1. The influence of PCI upon retail payment design and architectures Ian White QSA Head of UK&I and ME PCI Team September 4, 2013 Weekend Conference 7 & 8 September 2013

2. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.2 PROPRIETARY STATEMENT This document and any attached materials are the sole property of Verizon and are not to be used by you other than to evaluate Verizon’s service. This document and any attached materials are not to be disseminated, distributed, or otherwise conveyed throughout your organization to employees without a need for this information or to any third parties without the express written permission of Verizon. © 2013 Verizon. All Rights Reserved. The Verizon name and logo and all other names, logos, and slogans identifying Verizon’s products and services are trademarks and service marks or registered trademarks and service marks of Verizon Trademark Services LLC or its affiliates in the United States and/or other countries. All other trademarks and service marks are the property of their respective owners.

3. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.3 ISG Weekend Conference 7 & 8 September 2013 Agenda The PCI DSS The Retail Environment –Card Payments –The Retail Environment The retail store eCommerce The call centre (MOTO) Current challenges Further Information

4. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.4 ISG Weekend Conference 7 & 8 September 2013 The PCI Data Security Standard Managed by the PCI SSC on behalf of the Card Brands (Visa, MasterCard, AMEX, Discover and JCB) Currently on version 2.0, with Version 3.0 published 7 th Nov 2013 Compliance is managed by the individual Card Brands Recognises Merchants and Service Providers (or TPP / DSE) Annual validation usually based around transaction volumes (SAQ or Report On Compliance) QSA and ISA roles exist to support independent validation against the control requirements An industry standard – but backed by legislation in some jurisdictions and should be perhaps viewed as “best practice”

5. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.5 ISG Weekend Conference 7 & 8 September 2013 The Payment Card Industry standards PCI DSS Covers the security of environments that store, process or transmit Account Data. PCI PA DSS Covers Payment Applications so that they can support PCI DSS compliance PCI PTS Covers hardware devices, for example HSM and PEDs, for protection of PIN PCI P2PE Encryption, decryption and key management within secure devices (hardware / hardware) PCI PIN Secure management, processing and transmission of PIN data during online and offline payment processing

6. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.6 ISG Weekend Conference 7 & 8 September 2013 Cardholder Data Track 1 Track 2 Account Data

7. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.7 ISG Weekend Conference 7 & 8 September 2013 The PCI DSS Requirements Build and Maintain a Secure Network 1.Install and maintain a firewall configuration to protect cardholder data 2.Do not use vendor-supplied defaults for system passwords and other security parameters Protect Cardholder Data 3.Protect stored cardholder data 4.Encrypt transmission of cardholder data across open, public networks Maintain a Vulnerability Management Program 5.Use and regularly update anti-virus software or programs 6.Develop and maintain secure systems and applications Implement Strong Access Control Measures 7.Restrict access to cardholder data by business need to know 8.Assign a unique ID to each person with computer access 9.Restrict physical access to cardholder data Regularly Monitor and Test Networks 10.Track and monitor all access to network resources and cardholder data 11.Regularly test security systems and processes Maintain an Information Security Policy 12.Maintain a policy that addresses information security for all personnel PCI DSS Version 2.0

8. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.8 ISG Weekend Conference 7 & 8 September 2013 The Retail Environment Acceptance ChannelsInstitutionsCorporate Systems POS Terminals Store POS Controller Authorization Servers (Site A) POS Databases (Site B) Acquirer Internet MOTO Finance (Site C) Call Center (Site D) Acquirer Printer (Site E) Loyalty

9. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.9 ISG Weekend Conference 7 & 8 September 2013 “Connected To” Systems “Connected To” systems support the controls that protect the Cardholder Data Environment (CDE) and as such may be considered to be “in scope” of the PCI DSS for some requirements Typical examples include: –Active Directory (User accounts) –Log Management –AV / malware software update / management servers –Patching servers –Backup servers –Terminal Servers –Time Servers –Support personnel desktops / laptops –…

10. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.10 ISG Weekend Conference 7 & 8 September 2013 Authorisation Service Provider Acquirer Card Scheme network Issuer Cardholder BofE 1 2 3 4 5 6 7 WWW Merchant The merchant requests and receives authorisation from the issuer to proceed with the transaction and receives an authorisation code

11. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.11 ISG Weekend Conference 7 & 8 September 2013 Clearing Service Provider Acquirer Card Scheme network Issuer Cardholder BofE 1 2 3 WWW Merchant Acquirer sends issuer purchase information and issuer responds and then prepares for Settlement of funds

12. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.12 ISG Weekend Conference 7 & 8 September 2013 The Store Environment - expected

13. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.13 ISG Weekend Conference 7 & 8 September 2013 The Store Environment – actual?

14. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.14 ISG Weekend Conference 7 & 8 September 2013 The Store Environment – with segmentation

15. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.15 ISG Weekend Conference 7 & 8 September 2013 The Store Environment – P2PE? POS servers communicate with corporate office and card data is transmitted to P2PE solution provider PED and stand-alone chip- and-PIN reader that are P2PE validated

16. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.16 ISG Weekend Conference 7 & 8 September 2013 Point–to-Point-Encryption (P2PE) Currently very few solutions have been validated (2) The POI device encrypts the card data at the read head using a key that the merchant has no access to. P2PE supports HW to HW and so- called HW to Hybrid solutions (the term “Hybrid” refers to the decryption of the data taking place outside of the HSM and in software on a host system that uses an HSM to protect the keys) The use of a P2PE solution might enable a merchant to use a wide range of devices such as the iPAD as they would only be providing a secure communications path for the (encrypted) data. PCI SSC list of validated P2PE solutions as at 6 th Sept 2013

17. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.17 ISG Weekend Conference 7 & 8 September 2013 The eCommerce Environment - expected PCI SSC QSA training 2011

18. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.18 ISG Weekend Conference 7 & 8 September 2013 The eCommerce Environment – actual? PCI SSC QSA training 2011

19. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.19 ISG Weekend Conference 7 & 8 September 2013 The eCommerce Environment – with segmentation Which PCI DSS requirements apply here – if any?

20. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.20 ISG Weekend Conference 7 & 8 September 2013 The eCommerce Environment – Using a Third Party? Which PCI DSS requirements apply here – if any?

21. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.21 ISG Weekend Conference 7 & 8 September 2013 The Call Centre – areas to consider Policies and Procedures Virtual terminals Call recording software

22. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.22 ISG Weekend Conference 7 & 8 September 2013 Some of the current challenges for retail Logging Legacy systems and encryption CCTV – especially in retail store environment P2PE vs E2EE Wireless scanning / NAC Virtualisation / Cloud Services Contractual frameworks for third parties Loyalty schemes (Tokenisation?)

23. Confidential and proprietary materials for authorized Verizon personnel and outside agencies only. Use, disclosure or distribution of this material is not permitted to any unauthorized persons or third parties except by written agreement.23 ISG Weekend Conference 7 & 8 September 2013 Further Information Go to www.pcissc.org for detailed information and documentation (standards, guidance and FAQwww.pcissc.org http://www.verizonenterprise.com/DBIR/2013/ The Card Brands and Acquiring banks have many documents that provide detailed advice and guidance on the PCI DSS and associated compliance issues Ian.white@intl.verizon.com