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Visa, MasterCard to unveil new security rules

The updated PCI standard will cover Web apps, third-party controls

July 7, 2006 12:00 PM ET

Computerworld - Visa U.S.A. Inc. and MasterCard International Inc. will release new security rules in the next 30 to 60 days for all organizations that handle credit card data, a Visa official said this week.

The rules will be the first major updates to the one-year-old Payment Card Industry (PCI) data security standard, which analysts said is slowly but surely being adopted.

One set of PCI extensions is aimed at protecting credit card data from emerging Web application security threats, said Eduardo Perez, vice president of corporate risk and compliance at Foster City, Calif.-based Visa. Other new rules will require companies to ensure that any third parties that they deal with, such as hosting providers, have proper controls for securing credit card data.

Merchants who fail to comply with PCI can face fines or be excluded from processing credit cards.

The standard lists 12 broad controls that retailers, online merchants, data processors and other businesses must implement to protect cardholder data. They include technology controls such as data encryption, end-user access control and activity monitoring, as well as procedural mandates.

Most existing PCI requirements focus on security at the network level, but many of the latest threats are on the application side, said Philippe Courtot, CEO of Qualys Inc., a Redwood Shores, Calif.-based provider of managed security services. So it makes sense to update PCI to protect against Web application threats such as SQL injection attacks, cross-site scripting flaws, error-handling problems and validation errors, he said.

The PCI standard could become stricter in the next few years. Currently, companies are encouraged, but aren't required, to use payment applications that meet a set of PCI payment application best-practices standards, but that will become compulsory over the next two years, Perez said.

The number of companies complying with PCI requirements finally appears to be picking up after a slow start, several analysts said. Visa says that about 22% of Tier 1 merchants, which the company defines as those processing more than 6 million card transactions per month, are already PCI-compliant, with another 72% on track to becoming fully compliant.

The numbers reveal that progress is being made, albeit slowly, said Avivah Litan, a Gartner Inc. analyst. One of the biggest technology challenges is PCI's requirement for encryption, Litan said. Some companies are uncertain whether they're required to encrypt data or can implement other compensating controls, she said.

Another factor in the slow pace of adoption is the perception that PCI, unlike government mandates, is a private standard lacking enforcement teeth, said Nigel Tranter, a PCI auditor at Payment Software Co., an auditing firm in San Jose.

Read more about Security in Computerworld's Security Topic Center.

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