Your first enterprise prospect just sent you their vendor requirements. They want either SOC 2 or ISO 27001. Your FinTech investor is asking about PCI DSS compliance. Your healthcare client mentions HIPAA. Now you're Googling frantically at 11 PM trying to understand the difference between all these acronyms.

Choosing the wrong certification wastes time, money, and potentially loses deals you could have won. Pursue SOC 2 when your international customers actually want ISO 27001, and you've spent six months on the wrong framework. Assume you need HIPAA when you don't actually handle Protected Health Information, and you've added unnecessary complexity to your compliance program.

This guide breaks down the four major compliance frameworks that B2B tech companies encounter: SOC 2, ISO 27001, HIPAA, and PCI DSS. By the end, you'll know exactly which certification(s) you need and in what order to pursue them.

Quick decision tree: SaaS selling to US enterprises = SOC 2. Global SaaS = ISO 27001. FinTech processing payments = PCI DSS (often + SOC 2). HealthTech handling patient data = HIPAA + SOC 2. We'll explain why below.

If you're new to compliance concepts, start here: What is Compliance? A Business Owner's Guide

Understanding Certifications vs Legal Requirements

Before diving into specific frameworks, understand the fundamental distinction between two categories of compliance:

Voluntary Certifications (You Choose to Pursue)

SOC 2 and ISO 27001 are voluntary standards. No law requires you to get them. You pursue these certifications because customers demand them in vendor contracts.

Purpose: Demonstrate security competence to customers through independent third-party verification

Benefit: Competitive advantage, customer trust, ability to close enterprise deals

Consequence of skipping: Lost deals, harder sales process, disqualification from RFPs

Think of these as proof points you use to win business. They're "voluntary" in theory but practically mandatory if you're selling to enterprises.

Legal Requirements (You Must Comply)

HIPAA and PCI DSS are legal or contractual obligations triggered by the type of data you handle. If you meet the criteria, compliance isn't optional.

Purpose: Comply with laws or industry mandates to operate legally

Benefit: Ability to legally operate in that space, avoid fines and penalties

Consequence of skipping: Fines, lawsuits, inability to operate, potential criminal charges

Think of these as gates you must pass through to do business in certain industries.

The Common Confusion

People often ask: "Do I need HIPAA?" The answer isn't about what you want—it's about what data you handle. If you process Protected Health Information, HIPAA compliance is legally required, not optional.

Similarly with PCI DSS: If you store, process, or transmit credit card data, you're contractually obligated to comply through your payment processor agreements.

But with SOC 2 and ISO 27001, the answer is: "You need it if your customers require it." Survey your market to find out.

SOC 2: The SaaS Standard for US Companies

Let's start with the most common certification for B2B SaaS companies in the United States.

What SOC 2 Actually Is

SOC 2 (Service Organization Control 2) is an auditing standard created by the American Institute of CPAs (AICPA). It evaluates whether your security controls are designed appropriately and operating effectively.

SOC 2 audits focus on five "Trust Service Criteria":

• Security (always included) - Protection against unauthorized access
• Availability (common) - System uptime and accessibility
• Processing Integrity (less common) - System processing is complete and accurate
• Confidentiality (common) - Confidential information is protected
• Privacy (rare) - Personal information is collected and used appropriately

Most companies pursue Security + Availability. You choose which criteria apply to your business.

Who Actually Needs SOC 2

Primary audience:

• US-based B2B SaaS companies
• Service providers handling customer data
• Companies selling to enterprises
• Technology vendors in supplier relationships

If you're selling software to other businesses and your customers are US-based enterprises, you almost certainly need SOC 2. It's become the de facto standard for proving security competence in the US market.

Type I vs Type II: Which Version Matters

SOC 2 comes in two versions:

Type I: Point-in-time assessment of control design (2-4 months, $15k-40k)

Type II: 3-12 month assessment of operating effectiveness ($25k-75k)

Most enterprise customers require Type II. Type I proves your controls are designed properly. Type II proves they actually work over time.

