Restaurants at risk: How hospitality can fight back against payment fraud

Thomas Helldorff – VP of Airlines Travel and Hospitality, Worldpay from FIS

April 05, 2022

There’s no denying that over the last two years, we have made ordering take-out from our local restaurants a staple of our dining habits. In fact, online orders placed at quick-service restaurants (QSRs) increased by up to 134% between 2020 and 2021, with average order values rising by 22%.1

Across the entire restaurant sector, the picture has been more mixed, with full-service and other dine-in restaurants initially taking a severe hit to bookings2 before regaining some – but far from all – of their steam throughout 2021.3

But the number of online orders isn’t all that’s increased. With it, we’ve seen an increase in the threat of fraud – up around 32% in the restaurant industry during the COVID pandemic.4

Fast-paced, digital-first QSRs are particularly vulnerable to various kinds of fraud, including account take-orders, delivery fraud, loyalty program fraud and gift-card fraud.1 As more restaurants widen their scope to allow for online and no-touch orders, they may find themselves the target of fraudsters.

So, what can restaurants do to minimize fraud risk while still giving legitimate customers everything they want from their payment experience?

Embracing the digitalization of restaurants

There are a number of benefits to developing a digital offering in your restaurant, whether that be online ordering, a gift card system or even something like a grocery or merchandise arm.

By giving customers more and wider opportunities to interact with your restaurant, it could be that they end up spending more. You could also gain the ability to upsell or provide exclusive offers, perhaps in exchange for invaluable data about their preferences.

Digital offerings have the potential to boost the customer experience. Though ordering delivery is not quite the same as having a sit-down meal, providing customers the ability to “skip the queue,” explore options from the comfort of their own home and take advantage of online deals could prove valuable.

The appetite for online ordering is certainly there. 74% of global online shoppers have ordered food using a website or mobile app in the last 12 months.5

But, as mentioned at the outset, this digitalization must be balanced against fraud risk. Because customers are watching.

Securing the customer journey

62% of QSRs guests are wary of fraud risk when they order via a restaurant’s mobile app.6 This is perhaps unsurprising when finding out that 64% of American adults have been victims of data theft.7 Restaurants face a bit of an uphill battle to build trust in online ordering.

The problem can be exacerbated in the attempt to keep the customer experience simple. Though security can be increased through many means – multi-factor authentication, for one – some 40% of customers report being frustrated by orders that involve too many steps.7

Regardless, multi-factor authentication is vital for security and can foster feelings of safety in consumers, encouraging the security-conscious to trust your restaurant with their payment details. Be sure to highlight these measures as 63% of shoppers say they’re more likely to purchase if they see clear signs of digital security.5

Multi-factor authentication that incorporates one-time passcodes sent via SMS or email adds another layer of protection for user data. Biometric authentication could provide even more peace of mind. For example, confirm payment with pre-approved details or prove identity when collecting an order.

One critical factor is the decision of whether or not your business will retain card information. While this can help you to build a seamless payments experience – especially for repeat orders – the responsibility for securing this card data falls to you. This could be a significant cost for businesses like restaurants that typically have tight profit margins.

Solutions for a streamlined, secure payment journey

You could reduce the risk of card data theft by using a solution like OmniToken, which replaces card details with non-sensitive tokens. Payments can still be completed, but valuable and sensitive customer data is held outside of your environment.

This solution also works in tandem with Account Updater, which works quietly in the background to keep customer card data up-to-date. This keeps the ordering process quick and simple for customers and could mean fewer card declines for you.

Outside of the customer experience itself, restaurants must also be conscious of their regulatory responsibilities including complying with PSD2 and PCI-DSS. That might mean improving authentication processes using a solution like 3DSFlex or SaferPayments, both of which aim to make compliance simpler.

Finally, don’t forget that some forms of fraud are “friendlier” than others. Chargebacks are an increasingly common phenomenon in the hospitality sector.8 Be sure you have a system that gives you oversight over chargebacks and, ideally, the ability to deflect them.

To help minimize fraud wherever commerce goes, you may want to consider Worldpay’s multi-layered fraud solution tool, FraudSight. This combines data insights, technology and fraud prevention expertise to predict if a transaction may be fraudulent.

Order up!

Restaurants certainly face a number of challenges in this changing environment, especially as sophisticated fraudsters continue to exploit weaknesses in still-unfamiliar systems and processes. But, as we have seen, restaurants also have tools to help overcome these challenges.

With Worldpay from FIS, restaurants can rest assured that both payment security and customer satisfaction will always be front-of-mind.

If you’re ready to start building your fraud defenses, we’re here to help. Worldpay can help you identify where you could reinforce your restaurant’s payment processes.


1 Shkedi, F. (2021) Appetite for Deception: Fraud Attacks Against Quick-Service Restaurants (QSRs). Forter. Available at:

2Open Table (2021) State of the Industry: The restaurant industry in recovery. Available at:

3 Statista (2021) Year-over-year daily change in seated restaurant diners due to the coronavirus (COVID-19) pandemic worldwide from February 24, 2020 to December 6, 2021. Available at:

4 Forter (2021) Forter Releases the Eighth Edition Fraud Attack Index with a COVID-19 Special Report. Available at:

5Worldpay from FIS (2021) Power your Payments: Food. Available at:

6 PYMNTS (2020) How QSRs Are Fighting Digital Food Fraud. Available at:

7PYMNTS (2020) QSRs Face The Dual Challenges Of Digital Fraud And Third-Party Competition. Available at:

8CardNotPresent (2020) Chargebacks and Friendly Fraud Soar as Food Delivery and Pick Up Surge. Available at: