Friday, October 17, 2014

Unsolicited and Unwelcome Contacts

Good Afternoon!

Over the past several days many people associated with the Treasury Institute for Higher Education have received emails and phone calls from a representative of one side in a long-running labor dispute in Nevada between a labor group and a casino owners group.

These uninvited calls/emails are part of one side's aggressive tactics to force a particular outcome in the dispute at the Green Valley Ranch Resort (our host facility for the upcoming 2015 PCI-DSS Workshop). To all our friends and participants that were disturbed by this outreach, the Treasury Institute sincerely apologizes as well as the Green Valley Ranch Resort.

Please do not respond or engage these representatives, and refer all requests to Professional Development Group II, Inc. (our meeting's planning and organizing company) or the Institute’s Executive Directors.  We will continue to work directly with the resort to ensure that the upcoming workshop is unaffected by these tactics.

Jon K. Speare
Executive Director
The Treasury Institute for Higher Education

Friday, October 3, 2014

Report from Orlando

[Here is another in our series of  posts from Joe Tinucci, Assistant Treasurer of the University of Colorado. Thanks for the report, Joe! --gaw]

If you have been around the PCI DSS for any length of time, you know that the standard is developed and maintained by the PCI Security Standards Council (PCI SSC).  Every year the PCI SSC holds a series of Community Meetings around the globe; this year's North American meeting was held in Orlando, FL, on September 9 - 11, 2014.  This meeting serves as a good opportunity to find out what is on the Council's mind regarding current issues and the direction of the PCI DSS, to network with other merchants, and to talk to the payment card brands.

There were several trends and/or important issues apparent at the meeting; a short summary follows.

Evolution of the Payment Card Industry Data Security Standard (PCIDSS)
There was a lot of discussion of the best practice guides and information supplements issued by the Council over the past couple of years to clarify the PCI DSS.  It was clear from the conversations that these best practices will be integrated into the next version of the PCI DSS.  So, if you want to plan for tomorrow’s requirements, look at today’s guidance and best practice documents.

Compliance as Business-As-Usual
It was emphasized repeatedly that real system security cannot come from a once-a-year compliance event but must be integrated on an ongoing basis into a business-as-usual process.  Several speakers noted that ongoing compliance monitoring saves a significant amount of time and money over an annual point-in-time assessment.  It was also pointed out that most of the cardholder data breaches in the past year or two were of compliant entities who had let their security posture degrade, or whose compensating controls for PCI DSS requirements that could not be met directly didn’t adequately compensate for the risks / threats they were intended to counter.

Compensating Controls May Not Be Adequately Compensating
I got the sense from the official and unofficial discussions at the meeting that future guidance will tighten up on the issue of compensating controls.  A compensating control is put in place because an entity cannot meet one or more of the PCI DSS requirements, and is intended to address the risk but with a different approach.  Since many of the breaches of compliant merchants appear to have been at the point of a compensating control, extra attention will be given to the justification for a compensating control, the implementation of the control, the verification that the control is actually meeting the goal of the security control it was intended to replace, and the maintenance of the control.  If you need compensating controls, you need to fully document why, what, how, for how long, and who accepted the risk of not implementing the required control.

Risk Management Approach
If there was a clear theme to the meeting it was that merchants and service providers have to adopt a risk management approach rather than a check-the-box mentality to security, whether for cardholder data or any other sensitive data.  Documented risk assessment, ranking, management, and acceptance processes are crucial to best using limited resources to best advantage.  Also, it was noted that the PCI DSS was moving toward risk-based requirements in future versions.

Scoping is Essential
Reducing the scope of the merchant environment wherever it contains cardholder data is an essential technique for reducing the risk for a merchant; that is, limit the machines and systems that hold sensitive data to the fewest possible to process card transactions.  Written documentation of how and why the scope was determined, how the isolation of the cardholder data environment is accomplished and maintained, and how that isolation was tested is a current best practice and very soon to be a requirement.  This includes documentation of how the merchant determined that the scope of isolation from the rest of the network / infrastructure / environment was verified through penetration testing.  The Council has a much-anticipated workgroup creating penetration testing guidelines; once these are issued institutions will need to quickly bring their security staff up to speed on this security technology / technique.

