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WHY the Smiley? Lots of people ask us “What in the heck does a SMILEY FACE have to do with Credit Card Processing and why does everything TMC does, have a Smiley attached to it?”- we love the question and here is the simple answer. MOST business owners do not find JOY in working with their credit card processor- in fact, quite the opposite! So when we decided to take care of businesses and their processing needs, we knew we had to be different. The SMILEY FACE sends a certain message: We are glad to see you, hear you, work with you and to be of service. We CARE about you and we will do everything we can to put a smile on your face. Credit card processing is one of the products we provide but Taking Care of People and delivering a SMILE WORTHY experience is who we are and WHY we do what we do.
PCI Compliance
WHY the Smiley? Lots of people ask us “What in the heck does a SMILEY FACE have to do with Credit Card Processing and why does everything TMC does, have a Smiley attached to it?”- we love the question and here is the simple answer. MOST business owners do not find JOY in working with their credit card processor- in fact, quite the opposite! So when we decided to take care of businesses and their processing needs, we knew we had to be different. The SMILEY FACE sends a certain message: We are glad to see you, hear you, work with you and to be of service. We CARE about you and we will do everything we can to put a smile on your face. Credit card processing is one of the products we provide but Taking Care of People and delivering a SMILE WORTHY experience is who we are and WHY we do what we do.
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PCI Compliance

PCI DSS stands for Payment Card Industry Data Security Standard. It was developed by the major credit card companies as a guideline to help organizations that process card payments prevent credit card fraud, hacking and various other security vulnerabilities and threats. A company processing, storing, or transmitting payment card data must be PCI DSS compliant or risk losing their ability to process credit card payments and being audited and/or fined. Merchants and payment card service providers must validate their compliance periodically.

This validation gets conducted by auditors – i.e. persons who are the PCI DSS Qualified Security Assessors (QSAs). Although individuals receive QSA status reports, compliance can only be signed off by an individual QSA on behalf of a PCI council approved consultancy. Smaller companies, processing fewer than about 80,000 transactions a year, are allowed to perform a self-assessment questionnaire. TMC is committed to helping you insulate your business against credit card fraud and the fines that can ensue. We hope the information in this section helps you better understand the mandates set forth by the card associations.

The Payment Card Industry Data Security Standard (PCI DSS) is a set of requirements designed to ensure that ALL companies that process, store or transmit credit card information maintain a secure environment. Essentially any merchant that has a Merchant ID (MID). The Payment Card Industry Security Standards Council (PCI SSC) was launched on September 7, 2006 to manage the ongoing evolution of the Payment Card Industry (PCI) security standards with focus on improving payment account security throughout the transaction process. The PCI DSS is administered and managed by the PCI SSC (www.pcisecuritystandards.org), an independent body that was created by the major payment card brands (Visa, MasterCard, American Express, Discover and JCB.). It is important to note, the payment brands and acquirers are responsible for enforcing compliance, not the PCI council.

PCI applies to ALL organizations or merchants, regardless of size or number of transactions, that accepts, transmits or stores any cardholder data. Said another way, if any customer of that organization ever pays the merchant directly using a credit card or debit card, then the PCI DSS requirements apply.

All merchant that stores, processes or transmits cardholder data must be compliant now. However, as a Level 4 merchant, you will have to refer to your merchant bank for their specific validation requirements and deadlines. All deadline enforcement will come from your merchant bank. You may also find more information on Visa’s Website:

http://usa.visa.com/download/merchants/payment_application_security_mandates.pdf.

All merchants will fall into one of the four merchant levels based on Visa transaction volume over a 12-month period. Transaction volume is based on the aggregate number of Visa transactions (inclusive of credit, debit and prepaid) from a merchant Doing Business As (‘DBA’). In cases where a merchant corporation has more than one DBA, Visa acquirers must consider the aggregate volume of transactions stored, processed or transmitted by the corporate entity to determine the validation level. If data is not aggregated, such that the corporate entity does not store, process or transmit cardholder data on behalf of multiple DBAs, acquirers will continue to consider the DBA’s individual transaction volume to determine the validation level.

Merchant levels as defined by Visa:

Merchant Level Description
1 Any merchant — regardless of acceptance channel — processing over 6M Visa transactions per year.
Any merchant that Visa, at its sole discretion, determines should meet the Level 1 merchant requirements to minimize risk to the Visa system.
2 Any merchant — regardless of acceptance channel — processing 1M to 6M Visa transactions per year.
3 Any merchant processing 20,000 to 1M Visa e-commerce transactions per year.
4 Any merchant processing fewer than 20,000 Visa e-commerce transactions per year, and all other merchants — regardless of acceptance channel — processing up to 1M Visa transactions per year.


* Any merchant that has suffered a hack that resulted in an account data compromise may be escalated to a higher validation level.

