July 18, 2014, 12:15 AM — Matt Oh, a senior malware researcher with HP, recently bought a single Aloha point-of-sale terminal -- a brand of computerized cash register widely used in the hospitality industry -- on eBay for US$200.
Oh found an eye-opening mix of default passwords, at least one security flaw and a leftover database containing the names, addresses, Social Security numbers and phone numbers of employees who had access to the system.
His findings have received a fair amount of attention due to the role of such systems in high-profile data breaches at retailers including Target, Neiman Marcus and Michaels.
"What we found was that the overall state of security of the system was very poor," he wrote in a blog post describing his analysis.
Even second-hand POS systems aren't cheap, so it's unlikely that cybercriminals would spend hundreds of dollars on a chance that a few contain personal data.
But Oh's research illustrates the security issues facing the hospitality industry, beset by outdated POS systems which it sometimes cannot afford to update.
Oh answered questions about his findings with IDG News Service via email because he has not finished media training required by HP.
He wrote companies don't appear to be paying enough attention to security issues with their POS terminals, and older systems are often still in use, which may not be as secure, he wrote. Unknown software vulnerabilities also pose a risk.
"There are a lot of POS terminals out there, and we don't know how many of them are vulnerable to simple attacks," he wrote by email.
The Aloha POS system is sold by NCR, which came under its wing with its acquisition of Radiant Systems in July 2011 for $1.2 billion. It is one of the most popular systems in the hospitality industry behind those of Micros Systems, which Oracle bought last month for $5.3 billion.
POS systems may seem like glorified electronic cash registers but they're actually closer to ERP systems, tracking inventory, logging employee actions and handling other management functions, said Joseph Snell, CEO of Viableware, a Kirkland, Washington, company.
Snell has had a lot of conversations with companies about POS systems. His company sells a product called Rail Pay that is designed to speed up settling a bill at a restaurant, which integrates with POS systems.
Some smaller businesses he's seen could not be compliant with the Payment Card Industry's Data Security Standard (PCI-DSS) without upgrading their systems, Snell said. PCI-DSS is a set of security recommendations mandated by Visa and MasterCard for businesses processing payment cards.