The PCI Security Standards Council (PCI SSC) recently published a new information supplement, “PCI DSS v4.x: Guidance for Compensating Controls and the Customized Approach.”1 The document, developed in collaboration with the Global Executive Assessor Roundtable (GEAR) and the Board of Advisors (BOA), addresses two flexibility options in PCI DSS v4.x that are frequently misunderstood and, in practice, often conflated.
For organizations preparing for their next assessment, the guidance offers versatility. Here’s what it covers and why it matters.
Two Flexibility Options, Two Different Purposes
PCI DSS v4.x gives organizations two paths to implement and validate requirements: the defined approach and the customized approach. Compensating controls are an option within the defined approach. Despite their proximity in the standard, these two options serve different purposes and follow different rules.
- Compensating controls apply when an organization cannot meet a defined requirement as stated due to a legitimate technical or business constraint. The constraint must be documented, and the compensating control must address the risk the original requirement was designed to mitigate. This is a reactive option, e.g., if something prevents the organization from meeting the requirement directly, a compensating control can fill the gap.
- The customized approach is different in intent. It’s for organizations that proactively choose to meet a requirement differently by satisfying its stated Customized Approach Objective through an alternative control design. There is no constraint driving the decision. The organization has the capability to meet the requirement as stated but has identified a different method it believes addresses the same objective.
The distinction matters because the documentation, validation, and organizational maturity expectations differ significantly between the two.
The Customized Approach Is Not for Every Organization
The new guidance reinforces that the customized approach is designed for risk-mature organizations. Those are organizations with dedicated risk management functions and the internal capacity to design, implement, document, test, and maintain their own controls over time.2
This is an important qualifier. The customized approach is not intended as a simpler alternative to a defined requirement. It is a structured path for organizations that have the governance infrastructure to support a novel control and demonstrate its effectiveness through ongoing testing and documentation.
Organizations that lack that infrastructure are better served by the defined approach, with compensating controls used where legitimate constraints exist.
“The customized approach isn’t about avoiding the requirement. It’s about proving, with discipline and documentation, that an alternative control meets the same objective.”
Documentation Quality Can Drive the Outcome
One of the most practical sections of the new guidance addresses documentation expectations. Entities are encouraged to prepare clear and well-structured documentation for their compensating or customized controls. If documentation is incomplete, an assessor may be unable to validate that a control is in place and operating effectively.
This may be where some organizations underestimate the effort involved. A control may be well designed and fully operational, but if the supporting documentation doesn’t clearly demonstrate how the objective is met and how risks are addressed, the assessment outcome is at risk. The guidance notes that documentation should not rely on undocumented context.
For organizations using either option, evolving documentation quality before the assessment begins is one of the most effective ways to help avoid delays and findings.
Assessor Independence Applies to Both
The guidance reaffirms that assessor independence is a fundamental tenet of PCI DSS assessments. This applies equally to compensating controls and customized implementations.
In practical terms, the assessed entity is responsible for the development, implementation, and maintenance of the control. An assessor who was involved in designing or implementing a control cannot also assess that same control. This boundary exists to preserve the integrity of the validation process.
Organizations that work closely with their assessors during implementation should confirm that the roles are clearly separated and that the individual or team performing the assessment was not involved in building the control being evaluated.
Both Options Can Coexist
The guidance clarifies that organizations can use compensating controls for some system components and the customized approach for others, even for the same PCI DSS requirement. Each instance must be documented separately, and each must satisfy the applicable objectives independently.3
This is a useful clarification for organizations with complex or distributed environments where different system components face different constraints or where certain business units have more mature risk management capabilities than others.
“Organizations with complex environments should know that compensating controls and the customized approach can coexist for the same requirement, documented and validated independently.”
What This Means for Your Next Assessment
The guidance doesn’t introduce new requirements. It clarifies how existing flexibility options should be used and validated. However, that clarity has implications for how organizations prepare.
Organizations that have been using compensating controls should review their documentation to confirm it meets the expectations outlined in the guidance. Those considering the customized approach for the first time should consider whether their risk management maturity supports it.
In both cases, working with assessors who are familiar with your environment and these flexibility options can help reduce friction and improve the quality of the assessment outcome.
Actions to Consider Now
- Update compensating control documentation so it is complete, current, and clear without undocumented context.
- Confirm whether your risk management program can support a customized approach before using one.
- Clarify advisory and assessment roles early so Qualified Security Assessor (QSA) independence is appropriately maintained.
- Document each use of a compensating control or customized approach by system component.
- Bring your questions to a PCI professional before your next assessment.
How Forvis Mazars Can Help
Forvis Mazars brings deep PCI compliance experience, including a U.S.-based team of 10 QSAs who have contributed to PCI standards development. The team represents more than 100 years of combined payment security experience, with leadership averaging more than two decades in the field. Forvis Mazars helps organizations with evaluating flexibility options, strengthening documentation, and preparing for assessments in complex environments.
Professionals at Forvis Mazars can assist with PCI compliance programs and other IT Risk & Compliance services. If you have questions or need assistance, connect with our professionals today.