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Category: PKF Avant Edge (Page 11 of 18)

PCI-DSS – So Why Aren’t We QSA?

June 29, 2017 / / 0 Comments

We have faced this question many times before over the course of 7 years working on PCI-DSS in this region. Many customers have asked us, why haven’t we become QSA (Qualified Security Assessor), considering the amount of PCI work we have been involved in, as well as the PCI-DSS knowledge that we are having?

The answer is simply – we choose not to.

Don’t get me wrong. QSAs certainly have their place in our world, and the fact that we work closely with one, as well as representing them in our country states the importance of having a solid auditing foundation in every project that we go in.

But here are the main reasons why we have decided that being a QSA would hinder us, rather than assist us:

a) Conflict of Interest

This is a huge reason why we maintain our consulting and implementation practice, while choosing not to become an auditor. Our business is not just PCI-DSS. We have a huge chunk of consulting practices in ISMS (ISO27001), training as well as upcoming compliances like SOC1,2, Personal Data Protection Act etc. QSAs and the question conflict of interest has been around for a long time. It is also addressed in Provision 2.2.2 in the PCI-DSS validation requirements for QSA

The QSA must describe the company’s practices to maintain and assure auditor independence, including, but not limited to, practices, organizational structure/separation, and employee education in place to prevent conflicts of
interest in a variety of scenarios, such as the following:

The QSA customer uses products or applications developed or manufactured by the QSA company.
The QSA customer uses products or applications managed or configured by the QSA company.
The description must include details with respect to compliance with the Specified Independence Requirements called out in Section 2.1 above.

The thing is, we do a fair bit of work for our clients – including development of policies, reviewing their security, implementing policies and logging products etc – because we are good at it. Before PCI, we were operational guys, guiding SOCs and NOCs, troubleshooting routers and switches, deploying firewalls and SIEMs etc. We weren’t bred as auditors from the start, so most of us have an inherent instinct to just go in and get the job done for our clients. Now, the problem is once we do wear the auditor’s hat, there are a lot of grey areas. We make this demarcation very distinct in our IT general Controls audit – the moment we implement something for our client, we cannot audit or assess it. We can’t audit our own work. This is not just for PCI, this goes across the board for anything we do.

PCI gets around this by ensuring that the QSA has proper internal segregation – meaning it is generally accepted that policies be put into place that mandate a separation of duties between QSA Auditors and QSAs, or other individuals within a QSA certified company who provide remediation support. So generally, any QSA company should have its consulting group separated from its audit group. Now, PCI-SSC doesn’t specifically state that QSA Companies cannot provide remediative services – after all, if the QSAs know what it takes to pass PCI-DSS wouldn’t they be the best source of knowledge to clients after all (and they often are) – but QSAs need to be very aware that they cannot push their products or services as the only option for compliance. Customers must have the options on the table, the knowledge that there are other options in order for them to make informed decisions.

It’s made trickier due to our DNA as a CPA company. PKF wasn’t born an IT company or a security firm – our roots are in accounting and auditing, and most of our partners hail from Big 4 (PWC, KPMG, EY, Deloitte) and even ex-AA. In fact, I am the only non-audit guy in the partner table and my jokes are often not understood. Due to this background, inherently we have this default position whereby if there are any grey areas, it’s safer to err on the side of caution and not do it unless proper conditions are clear. So while in PCI the arrangement of QSACs providing remediation works are allowed with certain conditions, the very memory of how an 89 year old accounting firm had to surrender its CPA license due to the largest auditing scandal in history still lives on in our industry.

b) We Hate Auditing

Well not really. We are auditors after all! We do have a fair bit of audit and assessments as part of our work. But boy, have you ever been in an audit as an auditor? Everyone just hates you. I remember auditing for a very large BPO company for their IT general controls and software development. The head of software looked like he was going to put live electric eels down our pants halfway through our interview. And we weren’t even antagonistic. Asking for documentation of his software practices was like asking for the what Edward Snowden had. Another company had their head of operations sit with us in the room for 1 hour and throughout the entire session, he refused to answer anything without legal in the same room. It was like we were interrogating him for murder instead of just asking if he had a change management procedure. It’s not all like this of course, we do have excellent clients who are on the same page as us mostly and we do feel the whole auditing process is enriching to our professional lives. Really. Even with that, the follow up audits, the report writing and quality assurance process etc, the evidence gathering and formatting into the proper report, the cycle of obtaining management comments etc. It’s just very taxing on the guys. Report writing takes up a chunk. And guess what – in PCI, a normal Report on Compliance (ROC) for level 1 onsite assessments can stretch up to a thousand pages. Yes. A. Thousand. Or more. It’s like asking us to become Leo Tolstoy and start writing War and Peace every single assignment.

