Beyond PCI Compliance: Strengthening Payment Security for Middle-Market Companies

Many businesses assume that Payment Card Industry Data Security Standard (PCI DSS) compliance is the be-all and end-all of payment security. Achieving compliance is indeed a significant milestone. However, in an ever-evolving threat landscape, PCI compliance is just the baseline—not the finish line.

PCI DSS compliance is essential for middle-market companies. However, despite being a critical guide to building a strong cybersecurity ecosystem, it is not sufficient on its own. Fraudsters and their tools evolve daily, and emerging tactics may not make the cut. Businesses must adopt a proactive, multi-layered approach to security to stay ahead of threats such as sophisticated cyberattacks, ransomware, and data breaches. 

This article will explore how middle-market companies can develop a robust payment security strategy beyond the bounds of PCI DSS.

The Limits of PCI DSS Compliance

PCI DSS was designed to protect cardholder data but doesn’t fully address most businesses' current cyber risks. Essentially, PCI DSS compliance ensures that your company meets specific security standards. However, it doesn’t account for emerging threats or provide comprehensive protection against advanced attacks.

For instance, while PCI DSS outlines mandates for encryption and firewall protections, it doesn't specifically reference some modern security technologies, including:

• Network tokenization
• Behavioral analytics
• Cloud security protocols
• Endpoint detection and response (EDR)
• Zero trust architecture

If you follow PCI DSS regulations to the letter, you might overlook some more advanced methods, like those mentioned above. To avoid a security gap, we recommend going the extra mile to proactively implement security methods that align with the principles of PCI DSS regulations, even if they aren’t mandated. By strategically adding layers of protection to a payment processing system, companies can improve fraud prevention, reduce risk and liability, and build (and keep) consumer trust.

Building on PCI DSS Compliance: A Proactive Approach to Payment Security

We discovered that adopting a multi-layered, proactive approach is the key to reducing payment security risks in today’s environment. Combining advanced technologies like tokenization, multi-factor authentication (MFA), biometric security, and continuous monitoring can significantly enhance your company’s security posture. Let’s explore these tools and strategies.

1. Implement Tokenization and Vaulting

Tokenization replaces sensitive cardholder data with randomly generated tokens with no intrinsic value, storing all sensitive data in a secure vault. Even if hackers gain access to your payment systems, they can’t use the tokenized data. Tokenization can be internally managed or, more commonly, provided as a service by a PSP. By engaging a third party to manage tokens, companies can offload liability and reduce the scope of PCI DSS compliance by preventing sensitive cardholder data from commingling with other systems.

Network tokenization increases the “distance” between a merchant and payment data by transforming sensitive data into tokens at the card network level. It offers another layer of security, as each network token is unique, specific to each domain, and limited to a singular authorized device, merchant, channel, or transaction type. While network tokenization offers next-level security and many other benefits it also has drawbacks. The complexity of implementing network tokenization alone can prevent companies from leveraging it to improve security.

Either method can help companies protect against data breaches or other attacks without compromising user experience.

2. Leverage Multi-Factor Authentication (MFA)

MFA is one of the simplest and most effective ways to enhance payment security. With MFA, end users must provide multiple forms of verification – something they know (e.g., a password), something they have (e.g., a phone or security token), or something inherent to them (e.g., biometrics).

By simply introducing MFA, companies can ensure that even if one authorization component is compromised (like a password), they won’t be able to access critical systems. While not fool-proof, it has been a tried and true security measure since the mid-1990s. As companies have adopted MFA at scale, it has become almost ubiquitous with card not present (CNP) transactions.

3. Embrace Biometric Security

In recent years, biometric authentication has garnered high praise as a seamless, secure way to authenticate payments. It uses unique identifiers like fingerprints, facial recognition, or voice recognition to heighten security. While hackers can deepfake those identifiers, new GenAI security systems can spot fraudulent credentials from a mile away. More importantly, biometric authentication has negligible to no negative impact on the customer experience.

Today, consumers want fast, frictionless payment experiences. Suppose a business fails to do so, especially if it is a small to medium-sized enterprise (SME) company competing against tech mammoths. In that case, it can quickly drop to last place in the race for an excellent checkout experience.

This biometric approach to payments has set the bar for other companies in the payments industry, and middle-market businesses should take notice of its growing popularity.

4. Invest in Continuous Monitoring and Threat Detection

No matter how thorough, one-time security audits are not enough to protect payment systems from today’s dynamic cyber threats. Companies can proactively detect and mitigate emerging threats by utilizing advanced analytics and AI, ensuring their customers a secure and seamless payment experience. Creating strict monitoring protocols and ensuring adherence is essential for staying ahead of today's dynamic cyber attacks. 

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“Lax or non-existent monitoring and testing protocols are a common problem for our clients. Implementing monitoring and testing can dramatically improve security by detecting threats before any fraud can take place.”

- David Mohundro, Senior Software Engineer at Clear Function.

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5. Silo Payment Systems with Payment Orchestration Platforms (POP)

A POP, or payment orchestration layer, can help businesses streamline payment processing and reduce the scope of PCI DSS compliance. How? It separates the cardholder data environment (CDE) from other internal systems. By siloing sensitive cardholder data and adding additional layers of security, POPs can significantly reduce the risk of a data breach that exposes customers’ data.

Moreover, POPs centralize all payment operations, consolidating multi-channel payments and allowing merchants to leverage multiple payment gateways or payment service providers (PSPs). In addition to strengthening security, payment orchestration can optimize transaction routing, reduce costs, and improve customer experience.

6. Stay Ahead of Regulatory Changes

We understand that payment security is not static, and neither are regulations. So, as data protection laws and regulations (such as GDPR and KYC) change, businesses must stay updated on regulatory changes. If compliance is not met and maintained, companies may face hefty fines or, worse, loss of customer trust with legal repercussions.

Technological advances will continue to drive new ordinances or adjustments to current standards. For example, while the popularity of digital currencies like stablecoins has grown, a gap in US regulations could leave companies and end users vulnerable. However, a recent presidential executive order (EO) has signaled changes are on the way. 2025 is poised for a significant shift in payment and data protection practices, with PCI DSS 4.0 compliance taking effect on March 31st and companies readying to comply with new Anti-Money Laundering (AML) regulations by the first of January in 2026.

For middle-market businesses, it is critical to stay ahead of these changes if they want to ensure steady compliance.

7. Shift Towards Proactive, Layered Security Strategies

Finally, a proactive, layered approach to security is pivotal for middle-market companies that want to best cyber threats. This approach involves combining many different strategies to create a comprehensive security framework for a more sophisticated, user-friendly payment experience, including:

• MFA
• Tokenization and vaulting
• Encryption
• Payment orchestration platforms
• Continuous monitoring and testing

The upfront financial investment required to implement such a strategy might seem daunting. However, the cost of ignoring advanced security measures is far higher. Data breaches, fines, and reputational damage can have lasting impacts on your business, making the former a wise investment in the long run.

Conclusion

PCI DSS compliance is vital, but it’s just one part of a much larger puzzle. Middle-market companies must adopt a comprehensive, proactive approach to payment security. It has to be a strategy that goes beyond basic compliance requirements and embraces innovative, multi-layered defenses.

Now is the time to build a robust, future-proof security infrastructure. Contact us to schedule a free Payment Strategy Assessment and strengthen your payment security today.