7 Risks of PCI Non-Compliance

The Payment Card Industry Data Security Standard (PCI DSS) sets the baseline for how businesses must protect cardholder data. Falling into non-PCI compliance exposes organizations to costly fines, reputational damage and increased vulnerability to attacks.

This article outlines the most common violations and explores seven serious risks of PCI DSS non-compliance, with examples of how real businesses have been affected.

Common Violations of PCI Compliance

PCI DSS outlines 12 requirements, but many organizations overlook or cut corners on key practices. These oversights lead to common violations that create openings for attackers and leave businesses exposed to compliance failures.

Below are four of the most frequent mistakes that result in companies being non-PCI compliant.

Storing Credit Card and Personal Information Improperly

Businesses sometimes retain payment card data long after the transaction is complete, storing it in spreadsheets, local databases or unencrypted files.

This not only violates PCI requirements but also creates a high-value target for attackers. Even accidental storage of sensitive authentication data can result in penalties and heightened breach risk.

Lack of Strong Access Controls

PCI DSS requires that access to cardholder data be restricted to those with a legitimate business need.

Weak or outdated access policies often allow too many employees to view sensitive data, or lack multi-factor authentication. Without proper controls, insider threats and unauthorized users gain a foothold in the environment.

Failure to Encrypt Data

Encryption is central to PCI DSS compliance. If businesses transmit or store cardholder data in plain text, attackers can easily intercept and misuse it.

Proper encryption, combined with tokenization, ensures that even if data is stolen, it cannot be exploited.

Failure to Monitor Networks

Managing PCI DSS mandates ongoing monitoring and logging of systems that process or store cardholder data.

Without monitoring, suspicious activity may go unnoticed for weeks or months, allowing attackers to remain in systems undetected. Logs are crucial during forensic investigations after a breach.

Consequences of PCI Non-Compliance

When companies fall into PCI non-compliance, the consequences extend far beyond a checklist failure. Organizations may face fines, lawsuits and even the loss of their ability to process payments.

Here are the seven risks every business should be aware of.

1. Increased risk of data breaches

Non-compliant organizations often lack key security layers such as encryption, network monitoring or strong authentication. These weaknesses make it easier for cybercriminals to gain unauthorized access.

A single breach can expose millions of cardholder records, leading to identity theft, fraud and costly incident response efforts.

2. Fines and Loss of Revenue

Non-PCI compliance can severely impact a company’s bottom line. Card networks may issue fines of up to $500,000 per incident, and acquiring banks often pass down monthly penalties between $5,000 and $100,000 until compliance is restored.

Legal costs quickly add to the burden, but revenue loss from shaken customer confidence is often just as damaging. The Target security breach reflects the scale of impact: more than 40 million records were compromised, resulting in an $18.5 million settlement and over $202 million in legal and remediation expenses. For many businesses, a single event of this size could be financially devastating.

3. Legal Action and Regulatory Risk

Customers whose data is exposed may pursue lawsuits, either individually or through class actions.

Regulatory agencies may investigate whether a business neglected to protect cardholder data adequately. Even if an organization avoids a large settlement, the cost of legal defense and the disruption of investigations create long-term challenges.

4. Reputation Risk and The Erosion of Customer Trust

A payment card or data breach can significantly damage finances and undermine the trust customers place in your brand, making them hesitant to return if they believe their data is unsafe.

For example, Equifax, a global data and technology company, suffered a breach in 2017 that exposed the personal information of nearly 45% of Americans, including credit card data and Social Security numbers.

Incidents like these cause tremendous reputational harm, and rebuilding trust requires years of effort along with significant investment in public relations and customer support.

5. Audits and Investigations

After a suspected or confirmed breach, most companies and banks require a Payment Card Industry Forensic Investigation (PFI) review. However, it is not a legal requirement under PCI DSS itself.

These audits examine how the breach occurred, identify compliance gaps and recommend remediation. Investigations are time-consuming and costly, pulling resources away from normal business operations.

6. Loss of Card Processing Privileges

Non-compliance can jeopardize a business’s ability to process credit and debit card transactions.

If a bank or card network suspends merchant privileges, retailers lose access to their primary payment method. For e-commerce companies, this can halt revenue entirely until compliance is restored.

7. Disruption in Operations

If a breach occurs while a company is non-compliant, day-to-day operations often face immediate disruption. Payment systems may need to be taken offline to contain the incident and prevent further exposure.

Merchants can be forced to halt transactions, delay shipments or restrict services while investigators review systems. Internal teams are diverted from their core responsibilities to handle crisis management and remediation, creating bottlenecks. These disruptions compound financial losses and make recovery slower and more costly.