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Table of Contents

Lead Story

Hiring trends to watch in 2011

News

Industry Update

UBC first to deliver free POS system

Is the S1-PayPal partnership cause for ISO concern?

TSYS adds acquiring heft with full ownership of FNMS

PRC reports data breaches increase in 2010

Selling Prepaid

Prepaid in brief

Under the hood of hybrid cards

David Parker
Polymath Consulting Ltd.

Is 2011 the year of the health care card

Views

Dodd-Frank repeal unlikely, interchange changes possible

Patti Murphy
The Takoma Group

The impact of card brands' for-profit, public status

Daniel Federgreen
Analyst

Education

Street SmartsSM:
Will leasing make a comeback? - Part 2

Ken Musante
Eureka Payments LLC

Fraud: What to expect in 2011

Nicholas Cucci
Network Merchants Inc.

Experts weigh in on social media marketing - Part 2

Bill Pirtle
MPCT Publishing Co.

ISO legal setup steps

Adam Atlas
Attorney at Law

Surprising growth in global e-commerce

Caroline Hometh
RocketPay LLC

Company Profile

Clairvest Group

New Products

Payments on the fly

wCharge
Transaction Wireless

Inspiration

Navigating with grace through the electronic world

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

January 24, 2011  •  Issue 11:01:02

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Industry Update

NEWS

Visa steps up fraud detection

Visa Inc. upgraded VisaNet, its global processing platform, to improve security and its ability to detect and prevent electronic payment fraud. Visa developed new fraud models that enhance the speed and accuracy with which the company detects attempted card fraud. An analysis suggested the enhancements could identify $1.5 billion in fraud a year, representing a 29 percent performance improvement from 2009.

According to Visa, enhancements to the processing platform that powers Visa Advanced Authorization increased identification of fraud. A new operating system analyzes more information at once and performs more complex processing functions. A new cross-border model increases fraud detection for transactions occurring outside a cardholder's home country. Visa Advanced Authorization is also better able to detect high-speed fraud - when criminals attempt multiple transactions within a short time period, the company reported.

EMV stateside: VeriFone, Gemalto team up; Mercator weighs in

VeriFone Inc. and Gemalto plan to jointly introduce Europay/MasterCard/Visa (EMV) chip and PIN products to the U.S. market. At the end of 2010, the companies completed Gemalto's handover of its POS business to VeriFone in return for being named the preferred supplier of machine-to-machine wireless modules for VeriFone payment systems. "Combining the two companies' expertise at both issuing and accepting smart cards will provide a ready infrastructure to advance the U.S. market toward a much more secure and convenient payment method," the companies stated.

A new Mercator Advisory Group report, Waiting on Debit, a Mandate, or Just the Opportune Moment, forecasts at least one major U.S. card issuer will provide fee-based EMV cards to high-net-worth, traveling clients later this year. "The constraints of cost, uncertainty over ongoing debit regulation and the impact of evolving NFC [near field communication] mobile payments ... means any EMV announcement will be delayed," stated George Peabody, Mercator Director of Emerging Technologies Advisory Service. In anticipation of an eventual rollout, the report advises merchants to "spend the $10" for EMV-capable terminals now.

Global Payments reports solid second quarter

For its fiscal second quarter ended Nov. 30, 2010, Global Payments Inc. reported 8 percent revenue growth, to $443.5 million, over the same quarter of the prior year. However, diluted earnings per share fell to 67 cents, from 76 cents a year earlier. Excluding one-time expenses, adjusted earnings were 70 cents a share, compared with 71 cents a share in the same quarter of the prior year. Global Payments businesses performed especially well in Asia, according to Chairman and Chief Executive Officer Paul R. Garcia.

ANNOUNCEMENTS

BAI expands website features

BAI recently relaunched its website, www.bai.org, with new content and features. The redesigned site presents more information and innovation, an expanded delivery channel with new tools to simplify searches, and an integrated view. The site now offers more in-depth research studies, critical commentary and thought leadership to shape retail banking strategies, BAI noted. BAI streamlined its format of content and resources for easier navigation.

The BAI Intelligence Center delivers commentary on industry issues, as well as original research and market intelligence on consumer sentiment, consumer payment preferences and regulatory compliance issues. For more information, email info@bai.org.

BevMo! implements VeriShield

Beverages and more! reportedly reduced its PCI compliance requirements by implementing VeriShield Protect encryption from VeriFone. The change allowed BevMo! to direct its capital spending toward a next-generation POS platform, rather than an expensive, compliance-oriented upgrade, according to the retailer.

Coalfire validates Heartland's E3

Qualified Security Assessor Coalfire Systems Inc. validated that the E3 (end-to-end encryption) magnetic stripe reader wedge from Heartland Payment Systems Inc. eliminates the scope of the Payment Application (PA) Data Security Standard (DSS) for POS developers. By encrypting card data at the moment of swipe, E3 prevents plain-text data from reaching the payment application. To fully eliminate PA DSS scope, Coalfire specified that no encrypted data can be stored locally, no other payment systems can be supported, and merchants cannot possess or have access to decryption keys.

