Securing Payments — Decoding PCI DSS

Backspace Tech
8 min readOct 27, 2023

Introduction:

PCI DSS which stands for Payment Card Industry Data Security Standard is a global security benchmark designed to protect cardholder data and sensitive authentication data handled by entities engaged in card transactions. This standard establishes a foundational level of protection for consumers and combat fraud and data breaches within the entire payment landscape.

The core objective is to ensure the security and optimization of sensitive cardholder data, including credit card numbers, expiration dates, security codes, etc. In a nutshell, think of it as the fortress where your secret card information resides. PCI DSS ensures that this fortress is fortified with layers of security, making it impervious to hackers.

Let’s dive deeper into the origin of PCI DSS.

History and Evolution:

It all began in the 1980s and late 1990s when credit card transactions started migrating to the digital realm, creating opportunities for e-commerce. Yet, with this transition came the vulnerability of data breaches. From 1988 to 1999, Mastercard and Visa incurred losses exceeding $750 million due to online fraud. This prompted card companies to acknowledge the necessity for robust security standards.

In the early 2000s, various credit card brands embarked on individual initiatives to enhance information security. Visa introduced the Cardholder Information Security Program (CISP), while Mastercard, American Express, Discover, and JCB followed suit with their programs. However, the multitude of programs, each with its own requirements, created a chaotic landscape, making it challenging for businesses to navigate security compliance.

In 2004, the major credit card companies decided to unite their efforts, recognizing the need for a unified standard. This collaborative effort led to the birth of PCI DSS version 1.0; a comprehensive set of rules supported by all five major card brands.

In 2006, PCI DSS protection took further steps. The five-card brands established the PCI SSC (Payment Card Industry Security Standards Council), an independent entity responsible for managing the standard. It became a global forum where the payment card industry collectively monitored risks and issued regular updates to PCI DSS.

Who comes under PCI DSS?

These regulations encompass a broad spectrum of entities within the credit card processing ecosystem:

· Banks - Issuing banks and acquiring banks.

· Service providers - involved in the processing, storage, or transmission of cardholder data.

· Merchants - who accept payment cards from the five members of PCI SSC (American Express, Discover, JCB, MasterCard, and Visa)

· Processors - handles credit and debit card payments on behalf of merchants.

· Developers -who develop and maintain secure systems and applications.

· Assessors - organization authorized to validate an entity’s adherence to PCI DSS requirements.

And what exactly falls under the umbrella of protected payment card data elements?

These include the

  • PAN (primary account number),
  • Cardholder name,
  • CAV/CID/CVC2/CVV2,
  • Chip or magnetic strip data, and
  • Sensitive authentication data, which comprises a combination of user ID or account ID and the authentication factor(s) used to verify an individual, device, or process.

Ahem! You get to know about who falls under the PCI DSS’s roof and what data it protects under its roof.

But Main Picture Abi bi Baaki Hai.

Key elements of PCI DSS Compliance:

PCI DSS compliance comprises three key elements:

· Securely collecting and transmitting customer card data.

· Protecting data as per the 12 security domains of PCI standards, including encryption, continuous monitoring, and access security testing.

· Annual validation of security controls through assessments like forms, questionnaires, vulnerability scans, and third-party audits.

The Main Picture

Principles and Requirements of PCI -DSS:

The PCI SSC has established six primary principles within the PCI DSS, encompassing a total of 12 requirements which must be followed by entities that fall under the PCI DSS’s roof.

Principle 1: Construct and ensure a secure system and network

  1. Installation and maintenance of firewall configuration to secure cardholder data.

Firewalls serve as a crucial barrier, impeding the entry of external/unfamiliar entities seeking to reach sensitive information. They function as the initial layer of protection against both malicious and non-malicious cyber intruders. Their effectiveness in thwarting unauthorized access makes them a mandatory component for achieving PCI DSS compliance.

2. Should not use default settings provided by vendors for system passwords and other security parameters.

Operating systems and devices often include default settings, like easily guessed usernames and passwords, some of which are publicly available online. This requirement prohibits the use of default passwords and security parameters. It also mandates the maintenance of system inventories and consistent application of hardening procedures for new IT infrastructure additions.

Principle 2: Protect cardholder data

3. Safeguard cardholder data that is stored.

Cardholder data must undergo encryption using industry-recognized algorithms, truncated or tokenized. Additionally, this requirement outlines specific guidelines for the presentation of PAN permitting only the display of the first six and last four digits.

4. Transmit cardholder data via open or public networks using encryption.

Cardholder data is frequently transmitted across common channels such as payment gateways and processors for transaction processing. As this data is sent over open or public networks, it must be encrypted during transmission to safeguard against potential cybercriminal access. Account numbers should never be sent to unfamiliar destinations. Encrypting cardholder data before transmission using secure transmission protocols can significantly reduce the risk of data compromise.

Principle 3: Maintain a vulnerability management program

5. Defend every system from malware and update of antivirus program on a regular basis.

This requirement focuses on defending against various forms of malware that can impact systems. Organizations must establish risk assessment and vulnerability management programs to safeguard their systems from malicious activities like spyware and malware. Applications must be free from vulnerabilities that could be exploited to steal/alter cardholder data. All systems, including employee laptops and mobile devices used for both local and remote access, should have up-to-date antivirus solutions.

6. Create and manage safe systems and applications.

To reduce the risk of vulnerabilities being exploited, organizations should promptly apply critical patches to all systems within the card data environment. This encompasses operating systems, firewalls, routers, POS terminals, etc.

Principle 4: Implement strong access control measures

7. Limit cardholder data access to legitimate business needs.

Cardholder data should strictly follow the “need to know” principle. Only individuals who require access, based on their roles, should have it. This aligns with role-based access control (RBAC) in PCI DSS, which ensures data and system access is limited to those who need it. Organizations must maintain a documented list of users and their roles for card data access, regularly updating roles that require sensitive data access.

8. Determine and verify who has access to which system components.

This requirement mandates the use of unique user IDs and complex passwords to ensure traceability and accountability for cardholder data access. Two-factor authentication is required for non-console administrative access. Individual credentials and identification are necessary for those with access to cardholder data, preventing shared logins among multiple employees.

9. Limit the physical access to cardholder information.

This requirement emphasizes safeguarding physical access to systems with cardholder data to prevent unauthorized entry. It necessitates the use of video cameras and electronic access control for monitoring entry and exit doors at locations like data centers. Recordings or access logs of personnel movement must be retained for a minimum of 90 days. Additionally, all media containing cardholder data should be protected and deleted when no longer needed by the business.

Principle 5: Regularly monitor and test networks

10. Keep track of and an eye on every access to cardholder information and network resources.

The weaknesses in physical and wireless networks create opportunities for cybercriminals to steal card data. This requirement mandates that all systems establish proper audit policies and transmit logs to a centralized server. Regular reviews of these logs are necessary to identify anomalies and suspicious activities. Furthermore, all actions involving cardholder data and PAN must be logged. Compliance entails documenting data flow into the organization and the frequency of access.

11. Test security procedures and systems on a regular basis.

To maintain a robust level of security, it is imperative that all systems and processes undergo systematic testing. This entails a series of essential periodic activities which includes quarterly wireless analyzer scans to discern both authorized and unauthorized wireless access points, quarterly scans of all external IPs and domains within the Cardholder Data Environment (CDE), quarterly internal vulnerability scans, as well as comprehensive annual Application and Network penetration tests for all external IPs and domains, or after significant changes. Additionally, weekly file monitoring is a crucial component of this security regimen, aimed at promptly detecting any unnoticed changes that might pose a risk.

Principle 6: Maintain an information security policy

12. Keep a policy in place that covers information security for all employees.

This aspect of PCI compliance is aligned with the central objective of PCI DSS, which is to establish and uphold an information security policy for all personnel and parties. This requirement encompasses conducting an annual, structured risk assessment that identifies vital assets, threats, and vulnerabilities. It mandates user awareness training, employee background checks, and an effective incident management protocol. Furthermore, these compliance elements are scrutinized by Qualified Security Assessors (QSAs) to ensure their adequate implementation.

Levels of PCI DSS:

PCI DSS compliance categories merchants into four tiers, determined by the annual volume of credit or debit card transactions conducted by the business, encompassing both online and physical PoS transactions. The four levels are:

  • Level 1: applies to organizations handling more than 6 million Visa or Mastercard transactions annually, or more than 2.5 million for American Express.
  • Level 2: pertains to organizations processing between 1 million and 6 million transactions each year.
  • Level 3: designated for organizations that handle between 20,000 and 1 million online transactions on an annual basis, or for those processing less than 1 million total transactions in a year.
  • Level 4: encompasses organizations conducting fewer than 20,000 online transactions annually or those handling up to 1 million total transactions per year.

PCI DSS version history:

The PCI DSS has undergone several versions and updates over the years to adapt to the changing landscape of payment card security. Here’s a brief overview of the PCI DSS version history:

v. 1.1 (2006) — improvements in web application security issues.

v. 1.2 (2008) — improvements to wireless security.

v. 1.2.1 (2009) — clarifications and enhancements in various areas.

v. 2.0 (2010) — provided clarity and flexibility for easier merchant compliance.

v. 3.0 (2013) — focused on making payment security a regular business practice, emphasizing education, awareness, and shared responsibility.

v. 3.1 (2015) — addressed SSL (Secure Sockets Layer) vulnerabilities. [SSL, a protocol that ensures secure data transmission over the internet. It establishes an encrypted connection between a user’s web browser and a web server, protecting data from eavesdropping and unauthorized access.]

v. 3.2 (2016) — introduced measures to combat evolving payment threats.

v. 3.2.1 (2018) — minor updates regarding SSL/Early TLS dates.

v. 4.0 (2022) — enhanced multi-factor authentication (MFA) criteria, well-defined roles and responsibilities for each requirement, and added e-commerce and anti-phishing measures to tackle persistent threats.

Conclusion:

In the dynamic world of cybersecurity and payment card data protection, the importance of PCI DSS cannot be overstated. Just as the digital world continues to evolve, so will PCI DSS. As our exploration comes to a close, it’s evident that PCI DSS is not just a set of regulations but a safeguard against the ever-looming threats to sensitive financial information.

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Backspace Tech

Backspace Tech offers Fintech-as-a-Service to automate,simplify, and disrupt the payment industry by handling chargeback requests through a plug-and-play model.