c) Cost vs Benefit

Being a QSA is a great achievement. But there is a huge outlay for the company as well. Not only there are fees you need to pay to become QSA, there are fees you need to pay to operate in particular regions as well. Then you have training fees for your QSAs, yearly maintenance etc. It’s a lot of money to run a QSA company and because of that, you need to get your bacon from all over. For instance, if you have license in Asia-Pacific, then you probably want to tackle the China market. Or else, focus on the SEA region and get your QSAs to fly between countries. Focusing on a single country isn’t going to make up for the cost of maintaining your QSA company, at least from our point of view and our brief calculations. Now because of this, we need to fan out. To fan out, we need to expand the company. To expand, we need to hire and get jobs. I’m all for it, but its a matter of being a big fish in a small pond or a small fish in a big pond. As of this moment, our strategy is not to overstretch ourselves too much and to establish ourselves with the clients we have. It’s not as if PKF is in a hurry to IPO or go anywhere. We’re here for the long run, and in Standard Chartered slogan: We are here for good.

d) Stretching is not fun

We tried it before.

As in not physically, but in terms of a company. We grew our tiny little professional services firm to 16 people once upon a time, with dedicated R&D and Project Management group only to get kicked in the butt by a guy called “No Jobs”. We grew so fast, we didn’t get the sales in to keep up and after the initial projects were done, we were left with a lot of people on the bench playing Pokemon-go. We stretched. But we over did it. It’s not to say we are now not being ambitious. We still are, but we need to be realistic with our goals. If we target to get 10 – 15 tier one customers to keep our benefit more than our cost – how many QSAs do we need to do that? After that, how many consultants to do the remediation work?

Additionally, even if we had 10 QSAs for instance, these guys will be scrambling all over the region doing audits. They won’t have time for operational work. They won’t have time for consulting or providing technical services. They will either be auditing a customer, or they will be on a plane somewhere, or they will be writing or reviewing one of those 1000 pages tomes called the ROC.

e) We Want to Stick with our Customers

The bottom line is this. If we hadn’t found a trusted QSA whom we can work with and who are mostly on the same page as us, we would have gone and gotten our QSA ourselves and went another direction. I think we have enough legs and enough entrenchment in the region and global to do that. But we found a great partner. We found a QSA that we could work with and didn’t do any BS work. We found a QSA that had similar philosophies (although we are still working in synching our concept of deadlines, but hey, that’s like marriage, ain’t it) – and for 7 years, we have been working great together. They like what we do, that they can hands off a lot of the remediation advisory to us and don’t have to get on conference calls all the time or have to fly in and out of our client’s offices for weekly meetings. We like that we can work with our customer, look after our client’s interest and not worry to much about whether we are overstepping our limits as advisors or consultants versus auditors. We can stick with our customers and give them all we have. We can spend a whole day in our customer’s premise working with them without worrying that we need to head off for an audit for 2 weeks in Timbaktu. We don’t have to fly in and out of countries or tell our clients we can only meet 2 weeks later. If you want us within 24 hours, we will have someone there. Best of all, it’s very clear that once auditing starts, we are sitting on the side of our client, and ensuring that our client have what it takes to pass PCI-DSS.

Of course, this is simply our view at this current time. We are well aware of the flowing and ebbing of different forces in our industry and it might come a time whereby this model doesn’t work anymore. But for now, honestly, we just want to get cracking at troubleshooting your Cisco ASA as opposed to writing a War and Peace Novel. Drop us a note at pcidss@pkfmalaysia.com for more information!

IATA PCI-DSS: What Exactly is Required?

May 30, 2017 / / 2 Comments

pci-compliance

Continuing our series on Merchant program for PCI-DSS. Why this is (or will be) so important is that in around 12 – 15 months, if you are a merchant, very likely you will be getting a call from your acquirer.

