How About A Little Service Provider Responsibility Here, PCI-Wise?

Written by Walter Conway
March 29th, 2012

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

Among all of the PCI requirements, there is one that reflects a fundamental imbalance. That requirement is 12.8.2, which requires all merchants to: “Maintain a written agreement that includes an acknowledgement that the service providers are responsible for the security of cardholder data the service providers possess.” This is a great requirement, but it places the entire burden on the merchant. Where is the corresponding requirement that a service provider actually agrees to deliver that written acknowledgement?

This situation can be addressed with one simple change to 12.8.2. It would apply to service providers only. The change is to add wording that requires service providers to deliver this “acknowledgement” in writing to their customers.

Have more PCI phrasings you want changed? You now have your chance. The good news is that you still have time, although not much. Participating Organizations now have until April 15 to submit up to five ideas for improving PCI DSS (as well as PA-DSS). Therefore, your first step is to speak to the PCI contact within your company and see what feedback she/he is preparing.

Depending on what you learn, you may want to consider the following suggestions. I’ve based them on issues I see at retailers and other merchants. I hope the suggestions stimulate some thinking about what changes retailers want and need to see in the upcoming revisions to PCI.

Participating Organizations can make as many as five comments. The comments may:

  • Request clarification of a particular PCI requirement or testing procedure.
  • Request additional guidance on how to meet a requirement.
  • Suggest a change to an existing requirement or testing procedure.
  • Offer a completely new PCI requirement.
  • Provide feedback to the PCI Council on just about any topic without necessarily requesting any changes.

Let’s take them one at a time.

My nominee for requesting clarification is: At what point does a system reseller or integrator become a PCI service provider? I’ve written about how PCI pretty much ignores system resellers and integrators, even though they play a crucial role in many retailers’ POS implementations. In many cases, the reseller/integrator’s work includes configuring firewalls, changing default passwords and other security-related functions. When they do this, a retailer (or their QSA) could view the reseller/integrator as a PCI service provider, because their actions directly affect the security of each transaction.


3 Comments | Read How About A Little Service Provider Responsibility Here, PCI-Wise?

  1. lyal collins Says:

    I appreciate the one-sideness issue highlighted in this article. I also understand how card brands have a contractual link to merchants – but only rarely do with service providers. I’d find it virtually meaningless for the PCI requirement to mandate actions by the service provider, when they have no contracted responsibility to a commercial entity. That said, 12.8.4 places an obligation on the service provider to demonstrate compliance to their customer the merchant (or service provider, Acquirer etc).
    Is not the combination of these 2 requirements having the same outcome?

  2. Walt Conway Says:

    Thanks for the comment, Lyal. I am not sure I agree with your position on the “contractual link” part, though. Actually, service providers do have direct links to the card brands. For example, many have direct system connections/access points to the card networks. More importantly, all service providers validate their PCI compliance to the card brands. The brands (at least Visa and MasterCard) also post lists of compliant Level 1 Service Providers on their websites.

    My point was not so much about the card brands, though. I was observing that since PCI already has a number of requirements that only apply only to Service Providers and not to merchants, there is precedent for one more Service-provider-only requirement to cure the imbalance I noted.

    Then again, if all it takes to meet 12.8.2 is for the service provider to be PCI compliant, then all the PCI Council has to do is declare it in a FAQ or clarify the wording of the requirement.

    I (and more importantly, retailers and other merchants!) could be happy either way. It is the present, one-sided nature of this specific requirement (12.8.2) that is disappointing.

  3. Nathan Says:

    Walt, I’d suggest that perhaps you have a limited concept of who would be considered a Service Provider under the guidelines that you’ve suggested. The fact is that most resellers/integrators do NOT have direct links to the card brands or the card networks. They may work with processors to board new merchants or provide support, but there is no contractual or legal obligation at all. Your comment that all service provides validate their PCI compliance is also way off base if you include resellers & integrators. The limited number of Level 1 Service Providers probably do validate their compliance, but the vast majority of resellers/integrators are not that big.

    Lyal is correct that for most “service providers” (using your definition to include resellers/integrators) there is no contractual obligation or liability to an acquirer or a card brand. The only financial relationship is with the merchant. Adding your suggested line to the DSS won’t change that. In an ideal world it might encourage merchants to pursue the step further, but in reality it won’t happen. There is no incentive to the service provider and most (almost all) merchants won’t care to ask. If they do ask, and the service provider refuses to provide formal acknowledgment, the merchant has no options, short of completely replacing their POS system.

    Regardless of precedent, there’s nothing that PCI can hold over most resellers/integrators and force them to accept liability. The only option would be to do follow the precedent of payment applications and begin validating and certifying resellers/integrators. But even that only works if the Acquirers actually verify the information. You’ll still have Heartland sales people who are willing to fudge numbers & board any merchant with a pulse. And you’ll still have the kid down the street who’s willing to setup a router from Walmart so the merchant can offer WIFI. All that would do is put legitimate resllers/integrators who are actually trying, out of business.


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