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Category: PCI-DSS (Page 8 of 20)

PCI-DSS Full Disk Encryption Part 1

May 25, 2019 / / 0 Comments

In PCI-DSS, one of the most difficult requirement to get through would be Requirement 3, that deals with stored credit card information and how to protect it. Aside from Requirement 10: Logging and Requirement 6: Software, Requirement 3: Storage makes up a bulk of the remediation effort and cost of PCI-DSS.

The excerpt ominously states at the beginning: Protection methods such as encryption, truncation, masking, and hashing are critical components of cardholder data protection. If an intruder circumvents other security controls and gains access to encrypted data, without the proper cryptographic keys, the data is unreadable and unusable to that person. Other effective methods of protecting stored data should also be considered as potential risk mitigation opportunities. For example, methods for minimizing risk include not storing cardholder data unless absolutely necessary, truncating cardholder data if full PAN is not needed, and not sending unprotected PANs using end-user messaging technologies, such as e-mail and instant messaging.

It goes without saying that if you have credit card information on file for whatever reason, it would be a good time to relook at the necessity of it. If you don’t need it, get rid of it, because the cost of maintenance and remediation may not be worth whatever value you think you are obtaining from storage of card data.

If you do need it, well, PCI provides a few options for you to protect it: Encryption, Truncation, Masking and Hashing. In this series of articles we will be looking into encryption and more specifically Full Disk Encryption.

Encryption itself deserves a long drawn out discussion and the types of encryption – you have applications doing encryption through the application library, you have database encryption like TDE, you have file encryption or folder encryption, you have full disk encryption. One part is the encryption methodology. The other part of it is the encryption key management. The latter is the one that usually throws up a headache.

We will be exploring Full Disk Encryption or FDE, and where it can be implemented to comply to PCI-DSS.

There is a specific part in 3.4.1 stating:

If disk encryption is used (rather than file- or column-level database encryption), logical access must be managed separately and independently of native operating system authentication and access control mechanisms (for example, by not using local user account databases or general network login credentials). Decryption keys must not be associated with user accounts.

So aside from the encryption being strong encryption and key management being done properly, PCI says, there are a few more things to be aware of for full disk encryption:

a) Logical access must be separate and independent of the native OS authentication

b) Decryption key must not be associated with the user account.

What does this mean?

Let’s look at Bitlocker for now, since that’s everyone’s favourite example.

Bitlocker has gone through a lot of stick probably because it’s a native Microsoft offering. Maybe. I don’t know. The fact is Bitlocker is able to use 128 or 256 bit AES so basically, in terms of strong cryptography, it’s possible. It’s the key management that’s the issue.

For key management, the recommended usage with Bitlocker is to use the Trusted Platform Module version 1.2 or later. The TPM is a hardware in your server that somewhat acts like a key vault or key management module, to simplify it. It offers system verification to ensure there is no tampering of the system at startup. Beginning with Windows 10, version 1803, you can check TPM status in Windows Defender Security Center > Device Security > Security processor details. In previous versions of Windows, open the TPM MMC console (tpm.msc) and look under the Status heading.

Bitlocker can also be used without TPM, although that means the system integrity checks are bypassed. It can operate along with Active Directory, although the newer versions of bitlocker doesn’t store the password hash in AD anymore by default. Instead a recovery password can be stored in the AD if required.

With the TPM, it’s still not the end of it, because we need to make sure that there is a separation of authentication for bitlocker to operate. In this case we will look to configure it with a PIN (which essentially is a password that you know).

First of all, let’s see what at the end we should be seeing.

So at the end you are basically seeing both file systems being encrypted. I’ve been asked before if all volumes need to be encrypted, and the answer is no, because bitlocker can’t do that anyway. Your system drive can’t be encrypted. So for PCI, it makes sense NOT to store card data in drives that are not encrypted.

The next thing we need to check is to ensure your set up has fulfilled the strong encryption requirement of PCI-DSS:

So you have a few things to ensure that strong crypto is enabled and key protectors are in place. So what you have is bitlocker now enabled. You also basically need to ensure you properly document the key management policy – include in AES256 or 128 that you are using, which drives are protected, key expiry date.

