12 New Requirements to Secure Credit Card Transactions

As of June 2008, if your business processes credit card payments,

Any company or government agency that processes, stores, or transmits payment card data must comply with the Payment Card Industry Data Security Standard, a set of requirements to enhance data security. Some of the PCI standards are common sense, such as building and maintaining a secure network through common practices and not using vendor-supplied defaults for system passwords.

In early 2007, TJX Companies, a discount retailer of apparel and home products with stores such as TJMaxx and Marshalls, reported one of the largest data breaches ever, with an estimated 45.6 million credit and debit card numbers stolen from one of its systems. The cost has been severe for the retail giant, whose settlement required it to pay an estimated $65 million to MasterCard and Visa card users. The settlement with the Federal Trade Commission also requires the company to retain independent auditors to asses its security every other year for 20 years.

The TJX breach reveals what can happen to a company that fails to comply with the PCI DSS. Data security analysts criticized TJX for collecting too much personal information, keeping it too long, and relying on weak encryption technology to protect it.

The following 12 security guidelines will be mandatory for any organization that processes credit cards.

Build and Maintain a Secure Network

Requirement 1: Install and maintain a firewall configuration to protect cardholder data.
Requirement 2: Do not use vendor-supplied defaults for system passwords and other security parameters.

Secure Data

Requirement 3: Protect stored cardholder data.
Requirement 4: Encrypt transmission of cardholder data across open public networks.

Maintain a Vulnerability Management Program

Requirement 5: Use and regularly update antivirus software.
Requirement 6: Develop and maintain secure systems and applications.

Implement Strong Access Control Measures

Requirement 7: Restrict access to cardholder data by a need-to-know basis.
Requirement 8: Assign a unique ID to each person with computer access.
Requirement 9: Restrict physical access to cardholder data.

Regularly Monitor and Test Networks

Requirement 10: Track and monitor all access to network resources and cardholder data.
Requirement 11: Regularly test security systems and processes.

Maintain an Information Security Policy

Requirement 12: Maintain a policy that addresses information security.

With the prevalence of credit card transactions in private organizations and even government, the rigid credit card guidelines are forcing organizations throughout the world to revamp their payment account security. Only 65 percent of level-one merchants, who process 6 million transactions per year, report being fully compliant, according to Visa’s 2007 compliance report. The remaining levels, two through four, were at 55 percent compliance last year.

"PCI compliance is a trend nationally that addresses the fact that some of the hardware and software used to process credit card transactions are simply not secure, since they were designed 15 to 20 years ago and haven’t been changed," says Mark Weatherford, chief information security officer for the state of Colorado. "Earlier this year the PCI sent out a notification with a list of different products that are no longer compliant, and later this year those hardware and software pieces will no longer be authorized to process credit card transactions. It requires a significant reinvestment by some organizations to get new equipment."