The Green Sheet Online Edition
August 10, 2009 • Issue 09:08:01
Online bill pay on the rise
Online bill payment service Billeo Inc. has studied how consumers pay bills and shop online. Its 2008 survey revealed that two-thirds of e-commerce consumers pay at least one monthly bill with a credit or debit card.
"The most important thing we glean from this study is that a growing number of consumers are not only more comfortable doing a variety of transactions online, but they prefer it," said Murali Subbarao, founder and Chief Executive Officer of Billeo.
Further results included these statistics about consumers who pay bills and shop online:
- Seventy-five percent save electronic transaction receipts.
- Over 50 percent never pay late fees.
- More than 31 percent are baby boomers, with more than 58 percent over 45 years old.
- Over 56 percent have attended college, with more than half possessing a graduate degree.
- Ninety percent had credit cards; 47 percent of whom carried no debt on those cards.
Other Billeo research showed credit card bills represented the largest number of bills paid online. They also represented the highest average per transaction amount.
SSL vulnerability found
New research from Intrepidus Group revealed holes in Internet browser security. According to the report, fraudsters can perform "Man-in-the-Middle" (MITM) attacks on Web sites with extended validation (EV) secure socket layer (SSL) protection.
Web sites purporting to be secure with the green badge have been determined to be vulnerable. The research showed that a common Web browser design flaw is to blame. This flaw can be turned on the Web site owners in two ways:
- SSL rebinding, in which a rogue MITM server uses a combination of SSL certificates to manipulate client behavior, bypassing security
- EV cache poisoning, in which cached content of an EV SSL-protected site is persistently poisoned without the victim physically browsing the site
Mike Zusman, Principal Consultant for Intrepidus Group, and Alex Stoirov, an Independent Security Researcher, presented their findings at the Black Hat USA 2009 Briefing & Training conference on July 30, 2009, in Las Vegas.
"Our research shows that the green glow [the sign of secure connection] can be misleading and provide a false sense of security," said Rohyt Belani, CEO for Intrepidus Group. "Employees and customers should be provided a holistic perspective on phishing to best train them to be resilient to this ever-growing threat."
Mercator weighs value of VARs
Mercator Advisory Group released a report examining the influence of valued-added resellers (VAR) on merchant account retention. The 27-page report included the following findings:
- Value-added technology is changing the merchant services industry and acquirers are looking for ways to increase their value-added technology presence.
- VARs have fueled the innovation that has driven processors and acquirers to seek out value-added technology.
- Concerns about account attrition have also sparked acquirers' interest in value-added technology as a way to increase account retention.
- Because of their agnostic nature, VAR systems decrease merchant loyalty to the processor or acquirer unless the processor or acquirer is also the technology provider.
"Merchant attrition could be effectively alleviated if acquirers offered value-added solutions above and beyond the commodity service to merchants they want to retain, actually delivering value, making the merchants want to stay put," said David Fish, Senior Analyst in Mercator's Credit Advisory Service and author of the report.
"In the context of merchant-initiated voluntary attrition, technology can, and should, play a leading role in merchant account retention, thereby potentially reducing the amount of natural churn in the marketplace," Fish stated.
ACI Worldwide Inc.
According to a survey released by ACI Worldwide Inc., 18 percent of respondents had been victims of credit or debit card fraud in the past five years. If someone they knew was hit by card fraud, 22 percent would switch financial institutions and 27 percent would consider switching. The survey involved 2,400 consumers across eight countries.
Alpha Card offers MLS stimulus
Alpha Card Services Inc. has introduced the MLS Stimulus Plan. The company said it is an upgrade of its Zero Program designed to help its salespeople sign more merchants.
Way Systems' mobile POS certified
Way Systems Inc.'s way5000 device has been certified by Apriva Inc. With Apriva's Intelligent Gateway services, merchants can process credit and PIN-based debit transactions virtually anywhere with the way5000, Way Systems said.
Children's fund for late pro's family
To help support the family of payment professional Alan Gitles, who died in December 2008, Calpian Inc. has created The Gitles Children Education Fund for his children. Donations can be sent to Calpian Inc., 500 N. Akard St., Suite 2850, Dallas, TX 75201.
#h4 Doin' it right
The Electronic Payments Association, a group of over 60 financial institutions dedicated to educating policy makers, consumers and the media about the value of payment systems, received $30,000 in June 2009 from CO-OP Financial Services on behalf of its 3,000 member credit unions. The donation is designed to support the EPC's efforts to inform legislators on the facts surrounding interchange and to oppose changes to the current interchange fee structure.
