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Table of Contents

Lead Story

Getting a jump on the holiday season

News

Industry Update

PCI SSC releases new encryption requirements

Data security an ongoing concern

Google Wallet rollout generates questions

PayPal staking claim in mobile payments sphere

Trade Association News

Features

Seven steps to merchant success in recurring payments

Research Rundown

Meet The Expert: Andrew Altschuler

Selling Prepaid

Prepaid in brief

Nexon expands game card concept with Karma

Western Union enhances options at the POS

Views

Kick complacency out the door

Brandes Elitch
CrossCheck Inc.

Education

Street SmartsSM:
The ABCs of SAQs

Bill Pirtle
MPCT Publishing Co.

Reinvigorating the merchant club

Steve Norell
US Merchant Services Inc.

Trust in transparency

Jeff Fortney
Clearent LLC

Inspiration for women in payments

Peggy Bekavac Olson
Strategic Marketing

U.S. EMV implementation

Tim Cranny
Panoptic Security Inc.

Company Profile

First Annapolis Consulting Inc.

New Products

Look, Mom and Pop, no paperwork

CB App Express
Merchant Warehouse

An automation tool for walk-in payments

PayItFast
US Dataworks Inc.

Inspiration

Claim the podium

Miscellaneous

2011 Calendar of events

Departments

Forum

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

October 10, 2011  •  Issue 11:10:01

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Street SmartsSM

The ABCs of SAQs

By Bill Pirtle

Most merchant level salespeople (MLS) cringe when they think about Self-Assessment Questionnaires (SAQs). The Payment Card Industry (PCI) Data Security Standard (DSS) requires SAQs to be completed by all but the very largest merchants (Level 1), who have more stringent requirements.

When SAQs first appeared, many MLSs helped merchants complete them. Now that we understand the liability associated with helping merchants in this manner, we need to find other ways to get the job done.

Some larger ISOs have online SAQs merchants can be directed to, but most of those still require merchants to hire their own Approved Scanning Vendors (ASVs). I believe there are two very good reasons for MLSs and small ISOs to partner with a qualified information security company.

  1. The information security company can provide methods to keep merchants safe and productive parts of portfolio.

  2. This type of partnership adds another tool in the toolbox that will not only help attract and retain merchants, but enhance the profit of the MLS or ISO.

Questions posed and answered

For this article, I posed questions submitted by GS Online MLS Forum members to Greg Rosenberg, Alliances Sales Engineer at Trustwave. Rosenberg is considered by many to be the guru of the SAQ. His answers, thankfully, were not too technical and are mostly explanations of policies and suggestions to help you help your merchants. GMARTIN began by asking, "IP terminals are connected to the Internet to process transactions. If you read the questions regarding scans, it says if you have a connection to the Internet, it must be separate from other computers.

I take this to mean you would need a separate router to hook up to the IP terminal. I doubt many are following this, and since the terminals are secured with SSL or the like, and don't store card data, this requirement seems very onerous.

"I may be misunderstanding this, but that's how I read it a year or so ago. At that time, there was no special wording regarding IP terminals, just any forward facing Internet connection, of which an IP terminal would be included. What is your understanding of this?"

Rosenberg responded as follows: "In most cases, IP terminals generally qualify merchants for SAQ C or D. When we discuss IP terminals, we tend to think of them as otherworldly devices. We need to remember two basic tenets here:

Next, CLEARENT asked, "What is the scope of a scan and what does it entail? What defines different needs?"

Rosenberg replied, "To understand an external vulnerability scan, a good analogy for the process of the scan is akin to how a burglar would 'case the joint' before a robbery. In this analogy, your network is equivalent to the house that a burglar is checking out in hopes of finding soft spots to exploit.

"A scan generally starts with a port scan. This is equivalent to checking for unlocked doors and windows. Except in the case of your public-facing Internet connection, there are more than 65,000 possible entrances to your network. You may have heard of some of the more common ports; for example web traffic uses port 80, and email uses port 25. Some ports stay open to pass-through traffic, but hopefully these are as few as possible.

"Once the open ports have been identified for your network, the scanners try to identify all of the devices sitting behind them, called system enumeration. It's similar to a burglar peering through your windows to see if you have an alarm system or watch dogs.

For system enumeration, the scanner will identify the types of operating systems running on the devices on the network (Windows, Mac, Linux, UNIX, etc.) and the services running on those same systems. The scan may find payment applications, web servers or domain controllers.

"Lastly, once all available systems and services are identified, the scan performs two basic checks:

  1. Ensure all software security patches have been installed.

  2. Ensure the systems are configured securely.

"At no point will an external vulnerability scan attempt to manipulate or steal data from your environment. The moment that an individual tries to exploit a vulnerability scan, the process is either labeled a hack (you did not provide the permission) or a penetration test (you authorized the access)."

I then said many MLSs, myself included, wonder what the written policy of a merchant should look like to satisfy requirements.

"This is a complex question to answer and will vary from merchant to merchant," Rosenberg said. "Suffice to say that there are a few points to be aware of as far as policies and procedures:

  1. All merchants must have an information security policy in place, regardless of how they process credit cards.

  2. Nearly half of the requirements within the PCI DSS relate to policies and procedures.

  3. There are many affordable policies and procedures templates available in the marketplace. Ensure that any templates you use are PCI DSS-specific and have been reviewed by a Qualified Security Assessor (QSA).

