Restaurants Using Technology to Improve Credit Card Security

As credit card transactions continue to rise with nearly all merchants accepting credit as a form of payment, technology companies are finding new ways to combat credit card fraud.

One area in particular that has been highly scrutinized is the restaurant industry, which has seen lawsuits over identity theft in the past, and is finally beginning to step up the fight against credit card fraud.

Just last year El Pollo Loco and California Pizza Kitchen were named in a class action suit for failing to truncate credit card numbers on receipts.

While that issue seems to be resolved, the way restaurants handle credit card payments continue to put consumers in jeopardy.

Using a credit card at a restaurant poses more risk than a standard transaction because the employee must take the card away from your table to a terminal usually situated in a different part of the restaurant.

While it doesn’t seem all that problematic, no other merchants take your credit card out of sight, giving employees the opportunity to skim your information and commit credit card fraud.

That’s why a handful of restaurants are following Europe’s example and installing credit card terminals at individual tables in restaurants to alleviate this risk.

Although it’s a relatively old technology, it still hasn’t been adopted in the United States, and with credit cards being the payment of choice, it seems long overdue.

Hooters restaurant chain is testing the system at their Atlanta, Georgia location, and plans to implement the system in a second store shortly.

Ruby Tuesday has begun rolling out a different type of security system that sends encrypted credit card data directly from the payment device to the bank, so no critical information is left behind at the restaurant itself.

They claim the system will in place in all of their 900 locations by mid-April.

These technological advancements couldn’t come any sooner as credit card fraud and identity theft continue to be an epidemic in the United States, and will surely rise as credit continues its domination of the payment sphere.

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