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Table of Contents

Lead Story

Hard times expose vulnerable residuals

News

Industry Update

7-Eleven takes interchange issue to D.C.

Canadian debit shake-up

Two companies, two new security departments

Cyber thieves stealing from students

Features

How to leverage available technologies to manage risk and prevent fraud in RDC

Ed McLaughlin
RemoteDepositCapture.com

Research rundown

Selling Prepaid

Prepaid in brief

Vigilance is watchword in fraud prevention

Empowering the cash-compensated

Is PayPal a threat to prepaid?

Views

Portfolio conversions done right

Biff Matthews
CardWare International

The MLS and the ISO:
Cause for concern?

Brandes Elitch
CrossCheck Inc.

Education

Street SmartsSM:
Microbranding

Jon Perry and Vanessa Lang
888QuikRate.com

Reserve accounts and processor meltdowns

Adam Atlas
Attorney at Law

Digging into PCI - Part 3:
Protecting stored cardholder data

Tim Cranny
Panoptic Security Inc.

A practiced approach

Jeff Fortney
Clearent LLC

Revving up business with profit-controlled marketing

Daniel Wadleigh
Marketing Consultant

Company Profile

Payvision

New Products

Gateway as a service

paymentAccess
paymentAccess

First Data's new dynamic duo

First Data Secure Transaction Management
First Data Corp.

Inspiration

Little actions add up

Departments

Forum

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

October 12, 2009  •  Issue 09:10:01

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Industry Update

NEWS

Elavon acquires Diners Club merchants from Citibank

Elavon Inc., a wholly owned subsidiary of U.S. Bancorp, acquired the Diner's Club Card merchant processing portfolio for Western Europe from Citibank N.A. The portfolio represents more than 75,000 merchants. In a separate agreement, signed with Diners Club International Ltd., a business unit of Discover Financial Services, Elavon will add Diners Club card acceptance to its payment processing services.

The processing agreement pertains to the U.K., Ireland, France, Benelux, Switzerland and Germany. "We look forward to extending Elavon's robust and secure international processing platform and outstanding customer service to the many Diners Club-accepting merchants across Europe," said Stuart C. Harvey Jr., Chief Executive Officer of Elavon.

In other company news, Elavon formed an alliance with the Santander Group, Banco Santander S.A., which boasts that in 2008 it "became the third-largest bank in the world in terms of profits and the seventh in stock market capitalization." Santander banks span Continental Europe, the U.K. and Latin America.

Additionally, in the United States, Elavon acquired the merchant processing portfolio of Carolina First Bank, the banking subsidiary of The South Financial Group.

Coalition 'proves' regulation would be harmful

The Electronic Payments Coalition claims to have proof that interchange regulation would hurt consumers with increased fees, fewer benefits and zero savings at the POS. It said merchants have confirmed that they would not channel savings to their customers.

The organization cites an April 28, 2008, CRA International article, Regulatory intervention in the payment card industry, by the Reserve Bank of Australia: Analysis of the Evidene, available at www.crai.com/ecp/assets/Regulatory_Intervention.pdf and authored by Robert Stillman, William Bishop, Kyla Malcolm and Nicole Hildebrandt. CRA provides economic, financial and business management consultation.

The Coalition also cites the U.S. Government Accountability Office study, Credit and Debit Cards: Federal Entities Are Taking Actions to Limit Their Interchange Fees, but Additional Revenue Collection Cost Savings May Exist (GAO-08-558) and a May 15, 2009, article in the Credit Union Times reporting on a panel discussion at the Chicago Federal Reserve.

All three articles examine the effects of interchange regulation, introduced in Australia in 2003, on merchants and consumers at the POS in that country.

First Data, RSA team up

First Data Corp. and RSA Security, a division of EMC Corp., a global information technology company, partnered to introduce First Data Secure Transaction Management. With the new service, merchants can avoid storing card data, thus reducing risk of a breach and drastically lowering compliance obligations and costs.

The service encrypts the payment card data at the time of capture at the POS through transit to First Data's authorization switch. There, the data is decrypted and, after authorization, is replaced by a token value, which is sent back to the merchant. The merchant can still access the original card data through a secure vault on First Data's server as needed.

