Archive for the 'Requirement 3 – Protect stored cardholder data' Category

17
Mar
18

Can Every Requirement Be Met With A Compensating Control?

“In theory, theory works.” – Jeff Hall

Some years back, the PCI SSC came out at the Community Meeting and stated that every PCI DSS requirement could be addressed by a compensating control worksheet (CCW).  A rather broad statement but it started a bunch of us in the PCI community thinking, “Is that really the case?”

Before reading this post, I highly recommend reading my post on writing CCWs so that you can fully appreciate why not every requirement can be met by a CCW.

That said, it turns out that there are a lot of requirements where there is no way to develop a CCW.  Here are just a few examples.

1.1.2 – Network Diagram(s) and 1.1.3 – Data Flow Diagram(s)

What would be the mitigating controls here?  There are none because diagrams are diagrams.  There is nothing you can do to compensate for these missing other than provide them.

1.1.6 – Firewall Rules

As with 1.1.2 and 1.1.3, what could possibly serve as a mitigating control?  If the firewall rules are not able to be reviewed, there is nothing you can rely upon to go above and beyond the control.

I have had people suggest that the QSA could rely on Nmap and vulnerability scans of the firewalls.  But that does not necessarily confirm all of the ports/services that are configured for the firewall nor does it necessarily confirm that the devices using those ports are the same ones that are in scope for PCI compliance.

1.2.3 – Wireless Networking

QSAs have repeatedly been told that this requirement can never be marked as ‘Not Applicable’.  The QSA is required to respond to how they confirmed at wireless was either in or out of scope.  But can you create a CCW for these requirements?

The controls that you need to assess to meet these requirements are the same controls you have to use in the CCW for mitigation.  So, if you have to document and evaluate the controls regardless, why would you bother to write a CCW?  You would not.  You would document and meet the requirements and move on.

3.2 – No Storage of SAD

This is the requirement that started the whole CCW debate.  When the PCI DSS was originally issued, QSAs were trained that this requirement could NEVER, EVER have a compensating control.  But that changed when the Council issued their proclamation a few years back.  But is that really the case?

Remember, a CCW must go above and beyond the intent of the original requirement.  3.2 also states in a note that SAD cannot be stored even if encrypted.  Encryption would be the only mitigating control available to an organization that wants to store SAD.  So what replaces encryption if that cannot be used?  Tokenization by a third party would be an option, but if you go that route, you are not storing the SAD, so the discussion becomes moot.

8.3 – Multifactor Authentication

Some form of multifactor authentication (MFA) is required for non-console administrative access to cardholder data environment (CDE) systems and remote access to an in-scope network.  Since the Council has clearly defined MFA and also knocked down multiple logons with different credentials, what is left?  In the end, there is no way around meeting this requirement other than doing what the requirement states.

10.1 – 10.3 and 10.6 – Log Data

Here is another example of where there really is no way to write a CCW.  You are either gathering log data (centrally or on individual systems) or you are not.  You are either reviewing the log data daily or you are not.  Then there is the requirement of sending log data from internet facing devices to an internal device.  No matter how creative you think you are, there are no controls that will mitigate this situation and also go above and beyond.

As I said at the beginning of this post, these are just some of the examples where a CCW is just not going to make it.  So, the next time you think about meeting a PCI DSS requirement by using a CCW, make sure you understand the requirement and that there are controls that will mitigate the risk and go above and beyond the original intent of the requirement.  You will save yourself and your QSA a lot of time and consternation.

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17
Feb
18

Pre-Authorization And Post-Authorization (Part 2)

I discussed the concept of pre-authorization in a prior post.  Now it is time to cover post-authorization (aka “post-auth”) and the PCI requirements it drives.  Post-authorization is where the PCI DSS got started even though pre-authorization was always present.  That is because it was in post-authorization where merchants were losing cardholder data (CHD).  While this post is mostly about post-authorization, it still contains some important references and points about pre-authorization.

Post-Authorization

First, let us define what we mean by “post-authorization”.  Post-authorization starts immediately once a transaction has been processed and the payment has either been authorized or declined.  It is at this point that only the cardholder name, PAN (encrypted or tokenized) and expiration date are allowed to be stored in any post-authorization systems.

On page 8 of the PCI DSS, the PCI SSC provides an excellent chart on what can be retained and what must not be retained in post-authorization.

Post Auth PCI DSS Chart

However, this chart also creates confusion regarding pre-authorization and post-authorization because it is not labeled as such and that the discussion on this topic occurs after the chart, not before it.  The following is from the second paragraph following the chart and is usually missed.