About 2 months back, Mastercard announced that all acquirers must have in place a risk assessment program for Level 4 merchants by March 31, 2019. This basically means that there is a great concern that 99% of Level 4 merchants out there are blissfully unaware of this PCI-DSS nonsense they need to comply. It is the acquirer’s duty, but the pain starts all the way at the merchants.

One industry feeling the pinch here is the travel industry. But don’t worry, travel agents, soon, the other industries like your cousins at the hotels and hospitality will be going through the same process as you are going through now. It’s just who is going through first. And the faster you get through the better.

Travel agents across the world has been mandated by IATA to be PCI compliant. Please read our previous post here.

We have gone through the requirements in that post, but we’ve been hearing a lot of things coming to us from the travel agencies recently, namely:

a) All Travel Agents need to engage a QSA to formally sign off their SAQ.

IATA should be able to give a formal statement on this. QSAs or consultants or PCI experts cannot dictate or mandate the validation requirements. Mostly this is by the processor (IATA) or the acquiring bank. If they can’t make a statement, then it would fall back into the card brand validation requirements. Which it has so far, unless IATA comes forward to clear this up. We can’t seem to find anywhere that IATA has had special requirements other than listed in the card brands requirements.

There might be further explanation needed based on their PDF at http://www.iata.org/services/finance/Documents/pci-dss-compliance-procedure.pdf

The procedure first states

Travel Agents are encouraged to contact their merchant bank (acquirer) or the applicable payment brand(s) to identify the appropriate procedures based on their eligibility.

But then at the bottom it implies that for assessment, it needs to have a QSA perform ‘on-site’ PCI assessment – which is not exactly accurate as it depends on their level. Further on right at the bottom, it states:

Depending on the number of card transactions handled those can be:
– PCI DSS Attestation of Compliance (AOC) which must be completed by a Qualified Security Assessor (QSA).
– Self-assessment questionnaire signed by an authorized officer.
– The results of quarterly vulnerability scans if applicable.

The problem here is that if the AoC is required to be signed by the QSA, so does its corresponding SAQ. These documents have the same signoff (3c for QSA) section. If you read the above you might be tempted to also argue that IATA is saying, depending on the number of card transactions (meaning your level), the requirements can be either:

– PCI DSS Attestation of Compliance (AOC) and ROC or SAQ which must be completed by a Qualified Security Assessor (QSA) – this applies to Level 1 Merchant (they can also use ISA but lets put that aside for now), and also Level 2 if you deal with mastercard.
– Self-assessment questionnaire (SAQ) and AoC signed by an authorized officer. – This applies to level 3 and 4
– The results of quarterly vulnerability scans if applicable.

Now we don’t know if this is what IATA is saying – it’s just the many ways this section can be interpreted so we do hope IATA will have a clarification on this matter. They CAN decide on a more stringent requirement for their agencies (such as ALL levels engaging a QSA to be onsite like a level 1 merchant), but this needs to be clear, so agencies can forge ahead with the proper budget and expectation.

Most travel agents fall under the Level 4 category of merchants, which based on the current requirements of PCI-DSS only requires a merchant officer to sign off the document.

Mastercard’s SDP services recently responded back to us on this with a confirmation as below:

Level 4 merchants are required to ensure they are PCI-DSS compliant by filling in the correct SAQ based on their processing environment and have the evidences prepared , and also to do this each year. There is no requirement from Mastercard to engage a QSA/ISA to signoff their SAQ on part 3c or part 3d of their SAQ/AoC and their executive signoff on part 3b is sufficient. This must be signed by the merchant. Engaging a QSA will be above and beyond their requirement and only done if they require assistance in filling their SAQ. Therefore, using a QSA is entirely optional and based on the discretion of the merchant.

This goes a long way in saying the same thing that has always been said. The logic I would argue here is, if your industry is made up thousands of merchants, how do we build a meaningful program to get all these merchants compliant? If QSAs are supposed to validate all the evidences, how much bottleneck will there be?

This is also inline with the famous PCI-DSS myth document at https://www.pcisecuritystandards.org/pdfs/pciscc_ten_common_myths.pdf. In Myth 6:

Myth 6 – PCI requires us to hire a Qualified Security Assessor
Because most large merchants have complex IT environments, many hire a QSA to glean their specialized value for on-site security assessments required by PCI DSS. The QSA also makes it easier to develop and get approval for a compensating control. However, PCI DSS provides the option of doing an internal assessment with an officer sign-off if your acquirer and/or merchant bank agrees. Mid-sized and smaller merchants may use the Self-Assessment Questionnaire found on the PCI SSC Web site to assess themselves.