Keep in mind also the following:

FVEK (Full Volume Encryption Key) as DEK and VMK (Volume Master Key) as KEK.

FVEK stores in Boot sector (Volume meta data) in hard disk and VMK stores in TPM chip PCR register (it’s a Hardware chip which place in Motherboard).

In general, the above would fulfill PCI requirements. In our next article, we will write out on how logical access to the encrypted file system can be separated from the native OS authentication mechanism.

Meantime, please drop us any enquiries at pcidss@pkfmalaysia.com if you need to know more about PCI-DSS or any compliance matters in IT. We are here to help!

PCI-DSS: Internal Audit Signoffs

April 17, 2019 / / 0 Comments

After going through previously the nightmare of PCI-DSS Certificates, as described with considerable detail in our writeup previously, we are now faced with a new phenomenon called the Internal Audit Signoff, which is further confusing our clients.

OK, first of all, let’s do a brief recap.

How are 3 ways that PCI-DSS can be validated?

Answer :

  1. Full Report of Compliance (RoC) from QSA – Level 1 Service Providers, Level 1 Merchants
  2. Self Assessment Questionnaire (SAQ) signed off by QSA/ISA – Level 2 Merchants, (Maybe) Level 2 Service Providers
  3. Self Assessment Questionnaire (SAQ) signed off only by Merchant/Service provider – Level 3,4 Merchant, (Maybe) Level 2 Service providers

Those are the 3 endgames for PCI. And of course, the end scenario called Failure, or non-Compliance. But that isn’t cool, unless you are the type who is happy with Thanos snapping his fingers being the definite end to all things.

Now we all know item 1) requires the participation of a third party QSA/ISA to signoff on the Report of Compliance and the Attestation of Compliance. ISA here is internal security auditor. We won’t touch it this round, because this requires a whole new library of articles to discuss.

Item 2) likewise requires a third party QSA/ISA to signoff on the Self Assessment Questionnaire and the Attestation of Compliance.

Item 3) is basically, self signed – not a lot of acquirers take this seriously as basically, its anyone signing off anything they feel like. There is no validation, and sometimes, it’s akin to the CxO sticking a finger to the tongue and putting it up in the air and going, “Yeah, that feels ’bout right. Let’s sign off and say we have these controls!”

Let’s talk about item 1 and item 2.

In item 1, it’s a gimme that the QSA needs to go onsite to the locations to do an audit. I have never heard of any QSA signing off on a full RoC without actually going onsite. Maybe when our tech reaches a point where the QSA can be holographically present in a location and see what’s there without being physically there like a Jedi Force Ghost, that the PCI-SSC would accept the signoff. But by then, we could probably just tell PCI-SSC that these aren’t the companies they are looking for, and then there’s no need to do PCI.

Until then – the question is for item 2, for the QSA to signoff the SAQ, must they be onsite or they can provide a remote signoff?

Now if you ask a QSA what is the difference between 1) and 2), they would say, not much – except they don’t have to waste their time writing the tome called the Report of Compliance (ROC) for level 2. Level 2 is basically a judgement made by the QSA based on existing evidences that what is stated in the SAQ is true, or at least as much as they can have reasonable assurance on. The SAQ is not a document written by the QSA, although they can help, but in this case they are validating it. For Level 1, it’s a different story. They have to write the RoC and the work put into that reporting phase is surprisingly a lot. In comparison, it’s probably like reviewing a first term essay paper written by your senior students (SAQ Validation) versus writing the Silmarillion including the index (RoC).

However, for QSAs to conduct their audit and provide a fair opinion on the controls, they will still want to be onsite for option 2), much to the chagrin of many of my customers. Their argument here is: “Hey I am level 2, why must you come onsite??” And again, the crescendo grows that a Level 2 should have less things to worry about than Level 1 – another myth as old as us telling our children not to sleep with wet hair or else they will wake up with a storming headache.

To get to the bottom of this, we got directly from the horse’s mouth (in this case from Mastercard SDP program response: “In this scenario (describing item 2) the QSA has to be onsite. The QSA cannot simply review a RoC or SAQ without being at the location to validate that controls are actually in place.”

To be fair, the above discussion was applied to L2 Merchants (Level 2 Merchants) – those making more than 1 million volume card transactions per annum. Whether the QSA is willing to take the risk and perform an offsite review for a Level 3 or level 4, I wouldn’t know – that’s up to the QSA and the card brands I suppose. But to be absolutely safe, we would advice that all levels should be treated as such – if you need a QSA to signoff, that QSA needs to be onsite to get it done. Or use the Jedi Force Ghost. Both are acceptable to PCI-SSC I am pretty sure.

So, as an illustration, we had a request from a company, requesting us, for their location, to get the QSA to signoff remotely. Because “The Other QSA did it for us and certified us”. The other QSA meaning someone they engaged earlier.

OK – this certification term again. I am sure that did not happen – but many use the word certification for anything: actual RoC, doing the SAQ with QSA, signoff on SAQ by themselves, getting ASV scan etc…those are typical scenarios we see this certification word being thrown.

Digging further, we received a worksheet which was a typical ‘Scope’ document (you know, where they ask what sort of merchant you are, what business, how many locations, devices, whether you store card etc), and the instruction was to fill this up, send it over to the QSA and the QSA will ‘sign off’ their PCI-DSS compliance, all within 2 weeks.

QSA certified within 2 weeks, remotely, and with just the scope document, without validating any controls? No penetration testing or ASV? No Risk assessment? No review of information security policy? How?

We asked for the copy of the official signoff page (Section 3c of the AoC) but instead we got a signoff on a report from QSA stating what was scoped in and what was scoped out of PCI-DSS. A typical scope document. It’s a useful document, but it’s not a document required by the PCI SSC. In fact it doesn’t serve any purpose other than to simply state what is in scope for PCI-DSS based on the scope questionnaire (not the SAQ) provided by the QSA.

I am 100% sure the QSA meant well by this, but the problem was, there are interpretation issues. We cannot expect clients to right off the bat understand PCI-DSS and all it’s seemingly malarkey documents – the AoC, the RoC, the 9 different SAQs, the ASV scans, the partridge in the pear tree etc. So when we asked for a SAQ signed off by QSA, of course, clients will fall back to any document being signed off by QSAs. That’s why we are not big fans of the practice where clients are provided by ASV certificates just because they passed their ASV scans. They all think they are PCI certified because they have a QSA signed off document which is the ASV ‘certificate’! And the same here goes, this is simply a scope review document – almost like an internal audit report, that does not make a company PCI compliant. In fact, it is just confirming that the company MUST be PCI compliant according to the scope set.

So the moral of this story is: Not all QSA-signed off documents are valid documents for PCI-DSS. ASV scans, while valid, doesn’t make you PCI compliant. It’s only a small percentage of what you must do. Internal Audits or scope reviews like the one we saw, even signed off by the QSA, are not valid PCI-DSS documents. They do not make you PCI compliant. As PCI has explicitly stated before, the only valid PCI-SSC documentation are the AoC, SAQ, RoC and ASV scan reports (not certificates, with flowery borders and impressive cursive fonts in gold). Anything else are supplementary materials used to support the compliance, not to validate it.

For more clarity on PCI, drop us an email at pcidss@pkfmalaysia.com. We will try to sort any issues you have, and yes, we are the company you are looking for.

The Service Provider Conundrum

March 28, 2019 / / 0 Comments

This is probably the umpteenth time I am writing this, but again we need to clarify once more on how Service Providers that do not store, process or transmit credit cards come in scope for PCI-DSS.

I just finished a very testy call with a multi-factor authentication cloud provider (actually he is a reseller/distributor), who called us back on our enquiry whether his cloud service is PCI compliant or not. He said he doesn’t need to be but their solution will help our clients in becoming compliant. If I get a dollar everytime this argument is punched out, I will be retired in the Bahamas by now.

Now, to be fair, almost everyone thinks like this. “If we do not store, process or have any credit card processes, we don’t need to be PCI compliant.” It may be like this in the past, but unfortunately, QSAs are tightening up their definitions of service providers and cover what we now deem as having ‘security influence’ over CDE .

