Jul 12 2012

Restaurants Improve Payment Security with Tablets

Credit card payments no longer have to be taken to the back for processing.

Considering how much we rely on our credit and debit cards for day-to-day activities, it’s important to reduce fraud and theft vulnerabilities wherever possible.

Tablets have taken the consumer and enterprise world by storm. More business professionals are using them for work, and consumers are flocking to tablets in lieu of or in addition to traditional PCs. And now restaurants are turning to tablets for digital menus and payment processing. While there’s undoubtedly a cool factor that comes with using tablets in a restaurant, there’s actually a security benefit to it as well.

Traditionally, when customers finish their meals and opt to pay with a credit card, the waiter has to take the card out of sight, to the immobile point-of-sale system. But with tablets, the card never has to leave the customer’s table, which adds one significant layer of security to what could otherwise lead to credit card fraud.

Think the likelihood of credit card theft at restaurants is insignificant? Think again. NBC New York reported on a sophisticated criminal ring of waiters who were busted for scanning and reproducing customer credit cards. They went to town, shopping at high-end luxury stores such as Chanel, Jimmy Choo and Hermes. The gang of waiters racked up around $1 million in damages, according to NBC’s report.

Writing for the Federal Reserve Bank of Atlanta’s Portals and Rails blog, payments risk expert Douglas A. King highlighted the opportunity for improved security by paying with tablets.

While these portable devices have the "cool" factor, they also offer great benefits from a fraud-reduction perspective. Paying your restaurant tab without ever having your card leave your sight is a great first step in preventing the type of fraud described[…]

Restaurants, in general, have shunned portable POS devices in the past due in large part to their expense in an industry that operates on thin margins. What's exciting with these new devices is that the new technology offers both top- and bottom-line benefits to restaurants that traditional portable POS devices don't. These devices can actually help drive an increase in existing revenues (higher average tickets) or even be a source of new revenue (advertising and fees from videogames) while also lowering a restaurant's fraud loss exposure.

I am hopeful that this new technology catches on and restaurants do adopt a safer payment card transaction. For the parent in me, the thought of the device entertaining my small children when our conversation fails to do so or the chips and salsa run out is promising. From my payments risk perspective, I am ready to keep full control of my cards and hopefully avoid that dreaded call, text, or e-mail from my bank that says my card has been compromised.

This is proof that mobile payment solutions aren’t just a cool trick for businesses: they actually have tangible benefits that can be leveraged to prevent loss and improve the customer experience at the same time.

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