"The EPC is charged with responding to merchants' drive to decrease or eliminate interchange fees and we think it is badly conceived legislation," said Eric Porter, Executive Vice President, Business Development and Marketing for CO-OP Financial. "We want to do our part to protect this income source for credit unions. If interchange is eliminated it could potentially put small credit unions in a highly disadvantaged position.
"If they can't generate income from the expenditures incurred to issue cards and do the processing and transactions, then they eventually won't be able to issue cards at all. We're supporting both financially and through our contacts nationally through CUNA [Credit Union National Association] to put pressure on Capital Hill to make sure this legislation takes the proper direction for financial institutions and consumers."
Support without strings
The contribution is being used to help pay for mailings and to support the EPC's lobbying efforts, though Porter said CO-OP doesn't put any conditions on the donation. "We're a part of EPC," he added. "We're on their board, but it's whatever the EPC decides is best. We're not going to give them money and say they have to do this or that; all we say is that we need to support our credit unions in this endeavor to make sure they don't get hurt."
The EPC and CO-OP are working to fight both the Credit Card Fair Fee Act of 2009 as well as the S. 1212 provision introduced in the Senate, which would allow the U.S. Attorney General to appoint a panel of electronic payment system judges to act as mediators in setting interchange fees. Additionally, the proposed legislation excludes credit unions regulated by CUNA and those with under $1 billion in assets.
"We feel Washington does not fully understand the implications of interchange legislation on credit unions that protect the consumers," said Stan Hollen, CO-OP's President and Chief Executive Officer. "And if the interchange fee is lowered through poor legislation, smaller institutions like credit unions would have to make the difficult decision to either raise fees or stop offering credit and debit cards, harming consumers in terms of restricted payment choices."
Contributions with purpose
Interchange is a key revenue source for credit unions that helps to partially reimburse them as card issuers for the activities they perform and the risk they take on each transaction; however, the EPC contribution is just a small piece of the CO-OP puzzle. The organization's mission is designed to support their members in any way possible.
Porter said that in addition to CO-OP's contributions to CUNA, it also financially supports regional credit union leagues through its patronage distribution program, which returned over $19 million to its credit unions in 2008. CO-OP contributes to more than 60 credit union charitable events annually and is a sponsor to the Salt Lake City-based Children's Miracle Network, a non-profit organization that raises funds for more than 170 children's hospitals.
"We're a co-operative and by law we must return a minimum of 20 percent of our retained earnings back to our members," Porter said. "But typically we return anywhere from 50 to 70 percent of retained earnings. More than anything else, we want to be a bright light in this industry, to be a leader who says, 'You can do business as well as give back and contribute to the [credit union] industry's growth.'
"Banks are spending significant dollars in their dues and to their associations with the purpose of trying to destroy credit unions, and we're helping to fight that off. As credit unions nationally we need to stick together. At CO-OP, we leverage our vendors to help our credit unions get better pricing and services. So if we can keep our credit unions happy and keep them on the positive side of the balance sheet then we all win. That's why we're a co-operative."
CUP Data growing, winning awards
In the last six months, China UnionPay Data Services Co. Ltd. (CUP Data), TSYS' joint venture with China UnionPay, has reportedly signed five new long-term processing agreements and won several major domestic and international awards.
Three CUP Data systems were named Most Excellent Software Products by the Shanghai Software Industry Association, and its debit card program for Citibank was awarded Best Retail Payment Project Award by Asian Banker.
Digital River launches B2B solution
Business Direct is the latest business to business (B2B) e-commerce solution from Digital River Inc. The new offering provides private, online portals for its global resellers, business customers and partners for direct purchases and subscription renewals.
EVS adds to anti-fraud product line
Electronic Verification Systems LLC has released new solutions for identity fraud protection which address distinct business aspects and help businesses prevent identity theft. "Our products have been restructured to easily incorporate into the identity verification portion of a company's Red Flag compliance plan," said Jay Stewart, Vice President, New Business Development at EVS.
Health Transaction Network going west
Buffalo, New York-based HealthTransaction Network, which went operational in February, has signed a number of agreements to expand its operations throughout Western New York. It is also building relationships with organizations in other states, including Strategic Health Care, an Ohio-based health care advocacy and consulting organization that spans several states.
Carr drives keynote address in Vegas
Robert O. Carr, Chairman and CEO of Heartland Payment Systems Inc. will deliver the keynote address on data security at the 17th Annual ATM, Debit and Prepaid Forum in Las Vegas from Oct. 18 to 20, 2009. During the presentation, Carr will discuss how system intrusions have affected the market and spurred industry trends. Carr will also offer insight on the future of payment technologies and what every industry leader needs to know about cyber security.
