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Confronted with a seemingly impossible task, its human nature to long for a neighbors solution, even if that neighbor curses at that solution every day.
This comes to mind as we look at two aspects of the PCI world this week. Recent reports about PCI have raised questions about how many retailers are truly PCI certified as well as problems with PCI administration itself, including conflicts of interest, inconsistent enforcement and retail confusion.
But several states, including Minnesota and Texas, want to make PCI their states legal requirement for retailers operating within their borders.
The fact that retailers—who know PCI best—are becoming less enamored with it at the same time that states are growing fonder of PCI is interesting.
But these state efforts are troubling for other reasons. The states speak of protection against having to pay compensation to banks and others if a retailer is PCI compliant at the time of a databreach.
Thats a fine thought and motivation, but PCI accreditation is an ongoing process. The IT environment of a retail chain is constantly changing, as systems are upgraded, added and removed. Acquisitions of new stores is another factor that can immediately impact whether a retailer might no longer be compliant.
As our PCI process story details, there are many reasons why a responsible retailer—who is trying to adhere to every security guideline—might not have PCI certification.
Some of the state bills and laws are also troubling legally, as they offer protection for their states residents no matter what state they are shopping in. As different states enact these laws, it could impose difficult—and quite possibly contradictory—requirements on retailers, with different rules applying to customers based on what state they live in.
The other psychologically fascinating aspect of the PCI situation is the conflict-of-interest concerns. Retailers and auditors said they feel like they are living in a pre-Enron world and that its going to take Sarbanes-Oxley-like legislation to get retailers the same safeguards.
But many CFOs of publicly held companies are none too happy about working under Sarbanes-Oxley rules, so it is indeed surprising to hear retailers clamoring for SOX regs.
In both the state PCI and the retail SOX scenarios, the players fervently want to believe that the other side has the answer. Regrettably, neither side does. If states want to encourage safe retail data procedures, they need to mandate compliance with reasonable, industry-standard security practices.
But thats far too vague, right? Regrettably, it is vague and it needs to be vague. Security changes far too often for any legislation to identify what it should be. Then let juries and judges hear expert testimony at the time about whether the retailer complied.
The problem with making PCI certification the magic bullet is that it provides backing to an industry effort that, by its very nature, can’t be anything other than a very long, slow, laborious and political process.
Even worse, the carrot some of the states are using is that retailers will be held blameless—dollars-wise—if they are PCI compliant. Even under the best of circumstances, PCI compliance does not mean that a retailer is secure. Actually, lets set aside secure. Secure is a hypothetical, mythical state that no one will ever see.
Instead of focusing on the unattainable “secure,” how about a simple “prudent” security plan? If a retailer can establish that they went above and beyond handling all aspects of security, they should get liability protection. If they cut corners, do you really think they should get a pass because they found an auditor that would certify them?
Its simplistic—and yet still comforting—to mandate compliance with an industry standard and believe that youve bought yourself a secure environment. And while youre at it, can there please be an exception for retailers who self-audit?
Otherwise, Minnesota, youve just created a law that says in effect, “You can be exempt from liability if you concluded that youre sufficiently secure.” My concern isnt just with trusting credit data to a retailer that passes its own PCI audit. Im more worried about those firms that didnt.
Retail Center Editor Evan Schuman has tracked high-tech issues since 1987, has been opinionated long before that and doesnt plan to stop any time soon. He can be reached at [email protected].
To read earlier retail technology opinion columns from Evan Schuman, please click here.