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Table of Contents

Lead Story

Reload with prepaid

News

Industry Update

Cynergy acquired by ComVest

A certified alternative

Dueling Strategies: VeriFone-Chase, Heartland-Hypercom

Optimism prevails at WSAA

Features

Special report on the ETA's 2009 Strategic Leadership Forum

Brandes Elitch
CrossCheck Inc.

Wal-Mart and the unbanked

Patti Murphy
The Takoma Group

Glossary of common payments industry terms

Research Rundown

Selling Prepaid

Prepaid in brief

Prepaid players expand to meet demand

From coins to customers

In-house, SaaS or PaaS that solution?

Views

Sell, rent, lease or give it away - what to do?

Biff Matthews
CardWare International

Use security to retain merchants

Scott Henry
VeriFone

Education

Street SmartsSM:
Why do we think we're different?

Jon Perry and Vanessa Lang
888QuikRate.com

Start with ripples, not waves

Jeff Fortney
Clearent LLC

Legal aspects of high-risk processing

Adam Atlas
Attorney at Law

Digging into PCI - Part 4:
Encrypt transmission of cardholder data across open, public networks

Tim Cranny
Panoptic Security Inc.

Company Profile

Merchant e-Solutions Inc.

New Products

Consolidated purchasing for truckers

Smart Solutions
Comdata Corp.

A gateway into e-commerce

Brick and Click
First Data Corp., Yahoo! Inc.

Inspiration

Twenty tips for lifelong learning

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

November 09, 2009  •  Issue 09:11:01

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Industry Update

NEWS

Hypercom prepares data security trifecta

Hypercom Corp. set into motion initiatives to help fight payment card data fraud. The electronic payment products and services provider is introducing its Asia-Pacific-based EFTSec Server encryption technology to North America, Latin America and Europe, teaming with Voltage Security Inc. for cryptographic technology and forming a global data protection business unit.

The business unit, directed by T.K. Cheung, Hypercom's Vice President, Global Quality and Security, will address customer-specific security threats.

Philippe Tartavull, Chief Executive Officer and President of Hypercom, said the security approaches must be as diverse as the threats. Hypercom outlined five key components to payment card data security: line encryption for data in transit, protection for data end-to-end, protection for data during operation and maintenance, virtual terminals, and card authentication.

Mobile payments without credit, debit or prepaid

Answering the demand of online shoppers for instant access on the go, Telefonaktiebolaget LM Ericsson, a provider of technology and services to telecom companies, now offers its Ericsson IPX platform. The plat-form allows smart-phone users to shop securely from phone browsers without entering credit card or account information.

With a mobile site, businesses can display lists of content, thumbnail graphics of items for sale, and sell information unsuitable for text messaging or multi-media text messaging. This is an approach newspapers may consider to monetize some of their online content since they are struggling with declining print subscriptions. By using phone browsers, users avoid charges typically associated with premium simple text message services. Mobile carriers, which already have relationships with users, become the payment processors.

"The application stores launched by different device manufacturers have shown that allowing service providers to sell additional services inside an already installed application creates a new revenue stream for operators and at the same time provides higher completion rates and the possibility to sell new items to new customers," said Johan Rosendahl, Managing Director of Ericsson IPX.

Visa posts financials, authorizes share repurchase

Visa Inc. posted its 2009 fiscal fourth quarter financial results, reporting a net income of $552 million ($0.74 per diluted class A common share) for the quarter. Fourth quarter financial highlights included the following:

For the full fiscal year ending Sept. 30, 2009, Visa reported net income, adjusted to reflect restructuring and purchase amortization, of $2.4 billion. This also reflected the impact of Visa's sale of VisaNet do Brasil.

In addition, Visa's Board of Directors authorized a $1 billion share repurchase plan. The authorization will expire on Oct. 1, 2010, and is subject to extension or expansion at the discretion of Visa's board of directors.

ANNOUNCEMENTS

NFC for m-payments enabled

Charge Anywhere LLC enhanced its mobile-payment software for Nokia phones with near field communication (NFC) capabilities. The new solution allows for payment acceptance from NFC-enabled cards used at POS terminals powered by MasterCard Worldwide PayPass and Visa payWave technology.