Now, I know, there are so-called ‘merchant programs’ out there run by a few QSAs. I’ve spoken to many merchants who deem themselves compliant just because an ASV ran a scan on their external IP address and gave them a ‘certificate’ of compliance (which is not even a recognised document by PCI-SSC!).  If anything, it just makes the merchant falsely complacent and gives PCI a bad name and a bad rep as an on-paper compliance but practically as useful as ice is to eskimoes.

The crux of the matter isn’t whether QSAs need to be involved or not. It would be super if they can get involved, but the matter is cost and time. QSAs programs are not cheap, and also, how much work do they actually do for the client? The counter argument is, if QSAs are not involved, what then? You get a bunch of executives just signing off they have a firewall when in their mind they are thinking, “Man, Which wall am I going to have to set on fire to comply to this stupid request?”. It’s not a knock on their intelligence, but really, a lot of merchants are really good in doing whatever they are doing and they don’t exactly have a CIO to standby to interpret all the requirements of PCI-DSS for them. And PCI, despite its oftentimes banal requirements, is a compliance requiring a lot of technical understanding.

How do we solve this? Awareness.

The SAQs reason for existence serves simply as a baseline document and puts the onus on the merchant to ensure they have the proper security in place. A lot of merchants are not aware of this obligation. The moment they sign off that document, they are saying, I am taking responsibility over this document. I verify and validate this as true. If it’s not…well. If it comes to any breaches or anything, then the merchant takes responsibility.

If they are fully aware of their responsibility, then getting help is likely required. But now, there is no need for a formal QSA to get involved. If you can, then do so as QSAs do theoretically should have more experience in PCI – but consultants, or advisors can take this role. And there are many reasons why it might turn out better this way which I will explore in my next few articles.

b) All Travel Agents need to engage ASV to do their security scans

Man. This is probably the most misunderstood requirement of all time. All time. 100s of merchants have come to us proudly saying their ASV scan proves their PCI compliance. No, it doesn’t. The ASV scan is just one of many requirements you need to go through. It’s like you dressing for work and wearing only your shoes and nothing else and go to work and say, “Hey, I am all dressed!”. Um. No.

And while ASV is important, we have seen our fair share of trigger happy ASVs being done for travel agencies. Oh, you have a website? ASV! Oh, you have an internet facing IP and router? ASV!

Come on. We recently adviced one client who was having trouble remediating an issue on their website. I asked them, wow, for a small company doing internet transactions, its a big deal. And they went like, “What in the good name of **** are you talking about?” And they explained they just had a corporate website and were asked to do a scan. I went and look, and aside from the site looking like it had been designed by a 15 year old drinking too much mountain dew, it serviced no credit card transactions at all. They don’t even have any systems doing that. They just do EDC terminals that connect directly to the bank and completely isolated. So why the scan?

Because we were told, they said.

And so I drafted an email for them and told them to send it over to their QSA (they are level 4 by the way) and the response came back, “Oh thanks man, they told us there is no need to scan anymore! Yay!”.

The problem remains. How many merchants are scanning their completely static websites and receiving a certificate of compliance and pronouncing they are PCI ‘certified’? Is it the ASV or QSA’s problem? No. PCI clearly states that it is the merchant (or scan customers) who ‘defines the scope of the scan’, so merchants are taking a fair bit of the burden if the ASV is done incorrectly. ASV scans are needed if your site does credit card acceptance (SAQ A-EP). It’s also needed on any external IPs you might have if these are transmitting card information (SAQ B-IP, SAQ C). SAQ A, B and C-VT has no scan requirements listed. A lot of clients could possibly fall under the SAQ B and possibly SAQ C-VT, so ASV scans can be further avoided.

c) All Travel Agents will be fined XYZ amount for non-compliance

Now, this might be true but IATA hasn’t really come out to say anything. Frankly I will be very surprised if there is such a requirement. Basically, IATA is just saying, if you don’t become compliant, don’t connect to us. If you don’t connect to us, then you can’t issue tickets. This is a worse threat than being fined. So they don’t have to be overbearing to impose such a condition AND impose a fine for clients who are non compliant. Because technically, if you are non compliant, you are not connected to IATA. If you are not connected to IATA, what are they fining you for?

