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Table of Contents

Lead Story

Data breaches, more than bad publicity

News

Industry Update

Insuring against compromise

Negotiating the economic currents

U.S. court trims AmEx's clause

ACH network gets more mobile

Features

GS Advisory Board:
Challenge breeds opportunity - Part I

PCI Compliance for Dummies

Sumedh Thakar and Terry Ramos

Standing together against online fraud

And the nominations are

Selling Prepaid

Prepaid in brief

eCommLink refocuses, targets global remittance

Data breach leads to payroll card fraud

Event Innovation Inc.
Stored value - That's the ticket

Views

Coming in from the cold at NEAA

Patti Murphy
The Takoma Group

The HMS odyssey

Ken Musante
Moneris Solutions Inc.

Education

Street SmartsSM:
Rules by which to thrive, not dive

Jason Felts
Advanced Merchant Services Inc.

How to write right

Nancy Drexler
SignaPay Ltd.

Dead-on delegation

Vicki M. Daughdrill
Small Business Resources LLC

Keep an eye on the store

Adam Atlas
Attorney at Law

The lowdown on downloads

Dale S. Laszig
DSL Direct LLC

Company Profile

TransFirst Holdings Inc.

MicroBilt Corp.

New Products

Giving salons, spas the Midas touch

TouchSuite Salon POS
Company: Invenstar LLC

RDC, scanner tandem for small merchants

Dep@sit
Jack Henry & Associates Inc.

Inspiration

Cut back without cutting out

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

February 23, 2009  •  Issue 09:02:02

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Industry Update

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NEWS

AmEx joins EMVCo

American Express Co. joined EMVCo, the Europay, MasterCard and Visa (EMV) International standards body, in February 2009 as its fourth owner-member. AmEx joins Visa Inc., MasterCard Worldwide and JCB International in EMVCo, whose primary role is to manage, maintain and enhance the specifications for EMV smart card, or chip-enabled credit card, payment systems.

The addition of AmEx aligns with EMVCo's intent to attract further industry participation in the development of EMV specifications. AmEx acquired a one-fourth share of the EMVCo from the respective holdings of the other card brands and will have an equal interest in the organization.

"EMVCo welcomes AmEx as its fourth global payment systems member," said Tad Fordyce, Chairman of the EMVCo executive committee. "AmEx will be able to lend expertise at both the technical and management levels, which will directly support the EMVCo goal to enhance global chip standards and offer secure and interoperable payments at the POS around the world."

Fraud up, costs down

According to the Javelin Strategy and Research 2009 Identity Fraud Survey Report, the number of identity fraud victims increased 22 percent to 9.9 million adults in the United States, while the total amount of fraud increased only $48 billion - or 7 percent - in 2008. The report said fraud detection and resolution efforts are working well; as a result, the mean costs of identity fraud plummeted 31 percent to $468 per incident last year.

"Javelin's 2009 Identity Fraud Report highlights that fraud is increasing but is being caught more quickly; consumer costs [related to fraud] are declining; and crimes of opportunity, such as information from lost wallets, still comprise the vast majority of incidents," said James Van Dyke, President and founder of Javelin Research.

"The good news is research shows consumers have more control than they may think, and more of them are taking active steps to protect themselves. Additionally, the financial industry has made significant strides to resolve fraud incidents for their customers and put stronger controls in place to limit fraud, which is lessening the impact of the crime."

Alternative for small fuel merchants

The National Payment Card Association, a payment settlement provider, recently launched a payment system called GasCapRewards. The new decoupled debit card payment system offers retailers fixed transaction fees and immediate price rollbacks at the time of purchase. These rollbacks are self-funded from the savings generated by the elimination of credit card interchange fees.

The NPCA charges merchants a flat fee per transaction that can be connected to a loyalty card, third-party card or driver's license. Transactions are processed through the Federal Reserve automated clearing house. The decoupled debit platform requires a user ID number for authentication and is processed as an ACH transaction through the NPCA's network.

ANNOUNCEMENTS

Wallet in a phone

Mobile commerce solutions provider Blaze Mobile Inc. released a new version of its Blaze Mobile Wallet, a downloadable mobile commerce application compatible with an iPhone or iPod. The product enables users to manage online purchases, banking and money transfers, and also provides a mapping service.

