Visa Stats: Franchisee Security Changing, But Not Necessarily Improving

Newly released Visa stats on franchisee security breaches suggest a maturing of the security space, but not necessarily maturing into a more secure arena. The figures paint a picture more akin to burglaries that move from picking door locks to climbing into windows when confronted with more sophisticated door locks. Is it better? Not necessarily. But it's different.

In a look at how many of Visa's fraud reports came from its top five franchisee verticals (restaurants, apparel, direct marketing, sporting goods and lodging) over three years (2008 to 2010), the biggest short-term change was with restaurants, which plunged from 24 percent in 2008 to 9 percent in 2009.

It really was a short-term change, as restaurants went right back up in 2010, to 23 percent, almost where they had started.

The pattern of down-and-then-up held true for three of the other verticals, although at a much more modest rate. Clothing went from 9 percent to 3 percent and then it split the difference, delivering 6 percent in 2010. Direct marketing and sporting goods both showed even less of a change. The hotel space was the exception, with a jump from a 2008 percentage of five to a 2009 figure of 12 percent, and it then held at exactly 12 percent for 2010.

The attack methodologies showed two sharp changes, but Visa only reported 2009 and 2010 figures. Insecure network issues fell from 33 percent in 2009 to 19 percent in 2010, while remote access incidents shot up from 23 percent last year to 41 percent this year.

Eduardo Perez, Visa's head of global payment system security, said he saw the attack methodology changes as simply reflecting the fact that a lot of franchisees have been moving from dial-up to a networked direct connection. Also, remote access incidents are more common with restaurants and insecure networks are more common in hotels, so the numbers reflect increases in those segments.

Another methodology segment looked at different types of malware attacks. From last year to this year, keylogger attacks shot up from 14 percent to 51 percent while memory parser incidents fell a little less dramatically, from 49 percent to 30 percent.

The other malware stats all involved zero percents. Sniffer had been zero percent in 2009 but hit 12 percent this year. Zero Web attacks were reported last year, but they represented 5 percent of the reports this year. Backdoor techniques also were zero percent last year but two percent this year. A big change was in debugging, which plummeted from 17 percent last year to zero percent this year.

Visa also reported some PCI violation stats, reflecting how often specific PCI requirements were violated. The most significant changes were with Requirement 8 (Assign a unique ID to each person with computer access) and Requirement 2 (Do not use vendor-supplied defaults for system passwords and other security parameters).

The unique ID rule was responsible for 6 percent of all violations last year, but it almost tripled this year, to 17 percent. The default password rule also represented 6 percent of all violations last year; it increased to 15 percent this year.