So yes, you technically have nothing to do with credit card of your clients, but let’s say your client authenticates to your CLOUD solution to get multi factor authentication to access their CDE. Let’s say you are having a bad day and you get compromised, and the attacker hijacks your cloud and provide a counterfeit token attack similar to what was suspected to have occured on the RSA SecurID breach in 2011. Would a scenario like this equate to a CDE compromise? Would this mean your service is actually having security influence over CDE?

I could have explained this to the earnest reseller on the other end of the call. But I was fighting a fever, cough and flu all thrown in one large ball of crappiness that made my mood not so great. And the fact that he sounded a little patronizing when he said, “Oh, you are very confused. We don’t need PCI-DSS, so maybe you need to understand the standard a bit more.”

Hey, Captain, I’ve been living in this PCI crap for the past 8 years. I wish I didn’t understand it as much as I do right now to be honest because then I can always plead ignorance when questions like these pop up. As it is with all who are cursed with knowledge, I now have to trudge this lonely path of patronizing, condescending and almost pitiful responses to my queries as I had to on this very sick morning.

So, QSAs are lumping MFAs cloud solutions as critical security functions. To be fair to these QSAs, PCI did identify the following to be in scope:

“At least annually and prior to the annual assessment, the assessed entity should confirm the accuracy of its PCI DSS scope by identifying all locations and flows of cardholder data, and identify all systems that are connected to or, if compromised, could impact the CDE (for example, authentication servers) to ensure they are included in PCI DSS scope.”

We always assumed we were talking about authentication as in AD, or LDAP and never thought of lumping multi factor ‘authentication’ into authentication servers. But think about it. If you have an onpremise MFA solution in your data center, would that be under scope for PCI-DSS, if its used for access to get into CDE? How different would it be from AD or LDAP, which manages one factor of authentication (something you know). Wouldn’t the other factor also need to be looked into? (Something you have or something you are).

In the same argument, thus QSAs conclude that if there is an authentication in the cloud, regardless of which factor, that authentication service is in scope of PCI-DSS. Same goes for logging and monitoring service providers.

So what’s there left for customers using MFAs cloud providers to do?

Well, there are two options.

  • For providers that have undergone their own PCI DSS assessment: request and review the Attestation of compliance, scope, date
  • For providers that have not undergone their own PCI DSS assessment: include the provider’s environment as part of the entity PCI DSS assessment (increase your own assessment scope). You may need to request your own QSA to perform the provider’s review (tough… preferred solution is to work with providers able to demonstrate their PCI DSS compliance with their own assessment)

I am afraid it is what it is.

After getting sermonized by the (I believe, well intentioned, though somewhat with such poor communication skills) cloud MFA reseller, I thought writing all this down will save me the agony of going through over the phone to explain this particular situation. In that conversation, I just asked him, “Is your solution PCI Compliant or not?” and never really got him to answer properly because he kept arguing the fact that I am completely missing what PCI-DSS is all about.

Knowing it was impossible to argue on this point, I finally said, “Thank you so much for your time, I will let you know when I need more clarifications.” And away his solution went, lumped within the 20 others in my bin called “Non Compliant MFAs”. The search goes on, and looking forward to more patronizing put-downs from well-intentioned resellers. Hopefully this article goes some was in clarifying without anyone getting jumpy on us.

If you need more information on PCI-DSS or any other compliance standards for that matter, let us know and drop us an email at avantedge@pkfmalaysia.com

PCI-DSS and the problem of Email

February 4, 2019 / / 0 Comments

When we first started with PCI-DSS many years ago, most of our clients were service providers – payment gateways, financial institutions, and two banks. They had their challenges – in some cases, their scope were containable (payment gateways) due to the limitation of locations – and in the bank’s cases, at least they understood the massive headaches they faced in getting their entire environment compliant (with ATMs etc all in scope).

We saw a shift over to service providers OF service providers – hosting companies, Data Centers, BPO, outsourced call centers etc. Their challenges were somewhat different – call centers especially, because of their central hub of connectivity – their telephony system, and another big problem: Email. Email issues in PCI are longstanding and absolutely difficult to resolve – and it reaches to most businesses – travel agencies, hospitality, healthcare, insurance and so on .

