Payment processors prioritize PCI DSS compliance over SOC 1 for critical operational and regulatory reasons. The main factor is PCI DSS’s prescriptive nature targeting cardholder data security, backed by industry enforcement and significant business consequences. Understanding why PCI DSS occupies this central role helps clarify compliance strategies for any organization handling payment transactions.
PCI DSS vs SOC 1 and SOC 2: Specificity and Scope
PCI DSS (Payment Card Industry Data Security Standard) is a specialized security standard that focuses exclusively on protecting payment card data during storage, processing, and transmission. Its requirements are explicitly designed to counter threats to cardholder information, making it highly prescriptive and tightly aligned with payment processing operations. In contrast, SOC 1 and SOC 2 (System and Organization Controls) are broader audit frameworks overseeing a range of internal controls. SOC 1 centers on financial reporting controls, while SOC 2 addresses general principles of security, confidentiality, integrity, and privacy for service organizations.
SOC 1 and SOC 2 offer flexibility, allowing each organization to define its own control environment. These frameworks validate trust and transparency to stakeholders but do not mandate safeguards specifically for payment card data. PCI DSS mandates concrete technical and operational safeguards that payment processors must implement, making it critical for organizations seeking or maintaining the authority to handle payment card transactions.
Obligatory Nature of PCI DSS for Payment Processors
The obligatory status of PCI DSS is the most decisive factor for its prioritization. Any entity that processes, stores, or transmits cardholder data is legally and contractually required to adhere to PCI DSS. Non-compliance can result in immediate and severe consequences: loss of permission to process card transactions, high financial penalties, and reputational damage. Compliance is monitored and enforced directly by card brands and financial institutions, meaning failure to maintain PCI DSS can threaten the core business of payment processors.
PCI DSS audits are mandatory, performed annually either by Qualified Security Assessors (QSAs) or via Self-Assessment Questionnaires (SAQ), depending on transaction volume. The requirements are not optional for processors, and a lack of compliance can result in the permanent inability to process card payments. By contrast, SOC audits are voluntary and do not influence the right to process payment card transactions.
Technological and Operational Rigor of PCI DSS Controls
PCI DSS mandates a comprehensive set of 12 technical and operational requirements. These requirements include maintaining robust firewall configurations, encrypting cardholder data, controlling physical and logical access to systems, and regular monitoring and testing of the security environment. Such measures address the unique and evolving threats to cardholder data integrity.
The specificity of these controls ensures that organizations do not simply declare intent or establish general policies but must demonstrate strong, measurable practices directly related to card data security. The focus is not on abstract risk but on practical safeguards that have a real impact on the safety of payment transactions. Payment processors must thus maintain structures and processes tightly governed by PCI DSS criteria, or they risk regulatory censure and operational suspension.
The Role of SOC 1 and SOC 2 as Supplementary Assurance
SOC 1 and SOC 2 serve as tools for transparency, trust, and client assurance. While SOC 1 evaluates the financial reporting impact of controls and SOC 2 reviews the application of service organization criteria such as security and privacy, neither is written to address cardholder data protection specifically. SOC 2 reports, performed by Certified Public Accountants (CPAs), can be ‘Type I’ (focused on a point in time) or ‘Type II’ (covering a period). These reports are valued by customers and partners for broader organizational risk management but remain voluntary.
Payment processors often maintain SOC 1 or SOC 2 reports alongside PCI DSS certification to offer comprehensive proof of their internal control effectiveness. Still, these frameworks are not substitutes for PCI DSS and do not negate the need for card data-specific security measures.
Risk, Enforcement, and Strategic Prioritization
PCI DSS compliance is a non-negotiable foundation of payment processing. Without it, companies cannot legally or technically operate as payment processors. This standard is enforced directly by the payment card industry, and penalties for non-compliance are immediate—ranging from steep fines to complete disqualification from card processing. The most recent version, PCI DSS 4.0.1, illustrates that industry requirements are frequently updated to meet new security challenges, demanding ongoing vigilance.
By comparison, SOC 1 and SOC 2 lack external enforcement or regulatory penalties. Their primary value lies in enhancing credibility and trust, but failing to complete a SOC audit does not bring the same existential risk as non-compliance with PCI DSS. As such, payment processors view PCI DSS as the minimum operational requirement, with SOC frameworks providing added—but not critical—assurance.
Conclusion: Clear Compliance Priorities Defined by Industry Realities
The necessity to prioritize PCI DSS compliance over SOC 1 and SOC 2 arises from the explicit, compulsory nature of PCI DSS and its exclusive focus on safeguarding payment card data. For payment processors, the risk of not complying with PCI DSS is direct and severe—loss of processing rights and significant financial penalties. Meanwhile, SOC 1 and SOC 2, though valuable for comprehensive organizational assurance, do not replace or rival the importance of PCI DSS in the context of payment transactions. Payment processors understand that their operational viability depends fundamentally on rigorous and demonstrable PCI DSS compliance, making it the absolute priority in their regulatory strategy.
Source: https://www.thesoc2.com/post/why-payment-processors-skip-soc1-and-go-straight-to-pci-dss