Deep dive: SOC 2 Type I vs Type II: Key Differences Explained

Timeline and Cost Reality

Initial Type II certification: 9-12 months total

• Months 1-3: Design and implement controls
• Months 4-9: Six-month observation period
• Months 10-12: Audit and report issuance

Cost breakdown:

• Audit fees: $25,000-$75,000
• Tools and software: $10,000-30,000/year
• Internal labor: 200-500 hours
• Consultant help (optional): $20,000-$100,000

Annual renewal: $15,000-$40,000 plus ongoing internal labor

Pros and Cons of SOC 2

Advantages:

• Most commonly accepted in US market
• Flexible framework (choose relevant criteria)
• Strong indicator of security maturity
• Directly enables enterprise sales

Disadvantages:

• US-centric (less recognized internationally)
• Expensive for small companies
• Requires 3-12 months of evidence collection
• Annual renewal creates ongoing costs

Bottom line: If you're selling B2B SaaS primarily to US enterprises, SOC 2 is your starting point.

Want to get started? How to Prepare for a SOC 2 Audit in 90 Days

ISO 27001: The Global Alternative

ISO 27001 is the international standard for information security management systems. It's SOC 2's global counterpart with a more prescriptive approach.

What ISO 27001 Actually Is

ISO 27001 is published by the International Organization for Standardization (ISO). Unlike SOC 2's flexible framework, ISO 27001 prescribes 114 specific controls across 14 categories (called "Annex A" controls).

You implement applicable controls, document your Information Security Management System (ISMS), and undergo certification by an accredited certification body.

Who Actually Needs ISO 27001

Primary audience:

• Companies with significant international business
• European customers who prefer ISO over SOC 2
• Organizations pursuing multiple ISO standards (9001, 14001, etc.)
• Government contractors internationally

If more than 50% of your revenue comes from outside the US, or if European customers specifically request ISO 27001, this might be your better choice over SOC 2.

The Annex A Controls

ISO 27001 includes 114 controls covering:

• Organizational controls (37 controls)
• People controls (8 controls)
• Physical controls (14 controls)
• Technological controls (34 controls)

You don't implement all 114—you assess which controls are applicable to your business and implement those. But the framework is more prescriptive than SOC 2's open-ended approach.

Timeline and Cost Reality

Initial certification: 6-12 months

• Months 1-3: Gap analysis and ISMS design
• Months 4-8: Implementation and documentation
• Months 9-12: Pre-assessment and certification audit

Cost breakdown:

• Certification fees: $30,000-$100,000
• Consulting support: $20,000-$80,000
• Tools and software: $15,000-$40,000/year
• Internal labor: 300-700 hours

Maintenance:

• Surveillance audits (annual): $10,000-$30,000
• Full recertification (every 3 years): Similar to initial cost

Pros and Cons of ISO 27001

Advantages:

• Recognized globally (especially Europe and Asia)
• Three-year certification cycle (vs annual SOC 2)
• Prescriptive framework reduces interpretation
• Can stack with other ISO standards

Disadvantages:

• Less common in US market
• More rigid framework (less flexibility)
• Higher upfront cost
• Steeper learning curve for US companies

Bottom line: Choose ISO 27001 if your customer base is primarily international or if European customers specifically request it.

ISO 27001 vs SOC 2: Key Differences

Some companies eventually pursue both—ISO 27001 for international customers, SOC 2 for US customers. The controls overlap significantly, so maintaining both isn't twice the work.

HIPAA: Healthcare Data Requirement

HIPAA is fundamentally different from SOC 2 and ISO 27001. It's not a certification—it's a US federal law you must comply with if you handle certain types of healthcare data.

What HIPAA Actually Is

The Health Insurance Portability and Accountability Act (HIPAA) is a 1996 federal law that regulates how Protected Health Information (PHI) is handled. It's enforced by the Department of Health and Human Services Office for Civil Rights.

HIPAA isn't something you "get certified" in—it's an ongoing legal compliance obligation.

Who Must Comply with HIPAA

HIPAA applies to:

Covered Entities:

• Healthcare providers (doctors, hospitals, clinics)
• Health plans (insurance companies)
• Healthcare clearinghouses

Business Associates:

• Vendors who handle PHI on behalf of covered entities
• This is where most tech companies get caught

The Business Associate trap: Many companies assume "We don't provide healthcare, so HIPAA doesn't apply to us." Wrong. If your healthcare customer shares PHI with your system, you're a Business Associate and HIPAA applies to you.

