PCI Compliance Requirement: Stored Cardholder Data on Paper

For businesses that are still storing cardholder data on paper, are you really PCI Compliant? Meeting requirement 9, Restricting physical access to cardholder data,  is a lot harder than you may think. Here are some key questions you may face in the event of an audit, which is required in the event of a data breach.

locked file stored card data

  • Do you have a secure storage area exclusively for sensitive payment data?
  • Can you show an audit trail of everyone who accessed the secure area where the card data is stored, with date and time?
  • Is that area restricted to only those personnel who need access to that information?
  • Do you have a log to maintain a physical audit trail of visitor information and activity in any area that payments are processed, including visitor name and company, and the onsite personnel authorizing physical access?
  • Do you have a visitor badge system that expires for all visitors authorized to enter areas where cardholder data is processed or maintained?
  • Do you have an audit trail for the documents- created, removed from storage, and returned to storage, with names and dates?

Let’s face it, the requirements for PCI compliance are so cumbersome what merchant would want to store card data on paper? The argument that PCI Compliance paperwork takes more time for online solutions than with desktop terminals may be true, but the daily operational efficiencies and security gained far outweigh any extra paperwork.

3 Private Duty Home Health Care Provider PCI Compliance Mistakes

As a business owner, PCI Compliance, or payment card industry data security standards, should be a priority, but too often owners are given poor advice or simply haven’t found a way to fix the problem of collecting and storing credit card data. Here’s 3 major mistakes and how to fix them.

credit card authorization form healthcare


Most companies have an intake form with terms and conditions for payment, which includes fields for credit card authorization with full card data.

Employers entrust home health care provider staff and contractors with people’s lives, so surely they can be trusted with credit card information too, right? Not necessarily. Whether intential or by mistake, there are many ways the data can be compromised, and as an owner, the penalties in the event of a breach leading to identity theft could be crippling.

  • What if the forms are left in a car  (lunch breaks, forgot to bring them in house overnight etc) , and they’re stolen?
  • How are forms returned to the home office for processing? Are those methods secured every step of the way?
  • The form needs to be cross-cut shred. If the right shredder isn’t provided for home offices, how can one be sure the employee invested in one?
  • Merchants can never store the CVV or security code. If the form is needed for any purpose, can the sensitive payment data be cut off and shred without compromising the purpose of the document?


 There’s a variety of excuses why the paper form is needed to be kept on file so the card can be charged for each billing period, but all of them are baseless if the provider does their homework for alternative solutions.

  • Stored paper forms present significant risk. Cleaning staff, vendors and trusted employees all have potential access to the data. A top reason cited for data breaches is, “it was easy”, and this tops them all.
  • Businesses with up to 100 employees are at extremely high risk for identity theft.

Additionally, it’s just plain inefficient to manage billing by key entering the same card data over and over again.


Gathering the data digitally has the potential to be an excellent solution to paper methods.

  • Do not allow payment data to be entered into a spreadsheet or other non-secured form.
  • Is the payment application part of the private duty software, such that the software is in scope for PCI Compliance? Does the software need to be updated? Is the full card information ever available to users? The architecture of the solution strongly influences security. (Recall Target & Neiman Marcus data breaches).
  • Entering the card data directly into a cloud payment solution that is segregated from the business application software provides the optimal security. (Users should still follow all other PCI procedures.


  1. Encrypt data at the point of acceptance either with a secure swipe device or key entered.
  2. Directly enter payment data into a secure payment processing platform.
  3. Use tokenization. Tokenization replaces sensitive PAN (Primary Account Number) data with a unique identifier known as a token, which is useless to anyone who may intercept it.

How can the provider get a written authorization on paper, that is safe for the customer and safe for the provider? Contact us for a FREE Credit Card & ACH Authorization form make- over, that can be used in combination with safe, secure, PCI Compliant technology.

Target credit card data breach: Facts, Resources and Risk Mitigation

The Target data breach, discovered December 15, impacts all credit and debit card transactions in the USA between Nov. 27 and Dec. 15. This article explores what happened, why it happened, what merchants can learn from the incident, and links to top stories.

On December 15, 2013, Target discovered malware on their USA point of sale (POS) system and disabled the malware code. The impact is over 40 million cards. Notably, the breach impacted in store only.

From Business Insider,  “As shoppers swiped or punched in their numbers on the checkout keypad, the hackers copied every single number.” Read More: The Incredibly Clever Way Thieves Stole 40 Million Credit Cards From 2,000 Target Stores In A ‘Black Friday’ Sting

Stolen was the track data from the magnetic stripe, and equivalent data from chip cards. According to Target: The CVV data which is encoded on the magnetic stripe was stolen. The CVV2,  the three or four digit value that is printed on the back or front of the card, was not. CVV2 data is never on magnetic strips for security so it would have to have been manually entered to be stolen. (From Target…”No indication that CVV2 data was compromised.”)

