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Table of Contents

Lead Story

Do you speak payments?

News

Industry Update

Bob Carr takes the encryption lead at IAPP

PCI SSC broaches possible changes

Aite identifies industry challenges

BofA, First Data give birth to BAMS

Features

AgenTalkSM:
Bruce Reisman

GS Advisory Board:
Vertical market virtues - Part I

ISOMetrics:
Acquiring by the numbers

Selling Prepaid

Prepaid in brief

Cabbies moved to plastic

'Obolize' that card

Gift card legal perils - Part 1

Views

Where there's avarice, there should be ire

Biff Matthews
CardWare International

Hard-to-place merchants:
An untapped opportunity

Jeffrey I. Shavitz
Charge Cards Systems Inc.

Pulling the PIN on older systems

Scott Henry
VeriFone

Education

Street SmartsSM:
Independents Day

Jon Perry and Vanessa Lang
888QuikRate.com

PCI: The merchant experience

Tim Cranny
Panoptic Security Inc.

Target portfolios for increased profits, merchant retention

Christian Murray
Global eTelecom Inc.

Smart specialization

Jeff Fortney
Clearent LLC

Company Profile

checXchange Money Transfer Systems Inc.

New Products

Portable card swipe

POS app for BlackBerry
Merchant Warehouse

New Optimum family member

Optimum T4205
Hypercom Corp.

Inspiration

Revisit your resolutions

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

July 13, 2009  •  Issue 09:07:01

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Industry Update

NEWS

Go-to guys for payments

Just about everyone could use a go-to guy - someone to "go to" when you need help on a specific project. Lawyers and information technology professionals often fit the definition of go-to "guys," who in the truest sense can be persons of either sex.

Now there's a group of payments industry experts positioning themselves as the go-to guys for payments. The Payment System Go To Guys includes industry experts Paul Martaus, Peter Quadagno and Patti Murphy. (Murphy also authors the monthly Insider's Report on Payments column for The Green Sheet.) Between them, the three have spent more than 100 years in the payments space, and now they're blogging regularly - "providing one-sided discourse concerning topical issues of the day," according to the authors.

Recent blog entries have focused on interchange legislation, relationships between public transit and payments, and the need for involving ISO advocates in policy deliberations. Check it out at www.paymentsystemsgotoguys.com.

ETA offers free webinar series

The Electronic Transactions Association's free, interactive 2009 Economic Indicators Report Series kicked off July 7, 2009. The webinar, Today's Economy and How it Affects Your Business, included a review of the latest ETA/Strawhecker Group Economic Indicators report.

Presenters for the first webinar in the series were Laurie LeBoeuf, Chief Executive Officer, Take Charge Business Consulting; Deanna Rich, President, Merchant Acquirers' Committee; and Kurt Strawhecker, Managing Director, and Mike Strawhecker, Director of Marketing & Strategic Research, for The Strawhecker Group. The focus for the initial one-hour webinar in the series was underwriting and risk. Attendees were offered tools to help mitigate the impact on underwriting that the recession has wrought. The webinar and several other archived webinars are available for download on the ETA Web site, www.electran.org.

Heartland finishes end-to-end phase one

Completing the first phase of its end-to-end encryption pilot, Heartland Payment Systems Inc., partnering with Voltage Security Inc., transmitted live, advanced encryption standard (AES)-encrypted card transactions from a Texas-based merchant using multiple credit, prepaid and signature cards from each of the major card brands. AES, reportedly the highest level of encryption available, is set to replace the data encryption standard (DES) and the Triple DES as the preferred encryption method.

"These cards were read by our newly developed pilot tamper-resistant security module (TRSM) terminal," said Robert O. Carr, Heartland's Chairman and CEO. "The data was encrypted as the electronic digits left the magnetic stripe and entered the TRSM hardware device. The data was then successfully transmitted to and through our processing platform for authorization and settlement." The company's press release outlined five payment zones:

The recent test dealt with the first four zones; the fifth depends on the card brands.

ANNOUNCEMENTS

AllTrust Networks receives Check 21 patent

Alltrust Networks was granted a U.S. patent for its Check 21 service, which works in conjunction with its Paycheck Secure check cashing service. The service enables merchants to receive funds on their electronic deposits as soon as the next morning. The check is scanned during the verification of the check cashing transaction. It can then be deposited electronically by a single click of a button.

