Why PCI DSS Compliance Matters for High-Risk Merchants?
If your business accepts credit or debit card payments, you are required to follow the Payment Card Industry Data Security Standard (PCI DSS). This set of rules is designed to protect cardholder data and reduce fraud.
For merchants in high-risk industries such as CBD, adult services, travel, gaming, or subscription businesses, compliance is even more critical. These sectors often face higher chargeback rates and increased scrutiny from payment processors and banks. Non-compliance can lead to heavy fines, legal issues, and even the loss of your ability to process card payments.
Staying compliant is not only about avoiding penalties. It also shows your customers and partners that you take security seriously. This can help improve trust and support long-term growth.
What Is PCI DSS?
PCI DSS is a global security standard developed by the Payment Card Industry Security Standards Council (PCI SSC), which includes major card brands such as Visa, Mastercard, American Express, and Discover.
The standard is based on 12 core requirements that focus on protecting cardholder data. These include:
1. Building and maintaining secure networks and systems
2. Protecting stored cardholder data
3. Encrypting cardholder data when transmitted across public networks
4. Using and regularly updating anti-virus software
5. Restricting access to cardholder data on a “need-to-know” basis
6. Assigning a unique ID to each person with computer access
7. Tracking and monitoring all access to network resources and cardholder data
8. Regularly testing security systems and processes
9. Maintaining a security policy that addresses information security
These steps may sound technical, but they form the backbone of secure card processing.
Why High-Risk Merchants Have a Bigger Compliance Burden?
High-risk merchants deal with industries where fraud and chargebacks are common. For example:
- Adult content sites often face friendly fraud and recurring subscription disputes.
- CBD and nutraceutical sellers deal with regulatory grey areas, leading to increased oversight.
- Online gaming and betting see high transaction volumes and exposure to fraudulent accounts.
Because of these risks, acquiring banks and payment processors usually require strict compliance. In some cases, they may demand evidence of PCI DSS certification before approving your merchant account.
In addition, non-compliance for a high-risk merchant can be more damaging. Card networks may place you in risk monitoring programs like Visa’s VDMP or Mastercard’s MATCH list, making it harder to process payments in the future.
How to Stay Compliant Step by Step?
1. Know Your PCI DSS Level
PCI DSS requirements differ depending on your annual transaction volume:
- Level 1: More than 6 million transactions annually
- Level 2: 1–6 million transactions annually
- Level 3: 20,000 to 1 million transactions annually (e-commerce)
- Level 4: Fewer than 20,000 e-commerce transactions annually
High-risk merchants often process large volumes or work with multiple processors. Many end up in Level 1 or Level 2 even with moderate sales, simply because acquirers impose stricter controls for high-risk businesses.
2. Complete the Right Self-Assessment Questionnaire (SAQ)
For most merchants, compliance starts with a Self-Assessment Questionnaire (SAQ). This is a series of yes/no questions about how you handle cardholder data. There are different SAQs depending on how you process payments:
- SAQ A: For merchants outsourcing all cardholder data handling (e.g., hosted checkout)
- SAQ A-EP: For merchants that outsource card data but have a website that impacts security
- SAQ D: For merchants storing or handling cardholder data directly
If you use a payment gateway or processor that hosts checkout pages (like PayPal or Stripe), you might qualify for the simpler SAQ A. However, if you host your own checkout, you might need SAQ D, which is more extensive.
3. Use Secure Payment Gateways and Tokenization
One of the easiest ways to reduce your compliance burden is by not storing cardholder data at all. Instead, use a payment gateway that handles sensitive data for you.
For example, high-risk merchants often use gateways like NMI, Authorize.Net, or PayKings, which offer tokenization. Tokenization replaces card numbers with secure tokens, so even if your system is breached, there are no real card numbers to steal.
4. Maintain a Secure IT Environment
PCI DSS requires a secure IT environment. Here’s what that means in practical terms:
- Firewalls and network segmentation to separate cardholder data systems from public networks.
- Regular vulnerability scans and penetration tests.
- Strong access controls so only authorized personnel handle payment data.
- Multi-factor authentication (MFA) for remote access.
Many high-risk businesses hire Managed Security Service Providers (MSSPs) to monitor systems 24/7. While this can add cost, it is far less expensive than recovering from a breach or losing your merchant account.
5. Train Your Staff
Your employees play a big role in maintaining compliance. Even the best security tools can fail if staff are not aware of phishing scams or the proper handling of sensitive data.
You should conduct annual PCI DSS training that covers:
- How to handle cardholder data securely
- Recognizing phishing or social engineering attacks
- How to report suspected security issues
6. Work With PCI-Qualified Professionals
Sometimes, especially for high-risk businesses, internal resources are not enough. This is where a Qualified Security Assessor (QSA) can help.
A QSA is certified by the PCI Security Standards Council to assess and validate compliance. Working with a QSA ensures your controls are correct and documented properly, which can prevent issues during audits or bank reviews.
Real-World Example: A High-Risk Subscription Business
Consider an online subscription business selling wellness supplements, often labeled as high-risk. Initially, the company processed payments through a small gateway without fully understanding PCI DSS.
When a chargeback surge put them under review, their processor demanded proof of PCI compliance within 90 days. The business quickly moved to a tokenized payment gateway, completed SAQ D with help from a QSA, and implemented monthly vulnerability scans.
Result? They kept their merchant account, reduced fraud, and gained credibility with both banks and customers.
What Happens if You Don’t Comply?
The consequences for non-compliance can be severe:
- Fines and penalties from card networks (ranging from $5,000 to $100,000 per month)
- Increased transaction fees or reserves imposed by acquiring banks
- Termination of your merchant account
- Reputational damage after a security breach
For high-risk merchants, these consequences can be even more damaging because it is already challenging to obtain payment processing in the first place. Losing one provider may leave you with limited or very expensive options.
Tips to Simplify Compliance
- Choose PCI-compliant processors – Work only with payment processors and gateways that are already certified.
- Limit card data exposure – Do not store card numbers unless absolutely required. Use tokenization and hosted pages.
- Automate compliance checks – Many tools now monitor system logs and network security automatically.
- Document everything – Keep a record of every scan, training session, and system update. Documentation is critical during audits.
- Review compliance annually – PCI DSS compliance is not a one-time event. It requires ongoing monitoring and annual validation.
Bottom line
For high-risk merchants, staying compliant with PCI DSS is not just about meeting a technical requirement. It is about building trust, protecting customers, and keeping your business safe from fines and payment processing disruptions.
Compliance might feel like a big task, but with the right approach—using secure gateways, training staff, segmenting networks, and seeking professional guidance—you can meet the standard and focus on growth.
If you’re not sure where to begin, start with a compliance gap analysis from a qualified expert. It will help you identify what needs to be fixed, save time, and build your acquiring bank’s confidence in your business.
Get in touch with us today to schedule your assessment and take the first step toward full compliance.
For further insights, read our article: “Why Was My High-Risk Merchant Account Declined?”
Disclaimer
Widelia and its affiliates do not provide tax, investment, legal or accounting advice. Material on this page has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, investment, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction. Please consult https://widelia.com/disclaimer/ for more information.
