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Table of Contents

Lead Story

A roadmap to GS Online

News

Industry Update

The PA DSS deadline looms

Global anti-fraud tool on the horizon

First Data charts the rise of fraud as a service

Feedback from CAPP exercise proves informative

Features

Guiding merchants toward honest processing partners

Research Rundown

Selling Prepaid

Prepaid in brief

Prepaid's relevancy for mass transit reaffirmed

Perspective on the 'gift' economy

Thom Aldredge
World Gift Card

Views

Could the future of micropayments be Square?

Patti Murphy
The Takoma Group

Margin compression: What's goin' on?

Brandes Elitch
CrossCheck Inc.

Education

Street SmartsSM:
What does a merchant get for a PCI fee? - Part 2

Ken Musante
Eureka Payments LLC

Beyond professional courtesy

Dale S. Laszig
Castles Technology Co. Ltd.

Succeeding at PCI compliance - Part 2: Executing an effective pilot program

Dawn M. Martinez
First Data Corp.

Training to go global

Caroline Hometh
Payvision

Eight keys to a great first impression

Nicholas Cucci
Network Merchants Inc.

Company Profile

Retail Cloud

New Products

Check guarantee on the go

EZVerify
EZCheck

Easy to use, hosted gateway

Fusebox
Elavon Inc.

Inspiration

Dig for gold, revisit your portfolio

Departments

10 Years ago in
The Green Sheet

Forum

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

June 28, 2010  •  Issue 10:06:02

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Industry Update

NEWS

Opposition to Durbin Amendment mounts

Organizations are lining up against the Card Swipe Fee Amendment to the financial services regulatory bill now moving through Congress. Sponsored by Sen. Dick Durbin, D-Ill., the amendment attempts to apply a regulatory framework around debit card payment acceptance at the POS.

According to consulting firm Mercator Advisory Group, the amendment "calls for regulations that may have unintended and undesired effects on the financial services industry, reaching far beyond controlling debit card fees and negatively disrupting a complex payment ecosystem."

Mercator President and Chief Executive Officer Robert Misasi stated, "We believe strongly that caution is the watchword when considering this regulation." The firm called on Congress to withdraw the amendment from consideration at this time. "No action should be taken by Congress until a thorough study is conducted that includes regulators, credit union and community bank advocacy groups, industry stakeholders, academic experts and analysts," Misasi stated.

Mercator released a free report assessing the potential impact of the amendment on the payments industry. For further information, contact Brent Watters at 781-419-1709 or bwatters@mercatoradvisorygroup.com.

Adding his voice to opposition to the amendment, Rod Staatz, President and CEO of the Maryland-based SECU credit union, suggests it is flawed. "While the amendment is written to protect financial institutions with less than $10 billion in assets, the fact is that no issuer is going to incur the cost of developing two networks," he wrote.

PCI Council sets community meeting dates

The PCI Security Standards Council (PCI SSC) set the dates for its 2010 community meetings, to be held in the United States and Europe. The first will take place Sept. 21 to 23 at the Buena Vista Palace in Orlando, Fla. A second meeting will follow from Oct. 18 to 20 at the Hotel Fira Palace in Barcelona, Spain.

The annual forums give participating organizations and members of the assessment community a chance to engage with the council on Payment Card Industry (PCI) standards. Attendees participate in interactive discussions of the newest versions of the PCI Data Security Standard (PCI DSS) and the Payment Application DSS, as well as the recently released PIN Transaction Security requirements.

Attendees will get a first look at changes to the standards and provide feedback to council management, as well as have the opportunity to speak with representatives of the card brands at informal sessions. This year's agenda includes presentations on payment card security, law enforcement and current data breach investigations.

Members of all special interest groups will present updates at the meetings. Special sessions will be held for Qualified Security Assessors (QSAs) and Approved Scanning Vendors. Registration information can be found at www.pcisecuritystandards.org/community_meeting_2010/orlando/registration.html.

Patent suit against card brands will go forward

The U.S. District Court on June 7, 2010, denied a motion to dismiss a lawsuit filed in March 2010 by SmartMetric Inc. against Visa Inc. and MasterCard Worldwide for alleged patent infringement.

The suit, filed in the Central District of California, alleges that Visa's payWave and MasterCard's PayPass technology infringe SmartMetric's 2004 patent for a system for automatic connection to a network.

"We believe and allege in our lawsuit that both Visa and MasterCard are infringing on our U.S. patent ... by selling, offering to sell and using contactless card systems," SmartMetric CEO Colin Hendrick stated in early June when the company amended its complaint.

ANNOUNCEMENTS

Incentives speed merchant PCI validation at Avid

Michigan processor Avid Payment Solutions revealed that 62 percent of merchants in its portfolio had validated their PCI compliance within six months after Avid launched its PCI DSS compliance program. The results were achieved through a combination of incentives and SecurityMetrics' PCI site certification services. By April 2010, another 22 percent had enrolled, of which most had achieved partial validation, Avid said.