This new solution is hardware agnostic; there's reportedly no need to invest in new hardware. According to Arthur W. Coviello, Jr., Executive Vice President of EMC and President of RSA, the transition is seamless and transparent for the merchant and the consumer.

Michael Capellas, CEO and Chairman at First Data, said in a podcast available on Speaking of Security (www.rsa.com/blog/blog_entry.aspx?id=1522) that development would be completed by the end of the year. The pilot is set for January 2010, and the full launch should take place by the end of the first quarter 2010.

ANNOUNCEMENTS

eCrime Congress open for registration

The Anti-phishing Working Group opened registrat-ion at http://apwg.org/events/2009_gm.html for its eCrime Congress: Tacoma 2009. The three-day event begins on Oct. 19, 2009, in Tacoma, Wash. The APWG is a global pan-industrial and law-enforcement association formed to target fraud and identity theft.

Authorize.Net opens developer center

CyberSource Corp.'s Authorize.Net unveiled an upgraded developer community Web site. On the Authorize.Net Developer Center, developers can access Authorize.Net's Affiliate Reseller Program, Certified Solutions Program and Community Forum, as well as integration guides, sample code and troubleshooting tools.

BlueStar aids law enforcement

BlueStar Inc., an auto-identification, POS, mobility and radio frequency identification products distributor, rolled out a mobile identification solution for law enforcement applications. Paired with the Print Search Mobile MugRemote, the Motorola MC75 hand-held computer becomes a mobile identification solution for bookings, releases and onsite security, the company said.

Canon releases mobile scanner

Canon U.S.A. Inc. released the imageFormula P-150 personal scanner, a compact image capture device. The combination of speed, advanced features and high image quality in such a compact footprint make this an ideal image capture solution for everyone from on-the-go travelers to users in small offices, said Jim Rosetta, Canon's Vice President and General Manager, Imaging Systems Group.

YESpay works to solve EMV headache

Chase Paymentech Solutions LLC, a subsidiary of JPMorgan Chase & Co., is partnering with YESpay to roll out the managed Emboss card in Canada, which supports the introduction of the pre-accredited Europay, MasterCard and Visa (EMV) payment services.

Trustwave gives nod to China UnionPay, GCS

China UnionPay Data Services Co. Ltd. (CUPData) received Payment Card Industry (PCI) Data Security Standard (DSS) compliance validation from Trustwave, a PCI compliance management solutions provider and Qualified Security Assessor. CUPData also enrolled in Trustwave's TrustKeeper on-demand compliance management solution to address ongoing compliance needs.

Also, Global Contact Services' acquisition and fulfillment services gained pci PCI DSS certification from Trustwave. GCS provides integrated customer care solutions and business process outsourcing for many industries, including insurance, banking, financial, telecommunication and fulfillment.

ePN drives north

eProcessing Network LLC certified First Data's North platform (formerly CardNet) for POS, MO/TO, e-commerce, recurring and PIN-debit transactions. "Use of ePN's product set through the North platform will be a welcomed opportunity for sales offices considering First Data's initiative to increase usage of the North platform for both their wholesale and retail ISO base," said Steve Sotis, ePN's President.

#h4 Doin' it right

On Sept. 17, 2009, First Data Corp. Chairman and Chief Executive Officer Michael Capellas received the 2009 Secretary of Defense Employer Support Freedom Award. The award, sponsored by the U.S. Department of Defense, was presented to Capellas at the Ronald Reagan Building and International Trade Center in Washington, D.C.

The Freedom Award, established in 1996 by the National Committee for Employer Support of the Guard and Reserve, is the highest honor given by the U.S. government to employers. It was created to recognize exceptional support given by companies to the National Guard and Military Reserve personnel in their employ.

"I think the reason Michael was presented with this award was his and First Data's steadfast commitment to honoring the military servicemen and women that work for us," said Joe Samuel, First Data's Senior Vice President of Public Policy and Community Relations, who also attended the event.

Grass roots process

Fifteen executives received the Freedom Award this year. And a record 3,200 nominations were submitted by National Guard or Reserve members.

"Michael is an extremely patriotic person and supporting the military members of First Data is just something he does - and finds it unbelievable that everyone isn't as committed," Samuel said. "I grew up in a family that served, but I didn't understand the significance of this award until I attended the event. You see how important it is for these folks going into harms way to know that things are being taken care of at home."

