PCI Strategy: Avoiding The “Anything But SAQ D” Dilemma

Written by Walter Conway
September 27th, 2011

A 403 Labs QSA, PCI Columnist Walt Conway has worked in payments and technology for more than 30 years, 10 of them with Visa.

As I noted in last week’s column, there is only one problem with the shortened versions of the Self-Assessment Questionnaire (SAQ): They are incomplete. Merchants who qualify for SAQ C process payments on a payment application connected to the Internet. The target audience for SAQ C is small merchants with a payment application on their personal computer, which connects to the Internet to process card transactions. Other requirements are that the merchants store no electronic cardholder data and that their computer is not “connected to any other systems in your environment.”

In the real world, many retailers and franchisors (and franchisees) try to qualify to use SAQ C. I call this the “anything but SAQ D” approach. In my experience, the biggest challenge of SAQ C is isolating the application server(s) from the rest of the merchant environment. I know merchants who have devoted a lot of effort and changed their network so they can qualify for SAQ C. A recent clarification by the PCI Council, however, limits the ability of many retailers and franchisors to use this SAQ.

SAQ C contains 80 questions that cover parts of 11 of the 12 PCI requirements. The sole missing requirement is Requirement 10, informally known as the logging requirement. Allowing a merchant to host a payment application and not requiring logging seems to be a major oversight. I imagine the rationale is that because SAQ C merchants do not store electronic cardholder data, they have no need for audit logs. Maybe this situation goes back to the Council’s original intent that SAQ C would apply to a single person running a payment application on his or her personal computer.

But the reality today is that many sizeable retailers and corporations (i.e., Level 2, 3 and 4 merchants with millions of transactions a year) are using, or trying to qualify for, SAQ C. In my opinion, SAQ C merchants should implement all of PCI’s logging requirements even if they don’t store electronic cardholder data. For example, without logging a merchant would not be alerted if an admin changed the application configuration to store cardholder data or copied that data to his or her laptop.

Another item I would add to my SAQ C list is Requirement 11.5, file integrity monitoring (FIM). Without FIM, merchants hosting a payment application won’t know if a system or application file on one of their POS systems has been compromised. This is critical information needed to achieve a secure operation.

Lastly, although SAQ C includes internal and external vulnerability scanning, it is silent on penetration testing. A security-conscious merchant should include this requirement even though it does not appear on the SAQ. The bad guys are regularly scanning and testing merchants’ systems. At least with a pen test those merchants get to see the report of their vulnerabilities and, hopefully, correct them.

SAQ C-VT (the VT stands for “virtual terminal”) is new in PCI 2.0. It includes 51 questions covering parts of nine of the 12 PCI requirements.


Leave a Reply

Readers, specifically those who want to comment on a story:
Our Comment SPAM system is getting very aggressive these days and has been blocking legitimate comments. If you post a comment and don't see it appear within 2 hours or so, can you please send a heads-up to Ideally, please include the time you posted the comment. That will allow us to try and hunt for it. Thanks! P.S. We're working on fixing the system, but we don't want to lose any valuable comments in the meantime.


StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 17,000 retail IT leaders who subscribe to our free weekly email. Sign up today!

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...

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.