Intracorp launches digital e-billing, processing
In answer to pending, state-mandated electronic billing requirements and customer needs, Intracorp now offers electronic billing and automated payment processing solutions.
With Jopari Solutions Inc.'s solutions, Intracorp said its medical management customers will save paper and avoid the need to create their own Web portal for payments and billing.
Iovation tops 2 billion fraud checks
Iovation Inc., the Portland, Ore.-based device reputation service provider, recently passed the 2 billion mark for number of scans performed. Iovation's device fingerprinting technology identifies unique devices and establishes device reputations based on each device's history of fraud or abuse.
Total Settlement simplifies accounts payable
J.P. Morgan Chase & Co. rolled out its Total Settlement solution. The technology consolidates automated clearing house (ACH), commercial card, wire, and standard paper check payments in a single file and simplifies the accounts payable process with a self-service Web portal.
Jack Henry gains 33 CUs in 12 months
Jack Henry & Associates Inc. said its Symitar division has signed 33 credit unions in just 12 months. Eighteen of these credit unions opted to outsource their transaction and information processing.
Javelin shows increased interest in P2P
A new Javelin Strategy and Research study found that 24 percent more consumers are likely, or extremely likely, to use person-to-person (P2P) payments and transfers than those sampled in 2007. The main points included were P2P's value to payments professionals, key marketing strategies for mobile P2P, viable initial targets and available P2P transfer offerings.
PayPass accepted at Home Depot
The Home Depot U.S.A. Inc. is now accepting MasterCard Worldwide's PayPass at 1,974 locations across the United States.
Nebraska court payments go electronic
The Lancaster District Court's Administrative Office of the Courts in Lancaster County, Neb., has expanded its online payment options beyond assisting traffic violators not required to make court appearances. It now accepts credit card and ACH payments for: alimony, attorney fees, property settlements, probation fees and court costs.
RSA finds gap between security needs and tech
RSA Conference surveyed 150 C-level security executives and professionals about information security. The results, published in a paper entitled What Security Issues Are You Currently Facing?, revealed that respondents' major concerns were e-mail phishing and mobile device security, while money for the technologies used to address those risks are getting axed from budgets.
Sports Authority a contactless sport
All 450 The Sports Authority Inc.'s Sports Authority locations now accept MasterCard's PayPass contactless payments. "Accepting MasterCard PayPass will help keep our check-out lines short, so customers spend less time waiting in line when they make their purchases," Tom McVey, Sports Authority's Senior Vice President, Store Operations, said.
UMSI unveils free ECR program
United Merchant Services Inc. launched a free electronic cash register (ECR) program for its ISO partners nationwide. The ECR program provides ISOs with a free integration module and free terminal placement. "Our integration module is the first of its kind in our industry," said Jay Yoon, President and CEO of UMSI.
Valid Systems debuts check casher
Valid Systems has added a new product, the AIO350, a check cashing solution designed for convenience and retail stores. The AIO350 includes the following options: guarantee or non-guarantee risk management programs, Check 21 or non-Check 21, and cash drawer, ATM and card load payout options.
Visa earmarks $7 mil for litigation costs
Visa Inc. set aside $700 million into a litigation account. It had put away $3 billion from the initial public offering proceeds in March 2008, for legal costs which might have arisen. Class B shares are held by U.S. financial institutions. As Visa funds the account, it reduces the conversion price for class B shares into class A shares.
Absa picks ACI Worldwide platform
Absa Group Ltd., a Barclays Bank PLC member, is now using ACI Worldwide Inc.'s payment processing platform, BASE24-eps for Absa POS devices. The issuer processing has been migrated and the acquirer functionality will go online in the next phase.
An EPIC ear for payments
Fast Transact Inc. was selected by Ear Professionals International Corp. as its preferred payment processing provider. EPIC members can apply online for a merchant account from Fast Transact. This partnership followed Fast Transact's research into markets that lack merchant services or payment gateway technology.
Fifth Third adds Western Union services
Fifth Third Bank will offer Western Union Holdings Inc.'s money transfer services at its 1,300 plus locations across 12 states. The signing of Fifth Third Bank is part of Western Union's North America "go-to-market" strategy.
1st Century Bank taps Goldleaf
Goldleaf Financial Solutions Inc. has been selected to provide its ACH solution for 1st Century Bank, a Los Angeles-based financial institution with $260 million in assets.
