Public Connections? Don’t Follow The Crowd

Written by Todd L. Michaud
September 30th, 2009

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).

Public or Private? When it comes to what type of computer network should be implemented within a franchise retail chain, that is the question. Franchisees are challenging their chains to justify the costs, added complexity and reduced reliability of having a private network when there are other chains that operate without one. In today’s retail environment, having a basic, public Internet connection is not a good option. Good or bad, most of the business leaders and franchisees who I have worked with disagree, citing the time honored “but everyone else is doing it” argument.

IT security is truly a funny business. If you ask any business leader about the importance of having a top-notch IT security program, they will almost always tell you that it is paramount. Unless it is a large company that has regulatory requirements, when there is a conflict between a business need and a security concern, the security concerns more often than not are pushed aside or diminished. Such is often the case when determining if the chain should be leveraging a secure network (example: private frame or VPN connections) or going with a standard offering such as DSL, cable, satellite or a FIOS-like product.

Why is this such a challenge? Well, not only can you process credit card transactions over a public Internet connection, but the PCI standards say that that is OK as long as the system “uses strong cryptography and security protocols such as SSL/TLS or IPsec to safeguard sensitive cardholder data during transmission.” (PCI 1.2 Requirement 4.1, to be precise.)

Most retail business leaders argue that PCI is an IT security policy. The folks in retail IT will tell you that it is not. Many retail CIOs who I have spoken with have talked about how they wish they could do “what is right” versus “the minimum to meet PCI.”

In the franchisee retail IT world, if you are going to have franchisees spend more than what is required to meet the minimum standard, you had better be prepared to defend your position. Therein lies the problem: Although the list of benefits is long and significant, even the top IT professionals have a difficult time explaining to a non-technical person why having a private network is so important.

If you are looking for a surefire way to get a business leader’s eyes to glaze over, try explaining private IP addresses, centralized firewall policy management, intrusion detection or vulnerability scanning. For double points, do it without a whiteboard or paper. Want triple points? Do it without even using your hands as a visual aid. (Good luck!)

Another problem is that IT security is such a nebulous term. After all, you could never mitigate all of the risks, at least not without putting yourself out of business. So who is best suited to determine what level of IT security is appropriate?


One Comment | Read Public Connections? Don’t Follow The Crowd

  1. PoS Manager Says:

    Something else to ponder in the VPN vs. Internet debate is in compliance responsibility. With a centrally managed option (such as a VPN) the corporation can control and enforce compliance, whereas without such a setting, each franchisee is provided with the tools to become compliant, however, the ultimate responsibility to follow those practices is up to them.

    Managing 1000 security policies 1 by 1 is actually impossible and I’d venture much more expensive than a central option if the corporation takes on that role.


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.