Payment Card Industry Data Security Standards (PCI DSS)

TL;DR;

If a business processes, stores or transmits credit card data, it generally required to comply with the PCI DSS. It is a global standard that helps protect cardholder data and reduce fraud. It applies to merchants, service providers, and any third party involved in handling credit card information. Below is a summary of the core concepts, compliance levels, key requirements, and real-world challenges.

What is PCI DSS?

The PCI DSS is a globally accepted set of security standards created to protect credit card information. It outlines baseline security controls and practices to help organizations safeguard Cardholder Data (CHD) and Sensitive Authentication Data (SAD). The PCI Security Standards Council (PCI SSC), formed by major credit card brands like Visa, MasterCard, American Express, Discover, and JCB, developed the PCI DSS.

Credit card fraud and data breaches impact businesses of all sizes, and PCI DSS helps minimize the risk by enforcing data security best practices. Although not legally mandated, payment processors and banks often contractually require PCI DSS compliance.

Benefits of PCI DSS Compliance

• Reduced Security and Data Breach Risk: Minimum security controls and data protection procedures minimize the risk of data breaches and their associated costs, such as fines, legal fees, and reputational damage.

• Fraud Protection: Correctly implemented requirements help prevent and detect fraud, reducing the risk of financial loss associated with it.

• Compliance with Industry Standards: Achieving PCI DSS compliance demonstrates a commitment to industry best practices.

• Enhanced Trust: PCI DSS ensures the security of cardholder data, thus aiding businesses in building and maintaining trust with customers, partners, stakeholders, and regulators.

PCI DSS Scope

Any organization that stores, processes, or transmits cardholder data must comply with PCI DSS. This includes:

• Merchants of any size that accept credit ot debit card payments

• Payment processors and gateways

• Issuing and acquiring banks

• Managed service providers

• Any third party that can impact the security of CHD or SAD.

Outsourcing payment operations to a third-party provider does not absolve an organization of responsibility; they are still accountable for ensuring the third-party service provider complies with PCI DSS requirements. 

Merchant Compliance Levels and Validation

Compliance requirements are divided into four merchant levels, based on their annual volume of credit or debit card transactions processed. The levels determine the specific validation requirements, such as on-site assessment or self-assessment questionnaires.

• Level 1: Over 6 million card transactions annually. These businesses must pass a Qualified Security Assessor (QSA) assessment each year and have an Approved Scanning Vendor (ASV) do a quarterly network visibility scan.

• Level 2: 1 to 6 million transactions annually. These merchants must complete an annual Self-Assessment Questionnaire (SAQ) and might be required to submit quarterly ASV network vulnerability scans.

• Level 3: 20,000 to 1 million transactions annually. Merchants must complete an annual SAQ and might have to submit a quarterly network vulnerability scan.

• Level 4: Less than 20,000 transactions annually. The annual SAQ must be submitted, and they might have to submit a quarterly network vulnerability scan.

Key Data Types: CHD vs SAD

CHD and SAD are considered account data. Understanding the difference between Cardholder Data (CHD) and Sensitive Authentication Data (SAD) is essential:

Cardholder Data (CHD)

• Primary Account Number (PAN)

• Cardholder Name

• Expiration Date

• Service Code

Sensitive Authentication Data (SAD)

• Full magnetic stripe data or chip equivalent

• Card Verification Code (CVC/CVV)

• PINs or PIN blocks

IMPORTANT: SAD must never be stored after authorization, even if encrypted.

PCI DSS Requirements Overview

PCI DSS includes 12 main requirements, organized under 6 overarching goals/principles. Each requirement addresses specific security measures, controls, and policies that organizations must implement and maintain:

Build and Maintain a Security Network and Systems

Requirement 1—Install and maintain network security controls, such as firewalls and network segmentation, to restrict unauthorized traffic.

Requirement 2 - Apply secure configurations to systems, ensuring default credentials are removed and unnecessary services are disabled.

Protect Account Data

Requirement 3 - Implement controls to limit data retention and securely store cardholder data using encryption and masking.

Requirement 4 - Use strong cryptography to protect data during transmission over public networks and prevent data interception.

Maintain a Vulnerability Management Program

Requirement 5 - Deploy and manage anti-malware tools to protect systems from malware variants and phishing attacks.

Requirement 6 - Develop, test, and deploy secure applications; regularly patch systems to eliminate known vulnerabilities.

Implement Strong Access Control Measures

Requirement 7 - Restrict access to cardholder data and system components based on the principle of least privilege.

Requirement 8 - Ensure each user has a unique ID and enforce secure authentication protocols, including MFA.

Requirement 9 - Physically secure locations where cardholder data is stored or accessed, and control access to devices and media.

Regularly Monitor and Test Networks

Requirement 10 - Enabling logging and monitoring to detect unauthorized access or suspicious behaviour across systems.

Requirement 11 - Conduct vulnerability scans and penetration tests to identify and address weaknesses in the network and systems.

Maintain an Information Security Policy

Requirement 12 - Establish policies that define security responsibilities, conduct risk assessments, provide staff training, and manage third-party service providers.

Challenges of PCI DSS Compliance

• Complexity: Many controls and requirements can overwhelm smaller businesses.

• Cost: Compliance tools, consultants, and audits can be expensive.

• Continuous Effort: Compliance requires ongoing monitoring, testing, detecting, responding, and updating systems and measures.

• Keeping Up with Change: Evolving threats, technologies, and updates to PCI DSS require continuous learning and adaptation.

Conclusion

PCI DSS is a highly recommended standard and framework for any organization handling payment card data. Achieving and maintaining compliance may be challenging, but it’s essential for protecting customers, reputation, and financial standing. Organizations looking to attain compliance are advised to:

• Understand their scope

• Identify their merchant level

• Conduct a gap analysis 

• Follow and apply the 12 requirements