CO-OP offers CU's mobile solutions

CO-OP Financial Services is offering credit unions low cost, turnkey entry into the mobile banking and contactless cards payment arena, two of the newest technological advancements quickly gaining popularity with increasingly tech-savvy consumers.

CO-OP introduced its mobile banking offering in October 2008 with mFoundry's financial services platform to deliver mobile banking offerings to credit unions via a downloadable client application.

iDeposit, you deposit

Gulf Management Systems Inc. introduced iDeposit Plus, a Web-based remote deposit service that lets businesses deposit checks electronically and collect automatically on returned checks. The service includes automatic check representation, reducing fees by as much as 90 percent.

Canadian receivable operations expanded

J.P. Morgan Treasury Services expanded its receivables operations for both paper and electronic transactions across Canada, providing a one-stop process for both U.S. and Canadian account holders. This new capability enables clients to speed up their receivables payments throughout North America.

Debited and less indebted

Venture capital firm KPG Ventures invested $2 million in the National Payment Card Association to help the company further develop and expand it's low-cost debiting system. The NPC's merchant-friendly, user ID-based payment system avoids the interchange fees of credit card companies by processing transactions through the Federal Reserve ACH. The technology is currently deployed at fuel and convenience stores across the country, but the KPG investment will propel NPCA systems into supermarkets and drugstores.

Parascript introduces new check recognition software

Parascript LLC, an image analysis and pattern recognition software firm, introduced CheckUltra, a next-generation check recognition solution that offers higher recognition rates and a significant reduction in labor and human errors associated with check processing. CheckUltra is specially designed to improve check processing efficiency in image exchange, remote capture and proof-of-deposit environments.

Retrofitted bridge to cyberspace

Internet Protocol payment company Precidia Tech-nologies Inc. introduced its Transnet Payment Engine, which channels POS purchases to certified payment processors via a router that is compatible with Toshiba TEC America electronic cash registers.

The device eliminates gateway fees, allows merchants to choose payment processors and provides top-flight security designed to facilitate merchant Payment Card Insustry Compliance (PCI) Data Security Standard (DSS) compliance.

PHT joins PCI SSC

Medical payment processor Preferred Health Technology Inc. is now a member of the PCI SSC. Its new position entitles the company to a voice in establishing payments industry regulations - particularly regarding the hot-button issue of data security. The council currently has over 500 member organizations.

Experts to speak at Data Security Summit

Payment processor Propay Inc. is gathering some of the brightest minds in the payments industry to speak on the latest industry trends and best procedures for protecting sensitive customer data at the 2009 Data Security Summit, March 18 to 19, at the Snowbird Resort in Salt Lake City, Utah.

Representatives from the payments industry and law enforcement agencies will be on hand to network with attendees and talk about the latest updates from their respective organizations.

"The landscape of the payments industry is ever-changing, and the need to educate the market on best practices and the latest technology is essential to the survival of every company," said Greg Pesci, Propay Executive Vice President of Business Strategy.

"This Summit is an opportunity to bring experts and non experts together to educate each other on the trends in the market and the pains customers and businesses are experiencing in regards to digital transactions."

All aboard the PayDay Express

Processor and value-added reseller Secure Payment Systems Inc. is offering an upgrade to its 90 Days Same as Cash service, which allows merchants to accept up to four customer checks, deposited in 30 day intervals, for a single retail transaction. Under the enhanced version, called PayDay Express, payments are conducted electronically with consumers automatically debited at each 30-day juncture, rather than having merchants deposit the checks manually.

Visa aberrantly robust in 2009

Defying economic trends, Visa reported a net operating revenue of $1.74 billion in 2009 - a 17 percent increase from its $1.49 billion yield at this point in 2008. That figure is the product of growth in all revenue categories, including an 8 percent increase in service revenues ($793 million), a 13 percent increase in data processing revenues ($554 million), and a 33 percent upsurge in international transaction revenues ($505 million).

The company anticipates net revenue growth in the high single digits for the rest of 2009, but cautioned that revenue growth could be challenged in 2010 if the current economic conditions persist.

Voltage enhances encryption service

Voltage Security Inc. instituted enhancements to itsVoltage SecureData that support more environments and platforms including end-to-end encryption across distributed environments used by retail and payment processors. The service will make it easier to comply with regulations and protect sensitive customer information from the moment it is obtained.

