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PCI Penetration Testing Explained

Threat Intelligence • Sep 20, 2023

In today’s increasingly digitized world, we’re slowly seeing the modernization of payment systems and a shift to a possible cashless society largely made up of online transactions and digital currencies. However, online transactions are susceptible to malicious attacks and data breaches. Fraud is anticipated to cost the card industry $49.32 billion by 2030, when total payment card usage is expected to reach $79.14 trillion (Payment Dive).
How can you protect your business and customers from the devastating effects of financial crimes?
In this blog, we’re breaking down a data security test that is crucial to maintain information security today – the PCI DSS penetration test. Read on to find out everything you need to know about PCI pen tests.

What Is a PCI Penetration Test?

A PCI DSS Penetration Test is a security assessment that examines the technical and operational components of a system that gathers and handles payment and cardholder data to verify that it is PCI compliant. This test mimics a real hack and is a powerful technique to evaluate a network’s infrastructure and applications.
The PCI DSS or Payment Card Industry Data Security Standards is a basic set of technical and organizational regulations meant to help companies safeguard cardholder data from fraud using strong payment security.

Why Should You Conduct a PCI Penetration Test?

Today, credit card fraud is a prevalent issue affecting millions of cardholders around the world. When you deal with sensitive information like payment data on a regular basis, protecting that data must be your top most priority. Implementing and maintaining appropriate security standards for your customers’ data can help you avoid problems such as -

Hefty non-compliance penalties fines
Costly data breaches
Serious reputational damage
Loss of customers

and other resulting consequences. PCI pen tests help you to identify your security gaps and act before any permanent damage occurs.

Who Should Perform a PCI Penetration Test?

If your company stores, processes, or transmits Cardholder Data (CHD) and/or Sensitive Authentication Data (SAD), the PCI DSS applies to you. Example organizations that need to be PCI compliant include merchants, service providers, issuers, processors, and acquirers. PCI Compliance also applies to all other entities that handle sensitive payment data. PCI DSS penetration tests can be performed by an external or third party pen tester, or can even be performed internally if your organization has qualified staff to run the test. The internal staff member performing the test must be independent from the systems being tested - that is, they should not be someone that is actively involved in the management, setup, and support of the CDE systems.

How is the PCI Pen Test Performed?

As per PCI DSS requirements, a penetration test must be conducted at least annually, and every time there is a ‘significant change’ made to your CDE. However, ‘significant changes’ are variable and depend largely on the size of an organization and its IT environment. Therefore, any change that could compromise network security or provide access to the CDE is considered significant. Some examples of such changes include application or OS upgrades, and the addition or replacement of system components.
The PCI pen test methodology involves 5 major steps. Before getting into the process, it is important to have an understanding of what PCI DSS defines as the CDE and Critical Systems.
CDE or Cardholder Data Environment is defined by the PCI DSS as “the people, processes, and technology that store, process, or transmit cardholder data or sensitive authentication data”. Network segments where credit card or debit cardholder information can be found are automatically part of the CDE. This includes data such as the card’s expiration date, cardholder’s name, the card’s service code, Personal Identification Number (PIN), and card validation codes/authentication values.
Critical systems are defined by the PCI DSS as the systems that are involved in processing or protecting cardholder data. Some examples of critical systems include security systems, public-facing devices and systems, databases and other systems that store, process, or transmit cardholder data. These systems can also include additional devices and systems outside of the CDE perimeter that can affect CDE security.

The 5 Steps of a PCI Pen Test

Scoping

In this first step, the target organization works with the pen testing team to define the scope of the pen test, which includes the entire CDE perimeter (both internal and external), and any critical systems. It could also include access points, critical network connections, applications that store, process, or transmit cardholder data, and other locations of such data. Any systems that don’t connect to the CDE would be considered out-of-scope for this pen test.

Discovery

Once the scope is defined, the pen testing team gets to work by identifying your network assets within the specified scope. In this stage, the testing team gathers as much information on the target company by performing different types of reconnaissance.

Evaluation

Using the information gathered so far, the tester now attempts to enter your system through the discovered entry points and uncover potential security vulnerabilities that may be lurking behind your networks and applications.

Reporting

The testing team compiles a complete and comprehensive report that includes the details of the test methodology, highlights the security flaws discovered, and other relevant information.

Retest

The entire pen test process is repeated regularly and/or every time there is a change in your IT infrastructure. Retesting is the best way to ensure that your previous remediation efforts are effective.