When email first came out in the late 60s and early 70s, I can almost imagine how excited the users were. I wasn’t born then. But I recall back in the Uni days, early days when IRC/ICQ first came out, the level of excitement we had in communicating with an actual human being a thousand miles away INSTANTANEOUSLY was so mind numbingly out of this world. Back then, we spend countless hours in the school lab, playing these text based dungeons and dragons online called Multi-User Dungeons or MUDs for short, and completely almost failing all our subjects in the process. But the excitement was there: communication.

In that sense, email is almost half a century old and is still going strong. Primary communications are still through email, for business and personal communications. Email was never built to be secure. In fact, like the wonderfully robust (but now phasing out) SMS, when it was first used, no one imagined it would become the backbone of world communication as it is today. Nobody decided back then: hey, let’s prioritise security! Hey, let’s ensure that nobody can tap into this email of ours and see our messages! Email was like the conversation in the bar. Anyone could be standing around you, or sitting next to you and listening in to your conversation — and it was ok.

Until now, it isn’t.

Well, at least from PCI-DSS perspective.

“Never send unprotected PANs by end-user messaging technologies (for example, e-mail, instant messaging, SMS, chat, etc.” – Requirement 4.2 (PCI v3.2)

Unfortunately, a lot of business utilises email as the primary channel for PCI information. Hotels we deal with, travel agencies we have worked with – call centers etc – email is sent with card data because of the convenience and the efficiency of the whole process. When we enter these environments and suggest them to look for alternatives to e-mail, we invariably face a force so strong, it’s like hitting the stone wall of Helm’s Deep: Business.

Try as we might, we often end up talking about how we can use email AND pass PCI-DSS.

Now, it’s not impossible. But by the time we are done, we are basically looking at something so extraordinarily difficult or so expensive we invariably end up taking the path of least resistance (and least cost).

But how would you have EMAIL AND PCI-DSS?

First of all, we need to understand that like water, email exist in many forms. Or rather many locations.

First of all, it’s on the endpoints. This is where the email containing card data is sent and received. So, you have data at rest. All endpoints, whether agents or cashiers, or call center workstations are in scope as CDE (card data environment). All endpoints need to have their data encrypted. You could opt for a full disk encryption, folder encryption or simply data encryption: either way, your key needs to be managed appropriately as well. If you allow devices like iPads or phones to access, you are in a world of hurt, because basically it becomes impossible to secure these devices.

The second form is in transmission. Because email isn’t point to point, it hops through multiple relays, and multiple routing points to get to where it needs to be. At any point of the journey, your email could be sniffed, or leaked. Thankfully, many email services like Office 365 is able to encrypt TLS1.2 on transmission. Obviously this helps a lot – but that’s still only on transmission.

The third form is on the interim server(s) – mail servers, relays or anything else in between before the message ends up in the recipient’s mail boxes. Whether you are running your own mailserver or using a separate provider’s, the challenge is the same. How do you ensure that the messages at rest, be it temporary or permanent, are protected?

Pretty Good Privacy (PGP) has been often offered as a solution by kindly QSAs to assist in this matter. The problem with PGP is numerous. One, it’s very old. And more importantly, it’s very difficult to use. To make it easier, some email clients had tried to simplify it, but in doing so may render it vulnerable to attacks (see the recent EFAIL attacks here: https://efail.de/). And what if we don’t send over our public key? Or forget to encrypt the communication? At best, it’s similar to the problem that QSAs have with the manual muting int telephony systems. In theory, it might work (if vulnerabilities are removed, and if users use text-based only encrypted messages), but practically is a different story. Even before the recent researches to PGP’s vulnerabilities, everyone basically knows that PGP doesn’t encrypt meta-data (the information needed to route email) – so subject lines etc are all visible. It may not look like much, but a resourceful hacker will find these information gold.

If PGP is not used – how about some of the recommended secure messaging systems like Signal or Telegram? The problem is that these are not email technologies and these have issues of their own. How do you filter out Signal? If you do receive Signal/Telegram messages on your phone, it brings your devices all in scope. How do you run a PANScan on your phone? How do you secure every phone device there as per PCI requirement?

So how do we use Email for PCI?

