urricanes, floods, fires and earthquakes. The past year has shown exactly how unkind Mother Nature can be. Horrific events such as these often strike without warning and cause unthinkable destruction. Many businesses are not prepared to pick up the pieces. Even government agencies have difficulty moving forward under extreme circumstances.

If recent events have taught American businesses anything, it's that disaster recovery is paramount. Yet some research suggests that only half of all financial services firms have detailed recovery plans in place for all critical business units, both technology-laden and people-intensive operations.

All ISOs and merchant level salespeople should think about developing a plan in case of a disaster. A formal plan will make things less stressful and help you to continue operating following a catastrophic event.

We asked The Green Sheet Advisory Board (AB) the following questions to find out how well prepared they think their businesses are for continuing operations in the face of disaster:

How prepared is your business for a disaster equaling the magnitude of Hurricane Katrina? Is your business more focused on disaster recovery now than it was a year ago? How prepared do you think payments acquiring businesses are for natural disasters?

Do you sense that our industry is now more focused on disaster recovery? If so, do you think that this level of focus will continue long-term, or has it been more of a knee-jerk reaction? What are some of the factors that you think payments services businesses should consider when charting a disaster recovery plan?

Following are the AB members' responses that we received, listed in alphabetical order:

"There are so many facets of the payments industry that a general discussion of emergency preparations is difficult. But [I can speak] from an ISO owner's viewpoint. The major crisis we could face in Southern California is a major earthquake.

"We carefully and faithfully back up all of our data every night. Most businesses know of the possibility of earthquakes and have or should have taken their own precautions.

"When this latest disaster in the South came about, we had a few merchants in the area. Their volume dropped off and is just now starting to come back. But this is a small interruption for us but a large interruption for them. Other than supporting the relief efforts monetarily, there is nothing much we can do.

"If a major earthquake hits our area and we lose power and/or connectivity, we will do the best we can. If our phones go down we have voicemail that kicks in and allows the caller to put their own call direct to our cell [phones].

"We are as redundant as is possible and feasible. If one of our processors has a major shutdown, there is nothing we can do but answer the phone and advise them of alternative authorization methods. They, too, have redundant systems. So short of a nationwide disaster, we will continue to operate as usual if possible.

"I will be interested in reading what others say about your question, though. Other Advisory Board members represent different areas of the payments industry and some of those may be more susceptible to regional disaster."

"In my limited view, I have witnessed quite a bit of disaster preparedness within the industry with the use of PCs over mainframes. I think it is relatively simple to have a backup plan. Our business is 100% prepared. It is highly critical that we have a backup plan for our data, for our customer service and for our terminal support.

"Our primary facility is located in San Diego, extremely close to the fires that raged there last year. We experienced absolutely no down time in any of our departments and customers were not even aware of any issues.

"We have always viewed disaster recovery as important. I believe that you must have total redundancy of your systems on site and a backup facility should anything happen to your primary facility.

"I believe that frequently scheduled, routine back ups of your data are imperative as well as other pertinent back ups. Cross-training of staff is important should a true disaster occur, and you need to incorporate more bodies to pitch in to compensate for focused lacks due to disaster."

"If research suggests that only 50% of all financial services firms have a disaster recovery plan, then I would say the payment acquiring businesses are not prepared at all.

"In the event of a national disaster what would the other 50% of acquirers do? It would be crippling to the industry. Landmark has an excellent disaster recovery plan in place."

"I think it is quite clear from recent events that most people have an 'it can't happen to me' attitude and that is why we have seen that most individuals, businesses and government agencies were and are unprepared.

"We at Money Tree have always safely and securely stored all data, and certain employees maintain secure back ups of all data at offsite locations.

"In the event we had to evacuate our location and/or city, we could be up and running within a few days at a different location.

"Industry wide I would like to believe that precautions for both security and emergency preparedness are the norm, but my knowledge tells me otherwise.

"Being prepared is not always easy and if one has the belief that 'it cannot happen here' then preparedness comes too late."

"Fortunately, EXS is bicoastal. We have backup servers and duplication of departments in both California and Georgia, and if a catastrophic event occurred we would be able to continue operations.

"We started this thinking five years ago, and the recent [hurricanes and flooding] only confirms our caution was necessary.

"We also are not regionally sales intensive, so a localized catastrophic event like Katrina would and has affected our processing volume and sales effort but not to any serious consequence. Our naturally cautious nature has put EXS in a very safe and secure position."

"Hurricane Katrina is the exception that defines the need for excellent disaster recovery plans. I bank with a small bank that is headquartered in the Gulf area, and they were able to process transactions the day after the storm ... when I asked how they were so prepared they stated that they had been planning for an event like this for years. The good news is their plan worked.

"Now, in our industry, I believe all of the major processors have excellent disaster recovery plans and redundancies established today.

"Sarbanes-Oxley requires the proper audit checks to ensure that these financial intermediaries have adequate amounts of protection.

"Now, in the light of Katrina, we discovered that many merchants did not have manual imprinters so, without telephones and electricity, many merchants had no way to process transactions.

"Without telephones, there was no way to verify transactions against fraud records and the merchants, unfortunately, reverted to the old days of 'cash being king.'"