“Sensitive authentication data must not be stored after authorization, even if encrypted. This applies even where there is no PAN in the environment. Organizations should contact their acquirer or the individual payment brands directly to understand whether SAD is permitted to be stored prior to authorization, for how long, and any related usage and protection requirements.”

The first sentence makes it very clear that SAD must never be stored post-authorization.  The second sentence is to ensure that those entities that tokenize/encrypt the PAN do not think they can store SAD because they technically no longer have the PAN (believe it or not, people do think this is true and then claim it as such).  The last sentence was added to tell merchants to discuss with their acquiring bank whether or not they can store SAD as pre-authorization data.  While technically the merchant should have explicit approval from their acquirer for storing pre-authorization data, I can tell you from experience that very, very few merchants have such evidence.  Not so much because they did not ask (most do not), but even more so because acquiring banks do not recognize their responsibility for providing such approval and therefore are reluctant to provide it.

From a post-authorization perspective, any merchant that is storing SAD in a point of sale (POS) solution as pre-authorization data needs to have a secure delete or destruction process in place to remove the pre-authorization data once the card transaction completes (approval or decline).  But a very important point is that pre-authorization data stored for customer convenience in pre-authorization applications is not affected by this change in status.

For the fuel station example in the pre-authorization discussion, the POS system that is storing the encrypted SAD/CHD while you pump the fuel needs to securely delete that information when you complete pumping and the payment is processed.  In some cases, when you swiped your card at the pump, the system not only did the pre-authorization of your payment, but it also may have tokenized your PAN and now is holding that token, not the SAD/CHD.

To continue on with our hotel example.  The hospitality management system is going to pre-authorize payment and then either encrypt the PAN on that initial swipe/dip at check in or it may tokenize it for storage.  At check out, the PAN is either decrypted or the token is submitted for payment.

Most phone orders have the CHD directly entered into systems no different from any consumer buying something over the internet.  In fact, for a lot of call centers, the order is actually entered into the same Web-site that consumers use.  After all, why reinvent the wheel?

However, with telephone orders, there are going to be rare instances where systems are not available.  In those cases, merchants can take a couple of approaches.  During such an outage, I have clients that do not accept orders.  They tell their customers to call back later when systems are operational.  I have other clients that will take the order on a paper form in the name of customer service.  The forms are securely collected and stored until systems are back online.  The forms are then entered into the system(s) and then the people follow secure destruction procedures of the forms.  The important lesson is that either approach can be used depending on your organization’s customer service desires.  The only issue is ensuring security of the information if you choose the manual form approach.

For facsimile and mail order examples we definitely have the issue of the SAD/CHD existing on paper.  So you need to do something to secure that SAD/CHD once the form has been processed.  For facsimiles, the PCI DSS requires a secure facsimile solution be used.  The simplest way is to have a dedicated facsimile machine that is only used for receipt of orders.  This facsimile machine needs to be placed in a locked room or a locked cabinet so that only authorized personnel can access the facsimiles that come to that machine.

On the more automated side, I have seen simple solutions that utilize an outsourced facsimile solution through a secure gateway.  Customer service personnel can only view and print out the facsimiles to process them.  I have other clients that have sophisticated solutions that start out similar to the secure gateway, but the gateway delivers the facsimiles to secure printing solutions that allow the customer service person to use any printer on the network because they can only print after physically going to a printer and tapping their facility access card against a reader connected to the printer thus securing the output until the user is ready to print it.

In the case of mail orders, those require securing the mail upon receipt in the mail room from the post office.  The orders should be secured until they are picked up by customer service personnel or whomever in the organization is responsible for processing mail orders.  Only a limited number of customer service personnel should be allowed to pick up the mail at the mail room to take to the area for processing.  When picking up the mail, the person picking up should sign a log indicating that the mail was picked up, when it was picked up and by whom.  Once taken back to the processing area, the mail needs to be secured there until it is processed.

The easiest approach is what I call “Sharpie redaction”.  That involves using a black ink permanent marker (i.e., a Sharpie marker) and redacting the PAN to the last four digits, blacking out the three- or four-digit card verification code (if provided), copying the redacted form so that the redacted information cannot be read, filing away the copied form and destroying the original by shredding it.

To avoid the “Sharpie” approach, merchants are modifying their mail order and facsimile forms so that the portion containing the SAD/CHD are either at the top or bottom of the form and can therefore be torn off and securely shredded leaving the rest of the form able to be retained without the SAD/CHD.

