PCI Memo To Mobile Payment App Developers: It's Up To You

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A 403 Labs QSA, PCI Columnist Walt Conway has worked in payments and technology for more than 30 years, 10 of them with Visa.

One of the highlights of last week's PCI Community Meeting was the long-awaited release of the PCI Security Standards Council's guidance on mobile-payment application developers. The document lays out a set of requirements that together form a roadmap for mobile-payment application developers and would-be developers.

Currently, retailers have a choice. They can use their smartphones and tablets, sticking on a dongle that reads a payment card's magnetic stripe, and be cruising down the mobile commerce highway. Or they can be PCI DSS compliant. Unfortunately, the PCI Council has stated that smartphones and tablets are not secure, pointing to recent guidance from the National Institute of Standards and Technology (NIST) to support that position. The question, therefore, is: When will retailers have secure applications that enable them to use a wide range of smartphones and tablets for mobile commerce while still being PCI DSS compliant? I don't think we have an easy answer to that question yet.

Is having both mobile commerce and PCI DSS compliance too much to ask? I don't think so. But we all will find out soon.

The future of mobile commerce is in the smartphones, tablets and assorted iDevices that merchants and consumers love. These devices are behind the surge of new merchants that have never before taken payment cards. The devices have also attracted a new set of application developers, who may not know secure coding techniques or understand the risks inherent in a payment transaction. I suspect many of these developers think OWASP is a cry for insect repellent.

This future—or is it the present?—poses risks. The mobile devices often exist outside of any enterprise security management. A device's location changes as regularly as the merchant moves to different locations (that is what mobile commerce is all about) and it links to different networks. And if that is not enough, it is hard to detect tampering or malware on the device.

As a result, it is not possible for a retailer to be PCI DSS compliant when using a personal smart device.

That fact, however, has not stopped many merchants from using these devices, and therein lays our PCI DSS compliance challenge.

MasterCard was the first to recognize that PCI DSS compliance is not possible—downgrading it to a "unique challenge"—when it released its merchant guidance in May. The card brand's position was that because mobile commerce using a smart device equipped with a card-reading dongle is inevitable and because PCI DSS compliance is not realistic, retailers should do their best to be safe.

Visa followed shortly thereafter with similar guidance.Although the card brands' guidance focused on retailers, neither focused on telling developers all the things they need to do to develop secure applications. The PCI Council has stepped into that void by providing some guidelines for developers. The hope is that secure payment applications will be able to compensate for the inherent insecurity of the mobile devices themselves.

The Council's guidance is aimed straight at solution developers. Its stated purpose is to "educate stakeholders responsible for the architecture, design and development of mobile apps and their associated environment within a mobile device that merchants might use for payment acceptance." To its credit, the Council does not overpromise, either: "No assumption should be made that meeting the guidelines and recommendations expressed in this document would cause a solution to be compliant with PA-DSS."

The PCI Council offers guidance for transaction controls to prevent the three main risks associated with mobile payments: intercepting the card data when it is entered into the mobile device; compromising the account data while it is being processed or stored; and intercepting the data when it is transmitted. The guidance then proceeds to offer 15 security requirements that address environment controls for the mobile device and the payment application. These requirements include preventing unauthorized access (you need more than a just a "slide" to access the device), disabling the device remotely if it is lost or stolen, supporting only online transactions (no offline mode of operation), and authenticating attachments and applications (bye-bye Angry Birds, but will inventory checking be allowed?).

The next step is up to the mobile-application developers. One difficulty will be getting the word out to these developers. For example, does the PCI Council know how to reach them? I heard one story of a merchant meeting with his payment-application developers in a Chinese restaurant. That restaurant was their "office." Getting the word out to this developer community will involve more than posting a document on the Council's Web site.

Assuming the Council gets the word out successfully and the developers actually read the PCI Mobile Payment Acceptance Security Guidelines document, will those developers actually build secure mobile-payment applications? Without a guarantee of PA-DSS validation, will developers change their habits? If they do, will retailers be willing to pay for the secure applications? With the major card brands appearing to give retailers a pass on PCI DSS compliance, where is the incentive for a retailer to pay more for a secure payment application?

You have heard some of my questions, but I would like to hear what your questions are. Either leave a comment or E-mail me.