What Counts as Protected Health Information

PHI is individually identifiable health information that includes:

• Patient names linked to health conditions
• Medical records and treatment information
• Payment information related to healthcare
• Any of 18 identifiers (SSN, address, dates, etc.) linked to health data

Even de-identified data has specific rules under HIPAA. The regulations are complex and penalties for violations are severe.

HIPAA Requirements Overview

HIPAA requires three categories of safeguards:

Administrative Safeguards:

• Risk assessments and management
• Security policies and procedures
• Workforce training and management
• Business Associate Agreements (BAAs)

Physical Safeguards:

• Facility access controls
• Workstation and device security
• Physical access to PHI

Technical Safeguards:

• Access controls and authentication
• Encryption of PHI at rest and in transit
• Audit logging and monitoring
• Transmission security

Timeline and Cost Reality

HIPAA compliance isn't a one-time project—it's ongoing operational compliance.

Implementation timeline: 3-6 months to establish program (varies widely)

Cost range:

• Consultant support: $10,000-$50,000 (initial program setup)
• Technology investments: $5,000-$50,000/year
• Training and operations: Ongoing internal labor
• No formal "audit" like SOC 2, but you must demonstrate compliance

Penalties for violations:

Annual maximum: $1.5 million per violation category. These penalties are not hypothetical—HHS regularly enforces them.

HIPAA + SOC 2: Why You Need Both

Many HealthTech companies pursue both HIPAA compliance and SOC 2 certification. Here's why:

HIPAA = Legal requirement to operate

SOC 2 = Customer trust and enterprise sales requirement

HIPAA compliance is mandatory if you handle PHI. But enterprise healthcare customers often still require SOC 2 because:

• SOC 2 demonstrates your HIPAA compliance is effective
• SOC 2 provides independent third-party verification
• SOC 2 covers broader operational controls
• SOC 2 report format is what risk teams expect

The controls overlap significantly, so implementing both isn't duplicate work—it's additive.

Common mistake: "We have SOC 2, so we don't need HIPAA." Wrong. SOC 2 doesn't exempt you from legal HIPAA requirements. You need both.

Learn more: HealthTech Compliance: When You Need HIPAA AND SOC 2

PCI DSS: Payment Card Security

PCI DSS is the fourth major framework tech companies encounter. Like HIPAA, it's not optional if you meet the criteria—but unlike HIPAA, it's an industry requirement rather than government law.

What PCI DSS Actually Is

The Payment Card Industry Data Security Standard (PCI DSS) is a security standard created by major card brands: Visa, Mastercard, American Express, Discover, and JCB.

If you accept credit cards, you're contractually obligated to comply through your merchant agreement with your payment processor. It's enforced by the card brands, not a government agency.

Who Must Comply with PCI DSS

The critical question: Do you store, process, or transmit cardholder data?

Store: Keep credit card numbers in your database → YES, need PCI

Process: Card data touches your servers during payment → YES, need PCI

Transmit: Pass card data through your systems → YES, need PCI

None: Use Stripe/PayPal, card data never touches your infrastructure → Maybe not full PCI

Most modern SaaS companies use payment processors like Stripe that handle all card data. This dramatically reduces PCI scope—you might only need a simple Self-Assessment Questionnaire rather than a full audit.

PCI DSS Compliance Levels

PCI has four compliance levels based on transaction volume:

Level 1: 6M+ transactions/year

• Annual Report on Compliance (ROC) by Qualified Security Assessor (QSA)
• Quarterly network scans
• Cost: $20,000-$100,000

Level 2: 1-6M transactions/year

• Annual Self-Assessment Questionnaire (SAQ)
• Quarterly network scans
• May require ROC depending on processor
• Cost: $5,000-$30,000

Level 3: 20K-1M e-commerce transactions/year

• Annual SAQ
• Quarterly network scans
• Cost: $2,000-$10,000

Level 4: Under 20K e-commerce or under 1M total transactions/year

• Annual SAQ
• Quarterly network scans recommended
• Cost: $500-$5,000

Most startups fall into Level 3-4. As you grow, requirements increase.

