The New SAQ C Complicates PCI For Some Retailers, FranchisesWritten by Walter Conway
A 403 Labs QSA, PCI Columnist Walt Conway has worked in payments and technology for more than 30 years, 10 of them with Visa.
PCI version 2.0 brought several changes, most of which are evolutionary and not particularly dramatic. There was, however, one subtle but important change that will significantly complicate how some Level 2 (and smaller) retailers and franchises validate their PCI compliance. Interestingly, this change seems to have sailed under most retailers’ (and most QSAs’) radar so far.
The change is in the new version of self-assessment questionnaire (SAQ) C. It now stipulates that retailers can use this SAQ only if their payment application serves a single store location. In other words, any retailer that connects a branch or an additional location to their POS system, or any franchisee (or franchisor) that processes payments for more than a single location, can no longer use a simplified SAQ.
In practical terms, this change means that instead of using the old SAQ C, which had about 50 items, these retailers and franchise operators will need to complete SAQ D, which includes all 280-ish requirements of the PCI DSS. For these retailers, validating PCI compliance will take more time and likely cost a lot more money, too.
The PCI Council developed SAQ C to simplify compliance validation for merchants who have POS systems that connect to the Internet to authorize card transactions and that do not store any electronic cardholder data. The general idea is that this type of merchant has a payment application on a “personal computer,” and that payment application connects to the processor via the Web.
SAQ C previously had five requirements: the payment system and an Internet connection had to be on the same device; that device was not connected to any other system in the merchant’s environment; the merchant kept only paper reports or receipts; the merchant stored no electronic cardholder data; and remote vendor support was managed securely.
The payoff for meeting these requirements was that a retailer could qualify to use the simplified SAQ and avoid the much longer, more involved and significantly more costly process of using SAQ D. I personally know of many merchants who changed their business operations, reconfigured their POS systems and even signed tokenization contracts to qualify for SAQ C.
Unfortunately some of these retailers and franchises will no longer qualify to use SAQ C. The reason is that SAQ C now includes an additional sixth requirement: “Your company store is not connected to other store locations, and any LAN is for a single store only.”
This change means a retailer that supports a branch or a second (or more) location using its single POS system would need to use SAQ D. The same goes for franchisees and franchisors that may share the POS system across several stores (or even brands). I find myself thinking a franchisee with more than one franchise operating out of a single physical location might not even qualify to use the new SAQ C. The impact is not restricted to retailers. The change to SAQ C will affect many universities that have retail or food-service operations and support multiple campus locations with a single POS system.
My guess is that the PCI Council does not view the change as significant. From its perspective, the Council likely sees SAQ C as appropriate to small Web entrepreneurs running a business from their laptops.