Industry vets launch Eureka Payments

Three payments industry veterans launched Eureka Payments LLC. The California-based merchant-services firm, which will target direct marketers and wireless merchants, was founded by Ken Musante, Scott Bartlett and Steve Kimberling. Musante, former President of Humboldt Merchant Services and Chief Sales Officer at Moneris Solutions Inc., is President.

Eureka will assist clients "in maintaining a positive relationship with their processor and thereby minimize their total payment processing costs," Musante stated. Eureka Payments will utilize and outsource processing services through a small number of acquirers, depending upon the needs of the merchant.

Celent names Fifth Third its model bank

Fifth Third Bancorp won Celent's 2010 Model Bank award for transaction processing. The award was based on Fifth Third's Remote Currency Manager, which automates the cash-management process for retailers' cash transactions as part of an integrated receivables software suite.

Global Payments divests money transfer businesses

Global Payments Inc. sold its DolEx and Europhil money-transfer businesses to Palladium Equity Partners LLC. Palladium reportedly paid $85 million combined for the properties. Global Payments paid $190 million for DolEx in 2003 and acquired Europhil properties in late 2004 for an undisclosed sum, according to previous reports.

Hypercom achieves PCI PTS 2.1 certification

Hypercom Corp. reported that both its Optimum T4200-2.0 countertop and M4200-2.0 mobile product lines have achieved PCI PTS (PIN Transaction Security) 2.1 certification. The PCI PTS was formerly called the PCI PIN Entry Device (PED) security standard.

According to Hypercom, its countertop and mobile terminal product family is the first among the top payments industry equipment providers' offerings to achieve this rigorous security standard. A founding member of the Secure POS Vendor Alliance, the company said it was also the first to introduce an industry standards-based remote key injection product and the first electronic payment solutions provider to implement end-to-end card data encryption.

SPVA issues E2E encryption guidelines

The SPVA released guidelines for end-to-end encryption security related to data in payment card reading devices. Targeted at POS device vendors, the framework promotes the adoption of best practices. The guidelines address data to be encrypted during transmission, key management, physical and logistical security of the tamper-resistant security module and components, and encryption monitoring and management systems requirements.

TSG clients seeking portfolios

The Strawhecker Group said it has multiple clients looking for properties or joint ventures in the payments arena. The clients are looking for potential acquisitions and joint ventures of portfolios and properties ranging in value from $1 million to $75 million.

UN Credit Union issues EMV chip cards in U.S.

The United Nations Federal Credit Union began issuing contact EMV chip cards to its elite cardholders, it announced at the recent annual conference of the Smart Card Alliance. Reportedly the first financial institution in the United States to take this step, the credit union intends to evolve to dual contact/contactless technology to meet the needs of customers who travel internationally.

PARTNERSHIPS

Anthology chooses Element

Anthology Development LLC, a leading bookstore-management software provider, partnered with Element Payment Services Inc. Element will provide PCI DSS-compliant processing to Anthology's customers. Anthology has over 1,500 installations at booksellers worldwide.

Capital Payments contracts with Trustwave

Capital Payments LLC adopted a PCI DSS compliance validation system from Trustwave, a provider of information security software and services. Capital merchants will use Trustwave's compliance validation portal to complete PCI self-assessment questionnaires and schedule required scans.

Elavon signs encryption services

Elavon Inc., a subsidiary of U.S. Bancorp, chose two new encryption service vendors for its acquiring services and gateway. The processor signed a global agreement for security services from Semtek Innovative Solutions Corp. Elavon's host system will deploy Semtek's Cipher Decryption Service, among other encryption-management services.

Elavon also chose Voltage Security Inc.'s SecureData, which includes a format-preservation capability, as another end-to-end encryption option for its payment gateway. Also, Elavon developed advanced tokenization that will allow merchants to securely access card data for future transactions.

Kddi selects Gemalto for NFC trial

Japan's Kddi Corp. selected digital security provider Gemalto NV to provide the User Identity Module cards and Trusted Service Management solution for Kddi's upcoming near field communication (NFC) trial program. Through December 2010, participants in the pilot can experience such NFC services as mobile payments, transportation services, electronic driver's licenses, electronic ticketing and information acquisition from smart posters. Automobile manufacturers, airline companies and cinema operators are participating in the trial.

Deli chain chooses BHI's SecureConnect

McAlister's Deli chose SecureConnect from BHI Advanced Internet Inc. to implement a PCI compliance system at both its corporate and franchise restaurants. With 290 restaurants in 23 states, McAlister's Deli had originally used SecureConnect for firewall and Wi-Fi hotspot services only. Corporate stores will adopt the system first, while the company educates franchisees on the need to achieve PCI compliance.

