Wednesday, April 29, 2009

PCI’s Grading System Is Failing

David Taylor writes on StorefrontBacktalk:

For months, retailers and Congress have been attacking retail security standards, but few realize that the problem is not in the standard itself. The problem is a grading system that causes most retailers to be out of compliance most of the time because the rules require 100 percent compliance. How often in school did you score 100 percent?

The system is oriented to forcing retailers to fail and it does this by being utterly insensitive to risk, which is surprising because the financial services industry runs on risk management. So if big finance runs on risk management, why are retail payment security rules running away from it?

At the recent Electronic Transactions Association (ETA) conference, Visa and MasterCard executives again defended the standard against industry and government criticisms that the standard is insufficient to prevent breaches. They cited instances where merchants (e.g., Hannaford) and processors (e.g., Heartland) who claimed to be PCI compliant were actually not compliant during the extended period of time during which the breach occurred. That happened because, from a technical perspective, “companies can fall in and out of compliance,” and because sometimes “the PCI assessment is not comprehensive enough,” according to the executives. From these statements, it sounds like the blame for why a “compliant” company can get breached is due to either technology or the assessors. But I maintain that the culprit in all of this is the grading system used to measure PCI compliance, and it’s time for a change.

More here.


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