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PCI DSS: The Next Generation

March 25th, 2013

Another, more subtle point made by the PCI Scoping presenters was that just because a system is in the merchant’s PCI scope, does not mean that every single PCI DSS control necessarily apples. There are roughly 280 controls in PCI DSS. A patching server, for example, will not store, process or transmit cardholder data, so many of the requirements (e.g., Requirement 3, Protect Stored Cardholder Data, among others) will not apply. Next-generation PCI team members need to know they have the leeway to consider carefully each requirement and to determine whether or not it is applicable to their unique situation.

This is not to say merchants may take a risk-based approach to PCI. The difference may seem subtle, but merchants do not get to pick and choose between which PCI requirements they will apply and which they will skip. That approach has long been declared taboo, and the next-generation PCI team needs to understand that and move on.

One issue a U.S.-based next-generation PCI team will face very soon is the impact of the migration to EMV chip cards. I was recently asked whether the introduction of EMV chip cards in the U.S. market would not be the silver bullet that eliminates the need for PCI compliance. Unfortunately, I had to disabuse the questioner of that notion immediately. The answer is that EMV is about authentication, not confidentiality, and that PCI will not go away. Those of us who have been in the industry for a while know we resolved this question a long time ago. The next-generation PCI team was not around to hear the answer, however.

I hope the next-generation PCI phenomenon will produce one very particular, positive result: a fresh look at the organization’s PCI governance structure. Fresh people and fresh ideas present opportunities to improve how merchants and service providers manage their PCI compliance for the 364 days between yearly compliance validations.

For example, does your next-generation PCI team represent both the IT and the business side of the organization? Do the marketing and new product areas get their mobile commerce questions answered? Does the next-generation PCI team understand the impact of the new Wi-Fi system that the warehouse or fulfillment department is about to install? Are the EMV lessons from the organization’s European or Canadian operations—and the PCI compliance lessons from the U.S. operations—shared with the next-generation PCI team?

The emergence of the next PCI generation presents many more opportunities than challenges. Yes, it makes some people (like me) feel old or possibly frustrated at answering the same questions we heard five years ago. The upside, however, is the opportunity to take a fresh look at the organization’s PCI scope and PCI governance. These benefits will far outweigh any costs.

What do you think? I’d like to hear your thoughts. Either leave a comment or E-mail me.


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Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

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