smartmurphy

d) PCI-DSS is applicable to all Travel Agents even those without credit card acceptance and transactions

OK. I am not sure whether there will be such agencies or not, meaning there is ZERO card acceptance or processing or storage or transmission in your merchant environment. Now do note, even e-commerce when you outsource your ENTIRE payment processing, the fact that you have the credit card payment option on your website puts you in need of compliance. For merchants that do not have any facility whatsoever (either card present or card-non-present), then technically, PCI-DSS should not apply. I say technically. Because if you are connecting to IATA’s processor (BSP) then even if you make zero or a million transactions, the risk is still there. So yes again IATA as the big boss of BSP has the right to ask for compliance from agencies with zero credit card transactions. In this case, my suggestion is to write to IATA  and see what is the next step. I can’t imagine any merchant business now not catering to credit/debit card payment but, wait. OK, my neighbourhood barber actually told me they only accept cash only, or barter trade my iphone for 2 years supply of haircut. So yeah, why not. But really, if no credit/debit card payment is an option and you regularly settle through agency credit or carrying a pile of cash, you technically can ask IATA what’s the next step.

In summary, we are not saying that there is some sort of conspiracy theory going on where QSAs are trying to pull a fast one on customers and creating F.U.D in the industry. After all, we ourselves have been certifying clients for 7 plus years already. But what we need to understand is that wrong information could be worse than no information. We need to get the right information out there so that merchants can make informed decisions. If they want QSAs, then ok all the better. If they prefer in house or specialised consultants, then OK. If they decide to do the hokey pokey instead of PCI compliance, then hey, that’s an informed decision on their side.

So, let’s get this awareness out. Travel agencies have about 10 months to get compliant. It’s not crunch time yet. This is like the start of the 3rd quarter in basketball. Important, but not Michael Jordan clutch time.

If you need more information on PCI-DSS applicability in your merchant business, drop us an email at pcidss@pkfmalaysia.com. We’ll get in touch with you ASAP.

IATA and PCI-DSS to Travel Agents: Data Channels

April 30, 2017 / / 0 Comments

PCI

IATA has for a few years been championing the need for PCI-DSS to the travel agencies that are registered under them. More recently, they have been pushing compliance for PCI and even made a deadline at June 2017 for all agencies to be PCI compliant. Unsurprisingly like many well intentioned deadlines, it is now pushed further back to March 2018. Our prediction is that by November or December this year, we might see yet another delay in the deadline. But that doesn’t mean there’s any let up in compliance. Therefore, we’ve been reaching out to many of the agencies who were our clients previously and letting them know if they need help on their SAQ, they know where to find it. Us!

Now, just to summarise, being registered with IATA means a big deal to an agency. It simply means you can issue tickets. So how it works is that IATA is like a national ‘switch’. Whereby registered members can receive calls from clients, and based on pricing etc, select the airline and pricing and issue these tickets – either to other clients or in behalf of even other agencies. Firstly, there is credit card involved, of course. Secondly, IATA members can tap into the BSP – the IATA Billing and Settlement Plan. This is like a huge payment switch – whereby it handles all the payments to multiple airlines from the agencies, so that agencies don’t have to deal individually with airlines for settlement of the tickets. Which is good. Secondly – there is the GDS (the global distribution system). There are a few players in the market – Sabre is one of the biggest (used by Malaysian Airlines), others are like Amadeus, Patheo etc. We’ve so far encountered Sabre and Amadeus in our clients and both of these are PCI certified providers.

So, with this basic understanding of how agencies work, how does PCI apply?

First of all, unless IATA makes a statement otherwise, agencies DO NOT NEED a QSA to do a level 1 certification or sign off on SAQ, unless explicitly requested do. Since IATA is the processor for the agencies in this case, it’s their call. But it’s a big call, because level 4 merchants aren’t very large and they might not be able to get QSAs to help sign off their documents. We are working with one of the largest merchants at the moment and even they are not requested by their acquirer to get a sign off on SAQ from a QSA.

99.99% of agencies out there will fall under the Level 3 or Level 4 merchant band and we all know what that entails – SAQ, signed off by their executive – only if required should they get a QSA to participate. But it helps to have someone that knows about PCI or else you would be groping in the dark with the SAQ options.

