The latest breach involving Heartland Payment Systems is all the buzz. Some are surprised and/or appalled “yet another high profile breach.” Others question the timing of the announcement theorizing some public relations attempt to hide the announcement within the presidential anointment, oops, inauguration ceremony. What caught my eye is the latest campaign: Heartland CEO Calls For Industry Cooperation To Fight Cyber Criminals And Adoption Of End-To-End Encryption. While I agree with end-to-end encryption, I feel this is nothing more than a case of “do as I say, not as I do.”
My issue is the last paragraph of the above linked press release: “For the past year, Carr (Robert O. Carr, Heartland’s founder, chairman and CEO) has been a strong advocate for industry adoption of end-to-end encryption — which protects data at rest as well as data in motion — as an improved and safer standard of payments security. While he believes this technology does not wholly exist on any payments platform today, Heartland has been working to develop this solution and is more committed than ever to deploying it as quickly as possible.”
The technology already exists, just not in the terms that Carr may be implying. I think Carr is referring to chip cards of one sort or another, but there is nothing stopping a company from doing end-to-end encryption within their own network. While PCI does not currently require end-to-end encryption within a LAN, PCI is meant to be a “minimum” security standard – it is not a be-all, end-all blueprint for secure payments.
I try not to advertise for Shift4 within my blog, but Shift4 internally does end-to-end encryption within its network. The weakest point in the whole chain is the final hop to the bank or processor (which we have compensating controls in place to isolate and minimize the exposure at these points – but this is beyond the scope of this rant). Here, I would argue side-by-side with Carr to force all banks and processors to require application layer encryption at this hand-off point instead of solely relying on VPN encryption. Shore up the weakness of this layer, problem solved provided that the banks and processors internally do end-to-end encryption and you don’t have to wait for PCI rule change, nor do you have to toss out the baby with the bath water by switching to chip cards.
Switching to chip cards may solve some issues, but viewing chip cards as a panacea, I feel, will be a big and extremely costly mistake for merchants if other layers in the end-to-end data path are ignored. If merchants think PCI is expensive now, wait until they need to purchase and deploy all new hardware and fork out the POS software upgrade fees required to support this new hardware platform.