These are all just examples.  There are many more ways that can also work.  But I prefer simple methods as that is always the easiest to implement and follow.

The bottom line is that, regardless of pre-auth or post-auth, the data needs to be kept secure and the processes used to secure it need to work in your organization consistently and effectively.

27
Jan
18

Pre-Authorization And Post-Authorization (Part 1)

Welcome to a new year.  I have had a number of interactions with a variety of people over the previous year and it has become obvious that the concepts of pre-authorization and post-authorization data is not clear to a lot of people.  These two concepts are a key part of understanding PCI compliance.  I will start with pre-authorization in this post and have a separate post for a discussion of post-authorization.

Pre-Authorization

Where pre-authorization (aka “pre-auth”) typically comes up is when someone asks, “How does [pick your online merchant] store a customer’s payment data and still be PCI compliant?”

Before we get to that question, we need to define what we mean by “pre-authorization”.  Pre-authorization is that time when a merchant has a customer’s sensitive authentication data (SAD) or cardholder data (CHD) but has not yet processed it for payment.

For most merchants, that time between collecting the SAD/CHD and processing it is measured in seconds.  For card present (CP) transactions, the SAD can be in the form of chip or magnetic stripe data.  For card not present (CNP) transactions, it typically includes the cardholder name, primary account number (PAN), expiration data and CVV/CVC/CID.  Regardless of transaction type, the data is sent off to either be approved or declined in seconds.

However, there are situations where that does not always happen that quickly.  Mail order telephone order (MOTO) and facsimile orders are the most obvious examples that can extend the amount of time between receipt of the CHD and processing by minutes, hours or even days and weeks.

But there are some not necessarily obvious situations where processing delays occur.

My first example of delay is when you go to fill your car with fuel.  When you swipe your card to pump the fuel, the system that manages the payment process will pre-authorize the purchase and then temporarily store the SAD until you finish pumping and hang up the hose to complete the transaction.  When you complete the transaction at the pump, the system sends through the actual charge and securely deletes your SAD from the system.  Depending on the size of your vehicle’s fuel tank and how close to empty you were, the system could have your SAD for quite a few minutes.

Another example is for the hospitality industry.  In the hospitality industry, a reservation typically does not cause a charge until a customer checks out even though they are required to have a card on file to hold the reservation.  When a customer checks into the property, the hotel’s billing system records the SAD and may also pre-authorize charges, but the actual card transaction is not processed until the customer checks out.  As a result, hotels can have SAD on file for the length of a traveler’s stay.  In fact, I have encountered SAD in hospitality systems that have been stored for more than a year due to reservations for special occasions such as graduations, birthdays, family reunions and anniversaries.

But getting back to the original question, the example that usually draws the most questions is in regards to when you, as a customer, store your card information with a merchant for future purchases.  These entities store your payment information (pre-authorization) in their applications so that you or they can quickly pay for your purchases without constantly re-entering your payment information.  These applications are not always part of a payment application, so they may or may not be PA-DSS validated.  However, when encountering them, I use the PA-DSS standard to ensure they process, store and transmit the SAD/CHD securely.  In addition, as a customer, you should have explicitly approved of the merchant storing your payment data and know how they will use that data.

Last, but not least, another great example of pre-authorization data are eWallet applications such as Google Pay and Apple Pay.  eWallets are just an electronic version of a consumer’s physical wallet.  eWallets are not regulated by the PCI standards or the card brands nor are they required to be PA-DSS validated.  Not that these eWallet applications are not secure, it is just that there is no one independently validating that they are secure.  That said, I always instruct developers of eWallet applications (or any pre-authorization applications) to follow the PA-DSS for developing a secure eWallet application.

The most confusion I encounter over pre-authorization data typically occurs regarding SAD/CHD that an organization receives via email or instant messaging.  A lot of QSAs get their undies in a bunch over when this happens and point to requirement 4.2 as the reason why this is unacceptable.  As a refresher, requirement 4.2 states:

“Never send unprotected PANs by end-user messaging technologies (for example, e-mail, instant messaging, chat, etc.).”

The operative word in 4.2 is “send”.  Requirement 4.2 says nothing about receiving PANs by these methods.  That does not mean that the Council recommends receiving PANs via email, IM or similar methods.  It is only recognition of what goes on in the real world.  There will always be a small percentage of people that will send their cardholder data insecurely and there is little an organization can do to stop it.

Yes, you can put a data loss prevention (DLP) solution in the middle of all of these messaging technologies and catch the bulk of the offenders.  But then what?