Comodo clowns around

Paying homage to a popular television series, a new video produced by Comodo Group called Intervention: Laptop, illustrates the need for humor when tackling computer security. "We hope its humorous approach grabs viewers' attention and convinces them to install anti-virus and firewall software," said Melih Abdulhayoglu, Chief Executive Officer of Comodo.

Automation added to tokenization

CyberSource Corp. enhanced its Enterprise Security 2.0 solutions with automated account updating. Tokenized billing records on CyberSource's servers can be updated with new credit card numbers, expiration dates and so forth with the CyberSource Account Updater Service.

EPC launches direct debit schemes

The European Payments Council launched the SEPA Core Direct Debit Scheme and the SEPA Business to Business Direct Debit Scheme. It enables card users in Europe to transact domestic and cross-border, direct debit euro payments done in Single Euro Payment Area (SEPA) countries.

MCC unveils new program

Merchant Cash & Capital LLC released its Starter Plus cash advance program for businesses that cannot qualify for traditional cash advance. The new program is designed to help businesses graduate to more traditional cash advance in four to six months, according to Paul Giuffrida, Director of Renewals and Starter Plus Program at MCC.

Monitise an award finalist

Monitise Americas LLC is a finalist for the Mobile Excellence Award, administered by Little Monster Media. The award honors superior achievements in mobile entertainment by interactive media, film, television, music, games, agencies and high-tech enterprises. The awards ceremony is Dec. 7, 2009.

Flash memory card gets green light

Oberthur Technologies completed MasterCard compliance assessment and security testing certification for its flash-memory-based payment card. Using flash technology, issuers can securely load cards with customized debit, credit or other payment applications, sidestepping the masking process.

PayPal hosted developers' conference

PayPal Inc. held its first dedicated developer conference Nov. 3 to 4, 2009, in San Francisco, where developers had the opportunity to learn about PayPal's open platform and its possibilities for their businesses.

Tempo unveils platform

San Mateo-based affinity and co-branded debit provider Tempo Payments Inc. launched a Web-based platform that enables organizations to offer open-loop debit cards with rewards for use online or in card-present environments. Rewards range from cash back to charitable contributions. The cards are issued by First Bank & Trust, part of Fishback Financial Corp. of South Dakota.

In other company news, Tempo added three nonprofit organizations to its client roster: The Breast Cancer Fund, Greenpeace and Surfrider Foundation. These organizations receive contributions based on standard card transaction fees each time members use their cards for purchases. The debit cards are made of polyethylene terephthalate (PTEG), a clear, amorphous, thermoplastic alternative to the polyvinyl chloride plastic used in most cards today.

#h4 Doin' it right

Security and anti-fraud technology solutions provider MagTek Inc. reported that its MagneSafe technology for Secure Card Reader Authentication (SCRA) not only meets but exceeds all 14 points of Visa Inc.'s 2009 published best practices for data field encryption.

Additionally, MagneSafe was recognized by Pricewaterhouse Coopers, in a September 2009 report to the PCI Security Standards Council (PCI SSC) entitled Emerging Technology Research, as the only solution to combine all five "emerging technologies" identified as dynamic payment card data (DPCD), magnetic stripe imaging, end-to-end encryption, tokenization and virtual terminals.

One and only

"Our interpretation is that we are the only security vendor to combine all of these technologies," said Andy Deignan, MagTek's Vice President of Global Marketing and Strategy. "No one security technology out there is going to deliver all the protection necessary.

"However, stopping the use of a fraudulent card is not being addressed by PCI initiatives. So we've taken that process one step further by not only protecting the data, but actually stopping counterfeit card use. We do this by leveraging encryption, tokenization, fraudulent card detection, tamper recognition and data relevance and integrity to validate and protect the entire transaction."

Deignan added that the most important feature of the MagneSafe solution is its ability to use existing mag stripe cards to generate DPCD. It is the static data, he said, that is so valuable to cyberthieves.

Too much static

"DPCD is the opposite of static data," Deignan said. "In the traditional payment, the static data on a card is the same from transaction to transaction. So that information has value for the bad guys because they can reuse that data again and again."