Datamark Inc. wins Herae contract
Health care processor Herae LLC has selected Datamark Inc. to supply data entry services for Herae's Direct Deposit for Healthcare electronic payment system's paper conversion process.
Scanned explanation of benefits forms are transmitted to Datamark's outsourcing centers in El Paso, Texas, Juarez, Mexico, and Chennai, India, for data entry over a secure connection.
mPayy makes iOffer consumers can't refuse
Online and mobile payment provider mPayy Inc. teamed up with online auction and trading company iOffer.com to complete the deployment of the mPayy debit solution, which reportedly allows a cost-effective payment alternative to credit cards. With this solution, consumers can make payments from their checking accounts with just a cell phone number and a password.
Q2 community FIs get NetDeposit solutions
Payment processor NetDeposit LLC signed an agreement with Q2 Software Inc. to enable community financial institutions to access NetDeposit's remote deposit capture, branch capture, debit, credit card and automated clearing house payments.
QuikTrip chooses Balance Innovations for check conversion
To handle its back office check conversion, QuikTrip Corp. selected Balance Innovations LLC's vbEPIX. "With one solution we are able to process all checks with greater efficiency and speed," Carole Williams, Payment Systems Manager, QuikTrip, said.
Shazam to pilot Internet PIN debit technology
Shazam, an electronic funds transfer provider, will test Acculynk's PaySecure Internet PIN debit service. The pilot is designed to help gauge consumer acceptance of Internet PIN debit. "We are always seeking new and innovative ways for our community financial institutions to effectively compete in the market," said Mike Hollinger, Shazam's President and CEO.
TSYS signs with Consumer Health Technologies
TSYS Healthcare partnered with Consumer Health Technologies Inc. to incorporate its payment card solution into CHT's BenefitSpan, which manages health reimbursement, flexible spending and health savings accounts. "This partnership offers a single source for all administrative activities related to plan members who use their debit cards to pay for healthcare products and services," Trey Jinks, group executive for Healthcare, TSYS, said.
Bling Nation teams with Viaero Wireless
La Junta, Colo. residents using Viaero Wireless's nationwide wireless network can now make mobile payments with Bling Nation Ltd.'s Community Payments Service.
Viaero provides SIM cards that are read by BlingTag Readers at local merchants, keeping money within the community and saving community banks from network costs.
UMSI taps Daughtry
Bryan Daughtry, a 17-year veteran in sales leadership and management, has joined the United Merchant Services Inc. team as the Vice President of Sales and Marketing. Daughtry comes to UMSI from Global Payments Inc. where he held the position of Vice President of Sales for the Indirect Business channel.
WSAA expands advisory board
The Western States Acquirers Association has expanded its Advisory Board to include Ryan Fenley, POS Card Systems; Deborah Camm, Planet Payment Inc.; Jason Putnam, First American Payment Systems LP; and Tim McWeeney, Way Systems Inc.
Hamel named 3DSI's Platform Delivery VP
To oversee technical operations, compliance, system design, maintenance and support, and business development, 3Delta Systems Inc. welcomed Peter Hamel as Vice President of Platform Delivery.
"Pete's background and experience are superbly suited to his new role at 3DSI, having managed the development and growth of the payment industry's first Level-3 processor," said Aaron Bills, cofounder and Chief Operating Officer of 3Delta Systems.
New CTO for Turiss
Phil Mellinger, who is credited with drafting the original Payment Card Industry Data Security Standard, has signed on with Turiss LLC, a fraud software company, as its new Chief Technology Officer. Mellinger was previously Chief Information Security Officer for First Data Corp.
Discover gets Zaeske
Discover Financial Services has named Mark A. Zaeske as it's new Vice President, Finance and Chief Account-ing Officer.
He will oversee accounting, external reporting, management reporting, corporate tax and corporate procurement and payment services.
- A survey by online payment system 2Checkout.com, Inc. revealed retailers lose $4 billion each year to e-commerce fraud.
- Total 2209 spending for back-to-school and back-to-college is expected to reach $47.5 billion, according to a National Retail Federation survey conducted by BIGresearch.
- A mid-year 2009 report from The Digital Entertainment Group stated that 20 million Blu-ray discs were sold in the United States, almost 57 percent more than in the same period in 2008. Blu-ray disc player sales rose nearly 25 percent in the same period, to almost 11 million units.
- According to the May 2009 Port Tracker report from the NRF and IHS Global Insight, import cargo volume at major United States ports topped 1 million twenty-foot equivalent units for the first time in four months.
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