  4. Policies and procedures should not be a document collecting dust in a filing cabinet. If they are not part of your regular routines, then you are doing yourself a disservice."

CCGUY wanted to know, "Why is there no such thing as PCI Compliant Web Hosting?"

Rosenberg said, "In short, the PCI DSS is a holistic approach to protecting cardholder data. It applies to an organization and not just a cluster of servers. Most reputable web hosting providers have either self-assessed or had an independent auditor look at their business and its practices for review against the PCI DSS.

"Visa and MasterCard list web hosting providers who have had an on-site assessment by a QSA. When engaging a web hosting company, part of the due diligence should include whether the provider is PCI DSS compliant and how they can demonstrate their compliance.

Remember, in most cases, should a hacker breach a hosting provider and steal customer's credit card data, the merchant will likely be held accountable. Choose your partners wisely."

Having repeatedly heard differing answers on this topic, I asked, "If a merchant has a website with a separate gateway (like eProcessing Network), does the merchant need to scan his network? Does this change if the merchant uses a virtual terminal feature to key card numbers?"

"It depends," Rosenberg replied. "Do you transmit your cardholder data to the third party, or are you redirecting your customers to another website? Even if you don't touch cardholder data you still have risk, and scanning is recommended in many cases."

"Are there a certain number of mandatory scans for POS IP connected merchants?" FAITH asked. "If so, how many and how often? If not, are there a recommended number of scans? Lastly, what is the cost of an average scan?"

Rosenberg said, "The PCI DSS mandates that merchants pass at least one scan per quarter, at a minimum, if scans are applicable to their environments. However, monthly scans are recommended to stay on top of changes you are making and the effect on the scan results. For example, you would not want to scan once every quarter, fail that scan and then scramble to try to pass a scan that same day.

"The price will vary, but most small merchants should expect to pay a few hundred dollars per year for their scans in a retail setting. Many acquirers, processors and ISOs have PCI DSS validation programs that can bring that cost down significantly."

Next, CCGUY asked, "Why doesn't PCI DSS require that POS systems (computer systems) be on a closed system, closed network, no outside access to the net on any computer that is part of the POS system?"

Rosenberg replied, "Two concepts are really important when engaging in the PCI DSS compliance process for the first time: segmentation and 'least privilege.'

Segmentation means removing systems from the cardholder data environment with specific security controls like firewalls and point-to-point encryption (P2PE). Least privilege means individuals or systems only have access to that which they need to do their jobs and nothing else.

"Segmentation is not required by the PCI DSS, but it can significantly reduce the burden of compliance and the amount of exposed risk. Least privilege is generally required for all systems and personnel, but not often followed or interpreted properly.

"Most merchants with broadband connections generally need at least some access to the Internet or open networks for their POS systems to function properly. Unfortunately, all too many merchants do not stay vigilant with how many connections remain open over time. One should always be aware of the holes they have poked through their firewall and why they are keeping those holes open."

CCGUY asked another question that I'm sure many in the industry ask, "How do they expect a merchant who owns a restaurant with no IT [information technology] education, no IT department, no computer experience beyond sending email, etc., to answer the SAQ D?"

"If you are a merchant trying to fill out SAQ D on your own, and you don't have a technical background, please stop," Rosenberg said. "There are wizard-based approaches, like Trustwave's TrustKeeper, that can help translate the technical requirements into more meaningful text.

Even if you understand a good portion of the requirements, please look for a vendor that has this approach to help simplify the remaining 25 percent of the requirements.

"If you are a merchant that qualifies for SAQ D, then you are already at higher risk than about 75 percent of all other merchants. There are two paths that SAQ D merchants should take:

  1. Engage a security firm or consultant to guide you through the process and help you remediate where necessary.

  2. Take steps to move toward a simpler SAQ type. These steps could include changing processing methods or implementing specific segmentation controls."

Jim Motley of Alpine Network Solutions in White Lake, Mich., asked me why in the world would a scanning company fail his client because the ASV could not detect his client's network through his security system.

To this, Rosenberg said, "An ASV should never request that a merchant remove security controls to facilitate an external vulnerability scan. The scan is trying to mimic what a hacker might see from the real world.

You will expose yourself to unnecessary risk when removing these important security controls. Immediately escalate this issue with your vendor should they make such a request."

I would like to thank Greg Rosenberg for taking the time to answer questions on the SAQ. I'd also like to thank Greg Leos, Vice President at Trustwave, for making Rosenberg available, and Trustwave management, for allowing his participation in this article.

If you have further questions regarding SAQs, Rosenberg can be reached at grosenberg@trustwave.com.

Please contact me on the MLS Forum or by email if you would like to suggest a topic for a future article.

Bill Pirtle is the President of MPCT Publishing Co. and author of Navigating Through the Risks of Credit Card Processing. He is also a merchant level salesperson for Clearent LLC, Electronic Payments Inc. and Electronic Merchant Systems Inc. Bill's website is www.creditcardprocessingbook.com, and his email address is billpirtle@yahoo.com. He welcomes all connections on Facebook and LinkedIn.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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