Merchants struggle to comply with PCI security in economy

With the recession drying up compliance budgets, merchants send PCI Security Standards Council General Manager Bob Russo a letter asking for help (includes audio).

The heads of seven business organizations sent PCI Security Standards Council General Manager Bob Russo a cry for help earlier this month, saying the recession is making it "increasingly difficult" for merchants to meet the requirements of the Payment Card Industry's Data Security Standard (PCI DSS).

In an interview Wednesday, Russo said he understands what merchants are going through and that everyone will have a chance to offer input for the next version of the standard, set for release in September 2010.

[ LISTEN to what Russo had to say in this audio clip]

In the letter, leaders of the National Association of Convenience Stores, National Retail Federation, National Restaurant Association, American Hotel and Lodging Association, National Council of Chain Restaurants, Merchant Advisory Group and the International Franchise Association cited the trouble merchants are having:

"The vast majority of our members take data security seriously and have spent in excess of $1 billion on PCI DSS compliance as part of their security programs. However, it is becoming increasingly difficult for our members to comply with the program's requirements in a cost-effective and timely manner; especially in this difficult economic climate."

To alleviate the stress without compromising the security needed to protect cardholder data, the organizations proposed the following:

  • 1. Incorporate a formal review and comment phase on revisions to the PCI DSS by participating membership before they are issued. This will result in more informed revisions and will increase merchants' understanding of and ability to effectively implement the revised standards. We suggest that the PCI SSC adopt a similar process for writing standards in an open environment as is used by Accredited Standards Committee X9 (ASC X9). As ASC X9 also maintains data security standards, we recommend the PCI SSC partner with them in an effort to create a single standard that could be used by all.
  • 2. Ensure the amount of time from issuance of a revision to the PCI DSS and the effective date is appropriate for all merchants, including Level-1 merchants making enterprise-wide changes, based on the revisions that are being implemented, as well as small operators without the resources to readily comply. This will allow merchants to most effectively assess and implement the necessary actions needed to meet the requirements of the revision. Along with this, we request that the sunset date of version 1.1 of the PCI DSS be extended to Dec. 31, 2009.
  • 3. Follow and adopt the ASC X9 announcement of its plan to develop a new standard to protect cardholder data that may include end-to-end data encryption. By leveraging end-to-end encryption of credit card transactions, the industry could implement broad and consistent protections for consumers, businesses and the global electronic payment system by rendering card information useless to thieves.
  • 4. Utilize the concepts of key controls and controls rationalization to restructure the more than two hundred detailed requirements of the PCI DSS. (These concepts are similar to what the U.S. Government enacted for publicly traded companies as part of the Sarbanes-Oxley Act). This would reduce the reporting and maintenance burden on companies by ensuring they place a focus on the key controls that reduce overall risk for their particular business model.
  • 5. Require credit card companies and their banks to provide merchants with the option of keeping nothing more than the authorization code provided at the time of sale and a truncated receipt, rather than requiring merchants to store credit card information for dispute resolution, putting customers at unnecessary risk.

As difficult as the economy is making compliance for many merchants, Russo said he's also hearing from those who want to move more aggressively on PCI security improvements because of another byproduct of the recession -- a significant spike in online crime. [See: With Economic Slump, Concerns Rise Over Data Theft]. He said merchants won't have to worry as long as they're making an honest effort to meet PCI compliance needs to the best of their ability.

"It's not our goal to put people out of business over compliance," Russo said. "The fact that they're giving us feedback is exactly what we're looking for. A lot of this stuff is already in play."

He added that merchants will have ample opportunity to weigh in on the next version of PCI DSS in the coming months. The council is now seeking feedback on what could be improved upon in the next version, and a series of community meetings and workshops are planned.

"The Community Meetings are the highlight of our year, where stakeholders from across the globe partner to evolve the PCI standards and work together toward a more secure payment environment," he said. "For the PCI Security Standards to continue to be effective in protecting cardholder data, we must continue to solicit and represent the voices of payment chain stakeholders worldwide. We do this through a structured, but flexible, lifecycle and feedback process that provides critical input on future PCI security standards."

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