Types of PCI DSS Penetration Test

PCI DSS Application Pen Test

An application penetration test is a type of engagement that evaluates the architecture, design, and configuration of the web applications used by your business. Developers can sometimes use unsafe development practices and/or bad coding practices that can create room for potential security vulnerabilities in your applications. An application penetration test ensures that the web apps are not left vulnerable to data exposure and/or unauthorized data access. Some of the most commonly identified security issues include – injection vulnerabilities, broken authentication, broken authorization, and incorrect error handling. The remediation of such flaws usually involves recoding the application.

PCI DSS Network Penetration Test

A network penetration is an assessment that focuses on the design, implementation, and maintenance of a network and the services it hosts. It helps you to provide services in a secure manner without compromising sensitive data security. Common security flaws identified in this test include – misconfigured software, firewalls, and operating systems, outdated software and operating systems, insecure protocols, and unnecessary exposures. Remediation methods could be installing a patch or reconfiguring the software.

PCI DSS Wireless Network Penetration Test

Due to the wireless nature of network connections today, hackers often try to infiltrate an organization by compromising its network and corresponding devices. A wireless network pen test aims to detect the vulnerabilities lying in the security controls of wireless technologies. Weak security protocols and unauthorized access points increase security risks that can damage your organizational network. Other commonly detected security vulnerabilities include insecure wireless network encryption standards, weak encryption passwords, and unsupported wireless technology. Troubleshooting methods consist of eliminating rogue access points, using stronger passwords, and updating the wireless network protocol to an industry accepted protocol like WPA2.

Social Engineering Penetration Test

Social engineering pen testing evaluates people, processes, and the vulnerabilities they bring to your organization. Employee training and cybersecurity awareness are critical to the safety of your organization because ultimately, your employees are the weakest link in the cybersecurity chain and hackers will always look to exploit them. The objective of this assessment is to identify employees that don’t adhere to security best practices by using social engineering tactics such as phishing, USB drops, and/or impersonation. This helps to identify problems such as opening malicious emails, allowing unauthorized access, using external USB devices. The only way to avoid or remediate these issues is through proper and adequate security training of employees.

PCI DSS Segmentation Checks

Sometimes, organizations will use network segmentation to isolate high-security networks like the CDE for instance, from less secure networks. This protects the sensitive data in the high-security network by limiting the damage from any breaches or malware infections in other networks. A network segmentation test is used to test if the network segmentation rules applied by businesses are valid and appropriate. Pen testers test the implementation and functionality of network segmentation as part of these segmentation checks. Check out PCI DSS Network Segmentation Testing in detail.

PCI Penetration Test vs Vulnerability Scans

Penetration tests and vulnerability scans are similar tests in that they detect vulnerabilities in your system. Let’s look at the two main differences between the two processes – their purpose and methodology.
Penetration tests are carried out to detect and exploit vulnerabilities to surpass and defeat the security controls of a system. A pen test is performed manually and may include the use of vulnerability scanning and certain automated tools. The result of a pen test is a comprehensive report that lists and prioritizes vulnerabilities and includes detailed descriptions of each vulnerability, including the extent to which they can be exploited. A vulnerability scan on the other hand only identifies vulnerabilities existing in a system without exploiting them. Typically an automated process, it is combined with manual verification of the detected flaws. It reports the potential risks posed by the known security gaps and ranks them in order of severity.

PCI DSS 4.0 Requirements

With the introduction of PCI DSS version 4.0 in 2022, businesses faced the need to update their security measures to comply with the new requirements. This version shifted from a prescriptive to a customized approach, allowing organizations to tailor controls to their specific risk levels and cybersecurity programs. It brought additional flexibility, stronger multi-factor authentication, updated password requirements, and addressed evolving security concerns. Moreover, PCI DSS v4.0 emphasized the importance of a continuous and evolving security program, clearly defining roles and responsibilities for each requirement. It also enhanced validation methods and transparency in reporting, offering organizations a standardized yet adaptable framework for safeguarding customer data. For a comprehensive understanding of these changes, visit our blog post on PCI DSS v4.0 requirements.

PCI Pen Testing Frequency

Penetration testing frequency in compliance with PCI DSS mandates a minimum of annual assessments. Moreover, these assessments should be conducted after any substantial alterations or enhancements to the infrastructure or applications, which might encompass activities like operating system upgrades, the integration of new sub-networks into the environment, or the deployment of additional web servers. This proactive approach ensures that the security posture of payment card data environments remains robust and adaptable to evolving risks.

How Threat Intelligence Can Help

PCI DSS compliance is a continuous process that helps your organization to secure cardholder data, gain and retain customers, thereby growing your business. Threat Intelligence’s penetration testing services, along with security automation, discover your infrastructure's most critical security flaws before a malicious actor does. Our certified specialist security team offers a diverse range of pen testing services including PCI penetration testing to help you get compliant with the latest security standards. Explore our services today to become part of a global card data security solution.

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