I have some clients who have taken this approach and the DLP securely deletes the message and triggers a message back to the sender stating that they do not accept payment card information via this communication channel and then explains all of the appropriate and approved ways a customer can communicate SAD/CHD.

I have other clients that use the DLP but do not delete the message.  They explain that in this one instance, they will process the transaction because they are all about the customer experience.  They have a process that they follow to handle the message and then securely delete it.

To keep your email, IM and other messaging systems out of scope, the Council has told QSAs that organizations must have a policy in place that says they never encourage customers to use these messaging channels for communicating SAD/CHD and to make sure that organizations have a process to remove the SAD/CHD as soon as possible from those systems.  That typically involves the printing of the message, deleting the message from the system(s) and then securely destroying the printed message once the transaction is processed.  This is all considered “incidental contact” in the eyes of the Council and the QSA can then consider the system out of scope as long as they can satisfy themselves that the manual process is reliable.

The bottom line is that all of these situations involve pre-authorization data and pre-authorization data can include everything recorded on a card’s track or chip.  If a merchant does store the pre-authorization data for the convenience of their customers, they are obligated under the PCI DSS to store it separately, away from post-authorization data and to protect it with the same rigor as post-authorization data, i.e., encrypted, extremely limited access, logging, monitoring, etc. 

That is a key point that is often missed.  Pre-authorization data must be stored separately and away from any storage of post-authorization data.  That means that separate instances of databases need to be used on separate servers.  The rationale for this is no different than keeping key encrypting keys (KEK) away from data encrypting keys (DEK).  It is to ensure that in the event of a breach of post-authorization data, it does not readily lead to a breach of pre-authorization data.  It also allows for more rigorous controls over the pre-authorization data.

One final point regarding pre-authorization data that I made earlier, but it needs to be reiterated.  If a merchant intends to store pre-authorization data, I highly recommend that you have a legal agreement in place between your organization and your customers that explains why your organization is retaining this information and the business purpose(s) for which the information will be used.  That can be similar to a license agreement that the user either signs or clicks “Okay” online to acknowledge their approval.

In a future post I will discuss the world of post-authorization where the PCI standards were originally focused.

16
Apr
16

PCI DSS v3.2 Draft Released

On Friday, April 15, 2016 while a lot of you were probably getting your US income taxes done, the PCI SSC decided to release the draft of v3.2 of the PCI DSS.  I know the announcement message to me from the Council ended up in my company’s spam filter, so you may want to check there if you did not receive a message.  I was lucky enough for a colleague to forward his copy along to me.  However to get the draft, you need access to the PCI Portal to obtain the draft PCI DSS v3.2 and the requisite change log.

These are some of the more notable changes in the new PCI DSS version.

  • The draft provides an official sunset date for v3.1 of the PCI DSS. Regardless of the date in April that v3.2 is released, v3.1 will be withdrawn on October 31, 2016.  So any assessments done after that date will need to comply with and use v3.2.
  • Two new sections to Appendix A have been added. In addition to the Appendix for shared hosting providers (now marked A.1), we get Appendices A.2 and A.3.  2 covers SSL and early TLS for those of you that will miss the June 30, 2016 date.  For those of you that thought 2018 was the deadline and missed discussions on the Webinar about the SSL/early TLS deadline, while the deadline was extended to June 30, 2018, any organizations missing the June 30, 2016 date must fill out Appendix A.2.  A.3 is where the Council added the designated entities supplemental validation (DESV) requirements.
  • There are a number of new requirements for service providers that are best practices until February 1, 2018. Those new requirements include: (1) maintain a documented description of the cryptographic architecture, (2) detect and report on failures of critical security control systems, (3) perform penetration testing on segmentation controls at least every six months, (4) executive management to establish responsibilities for the protection of cardholder data and a PCI DSS compliance program, and (5) perform reviews at least quarterly, to confirm personnel are following security policies and operational procedures.  I would bet that numbers three and five will likely create a lot of contention with service providers.  But you have until February 1, 2018 to get those in place.  However, if experience teaches us anything, service providers had better start now getting these new requirements in place and operating.
  • All organizations picked up the following new requirements that are best practices until February 1, 2018: (1) change control processes to include verification of PCI DSS requirements impacted by a change, and (2) multi-factor authentication for all personnel with non-console administrative access to the CDE. As with the aforementioned new requirements for service providers, these will also require a lot of organizations to get started now to ensure these new requirements are in place and operating.
  • The Council clarified requirement 8.1.5 to show that it is intended for all third parties with remote access, rather than only vendors. While most organizations understood the intent of this requirement, there were a few that played “legal eagle” and refused to require compliance for non-vendors.
  • Requirement 6.5 has been clarified that developers must go through secure coding training at least annually. This change will likely create some consternation for some organizations that are developing their own software that is in-scope for PCI compliance.
  • Clarified 11.5.a by removing “within the cardholder data environment” from the testing procedure for consistency with requirement, as the requirement may apply to critical systems located outside the designated CDE. This will likely expand the number of systems that require critical file monitoring.
  • Clarified 12.8 1 by saying that the list of service providers now must include a description of the service(s) provided.
  • Clarified 12.8.2 by adding guidance that service provider responsibility will depend on the particular service(s) being provided and the agreement between the two parties.
  • One of my pet peeves has finally been addressed. I have always had an issue with requirement 1.1.6 and the use of the terminology “insecure protocols”.  The reason is that in one way or another, all protocols have their insecurities whether they are known or not.  In v3.2, the Council has finally removed the “insecure” designation as, in their words, “these may change in accordance with industry standards.”  It is those small battles at times that make your day.