Also stolen were 4 digit encrypted pin debit codes. This data is encrypted on the POS device and is simply passed through to the processor in the encrypted state. From Target, “The PIN information was fully encrypted at the keypad, remained encrypted within our system, and remained encrypted when it was removed from our systems.”

Summary: thieves have enough information to clone credit cards for retail sales


The data quickly reached the black market with nefarious buyers taking advantage.


In my opinion, and others, it’s likely related to system architecture. The thieves were able to get full track data needed to clone cards and increasing risk of the data being used. Target uses a custom POS application which requires Payment Application Data Security Standards (PA-DSS) in addition to Payment Card Industry Data Security Standards (PCI DSS) Compliance.

From Security: Dark Reading, Target Breach Should Spur POS Security, PCI 3.0 Awareness: Lyne says he believes the Target breach points to poor architectural and business practices. “It is critical that organizations handling such data take steps to protect it — such large volumes of data should never be accessible by one user or process — and should be encrypted to segment the data and should be detected if an export of such size occurs,” Lyne says.

An alternative workflow encrypts data at the point of sale by a payment gateway, which then delivers to the payment processor. This segregates point of sale data from payment data, reducing the scope for PCI compliance, and removing the POS application from scope for PA DSS. The payment application sends non-sensitive information, such as authorization code, back to the POS.

One way to spot potentially vulnerable systems as a consumer is whether or not the POS shows the item name and amount on the signature capture pad. This is an indication that the POS may be driving the payment application. When payment and POS are segregated, the signature capture pad shows only payment information.


Solutions fall into two categories: processor gateways and third party gateways. Merchants may be reluctant to integrate a processor gateway because it locks them into a specific vendor and can be very disruptive to operations to make a change in the future. Third party gateways provide increased flexibility, but also add extra cost to each transaction.  Factors included in choosing a solution include: single vs multi-store, USA or international, payment types, consumer or business to business, future purchase methods – need to store credit card information for recurring billing, multi-channel, and others.

THE IMPACT OF EMVemv chip card smart cardTarget was an early adopter of EMV, (Europay, MasterCard & Visa),  an open-standard set of specifications for smart card payments and acceptance devices. Credit and debit cards contain a small computer chip; This makes it harder to steal data on the point of sale device and to clone cards.

EMV  vs magnetic strip cards:  Traditional magnetic stripes contain “static” data consisting of the Primary Account Number, expiration date and other information; the same information is passed to the card issuer for every transaction. This makes it easy to clone cards.

EMV uses dynamic authentication.  In EMV transactions using dynamic authentication, the data changes with every transaction, thus any captured information is effectively useless to thieves. The chip is nearly impossible to counterfeit.

In the US, with low EMV merchant acceptance capabilities, cards may be issued with both magnetic stripe and chip. This means that thieves can still clone cards that contained a chip if the consumer uses the magnetic stripe in the transaction.


Without CVV2 data, using the card data for online transactions is unlikely because most ecommerce merchants verify that data. Retailers will be most at risk for cloned cards.

5 tips to prevent losses linked to cloned cards from Target or any other data breach:

  1. By card association rules, merchants can ask for identification, but they cannot deny a transaction if the cardholder will not provide it.
  2. Checking the zip code at the POS, where allowed by state law. *  The average thief doesn’t have this information and wouldn’t take the time to memorize it anyway. An intelligent system will decline the transaction if the zip code doesn’t match.  This may be inconvenient, especially in a fast paced environment. Some solutions allow merchants to validate the zip code only if over a certain dollar amount, reducing checkout burden while increasing risk management.
  3. Train cashiers to look at the cards for proper holograms and logos.
  4. Train cashiers to verify signatures.
  5. Require cashier to verify the last 4 digits at the POS.*  With cloned cards, the front of the card often does not match the magnetic stripe data. This is a highly successful fraud prevention tool to implement with minimal effort.

* Contact your processor to turn the zip code or last 4 digits flag on, or modify the payment gateway settings, whichever is appropriate.


Kreb’s on Security:  Who’s Selling Credit Cards from Target? http://krebsonsecurity.com/2013/12/whos-selling-credit-cards-from-target/

Wall Street Journal: Target’s Data-Breach Timeline 

http://www.abullseyeview.com/ Target’s web site for an inside view. Includes http://www.abullseyeview.com/2013/12/target-data-breach-5-things-you-need-to-know/

https://corporate.target.com/about/shopping-experience/payment-card-issue-faq Target’s corporate web site. Everything consumers need to know. (Author note: Target advises monitoring for fraud.  I advised my daughter to request an immediate debit card replacement.


Why Government Agencies Are High Risk For Failing PCI Compliance

Why is it that government agencies are the last to get on board with cleaning up PCI Compliance risky practices? The credit card authorization form is prevalent at local, state, and federal agencies. Problems persist across all agencies from district attorney to healthcare.  What am I picking on? The print and then ‘fax or mail’ credit card authorization form with card security code which is never, ever supposed to be stored.

