PCI Compliance In The Cloud

Written by Walter Conway
March 8th, 2011

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

Can a retailer (or even a service provider) move its payment applications to the cloud and maintain PCI compliance? I believe the answer to this question is yes, it is possible to be PCI compliant in the cloud. Neither validation nor compliance will necessarily be easy, and success is not guaranteed, but achieving both is possible. A better question, though, is how can a merchant implement a payment application in the cloud and be both PCI compliant and secure?

Achieving PCI compliance in a cloud-based environment will involve some intense negotiations between the merchant and its cloud provider. If a merchant is neither willing nor able to dig into the details and maybe do a little arm wrestling with its provider, moving a payment application to the cloud is not for that merchant.

Negotiating a detailed, comprehensive service level agreement (SLA) will be perhaps the most important single step to achieving PCI compliance in the cloud. But before you can even begin to develop an SLA, a merchant needs to understand who does what. That is, the first thing you need to know is which services will be provided by the cloud provider and which are the merchant’s responsibility. The oft-repeated maxim that you can outsource a function but you cannot outsource the responsibility still holds in the cloud.

“The cloud” has many definitions. The National Institute of Standards and Technology (NIST) defines cloud computing as “a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.” The most common metaphor to explain cloud computing is an electric utility: Consumers don’t know or care where the electrons are generated; they only know that when they flick a switch, the lights go on.

That definition means cloud computing involves a multi-tenant environment (there are private clouds) with elastic scale. Capacity can be added or removed almost instantly to meet changing demand. Merchants contract with a third party—the cloud provider—that is responsible for maintaining the cloud environment. Do not confuse cloud computing (a service) with virtualization (a technology that may be used by cloud providers).

Access to the cloud is by the Internet. That means the cloud is widely available to the merchant, its employees and its customers. The down side is that this broad access also includes potential bad guys. Furthermore, the cloud provider may not be able to tell you where your data is (or has been), either physically or geographically at any particular point in time.

Therefore, a brief definition of the cloud might be: your data, on someone else’s network, sharing a server somewhere and accessible by the Internet. That is why a comprehensive SLA is critical for any merchant or service provider looking to move its payment application to the cloud.


3 Comments | Read PCI Compliance In The Cloud

  1. Dr.P Says:

    Payment risks and cloud service quirks certainly call for putting together an appropriate SLA. Many small businesses as well as merchants have similar risks when putting other sensitive financial or sales data in the cloud. Small businesses are especially vulnerable to these risks since they may not realize there are technology holes or just do not have the technical expertise or staff to develop or negotiate a SLA.

  2. Thierry Grenot Says:

    Dear Walter,
    I’m not a PCI specialist and (because of this?) wonder if there is – so far – a real interest to move such a critical application to the wild wide cloud? The cloud magic lies in its amazing efficiency thanks to massive and virtualized infrastructure and a high level of automation/orchestration. The level of complexity and trust required by PCI compliance will likely limit suppliers to very specialized one. Hence, the true added value would be this specialized knowledge rather than plain computing power and flexibility. A bit like renting a cheap car driven by a rock star. Am I missing a point?
    All the best, Thierry.

  3. Walt Conway Says:

    Thanks for the comments!

    Dr. P: I agree it can be difficult to put together an SLA even with a lot of resources. I am hoping to try and do a little bit more on that in an upcoming column.

    Thierry: You asked if there is any real interest in moving a mission-critical application like payments to the cloud. I can tell you from first hand experience that there most definitely is such interest, and it is not just merchants, but their service providers, too. I’ll not comment specifically on your analogy (I’d get the cloud providers mad at me for saying they are like “cheap cars”…), but you raise the first half of what I think is the key issue: trust.

    The other half? It is: verify. And this will not be easy.


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