Payment security in Europe has taken on a new legal dimension following the Schrems II rulings and decisions of European Data Protection Authorities. Storing card data on extra-EU servers is no longer just a technical matter: it is a real legal risk that can expose companies to GDPR penalties even in the absence of a data breach. EU data residency for payments has become a de facto requirement for any company wanting to operate in compliance with the European regulatory framework.
Schrems II and card data: the legal problem with extra-EU vaults
The Schrems II ruling of July 2020 invalidated the EU-US Privacy Shield and established that transfers of personal data to the United States are lawful only with adequate guarantees (Standard Contractual Clauses plus supplementary measures) verified on a case-by-case basis. Card payment data falls within the definition of personal data under GDPR: a PAN associated with a name and billing address identifies a specific individual.
The 2023 EU-US Data Privacy Framework partially resolved the issue for transfers to certified companies, but its legal robustness remains subject to legal debate. The Italian and other European Data Protection Authorities have already initiated proceedings against companies that transferred data to the US without adequate guarantees. For a card data vault, which by definition contains highly sensitive personal data, the risk of an uncertified extra-EU transfer is real and quantifiable.
EU data residency and PCI DSS: what the regulations say
PCI DSS does not explicitly prescribe the geographic location of card data: a global standard cannot impose a specific jurisdiction. However, choosing to store data in Europe is not just a GDPR matter. It is also a risk governance choice: vaults located in the EU are subject to European legislation on network and information systems security (NIS2), oversight by European data protection authorities, and EBA technical standards for digital payments.
Many European acquirers and commercial partners include data residency clauses in their contracts. Some categories of merchants, particularly those operating in regulated sectors like banking, insurance and healthcare, have additional data localisation obligations that make an extra-EU vault incompatible with their sector's regulatory requirements. Data sovereignty - control over data within the boundaries of one's jurisdiction - is an increasingly prominent theme in public tenders and enterprise contracts.
PCI Proxy EU: European vault with complete certifications
PCI Proxy EU stores all card data on infrastructure physically located in Europe, in ISO 27001 certified data centres compliant with EBA technical standards. The vault operates on FIPS 140-2 certified HSM hardware, with cryptographic keys that never leave the European perimeter. The PCI DSS Level 1 certification is renewed annually with an independent QSA audit, and compliance reports are available to customers for their own due diligence activities.
From a contractual perspective, PCI Proxy EU operates as a Data Processor under GDPR, with a Data Processing Agreement compliant with Art. 28 that transparently defines responsibilities of both parties. There are no data transfers to third countries, no extra-EU sub-processors and no access by entities subject to extraterritorial legislation like the American CLOUD Act. For a European merchant, this translates into a concrete reduction in legal and reputational risk.
Frequently asked questions
If my card data is in the US do I have a legal problem?
It depends on the contractual guarantees in place. If the US vault is certified under the Data Privacy Framework and has valid Standard Contractual Clauses, the transfer may be lawful. However, the robustness of these guarantees depends on a case-by-case analysis, and many companies prefer to eliminate the risk entirely by choosing an EU-located vault.
Is EU residency mandatory for payments or just recommended?
It is not absolutely required by law, but becomes implicitly mandatory in many contexts: contracts with partners including localisation clauses, regulated sectors with specific requirements, public tenders and banking operations. For a merchant wanting solid and documentable GDPR compliance, EU residency eliminates a class of risks that are otherwise difficult to manage.
Where are PCI Proxy EU's servers physically located?
PCI Proxy EU servers are located in ISO 27001 certified data centres within the European Union. The exact location is not disclosed for operational security reasons, but contractual documentation and the DPA confirm data residency in EU territory. Customers can request written evidence of localisation during contractual due diligence.
Want a card data vault with confirmed EU residency, complete certifications and zero extra-EU transfer risks? Discover PCI Proxy EU.