Restaurants must aim for credit card security rules
The credit card industry came down hard on thousands of restaurants that have not sufficiently protected the credit card data of their customers from potential theft, with Visa, MasterCard and financial institutions that process electronic payment over recent months sending warnings letters and holding seminars. Such moves are aimed at forcing restaurants to take additional steps to protect credit card information.
On the side of companies that process card transactions, there are still tens of thousands of eateries that do not comply with the security rules set by the credit card industry. So all companies that takes plastic 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, restaurants made up around 40 percent of incidents in which criminals gained unauthorized access to credit card information -- 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 with the 62% security violations it witnessed during the prior 18 months are with the restaurant industry.
These violations includes various security lapses such as the poor guarding of wireless networks -- which enable thieves to access information from the parking lot using a laptop -- and lax systems that makes it a lot easier for bad employees to grab credit card information.
Oftentimes, consumers are not aware when their credit card information is in danger. Although, not all security breaches succeeds, and mostly, merchants do not acknowledge these incidents unless there's a significant probability that a major fraud has already been identified or about to take place. Furthermore, companies that issues credit cards usually don't close a customer's account except if fraud has taken place.
Restaurateurs may have a tough time with credit card security rules, since its regulations can be very hard for small sized businesses. The National Restaurant Association trade group says that it hears from restaurant owners who thought they complied with rules, but 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 $100,000 in some cases. In 2006, Visa fined merchants across all categories $4.6 million for security violations, an increase from the $3.4 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. These companiesthreatened those who do not follow security regulations that they will end their services.
Since most restaurants uses software combining such features as tabulating bills, delivering orders to the kitchen and tracking reservations, credit card companies are worried because they cannot command software developers to abide by their security rules, so they put on the pressure to restaurants. Visa has a list of software programs that meet its requirements maintained on their web site.
But software developers that even with the best software, restaurants can still be in a lot of trouble if they disregard password protection or firewalls. For software companies, they say that it's not their responsibility to let restaurateurs know what they must do to be in compliance with the security rules of the credit card industry.
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 specialists can help your business achieve greater success in these difficult economic times.
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