The only solution it seems now, is to have a PCI-DSS service provider for Email and to use them. As we don’t represent any service provider, we won’t list them down here, but a simple google search will give you some alternatives. Be aware though, to go through their AoC and ensure that their email service is fully certified. It may be likely as well for the QSA to request more information on the encryption and key management as well, as to whether keys are managed by clients on (likely, such as in the case of cloud services), managed by the provider, or they can provide a client-managed key cloud solution.

That’s only half the solution (if that manages to pass). The second problem you have is to limit the endpoints accessing the PCI compliant service as these are considered CDE. Now remember, everything connecting to the CDE becomes PCI scope. So for the rest of the organisation using email for other purposes or needing email on their phone etc (let’s call this corporate email, vs the secure email for PCI) – the corporate email needs to be segregated from the secure email. This means separate solution. This means separate emails for corporate and secure – in most cases, meaning separate email addresses. While theoretically you can split email through subdomains, the main domain still needs to accept the initial email before forwarding – so for instance if you want to have pcidss@mycompany.com come to your specific secure email provider, unfortunately, it will still hit the MX record (Mail Exchange) of mycompany.com, which means your corporate email gets into scope. It’s an endgame there. Once corporate email is in scope, it’s over. Everything else becomes impossible to be compliant.

So you need to have mycompany2.com for secure email. It doesn’t seem too difficult and it might be possible – but let’s say you have 10,000 agents or clients or service providers in the field – how do you re-educate an entire workforce to get them to resend? Remember, you can’t incrementally ‘migrate’ – i.e continually use the old email and then forward it over to the secure email – you need to completely move over to the new email service and shut down processing card on the old email. This means a lot of lost business, a lot of customer experience issues, a lot of complaints – all adding up to business issues.

After that, isolating receiving end points becomes an issue as well. All endpoints come in scope so depending on your business, this could be a secure room with only a few systems, or a distributed nightmare if you have 200 branches or outlets receiving these emails. This isolated segment is CDE, so anything it touches becomes NON-CDE in scope. Yes. It’s a nightmare. Any shared services will be pulled into non-CDE but in scope. If you want them to also use their corporate email, corporate email comes in scope. All endpoints subjected to full PCI controls. On top of that, most QSAs will likely require additional controls like data loss prevention to be present in the gateway or endpoints if let’s say the CDE systems are hooking on to another potential channel to send email (like the corporate email). Key management also comes in play for the full-disk, folder encryption at rest in the endpoints.

Overall, the massiveness of using email for PCI is difficult. I think the whole point that business wants to use email for PCI data is either the ease of use, or not changing the current way of doing business. Both are not on the cards – even if email is continually being used, the ease of use is no longer there for PCI. Also, the customer experience and frustration could be ten times worse that searching for another solution like secure repository or customer portal, or tokenisation or something. The amount of complaints foreseen in implementing new procedures, new techniques, new solutions etc – these are not just operational security nightmare, it’s a business nightmare. Plus your entire business becomes hinged on the service provider being PCI certified. What if they decided not be? Or they fail their next audit? Or they get acquired by a competitor?

If a business is willing to embark on the complexity of getting email in scope for PCI, a humble suggestion we have would be to look for alternate solutions and have them on the table as well. Because once everything is scrutinised and risk is assessed, then they would have the full picture of what they are dealing with.

For more information on PCI-DSS or any compliance or IT advisory, please drop us an email at avantedge@pkfmalaysia.com.

PCI-DSS – Merchant EDC and Scoping

February 2, 2019 / / 0 Comments

Many merchants we meet often tells us this: They are not in scope because they only do EDC (electronic data capture) – or payment terminal – transactions and these belong to the bank. Therefore, the bank has to ensure these are compliant and merchants do not need PCI-DSS since they do not store credit card.

Upon this, it’s the prevailing myth that storing credit card information is what PCI-DSS is all about, and as long as we avoid this, we don’t need to be PCI.

While non-storage of credit card does reduce scope SIGNIFICANTLY, it’s not the only thing PCI is harping about. It’s pretty clear in the standard itself:

PCI DSS applies to all entities involved in payment card processing—including merchants, processors, acquirers, issuers, and service providers. PCI DSS also applies to all other entities that store, process, or transmit cardholder data and/or sensitive authentication data.

