STE WILLIAMS

Visa has relaxed its regulatory rules so that European high street merchants who capture at least three-quarters of their take through EMV-enabled chip-and-PIN terminals will no longer have to pass Payment Card Industry Data Security Standard (PCI DSS) audits every year. The programme, which will help high street shops to reduce compliance cost, kicks in from 31 March 2011.

Retail merchants will have to first establish compliance before they can benefit from the newly introduced programme, which means that this status will no longer be reviewed every year, at least as far as Visa is concerned. Mastercard is yet to introduce a comparable scheme, so the move doesn’t yet mean that most high street merchants can avoid annual security audits, at least for now. Chip-and-PIN transactions are, of course, irrelevant for online retailers. In addition, the programme only applies in Europe and elsewhere in the world, except the US, where chip-and-PIN as a method to authorise face-to-face credit card transactions in preference to signatures is yet to become commonplace.

“EMV chip is a proven technology platform that can offer the industry the ability to facilitate dynamic data as well as enable payment innovations,” said Jim McCarthy, global head of product at Visa, in a statement. “In addition, merchant adoption of dual interface contact/contactless terminals will support the emergence of near field communication (NFC) payment form factors, including mobile devices.”

Ross Brewer, president and managing director of security compliance and management tools firm LogRhythm, said that although the new rules may reduce the compliancy burdens for some, they will inevitably lead to greater confusion over regulations.

“Visa should of course be applauded for trying to reduce the compliance burden for merchants that are using the latest secure technologies, in this instance, contact or dual contact/contactless chip-and-PIN terminals,” Brewer explained. “However, this by no means spells the end of compliance – other card firms, including MasterCard, will still require annual validation that regulations are being met – so appropriate compliance procedures still need to be in place.”

Assuring security at a point-of-sale terminal is only part of maintaining a secure retail environment. Encryption of customer details and maintaining secure wireless networks in retail environment are also important. Brewer cautioned that Visa appeared to be sending out a “mixed message” about complying with industry best practices by failing to stress a holistic approach. Brewer said: “Even if point-of-sale security is completely watertight, who’s to say that the credit card details stored elsewhere in the merchant’s IT infrastructure are just as safe?”

“PCI compliance – as burdensome as it sometimes seems – still delivers benefits to merchants, as it helps them achieve best practice,” he concluded. ®