Web Site Security for Ecommerce Transactions
There is a new emphasis on the security of merchant web sites / web applications that hand over the processing of payment card transactions to a third party service processor.  Multiple recent breaches have been initiated with a compromise of the merchant web site, even though the actual payment was processed by the third party gateway processor.  The newest version of the PCI DSS, version 3.0, splits apart the old assessment used with third party service providers in two – one for completely outsourced situations and the other for any other type of ecommerce web site.

Managing Third Party Service Providers
Many organizations outsource the actual processing of a payment card transaction to a third party service provider.  There was a lot of discussion of best practices in managing these service providers, including the requirement to renegotiate contracts to be much more specific about which party is responsible for each of the PCI DSS requirements. Documentation should be provided for how third party service providers were vetted, how their performance is monitored, and to whom they are providing data from the merchant’s customers and the compliance status of those other parties.

Chipcards Are Coming But Are Not The Complete Answer
Chipcards, or smartcards with an onboard computer processing chip that conforms to the Europay / MasterCard / Visa (EMV) standard, are being issued (slowly) by financial institutions and merchants must be prepared to process them.  The implementation of EMV cards is being spurred by an October 2015 deadline by which liability is switched from the card issuer to the accepting merchant for card-present fraud if the merchant cannot process EMV card transactions, as well as announcements of large retailers that they will be upgrading their equipment to accept EMV transactions (most of the announcements have come after massive breaches, with Target and Home Depot providing some recent examples).  EMV cards provide much better protection against counterfeit plastic but do not provide much additional protection against other types of fraud.  Also, other countries that have adopted the EMV standard for the card networks have seen fraud migrate from card-present transactions to card-not-present and ecommerce transactions.

Joe Tinucci is the Assistant Treasurer at the University of Colorado, where he manages the University's banking relationships.  As part of that job, he also drives the PCI DSS compliance process for approximately 160 card-accepting merchants across diverse card-acceptance environments in four campuses. Joe can be reached at (303) 837-2185 or

Wednesday, August 27, 2014

Announcing: The 2015 PCI DSS Workshop

PCI DSS Workshop 2015
April 19 - 22, 2015  
Green Valley Ranch Resort, Spa and Casino
Henderson, NV (Las Vegas metro area)
The Treasury Institute for Higher Education is facilitating its annual PCI DSS Workshop. This program is geared toward business, financial, or IT manager responsible for PCI-DSS. The workshop will once again explore the unique PCI compliance challenges facing Higher Education institutions. As well as offer a deeper understanding of PCI, how institutions can achieve and maintain compliance, and the opportunity to make valuable new contacts with peers at other institutions facing the same challenges.

Please note that attendance at this program is
limited to representatives from colleges and universities only.

Tuesday, August 12, 2014

Higher Ed PCI Listserv

If you are a subscriber to the Payment Card Industry Compliance Discussion listserv, please be aware that there will be a change to the list address coming this week. You should see an announcement from the list in your Inbox soon.

You may need to change your anti-spam filters to keep the messages coming without interruption.


Wednesday, August 6, 2014

Who Should Drive PCI DSS Compliance?

[This is our second guest post from Joe Tinucci, Assistant Treasurer of the University of Colorado. --gaw]

Whenever I talk to my colleagues around the country about who in their organization is responsible for managing PCI DSS compliance, I usually get two different answers -- either the technical security side of the organization or the business side.  Of course, the merchant is the responsible entity as far as the acquiring bank or the payment card associations are concerned but when there are multiple merchants in the organization there needs to be someone coordinating / managing the compliance effort.  So, who is in a better position to drive / manage the compliance effort?  (Or, as we say around here, who is responsible for herding the cats?)

