Credit card security rules required for restaurants

The credit card industry came down hard on thousands of restaurants that have not fully 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. With these moves, it forces restaurants to take in consideration additional steps on how to safeguard their customers' credit card information.

For the companies that process card transactions, there are many restaurants that are not fulfilling the 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 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 easily gives access to thieves on sensitive information using a laptop from the parking lot — and the lack of strictness to their systems that makes it a lot easier for unethical employee to steal credit card information.

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

Restaurant owners may have a tough 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.

An amount of 0,000 or more in some cases have been fined to restaurants that violated the credit card industry rules by keeping credit card information. Merchants across all categories .6 million for security violations were fined by Visa in 2006, an increase from the .4 million in fines the previous year.

Visa, which declined to provide a breakdown of merchant types, said it recently held special security briefings with several hundred restaurants, a merchant group Visa believes needs additional attention.

During the same time, companies that process credit card transactions are also turning up the heat on restaurants. These companies, as punishment, will end services to those who disregards the security regulations.

Since most restaurants uses software combining such features as tabulating bills, delivering orders to the kitchen and tracking reservations, credit card companies are especially worried because they cannot command software developers to follow their security rules, so the pressure it passed on 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 can 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 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 experts can help your business achieve greater success in these difficult economic times.