Evan Schuman's StorefrontBacktalk

The key argument of the report is that none of the three groups of companies involved—the card brands, the issuing banks and key retailers—is spending the dollars to create true incentives to make contactless payment work, said lead report author Bruce Cundiff, who is Javelin's director of payments research. "There is no effective value proposition for merchants and for wireless carriers," Cundiff said. Read more...

With that in mind, StorefrontBacktalk has been asking retailers, lawyers and other experts (and gadflies) for their favorite credit card security issue brain teasers. How many can you figure out? (No, there are no right answers, other than accepting cash.) Read more...

The PCI Security Standards Council on April 15 officially rolled out version 1.1 of the Payment Application Data Security Standard (PA-DSS). The specifics of the standard were spelled out last November and this is just the expected formal unveiling.

This fall, the group said it will maintain a list of validated payment apps. Also this fall, the group is likely to introduce an entirely new version of the PCI specification. But that version is not expected to have any impact on which apps are considered compliant.…

Any security consultant will tell you that it's important to have a data classification scheme. Although it makes a nice spreadsheet, we have seen only a few leading-edge merchants and banks that actually attempt to enforce it and use it to drive access controls. Why? Taylor has concluded that it's for a single strategic reason: "Data classification is boring." Read more...

"A good QSA would ask not only if an antivirus package existed or if a firewall appliance was installed or if a unique user ID policy was followed, but also how these were designed, architected, implemented, configured and monitored," Weise wrote. "A good QSA would ask to what security policy must applicable operational procedures adhere and whether anyone looks at the alerts and logs generated by the antivirus or firewall products."Read more...

With the exception of in-person pickups and cash-on-delivery, plus a handful of large-ticket items (specifically cars, motorcycles, aircraft, boats, caravans, trailers, commercial trucks, services, real estate and businesses) for sale, sellers will be required to offer eBay-owned PayPal as a payment method by May 21, in anticipation of the June 17 ban on anything else. Said eBay: "If we think these changes will significantly improve the buyer experience, we may expand them to additional segments of sellers or categories." Read more...

The $4.8 billion automotive aftermarket parts chain—which dubs itself the nation's second largest such chain, with 3,261 stores in 40 states, Puerto Rico and the Virgin Islands—said the breach appears to have impacted customers from 14 of its stores in Georgia, Ohio, Louisiana, Tennessee, Mississippi, New York, Virginia and Indiana. Read more...

PCI DSS is famous for its level of detail, in laying out for merchants procedures for implementing and testing many different security controls. But PCI DSS does not tell merchants how they should actually manage all these alerts or which of these controls need to be integrated, and which of the procedures need to be automated.Read more...

Saying only that a TV station’s news coverage of its data breach was too “aggressive,” the Hannaford grocery chain has canceled its commercials from the Portland, Maine, CBS affiliate. The station, which announced Hannaford’s decision on its own news site, said the chain declined to cite any errors or problems with the coverage.

This is a baffler. You have a media outlet in your community that is saying accurate but not nice things about you. What’s the response? Make sure you give up the one way you can give your side of the story by pulling your ads.

I always get in trouble when I say this, but a better approach is to pull your ads from media that are already saying your side of the story for free and use that money to buy twice the ads on the other sources. That way, you get your message aired where it needs to be heard most. But that’s a lot less fun than punishing people who stay stuff you’d rather not be said.…

The European Commission is cracking down on search engine data-retention, with a new proposed rule that search engines should delete personal data about their customers within six months.

The BBC News site said this recommendation is likely to be accepted by the European Commission and could lead to a clash with search giants like Google, Yahoo and MSN. “Google and MSN anonymise user data after 18 months, while Yahoo does the same after 13 months,” the BBC reported.…

ISPs have been quietly expanding their use of deep-packet inspection. They are capturing everything a user does–to the point where “at least 100,000 U.S. customers are tracked this way, and service providers have been testing it with as many as 10 percent of U.S. customers, according to tech companies involved in the data collection,” said a new report in The Washington Post.

The service providers exploring and testing such services have largely kept quiet–“for fear of customer revolt,” according to one executive involved who was quoted in the Post story. Each company allows users to opt out of the monitoring, though that permission is buried in customer service documents.…

Such claims are commonplace, but the VeriShield Protect from Verifone is making claims that—if ultimately proven true—would significantly advance retail payment security. The new unit uses Hidden Triple Data Encryption Standard (H-TDES) from a company called Semtek Innovation Solutions Corp.. It's hardware unit is designed to deactivate if anyone succeeds in opening the case, making the planting of physical data-capture devices more challenging. Read more...

covers a variety of uses (see the Patent's full text here as well as some illustrations that accompanied the federal filing), but its core functionality would require consumers to download a small applet to their phone, which would then be associated with a payment method plus a password and potentially some other authentication approach such as any form of biometrics. Password-only protection is the default scenario. Another piece of software would be installed in the retailer's POS system. Read more. Read more...

Whether it's leaving firewalls in learning mode or having database access controls that all but ignore the activity of authorized users--who may be capable of nastiness few cyber thieves could dream of--it's an amazingly risky approach. Read more...

Although the merchant behind the program—Chockstone—stresses a variety of security mechanisms, the nature of the program itself seems to fly in the face of PCI guidelines that discourage using credit card numbers for anything other than payment transactions, similar to the unsuccessful attempts to get American businesses to stop using Social Security numbers as defacto employee and customer identification numbers. Read more...

Nowhere is this myth more wrong—indeed, polar opposite wrong—than when dealing with security breach issues of U.S. retailers. I'm going to try and avoid using modern-day chains to illustrate good and evil. Regrettably, I think it's a safe bet that I am about two sentences away from failing that effort. Let's take TJX as an example. (Only one sentence. I was close, though.) Based on various SEC filings and court documents, it's clear that TJX engaged in a wide range of security procedures that were, to be charitable, less than diligent. But, as we've pointed out many times, the millions in expenses that TJX has had to spend had absolutely nothing to do with any alleged security sloppiness. Read more...

Was the Hannaford data breach isolated or was it part of a sweep of similar penetrations? A Vermont ski resort is reporting an almost identical breach of card information in transit in February and an official there was told by law enforcement “that they currently are looking into about 50 reported incidents of the same sort in the Northeast alone.”

Those new details–courtesy of a Computerworld story–suggest that this might soon become the norm. The Okemo Mountain Resort ski area in Vermont announced this week that data from more than 46,000 credit and debit card transactions may have been compromised during a system intrusion over a 16-day period in February. “We can tell you that this was a real-time theft,” said Okemo spokeswoman Bonnie MacPherson. “The information was being taken as the cards were being swiped.”…

TJX will pay as much as $24 million to cover databreach losses suffered by MasterCard banks, assuming 90 percent of the banks agree to the settlement offer, TJX and MasterCard announced on Wednesday. TJX last year announced the world’s worst payment data breach, which impacted some 100 million cards.

Participants “must agree not to seek or participate in any other recoveries that may be available to issuers and must also release MasterCard, TJX and TJX’s acquirers from all legal and financial liability associated with the TJX data breach, ” a joint statement said. Those banks have 30 days to whether to accept the offer. …

Bankrupt Pay By Touch—officially using the name Solidus Networks—has sold off two key units for a total of $4.8 million.

Phoenix Check Cashing dropped $4.2 million to pick up Pay By Touch’s check-cash¬ing division, known as BioPay Paycheck Secure, according to The Nilson Report. Acculink paid $600,000 for ATM Direct, a unit trying to introduce PIN-based debit card payments for E-Commerce sites, the publication reported.…

This week brings the news that American Express is halting its ExpressPay keyfob, some six years after the payment giant started offering it. The program is expected to deactivate the last of its fobs by July. There are many reasons the fob may have died, but at least Amex—with six years of fob effort under its payment belt—can't be accused of not giving the fob enough time to work.Read more...

The Hannaford data breach included payment information that was partly encrypted and partly clear text—and it was all transmitted over a private fiber-optic cable, according to a Hannaford official quoted in the Wall Street Journal.

This information—on top of the reports that Trojan Horse software was installed on 300 servers in 300 Hannaford stores–is painting a picture of a retailer that seemed to be following accepted security procedures. The story reported that the cyber-thief created software “intercepted the information as it went back and forth over a cable to a transaction processor in Denver. It was then transmitted to an Internet service provider somewhere outside the U.S.,” according to Hannaford marketing VP Carol Eleazer, who added that “it took a team of about 30 forensics experts and information technologists more than 10 days of round-the-clock troubleshooting to discover the malware.”…

A new type of payment card forger is making the rounds, this time armed with a razor blade and very little money.

After the thief has been able to guess at random numbers and find a viable payment card, the culprit razors off the last few digits from a real payment card and KrazyGlues the guessed at numbers onto the card. He/she then scratches the magstripe to force the cashier to manually enter in the digits, according to this nicely-done story from the Oregonian newspaper.…

The data breach at Hannaford involved a Trojan Horse that was installed on servers at every one of its 300 grocery stores, according to Hannaford officials. The software intercepted card data at the POS and then periodically transmitted them “to an unnamed offshore Internet service provider.”

Those details come courtesy of a letter sent by Hannaford general counsel Emily Dickinson to Massachusetts Attorney General Martha Coakley and Governor Deval Patrick’s Office of Consumer Affairs and Business Regulation, according to Hannaford officials and a report in The Boston Globe, which quoted from the letter. The chain decided to replace all of the servers to make absolutely certain the malicious programs were removed from the network.…

That report also found that TJX "did not require network administrators and other users to use strong passwords or to use different passwords to access different programs, computers, and networks" and that it failed to "use readily available security measures to limit access" and cited one crucial example: not "using a firewall to isolate card authorization computers."Read more...

They like to buy liability insurance, buying into the line that shareholder assets will then be safe no matter what that boneheaded new Operations VP does in a year. They like Poison Pill plans, believing their lawyers that it will prevent them from ever being taken over. And, most recently, they are simply ga-ga for those who say that a PCI compliance letter means they are in a magical safe harbor, where they can do anything with their security that they want and be utterly immune from liability.Read more...