Payment Card Industry Data Security Standard

Overview

The Payment Card Industry Data Security Standard (PCI DSS) is a global data security standard that regulates how entities store, process, and transmit cardholder data (CHD) and/or sensitive authentication data (SAD). PCI DSS includes guidelines regarding components of organizations' technical and operational system that are related to such data. Cardholder Data refers to information including Primary Account Numbers (PAN), cardholder names, expiration dates, and service codes. Sensitive authentication data refers to information including "full track data (magnetic-stripe data or equivalent on a chip)," card verification codes, and PINs/PIN blocks. This standard is administered by the Payment Card Industry Security Standards Council, and its use is enforced by the major payment card brands. PCI DSS was created to improve and streamline the security controls organizations use when handling cardholder data and reduce credit card fraud. These organizations, including merchants and service providers, must prove compliance to the PCI DSS through an assessment and validation process. The payment card brands issue fines and other penalties when merchants or service providers fail to prove compliance. Validation of compliance is performed annually or quarterly with a method suited to the organization's volume of transactions:

Self-assessment questionnaire (SAQ) Firm-specific Internal Security Assessor (ISA) External Qualified Security Assessor (QSA)

History

Before the PCI DSS was launched, payment card information security was handled by the five major payment card brands: Visa, Mastercard, American Express, Discover, and JCB. They each had different independent security programs:

Visa's Cardholder Information Security Program Mastercard's Site Data Protection American Express's Data Security Operating Policy Discover's Information Security and Compliance JCB's Data Security Program The intentions of each were roughly similar: to create an additional level of protection for card issuers by ensuring that merchants meet minimum levels of security when they handle payment cards and related account information. As payment card fraud rose in the late 1990s and early 2000s, the major payment card brands felt a growing need to streamline and unify these information security standards. Each program had its own methods and guidance regarding compliance validation, assessments, and requirements. To address interoperability problems among the existing standards, the combined effort by these payment card brands resulted in the release of version 1.0 of PCI DSS in December 2004. The main payment card brands then founded the Payment Card Industry Security Standards Council (PCI SSC) and aligned their policies to create the PCI DSS. PCI DSS has since been implemented and followed by numerous organizations around the world. MasterCard, American Express, Visa, JCB International and Discover Financial Services established the PCI SSC in September 2006 as a global administrative and governing entity that mandates the evolution and development of the PCI DSS. Independent private organizations can also participate in PCI development as part of the PCI Security Standards Council Participating Organization Program. To join that program, organizations must register as a PCI SSC Participating Organization (PO). Each participating organization joins a SIG (Special Interest Group) and contributes to activities mandated by the group. The PCI DSS is a living document that is regularly updated by the PCI Security Standards Council. The PCI SSC releases major version updates, such as version 4.0, approximately every few years. Minor updates, such as version 4.0.1, are released more frequently and typically add small changes or clarifications. When updates are released, organizations have a transition period during which they must become familiar with the new changes and begin ensuring compliance with the current version. During the transition period, organizations are only required to be compliant with either the current version or the previous version. The following versions of the PCI DSS have been made available:

Requirements and control objectives

The PCI DSS has twelve requirements for compliance, organized into six related groups known as control objectives:

Build and maintain a secure network and systems Protect cardholder data Maintain a vulnerability management program Implement strong access control measures Regularly monitor and test networks Maintain an information security policy Each PCI DSS version has divided these six requirement groups differently, but the twelve requirements have not changed since the inception of the standard. Each requirement and sub-requirement is divided into three sections:

PCI DSS requirements: Define the requirement. The PCI DSS endorsement is made when the requirement is implemented. Testing: The processes and methodologies carried out by the assessor for the confirmation of proper implementation. Guidance: Explains the purpose of the requirement and the corresponding content, which can assist in its proper definition. In version 4.0.1 of the PCI DSS, the twelve requirements are:

Install and maintain network security controls. Apply secure configurations to all system components. Protect stored account data. Protect cardholder data with strong cryptography during transmission over open, public networks. Protect all systems and networks from malicious software. Develop and maintain secure systems and software. Restrict access to system components and cardholder data by business need to know. Identify users and authenticate access to system components. Restrict physical access to cardholder data. Log and monitor all access to system components and cardholder data. Test security of systems and networks regularly. Support information security with organizational policies and programs.

