Tightening up credit card security on restaurants
Tens of thousands of restaurants is being opposed by the credit card industry for not fully protecting their diner’s credit card info from the possibility of theft, with Visa, MasterCard and financial institutions that process electronic payment over recent months are sending warning letters and holding seminars. With these moves, it forces restaurants to take additional steps to guard credit card information.
On the side of companies that process card transactions, tens of thousands of eateries are not complying with credit card industry security rules. So every restaurant that takes plastic is required to follow a set of security regulations instituted by Visa, MasterCard, American Express and Discover.
Data recorded by Visa indicates that since January 2005, restaurants made up around 40 percent of incidents in which criminals gained unauthorized access to credit card information — accounting for the largest percentage of incidents for a merchant category.
Separately, there are reports from a Chicago-based data security auditor, AmbironTrustWave, for merchants that 62% of the security violations it witnessed during the prior 18 months occurred in the restaurant industry.
These violations includes various security lapses such as the poor guarding of wireless networks — which easily gives access to thieves on sensitive information just outside of the parking lot using a laptop — and lax systems that make it possible for unethical employees to grab credit card information.
Consumers often are unaware when their credit card information is in danger. Not all security breaches produced successful fraud, and mostly, merchants do not recognize these incidents unless there is a significant likelihood that a major fraud will take place or has already been identified. Also, credit card issuers don’t usually close a customer’s account unless fraud has taken place.
Restaurateurs may have a difficult time with credit card security rules, since the regulations can be difficult for smaller merchants. Hearing from the restaurant owners who thought they complied with rules, the National Restaurant Association trade group found out their systems were not functioning properly and were penalized.
Fines for restaurants that violate credit card industry rules by storing credit card data have amounted to more than 0,000 in some cases. Merchants across all categories .6 million for security violations were fined by Visa in 2006, an increase from the .4 million in fines the previous year.
Visa, which declined to provide a breakdown of merchant types, said it recently held special security briefings with several hundred restaurants, a merchant group Visa believes needs additional attention.
During the same time, the companies that process credit cards have also turned the heat on restaurants. Credit card companiesthreatened those who do not follow security regulations that they will end their services.
Credit card companies are especially worried about specialized software restaurants use, which combine such features as tabulating bills, delivering orders to the kitchen and tracking reservations. Since credit card companies cannot require software makers to abide by their security rules, they instead apply pressure to restaurants. Visa maintains a list on its Web site of software programs that meet its requirements.
But software programmers that even with the best software, restaurants could still be in heaps of trouble if they lack ample password protection or firewalls. Software companies say it is not up to them to let restaurateurs know what they must do to be in compliance with credit card rules.
The author of this article writes for POS-For-Restaurants.com, a VP of Customer Relations with over 20 years experience in restaurant point of sale system, helping restaurant owners nationwide increase their efficiency and bottom-line profits.
You may visit POS-For-Restaurants.com for more information on how our national network of restaurant point of sale experts can help your business achieve greater success in these difficult economic times.