PARTNERSHIPS

Bling Nation in another nation

The Chilean economic development agency Corfo has given a $500,000 grant to help cultivate a partnership between Chilean engineering company Micrologica Systems Ltd. and payment network provider Bling Nation Ltd. The partnership, Micrologica Innovation, is investing $2 million in product development, including mobile payment devices and software applications to enable online payments on smartphones, wireless POS machines and contactless payment tags. Corfo offers American technology companies grants to conduct research and development work in Chile.

Micros teams up with Goals Soccer Centres

UK sports venue operator Goals Soccer Centres PLC and Micros Systems Inc. partnered to implement information technology aimed at increasing business efficiency. Micros Systems, a information technology services provider for the hospitality and retail industries, will provide Goal Soccer Centres with systems to improve efficiency and centralize the management of its 30 locations.

Oberthur, Xiring team up

Smart card solutions company Oberthur Technologies S.A. signed an agreement with authentication solutions provider Xiring to enhance its Subscriber Identity Module (SIM)-based two-factor authentication for secure online services. SIM-based authentication allows mobile operators to deploy SIM Token Password technology, which is compatible with smart phones and all standard computer operating systems.

"The need for protecting the identity of individuals on the Internet is increasing," said Olivier Leroux, Director of Oberthur's Card Systems division. "With our enhanced SIM Token solution, mobile network operators can now offer secure online solutions based on SIM cards."

Omega to sell RDM's remote deposit products

Omega Transactions Corp. has teamed with RDM Corp. to resell RDM's electronic check conversion software and hardware products, allowing the ISO to provide customers with remote deposit capture services for electronic check deposits.

The software is not limited to use with any particular bank, so merchants won't need to change their existing banking arrangements. To kick off the introduction of RDM products, Omega Transactions will offer a 90-day-free trial of Simply Deposit, a product developed specifically for small businesses.

Partnership offers new image clearing option

Payment processor COCC and Bankers' Bank North-east formed an alliance to deliver image cash letters from COCC's client institutions for settlement to BBN. The partnership introduces additional image presentment options for COCC clients, as well as access to BBN's OnWe Network for local, regional and national presentations.

ACQUISITIONS

UBC procures more accounts

United Bank Card Inc. will acquire over 5,000 merchant accounts, valued at $11 million, from Optimal Payments Corp. "This deal was a long time in the making and represents the hard work and dedication of the staff and management of both Optimal Payments Corp and United Bank Card," says UBC Chief Executive Officer Jared Isaacman. "To complete an acquisition of this size in such difficult economic times is a testament to the strength of United Bank Card."

Doin' it right

Apriva Inc., a payment gateway focusing on Internet protocol (IP)-based transactions, is dedicated to providing Payment Card Industry (PCI) Data Security Standard (DSS) compliance for data in motion. To that end, Apriva joined the PCI Security Standards Council (SSC) on Feb. 4, 2009, and will work with the council to enahnce the PCI DSS and other PCI data protection standards.

"We offer a program with our terminals called Certified Secure, and we're one of the first companies to be certified and fully compliant with data in motion," said Bill Clark, Executive Vice President of Apriva. "We're also very active in securing transaction transport from the POS terminal systems [PTS] all the way to the processors. Joining the Council was a natural extension because we're interested in helping to drive those standards and add value where we can."

#h4 An active voice

As a participating organization, Apriva has access to the latest standards issued by the PCI SSC and will be able to provide feedback on the PCI DSS in conjunction with other council members. Bob Russo, General Manager of the PCI SSC, said the council is committed to helping everyone in the payment chain protect consumer data. And he added that Apriva's participation in setting standards demonstrates the company is devoted to playing an active part in attaining this goal.

"We are pleased to announce our participation in the PCI SSC," said Paul Coppinger, President of Apriva. "We look forward to providing significant contributions to the collaborative effort to advance the security of payment data." The PCI DSS, endorsed by all five card brands, requires merchants and their service providers that store, process or transmit payment card data to adhere to information security controls and processes that ensure data integrity.

Clark saw joining the PCI SSC as another avenue for being involved in developing and implementing new security solutions in the payments industry. Apriva is also a member of the Electronic Transactions Association and the Financial Services Technology Consortium, whose goal is uniting financial service professionals to work in a noncompetitive, open forum to share problems and challenges, and develop next-generation technologies.

#h4 Ahead of the curve

"More than anything, it's important to know where these businesses are going so that we can try to stay ahead of things," Clark said. "We ensure all of our partners, carriers, deployment houses and processors who utilize our software and processes that we are here to help with the PTS and PCI compliance.