There are good arguments for letting the technical security people drive the process:

  • They are closer to the actual technology used to process transactions at the merchant level.
  • They understand the security techniques used to secure the transactions (blinking lights and all).
  • They control the infrastructure through which transactions are processed (network, firewalls, phone lines, PCs, and so forth) -- or they have direct links to the people who control it.
  • They understand the techno-speak language in which the PCI DSS / PA-DSS is written, and, in particular, understand the objectives behind each of the standard's requirements.
  • PCI DSS compliance is a security thing and that is what they are paid to do.

You can probably add other reasons why PCI DSS compliance belongs on the technical side.

On the other hand, I feel that there are good arguments for making the business side of the house responsible for driving PCI DSS compliance:

  • They control the money, including funding for those parts of the security process that might need outsourcing (penetration testing, ASV scans, QSA assistance, and so forth).  And, in the event that remediation is required, they are generally the ones who have to figure out where to find the money, often on an emergency basis.
  • They already deal with multiple other compliance regimes in a lot of other areas; that experience can be directly applied to the PCI DSS compliance process.
  • The business side of the organization is already doing risk assessments in other areas and so can assist with the critical but non-technical aspects of PCI DSS risk assessments (in areas such as phishing, social engineering, broken processes, etc.).
  • They are already managing business risk trade-offs in other areas of the organization (particularly in treasury) and can apply that expertise to PCI DSS compliance -- particularly with respect to accepting risk or implementing compensating controls.
  • Treasury, in particular, speaks that really strange language that only bankers speak (ACH? settlement? OFAC? credits and debits?) and they manage the organization's relationship with the Acquiring Bank.  It is really that relationship that is driving the organization’s PCI DSS compliance efforts.  In addition, if a merchant account needs to be cut off, it is the business side that needs to work with the Acquirer to close out the merchant account.
  • They understand the larger context of the business and how all the moving parts, including payment acceptance, fit together.
  • They understand good business practices and procedures that should be in place in every merchant environment.

It is this last point that really convinces me that the business side (most likely Treasury) should be driving the compliance process.  God bless the technical security staff but they will secure whatever they are asked to secure -- including horrible business practices that should never have been allowed in the first place.

In reality, of course, neither side can have a successful compliance process without the other; it is a complex dance between partners with the goal of making each and every merchant secure through both best business practices and best technical security implementations.

Your thoughts on the issue?

Joe Tinucci is the Assistant Treasurer at the University of Colorado, where he manages the University's banking relationships.  As part of that job, he also drives the PCI DSS compliance process for approximately 160 card-accepting merchants across diverse card-acceptance environments in four campuses.  Joe can be reached at (303) 837-2185 or

Thursday, July 10, 2014

A Few Thoughts on Liability

[This is a guest post from Joe Tinucci, Assistant Treasurer of the University of Colorado. --gaw]

The other day I met with some colleagues of mine from a nearby city which was covered under our joint state-wide governmental entity merchant services contract. They had several questions raised by their legal department about their obligations under the contract.  The main thrust of their questions and our subsequent conversation revolved around their liability, for both merchant activity and PCIDSS compliance, when they had completely outsourced their merchant processing to a third party.

Under the typical merchant services contract, the merchant of record is the responsible party -- for everything, including PCIDSS compliance.  You can try to limit your liability by outsourcing your processing to a compliant third party processor, but in the end they are simply acting as your agent and you still have liability for them.  This seemed to be a surprise to my colleagues, even though they had read the contract.

It is probably a good idea to take a few minutes to review your contract to confirm this issue.  If you read it carefully, you will probably not find much, if any, discussion of third party service providers -- everything is framed in terms of your responsibilities to submit valid transactions, of proper amounts, for legal goods and services, in accordance with the card association rules, and so forth.  In addition, your agreement likely requires you to indemnify the acquirer against any losses or liabilities arising from your service provider's actions or inaction.

You might also want to talk to your bank about being the merchant of record.  In our discussions with our bank, they have always indicated that the "merchant of record" is the responsible entity (as well as their client) for everything, including PCIDSS compliance.  If you are not the merchant of record, though, then it's not your problem -- at least according to our bank.  I'm not sure that is the entire story, however, as it is very possible to take a hit to your reputation even if a third party is the merchant of record but processing transactions for your customers (say, an online event registration site processing registrations for one of your departments).  