AmeriMerchant's preservation program

AmeriMerchant LLC introduced its Merchant Cash Advance Portfolio Servicing and Wind-Down Program. The program is designed to "preserve the capital of existing merchant cash advance portfolios using AmeriMerchant's back-office services and technology," said David Goldin, President and CEO of Ameri Merchant.

Axiom launches digital ID

Axiom Corp. released a privately branded digital identity card for retail merchants, corporations, financial institutions and other organizations. With the Axiom "card," consumers can register for and log into online accounts using encrypted identities stored on their computers.

B32Trust releases two-way authentication

B32Trust SAS offers what it says is the first multifactor, mutual online authentication and transaction validation system. This authentication extends in both directions: The commercial site is authenticated in addition to the user. B-Authenticated works with any authentication device and is designed to make authentication methods resistant to phishing and hacking attacks.

The portable system can lock and unlock a user's electronic identity and financial details from any PC.

#h4 Doin' it right

Tokenization, the use of a common key to keep card information encoded as if passes between merchants and processors, has been used in the payments industry since 2005. But payment solutions provider and processor BluePay Inc. believes it has made the technology more secure and reduced the complexities associated with Payment Card Industry (PCI) Data Security Standard (DSS) compliance.

"Some companies are using tokenization in a broad sense, but implementing it with the latest PCI standards introduces more challenges compared to a few years ago," said John Rante, BluePay's Chief Executive Officer. "But I think one differentiating factor is that, as a processor, our tokens are tied directly to a merchant's account in our system, so we don't have any merchants cross-processing."

Tokenization is designed to prevent the theft of card information in storage. It was developed to meet the PCI requirement that consumer card information not be stored at the POS after transactions. When a merchant swipes a consumer's card, that information is sent to the processor for authorization and approval. But when that approval - or decline - is sent back to the merchant, a token is substituted.

Tokens are intended to replace the card number with a 16-digit, randomly generated number that contains the last four digits of the card number or other account information, which become the first four digits of the newly generated token. The token is then used from that point forward to conduct continuous multiple transactions, recurring billing procedures or incremental authorizations.

However, BluePay's tokenization program uses a 12-digit number that contains no partial card number or any miscellaneous cardholder account information. And according to Joel Tosi, BluePay's Vice President of Technology, the same token can be used for multiple transactions or it can change with every transaction.

"We found that merchants had a real need for this type of solution, particularly with the PCI profile getting larger and merchants being exposed to some real fines," Tosi said. "All of a sudden there were a lot of merchants out there who were looking to outsource their payment processing piece and wanted nothing to do with storing consumers' card numbers."

Start to finish

While tokenization is not a replacement for end-to-end encryption, Rante feels it is not only complementary but also superior to end-to-end encryption. "Absolutely I feel that way, because ultimately with end-to-end at some point that card number needs to be decrypted, leaving it vulnerable," Rante said. "But tokens are useless for a hacker who might break into a system, steal that information and try to sell it on the open market."

Additionally, BluePay's tokenization program can be cost-effective for merchants because the company is a software-as-a-service host provider. "It's important to point out that BluePay also has the capability to store account numbers without the need to run an authorization against the payment method because our tokens are unique to our solutions," Tosi said. "And we can provide tokenization on all types of payments, not just recurring billing."

A token vertical

Since the company introduced its tokenization platform, it has seen its vertical footprint grow along with its ISO reseller channel. "We have ISOs all across the country that have been especially successful working with utilities as it relates to our tokenization product," Rante said. "The key is that it fits right in with our electronic bill presentment and payment, so where you have a merchant with a need for a recurring charge it's a perfect application."

BluePay has seen significant growth with utility-type companies like telecommunications providers, water and power companies, alarm monitoring, waste hauling, lawn care and nonprofits. Tosi added that the company is also deploying the application to handle any type of mobile POS device.

"As far as the application type, we can handle all types of mobile payments to include both card present and card-not-present transactions," he said. "And I believe one of our big advantages is that we have full visibility of the transaction from the time it hits our system all the way through until the merchant gets funded."

BluePay goes green

BluePay Inc. has added View'n Pay, an electronic invoicing system, to its product line. The new offering promises to give customers more payment options, reduce merchant expenses and save paper.

Central Payment chooses Hypercom

Central Payment Corp. selected Hypercom Corp.'s T4205 for its U.S.-based merchants. CPC has a merchant base of over 25,000 and adds 1,300 new merchants monthly, according to Hypercom. The T4205 is the newest terminal in Hypercom's T4200 series.