It’s possible that forms are being scanned after data is input, and sensitive data is masked, but it’s improbable for many government organizations because they simply do not have the resources.

Here’s 4 potential problems with this practice:

    1. The person handling the form can snap a picture with a cell phone.
    2. The form is received on a digital fax. Who can retrieve it? Is there a policy in place for destruction of the hard drive data, and is it actually followed? Are forms downloaded to individual hard drives, creating a whole new series of PCI Compliance concerns, and broadening the scope.
    3. The form may be sent to a local office instead of a lockbox. From the moment that form hits the mail, all the people that touch it are risk points.
    4. Stored payment data on computers. This practice continues to be widespread until there is a breach. On October 10, 2012, the U.S. Secret Service detected a security breach at the S.C. Department of Revenue, but it took state officials 10 days to close the attacker’s access and another six days to inform the public that 3.6 million Social Security numbers had been compromised. The attack also exposed 387,000 credit and debit card numbers. I’m not in the business of securing social security numbers so I can’t respond to that, but why the heck was there full card data to expose?
    5. Every time a human has access to card data, mail, or faxes, there is opportunity for theft.

All images shown were obtained today via publicly available information.

CREDIT CARD AUTHORIZATION FORM: Florida Health, Charlotte County.

This poorly designed form captures the security code in the middle of the page and also requires a drivers license. Card brands prohibit the last practice as being required to accept cards.


credit authorization form-florida charlotte county

CREDIT CARD AUTHORIZATION FORM: United States District Court District of Kansas

This form captures the security code in the middle of the page and says that it will be stored,  a violation of card acceptance and PCI Compliance rules.  Additionally, the only way another person can be authorized to use a card is if there is a power of attorney on file,  so the form may be misleading. It is possible to have multiple cards with the same number on an account, however, each card is issued to a different cardholder name.

credit card auth form kansas

CREDIT CARD AUTHORIZATION FORM: Arizona Department of Health

This form captures the security code in the middle of the page. If it’s stored,  it’s a violation of card acceptance and PCI Compliance rules. It offers a mail option to the local government office instead of a lockbox, a  riskier practice.


CREDIT CARD AUTHORIZATION FORM: City of Laredo Health Department

This form has a clear policy that the sensitive payment information will be shredded. Hurray!
I recommend adding a field for the card brand and last 4 digits, that won’t be shredded.


credit card authrozation form AZ Dept of health

CREDIT CARD AUTHORIZATION FORM: Chatham County Public Health Department

This form has a clear policy that the sensitive payment information will be shredded. Hurray! I recommend adding a field for the card brand that won’t be shredded. The form appears to allow reuse for recurring billing since the amount is not specific, though it is not specifically stated as required by the card brands. Why isn’t the total amount known if this is for a one time transaction? If stored, I wonder where the card data will be stored once the form is destroyed? credit card authorization form chatham public health



This last form is from our technology for recurring billing authorizations. The customer can enter the payment information on a secure hosted pay page, or it can be key-entered or swiped. The custom personalized form is autuomatically generated when a new card is stored. The form is signed and both the customer and the merchant have the token ID to use for billing future charges. With the email address, the cardholder automatically gets a receipt whenever a transaction is processed.

recurring billing authorization form cenpos

By accepting payments online, merchants can reduce PCI Compliance burden. What did you think of this article? Please leave your comments.

Will insurance cover data breach of credit card information? Whether or not PCI Compliant?

The typical business general liability insurance policy provides ZERO insurance coverage. A special policy referred to as Cyber Liability Insurance includes a section called Network Security coverage that protects you for both first-party and third party liabilities arising from a data breach event. In order to get the special insurance, a merchant must be PCI DSS Compliant at the time the policy is written, and attest to compliance on the insurance application.

Cyber Liability is a generic term for an insurance policy and possible coverages include identity theft from computer network data and paper files.


  • Merchant doesn’t know what PCI compliance means (Payment Card Industry Data Security Standards)
  • Merchant cannot provide a copy of written policy for actively monitoring PCI compliance- and record of doing so.
  • Merchant statements contain “non-PCI Compliance validation fee”.

What if the PCI Compliance status changes during the term of the policy? This is a grey area and likely many factors will influence a decision to pay out, including how egregious the issue was that caused the breach as well as the business efforts to maintain compliance.

If a business qualifies for a discount because they have a building alarm, but then post the alarm code next to the door for everyone to see,  would the carrier be happy paying a theft claim? If a business was PCI compliant but then started accepting credit card sales via fax and stored all the forms in a file folder on someone’s desk where other employees or cleaning personnel have access to, do you think the insurance carrier might have an issue with this? What if the business made every effort to meet PCI compliance, but a key senior employee goes rogue?

Businesses can mitigate the risk of losses by data breach by outsourcing the responsibility, using third party payment processing technology, and by purchasing Cyber Liability Insurance.

Thanks to Steven Breitbart, of Cypress Insurance Fort Lauderdale, for contributing to this article.