Things To Look Out For In New PCI Version 2.0

No big surprises were found in the new Version 2.0 of the Payment Card Industry Data Security Standards (PCI DSS) and PA-DSS released today--a summary of the changes were announced in August--but some subtle shifts and clarifications to the standard could mean big changes for some merchants.

Perhaps the most significant shift is in application security. The wording for centralized logging of payment applications in the PA-DSS, for example, went from "should" do to "must" do, which will put more pressure on merchants to better secure their applications, notes Eric Knight, senior knowledge engineer at LogRhythm. "This means if people have not been logging applications centrally, [they must do so now]," Knight says.

"The bulk of the tasks ahead for the new PCI DSS 2.0 are focusing more on the applications. You have to be more concerned about what apps have to be audited and protected, and centralized logging needs to be performed," he says, adding that could be challenging for some merchants because the monitoring load will likely increase. "A lot of people have been forwarding logs to syslog collectors. You also must do monitoring on those systems."

And some more sophisticated point-of-sale terminals that hold cardholder information temporarily could conceivably be pulled into the PCI scope, Knight says. Some QSAs already consider these systems part of the cardholder environment, while others do not, he says, so much of this will be up to the auditor.

"PCI is further redefining what a hardware terminal is: It's supposed to take payments outside of the PCI card data environment so you don't have to do any monitoring of them," he says. "But we've seen outbreaks of tampering [of devices] to capture cardholder data ... they are changing the definition, which could bring a lot of intelligent terminals collecting payments brought into [PCI]."

Merchants also now will rank vulnerabilities based on actual risk of exploitation and potential damages so, for instance, they don't have to address a vuln at all if it's a low-risk item. And primary account numbers can no longer travel via unprotected communications, such as instant messaging and email.

Gretchen Hellman, vice president of marketing and product management at Vormetric, says there are some major gotchas in the new version of PCI DSS when it comes to virtualization. "It talked about how each VM needed to be treated as a component and how it needed to be a single function per virtual component. But there are a number of PCI entities virtualizing their servers to save money and introducing new [elements that the] recommendations do not address, which will create more chaos in PCI DSS," Hellman says, given the new three-year cycle of the standard."They refer to the hypervisor and VMs, but the method to secure data within VMs is inherently different."

And the big news is PCI's three-year life cycle, which security experts worry is too big of a window that help keep attackers ahead of merchants' security. The goal of the three-year cycle was to give merchants some breathing room and to promote compliance, but it could also backfire.

"By the way, we just published a playbook" for attackers to refer to, says Joshua Corman, research director for the enterprise security practice at The 451 Group, who says the three-year cycle gives the bad guys plenty of breathing room as well.

The emphasis by the PCI Standards Council has been on making the standard less onerous and more administratively streamlined to deploy. But keeping it "stable" for a longer period of time also means it won't include the most up-to-date defense mechanisms for the newest threats, either, experts say. "It's a ladder in quicksand," Corman says. "Motivated adversaries are going to continue to evolve."

Corman points out that the recent Verizon Business breach reports showed 94 percent of all breached records involved custom malware. "PCI only requires antivirus. By definition, custom malware is modified just enough to evade AV," he says.

PCI is basically a low bar that you need, even though it might not protect you in the end, according to Corman.

But Jeremy King, European director of the PCI Standards Council, says the council had strong feedback to move from a two- to a three-year cycle. "And when you look at the new standard, it's mainly about improving greater clarity on the requirements, improving the flexibility around it, and allowing merchants to have more focus and a risk-based approach to compliance," King says.

And the standard will evolve midcycle as needed, he says. "We can change from 2.0 to 2.1 if it's necessary," he says.

What about criticism that the standard doesn't have enough teeth for enforcement? "That's not what the council is about. Our role is to provide standards to which people can adopt and obtain compliance," King says. The rest is up to the card brands, he says.

King says PCI has already made a huge impact on cardholder data. "From a data security perspective, I think the biggest impact we've had is merchants do not store data. They are protecting the data going through their systems and recognize this is something that needs to be protected, should be, or could be used in fraudulent way," he says.

PCI becomes effective Jan. 1, 2011, but Version 1.2.1 compliance is good through Dec. 31, 2011. So Version 2.0 is required by Jan. 1, 2012. The PCI Standards Council has launched a new website with more information and the PCI documents here.

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