PCI Finally Addresses Vending Machines, Phones And Kiosks That Take Cards. For Retailers, Though, It's Still Tricky
The PCI Council has updated its PIN Transaction Security (PTS) rules to include newer types of card-accepting systems, including mobile, kiosks and vending machines, but left vague are many of the most practical retail issues. The new PTS version 3.1 is aimed at device manufacturers. Given that retail shops need to be populated with compliant devices, though, how much time will device makers have to make upgrades? How long will existing systems be given a pass?
The guidelines are generally filled with commonsense security restrictions. Consider B14: " There is no mechanism in the device that would allow the outputting of a private or secret clear-text key or clear-text PIN, the encryption of a key or PIN under a key that might itself be disclosed, or the transfer of a clear-text key from a component of high security into a component of lesser security." But there is nothing about timing, schedules or when retailers can—or should—include the new requirements in RFPs.
The closest the guidelines get to referencing existing hardware is a brief comment that such components can be reused in newly approved systems.
"The PCI PTS POI approval framework is oriented to the evaluation of integrated PIN entry devices (i.e., device where PIN entry functionality is in a secure logical and physical perimeter). However, it allows the re-use of previously approved individual components or their combinations (card readers, display, keypads, or secure processors) into the approval process of integrated PIN entry devices," the guidelines say. "The POS Terminal Integration Evaluation Module ensures that the integration of previously approved components does not impair the overall security as stated in security requirements. This module also supports the cost-effective maintenance of components. This module includes security management requirements applicable to the integrated device."
Beyond the mechanisms of the hardware, the PCI issues raised by devices—especially kiosks and vending machines—are also legal. As Wal-Mart discovered back in 2009, there are two contractual questions. First, if the device is handled by a third-party firm, can that firm truly—regardless of what it promises, even in its contract—take on all of your legal risks? Will that firm's representation that it has achieved PCI compliance on the hardware in your store be sufficient to protect you in case of a breach?
Then there's the other type of legal headache, the one that falls under the heading of "Anyone Can Sue You Over Anything At Any Time. The Only Question Is Whether They Can Win." If you're a major (read: deep-pocketed) retail chain and your brand and colors are plastered all over the kiosk and it's sitting in the middle of your floor, how can you argue with the attorney representing your customer that said customer had a reasonable expectation that you were standing behind the payment-card transaction? And further, that customers would have never given their Visa cards to a machine had they known it was controlled by the Acme Kiosk Outsourcing Company? The loyalty and confidence you've built with your brand will come back to haunt you.The loyalty and confidence you've built with your brand will come back to haunt you.
The PCI Council's new rules, insofar as they go, are quite strong and necessary. Our concern is solely with the "insofar as they go." Without the context of a timeline and related rules, this document may certainly offer a comforting tech list of what manufacturers have to include in upcoming releases, but it offers little concrete comfort to retailers.
Also, for some manufacturers, those new lab fees to PCI (don't kid yourself: With every device that needs to be tested, tweaked and retested, those fees will add up to some non-trivial totals) may push for price increases.
How much are the fees? Well, the lab fees are whatever the market will bear, another PCI document reports. "All testing-related fees and dates are negotiated between the vendor and laboratory, and the vendor pays all fees directly to the laboratory. If a discrepancy requires the vendor to modify the physical design of the payment security device or the firmware, the payment security device must be resubmitted for a new test cycle and the laboratory will invoice the vendor accordingly."
But PCI still gets its cut, which is understandable. Beyond the lab fees, "vendors are assessed a $2,000 fee for every new evaluation report received. In addition, vendors will be assessed an annual listing or maintenance fee of $1,000 for each existing PCI approval. All initial evaluations under a major version (e.g., 2.x, 3.x, etc.) of the security requirements for a given product shall constitute a new evaluation and shall receive a new approval number and be billed accordingly."
On the plus side, retailers can certainly set their own timetables. "As of X-and-Y date, we will accept no systems that don't comply with the new PTS rules, with lab results to back it up." But how much of a delay—especially with mobile devices—is any chain willing to accept? That's why this timetable needs to come from PCI or Visa, so that the delays—if any—can be equally forced on all chains and all of their rivals.
The PTS rules tie directly into last month's release of new Point-to-Point Encryption rules that are not slated to kick in until Spring 2012. Those P2PE changes dropped the number of requirements P2PE-compliant chains must worry about, all the way from 12 to merely two requirements.
But based on the released PTS guidelines, there is no timing listed.