MasterCard Worldwide introduced its much anticipated road map to Europay/MasterCard/Visa (EMV) adoption in the United States Jan. 30, 2012. The payments industry expected MasterCard to introduce its own plan for EMV adoption ever since Visa revealed in August 2011 it would push for EMV here. Visa's plan for EMV adoption in the United States rewards merchants by removing the requirement to annually validate their Payment Card Industry (PCI) Data Security Standard compliance if they implement EMV technology and meet certain other requirements.

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A recent white paper issued by Dutch international digital security firm Gemalto N.V., a strategic partner of VeriFone Inc., gives a European perspective on the drive to introduce the Europay/MasterCard Worldwide/Visa Inc. (EMV) chip technology to the United States. The free paper, titled The Migration to EMV Technology – EMV Implementation in the U.S., discusses the importance of Visa's EMV push in the United States and looks at the consequences and costs of EMV implementation here for merchants and issuers. VeriFone and Gemalto are working together on new chip card solutions and technology for U.S. retailers and card networks.

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Following are research highlights from recently released payments industry reports. #h2Data breach aftermath detailed A study released Jan. 25, 2012, by Experian Data Breach Resolution, a division of Experian Information Solutions Inc., and the Ponemon Institute LLC offers lessons in best practices for companies that have experienced data breaches. The study, titled Aftermath of a Data Breach, surveyed 500 information technology (IT) professionals at companies victimized by fraudsters.

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Following are a few items that caught The Green Sheet's eye recently: #h2MasterCard mobile payments MasterCard Worldwide said it is launching a pilot in Australia to test its new QkR (pronounced "quicker") mobile payment application. The new application will allow movie goers to peruse menus, order, and pay for food and drinks from their seats using smart phones. The purchases are delivered to the customer at their seats. QkR works by scanning a QR code or by entering a special QkR label.

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A new study from fraud management company and Visa Inc. subsidiary CyberSource Corp. concluded that the e-commerce fraud rate dropped in 2011 to its lowest level in the 13-year history of the CyberSource fraud survey. However, the study also found that the cost of fraud is rising. In 2011, fraud prevention costs increased, dollar losses rose and merchants reported fraud is getting harder to detect, according to CyberSource.

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Apparently PayPal Inc., the payment arm of eBay Inc., isn't waiting for the development of near field communication (NFC) or Europay/MasterCard/Visa (EMV) infrastructures to revolutionize payment paradigms for U.S. retailers and consumers. AJB Software Design Inc. said Jan. 16, 2012, it will introduce PayPal payment options to its more than 140 customers (many of whom are tier one retailers) and their more than 250,000 POS terminals. The companies said the cloud-based, Internet protocol-enabled solution involves a POS application programming interface that allows AJB retailers to offer customers the ability to pay with a PayPal payment card or by using PayPal's Empty Hands solution, where users enter mobile phone numbers and PINs at the POS, with no new infrastructure costs or technology upgrades required by merchants.

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A Jan. 5, 2012, ruling by the U.S. Court of Appeals for the Third Circuit upheld an injunction that blocks New Jersey from enforcing all of the controversial gift card provisions contained in its updated abandoned property laws. The law firm Ballard Spahr LLP called the ruling "a victory for gift card issuers."

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Fourth quarter reports are in from many of the biggest players in the payments industry. While it appears payments remains a profitable business, at least one company noted the negative impact on earnings related to the new debit card interchange rate set by the Federal Reserve and required by the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

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Online fashion retailer and Amazon.com subsidiary Zappos.com revealed Jan. 15, 2012, that over 24 million of its customer accounts were breached. Zappos.com said a fraudster was able to obtain names, email addresses, billing and shipping addresses, phone numbers, the last four digits of credit card numbers listed with accounts, and encrypted passwords. A class-action lawsuit on behalf of Zappos.com customers was subsequently filed Jan. 16, 2012, in the Western District of Kentucky in Louisville.

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Smart meter technology firm PayGo Electric entered a pilot program with utility company Georgia Power to determine the commercial viability of prepaid electricity metering in Georgia. While electricity prepayment programs are gaining in popularity across the United States and abroad, PayGo said its technology differs from that of other providers in that the service can be enabled for real-time payments and account updates.

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In its push for the adoption of Europay/MasterCard /Visa (EMV) chip cards and near field communication (NFC)-enabled mobile payment devices in the United States, Visa Inc. released a set of best practices designed to clarify issues that concern EMV. One popular myth Visa seeks to dispel is that EMV will require personal identification numbers (PINs). "There's a lot of confusion around the myth that EMV means 'chip-and-PIN,'" Stephanie Ericksen, Visa Head of Authentication Product Integration, said in a blog published Jan. 13, 2012. "It doesn't in many countries, including the U.S. That's because, in the U.S., we can rely on online processing where transactions are transmitted in real-time to the issuer for approval. With that in place, there's no need for the offline authentication that was the genesis of chip-and-PIN."

