The recent data breaches at Target and Neiman Marcus have once again shown that compliance with the Payment Card Industry Data Security Standard (PCI DSS) is no guarantee against an intrusion.
What's unclear is whether the problem lies in the standard itself, or the manner in which it is implemented and assessed.
In a letter to U.S. Sen. Richard Blumenthal (D-Conn.) explaining the recent breach that exposed 1.1 million payment cards, Neiman Marcus CIO Michael Kingston claimed the intrusion happened even though the company had security measures that exceeded PCI standards.
Target, which last month disclosed a data breach that exposed credit card data on 40 million people, is also believed to have been PCI compliant at the time of the intrusion.
Several other companies that have suffered major data compromises in recent years have also claimed they were compromised despite being certified as PCI compliant.
Security analysts and researchers have differing takes on what might be going on.
Visa, MasterCard, American Express and other major credit card associations established PCI several years ago to get companies to adopt a set of security controls for handling credit and debit card data. Over the years, the retail industry in particular, is believed to have spent billions of dollars implementing PCI requirements and billions more in mandatory third-party compliance assessments.
That companies like Target and Neiman Marcus were compromised in such spectacular fashion despite adhering to PCI has vexed many.
The breaches "highlight weaknesses in PCI and in the security industry," said Avivah Litan, an analyst with research firm Gartner. Nothing in the PCI standard, for instance, would have helped Target detect and block the intrusion before it happened, according to Litan.
"PCI does mandate checking for malware but none of the typical anti-malware products could find the Target malware, and PCI doesn't mandate next-generation anti-malware security that's starting to emerge," she said.
Some of the problems may have to do with the manner in which compliance is assessed, Litan said. Most assessments are done using previously known attack vectors and threats. Companies are not being assessed for their readiness in dealing with new threats. "That's why we need a new paradigm and stronger security inside the payment system," Litan said.
James Huguelet, an independent PCI consultant, said the biggest problem with the PCI standard is that it doesn't require companies to encrypt data in motion. While the standard has requirements for encrypting data at rest, there is no such requirement for data in action during the entire transaction processing chain.
"This leads to many points along the path of an active transaction where criminal malware can 'spy' on the information as it passes by which is what appears to have occurred at Target," Huguelet said. The best approach is to require that all card holder data be encrypted at the point it is swiped all the way until it reaches the merchant's bank for processing.
"This would take merchants' entire retail infrastructure out of the gun sights of payment criminals. There would simply not be any payment data that could be stolen from the retailers," he said.
Such end-to-end encryption can be costly, Huguelet said, but it is a one-time cost that is sure to drive real and lasting improvements in retail security.
John Pescatore, director of emerging technologies at the SANS Institute, said the breaches point out PCI implementation failures rather than a lack of controls in the standards itself. There's plenty in the standard that should have enabled Target and Neiman Marcus to catch the intrusions on the way in or to find and block the path the intruders took to break into the networks, Pescatore said.
"Doing security right is not trivial. But the problem is not some lack of requirements in PCI DSS or other standards," he said. "In fact, it would be counter-productive to try to jam attack-specific requirements into standards. It makes no sense."
The part of the PCI process that needs change is the compliance assessment process, Pescatore said.
The certified security assessors who verify a company's compliance status often don't do a good enough job. "Implementation or process failures should be caught by the assessors who do the yearly evaluations, or by quarterly vulnerability scanning," he said. "But too often the yearly assessments don't catch much and quarterly vulnerability scanning is not frequent enough."
The PCI Security Council, which administers the standard, did not have any immediate comments.
Jaikumar Vijayan covers data security and privacy issues, financial services security and e-voting for Computerworld. Follow Jaikumar on Twitter at @jaivijayan or subscribe to Jaikumar's RSS feed. His e-mail address is [email protected].