Keep in mind that Visa and Mastercard don't impose fees on businesses that are PCI non-compliant - that decision comes from your processor, so it's purely a for-profit charge for them. Processors are not required to charge you a non-compliance fee. Let's take a closer look at PCI non-compliance fees and how you can avoid them.
What is PCI?
PCI stands for "payment card industry" and it's the first half of the acronym PCI-DSS. (The second part stands for "data security standards.") While you may see the full term PCI-DSS, it's more common to see just "PCI." However, it refers to the same set of standards. PCI-DSS is a set of rules regarding secure credit card acceptance. Any business that takes credit cards is required to be PCI compliant. In addition to taking steps to secure your systems, you'll need to fill out a yearly Self-Assessment Questionnaire (SAQ) as part of the compliance process. Not doing any of the requirements for PCI will mean you are not PCI compliant and may find yourself receiving regular PCI non-compliance fees.What is a PCI non compliance fee?
Some processors choose to charge a PCI non-compliance fee when a business fails to provide proof that it complies with PCI requirements. Sales people in the industry sometimes justify the fee as a penalty charged by Visa and Mastercard that is simply being passed along, which is not necessarily true. Visa and Mastercard do not charge businesses or processors a fee for PCI non-compliance by itself. They will not impose fees simply for not completing the SAQ, for example. However, the cards brands may impose compliance fines if non-compliance leads to a security issue or breach. In the most generous light, processors could claim that they're insuring themselves against such a compliance fine if your business experiences a data breach that results in fines. The card brands’ fines are often large, one-time charges imposed after a specific security-related issue occurs. PCI non-compliance fees, on the other hand, are relatively small monthly or annual fees imposed directly by processors. Since Visa and Mastercard don’t charge non-compliance fees, the revenue generated from these fees goes straight into processors’ pockets.Non-Compliance Fees vs. Compliance Fees
Most processors charge PCI non-compliance fees, but some also charge compliance fees. PCI compliance fees are often smaller than non-compliance fees, and (in theory) cover the costs for the processor to assist you with PCI compliance or provide tools that make it easier to become compliant. Both PCI compliance and non-compliance fees are commonly a monthly charge, though they can be yearly charges. However, processors typically only charge non-compliance fees in the months that you aren't PCI compliant. That means that you can avoid non-compliance charges completely by maintaining PCI compliance. Additionally, if you're not compliant, it means that you can become compliant to stop future non-compliance charges. On the other hand, processors will usually charge PCI compliance fees regardless of your status.Identifying the Fee
Non-compliance fees are typically listed on your monthly statement and clearly labeled. In the image below, we've compiled snippets from multiple statements showing how the fee may be listed.
As you can see, different processors refer to the fee by different names, including PCI non-validation, non receipt of PCI validation, and non-PCI chg (charge.) Despite the variation in terms, all of them refer to the same fee: PCI non-compliance charge because you're considered non-compliant.
You can also see the range of charges, from the low end of $9.95 to a high of $65.00. Again, these fees are avoidable by becoming PCI compliant.
Processors Set Fees Individually
It’s the responsibility of individual processors to validate compliance, so each processor chooses whether to charge a PCI non-compliance fee, and if so, how much the fee is. PCI non-compliance fees typically range from $10 to $30 a month, but can go as high as $100 a month for processors interested in leveraging the fee for excessive profits. As you see from the statement snippets above, the actual charges are all over the board.How to Get Rid of PCI Non-Compliance Fees
The legitimate purpose of the PCI non-compliance fee is to encourage businesses to become compliant. If you see a non-compliance fee on your credit card processing statement, call your processor and inquire about having it removed. You'll likely have to become compliant before they will stop charging the non-compliance fee. Fortunately, PCI compliance is often not as painful as it sounds. In the case of retail businesses that swipe the majority of transactions, compliance can be as simple as completing a self-assessment questionnaire. In the case of e-commerce businesses, compliance entails a questionnaire and quarterly network scans. The latter is a little more involved, but neither justify paying a PCI non-compliance fee that can be hundreds or even thousands of dollars a year. If you're new to PCI compliance, be sure to check out our article on how to become PCI compliant. You can also contact your processor for assistance.
Ben Dwyer
Ben Dwyer began his career in the processing industry in 2003 on the sales floor for a Connecticut‐based processor. As he learned more about the inner‐workings of the industry, rampant unethical practices, and lack of assistance available to businesses, he cut ties with his employer and started a blog where he could post accurate information about credit card processing. As the blog gained in popularity, Ben began directly assisting merchants in their search for a processor. Ben believes in empowering businesses by providing access to fair, competitive pricing, accurate information, and continued support. His dedication to transparency and education has made CardFellow a staunch small business advocate in the credit card processing industry.
