The Payment Card Industry has had a couple of years to prepare for the new PCI DSS 4.0 requirements, which become mandatory after 31 March this year.
With the release of PCI DSS 4.0.1, the payment card industry faces both new opportunities and significant challenges. This updated standard reflects the evolving cybersecurity threat landscape, and the industry’s urgent need to mitigate increasingly sophisticated threats.
In this guide, we’ll explore why the updated standards are essential, the changes introduced in PCI DSS 4.0, and practical strategies to meet the compliance deadline.
Myth Buster: Non-Compliance Means Hefty Fines
Contrary to popular belief, there are no brand-sanctioned fines for non-compliance in PCI DSS. Acquiring banks can mitigate the risks of handling transactions for non-compliant merchants by charging higher interchange fees per transaction. PCI compliance is a commercial obligation, it is not a law, so every acquirer can assess penalties as they see fit.
For instance, a compliant merchant might incur a preferred interchange fee of, say, 0.2% for every card transaction. In contrast, non-compliant merchants, considered higher risk, are likely to be charged a non-preferred, higher rate.
While these higher charges can impact a merchant’s bottom line, they are not fines. Fines are only applicable if a merchant suffers a breach. In such cases, fines are 25% higher than standard penalties if the merchant claims PCI compliance, but the forensics investigation shows otherwise.
PCI DSS 4: From Controls-Based to Risk-Based Standards
PCI DSS 4.0 introduces enhancements that address emerging threats, provide greater flexibility, and encourage a proactive approach to security.
Key drivers for PCI DSS 4.0 include:
- Rising Cyber Threats: Payment ecosystems face growing challenges from ransomware, card skimming, and credential stuffing attacks.
- Shift to Cloud and Automation: The increasing adoption of cloud technologies necessitates new frameworks for secure implementation.
- Enhanced Accountability: The new standard shifts focus from compliance checklists to embedding a security culture across organisations.
PCI DSS 4.0 provides flexibility for the payment industry's compliance framework to move from a controls-based approach towards a risk-based model. As cybercrime grows more sophisticated, targeting vulnerabilities in payment systems with alarming precision, this new approach allows organisations to:
- Conduct targeted risk assessments for ‘periodic’ tasks;
- Develop customised controls to meet the intent of the current DSS controls;
- Build personalised compliance frameworks tailored to their unique needs.
However, this customisable approach also presents one of PCI DSS 4.0’s greatest challenges: its complexity.
The Road to PCI Compliance: How to Engage the Right Consultant
The best Qualified Security Assessors (QSAs) are not merely consultants – they are educators.
Many businesses start their compliance journey with limited understanding. A typical scenario involves receiving a letter from their bank stating they must achieve PCI compliance within a certain timeframe. For many, the requirements are unclear.
The first step for most QSAs is a gap analysis, but a good QSA will go beyond that. They will educate their clients, helping them understand what PCI compliance looks like for their organisation.
Unfortunately, a bad QSA may wait for clients to ask all the questions. However, if the client knew which questions to ask, they likely wouldn’t need a QSA in the first place.
What’s New in PCI DSS 4.0.1?
- Customised Validation Approaches: Organisations can now implement tailored security measures while demonstrating compliance.
- Automated Log File Reviews: Daily manual reviews are no longer acceptable; automation is mandatory under 4.0.1.
- Data Encryption: Cardholder data store PRE-authorisation, must be encrypted.
Myth Buster: Is PCI DSS 4.0.1 a Major Update?
There are no significant differences between PCI DSS 4.0 and 4.0.1. While there are minor wording changes, 4.0.1 primarily introduces small evolutionary additions to version 4.0.
PCI DSS 4.0.1: An Opportunity for Excellence
While compliance is mandatory, the PCI DSS has always represented an opportunity to exceed, what amounts to, a bare minimum set of requirements. By adopting these standards as part of a broader security strategy, organisations can position themselves as industry leaders.