As can be inferred from the new SAQ A under version 3.0, even outsourcing everything to a compliant third party processer still requires:
  • Confirmation of service provider compliance with the PCIDSS, as well as ongoing monitoring of that compliance
  • Prohibition of the electronic storage of cardholder data
  • Physical security of any cardholder data which may be held on paper
  • Destruction of the cardholder data when no longer needed, if retained
  • A security policy in place that covers cardholder data security, management of third party service providers, written agreements with service providers, and specification from the service provider about which PCIDSS requirements they manage and which are your responsibility
The conclusion from our discussion and this line of thought -- it is extremely important that you thoroughly investigate any service providers before you trust them to handle your merchant activity.

Joe Tinucci is the Assistant Treasurer at the University of Colorado, where he manages the University's banking relationships.  As part of that job, he also drives the PCIDSS compliance process for approximately 160 card-accepting merchants across diverse card-acceptance environments in four campuses.  Joe can be reached at (303) 837-2185 or

Tuesday, April 29, 2014

Live from Chicago

Poor lodgings
Our hotel is nicer than this one.
Hi Folks!

I just wanted to check in from the 2014 Treasury Institute for Higher Education PCI DSS Workshop. I have to say that in my four years of attending this event, this year's program seems outstanding. We have had a number of great guest speakers and member-provided programs that show off the amazing talent and depth of knowledge this group possesses.

One theme that has been coming through this week is that there is no other event like this: a three-day workshop (or conference) focused on educating the attendees about information security and PCI DSS. The closest thing to this that I am aware of is the Community Meeting sponsored by the PCI Security Standards Council itself. And considering that we are not the authors of the standard, the higher education PCI compliance community can take a lot of pride in what we teach and share about our nuts-and-bolts, boots-on-the-ground experiences with trying to apply this standard in the most complex environments in the world.

We have heard for years that the unique environments of our college and university campuses are less like a merchant and more like a city full of diverse (and sometimes unruly) merchants when it comes to working with the PCI DSS. And most of us have far fewer resources to work with than a major retail, hospitality, or healthcare corporation. How do we do it?

Commitment. Teamwork. Knowledge. Communication. Sharing.

We have put into practice here and on our PCI Listserv a true Open Source Community in the classic sense. The private business sector could not duplicate what we do here every spring with our PCI Workshop. Can you imagine business rivals working together to share examples of how they conduct their operations? To encourage and help their competitors find the solutions that would keep them in business? To be open to engaging with their rivals to work together and share their corporate intellectual property and the results of their years-long research projects? It's a stretch for me to think of something like that, but it is what we do here intensely for three days every spring and what we do day-in and day-out on our listserv and in e-mails and phone calls to one another.

You know, we're not the ones who came up with the idea of putting unencrypted credit account data on a magnetic stripe stuck to the back of a piece of plastic. We didn't build the systems that can be used to easily steal that data from computers and networks, and then duplicate the cards in order to steal money from innocent victims. An we're not the ones who said "Oops, we better fix that with these 286 security requirements that we'll make merchants who are already broke prove they can meet, every single day without fail. No prior knowledge of InfoSec required." I know none of you thought up this situation. (Although I often get blamed for it.)

But each day we rise to the challenge of PCI DSS compliance and say, "OK. Bring it on!" I'm really proud of all of us here. For me, you guys make my success in my job possible. You challenge me and make me think of how to solve my problems in whole new ways. I am so grateful that I get to meet with you all every year and soak up your energy and optimism.

Thank you Treasury Institute for Higher Education. Thank you PDG and Katy. Thank you Dennis, Ron, and all of you who came from schools spread out from Florida to Alaska. And thank you, Walt Conway, for bringing everything you had to build this workshop into what is has become. I hope we have been able to honor you, in gratitude for what you gave to us. I hope you are also proud of what we have been able to do here this week. We'll remember you always.