongoing adherence.

Tools and Strategies to Maintain PCI Compliance

Maintaining PCI DSS compliance is not a one-time project but an ongoing commitment. High-risk businesses, those operating in industries with elevated fraud exposure or regulatory scrutiny, must deploy a layered security strategy. Below are proven tools and practices that help reduce vulnerabilities and ensure adherence to PCI standards.

Tokenization & Encryption

Tokenization replaces sensitive card data with unique tokens, ensuring merchants never store actual account numbers. Combined with end-to-end encryption (E2EE), this drastically reduces the risk of data breaches. According to the PCI Security Standards Council, both technologies are core methods to minimize data storage scope.

Secure Payment Gateways

For high-risk merchants, using a PCI-compliant payment gateway is essential. These gateways encrypt data during transmission and reduce liability for businesses. Providers like Authorize.net highlight how compliant gateways handle sensitive information securely while supporting recurring billing, multi-currency payments, and fraud filters.

Regular PCI Scans & Audits

Quarterly Approved Scanning Vendor (ASV) scans and internal audits ensure vulnerabilities are identified before attackers exploit them. Merchants must also complete the Self-Assessment Questionnaire (SAQ) annually. Trustwave emphasizes that regular scans are mandatory for PCI DSS and help prove compliance to acquiring banks.

Fraud Prevention Tools

Advanced fraud prevention is critical in high-risk verticals. Tools like Address Verification Service (AVS), Card Verification Value (CVV) checks, and 3D Secure 2.0 significantly reduce unauthorized transactions. Visa reports that 3D Secure can cut fraud by more than 50% in certain industries.

White-Glove Support

Compliance can be overwhelming, especially for high-risk merchants juggling multiple regulations. Providers like 2Accept and other payment facilitators offer white-glove compliance support, helping merchants with PCI documentation, quarterly scans, and integration of secure gateways. This personalized guidance reduces errors and speeds up compliance certification.

How Specialized Providers Help With PCI Compliance

For high-risk businesses, achieving and maintaining PCI compliance can be overwhelming due to the technical depth and constant updates to standards. This is where specialized providers step in, offering not just tools, but expertise and ongoing support. A key benefit of using a specialized provider is outsourced compliance management. Instead of merchants trying to stay current with every PCI DSS update, providers take responsibility for integrating the latest security protocols into their systems. For example, many providers automatically update their infrastructure to align with PCI DSS v4.0, reducing the need for merchants to track changes themselves. Another critical advantage is secure gateway technology tailored for high-risk merchants. Unlike generic payment processors, specialized providers design gateways that can handle elevated chargeback ratios, international transactions, and recurring billing models; all while staying PCI-compliant. Services like Trustwave focus on providing these high-risk capabilities alongside compliance oversight. In short, specialized providers allow high-risk merchants to focus on growth while ensuring compliance is actively managed behind the scenes.

Frequently Asked Questions

What does PCI compliance mean for merchants?

PCI compliance refers to meeting the requirements of the Payment Card Industry Data Security Standard. For merchants, this means following strict rules to protect cardholder data, such as using secure payment systems and maintaining strong security policies.

Do all high-risk businesses need PCI compliance?

Yes, any business that stores, processes, or transmits cardholder data must comply with PCI DSS, regardless of size or industry. This applies equally to high-risk industries like CBD, gambling, or nutraceuticals, where transaction risks are higher.

What happens if I’m not PCI compliant?

Non-compliance can result in serious consequences, including fines from card brands, higher transaction fees, and even merchant account termination. Beyond financial penalties, businesses also face reputational damage and the risk of losing customer trust if a data breach occurs.

How often do I need PCI scans?

Most merchants need to undergo quarterly network scans conducted by an Approved Scanning Vendor. The frequency depends on the merchant’s compliance level, which is determined by annual transaction volume.

Can ACH or crypto payments bypass PCI rules?

Yes, PCI DSS applies only to card-based transactions. If a business accepts ACH bank transfers or cryptocurrency payments, PCI requirements do not apply to those methods. However, these payment types are subject to their own compliance frameworks.

What are the 4 levels of PCI compliance?

PCI compliance has four levels based on transaction volume. Level 1 covers merchants processing over 6 million card transactions annually, while Levels 2–4 apply to businesses with fewer transactions, with Level 4 being the lowest (<20,000 annual e-commerce transactions).

Do all businesses need to be PCI compliant?

Yes. Any business that stores, processes, or transmits cardholder data must comply with PCI DSS standards, regardless of size or number of transactions, to protect customer data and avoid penalties.

What are the 12 PCI compliance requirements?

The 12 requirements include building secure networks, protecting cardholder data, maintaining vulnerability management programs, implementing strong access controls, regularly monitoring/testing networks, and maintaining an information security policy. These form the foundation of PCI DSS.

Don’t Risk Penalties—Take Control of PCI Compliance Now

For high-risk businesses, PCI compliance is not just another regulatory box to tick; it’s a fundamental safeguard against financial loss, fraud, and reputational harm. With industries like CBD, gambling, adult, and nutraceuticals facing heightened scrutiny, the consequences of non-compliance are even more severe. Meeting the PCI DSS standards ensures that sensitive payment data is protected, customers maintain trust, and merchants avoid costly penalties. In a landscape where data breaches and cybercrime are rising, compliance is both a shield and a competitive advantage. For high-risk merchants, the best way to handle these challenges is by working with the right partners and using trusted tools. With 2Accept’s services, you can protect your business from fraud, chargebacks, and compliance issues. Taking action now not only keeps you PCI compliant but also helps your business grow safely and stay competitive in the long run.