There are other clarifications and edits that have been made to the new version.

For all of us QSAs, we await the Reporting Template which will detail out the actual testing to be performed which will allow us to assess the real impact to the effort required to conduct an assessment.  As a result, there could still be some surprises with this new version of the PCI DSS.  So stay tuned.

09
Apr
16

Living In PCI Denial

This was one of those weeks where you see something and all you can do is shake your head and wonder what some organizations think when it comes to PCI.  What added insult to injury in this case was that the organization arguing over PCI compliance is the manufacturer of card terminals, also known as point of interaction (POI).  It shocked me that such an organization was so clueless about PCI as a whole when you would think it is their business to know. But to add insult to injury, my client’s transaction processor and acquiring bank are also apparently clueless.

As background, I am working on a client’s Report On Compliance (ROC).  This client has almost completed with their roll out of an end-to-end encryption (E2EE) solution at all of their 4,000+ retail locations.  This E2EE solution will take all but the POI at those retail locations out of scope for PCI compliance.  That is the good news.

But if there is good news, you know there must be bad news.  In reviewing their documentation of this E2EE solution, I discovered that the POI vendor is providing management and updates to the POI through a terminal management system (TMS).  Since this TMS solution/service connects directly to my client’s cardholder data environment (CDE), I naturally asked the client for a copy of the vendor’s Attestation Of Compliance (AOC) for the TMS solution/service.

I thought those worthless PCI Certificates of Compliance took the cake.  Then, BAM!  I got the following message forwarded to me by my client from the POI vendor.  I have redacted all of the potential information that could identify the relevant parties and the TMS solution/service.

“Please see the follow up note below that you can send to your QSA for review and feedback:

  1. TMS systems in our industry do not require any type of PCI certification since PCI is concerned about card holder information that would be at risk. Since [vendor solution] does not have any card holder data at all, it falls outside of PCI requirements.  [Vendor solution] is merchant configuration and estate management tool only and as such, no payment card information passes through it, or directed to it.  In addition, no secure keys are stored on [vendor solution] so transaction data cannot be decrypted with anything on [vendor solution] or POS.
  2. [Vendor] Hardware and [vendor solution] Software are all PCI PTS compliant and certified and listed on the PCI website. Transactions are encrypted in hardware using the [encryption solution] keys which again [vendor solution] has no knowledge.  Transaction information can only be decrypted by [processor] the processor.  [Vendor solution] has no knowledge of this encrypted information being sent directly from the [vendor] to the processor.
  3. The beauty and simplicity of [vendor solution] semi-integrated terminal application is that is has all transaction data go directly to the Processor ([processor]) and no customer data is directed to the POS or [vendor solution] which makes the POS out of PCI Scope by the very nature of no card holder data in their environment.
  4. [Client] has a merchant certification with [processor] for the [encryption solution] with our [vendor solution] terminal application. Any questions regarding the certification should be directed to [acquiring bank] or a [processor] representative.

Let us know if your QSA has any further questions and we can also schedule a concall with all parties to address any concerns on [vendor solution] TMS and PCI.”

The first thing that wound me up is that this vendor is a business partner of my client’s transaction processor.  The processor is also a business partner of my client’s acquiring bank.  Those two organizations put forth this vendor to my client as being able to provide POI compatible to the processor’s E2EE and tokenization solution.  Obviously from this vendor’s response, these two well-known institutions did nothing in the way of due diligence to ensure that this vendor and its services were PCI compliant.

