Credit card security rules required for restaurants

Hundreds of restaurants have been burdening the credit card industry for not fully protecting their customers’ credit card info from potential theft, with Visa, MasterCard and financial institutions that process electronic payment over the months are sending warning letters and holding seminars. Moves like this aims at forcing restaurants to take additional steps to guard credit card information.

According to companies that process card transactions, there are still tens of thousands of food service establishments that do not comply with the set of security rules of 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, 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 wireless networks that are poorly guarded — 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 steal credit card data.

Consumers often are unaware when their credit card information is in danger. Although, not all security breaches produced successful fraud, and mostly, 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, companies that issues credit cards usually don’t close a customer’s account except if fraud has taken place.

Restaurant owners may have a hard time with credit card security rules, since its regulations can be very difficult 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.

A fine amounting to more than $100,000 in some cases were given to restaurants that violated credit card industry rules by keeping credit card information. Visa fined merchants across all categories $4.6 million for security violations in 2006, an increase from the $3.4 million in fines the previous year.

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

During the same time, companies that process credit card transactions are also turning up the heat on restaurants. These companiesthreatened those who do not follow security regulations that they will end their services.

Since most restaurants uses special software with features such as as tabulating bills, delivering orders to the kitchen and tracking reservations, credit card companies are especially worried because they cannot require software developers to follow their security rules, so they put on the pressure to restaurants. Visa maintains a list on its Web site of software programs that meet its requirements.

But software programmers that even with the best software, restaurants can still be in heaps of trouble if they disregard password protection or firewalls. For software companies, they say that it’s not up to them to let restaurant owners know what they must do to be in compliance with credit card 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 specialists can help your business achieve greater success in these difficult economic times.