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Table of Contents

Lead Story

Expanding options through microfinance

Patti Murphy
The Takoma Group

News

Industry Update

Indictment for gambling processor

EPX, joining end-to-end and tokenization

Be the miracle

A silver anniversary for Fiserv

PCI SSC reaches Iron Mountain

W.net appoints new director

Features

Payments on the edge: A conversation with Conrad Sheehan

The irrational truth of customer behavior

Industry Leader

Paul R. Garcia –
Apple thriving close to the tree

Selling Prepaid

Prepaid in brief

A new kind of smart card

A smarter way for the government to pay?

Card payments for caregivers

Views

Financially strapped boost payment alternatives

Patti Murphy
The Takoma Group

Accounts receivable processing and the ISO revenue model

Brandes Elitch
CrossCheck Inc.

Education

Street SmartsSM:
Blackjack savvy applied to merchant acquiring

Jon Perry and Vanessa Lang
888QuikRate.com

How to do effective performance appraisals

Vicki M. Daughdrill
Small Business Resources LLC

Processing continuity: Threats and remedies

Dale S. Laszig
DSL Direct LLC

An operational look at improving sales force training

Deana Sellens
Take Charge Business Consulting LLC

Company Profile

M2 Global Ltd.

New Products

Flag and filter online payments

Shop BuyVoice
Planet Payment Inc.

Merchant management minus tech troubles

Hosted Download Management Service
POS Portal Inc.

Inspiration

Reflect that glory

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

August 24, 2009  •  Issue 09:08:02

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Industry Update

NEWS

Third-party processors poised for growth

According to The North American Market for Third Party Payroll, Payment and Health Care Transaction Processing, 3rd Edition, a report published by research firm Packaged Facts, a division of Market Research Group LLC, the third-party processing market grew more than 11 percent in 2008 to $61.9 billion and is expected to jump another 57 percent by 2013.

The report also found that corporate functions contracted to third-party processors are usually back office activities such as payroll, human resources, customer service, accounting, payables and receivables, records management and transaction processing. Major third-party processors are actively promoting new technologies and tapping into verticals like human resources outsourcing and mobile transactions to boost business.

The report assessed the market for data and payment-related transaction outsourcing and focused on three segments: electronic payment, payroll and health care transaction processing. "The drive for health care reform is helping to train public attention on using technology to streamline health care for patients and providers, a shift that won't come overnight but is likely," said Tatjana Meerman, Publisher of Packaged Facts.

Comprehensive RDC guidelines now available

Information technology (IT) research firm T. Houston Technology Group LLC published its Risk Management of Remote Deposit Capture Guidelines as per The Federal Financial Institutions Examination Council's mandate that financial institutions offering RDC services provide training and risk management guidance.

"After months of research and development, we are publishing a comprehensive guide to RDC," said Tom Houston, President of T. Houston.

"Our goal with the guide and training program is to make the financial institution's job easier and provide the information they need to assist their customers." Joy Feyt, Senior Vice President of Business Development for T. Houston, added that everything needed to comply with state and federal regulations is in the guidelines.

For more information visit www.thouston.com.

Airlines' high risks of fraud

A recent survey of airline fraud investigators from 41st Parameter Inc., a fraud and risk management solutions provider to the airline industry, found insufficient rules and defense mechanisms in place at most airlines due mostly to lack of proper fraud detection tools. Consequently, payment losses due to fraud are a top priority for airline officials. Other survey findings include:

"The travel industry is under siege by well-organized international fraud rings," said Ori Eisen, founder and Chief Innovation Officer, 41st Parameter. "Without comprehensive technology tools to aid investigators, airlines face a greater risk of fraud succeeding, especially as fraudsters exploit new channels and payment methods which in many cases are not currently detected."

ANNOUNCEMENTS

Apriva class A certifies Hypercom's SPOS32

Apriva class A certified Hypercom Corp.'s SPOS32 payment software on the Optimum T4230 terminal. The Payment Card Industry (PCI) PIN entry device-approved terminal features long-range general packet radio service with dial backup; 32-bit, multi-application processing; and 24 megabyte memory, which can accommodate gift card and loyalty programs.

Blackboard Transact 3.5 PA DSS-compliant

Blackboard Inc.'s Blackboard Transact 3.5, a payment and security platform used by colleges and universities, was certified by qualified security assessor Trustwave as Payment Application (PA) Data Security Standard (DSS) compliant. "We remain steadfast in our commitment to delivering applications that comply with these evolving data security standards," said David Marr, President and Chief Operating Officer for Blackboard Transact.