Unconditional support

Samuel noted that the United States has increasingly relied on the Guard and Reserves to help fill military personnel gaps and provide relief to active duty members. He added that First Data currently has 40 employees serving overseas.

"Since 9/11 and the escalation of hostilities in Iraq and Afghanistan, our folks may have to leave at a moment's notice," he said. "But beyond that, they often get called to duty for longer than they anticipated or recalled again even after their initial tour. And it's hard for them, and very unnerving for them, to have to say, 'You're not going to believe this: I need to go away again for several months.'

"But Michael's unwavering confirmation of their value to the company lets them know that their jobs are safe, they don't lose any accrual of their benefits and they don't have to worry about losing rank in the employee base. He treats them like they never left and goes over and above to remind that soldier/employee that we're still here for them. And that's what I believe won us the award."

Connections never severed

In addition to maintaining continuity of health care and life insurance benefits, First Data also provides differential pay between military and company salaries.

Samuel pointed out that Capellas spends significant time to personally contact families of deployed service members. Company employees not serving also send care packages to troops during the holidays and volunteer at local Veteran's Hospitals year round.

"For those employees who know someone who has been called to duty, they usually send something from home to remind those guardsmen and reservists that we're thinking about them and hope they come back safe," Samuel said. "And that could be anything from food to kids' pictures to calling cards and cell phone service.

"We realize how important it is to do just the little things that provide peace of mind for our folks overseas. And for me, I'm very proud to work for someone who has instilled those values in our employees company wide."

Heartland scores two, augments restaurant offering

Heartland Payment Systems Inc. took the top innovator spot in Bank Technology News' Annual FutureNow List. The publication said Heartland's E3TM end-to-end encryption solution was "this year's biggest security invention." Also, InformationWeek included Heartland in its InformationWeek 500, which honors the 500 most creative users of information technology.

In addition, Heartland enhanced its restaurant service offering in partnership with Tampa, Fla.-based Restaurant Magic Software. Together, the companies will provide regional and national chains operational and financial management tools to improve efficiency for its restaurants and central headquarters.

International Payments is buying ISOs

International Payments Corp., a new processor based in San Jose, Calif., armed with $150 million in private funding, is in the market for ISOs. The company, founded by a team of veteran payment executives, plans to expand through the acquisition of ISOs that serve the U.S. and Canadian markets.

Jack Henry breaks records, teams with CornerStone

Jack Henry & Associates Inc.'s remote deposit capture (RDC) solution experienced two record-breaking months, with more than 11,350,000 RDC transactions processed in July 2009 and more than 11,685,000 in Aug. 2009. Most notable in that period was Aug. 3, with approximately 875,000 RDC transactions processed and an all-time record-breaking dollar volume of more than $800 million. In other company news, CornerStone State Bank selected Jack Henry & Associates' Jack Henry Banking's Core Director to automate the bank's processes. Core Director is a Microsoft Corp. Windows-based processing system. The Minnesota-based bank will implement it in-house.

Merchant e-Solutions certifies TransNet

E-commerce payment provider, Merchant e-Solutions awarded class B certification to Precidia Technologies Inc.'s TransNet payment engine software. Merchants can use the POSLynx220/TransNet payment solution to send credit and debit transactions to MeS' host.

Scansource educates VARs

Scansource POS & Barcoding, the sales unit of ScanSource Inc., launched a new educational offering. Healthcare VAR Source teaches value-added resellers (VARs) about the health care market. It includes webinars, road shows, informational tip sheets, educational materials and access to independent vendors of health care software.

PARTNERSHIPS

Cardinal, SafetyPay team up

CardinalCommerce Corp., a global electronic commerce and mobile commerce solution provider, partnered with SafetyPay Inc. to add SafetyPay to its Cardinal Centinel platform. Manuel Montero, CEO of SafetyPay, said its relationship with CardinalCommerce will provide access to the online, cross-border market and help "merchants to expand their customer reach."

GoECart, MFP sign agreement

GoECart signed a reseller agreement with Merchant Focus Processing Inc. to provide GoECart clients with Merchant Focus' processing services. CyberSource's Authorize.Net will supply the payment gateway.

