Many companies don't appreciate the governance around trading within the digital economy with issues such as the Payment Card Industry Data Security Standard (PCI DSS) and distance trading regulations part of wide range of regulations, standards and requirements that a company must get to grips with.
The PCI DSS was initiated by the Payment brands (VISA, Mastercard, American Express, Discover and JCB) to combine their individual security requirements into a single set of requirements. The standard is developed by the PCI Security Standard Council (SSC). It contains mandatory requirements for the storing, processing or transmission of cardholder data and includes anything that might affect the storing, processing or transmission of cardholder data. Merchants who receive payments from payment card from the 5 brands are responsible for ensuring the payment collection process is compliant to the standard. Merchants cannot delegate the accountability, even if all payment process is done by 3rd parties the Merchant still is subject to requirements of ensuring the 3rd parties are compliant,
One of the pit falls I came across when advising companies about the PCI DSS occurs when they have already got an eCommerce presence online before attempting to gain PCI DSS certification and their existing eCommerce operation is not compliant with the requirements of the standard.
For example, they have a website designed, hosted and managed by 3rd parties to card payment online rather than do it themselves; this is a good option form many companies as they may not have the expertise. However they find that instead of it being an easy process, it has become very difficult due to the use of suppliers that are not compliant to the PCI DSS requirements.
Outsourced eCommerce Compliance
For this type of situation of outsourced eCommerce; for companies not meeting the level 1 merchant status; there is a cutdown version of the questionnaire know as Self-Assessment Questionnaire SAQ A "Card-not-present Merchants, All Cardholder Data Functions Fully Outsourced". It was been developed by the SSC to address requirements applicable to merchants whose cardholder data functions are completely outsourced to validated third parties, where the merchant retains only paper reports or receipts with cardholder data.
The eligibility criteria for completing a SAQ A is given with the document; however the critical point is cardholder data functions are completely outsourced to validated third parties. Validated parties means the service providers must be PCI DSS Compliant for the services they deliver and this includes the following services.
- Website Design
- Physical Hosting
- Managed Hosting
- Payment processing
There is a distinction between being certified for being a merchant and being certified for services offered. A service provider will have an Attestation of Compliance (AoC) for either a RoC or a SAQ D for service providers where the AoC will state the services being covered.
Some companies get caught out because their service provider is certified as a Merchant for taking payment and may not have the service being offered covered by the certification.
For example; you could pay for the creation and hosting of a website from a website design company that take payment by credit card. They may have outsourced their eCommerce operation and completed a SAQ A themselves. When asked for evidence of compliance, they may offer the SAQ A as proof of certification, but this only covers their merchant activity and not their software development and hosting services. They should have an SAQ D for service providers to prove their services are compliant and present the AoC for this when requested.
In my experience companies get caught out by having a website designed and hosted and then find they have to be compliant to the PCI DSS when their acquiring bank asks for a SAQ to be completed. At this point they find out that their suppliers are not PCI DSS compliant for the services contracted and also they don't have sufficient information to complete a SAQ D; which is the self-assessed version of the full set of requirements, as they don't have control over the hosting or management of the website.
This leaves them in the situation where they have been asked by their acquiring bank to demonstrate compliance and they are unable to meet the request.
The options are
- Ask the suppliers to become compliant
- Audit the suppliers as part of the companies compliance
- Change to a certified supplier
None of these options are attractive or easy to complete. Whilst a company is non-compliant they could be fined by the acquiring bank monthly, pay additional transaction costs or in extreme cases have the ability to process payment cards removed.
My advice for companies thinking about starting an eCommerce operation is to contact an expert in the PCI DSS and get advice on the standard before actually implementing the website. This can save a lot of hassle, time and money in the long term,
There should also be more effort by governments, acquiring banks, payment brands and payment processors to makes sure those new to online payments can get the right advice.