PCI Confusion Is The Norm

With all of the concern today about retailers inadequately protecting their credit card data, it's logical to assume that retail IT managers would have made themselves quite familiar with the ins-and-outs of the Payment Card Industry Data Security Standard (PCI DSS).

But every day, we see evidence that PCI adherence is fraught with confusion. For example, the lists of elements that PCI tries to enforce has fostered the mistaken belief that PCI compliance is automatically and instantly granted to any retailer whose systems do what the list says.

Hardly. PCI Compliance for Level 1 retailers is granted only after an authorized assessor conducts his/her own assessment and that assessment is accepted by the merchant's credit card processor aka acquirer.

A good example of that confusion cropped up this week when VanDyke Software released the results of its IT Security Survey of 350 IT managers and network administrators. That survey concluded that more than 80 percent of its surveyed said they were PCI compliant. That's odd, given that even PCI cheerleader Visa itself claims compliance for Level 1s in the 60s and even that claim is challenged by some. Levels 2 through 4—smaller retailers--are much lower.

Delving into the numbers presents an even more intriguing mystery. The statement about the report—released from VanDyke—said that "33 percent said they were compliant and 48 percent said they were very compliant."

Very compliant? Isn't that like very pregnant? Isn't PCI compliance a binary? The merchant has either been declared compliant by the PCI powers-that-be or it hasn't. Not quite sure what "very compliant" means.

The release gets better: "Furthermore, of the 212 respondents that indicated their organization accepts credit card payments, 40 percent indicated that their organization had been audited for compliance with the PCI Data Security Standards." Hold on. How could 80 percent of the surveyed group be compliant when only 40 percent have thus far been audited? Were the surveyed only small merchants who self-audited, which raises lots of other questions?

VanDyke President Jeff VanDyke said the study makes it clear that there's a lot of confusion today about what PCI compliance means and what it requires.

"The survey shows that more education on what it takes to be compliant needs to take place," VanDyke said. "For 80 percent to indicate they feel they are compliant and only 40 percent saying they have undergone an audit, demonstrates an education is needed about what it takes to be deemed 'compliant'."

'Tis true, but does the confusion run even deeper? Mark Rasch, the former head of the U.S. Justice Department's high-tech crimes unit and a retail technology specialist, thinks it does.

"First of all, it's an assessment, not an audit. And there are merchants that believe that conducting the assessment is the same as being compliant," Rasch said. "You have to conduct the assessment and then correct any deficiencies and then redo the assessment."

Level 1 retailers—which Visa defines as any merchant processing more than 6 million Visa transactions per year, regardless of volume or acceptance channel—are required to have a third-party assessment, but smaller retailers may do a self-assessment but the rules are identical.

"Among Level 1 retailers, there is a fairly high level of understanding today," Rasch said. "The lower down the food chain you go, the lower the understanding. Some don't even know how to spell PCI."