What we see a lot are merchants automatically selecting SAQ D-MER when it comes to PCI. Again you don’t have to.  Depending on the number of channels you have you might be able to select C-VT, or B, or even A-EP, A. We call these specialised SAQs – remember, if you don’t meet any of these criteria, you drop into the SAQ D bucket.

What many people don’t know is that you can opt for a separate SAQ for each channel, instead of having one SAQ D to cover all. Both are possible, but its just that for SAQ D, you would be marking a fair bit N/A if you are say just doing POS and e-commerce.

Before we venture into the dark arts of SAQ selection, let’s explore probable channels that agencies have.

a) Through the website – this is not that common actually. Now with Expedia, Agoda and all these portals coming up, it’s easier for consumers to get the best price regardless. But for corporate trips etc, some of these websites might still prove useful. Most of these websites will either redirect to another payment gateway or might even link to a GDS. Either way, they generally do not host the site where credit card information is being entered. So in this case, SAQ A might work. If they have card information collected in their environment before sending it over to the payment gateway, then SAQ A-EP. Questions for A = 22, A-EP = 191. So please think it over as to why you want to collect card information on your site.

b) MOTO – or Mail Order Telephone Order. In most cases, there would be a call into the agency requesting booking. Now it’s important then how card data is now transmitted, processed and stored. The agent likely will not have any funky call system like Ameyo or Genesys, and may just rely on our good old PSTN phone line. Once call is received, the agent will request details , including card details and type it directly into a GDS system. In this case, as there is no recording on the line, it’s fine, and as long as the agent is using a hardened desktop/laptop with a virtual terminal into the GDS, you can rely on SAQ C-VT to cover this. Now, what is a virtual terminal? Basically, it’s a virtual POS. You just don’t need to buy the POS devices. All GDS offers this solution, whereby you log into the virtual terminal and just input the card information.

The tricky part here is that not all information is received on phone. Sometimes, clients will say, OK, let me send you a batch of credit card info in a text file via email. Or, hold on, I am shooting you an image via WhatsApp or Skype. Or, wait, let me fax you the form. Oops.

Now what happens is that other channels are being utilised. You have storage of credit card information. You are no longer eligible for C-VT. C-VT = 81 questions. D-Mer = 332 questions. So, if you can stop these practices, I would suggest, go ahead and stop it.

c) Walk-In – most agencies have outlet(s) and you can walk in, and pay off the counter. They will either key in the information as if you had called, into the virtual terminal – OR, they might have an actual POS machine for you so you can dip your card and make a card present transaction. In this case, it depends on how the POS machine is setup. It would be pretty similar then to a normal retailer transaction – like a grocery store or departmental store. We’ve already written this at length here: http://www.pkfavantedge.com/it-audit/the-saq-bs-and-how-they-apply-to-you/.

So there you have it. Remember the following

SAQ A = 22 questions (good!)

SAQ A-EP = 191 questions (not great!)

SAQ B = 41 questions (good!)

SAQ B-IP = 82 questions (not so great!)

SAQ C = 160 (not very good!)

SAQ C-VT = 81 (that’s ok!)

SAQ D- MER(SP) = 332 or 359 questions (bye bye weekends!)

So there you have it. If you are an agency or a retailer and you need any help at all to clarify this PCI-DSS requirement, drop us an email at pcidss@pkfmalaysia.com. We will attend to you immediately!

 

 

The SAQ Bs and how they apply to you

March 31, 2017 / / 0 Comments

pci-compliance

We always say SAQ As and Ds get all the glory and attention.

This is because a majority of our SAQ clients are e-commerce companies and therefore they apply SAQ A or A-EP depending on where their credit card information is collected.

However, recent times, we have been working on a well-known retailer and were told that SAQ D would be the one that applies to us. Now the SAQ was passed to them by the bank and the bank insisted that they do SAQ D-Mer.

Now this post is going to assume that you have some working knowledge on what SAQ’s are in PCI-DSS world. Self Assessment Questionnaires are one of the most misunderstood concepts in PCI. They are like Donald Trump’s foreign policy and the plot of Interstellar all mashed into one misunderstood mess. Often because acquirers find it so hard to understand, they just tell all their merchants that they should go for SAQ D.