Updates and supplemental information

The PCI SSC (Payment Card Industry Security Standards Council) has released supplemental information to clarify requirements, which includes:

Information Supplement: Requirement 11.3 Penetration Testing Information Supplement: Requirement 6.6 Code Reviews and Application Firewalls Clarified Navigating the PCI DSS - Understanding the Intent of the Requirements PCI DSS Wireless Guidelines PCI DSS Applicability in an EMV Environment Prioritized Approach for PCI DSS Prioritized Approach Tool PCI DSS Quick Reference Guide PCI DSS Virtualization Guidelines PCI DSS Tokenization Guidelines PCI DSS 2.0 Risk Assessment Guidelines The lifecycle for Changes to the PCI DSS and PA-DSS Guidance for PCI DSS Scoping and Segmentation PCI DSS v4.0 Resource Hub PCI DSS Summary of Changes: v4.0 to v4.0.1

Merchant levels

Merchants that store, process, and transmit cardholder data are subject to PCI DSS standards, and thus, must be deemed PCI-compliant. The PCI DSS framework classifies these entities into merchant levels that determine the type of reporting a business must complete to achieve compliance. A business' merchant level is determined by its dataset size which refers to the number of transactions a business makes annually. An acquirer or payment brand may manually place an organization into a reporting level at its discretion. Not all payment card brands use all four merchant levels, and each level's transaction volume can vary among payment card brands. For instance, Visa only has three merchant levels. The four typically accepted merchant levels are:

Level 1 – Over six million transactions annually Level 2 – Between one and six million transactions annually Level 3 – Between 20,000 and one million transactions annually, and all e-commerce merchants Level 4 – Less than 20,000 transactions annually Each card issuer maintains a table of compliance levels and a table for service providers.

Service provider levels

According to the PCI DSS, third-party service providers that store, process, or transmit cardholder data, or have access to customers’ account data are subject to PCI DSS standards. Service providers can include payment software vendors, software as a service (SaaS), data centers, and other such entities. Service providers are required to prove PCI DSS compliance through the assessment process. The type of reporting process a service provider must complete are dependent on the type of service provider. Service providers are classified into levels which determine the reporting required for compliance. The two service provider levels are:

Level 1: All Third-Party Processors (TPPs) All Staged Digital Wallet Operators (SDWOs) All Digital Activity Service Providers (DASPs) All Business Payment Service Providers (BPSPs) All Token Service Providers (TSPs) All 3-D Secure Service Providers (3-DSSPs) All Installment Service Providers (ISPs) All Merchant Payment Gateways (MPGs) All AML/Sanctions Service Providers, Data Storage Entities (DSEs) and Payment Facilitators (PFs) with more than 300,000 total combined Mastercard and Maestro transactions annually Level 2: All AML/Sanctions Service Providers, DSEs6 and PFs with 300,000 or less total combined Mastercard and Maestro transactions annually All Terminal Servicers (TSs)

Compliance

The payment card brands regularly require both merchants and service providers to demonstrate PCI DSS compliance. PCI DSS compliance involves implementing security controls that follow all requirements of the PCI DSS and passing the PCI DSS assessment process to achieve compliance validation. The major credit card brands enforce PCI DSS compliance by issuing fines for merchants who do not obtain compliance validation. Merchants and service providers sign business-to-business contracts with payment processors and payment card brands, which outline such fines and fees. In the event of a merchant's compliance violation, payment card brands issue fines to the acquiring bank who then fines or otherwise penalizes the non-compliant merchant. Obtaining PCI DSS compliance and navigating the assessment process can be complicated, which is why many businesses often struggle with this. According to Verizon's 2018 Payment Security Report, 47.5% of organizations were not PCI DSS compliant during interim compliance validation. The number of organizations achieving compliance had been steadily increasing through the early 2010s, but this increase may likely have dropped in recent years.

Compliance validation

Compliance validation involves the evaluation and confirmation that the security controls and procedures have been implemented according to the PCI DSS. Validation occurs through an annual assessment, either by an external entity, or by self-assessment. The assessment process includes the following steps:

Confirm the scope of the PCI DSS assessment. Perform the PCI DSS assessment of the environment. Complete the applicable report for the assessment according to PCI DSS guidance and instructions. Complete the Attestation of Compliance for Service Providers or Merchants, as applicable, in its entirety. Submit the applicable PCI SSC documentation and the Attestation of Compliance, along with any other requested documentation to the requesting organization (those that manage compliance programs such as payment brands and acquirers (for merchants), or other requesters (for service providers)).

Report on Compliance

A Report on Compliance (ROC) is conducted by a PCI Qualified Security Assessor (QSA) and is intended to provide independent validation of an entity's compliance with the PCI DSS standard. A completed ROC results in two documents: a ROC Reporting Template populated with detailed explanation of the testing completed, and an Attestation of Compliance (AOC) documenting that a ROC has been completed and the overall conclusion of the ROC.

Self-Assessment Questionnaire

The PCI DSS Self-Assessment Questionnaire (SAQ) is a validation tool intended for small to medium sized merchants and service providers to assess their own PCI DSS compliance status. There are multiple types of SAQ, each with a different length depending on the entity type and payment model used. Each SAQ question has a yes-or-no answer, and any "no" response requires the entity to indicate its future implementation. As with ROCs, an attestation of compliance (AOC) based on the SAQ is also completed.

Security Assessors

The PCI Security Standards Council maintains a program to certify companies and individuals to perform assessment activities.

Qualified Security Assessor

A Qualified Security Assessor (QSA) is an individual certified by the PCI Security Standards Council to validate another entity's PCI DSS compliance. QSAs must be employed and sponsored by a QSA Company, which also must be certified by the PCI Security Standards Council.