Credit Industry Pitches Card Encryption

On Tuesday, the Payment Card Industry (PCI) Security Standards Council released new guidance on the use of point-to-point encryption and EMV card security standards. The guidance takes the form of two new white papers, produced by a collaboration of the council's technical working group, special interest groups, as well as various industry and security experts and vendors.

The new guidance is designed to help organizations "understand how they can better secure their payment card data and how specific technologies may assist them in meeting the requirements of the PCI Data Security Standard (DSS)," said Troy Leach, chief standards architect for the PCI Security Standards Council.

The EMV card security feature, also known as "chip and PIN," requires consumers to enter a personal identification number when paying with a credit or debit card in person. But while EMV (which was named for the companies that developed the standard, Eurocard, Mastercard, and Visa) was designed to cryptographically protect the purchasing process, card data -- including routing data -- still gets sent to processors in clear text. "If this data is obtained by criminals at some stage of the process, it can be used to create 'card not present' fraud," said Jeremy King, European regional director for PCI.

Accordingly, the council is exploring point-to-point encryption, which it purposefully avoids calling end-to-end encryption, since data would only be encrypted at certain points. "We've been looking at creating a road map, and this is what we've released with the white paper, which lays out how point-to-point encryption can work, and how it will work," said King.

One upside to such encryption would be that merchants would no longer have to ensure that customer data stays secure, since it would already be encrypted, thus easing their PCI DSS compliance requirements and hopefully enticing more companies to comply with the standard.

While official compliance statistics haven't been released, some studies suggest that many organizations don't treat PCI compliance as a requirement. However, according to one recent study, complying with PCI improves security and reduces an organization's risk of data breaches.

Introducing PCI changes, however, takes time. "The devil is in the details, and there are a lot of technical issues around how you introduce point-to-point encryption," said King, not least of which is key management. In addition, "we're introducing global standards for adoption anywhere in the world, and that creates challenges in different parts of the world," he said.

In other PCI news, on October 28, the PCI Council will release new versions of the PCI DSS, PIN Transaction Security requirements, and the Payment Application Data Security Standard. The new versions will now be refreshed every three years, instead of two, and the simultaneous update is designed to keep future versions in sync.

"The updates to the standards are certainly going to help the merchants," said King. "They're designed with the new three-year lifecycle to give them more time and give them more time to understand how they've matured, and that's a key phrase, because the standards have been around for some time. They're quite mature."