Source: http://usa.visa.com/merchants/risk_management/cisp_merchants.html
To satisfy the requirements of PCI, a merchant must complete the following steps:

  • Identify your Validation Type as defined by PCI DSS – see below . This is used to determine which Self Assessment Questionnaire is appropriate for your business.
    SAQ Validator Type SAQ Description
    1 A Card-not-present (e-commerce or mail/telephone/order) merchants, all cardholder data functions outsourcd. This would never apply to face-to-face merchants.
    2 B Imprint-only mechants with no cardholder data storage.
    3 B Stand-alone dial-up terminal merchants, no cardholder data storage
    4 C Merchants with payment application systems connected to the internet, no cardholder data storage
    5 D All other merchants (not included in descriptions for SAQs A-C above) and all service providers defined by a payment brand as eligible to complete an SAQ
  • Complete the Self-Assessment Questionnaire according to the instructions in the Self-Assessment Questionnaire Instructions and Guidelines.
  • Complete and obtain evidence of a passing vulnerability scan with a PCI SSC Approved Scanning Vendor (ASV).
    Note: Scanning does not apply to all merchants. It is required for Validation Type 4 and 5 – those merchants with external facing IP addresses. Basically if you electronically store cardholder information or if your processing systems have any internet connectivity, a quarterly scan by an approved scanning vendor is required.
  • Complete the relevant Attestation of Compliance in its entirety (located in the SAQ tool).
  • Submit the SAQ, evidence of a passing scan (if applicable), and the Attestation of Compliance, along with any other requested documentation, to your acquirer.

All merchants, small or large, need to be PCI compliant. The payment brands have collectively adopted PCI DSS as the
requirement for organizations that process, store or transmit payment cardholder data.

Yes. All business that store, process or transmit payment cardholder data must be PCI Compliant.

Yes. Merely using a third-party company does not exclude a company from PCI compliance. It may cut down on their risk exposure and consequently reduce the effort to validate compliance. However, it does not mean they can ignore PCI.
If your business locations process under the same Tax ID, then typically you are only required to validate once annually for all locations. And, submit quarterly passing network scans by an PCI SSC Approved Scanning Vendor (ASV), if applicable.
In-scope cards include any debit, credit, and pre-paid cards branded with one of the five card association/brand logos that participate in the PCI SSC – American Express, Discover, JCB, MasterCard, and Visa International.
No. SSL certificates do not secure a Web server from malicious attacks or intrusions. High assurance SSL certificates provide the first tier of customer security and reassurance such as the below, but there are other steps to achieve PCI Compliance. See Question “What does a small-to-medium sized business (Level 4 merchant) have to do in order to satisfy the PCI requirements?”
  • A secure connection between the customer’s browser and the web server
  • Validation that the Website operators are a legitimate, legally accountable organization

The payment brands may, at their discretion, fine an acquiring bank $5,000 to $100,000 per month for PCI compliance violations. The banks will most likely pass this fine on downstream till it eventually hits the merchant. Furthermore, the bank will also most likely either terminate your relationship or increase transaction fees. Penalties are not openly discussed nor widely publicized, but they can catastrophic to a small business.

 

It is important to be familiar with your merchant account agreement, which should outline your exposure.

Cardholder data is any personally identifiable data associated with a cardholder. This could be an account number, expiration date, name, address, social security number, etc. All personally identifiable information associated with the cardholder that is stored, processed, or transmitted is also considered cardholder data.

For the purposes of the PCI DSS, a merchant is defined as any entity that accepts payment cards bearing the logos of any of the five members of PCI SSC (American Express, Discover, JCB, MasterCard or Visa) as payment for goods and/or services. Note that a merchant that accepts payment cards as payment for goods and/or services can also be a service provider, if the services sold result in storing, processing, or transmitting cardholder data on behalf of other merchants or service providers. For example, an ISP is a merchant that accepts payment cards for monthly billing, but also is a service provider if it hosts merchants as customers.

 

Source: PCI SSC

Any company that stores, processes, or transmits cardholder data on behalf of another entity is defined to be a Service Provider by the Payment Card Industry (PCI) guidelines.

What constitutes a payment application as it relates to PCI Compliance? The term payment application has a very broad meaning in PCI. A payment application is anything that stores, processes, or transmits card data electronically. This means that anything from a Point of Sale System (e.g., Verifone swipe terminals, ALOHA terminals, etc.) in a restaurant to a Website e-commerce shopping cart (e.g., CreLoaded, osCommerce, etc) are all classified as payment applications. Therefore any piece of software that has been designed to touch credit card data is considered a payment application.

Payment Gateways connect a merchant to the bank or processor that is acting as the front-end connection to the Card Brands. They are called gateways because they take many inputs from a variety of different applications and route those inputs to the appropriate bank or processor. Gateways communicate with the bank or processor using dial-up connections, Web-based connections or privately held leased lines.

