advertisement
advertisement
advertisement

This is page 2 of:

The New SAQ C Complicates PCI For Some Retailers, Franchises

May 23rd, 2011

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. Indeed, this is why the Council requires (which, in my experience, too many merchants manage to overlook) the POS system to be isolated from all other systems in the merchant environment.

For such a single-location merchant, the change in 2.0 is of little significance. Supporting this view of the Council’s intention is the fact that the change to SAQ C did not merit a mention in the “Summary of Changes from PCI 1.2.1 to 2.0” document issued last October. My search of that document for any reference to SAQs yielded no hits.

Another important point to make is that merchants are expected to be compliant with all PCI requirements at all times. Because a merchant uses a simplified SAQ does not mean it gets a free pass on the PCI requirements not explicitly mentioned in that particular SAQ. It is just that if a merchant fits a particular profile, instead of writing N/A lots of times, it can use the appropriate simplified SAQ. Therefore, one could claim that even if some retailers are now excluded from SAQ C, it should not make much difference anyhow.

The business reality, though, is that many retailers and franchises segmented their networks and reconfigured their POS applications to qualify for SAQ C and simplify their PCI compliance validation. They did not want to pay for, say, the penetration testing or extensive logging systems called for in SAQ D. Significantly, these merchants’ actions also reduced their risk of a data compromise.

The bottom line is that some merchants who used SAQ C in the past will need to make a choice. Either they implement a separate instance of their POS system in each location (with the additional software licensing and hardware costs), or they bite the PCI bullet and move to SAQ D (with those additional costs) when they validate or revalidate their compliance.

Any retailers affected could, of course, choose to validate before the end of this year using the previous version—1.2—of the SAQ. That version is valid until December 2011. Making such a choice may forestall the inevitable for a year, but it won’t make much difference in the long run.

What I fear more is an unintended outcome for many smaller Level 3 and 4 merchants who will delay even further their PCI compliance. Compliance among small and midsize merchants is low. Looking at SAQ C can be daunting enough for a small business without an IT department. Telling them they need to complete SAQ D when most of them can’t tell a FIM or SIEM from a can of paint is unlikely to either make a lot of converts or reduce data breaches.

I have long maintained that the SAQs need updating and revising to reflect the current threat environment. This change (or clarification, if you prefer) to SAQ C was not necessarily what I had in mind. I am thinking in particular about the impact on franchisees and small retailers with more than one store. The new rules for SAQ C will mean more costs for many of them. I’m also thinking about those corporate franchisors already facing Visa’s registration requirement that they act as third-party agents. For some of them, this change will be one more PCI complication they need to address.

What do you think? I’d like to hear your thoughts. Either leave a comment or E-mail me at wconway@403labs.com.


advertisement

Comments are closed.

Newsletters

StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!
advertisement

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...

StorefrontBacktalk
Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.