Now we have fought for our clients before – where we overturned the acquirer insistence for one of our e-commerce clients to do an SAQ D-Mer, and instead got them to agree that an SAQ A-EP is sufficient. SAQ A-EP = around 140 questions. SAQ D-Mer = around 320 questions. Big difference.

Why is this important? We firmly believed in the concept of overdoing PCI is not a good thing. Why? Because our clients have other things to do and limited time and money to do these. Ideally, sure, everyone should go on Level 1 Certification. But the reason why the PCI Council created a whole bunch of ‘levels’ and then types of SAQs is simply because different businesses face different risks. It doesn’t make sense for a neighbourhood grocery that accepts 10 cards a month to implement the same million dollar controls as, say, Tesco or Exxon Mobil. So. Don’t overdo things, but don’t under-do it as well.

Back to SAQ Bs. So with this client, after talking to them a few rounds we found out that:

a) Their credit card terminals are separate and not integrated with their POS machines and connected via USB.

b) The POS machines are all connected back to the branch switch (let’s call it branch switch) and from there connects back to corporate HQ for reconciliation purposes

c) However – we found out that the Credit Card terminals have their own connectivity to their own ethernet switch (lets call it Credit Card switch) that connects to an ISDN router and directly to the bank.

This means, there are two flows – once the credit card is used on the Credit Card terminal, the card information is sent out directly via ISDN to the bank. Whatever approval etc that comes back, it will go through the USB to update the POS.

The crunch here is that NO CREDIT CARD information is ever sent back to the client’s environment. Everything is out through the bank environment – as the Credit Card Switch all belongs to the bank. It’s only located on the customer premise but the customer has no access to it – physical or logical.

So begin our argument with the acquirer, to overturn their SAQ D to SAQ B or B-IP. Let’s look at SAQ B criteria as per PCI document:

a) Your company uses only an imprint machine and/or uses only standalone, dial-out terminals (connected via a phone line to your processor) to take your customers’ payment card information;

Seems like it. Technically, the question here is whether a credit card terminal connected to a POS machine with USB is considered ‘standalone’. Our argument here is yes, as long as no credit card info flows through that USB connection and only approval/decline/transaction dollar amounts etc. Remember the USB connection connects the terminal to to the POS machine (a Windows box). Credit card info flows out the other way, directly to the bank via a circuit switched technology like ISDN (i.e dial out). For the millenials, ISDN used to be the granddaddy of broadband. If you have ever gone through internet connectivity era with normal dial up 14.4kbps, ISDN is like what God would send to us out of mercy and grace.

b) The standalone, dial-out terminals are not connected to any other systems within your environment;

Again, the argument here is ‘connected’. What does this mean? Is it through IP means, or even an RS232 connectivity is considered connected? Our reasoning is that this is USB connection and no card data flows through this ‘connection’ and we will use this reasoning once we get on the table with the acquirer.

c) The standalone, dial-out terminals are not connected to the Internet;

No they aren’t. They are on ISDN direct to the acquirer.

d) Your company does not transmit cardholder data over a network (either an internal network or the Internet);

No they don’t. In fact, no credit card info is stored, processed or transmitted anywhere in the customer environment. Except for the physical protection over the bank equipments residing on customer premise.

e) Any cardholder data your company retains is on paper (for example, printed reports or receipts), and these documents are not received electronically; and

They do have some credit card info on paper which they need to protect, but these are manual forms they need to fill out for refund process. And the process is dictated by the bank.

f) Your company does not store cardholder data in electronic format.

No, of course not.

So you see, except for the tiny word ‘connected’ in question b), our client does meet all the SAQ B criteria. It’s really ridiculous to have someone go through the entire SAQ D when they do not have card holder data in the environment they control. And what if they have 80 branches, each with 10 POS terminals and servers? That would mean 800 systems in all branches come into scope for pentest, internal scans etc? No wonder I hear some retailers using PCI as a cuss word these days.

So, we don’t know how this is sorted out yet, but we will soon, and perhaps that will constitute another post. For now, if you need any help with your PCI-DSS – SAQ or Level 1 certification, drop us an email at pcidss@pkfmalaysia.com.

Cheers for now!

