Restaurants must aim for credit card security rules
The credit card industry came down hard on tens of thousands of restaurants that have not fully protected their customers’ credit card information from potential theft, with Visa, MasterCard and financial organizations that process electronic payment over recent months sending warnings 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. For as long as a food service establishment takes plastic, they are 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, around 40% of incidents in which criminals gained unauthorized access to credit card information was made up of restaurants — accounting for the largest percentage of incidents for a merchant category.
Separately, AmbironTrustWave, a Chicago-based data security auditor for merchants, reported that 62 percent of the security violations it witnessed during the prior 18 months occurred in the restaurant industry.
The violations involved various security lapses such as poor guarding of wireless networks — which easily gives access to thieves on sensitive information using a laptop from the parking lot — and lax systems that makes it a lot easier for a staff with criminal intention to steal credit card information.
Mostly, consumers have no idea when their credit card information is in danger. Not all security breaches produced successful fraud, and mostly, merchants do not acknowledge incidents unless there is a significant likelihood that a major fraud will take place or has already been identified. In addition, companies that issues credit cards don’t usually close a customer’s account unless fraud has taken place.
Restaurateurs may have a tough time with credit card security rules, since its regulations can be very hard for small 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 keeping credit card information 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.
After recently conducting special security briefings with several hundred restaurants, although they declined to provide a breakdown of merchant types, Visa believes a merchant group needs additional attention.
During the same time, the companies that process credit cards have also turned the heat on restaurants. These 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 has a list of software programs that meet its requirements maintained on their web site.
But software makers that even with the best software, restaurants can still be in a lot of trouble if they have a weak password protection or firewalls. For software companies, they say that it’s not their part to let restaurateurs know what they must do to in order to comply with credit card security rules.
The author of this article is the VP of Customer Relations at POS-For-Restaurants.com with over 20 years experience helping restaurants nationwide increase their efficiency and bottom-line profits using restaurant POS systems.
You may visit POS-For-Restaurants.com for more information on how our national network of restaurant point of sale professionals can help your business achieve greater success in these difficult economic times.