Taxi payments suppliers pick Hypercom

Financial institution Suncorp and taxi software developer Live TaxiEpay selected Hypercom Corp.'s Optimum M4230 mobile payment terminals to create a taxi payments vertical. The terminals are being rolled out to 3,500 taxis in Sydney and Melbourne, Australia. Live TaxiEpay is a subsidiary of The Live Group PLC.Hypercom said the Optimum M4230-2.0, which provides general packet radio service (GPRS) with dial back-up, is one of several Hypercom countertop and mobile terminals to achieve PCI PTS 2.1 certification - the payment security standard formerly called PCI PED.

TransFirst partners with MindBody

Acquirer TransFirst has teamed with MindBody Inc., which sells business-management software to the wellness industry. MindBody will offer TransFirst's processing services to its fitness studio clients. The software specialist is said to have nearly 10,000 clients in 60 countries.

ACQUISITIONS

Jack Henry completes iPay purchase

Jack Henry & Associates Inc. closed the acquisition of iPay Technologies for approximately $300 million in cash. The acquisition gives Jack Henry iPay's turnkey online bill pay services, which serve 3,600 banks and credit unions.

Muscato Group solidifies global strategy

Muscato Group Inc. acquired two financial payment services companies, M2 Financial Ltd. and M2 Europe Ltd. Muscato Group said the acquisitions solidify the company's strategy for Europe, the Mideast, Africa and Latin America by adding a portfolio of clients. It also reportedly strengthens Muscato's control over relationships with financial institutions for which the company provides its technology and processing platform for their global financial transaction services. The acquisitions include key processing certifications with Visa, MasterCard and JCB International Co. Ltd.

NAB buys Point and Pay

North American Bancard LLC expanded into the government sector with the acquisition of Point and Pay from Vesta Corp. NAB said the acquisition will enable the ISO to better target government agencies such as utilities, schools, courts, tax collection and motor vehicle departments. Point and Pay's software enables agencies to convert from paper-based processing to automated electronic payment and remittance processes.

UL picks up RFI Global

Underwriters Laboratories Inc. acquired payment technology certification expert RFI Global Services Ltd. RFI Global will be integrated into UL's verification services business, which provides performance testing and auditing for product manufacturers and retailers worldwide. RFI Global tests and certifies new payment devices, including contactless cards and terminals and mobile payment systems.

APPOINTMENTS

Baumann joins Aurum Bankcard

Aurum Bankcard LLC named Bret Baumann its President. Before joining the company, Baumann was Senior Vice President at TriSource Solutions and Vice President at WAY Systems Inc. He will lead Aurum Bankcard's recruitment of ISOs and merchant level salespeople.

Neovia names new CFO

Neovia Financial PLC appointed Keith Butcher to the post of Chief Financial Officer. Previously, he was Financial Director at Datacash Group PLC.

Chandnani named Obopay President

Mobile payment provider Obopay Inc. promoted Deepak Chandnani to the newly created position of President.

Chandnandi, who joined the company in 2008 and was responsible for operations in India, Africa and Asia, will supervise global operations across all markets and geographies from Obopay's office in Mumbai, India.

NAB taps Connell for new acquisition

Concurrent to its purchase of Point and Pay, NAB appointed Kevin Connell as Point and Pay's President.

Connell was previously Senior Vice President for Sales and Marketing at Official Payments Corp. and held various senior positions at Discover Financial Services. NAB said that, as the newly appointed President, Connell will oversee all aspects of Point and Pay's day-to-day operations.

Huebner joins BHI

BHI Advanced Internet Inc., a managed security services provider, hired Blake Huebner as Director of Information Security. Previously, Huebner was a PCI team leader and QSA at computer and network security providers.

Mehta to manage partnerships at Bling Nation

Bling Nation named Shan Mehta to its management team. He is responsible for strategic partnerships at the mobile payment service provider. Previously, Mehta was the owner of Evigna LLC, a promotional merchandise distributor.

Paul appointed VP at RedFin

William "Bill" Paul joined RedFin Network Inc. as Vice President of ISO Business Development. Previously, he was President and Managing Director at Merchants' TPS.

JPMorgan Chase hires Stephenson

JPMorgan Chase & Co. appointed Jack Stephenson Director of Mobile, eCommerce and Payments. Formerly, he was Senior Vice President at PayPal Inc. and a director at McKinsey & Co.

Stephenson will lead the companywide strategy for mobile devices and Internet payments, encompassing cards, merchant services, consumer and business banking, and commercial payments.

BOTTOM LINES

Spotlight Innovators:

North American Bancard | Harbortouch | USAePay | IRISCRM.COM | Humboldt Merchant Services