PCI and Multi Processing Environments

March 31, 2017 / / 0 Comments

PCI

Since our last post, we have received some queries from other companies asking us about their PCI compliance. Just to be clear, we do not charge a fee for replying to your email and assisting you make sense of this compliance. We know how frustrating it is, and no, anyone that tells you that PCI is easy as 1-2-3 isn’t really letting you know the full picture. This is because some emails had been – “I have this question, but wait, if you are going to respond and charge me a fee, then don’t bother.” What are we, mercenaries? Yes we are a company requiring profits and not an NGO, but over the 7 years we have been involved in PCI, we have actually done a fair bit of advisory without charge, just to get PCI awareness out there into the market.

So, to save the trouble, I’ll put up a public post here to sort some of the questions out. This question, we have been getting a fair bit: What if the company has a multiple processing environment? What does this mean?

Let’s say, a retailer. It has a POS environment whereby they run standalone terminals connecting to the bank for purchases in their store. Credit card is used here – card present transactions. Then they launch their e-commerce site, which redirects all card non-present transactions to a PCI certified payment gateway, where the card collection page is hosted by the gateway.

You see here – there are two different channels for credit card interaction. The traditional POS, and the e-commerce site. Both are completely outsourced – one is direct dial up to the bank, the other to the payment gateway. So how do you deal with this?

You have two options – one is to do separate SAQs for both environments. Yes, you can. In the example above, doing an SAQ B for your POS environment and an SAQ A for your ecommerce environment (assuming you are level 3 or 4 merchant) should be able to suffice. The second option is to combine these channels into one SAQ. Once you do that however, you won’t be able to go through the ‘specialised’ SAQs. Specialised SAQs are like A, A-EP, B, B-IP, C, C-VT – meaning they have conditions in which you need to adhere to in order to use them. For instance for A, it says that this will only apply to merchants with card non-present business. And likewise for B, it has condition that you do not store card information electronically and is not applicable to e-commerce merchants. So when you don’t fall into any of these SAQ buckets, you end up with SAQ D-MER, which basically covers everything in PCI. But don’t worry, you a lot of the SAQ would be non-applicable in this case, and only those related to outsourced e-commerce and POS facilities would apply.

Now another related question, and one that I ended up having a 2 hour discussion with a client on = can an entity be both merchant and service provider?

The short answer is yes, you can.

An example would be a telco. Telcos generally have massive merchant business. They accept payments for their pre-paid, post-paid etc from end customers through e-commerce, POS channels etc. But the Telco could also support a manage services and hosting environment whereby other merchants are hosting their payment sites on. Then, now you have a service provider environment.

Or, it could even be within the same organisation, you have your merchant business of a payment portal, Mobile POS, or mobile app, connecting to an outsourced payment gateway. Suddenly you decide you want to set up your own payment gateway and channel all the transactions of your merchant business to your own payment gateway.

In the first instance, if you have separate environments and businesses isolated from each other – you can again opt for separate compliance. You could be a Level 3 Merchant filling up an SAQ B form, and also a Level 1 Service Provider doing an ROC with a QSA.

In the second example where your merchant business connects to your own payment gateway, it’s a little more complicated because in all likelihood, the systems utilised by both business would be common. In this case, isolation and demarcation of type of business is more difficult to attain. Assuming you are eligible for Level 2 service provider, you can technically fill that up and ensure that it includes your payment channels within that SAQ. If you are doing a Level 1, then similarly, the QSA would likely include your payment channels (previously what you would call your merchant business) into your service provider certification efforts. Otherwise, you can still opt for a separate PCI compliance program, whereby you fulfill your merchant compliance, and for your service provider compliance program you do it separately.

For the latter option, the advantage is that if you launch your payment gateway and you provide options for other companies (not just your own) to connect to you, your compliance isn’t dependent on your payment channels (your merchant business). You would treat your own payment channels as just another merchant out of many, that are connecting to you. The downside of this is that you would likely need a clear demarcation and separation of systems between your merchant and service provider business.

Again, there are many ways to skin PCI. The best way (on paper at least) is to get your acquirer on the table or your payment service provider to ask them what is applicable to your business. Unfortunately, around 99% of the time in this region, the acquirers aren’t too knowledgeable themselves and either give wrong information or just tell our clients to do a Level 1 Certification with a QSA.

As part of our job scope – we will assess our client’s environment and provide the options on the table, and in some cases even be present on the table in the discussion with their acquirer – to obtain a clear indication on how to move forward and what PCI options are acceptable.

As always, drop us a note at pcidss@pkfmalaysia.com and we will do our best to accommodate your inquiries!

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