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Restaurants must aim for credit card security rules

The credit card industry has been coming down hard on many restaurants that have not sufficiently 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. Such moves forces restaurants to take in consideration additional steps when safeguarding their customers’ credit card data.

On the side of companies that process card transactions, there are still tens of thousands of food service establishments that do not comply with the security rules set by the credit card industry.  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, 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, 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 different kinds of security lapses such as poorly guarded wireless networks — which easily enable thieves to access sensitive information just outside of the parking lot using a laptop — as well as the lack of strictness to their systems that makes it a lot easier for bad employees to grab credit card information.

Mostly, consumers are not aware when their credit card data is in danger. Although, not all security breaches produced successful fraud, and most merchants do not acknowledge incidents unless there is a significant likelihood that a major fraud will take place or has already been identified. Also, credit card issuers usually do not close a customer’s account unless fraud has taken place.

Restaurateurs may have a rough time with credit card security rules, since the regulations can be difficult for smaller merchants. 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.

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. Visa fined merchants across all categories .6 million for security violations in 2006, an increase from the .4 million in fines the previous year.

Visa, believes a merchant group needs additional attention, held special security briefings with several hundred restaurants.

At the same time, companies that process credit card transactions are also turning up the heat on restaurants. These 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. In Visa’s web site, they maintain a list of software programs that meet its requirements.

But software programmers that even with the best software, restaurants can still be in trouble if they lack in password protection or firewalls. For software companies, they say that it’s not their duty 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 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.

To learn on how our national POS network of restaurant point of sale professionals can help your business achieve greater success in these difficult economic times, visit POS-For-Restaurants.com.