SUM expands with Select-a-Branch

NYCE Payments Network LLC signed an agreement with King of Prussia, Pa.-based Select-a-Branch, which gives NYCE's SUM selective ATM surcharging program participants access to select terminals in SAB's surcharge-free ATM network.

Source One selects ControlScan

Source One Payment Solutions chose ControlScan Inc. for its PCI DSS compliance and security needs. "We chose to partner with ControlScan because of their easy-to-implement PCI compliance program designed with small merchants in mind," said Glenn Zapolsky, Source One's Chief Financial Officer.

VeriFone hits Maryland streets

Using VeriFone Transportation Systems Inc.'s passenger information modules (PIMs), taxi riders can swipe their credit cards to pay fares and watch videos about local services. VeriFone is deploying VTS PIMs in the vehicles of Kensington, Md.-based Barwood Taxi, a Blue Star Group Inc. company. Barwood plans to outfit its entire fleet of 435 taxis in the Washington, D.C., area by the end of 2009.

ACQUISITIONS

Marketing meets payments

E-commerce shopping cart provider Commerce V3 Inc. and online marketing agency Timberline Interactive Inc. merged to provide more services to the companies' respective customer bases. Timberline's founder Bud Reed is retiring from daily duties but will be available in an advisory role to the combined companies.

BlueStar acquires Impuls ID Distribution

Hebron, Ky.-based payment solution distributor Blue Star Inc. signed a definitive purchase agreement with Impuls ID Distribution of Sabadell, Spain. Impuls carries automatic identification, security and identification card and specialty application products.

APPOINTMENTS

Berg named Director at DCS

Dynamic Card Solutions LLC named Guy Berg as its Director of Advanced Payment Technologies. Berg, who has two decades of experience in the banking and payments industries, brings to the position significant expertise in EMV, contactless and near field communication payments.

OneBridge adds regional VP of Sales

OneBridge, a credit and debit card processor for financial institutions (FI), welcomed John Buaas as its new regional Vice President of Sales. Buaas brings nearly 30 years of FI experience to his new role.

Cummings joins Gila's Board

Gila Corp. elected Bruce Cummings President of its board of directors. With Gila since 2007, Cummings moved from Vice President of Marketing and Business Development to Chief Marketing Officer and finally to President of the company in 2008.

Dailey takes helm at 2CO

A former senior executive with Morgan Stanley's Discover Card unit (now Discover Financial Services), Tom E. Dailey accepted the role of President for 2Checkout.com Inc. The Columbus, Ohio-based company is said to provide e-commerce solutions to tens of thousands of Internet-based businesses worldwide.

TNB appoints new CEO

Steven L. McDonald stepped up as President and CEO for Town North Bank, N.A., the parent company for TNB Card Services. The outgoing President, John C. Reap, retired after 15 years of service.

Commerce taps Regan

Commerce Online Inc., a provider of POS and wireless payment solutions, added Russ Regan to its advisory board. Regan, a 40-year veteran of the entertainment industry, is credited with helping to launch the careers of such recording artists as Elton John, Neil Diamond and Olivia Newton-John. Commerce Online hopes Regan will open new doors for the company in the entertainment industry.

First Data adds execs, board members

First Data appointed Kevin J. Schultz as President of Financial Services, John Elkins as Chief Marketing Officer and two new members to its board of directors: Henry R. Kravis and Joe W. Forehand.

Michael Capellas, Chairman and CEO of First Data, said the additions of Schultz and Elkins, "not only showcase our ability to recruit top talent, but create a powerful team of leaders who will have a tremendous impact on the future of First Data."

Merchant Warehouse hires Small

Doug Small joined Merchant Warehouse as its Director of Third Party Sales. "We are looking forward to Doug's contributions to the company as he brings his unique knowledge and understanding of the industry into this position," said Michael Gavin, the company's Vice President of Third Party Sales.

EVS promotes Stewart

Electronic Verification Systems LLC promoted Jay Stewart to Vice President of Business Development. According to EVS, Stewart's consistent application of time and energy to the company's new Web site earned him the promotion, and his knowledge of information services, marketing and product development equip him for his new role.

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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