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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


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