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General purpose reloadable (GPR) prepaid card provider nFinanSe Inc. wants prepaid card distributor InComm to stop operating its Vanilla Reload Network. In a preliminary injunction filed Jan. 17, 2012, in the Atlanta division of the U.S. District Court – Northern District of Georgia, nFinanSe claims InComm's network constitutes an "illegal price-fixing conspiracy."

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A new year brought a new Internet security threat with it, according to recent FBI warnings. The new threat is a phishing scheme dubbed "Gameover" that attempts to get people, often in financial institutions, to open fake emails purportedly from NACHA – the Electronic Payments Association. Once the emails are opened and a link in the message is activated, malicious software embedded in the website attached to the link infects the recipient's computer and gives criminals access to the recipient's bank accounts.

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In what she said was a surprise to many of her peers in the payments industry, Kimberly Fitzsimmons, the well-known President of Independent Sales for First Data Corp. Commercial Services, left First Data in January 2012 to become the new Chief Executive Officer at Cynergy Data LLC. Fitzsimmons began her career in the industry in 1987 with payment processor Concord EFS Inc. She was a Senior Vice President with Concord when First Data acquired the company in 2004 and is credited with being a key in the successful integration and merger of the two companies.

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As affinity prepaid cards go, The Approved Card touted by financial celebrity guru Suze Orman is garnering generally positive reviews. Unlike fee-laden general purpose reloadable (GPR) cards fronted by reality television personalities the Kardashian sisters or the rapper Lil Wayne, The Approved Card has received praise for its low fee structure and features that include credit reporting and a savings component.

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Leading acquirer First Data Corp. released the First Data SpendTrend analysis comparing December 2011 and December 2010 data. SpendTrend tracks same-store consumer spending by credit, signature debit, PIN debit, electronic benefit card and check at U.S. merchant locations. "Dollar volume growth on cards overall was a healthy 6.9 percent in December," First Data reported.

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EBay Inc.'s payment arm, PayPal Inc., confirmed in a Jan. 9, 2012, blog post by its Director of Communications, Anuj Nayar, that it is launching a limited POS trial with The Home Depot U.S.A. Inc. "It's true that The Home Depot is the first retailer to roll out a limited pilot program for our new POS technologies," Nayar wrote.

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A gun buy back program held at two Baptist churches in New Castle, Del., was so successful that $100,000 in Visa Inc.-branded, open-loop gift cards exchanged for the guns were gone before the day was out. Vouchers issued in lieu of gift cards were given to program participants for the rest of that day. The office of Delaware Gov. Jack A. Markell authorized the allocation of additional funds to purchase more gift cards to be swapped for the vouchers on Jan. 7, 2012.

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Investors and payments industry professionals are talking about InspirePay, a free software-as-service payment tool from Boulder, Colo.-based merchant acquirer Inspire Commerce Inc. Launched in December 2011, InspirePay reportedly enables online merchants to invoice and receive payments through any payment system the business chooses. For instance, an online merchant can invoice a customer and, at the same time, give the customer payment options from a list that may include, but is not limited to, any credit card; the payment services of Amazon.com Inc., PayPal Inc. (including PayPal and Zong), Dwolla Corp. and Stripe Inc.; or the open source currency Bitcoin.

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In a controversial move, President Obama appointed former Ohio Attorney General Richard Cordray to the position of director of the newly created Consumer Financial Protection Bureau. The Jan. 4, 2012, appointment raises the issue of what regulatory power the agency will have over the prepaid card industry.

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Fiserv Inc., CheckFree Corp., CashEdge Inc., Fidelity National Information Services (FIS), Metavante Corp and Internet Identity are among the companies that caught our eye today. #h2Fiserv files payment patent suit Fiserv subsidiaries CheckFree and CashEdge filed a patent infringement lawsuit against FIS and Metavante, a subsidiary of FIS, Fiserv reported Jan. 5, 2012. The suit, filed in the United States District Court for the Middle District of Florida, alleges FIS' Payment Manager products infringe on Fiserve patents.

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As we begin 2012, The Electronic Transactions Association, the Smart Card Alliance and the Northeast Acquirers Association are all doing good things for payments. #h2ETA board updates Electronic Transactions Association members elected three new board members and reelected two current members, according to the organization's interim Chief Executive Officer, Pamela Furneaux.

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Florida-based payment technology provider Every Penny Counts Inc. sued Wells Fargo & Co. on patent infringement claims. EPC said the technology it licenses to financial institutions, which allows bank customers to automatically deposit funds into savings accounts when they make debit card transactions, is being infringed upon by Wells Fargo with its Way2Save and Save As You Go banking programs.

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You don't have to tell ISOs or merchant level salespeople things happen quickly in the payments industry. Things seem to change literally over night this business. Here are some significant news items of interest to the industry that may have been missed over the holidays: #h2New security threat Prolexic Technologies Inc., a San Francisco security company specializing in fighting and preventing distributed denial of Service (DDoS) attacks, issued a threat advisory for a high-risk DDoS tool kit called Dirt Jumper.

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