The second thing that totally irritated me is that there is no excuse for this vendor’s uneducated response.  Granted, this vendor is new to the US market, but they have been supplying POI to other merchants all over other parts of the world.  Which then starts to make you wonder just how lame are the banks, processors, card brands and other QSAs that they have not been called on the carpet about this before.  But that is a topic for another post and a good reason why the FTC is investigating the PCI compliance industry.

So let me take apart this vendor’s response.

“TMS systems in our industry do not require any type of PCI certification since PCI is concerned about card holder information that would be at risk.”

Wrong!  On page 10 of the PCI DSS the first paragraph under ‘Scope of PCI DSS Requirements’ clearly defines what is in scope for PCI compliance.

“The PCI DSS security requirements apply to all system components included in or connected to the cardholder data environment. The cardholder data environment (CDE) is comprised of people, processes and technologies that store, process, or transmit cardholder data or sensitive authentication data. “System components” include network devices, servers, computing devices, and applications.”

The operative phrase the TMS solution/service falls under is “connected to”.  The TMS solution/service directly connects to my client’s CDE.  That solution/service may not process, store or transmit cardholder data (CHD) or sensitive authentication data (SAD), but it is directly connected to my client’s CDE.  As a result, according to the above definition, the TMS solution/service is definitely in scope for PCI compliance.

“[Vendor] Hardware and [vendor solution] Software are all PCI PTS compliant and certified and listed on the PCI website.”

PTS certification is a card brand requirement, not a PCI DSS requirement.  Nowhere in the PCI DSS does it require that a PTS certified POI be used so I really do not care about this statement as it has nothing to do with my PCI DSS assessment activities.  If PTS were a PCI DSS requirement, then all of those people using Square and the like would be non-compliant.

“In addition, no secure keys are stored on [vendor solution] so transaction data cannot be decrypted with anything on [vendor solution] or POS.”

“Transaction information can only be decrypted by [processor] the processor.”

True, your TMS solution/service does not have the encryption keys.  But the firmware delivered by the TMS solution/service does have access.  (Unless you are the first POI vendor I have ever encountered that spent the huge amount of money required to truly create a hardware-only encryption solution.)  Given the low retail price and discounting of your POI you gave my client, I very seriously doubt that is the case.  So the firmware that your TMS solution/service delivers is what is doing the encryption and therefore has access to the encryption keys.  So while the TMS solution/service does not have the keys, it could be used to deliver rogue firmware that could obtain them.

Then there is the firmware delivery itself by your TMS solution.  If someone hacks your TMS environment, how easy would it be for them to have it deliver a rogue version of your firmware?  Since my client has no AOC, I have no idea if your security measures surrounding your TMS solution are adequate to prevent such an attack.

“[Client] has a merchant certification with [processor] for the [encryption solution] with our [vendor solution] terminal application.”

Such a statement ranks up there with those previously mentioned worthless PCI Certificates of Compliance.  Any QSA is required to obtain an AOC for the TMS solution/service to ensure that it is PCI compliant or the solution/service must be assessed as part of the merchant’s PCI assessment.

PCI DSS requirements under 12.8 are very clear as to everything a merchant needs to be able to provide to their QSA regarding third party PCI compliance.  Primarily of which is that AOC for your TMS solution/service among other items of evidence.

So I have a conference call with my client’s bank to discuss this situation.  I pushed back very hard when they told me that my client needs to do a compensating control for their business partner’s incompetence.  I even got an “atta boy” from the bank for identifying to them that they have a PCI compliance and potential security issue.  But I could not make the bank budge on the compensating control so I am off to get that written.

The lesson to be learned from this post is that nothing can be taken for granted when doing a PCI assessment even when you transaction processor and bank are involved.  A lot of people and QSAs would assume that a POI vendor would know better and that their bank and transaction processor had vetted the POI vendor.  Therefore, why do I have to worry about this vendor?  However as I have pointed out, you can never take anything for granted even when it involves organizations that you would think would know better.

This is just one way of many that could result in an organization being breached.  The TMS solution/service is a gateway directly to the merchant’s CDE.  Yet there has been no PCI assessment of that solution/service to ensure that it is PCI compliant and the risk it could be subverted has been minimized.

Thank goodness it is the weekend.  Oh, wait.  This weekend’s project is my income taxes.  Looks like I will be cranky all weekend as well.

