Focusing on restaurant credit card security measures
The credit card industry has been coming down hard on many restaurants that have not fully protected their customers’ credit card information from potential theft, with Visa, MasterCard and financial institutions that process electronic payment over recent months sending warnings letters and holding seminars. With these moves, it forces restaurants to take in consideration additional steps on how to safeguard their customers’ 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. Any company that takes plastic is required to follow a set of security regulations instituted by Visa, MasterCard, American Express and Discover.
With the data recorded by Visa indicates that since January of 2005, around 40% of the incident wherein criminals gain unauthorized access to credit card info is made up of restaurants — provides 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 enable thieves to access sensitive information just outside of the parking lot using a laptop — and lax systems that makes it a lot easier for a staff with criminal intention to gain access to credit card information.
Mostly, consumers are not aware when their credit card information is in danger. Not all security breaches produced successful fraud, and most merchants do not recognize these incidents unless there is a significant likelihood that a major fraud will take place or has already been identified. Furthermore, credit card issuers don’t usually close a customer’s account unless fraud has taken place.
Restaurateurs may have a rough time with credit card security rules, since its regulations can be very difficult 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.
An amount of 0,000 or more in some cases have been fined to restaurants that violated the credit card industry rules by storing credit card information. Visa fined merchants across all categories .6 million for security violations 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.
At the same time, companies that process credit card transactions are also turning up the heat on restaurants. Credit card companies, as punishment, will end services to those who do not follow security regulations.
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’s web site maintains a list of software programs that meet its requirements.
But software makers that even with the best software, restaurants could still be in a lot of trouble if they disregard 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.
To learn on how our national POS network of restaurant point of sale experts can help your business achieve greater success in these difficult economic times, visit POS-For-Restaurants.com.
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