The point of sale (POS) environment refers to a transaction that takes place at a merchant location (i.e. retail store, restaurant, hotel, gas station, convenience store, etc.). An Internet protocol (IP)-based POS is when transactions are stored, processed, or transmitted on IP-based systems or systems communicating via TCP/IP.

PA-DSS refers to Payment Application Data Security Standard maintained by the PCI Security Standards Council. PABP is Visa’s Payment Application Best Practices, which is now referred to as PA-DSS. Visa started the program and it is being transitioned to the PCI Security Standards Council (PCI SSC).

To address the critical issue of payment application security, in 2005 Visa created the Payment Application Best Practices (PABP) requirements to ensure vendors provide products which support merchants’ efforts to maintain PCI DSS compliance and eliminate the storage of sensitive cardholder data. See www.visa.com/pabp for more information.

The Payment Card Industry Security Standards Council (PCI SSC) will maintain the PA-DSS and administer a program to validate payment applications’ compliance against this standard. The PCI SSC now publishes and maintains a list of PA-DSS validated applications. See https://www.pcisecuritystandards.org/security_standards/pa_dss.shtml for more information.

VISA MANDATE PHASE DEADLINE
  1. New PCI Level 4 merchants (including new locations of existing relationships) may not use vulnerable payment application versions – those that store prohibited cardholder data. January 1, 2008
  2. New PCI Level 4 merchants using third-party payment software must be either PCI DSScompliant or use PA-DSS validated compliant payment applications. October 1, 2008
  3. ALL PCI Level 4 merchants (new and existing) using third-party software must use validated applications. July 1, 2010
PCI DSS requirement 3.3 states “Mask PAN when displayed (the first six and last four digits are the maximum number of digits to be displayed).” While the requirement does not prohibit printing of the full card number or expiry date on receipts (either the merchant copy or the consumer copy), please note that PCI DSS does not override any other laws that legislate what can be printed on receipts (such as the U.S. Fair and Accurate Credit Transactions Act (FACTA) or any other applicable laws). See the italicized note under PCI DSS requirement 3.3 “Note: This requirement does not apply to employees and other parties with a specific need to see the full PAN, nor does the requirement supersede stricter requirements in place for displays of cardholder data (for example, for point of sale (POS) receipts).” Any paper receipts stored by merchants must adhere to the PCI DSS, especially requirement 9 regarding physical security.

Source: PCI SSC

If you electronically store cardholder data post authorization or if your processing systems have any internet connectivity, a quarterly scan by a PCI SSC Approved Scanning Vendor (ASV) is required.

A network security scan involves an automated tool that checks a merchant or service provider’s systems for vulnerabilities. The tool will conduct a non-intrusive scan to remotely review networks and Web applications based on the external-facing Internet protocol (IP) addresses provided by the merchant or service provider. The scan will identify vulnerabilities in operating systems, services, and devices that could be used by hackers to target the company’s private network. As provided by an Approved Scanning Vendors (ASV’s) such as ControlScan the tool will not require the merchant or service provider to install any software on their systems, and no denial-of-service attacks will be performed. Note, typically only merchants with external facing IP address are required to have passing quarterly scans to validate PCI compliance. This is usually merchants completing the SAQ C or D version.

Every 90 days/once per quarter you are required to submit a passing scan. Merchants and service providers should submit compliance documentation (successful scan reports) according to the timetable determined by their acquirer. Scans must be conducted by a PCI SSC Approved Scanning Vendor (ASV). ControlScan is a PCI Approved Scanning Vendor.

PCI is not, in itself, a law. The standard was created by the major card brands such as Visa, MasterCard, Discover, AMEX, and JCB. At their acquirers/service providers discretion, merchants that do not comply with PCI DSS may be subject to fines, card replacement costs, costly forensic audits, brand damage, etc., should a breach event occur.

For a little upfront effort and cost to comply with PCI, you greatly help reduce your risk from facing these extremely unpleasant and costly consequences.

Yes, home users are arguably the most vulnerable simply because they are usually not well protected. Adopting a ‘path of least resistance’ model, intruders will often zero-in on home users – often exploiting their ‘always on’ broadband connections and typical home use programs such as chat, Internet games and P2P files sharing applications. ControlScan’s scanning service allows home users and network administrators alike to identify and fix any security vulnerabilities on their desktop or laptop computers.

We recommend following the procedures outlined in Visa’s” What to Do If Compromised Visa Fraud Control and Investigations Procedures” document. Link below.

http://usa.visa.com/download/merchants/cisp_what_to_do_if_compromised.pdf
Absolutely. California is the catalyst for reporting data breaches to affected parties. The state implemented breach notification law in 2003 and there are now over 38 states that have similar laws in place. See www.privacyrights.org for more detail on state laws.