I don’t blame the merchants. They already have a hard enough time competing in a new digital landscape of virtual buyers and getting margins from their products – the last thing they need is a consultant coming in, brandishing some sort of standard called the PCi-DSS and the only thing that flashes through their minds is: How much is this sucker going to cost me, now ?

But it is what it is and we try to make our client’s (or in many cases, not even our clients, but anyone who calls us – and doesn’t even need to pay) life easier – and provide enough information for them to decide whether they need consultation, help or go it alone for PCI.

Yes – we technically consult them to potentially not consult with us.

But we believe in the long run, trust is something every consultants or advisors need to earn and it’s not something that comes with the territory. In fact, if I had a ringgit for every joke made about CON-SULTANS…we wouldn’t need to make any more new sales.

Anyway back to PCI. So the question to ask back the merchant is simply: “Great that you don’t store – but do you process card data?”

“No we don’t, the bank does it.”

“You don’t handle card data?”

“Handle? As in physically handle?”

“Yes”

“Of course (now somewhat flustered) – how do we get customer card if we don’t handle it?”

So in that sense – they answer their own question – if they are not there (handling the card), there is no transaction and no processing of card. Therefore, they are involved in the processing of card data. Does PCI apply? Yes, it does.

How does PCI apply?

Again, I am not going into the story of levels (how do be validated) vs controls (what to be validated) – already covered in previous posts on this, recently here .

But before our merchants get discouraged, most of their scope is very limited and in fact, I recommend them to try and go it alone.

Scenario 1

Their EDC connects directly to the bank through a dial up or cellular. No storage of card.O Only flow is to receive card, dip it, wave it and pass it back to the customer. That’s it.

Look at SAQ B. Last check, there are 41 questions. You don’t really have too much complexity in there, except to just ensure information security policy is there, physical security of the EDC is there etc. It’s not that difficult and really, most merchants should try to at least get these done.

Scenario 2

Their EDC connects to the bank via the merchant broadband.

This becomes trickier as this means the card data potentially passes through devices in the customer premise. This also includes when the branch locations sends credit card information back to the HQ and uses the HQ own internet set up to send to the acquirer. Another permutation here is that the acquirer would have their own equipment in the customer HQ where all branch data is consolidated to and sent.

The above scenario is more often found in very large Merchants.

In this case, the best bet we can go for is SAQ B-IP, with around 82 questions. Again, card data cannot be stored (full 16/15 PAN) or Sensitive Authentication data like CVV or track or PIN cannot be stored. In this case, PCI can still accept SAQ B-IP but most of the interim systems will be in scope for SAQ B-IP controls.

The trick here is really the SAQ B-IP requirement:

“The standalone IP-connected POI devices are not connected to any other systems within the merchant environment (this can be achieved via network segmentation to isolate POI devices from other systems);”

This is not as easy as it sounds as many environments still have their EDC all in a flat network as any other systems, and part of the requirement will need these EDCs to be properly segmented out to avoid pulling in the entire corporate into scope. This becomes complicated further if EDCs connect via wireless.

Another thing to be aware of is that you probably need a letter or confirmation from the acquirer that the entire card flow is encrypted end to end – meaning from the EDC all the way to acquirer environment, rendering the merchant environment as simply a transition point. Think of a road, being used by an armored truck that the merchant has no access to, as they do not have access to the encryption keys.

Other than that, depending on the number of segments you have – segmentation penetration testing is probably another headache you need to look at. However, this can be done via sampling, so consult with either the QSA or PCI expert for an idea of what an acceptable sampling is. Due to the risk being rather low, the challenge here is just to ensure that all setup is standardised across stores.

Your EDC shouldn’t be relying on your POS machine to send card data or process. The POS should only be passing transactional information and any information obtained from the EDC should be truncated PAN (if necessary) or only transaction information.

There you go.

With these, you can probably navigate through the initial headache of PCI for your merchant environment! Let us know at pcidss@pkfmalaysia.com if you have further questions! Since we sometimes consult you not to consult us, it would definitely be an interesting discussion!

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