"Our goal is to help guide those standards. Our information technology people are working with the PCI SSC's research and development folks on new products and technology related to the evolution of data in motion.

Additionally, our Chief Security Officer will be actively working to make sure that we understand what the council's processes and goals are moving forward."

An expanded market footprint is a side benefit to Apriva's membership in the PCI SSC, Clark said, but there is another, more important priority for the company. "We have a lot of resellers that rely on us to provide secure and dependable solutions," he noted. "So we see our involvement with the PCI SSC as just a way of extending that capability and to stay in sync with the industry's product and technological evolution."

#h4 Standing out

Clark also mentioned that what makes Apriva unique among many other wireless service providers is that it provides more than just a data connection. The company currently has six security software patents related to keeping data out of the clear.

"We provide security software on the device as well as in our gateway," Clark said. "That's what has helped us become PTS- as well as PCI DSS-compliant. We also provide assurances that those devices are certified with all our integration software."

Apriva plans to unveil a secure networking product at the ETA's Annual Meeting & Expo in Las Vegas in April 2009. The device offers end-to-end IP security and is placed right at merchant POS terminals.

"We are focused on providing end-to-end secure transactions wherever possible," Clark said. "With multiple players in the data stream, it's not always possible to have complete customer data security, but certainly we are moving very quickly in that direction."

Trustwave acquires Mirage

Trustwave, a leading provider of on-demand data security and payment card industry compliance management solutions to enterprises worldwide has agreed to acquire Mirage Networks, a developer of patented network access control (NAC) technology. The terms of the deal are confidential.

"Mirage Networks' NAC technology and expertise in endpoint compliance and behavioral policy enforcement will complement our current suite of security services," said Robert J. McCullen, Chairman and CEO of Trustwave. "Malware that circumvents traditional security measures or results from insider abuse of network access is stopped with Mirage Networks' patented NAC technology."

APPOINTMENTS

Buske joins Optio Solutions

Terry Buske joined Optio Solutions LLC as Vice President of National Sales, where he will oversee the opening of a new office in Houston while helping manage the sales teams in Rohnert Park, Calif. and Dallas.

Busque brings to Optio several years of management experience in the technology, financial services and collection industries.

Electracash tags Cornejo

E-commerce payment processor Electracash appointed Richard S. Cornejo its new Director of Marketing.

The addition of Cornejo is part of the company's push to market a recently unveiled affiliate program for electronic payment resellers and their business partners.

Cornejo has held a number of executive management positions at leading financial institutions, including service as Executive Vice President and BankCard Manager for Charter Pacific Bank and President and CEO of BBH Qualified Plans Inc.

TSYS elevates two

TSYS Acquiring Solutions promoted two team members to its senior management team. Jim Cosgrove moved up to Treasurer and Group Executive of Finance, while David Duncan advanced to Group Executive for China and Southeast Asia. Duncan will be responsible for TSYS China and China UnionPay Data Services Co. Ltd.

Cosgrove will work out of the company's headquarters in Columbus, Ga.

Foss moves up at ProfitStars

Jack Henry & Associates Inc., a provider of integrated technology solutions and data processing services for financial institutions, promoted David Foss to President of its ProfitStars division.

Foss, who has been with the company since 1999, had been ProfitStars' General Manager.

NIC promotes Knapp to EVP

Robert Knapp, a nine-year veteran of government payment processor NIC Inc., was promoted to Exec-utive Vice President. Knapp has served as General Manager, Regional Manager and Vice President of the company's Portal Operations, where he will maintain oversight while also attending to company wide growth initiatives.

Jacques to the Pacific

Hypercom Corp. appointed Jacques-Herve Maupin as Managing Director, Asia Pacific. He will take over for T.K. Cheung, who has taken the job of Vice President, Quality and Security for the company.

Maupin brings 20 years experience in the electronic payment, smart card and information technology industries.

De Veyra to lead global council

Lib de Veyra, Vice President, Emerging Technologies at JCB, has taken over as chairperson of the PCI SSC. A new chairperson is appointed annually by a rotation among representatives of the five major card brands making up the council's Executive Committee: AmEx, Discover Financial Services, JCB, MasterCard and Visa.

De Veyra succeeded Rob Tourt, Vice President, Discover, who served as chairperson in 2008.

BOTTOM LINES

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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