Rethinking Payment Security Outsourcing
Written by David TaylorGuestView Columnist David Taylor is the Founder of the PCI Knowledge Base, Research Director of the PCI Alliance and a former E-Commerce and Security analyst with Gartner.
Is adopting a superior technical or business approach the right choice, even if that approach results in the loss of jobs for the company? Or, put another way: Is it justifiable to implement a less secure technology, if employees’ jobs are preserved in the process?
I bring this up because we have noticed a “protectionism” trend in our research results recently, when it comes to the outsourcing of payment management for the purpose of reducing PCI compliance scope. We’re talking about companies opting to store and manage more credit card and other confidential data than necessary, and we suspect protecting jobs in technology, compliance and finance is the main reason for this. But is this “bad”? Let’s do some analysis.
Outsourcing is usually about taking jobs away from people who get paid relatively well (usually in so called “developed” countries) and giving them to people who will work for less (often in other countries). So, for most people (who don’t run companies), outsourcing is “bad.”
On the other hand, when it comes to the cost and the scope of a PCI compliance assessment, merchants are generally inclined to want to want to reduce cost and scope, often by eliminating cardholder data itself. When the data cannot be simply purged, many merchants consider approaches such as end-to-end encryption and/or tokenization. The hope is that by adopting such approaches and the process changes brought with them, they can remove their POS and/or their E-commerce website from PCI scope, reducing their risk of a security breach in the process.
But some of the companies that offer these types of approaches have found that they have to avoid the term “outsourcing,” even if it’s a payment processor offering to take on full responsibility for the dreaded PCI data. It’s not just the word that’s the problem.
I’m seeing two distinct trends when talking to merchants: Senior business and technical executives are strongly motivated to consider hosted payment approaches and tokenization. But the application managers, security managers and compliance managers are generally opposed to these approaches. Maybe they are simply trying to protect their jobs. After all, with fewer pieces of sensitive data to protect, and more monthly bills coming in from service providers, it would seem like somebody’s job will be in jeopardy. There is, however, more to it than that.
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.
-Marc