CO-OP contributes 30K to EPC

CO-OP Financial Services is donating $30,000 to the Electronic Payments Coalition on behalf of its member credit unions. Stan Hollen, President and CEO of CFS, said, "The EPC is leading the charge against badly conceived legislation on interchange, and we want to do our part in protecting this important income source for credit unions."

Digital River delivers new e-commerce solution

For online sales of limited quantity, limited edition, refurbished and clearance items, Digital River Inc. rolled out its Limited Edition e-commerce solution, which provides e-storefronts, marketing functions that utilize social networks and online tools for inventory management.

enStage gets backing from India

Accel Partners, a Bangalore, India-based venture capital firm invested in enStage, a payment solution and authentication provider that specializes in emerging markets. EnStage, based in Cupertino, Calif., offers card solutions, payment gateways, mobile payments, interactive voice response payments and e-commerce authentication.

Forrester online bill payment forecast

In its report, U.S. E-mail Marketing Forecast, 2009 to 2014, Forrester Research Inc. estimates 63 million households will pay bills online in 2014, compared to 48 million in 2009. The research firm also projects that by 2012, online bill payment aggregators will claim more market share than the direct, single-bill sites for the first time. The study revealed that young affluent consumers have been slower to choose aggregating sites for online bill payment.

Safe-T-PIN achieves first

HomeATM ePayment Solutions' Safe-T-PIN was certified Payment Card Industry (PCI) Data Security Standard (DSS) compliant. HomeATM is powered by Atmel Corp.'s secure microcontroller, which Amtel said is the first ever Internet PIN entry device (PED) that has achieved PCI 2.0 certification.

Javelin looks at alternative payments

Javelin Strategy and Research published a new report that studies alternative payments. The main questions the 49-page report delved into were: Why should financial institutions invest in online alternative methods of payment?; What drives value in an alternative method of payment for consumers, merchants and financial institutions?; and What are the emerging alternative methods of payment that best meet the needs of each constituent and why?

Optio gets new strategy

Optio Solutions LLC released Strategy I Plus, a "unique" collection product that combines a written demand series with a phone call reminder enhancement. With Strategy I Plus, Optio Solutions said it has built upon the flat-fee written demands product by adding strategically timed phone calls.

This expanded contact with past-due customers and patients drives increased results and profitability, while remaining a cost-effective solution for the client.

Precidia upgrades TransNet

Precidia Technologies Inc. released a new version of its TransNet payment engine, which expands the support for the POSLynx220, a POS system used in the hospitality industry. The company stated the payment application is the first of its kind to be Payment Application DSS validated. The new version also adds e-commerce capability.

PatientCompass certified PCI compliant

Trustwave validated RelayHealth's PatientCompass PCI DSS compliant, awarding the company Level 1 Service Provider Certification. Jim Bodenbender, RelayHealth's Business Unit President, said, "No one wants a headline reporting exposure of confidential patient financial information stolen from their hospital."

Wireless ePay available for download

Wireless ePay, a USA ePay credit card processing application, is available as a free download at Blackberry App World (www.blackberry.com/appworld) and Android Market (www.android.com/market). The application is compatible with any network and is available for Blackberry, Windows Mobile and Android phones. The company plans to roll out a version of Wireless ePay for the iPhone 3.0 later this year.

YESPay comes to North America

YESpay International Ltd. now has an office and data center in Toronto. The office's primary goal is to help retailers adopt Europay, MasterCard and Visa Chip and PIN, contactless payment and 3D Secure Web payment standards without retailers having to obtain formal bank accreditation or full PCI DSS approval.

YESpay's IP-based payment processing service has been pre-accredited by card processors in Europe and North America and is Level 1 PCI DSS-certified.

PARTNERSHIPS

Edwards goes to Warp 9

Edward's Luggage extended its contract with Warp 9 Inc. for e-commerce.

Michael Ware, Director of E-commerce for Edwards Luggage, said, "Warp 9's solution gave us more features, the ability to grow our business, better support and advice, no large capital expenditure, and low ongoing cost of Web site operations. The free features and new release upgrades keep us competitive as well."

Heartland beefs up

Heartland selected MicroStrategy Inc. for enhanced reporting and analytics for its customers.

"After conducting an evaluation of numerous reporting and analysis products, we selected MicroStrategy because of its integrated platform, scalability for large volumes of data and easy-to-use reporting capabilities for our diverse user population," said Alan Sims, Chief Technology Officer for Heartland.

The Phoenix Group signs for $6 million

Hypercom signed a deal with The Phoenix Group for $6 million worth of Hypercom Optimum payment devices for resale.

The Phoenix Group, a large independent POS distributor, will market the payment products to its bank and ISO customers across the United States.

Merchant Data, ControlScan team

To meet its PCI DSS compliance needs, Merchant Data Systems Inc. has contracted with ControlScan Inc., an Atlanta-based compliance solution provider.

"We are very impressed with how ControlScan's proactive outreach programs help educate and engage merchants through the complex PCI compliance process," said Merchant Data Systems President Drew Freeman.

MerchantPro shares with One to One

One to One Leadership, a management training and recruitment company, entered into an agreement with MerchantPro Express LLC that will compensate One to One for profits generated by agents it trains and manages for MerchantPro.

Clients of the New York-based One to One include First Data Corp., Chase Paymentech Solutions LLC and RBS WorldPay Inc.

NetPay's Noteworthy introduction

Noteworthy Medical Systems Inc. released the Web-based application, NetPay. Powered by mPay Gateway Inc., NetPay integrates with Noteworthy's NetPracticePM to collect deductibles, out-of-pocket patient payments and co-pays at the time of service.

John Wallace, Senior Vice President for mPay Gateway, said he has seen practices cut their patient payment receivables in half using the mPay Gateway product.

PDS teams with Plug'n Pay

Integrated payment provider Payment Data Systems Inc. finished integrating its automated clearing house platform with Plug'n Pay Technologies Inc.'s e-commerce gateway to offer an e-check service to its customers.

The merchant can access both services from a single interface.

Bling signs The State Bank

The State Bank's La Junta, Colo., branch chose Bling Nation Ltd. to provide a local payment network and the rewards program Redi Pay Bling.

The bank now offers Community Payments Service, a contactless debit network, to its individual and commercial customers.

VerifySmart signs with BetED

VerifySmart Corp. will provide VSC's VerifyGateway and VerifyNGo suite of services as part of a five-year agreement with BetED Corp., an Internet wagering provider. BetED will pay a per-transaction verification fee to VerifySmart for the service.

The Charge Anywhere way

The way5000, a PCI PED-approved mobile payment solution, is now supported by Way Systems Inc. for Charge Anywhere LLC customers. With the way5000, merchants can go mobile while still qualifying for lower transaction rates.

APPOINTMENTS

New COO for MasterCard

MasterCard Worldwide has named Ajay Banga its President and Chief Operating Officer. He will report to Robert W. Selander, who is the current President and CEO. Selander will continue as CEO.

Most recently, Banga served as CEO of Citigroup's Citi Asia Pacific. At MasterCard, he will take charge of essential business operations, including domestic and global customer relationships, markets, products, services and marketing.

Century snags Fadel

Century Payments Inc. named former Chief Financial Officer of Sage Payment Solutions Inc. Christian Fadel as its new CFO.

"The positive momentum exhibited by Century in the current market makes this an ideal opportunity to leverage the experience I gained with both Verus [Payment Systems] and Sage over the last seven years," Fadel said.

Fiserv names new EVP and CIO

Financial services technology provider Fiserv Inc. welcomed Maryann Goebel as its new Executive Vice President and Chief Information Officer. Goebel has 30 years of progressive technology experience. She will report to Fiserv President and CEO Jeffery Yabuki.

VocaLink taps Claire Hafner

Claire Hafner joined VocaLink as a board member and CFO. Marion King, CEO for VocaLink, said Hafner's "extensive experience in streamlining the finance functions of a company, as well as her significant board experience both in the U.K. and internationally, make her a valuable addition to our board."

Riley to drive A-Claim sales

Preferred Health Technology Inc. welcomed Sean Riley as its Vice President of Sales. Riley will take charge of nationwide sales of A-Claim, PHT's payment solution for the medical industry. Riley comes on board with 33 years of payment industry experience, including a seven-year stint as Group Manager of Third Party Sales and Support at Chase Paymentech.

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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Spotlight Innovators:

North American Bancard | USAePay | Super G Capital LLC | Humboldt Merchant Services | Impact Paysystems | Electronic Merchant Systems