Discover Zip payment devices accepted at Home Depot

Discover Financial Services Zip payment devices - adhesive, contactless mini-cards that can be attached to personal items - are now accepted at The Home Depot U.S.A. Inc.'s 1,974 U.S. locations. "Saving time at the checkout provides added value to our merchants, our card issuers and our account holders," said Farhan Ahmad, Discover's General Manager, Prepaid and Director of Emerging Markets.

First Data certified Slim CD

First Data Corp. certified Slim CD Inc.'s gateway software, which includes POS software, for its CardNet platform. Slim CD software reportedly allows for 2- to 5-second transactions through its Frame Relay.

Internet Payment Exchange is 10 years old

Internet Payment Exchange Inc., which caters to health care providers, utility companies and municipal governments, has been offering its billing and payment solutions for 10 years. "Since starting in 1999, IPayX has helped organizations ranging from small municipalities to mid-sized health care systems, as well as large corporations to automate their billing and payment processes," said Douglas Braun, President and Chief Executive Officer of IPayX.

Intuit's GoPayment now available at App store

Mountain View, Calif.-based Intuit Inc.'s GoPayment is now available as a free download at Apple Inc.'s App Store. The GoPayment application allows iPhone and iPod touch users to process card payments on those devices.

Mercator study explores card use

A recent Mercator Advisory Group report revealed changes in consumer credit card use in response to the economic downturn. The Consumers and Their Credit Cards: A Cooling Relationship Threatens Post-Recession Outlook found a 60 percent success rate among the 27 percent of consumers who applied for credit cards. Almost two-thirds of those surveyed had switched to other means of payment for at least some of their purchases.

Merchants' Choice changes its name

To reflect its expanded services, 20-year-old Merchants' Choice Card Services has changed its name to Merchants' Choice Payment Solutions. "We feel this change in corporate identity demonstrates the breadth of our product and service offerings and our future strategic direction," said Robert E. Marling Jr., Chairman of MCPS and CEO of Woodforest National Bank.

#h4 Doin' it right

According to payments industry experts, the two biggest obstacles to bringing level 4 merchants into compliance with the Payment Card Industry (PCI) Data Security Standard (DSS) are lack of education and inactivity. Despite ISOs' and merchant level salespeople's (MLSs) efforts to keep PCI relatively simple, most small and mid-sized retailers remain bewildered by PCI's language and purpose.

To remedy this, PCI compliance and security solutions provider ControlScan Inc., The National Retail Federation and research firm PCI Knowledge Base released a report entitled, What Small Merchants Know (And Don't Know) About PCI Compliance, based on a survey of 220 level 4 merchants (those processing fewer than 1 million transactions or 20,000 e-commerce transactions annually).

Minimal knowledge, maximum frustration

According to David Taylor, founder of PCI Knowledge Base, awareness of PCI among merchants has increased 86 percent since the PCI DSS was introduced in 2005, but a lack of intelligibility has deterred a considerable number from taking action to get PCI DSS certified.

"A lot of people we talked to don't necessarily believe that just because you're compliant means you're secure against a breach," Taylor said. "The other aspect we were concerned with is if they felt that PCI was worthwhile.

"Just because you're aware of something doesn't mean you're going to have positive feelings around it. And many payment security organizations are frustrated because the level of knowledge and action is pretty minimal."

The survey disclosed that 85 percent of all breaches occur with small merchants and that 81 percent of breached businesses subject to PCI DSS were not compliant before their data were compromised. And fines for small merchants who have experienced breaches can be staggering - between $5,000 and $25,000 every month until compliance is achieved - far higher than the cost to upgrade terminal systems and get certified.

Three sites, no charge

The report is being offered at no cost on all three organizations' Web sites. The survey's goal was to determine merchants' understanding and acceptance of PCI, perceptions of risks associated with being breached, level of confidence in their own PCI programs and money spent on compliance.

"My main worry is that these merchants think they know more than they really do, but in many cases they still need a lot of clarity," said Heather Varian Foster, Vice President of Marketing, ControlScan. "They view PCI and security very high, but they don't see how much risk they face, and that's the dichotomy. And certainly through our partnership with the NRF and PCI Knowledge Base we are working to help educate all those involved.

"By expressing their views about PCI, it means they are open to PCI products and services. Most level 4 merchants' compliance rates are very low, so I think this is huge progress and something that we can use as a platform to help them fine tune what they need to know and provide better service and instruction as an industry to keep them from being a statistic. These merchants are asking for guidance to secure their businesses without it being overly complex."