The 12 PCI DSS Requirements

PCI DSS has 12 main requirements covering 6 control objectives:

Build and Maintain a Secure Network:

1. Install and maintain firewall configuration
2. Don't use vendor-supplied defaults

Protect Cardholder Data: 3. Protect stored cardholder data 4. Encrypt transmission across public networks

Maintain a Vulnerability Management Program: 5. Protect systems against malware 6. Develop secure systems and applications

Implement Strong Access Control: 7. Restrict access by business need-to-know 8. Assign unique ID to each person with access 9. Restrict physical access to cardholder data

Monitor and Test Networks: 10. Track and monitor access to network and cardholder data 11. Regularly test security systems and processes

Maintain Information Security Policy: 12. Maintain policy addressing information security

These 12 requirements expand into 78 base requirements and 400+ test procedures for Level 1 validation.

How to Avoid Full PCI Scope

Most SaaS companies take this approach: Don't touch cardholder data at all.

Use a payment processor that handles everything:

• Stripe, PayPal, Braintree, Adyen
• Embedded payment forms that bypass your servers
• Tokenization so you only store tokens, not card numbers

Result: Your PCI scope shrinks dramatically. You might only need a simple SAQ-A (13 questions) rather than a full audit.

This is the smart approach for most companies. Unless payments are your core business, let specialists handle card data.

PCI DSS + SOC 2: The FinTech Reality

Many FinTech companies need both PCI DSS and SOC 2:

PCI DSS = Required to process payments

SOC 2 = Required by enterprise customers

These frameworks serve different purposes:

• PCI focuses specifically on payment card security
• SOC 2 covers broader operational controls
• Different audit approaches and reporting formats
• Complementary, not redundant

Timeline approach: Implement PCI DSS immediately (required to process payments), then pursue SOC 2 when moving upmarket to enterprise customers.

Learn more: FinTech Compliance: Navigating SOC 2 and PCI DSS

Decision Framework: Which Certification Do You Actually Need?

Let's make this practical. Answer these questions to determine your compliance path.

Question 1: What Type of Data Do You Handle?

Protected Health Information (PHI)? → HIPAA (required by law)

Credit card data (stored/processed/transmitted)? → PCI DSS (industry requirement)

Customer business data? → SOC 2 or ISO 27001 (voluntary but customer-required)

Multiple types? → Multiple certifications needed

Data type determines mandatory requirements. You don't get to choose whether you need HIPAA or PCI—the data triggers the requirement.

Question 2: Where Are Your Customers?

Primarily US-based? → SOC 2

Primarily Europe/Asia? → ISO 27001

Global distribution? → Consider both, or start with ISO

Selling to US government? → FedRAMP (different beast entirely)

Customer geography significantly influences which voluntary certification matters most.

Question 3: What Do Your Customers Require?

This is the most important question. Don't guess—actually check:

• Review RFPs and security questionnaires you've received
• Survey your top 10 prospects about their requirements
• Ask existing enterprise customers what they needed from vendors
• Check competitor certifications in your space

Customer requirements should drive your decision, not industry conventional wisdom.

Question 4: What's Your Industry?

General SaaS? → SOC 2

FinTech? → PCI DSS + SOC 2

HealthTech? → HIPAA + SOC 2

Global enterprise software? → ISO 27001

GovTech? → FedRAMP or other government-specific frameworks

Industry creates baseline expectations that are hard to avoid.

Common Scenarios and Recommendations

Scenario 1: Early-stage B2B SaaS, US market

Start with SOC 2 when you reach $500k-$2M ARR and prospects start requiring it. Pursue Type II if timeline allows (9-12 months). Annual renewals become part of operations.

Scenario 2: FinTech processing payments

PCI DSS immediately (required to operate). Level depends on transaction volume. Add SOC 2 when moving upmarket to enterprise (12-18 months after PCI).

Scenario 3: HealthTech handling patient data

HIPAA compliance immediately (legal requirement). Add SOC 2 when selling to enterprises (proves HIPAA effectiveness). Consider HITRUST for combined framework.

Scenario 4: Global SaaS, multinational customers

ISO 27001 for worldwide recognition. May add SOC 2 later for US customers specifically. GDPR compliance required if serving EU.

Scenario 5: Mature company, $10M+ ARR

Multiple certifications likely needed. SOC 2 + ISO 27001 common combination. Add industry-specific frameworks as you expand.

Can You Do Multiple Certifications Simultaneously?

Technically yes, practically challenging. The controls overlap significantly (especially SOC 2 and ISO 27001), but the administrative burden of multiple audits is substantial.

Most common approach: Focus on highest-impact certification first, then add others.

Exception: PCI DSS and SOC 2 are often pursued in parallel because PCI is non-negotiable (you can't process payments without it) while SOC 2 enables enterprise sales.

