Visa To Franchisors: “We’re Here To Talk, Not To Listen”

Written by Todd L. Michaud
June 17th, 2010

Franchisee Columnist Todd Michaud has spent the last 16 years trying to fight IT issues, with the last six years focused on franchisee IT issues. He is currently responsible for IT at Focus Brands (Cinnabon, Carvel, Schlotzsky’s and Moe’s Southwestern Grill).

When it comes to PCI compliance for franchisors, Visa is completely out of touch with reality.

Well, perhaps not completely out of touch with reality. But based on a 9-hour Visa Franchisor Payment Systems Security Symposium on Wednesday (June 16), the brand is pretty darn close.

With high hopes, I spent Wednesday at the sessions. I was excited about the opportunity to finally have my voice heard about the specific struggles that franchisors face, in addition to learning how to better face these challenges. As it turns out, I was not given the opportunity to do either of these things. (Remind me next time to ask for a detailed agenda before I book a coast-to-coast flight.)

Instead, the morning was spent providing horror stories about how the sophisticated Russian organized crime syndicates responsible for the lion’s share of breaches operate. The afternoon, meanwhile, was spent talking–indirectly–about what role tokenization and encryption may or may not play in the future of card data protection. Retailers representing more than 50,000 domestic locations were all in the same room, and not once were we asked our thoughts and opinions on the matter. What a wasted opportunity.

The entire payment industry is complicit in allowing Level 4 merchants to bury their heads in the sand and proclaim: “This information security mumbo-jumbo is too complicated for little ole me. How’s a poor sandwich maker supposed to know about stateful packet inspection firewalls?”

Too much money is on the line, with everyone getting a cut, to play hardball. The response should be: “If you want to keep processing credit cards, then you are going to have to learn all about it.” With 92 percent of all reported breaches in the first quarter of 2010 affecting Level 4 merchants, you would think someone would take the hard line. Instead it appears the approach is to pull in franchisors in an attempt to offset the burden to them.


5 Comments | Read Visa To Franchisors: “We’re Here To Talk, Not To Listen”

  1. Sean McDermott Says:

    Why are people surprised? The PCI DSS is not about securing Data. It is for indemnifying the card companies against liability for breaches. Period.

  2. Steve Sommers Says:

    Funny, that’s what I’ve been saying all along. PCI’s primary function is a liability shield for the card brands. To me, this is why Visa can say “…no compromised entity has yet been found to be in compliance with PCI DSS at the time of a breach.” I would go further, “no compromised entity will be found in compliance…”; they have an incentive to make sure the merchant is out-of-compliance in the event of a breach.

  3. Cranston Snoard Says:

    Similarly, I’ve always pointed out to those who see PCI as the savior of identity theft that it is only about liability transfer.

  4. Biff Matthews Says:

    As a 40 year industry veteran, data security is a noble goal. However, I propose that
    1. PCI is purposefully written to be confusing, like the IRS code, as a money grab the card associations
    2. PCI does nothing to address the greater need for overall data security nor other payment methods such as ACH or checking account data
    3. It is a tactic to drive small and medium size acquirers from the field. The card associations have thousands of members, say 3000, if they can reduce the number to 500, because transaction volume will not decrease, the expenses of the card associations drastically drop while their income remains unchanged.
    4. As another respondent wrote, it’s a liability shield.

    More time and money is spent attempting to prevent the unpreventable than catching and punishing the offenders.

    IRS, TSA and now PCI

  5. Cranston Snoard Says:

    @Biff and Steve:
    Well said, both! You’ve caught on to the REAL credit card scam… PCI DSS!

    PCI SSC and the brands do seem to have intentionally designed PCI DSS requirements in such a manner that they can always claim a breached system was non-compliant even if a Report of Compliance certification was granted mere hours before the breach occurred.

    And if a breach had been occurring and went undetected during a QSA review which resulted in a ROC being issued, PCI SSC will merely claim that the QSA was not qualified — and that you should not have used that QSA, even though PCI SSC issued the QSA its qualification…

    I willing to wager that even Las Vegas casino owners wish they could stack the house odds in their favor the way PCI SSC does!


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