14
Nov
15

Small And Mid-Sized Businesses

At this year’s PCI Community Meeting, the push was to address the security issues faced by small and mid-sized businesses, otherwise referred to as SMB. However, in my opinion, the approaches being suggested are still too complex. Great security results from simplicity, not complexity. As a result, I propose the following approach for SMBs because SMB executives typically have little time to fully educate themselves in information security, let alone, PCI. And while I am of the opinion that executives should have such knowledge, it is just not happening.

There Are No “Silver Bullet” Solutions

First and foremost. There are no “silver bullet” solutions that will entirely remove your organization from PCI scope. Any vendor telling you that their solution removes your organization from PCI scope is lying to you. If you hear such a statement from a vendor, the vendor does not know what they are talking about and their statements regarding PCI should no longer be trusted. The bottom line is that, if your organization accepts credit/debit cards for payment for goods/services, the organization will always have some PCI scope. The least amount of scope an organization can achieve is complying with the requirements listed in the SAQ A. There is nothing less. Anyone telling you otherwise does not know what they are talking about.

DO NOT STORE CARDHOLDER DATA (CHD)

This is probably the biggest single thing an SMB can do. In this day and age, there is no reason that any organization needs to retain CHD. Period. The most common business justification is that the organization does recurring transactions and that is the reason to retain CHD. Processors have a solution for that situation and many others. So I say it again. There is no valid business reason for any organization to retain CHD. None. Nada. Zip.

The first question out of an SMB executive’s mouth to a payment solution vendor should be, “Does your solution store cardholder or sensitive authentication data?” If the answer is anything other than an immediate and definitive “NO”, the meeting or telephone call is over, done, complete. There is nothing more to discuss. SMBs must stop being an easy target for attacks. The easiest way to do that is not having the CHD in the first place.

The second question that a payment vendor should be asked is, “How does your solution minimize my organization’s PCI scope?” If the vendor cannot provide you with a whitepaper on this subject, run away. If the documentation provided by the vendor leaves you with more questions than answers for PCI compliance, you also need to run away. In all likelihood, if this is what you encounter, the vendor’s PCI compliance is questionable, complex or requires too much effort on your part to be PCI compliant. This question should result in a one to three page whitepaper on PCI and how the vendor’s solution minimizes your organization’s scope.

So what solutions reduce scope to the minimum?

If you are a traditional brick and mortar retailer, end-to-end encryption (E2EE) from the card terminal, also known as the point of interaction (POI), to the transaction processor. PCI has a validation program called point-to-point encryption (P2PE). P2PE solutions are independently validated to ensure that they are secure. Solutions such as Shift4’s Dollars on the Net, First Data’s TransArmor and Verifone’s VeriShield are E2EE solutions that could meet the P2PE standard, but for various reasons the providers chose not to validate them to the P2PE standard. The key capability for any such solution is that the solution encrypts the CHD/SAD immediately when it is read from the card and none of your organization’s technology can decrypt the information and therefore read it.

If your organization does eCommerce, then you want to use a redirect or iFrame to process transactions in order to reduce PCI scope. The best example of a redirect is when a merchant uses PayPal for processing payments. The merchant’s Web site has a PayPal button that sends the customer to PayPal who then processes the customer’s payment transaction. At no time does the sensitive authentication data (SAD) encounter the merchant’s Web site. One of the concerns from merchants about redirects is the myth that customers vacate their shopping carts because they are redirected to a different site for payment. While this was true in the early days of eCommerce, with the increased use of PayPal and similar payment services, customers seem to have gotten over that practice and vacated shopping carts are no longer an issue. But if this is still a concern, use this as a teaching moment and educate your customer base that you do the redirect to ensure the security of their SAD.

An iFrame is essentially a Web page within a Web page. But the key thing from a PCI compliance perspective is that the iFrame is produced and managed by a third party, not the merchant. An iFrame can be a Web page, but more often than not it is a series of fields that gather the SAD for conducting a payment transaction. As with the redirect, the SAD never comes into contact with the merchant’s Web site.

Both of these solutions take your organization’s Web site out of scope so you do not need external and internal vulnerability scans and penetration tests. However, just because your Web site does not have to go through the rigors of PCI compliance, you still need to ensure its security. See my post on SAQ A and SAQ A-EP for a more detailed discussion on this topic.

Tokenization

Tokenization is the act of encrypting or tokenizing the primary account number (PAN) so that when it is returned to the merchant for storage it has no value to anyone if it is disclosed. Tokenization can occur at the time a card is swiped or dipped at the terminal or it can be done by the transaction processor at the back end of the transaction. Regardless of where the tokenization occurs, paired with E2EE or P2PE, tokenization further minimizes PCI scope.

If your organization needs to perform recurring transactions such as with subscriptions or automatic reorders, tokens can be generated by the processor so that they can be used just like a PAN. While a token is not a PAN, in situations where they can be reused for future transactions, it is incumbent upon the merchant to protect access to the token so that it cannot be sent to the processor for fraudulent charges.

And that is it. Not storing CHD, E2EE/P2PE and tokenization will reduce an organization’s PCI compliance footprint to the absolute minimum. It really is that simple. However, finding the solutions that bring all of that to the table is where the work comes in. However, any SMB that asks the right questions of its vendors can put together a solution that minimizes their scope and provides protection for CHD/SAD as good as with the big boys.

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May
15

Whole Disk Encryption Explained

There are a lot of security professionals and lay people that seem to believe that encryption is encryption and that is simply not the case. Worse yet, vendors play into this misconception and obfuscate the issue with lots of words and phrases discussing seemingly complicated encryption key management procedures and the like that are actually meaningless when it comes to protecting data on running systems. As a result, it is time to clarify all of this misunderstanding.

First things first, we need to discuss how whole disk encryption works. As its name implies, whole disk encryption encrypts an entire disk drive. When a file on the whole disk encrypted drive is accessed, the encryption solution decrypts the file necessary using the decryption key provided at system startup and the rest of the drive remains encrypted. That way if a system failure occurs or the system is shutdown deliberately, the drive is always protected.

That is the key concept of whole disk encryption. The drive is technically only encrypted when the system is shutdown. If the system is running, the encryption is technically not in place because the operating system has the decryption key to access the disk at will. This is why whole disk encryption is great for devices like notebooks and the like that are shutdown at some point.

This is also why whole disk encryption is meaningless when applied to a server. When is a server shut down? Never. When using whole disk encryption on a running server, the only control that protects data is access controls, not encryption.

So using this definition, let us examine requirement 3.4.1 in the PCI DSS. That requirement states:

“If disk encryption is used (rather than file- or column-level database encryption), logical access must be managed separately and independently of native operating system authentication and access control mechanisms (for example, by not using local user account databases or general network login credentials). Decryption keys must not be associated with user accounts.”

The first statement that throws people is “logical access must be managed separately and independently of native operating system authentication and access control mechanisms”. In short, whole disk encryption cannot rely only on the operating system’s authentication process.

The best example of this is Microsoft BitLocker. BitLocker has a number of modes under which it can operate. It can integrate with Active Directory (AD), it can rely on a trusted platform module (TPM) chip in the computer or it can operate stand-alone.

In stand-alone mode, BitLocker requires the user to provide the BitLocker key by either manually keying it in or providing it on a USB device that stores the BitLocker key in order to boot the system. If that key is not provided, the system will not even offer the user to logon. This form of BitLocker meets the requirements set forth in requirement 3.4.1.

But then the requirement goes on and say, “Decryption keys must not be associated with user accounts”.

In stand-alone mode, the BitLocker key is not associated with the user’s credentials so it also meets this part of 3.4.1.

However, in the AD or TPM modes, BitLocker operates behind the scenes and the end user never knows that their disk is encrypted and the user still logs onto the system as always using their Windows credentials. These modes do not meet the independence requirement in 3.4.1 because all that is protecting the data is the user’s Windows credentials. And in the case of AD mode, BitLocker also does not meet the user credential disassociation requirement because the BitLocker decryption key is tied to the user’s Windows credentials.

But if people would fully read the Guidance column for requirement 3.4.1 they would read the following at the end of the guidance for 3.4.1 where the Council states:

“Full disk encryption helps to protect data in the event of physical loss of a disk and therefore may be appropriate for portable devices that store cardholder data.”

BINGO!

Whole disk encryption helps protect data in the event of physical loss of a disk. Period.

So with a server that never shuts down, if a drive in a SAN or NAS fails, the failed disk with whole disk encryption will be encrypted when it is pulled from the array. But if things are running just fine, whole disk encryption does nothing to protect the data.

So do not be baffled by the statements from those vendors trying to convince you that whole disk encryption on your server is going to protect your data while the server is running. That is not true.

Now you know.




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If your organization has a PCI opportunity, is in need of assistance with a PCI issue or if you would like the PCI Guru to speak at your meeting, you can contact the PCI Guru at pciguru AT gmail DOT com.

I do allow vendors to post potential solutions in response to issues that I bring up in posts. However, the PCI Guru does not endorse any specific products, so "Caveat Emptor" - let the buyer beware. Also, if I feel that the response is too "sales-ee", I reserve the right to edit or not even authorize the response.

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