The Phased Approach to Multiple Certifications

Phase 1: Mandatory requirements (HIPAA, PCI if applicable)

Phase 2: Primary customer requirement (usually SOC 2 for US companies)

Phase 3: Market expansion certifications (ISO 27001 for international)

Phase 4: Competitive differentiation (additional frameworks as needed)

Don't try to do everything at once. Build your compliance program systematically.

Cost and Timeline Comparison

Let's look at the complete picture: time investment, financial cost, and ongoing maintenance.

Hidden Costs to Consider

The audit fees are only part of the total cost. Factor in:

Internal labor: 100-500+ hours for initial implementation depending on program maturity

Tool purchases:

• SIEM (Security Information and Event Management): $5,000-$30,000/year
• Vulnerability scanning: $2,000-$10,000/year
• Compliance tracking platforms: $5,000-$50,000/year
• Backup and DR solutions: $3,000-$20,000/year

Remediation work: Fixing gaps identified during readiness assessment or audit can range from $10,000-$100,000+ depending on what's broken

Training and awareness: Security training platforms, phishing simulations, and employee education programs

Ongoing operations: Staff time for evidence collection, quarterly reviews, policy updates, and audit preparation

Budget planning rule: First year costs 2-3x the audit fee when including all internal and external costs. Subsequent years cost 1.5-2x the renewal fee.

Making Your Certification Decision

Let's bring this all together with clear action steps.

Key Takeaways

Legal requirements are non-negotiable. If you handle PHI, HIPAA applies. If you process credit cards, PCI DSS applies. Start there.

Voluntary certifications are customer-driven. Survey your market to understand what prospects and customers actually require. Don't guess.

SOC 2 is the US SaaS standard. If you're selling B2B software to US enterprises, SOC 2 Type II is your baseline.

ISO 27001 is the global alternative. If international customers dominate your revenue, ISO 27001 might be the better choice.

Most companies need multiple certifications eventually. Plan for a phased approach rather than trying to do everything simultaneously.

Start with highest-impact certification first. Focus on the certification that unblocks the most revenue or satisfies the most customer requirements.

Your Action Plan

Step 1: Identify mandatory requirements

• Do you handle PHI? → HIPAA
• Do you process credit cards? → PCI DSS
• These aren't optional—start here

Step 2: Survey your customers

• Email your top 10 prospects: "What certifications do you require from vendors?"
• Review security questionnaires you've received
• Ask your sales team what objections they hear

Step 3: Check competitor positioning

• What certifications do competitors in your space have?
• This reveals market expectations
• Use it to validate your survey findings

Step 4: Assess your current security posture

• Are you starting from scratch or do you have mature controls?
• Consider a readiness assessment ($5k-15k)
• Understand the gap between current state and compliance

Step 5: Create a phased plan

• Don't try to pursue three certifications simultaneously
• Sequence them based on urgency and impact
• Budget for 6-18 months per certification

The Reality Check

Compliance certifications are expensive and time-consuming. SOC 2 alone costs $50,000-$100,000+ when you include all costs in the first year. ISO 27001 can run $70,000-$150,000+. Multiple certifications multiply these costs.

But here's the business case: One enterprise contract can be worth $100,000-$1,000,000+ in annual recurring revenue. If SOC 2 unlocks three enterprise deals worth $300k each, that's $900k in ARR. Your $75k compliance investment pays for itself twelve times over.

Compliance isn't a cost center—it's a growth investment that enables revenue you couldn't capture otherwise.

Don't try to DIY your first certification without guidance. Whether you use consultants, auditors, or comprehensive implementation templates, get help from people who've been through multiple audits. The time and mistakes you save will more than cover the investment.

Whether you're pursuing SOC 2, ISO 27001, or preparing for HIPAA/PCI compliance, you need comprehensive security documentation. Our Complete Bundle includes 15 policies, 22 documents, and 40 evidence explanations that work across multiple frameworks—saving you months of work and thousands in consultant fees. For companies focused specifically on SOC 2, our Policy Bundle provides all the foundational policies you need to start your audit with confidence.

Ready to dive deeper into specific certifications? Check out these detailed guides:

• SOC 2 Type I vs Type II: Key Differences Explained
• How to Prepare for a SOC 2 Audit in 90 Days