PCI New Rules: Reading The Tea Leaves

Written by Walt Conway and Evan Schuman
August 19th, 2010

When the PCI Council periodically sends out sanctioned teases about an upcoming version, the fun part is the tea-leaf-like reading of its deliberately vague hints. And the Council has offered us quite a bunch to choose from, including “expanded definition of systems components to include virtual components,” “recognize that issuers have a legitimate business need to store sensitive authentication data” and the especially intriguing “update requirement to allow business justification for copy, move and storage of CHD during remote access.”

The most powerful change from the hints was a warning that too much encryption may actually weaken network security. (See this week’s PCI column from Walt Conway.) But let’s delve into some of the more mysterious and intriguing elements first.

  • Scope Of Assessment
    PCI phrasing: “Clarify that all locations and flows of cardholder data should be identified and documented to ensure accurate scoping of cardholder data environment.” Interpretation: This is a most welcome change. It should be an explicit requirement to spend time locating all of the sensitive data anywhere in the network–or on PDAs, thumbdrives, iPads, home computers or backup drives–and making sure it complies with all PCI requirements.
  • Virtualization
    PCI phrasing: “Expanded definition of system components to include virtual components. Updated requirement 2.2.1 to clarify intent of ‘one primary function per server’ and use of virtualization.” Interpretation: Expect guidance on what is and is not in scope. As virtualization becomes more common–and complex–some solid operating rules will be essential for expansion confidence.
  • Legitimate Business Need
    PCI Phrasing: “Recognize that Issuers have a legitimate business need to store Sensitive Authentication Data.” Interpretation: Hello, hornet’s nest. This concept goes beyond the typical compensating control question and allows QSAs to give weight to the legitimate business argument, at least for issuers. Presumably, this concept will be somewhat more stringent than “a business need is to save money and it’s cheaper to simply leave that stuff in there.” Issuers have quite a few commonsense needs to retain such data, so the exact phrasing will be fascinating. At one extreme, it might have little consequence beyond giving QSAs official cover for what almost all were already doing.
  • Remote Access
    PCI Phrasing: “Update requirement to allow business justification for copy, move and storage of CHD during remote access.” Interpretation: Just saying “remote access” is enough to make many QSAs pass out. But acknowledging that retailers have increasing needs for doing almost everything remotely–at times–means that some liberalization of remote cardholder data is inevitable. How far the Council will go is the question.
  • Key Management
    PCI Phrasing: “Clarify processes and increase flexibility for cryptographic key changes, retired or replaced keys and use of split control and dual knowledge.” Interpretation: The Council is reinforcing what every security person and QSA knows: The bad guys attack the keys, not the crypto. Expect clarification on hashing standards and more.
  • Hardware
    PCI Phrasing: “Provide further guidance on PA-DSS applicability to hardware terminals.” Interpretation: The most interesting potential area here is the smartphone and POS interaction area.


Comments are closed.


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!

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.