Why PCI DSS Compliance Is Not Like The Flu

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

PCI DSS compliance is not like the flu. You can't "catch" it from your service provider, even though that provider might be PCI compliant. Merchants must go beyond reading the marketing materials and taking a quick glance at the service provider's attestation of compliance (AOC). The path to PCI compliance starts with PCI-compliant service providers, but it then takes the extra step of performing effective due diligence.

This lesson has been reinforced at least three times in the past few weeks in separate PCI Security Standards Council (PCI SSC) guidance documents. One question is whether merchants—particularly small and midsize merchants—will ever hear this advice. We all will have to leave the answer to that question to the industry associations. They have a key role to play in educating and protecting their members on all things PCI-related, including dealing with their service providers. The other, and possibly more relevant, question is whether all service providers will listen and be forthcoming with the information. If not, then all the guidance documents in the world will not be worth the electrons used to deliver them.

As a QSA, I occasionally get the impression that clients might not spend more time researching their next smartphone, laptop or sailboat than they do reviewing their service provider contracts and service-level agreements (SLA). It is particularly important for merchants to realize the source of the advice. It comes not from the PCI SSC staff but from active PCI practitioners with first-hand experience.

Section 5.4 of the PCI DSS E-Commerce Guidelines released in January lists a set of best practices for assessing the security of E-Commerce service providers. The special interest group (SIG) that prepared that document counsels merchants to develop a detailed SLA that specifies not only the responsibilities of the merchant and service provider, but also how each party will meet its obligations.

I was member of that SIG. Although I won't discuss our deliberations (all SIG members are governed by a non-disclosure agreement), it is pretty clear that meeting this due diligence standard means going beyond looking at the service provider's AOC. In some cases, service providers readily deliver this information when requested. Where they don't, however, it is up to the merchant to get it.

If this advice is good for E-Commerce merchants, should it not be equally good for all merchants? That is, there is nothing particularly unique or risky about E-Commerce service providers. Merchants should heed the E-Commerce Guidelines even if they never have a Web-based transaction.

The recently released PCI DSS Cloud Computing Guidelines crisply summarizes the situation when it states: "Use of a PCI DSS compliant [cloud service provider] does not result in PCI DSS compliance for the clients." Truer words were never written. The problem is that the SIG members—PCI professionals, all—felt it necessary to say them.To my knowledge, the cloud guidance was the first document to tell merchants and their QSAs that they need to go beyond checking the service provider's AOC. The guidance instructs merchants to review "applicable sections" of the report on compliance (ROC), including "the Executive Summary and Scope of Work sections."

The Cloud SIG provides merchants (and service providers) with a comprehensive responsibility matrix (Appendix C) that details what a merchant needs to know from its cloud service provider. Section 6.1 of the guidance is a virtual "how-to" list for risk management, due diligence and SLA construction.

My question is worth repeating: If this due diligence is needed for cloud service providers, should it not also be needed for all of a merchant's service providers?

The third, and most recent, recommendation for merchants to know about their service providers is the PCI SSC's Mobile Payment Security Guidelines for Merchants. You have only to read Appendix C to know merchants are going to need a lot more than a service provider's AOC to validate their PCI compliance. Yes, the first item on the list essentially tells the merchant to review the vendor's AOC. The advice then proceeds to instruct merchants to document their mobile vendor's warranties, logging, training and reporting. None of the latter items is in the AOC.

The unasked issue in all three documents is whether service providers will deliver the information. Smart service providers offer the necessary documentation, and they do it happily. They view evidence of their PCI compliance, security and cooperation with their customers as major selling points that differentiate them from their competitors. These service providers are true partners with their merchant customers.

Merchants whose service providers are not in this group may want to note that one of the two SIGs this year is addressing third-party—i.e., service provider—compliance. No member of that SIG (including me) can discuss any of our deliberations. The important message, though, is that participating organizations around the world saw the need for further guidance and voted for this SIG. Hopefully, the existence of this SIG will be further support for service providers and their merchant customers to work more closely together to create powerful and secure long-term partnerships.

What do you think? I'd like to hear your thoughts. Either leave a comment or E-mail me.