Deignan said that MagTek has solved the problem of static data susceptibility with its MagnePrint solution, a dynamic card authentication technology that reads the individual "fingerprint" indigenous to every mag stripe card called the digital identifier.

"Every magnetic stripe card that has ever been manufactured has randomly distributed and randomly sized magnetic material that is as unique as your retina or DNA," Deignan said.

"If I take two magnetic cards and encode the same data on them, it is the same from card to card - but the material that the data is encoded onto emits an inherent or analog noise that is unique to that card.

"MagnePrint is able to identify those fraudulent cards and determine whether they are authentic or counterfeit. Additionally, that transaction is only good one time. Once it's used, it can't be re-presented; there's no redemption value to that stolen data; that's why PWC said that this solution has the potential to eliminate PCI DSS [Payment Card Industry Data Security Standard]."

Problem affects all

MagTek is a company that believes industry-wide problems need industry-wide solutions. Deignan said that data breaches and counterfeit cards go hand in hand and he feels PCI DSS at this time serves only to place "a band-aid on a bleeding wound."

"We believe we're giving merchants a cure to this problem, so we're trying to educate the industry about dynamic authentication," Deignan said. "We can't keep shifting the liability to the next guy.

"No one is taking on the task of 'How do we fix the problem and stop the fraud?' so we see DPCD as a sensible and practical way of providing real security.

"Merchants don't want to invest in technology that won't give them future piece of mind. We're making excellent progress, though, and getting more players to join our cause because we're getting to the core of the problem to stop fraud altogether and forever."

Transactiv secures funding

Ohio-based Transactiv received $1.2 million Series A venture funding from Blue Chip Venture Co., CincyTech, Neyer Holdings Corp., Queen City Angels and Cincinnati-based private investors. Transactiv plans to use the funds for development of its e-commerce platform, intellectual property portfolio and technology leadership endeavors.

TSYS launches FI credit card program

Total System Services Inc. formed a new division to offer turnkey credit card programs for regional and community banks and credit unions in the United States. TSYS Program Solutions will be led by Andrew Mathieson, Patrick Fox, Fred J. Grigsby III and George Whitley. In other news, TSYS Acquiring Solutions introduced MobilePASS, a smartphone-based application that allows merchants to accept and process card payments anywhere. If coupled with the PayMate Pro 200, an optional Bluetooth magnetic stripe reader and thermal printer, TSYS said MobilePASS transactions qualify for card-present interchange rates.

Free ECR program surpasses expectations

The free electronic cash register program launched by United Bank Card Inc. in partnership with Casio America Inc. surpassed both companies' original expectations. "We are absolutely thrilled with the success of the program so far, and we don't expect the response to slow anytime soon. ... This may very well be the most compelling marketing pitch that the ISO community has seen in the last 15 years," said Jared Isaacman, CEO of UBC.

USA Technologies hits transaction record

In September 2009, USA Technologies Inc. surpassed its one-month record with more than $5 million in cashless micro-transactions processed through its network. The company processed 2,696,290 such transactions on its 57,000 cashless vending machines located in the United States and Canada.

VSoft in top 500 two years running

Software Magazine named VSoft Corp. to its 2009 Software 500 list for the second consecutive year. Company revenue determines rankings in the list. VSoft provides technology solutions for financial institutions, transaction processors and governments.

PARTNERSHIPS

Merchant Warehouse teams with Aldelo

To help hospitality organizations protect cardholder data from fraudsters when processing card payments, Aldelo Systems Inc. partnered with Merchant Warehouse. "The MerchantWARE solution integrates seamlessly with our EDC POS system and will give merchants the benefit of knowing their data and their customers are secure at all times," said Harry Tu, CEO of Aldelo Systems.

Precidia's TransNet chosen by Axia, Unidine

Axia, a Santa Barbara, Calif.-based merchant program reseller, added Precidia Technologies Inc.'s TransNet payment engine to its offerings for hospitality and retail merchants.

Features that attracted Axia to TransNet included management tools, reliability, automatic dial backup, network alerts and Payment Card Industry Data Security Standard default settings, according to Randal Clark, President and CEO of Axia.

Unidine Corp. also chose Precidia Technologies' TransNet to integrate credit, debit, gift and loyalty payment processing with Unidine's electronic cash registers at its dining locations in hospitals, businesses and facilities for senior citizens.