Continued education, leadership opportunities

Foster noted that thorough knowledge of what PCI compliance entails, as well as the ability to explain the requirements in layman's terms and help merchants properly complete the Security Assessment Questionnaire, can provide an opportunity for ISOs and MLSs to take leadership in rolling out PCI compliance programs. Merchants not only want education, but they also want their service providers to be their go-to resource.

"There really has to be specific training, so what we've done through this partnership is to really drill down and target a focused education program so those ISOs and acquirers can position their PCI service as a value that ties to that level of support and have an opportunity to really distinguish themselves," Foster said.

"This is a place for payment professionals to be leaders in this. A number of ISOs are starting to implement PCI as part of their whole product development process. There should no longer be just a check-the-box approach to PCI. It might be a challenge to execute, but there are certainly ways to do that. And what we've done with the help of the NRF and PCI Knowledge Base is to make that process as simple as possible."

For more information visit www.controlscan.com, www.pciknowledgebase.com or www.nrf.com.

NetCapture Receivables rolled out by NetDeposit

Payment processor NetDeposit LLC's newest remote deposit capture (RDC) solution NetCapture Receivables debuted at The Association for Work Process Improvement's (TAWPI) 2009 Forum and Expo in Washington, D.C. NetCapture Receivables is a Web-based coupon and check capture application designed for accounts receivable environments and treasury management groups at financial institutions.

OrderDynamics offers e-commerce

OrderDynamics Corp. offers an on-demand e-commerce platform which keeps all online merchants' e-commerce needs in one place without the need for payment or third-party processors. OrderDynamics' built-in Order Management Systems is fundamentally linked into all aspects of the process: e-mail marketing, customer relationship management, fulfillment and inventory control, front-end presentation, and merchandising rules.

SCM Microsystems' tiny smart card readers

The latest smart card readers from SCM Microsystems Inc. are as small as a flash drive. These devices connect with either universal serial bus or near field communication to read standard or contactless smart cards, regardless of technology or manufacturer. Felix Marx, CEO of SCM Microsystems said the new readers come at the juncture of the "growth of contactless technology and the convergence of physical access and IT security systems."

USMS introduced TouchLite POS System

U.S. Merchant Systems launched the TouchLite POS, a new, all-in-one POS system that supports multiple taxes, price levels, kits and matrices. Merchants can manage customer accounts and synchronize between stores and a central office. The unit comes with a three-year warranty.

Unisys introduces new image capture solution

Unisys Corp. launched its SmartSource Adaptive series, capture devices for banks and corporate clients at the TAWPI 2009 Forum & Expo. The series has "a full complement of inbuilt check processing capabilities and the added benefit of intermixed full-page processing in a single compact footprint that is tailored to the bank branch and back office environment," said Alan Howard, President of Unisys Payment Systems.

UPS rolls out new e-commerce suite

The United Connect Business Suite, United Payment Services' new PCI DSS compliant e-commerce suite, offers its customers the ability to accept payments via e-mail, the Web, smart phone or in person; credit card tokenization for returning customers; 24/7 online reporting; and an Internet payment gateway with built-in shopping cart.

In other news, UPS made the 2009 Inc. 5000 list of the fastest-growing private companies in America.

TSYS Class A approves three more VeriFone wireless terminals

Three more of VeriFone's Vx solutions were Class A approved by TSYS Acquiring Solutions. The wireless models Vx 510 GPRS, Vx 610 GPRS and Vx 670 GPRS join a dozen other Vx models previously Class A approved.

PARTNERSHIPS

Alliance partnership is Charming

Loyalty and marketing solutions provider Alliance Data Systems Corp. signed a long-term partnership with apparel retail chain Charming Shoppes Inc.

Under terms of the agreement, Alliance Data will assume operation of Charming Shoppe's private-label credit card programs, its credit card files and branded card program service center operations.

Elavon signs alliance agreement with FNC

Payment processor Elavon Inc. signed a three-year agreement with FNC Inc., a technology company serving the real-estate and mortgage industries. With Elavon's solution, FNC lender clients can include an electronic payment feature on their FNC dashboards for collecting and paying vendor fees.

First Capital under control

Small-business credit card processor First Capital Payments joined forces with security solutions provider ControlScan Inc. to help small merchants meet the mandatory requirements set forth by the PCI Security Standards Council.

First Capital will have access to ControlScan's PCI 1-2-3 compliance solution, which allow merchants to analyze, remediate and validate their compliance with PCI DSS.

