The first thing that typically happens with the design of PCI network configuration is that an inventory of all systems/processes involved in the storage, processing, or transmitting cardholder information is performed, and a network diagram that shows where these systems live is produced. The prevailing wisdom over the last few years has been to create a “PCI Zone“ using network segmentation which is basically a separate network zone (QSA’s like to say VLAN ) where all of the cardholder systems are that has stateful firewalls and well defined firewall rules for both incoming and outgoing traffic. This is a very important scope reduction technique, that lets you focus on implementing the security controls that are mandated by PCI in the environment of the data and systems that need protection. Within the PCI Zone - PCI requirements allow for non-encrypted card numbers to be sent across the internal network. (Requirement 4: Encrypt transmission of cardholder data across open, public networks ) I think Rich Mogull said it best: “Corporate networks are like candy bars: hard on the outside, soft and chewy on the inside,”. The PCI Zone is still soft and chewy in some regards. There are some rumors and speculation that a PCI Compliant merchant, Hannaford supermarket chain’s POS system (like many other merchants) does not send encrypted data between the point of sale and the branch server. Some of our implementations of OLS.Switch supports field or data element level encryption that is passed on from the Point of Sale system to our switch. The main thing that allow us to perform this is that: We or our customer “own/control” the POS message format to us and can adapt and handle the programming of the POS System and POS message formats – our account number fields are not limited to 16 digits - we can handle a much large encrypted value. So over the wire - these implementations are “protected” from eavesdropping or sniffing. I wouldn’t be surprised that if in future revisions of the PCI DSS - traffic from POS systems on private networks will be required to be transport encrypted in a tunnel or require encrypted fields/data elements. Also related to this subject: Dr. Neal Krawetz has a very good White Paper called Point-of-Sale Vulnerabilities. Read it!!!