Restaurants must aim for credit card security rules

Tens of thousands of restaurants is being penalized by the credit card industry for not fully protecting their customers’ credit card info from the possibility of theft, with Visa, MasterCard and financial organizations that process electronic payment over recent months are sending warning letters and organizing seminars. This forces restaurants to take additional steps to guard credit card information.

For the 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.

Data recorded by Visa indicates that since January 2005, around 40% of the incident wherein criminals gain unauthorized access to credit card info is made up of restaurants — providing 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 poorly guarded wireless networks — which enable thieves to access information from the parking lot using a laptop — as well as the lack of strictness to their 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 these incidents unless there’s a significant probability that a major fraud has already been identified or about to take place. Also, companies that issues credit cards don’t usually close a customer’s account except if fraud has taken place.

Restaurant owners 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.

A fine amounting to more than 0,000 in some cases were given to restaurants that violated credit card industry rules by storing credit card data. In 2006, Visa fined merchants across all categories .6 million for security violations, 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, the companies that process credit cards have also turned the heat on restaurants. Credit card companies, as punishment, will end services to those who disregards the 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 has a list of software programs that meet its requirements maintained on their web site.

But software programmers that even with the best software, restaurants could be in a lot of trouble if they lack ample 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 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.

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