CIOs are being warned to comply with new PCI DSS (Data Security Standard) regulations with heavy fines set to hit non-compliant companies from next month.
Both Visa and MasterCard will require level one merchants - companies that process over six million credit card transactions annually - to engage a qualified security assessor to prepare an annual report on these transactions in a bid to stop credit card fraud.
Sean Curran, director of IT security at consulting firm Protiviti, said engaging a security assessor is a small price to pay compared with the cost of non-compliance.
“With fines reaching $25,000 a month, it’s little wonder that many merchants are beginning to realise the costs of ensuring they are PCI DSS-compliant are not significant by comparison, and in any event, are a small price to pay for the peace of mind of knowing they meet industry-wide security standards that strengthen consumer protection,” Curran said.
Director of Bridge Point Communications, Tim Smith, told CIO the regulations are as much about technology compliance as security compliance.
“It means a lot for CIOs. It’s the closest thing we’ve got to a regulated standard so it tends to become relevant to employees higher up in organisations. Depending on the maturity of organisations, the CIO would be one of the key contacts to speak with on the idea of PCI compliance. While it is a security issue and it has its grounding in risk, it is also a technical standard. It follows the best practice of risk but it is also unusually prescriptive in terms of controls that you need to look at putting into place,” Smith said.
The regulations will begin to affect level two merchants, companies that process between one and six million MasterCard transactions, from December 31 this year, but Smith warns CIOs to begin preparing now.
“My advice is to engage with an expert early on. One of the key areas of PCI is that you’ve got the opportunity early on to get an idea of the scope of the environment that’s under review. A quick audit of that environment can make the job a lot quicker, and also improve some business efficiencies as well,” he said.
Credit card fraud cost $145.8 million in Australia last year and Smith said the regulations are only the first step in the process of stopping such fraud.
“The idea behind the regulations is to stop credit card fraud. It’s not going to fix up all of the issues but it’s a huge step forward from where most organisations are. Yes, it’s certainly going to help, but it’s fundamentally about building an in-depth and secure environment,” he said.
Smith said merchants and service providers must do twelve things to ensure they comply with the standard.
1. Install and maintain a firewall configuration to protect cardholder data
2. Do not use vendor-supplied defaults for system passwords and other security parameters
3. Protect stored cardholder data
4. Encrypt transmission of cardholder data across open, public networks
5. Use and regularly update anti-virus software or programs
6. Develop and maintain secure systems and applications
7. Restrict access to cardholder data by business need to know
8. Assign a unique ID to each person with computer access
9. Restrict physical access to cardholder data
10. Track and monitor all access to network resources and cardholder data
11. Regularly test security systems and processes
12. Maintain a policy that addresses information security for employees and contractors