Chicago's Metra chooses Acquity Group

Metra, the Chicago metropolitan commuter rail service, enlisted Acquity Group LLC to build a new Web site complete with electronic ticketing capabilities for Metra's commuters. "From the hundreds of proposals we received for the new Web strategy, Metra chose Acquity Group for its deep understanding of e-commerce and tactical way of doing business," said Phil Pagano, Metra's Executive Director. Riders will also be able to receive service alerts on their mobile phones.

Joint venture offers more mobile

Mobile banking and payment solutions company Monitise PLC extended its business into Africa and the Middle East in a joint venture with payment processor Paynet Systems Inc. The companies expect to start operations under the agreement beginning in early 2010.

It's Avangate for Movavi's e-commerce

Movavi, a Russian-based developer of multimedia processing tools, teamed up with Mountain View, Calif.-based Avangate Inc. for its e-commerce needs.

Movavi will use Avangate's e-commerce platform and the company's consultancy services to sell its software products globally.

Sterling, PSCU target small business

PSCU Financial Services Inc. entered into a referral agreement with Sterling Payment Technologies for small business merchant processing.

"Small business owners can achieve significant benefits from our electronic payment services, and delivering this platform through their local credit union will also strengthen that relationship," said John Miglino, Sterling's Executive Vice President of Product and Marketing.

PayLogec, Nxgen Canada join forces

PayLogec Merchant Solutions and Nxgen Canada partnered to market new payment solutions to financial institutions, trade associations, businesses and nonprofit organizations in Canada.

PayLogec's President, Don Andrews, said it would use Nxgen's operations and IT infrastructure to "automate processes and offer unique online data access to our valued partners."

The Golden 1 adds Fiserv's RDC solution

The Golden 1 Credit Union added Fiserv Inc.'s Consumer Source Capture, integrating the RDC solution into its existing Fiserv solutions. The Golden 1's President and CEO, Teresa Halleck, said the addition would "bolster our retail banking capabilities, as our members will now have the option of saving time and money by depositing checks anywhere anytime without making a trip to the credit union."

ACQUISITIONS

Bottomline snares BofA's PayMode

Bottomline Technologies signed a multiyear agreement to acquire Bank of America Corp.'s Software-as-a-Service, PayMode product, operations and vendor network. BofA will continue to market the electronic network for payment and invoice automation, retain existing PayMode clients, join Bottomline's Strategic Advisory Council and hold an equity interest in Bottomline in the form of warrants for 1 million shares.

FleetCor's ninth European acquisition

Commercial fuel card provider FleetCor acquired the U.K. and Ireland fuel card business of Retail Decisions (ReD). The acquisition includes all of ReD's fuel card operations as well as its network of U.K. bunker fuel outlets, which contain the low-grade coal or heavy oil used to power ships.

APPOINTMENTS

TrialPay taps Greenberg

E-commerce solution provider TrialPay welcomed Daniel Greenberg as its new Chief Marketing Officer. Greenberg brings nearly 20 years of experience in the software and Internet industries to the table and will head up global corporate, field and product marketing for TrialPay.

ETA gains Miller

The Electronic Transactions Association appointed Jill Miller, an associate with the Jaffe Raitt Heuer & Weiss law firm, to its Government Relations Committee.

Miller's responsibilities include identifying, monitoring, and evaluating legislative and regulatory activities at the national and state level and disseminating those findings to its members.

Mills a leader at RPS

Software developer and payment processor RP Solutions Inc. created a new position to drive sales and corporate growth. Jim Mills, a payment veteran with 20 years of senior executive experience in the financial sector, is the company's new Vice President of Business Development.

Litle beefs up management

To accommodate increased demand for its payment management platform and merchant services suite, Litle & Co. hired Thomas Murphy as Vice President, Sales. He has over 20 years of business development and technology sales experience.

Litle also appointed three new directors who will report to Marc Haskelson, Vice President, Business Development: Ryan Friel, Rob Lyons and Matt McDowell.

CRI appoints technical director

In its continued development of countermeasures for side-channel attacks, Cryptography Research Inc. hired Pankaj Rohatgi as its new Technical Director, Hardware Security Solutions.

He will help the company's engineering team expand research and development efforts to fight such attacks. Prior to this appointment, he was a research scientist at IBM for 13 years.

MDS names new director

To enhance the support it provides to ISOs, Miami-based processor Merchant Data Systems Inc. welcomed George Sherman as Director of ISO Relations. Sherman has over 10 years of experience with relationship and technical support.

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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