Experts fret over credit card compliance

Efforts by the credit card industry to boost merchant security are likely to flounder unless tighter regulations are accompanied by punishments against transgressors.

The Payment Card Industry Data Security Standard (PCI DSS) methodology aims to improve the security of cardholder data among banks, service providers and the merchant community. The industry self-regulation standard is more prescriptive and detailed than earlier regulatory regimes (such as Sarbannes-Oxley) but still leaves plenty of room for interpretation. Although voluntary, at least in theory, those subject to a breach who aren't able to show they've followed best practice by signing up to PCI DSS risk having their ability to process cards taken away.

Merchants and service providers need to validate compliance against an audit by a qualified assessor.

But there are major holes in the process of becoming compliant, and even greater challenges in staying compliant as networks are evolving, according to panelists discussing the issue at the NetEvents technology summit in Malta on Thursday. Hundreds of qualified assessors attempting are audit hundreds of thousands of merchants creating a potential gap in the system.

Neal Hartsell, VP of product marketing at IPS supplier TippingPoint, said that although the high profile credit card security beach at TJX has stole the headlines problems at small merchants also present a severe risk. For example the link between a scanning device through to the software application on the PC in a small store is often unencrypted, even though the data is encrypted is placed in an encrypted tunnel after it leaves the computer. A keystroke logging planted on such machines therefore presents a severe security risk.

The problem is that small shops don't know PCI DSS exists and, if they do, they don't take the process seriously enough. "SMEs are not able to make these kinds of decisions, which ought to be the responsibility of vendors," Hartsell said.

Bob Walder, chief scientist at testing and certification firm NSS Labs, said small merchants using self-assessment will be tempted to just tick boxes saying they had set up a firewall or secured their network. Part of the problems is that assessors act more like consultants than health inspectors. Nothing will happen unless you take away merchant accreditation.

Many merchants wonder why they should invest in PCI DSS compliance when it does little to help them sell more products, Walder added.

Hartsell criticised SOX compliancy as a "wasted effort" from a security perspective because it failed to outline tactics for achieving strategic directions. PCI DSS is better because it outlines best practice, such as using a firewall and a secure wireless LAN, but doesn't go far enough. "DSS and it tells me what I have to do, but it doesn’t actually tell me how I’m going to do it", said Walder, who added a product accreditation scheme was needed. ®