Bluestone to resell TotalTransact

Bluestone Payments now offers NetDeposit's TotalTransact service, which adds remote deposit capture and automated clearing house to Bluestone's payment solutions. "There is strong demand for remote deposit capture and e-check acceptance solutions among our customers," said Linda Rossetti, President of Bluestone Payments.

ICE, People's Trust team in Canada

Integrated Card Exchange, a CardWorks Inc. affiliate, and Peoples Trust, a Canadian financial services provider, joined forces to offer a turnkey processing solution powered by New York-based processor Planet Payment.

Hospital chooses FreedomPay

Sharp Grossmont Hospital, which serves East San Diego County, Calif., selected FreedomPay to update its POS system with a subsidized meal program and cashless payment system. The hospital's new Meal Tracker program loads funds for meal credits to a FreedomPay tag or employee badge.

TNB signs Western Vista FCU

TNB Card Services entered into a seven-year processing agreement with Western Vista Federal Credit Union of Cheyenne, Wyo. Western Vista is a $110 million credit union with 10,500 members.

VeriFone helps soldiers pay to play

VeriFone's PAYware Transact was selected for the Vermont Systems Inc.'s RecTrac facilities management system, which serves U.S. Army and Navy recreational facilities worldwide. VSI provides software solutions for recreation and parks operations from the municipal to the federal level.

APPOINTMENTS

Ingenico names new management team

As part of a restructuring effort focused on forging strong management and improving product quality and customer service, Ingenico North America appointed six executives to its executive management team.

The following executives stepped into new positions: Hal Hanna, Senior Vice President, Strategic Initiatives; Gregory Boardman, Vice President of Product Development; Svy Nekrasas, Vice President of Marketing; Philippe Piovesan, Vice President of Operations; Bernard Frey, Director of Indirect Sales, responsible for the banking channel; and Mark Little, Director of Sales for Managed Services.

Nxgen appoints two execs

Merchant services provider Nxgen Payment Services promoted Adam Montague to Chief Operations Officer and Dowe Kaufman to National Sales Manager.

Both executives will report to Nxgen President, Giuseppe Caltabiano.

Visa's Partridge promoted to President

Visa promoted Chief Operating Officer John Partridge to the position of President. He will continue to report to Chairman and CEO Joseph W. Saunders.

Partridge will be charged with directing marketing and product functions worldwide.

ISTS welcomes Perry as EVP

ISTS Worldwide Inc., a technology consulting firm specializing in retail and payment verticals, appointed Linda S. Perry, a 25-year acquiring industry veteran, to the position of Executive Vice President, Global Sales & Marketing. She retired from Visa as Senior Vice President and Head of U.S. Acquirer and Processor Sales after 17 years of service.

Merchant Warehouse taps Rocco and Sperry

Merchant Warehouse appointed Marianne Rocco as Director of Marketing and Communications and Stephanie Sperry as Senior Marketing Manager for the agent and ISO channel. Rocco comes to Merchant Warehouse with 10 years of leadership in managing and developing marketing and product strategies in the technology sector. Perry managed all aspects of marketing communications and product marketing for companies of all sizes for eight years.

Stambaugh joins Bling Nation

Mobile payments provider Bling Nation welcomed Rod Stambaugh as Regional President for its Colorado region, home to The State Bank, Bling Nation's first customer. "La Junta, Colorado, was the first community in the United States to fully embrace mobile payments and, as a result, The State Bank and La Junta merchants and consumers are experiencing an uptick in business and savings," said Wences Casares, Co-CEO of Bling Nation.

SCA intros new officers, steering committee

To help achieve its goal of providing more education about chip card technology and its ability to fight credit card fraud, the Smart Card Alliance welcomed the following incoming officers: Charles Walton of INSIDE Contactless as Chair; Ron Pinkus of Giesecke & Devrient as Vice Chair; and JPMorgan Chase's James F. Lock III as Secretary.

Steering Committee members for the 2009-2010 year are: Willy Dommen, Troy Bernard, Jack Jania, Sri Chawla, Ken Moy, Paul Korczak, Garfield Smith, Dan Loomis, Simon Hurry and Mohammad Khan.

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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