CO-OP celebrates new milestone

For the first time in its history, CO-OP Financial Services handled over 2 billion transactions in one calendar year on behalf of its 3,000-plus credit union clients. The volume represents a 10 percent increase over 2009.

Element named a best channel vendor, selected by Rollins

Element Payment Services Inc. was chosen one of the Best Channel Vendors for 2011 by Business Solutions magazine. The company was selected based on surveys of participating value added resellers (VARs) and software vendors. The survey was conducted in partnership with Penn State University.

In addition, Rollins Inc., parent company of Orkin and numerous pest-control service companies, turned to Element for hosted payment processing. Rollins is integrating its business management software with Element's Express Processing Platform, thereby removing the need to make the software compliant with the PA DSS and reducing the scope of compliance for individual companies within the Rollins brands.

41st Parameter granted patent

Security services firm 41st Parameter Inc., which provides person-not-present fraud detection software, was granted a U.S. patent for its Time Differential Linking technology. TDL detects account takeover attempts. It is used by financial institutions for transaction verification.

Ingenico expands PCI compliance, delivers 1 million terminals to Latin America

Ingenico's iSC2xx series of signature capture devices reportedly have been deemed compliant with the Payment Card Industry (PCI) PIN Transaction Security standard. The series is built on Ingenico's Telium 2 platform, which uses dual processors for extra power.

In other company news, Ingenico delivered over 1 million terminals in Latin America in 2010. The markets showing the greatest demand for terminals were Brazil, Mexico, Argentina, Columbia and Venezuela.

Intuit goes after mobile small business market

To attract small businesses to its mobile payment service, Intuit Inc. is offering - for a limited time - free card readers and no monthly service fees with its GoPayment service. Card readers from ROAM Data work with 40 mobile handset models, including the Apple Inc. iPhone and Research in Motion Ltd. BlackBerry.

NAMAA elects officers, adds new members

The North American Merchant Advance Association added four member companies to its organization and elected new officers. Joining NAMAA were American Finance Solutions, Business Consulting Options LLC, Merchant Capital Access Inc. and Merchant Cash Group.

NAMAA supplies members with a database of merchants that have defaulted on other merchant cash advance providers.

It also prevents two providers from funding the same merchant at the same time. In 2011, the association expects to begin publishing metrics on the merchant cash-advance business.

Newly elected directors and officers include President and Director David Goldin, President and CEO of AmeriMerchant LLC; Vice President and Director Jeremy Brown, CEO of Rapid Advance; Director John Damico, Managing Director of GRP Funding LLC; Director Stephen Sheinbaum, CEO of Merchant Cash and Capital LLC; and Director John Snead, President of Merchant Capital Access.

Utah county chose Creditron for tax payments

Summit County, Utah, selected the ItemAge Express platform from Creditron to automate the processing of county tax payments. The platform provides image-enabled payment processing. Most of the county's tax payments include a check and remittance stub with an optical character recognition scan line for account numbers and amounts due.

Simmons heads leadership forum in 2011

Dennis Simmons, President and CEO of Dallas-based SWACHA - The Electronic Payments Resource, was elected Chairman of the Payment Executives Leadership Forum. SWACHA is one of 18 regional payments associations whose top executives make up the forum.

The leadership forum facilitates collaboration among the associations. The year 2011 "should be an interesting year as we continue to deal with the increasing threat of cyber fraud, alongside Americans' increasing use of electronic payment methods such as debit cards and mobile phones," Simmons said in a statement.

Tyfone racks up authentication patents

Tyfone Inc. was awarded a patent for an aspect of its mobile electronic wallet technology. Tyfone's fourth patent, entitled Asymmetric Cryptography with User Authentication, enables the company's u4ia mobile secure transaction platform.

UBC moves to larger quarters

United Bank Card Inc. is moving its corporate headquarters from Hampton, N.J., to a larger facility in Allentown, Pa., to accommodate the company's growth. The new 30,000-square-foot space is the former regional headquarters for Kraft Foods Inc. The new location includes a loading dock, allowing UBC to consolidate its Harbortouch POS division and deployment center in the same space with its central offices.

PARTNERSHIPS

Payzone picks ACH Federal

ACH Federal is providing automated clearing house (ACH) processing services to Payzone, a regional payroll service bureau in Fairfield, Conn. ACH Federal initiates direct deposit services for Payzone's small business customers and their employees.

CheckAlt joins NACUSO

CheckAlt Payment Solutions joined the National Association of Credit Union Service Organizations to enhance communication and services to its credit union client base. By joining, CheckAlt extends its remote deposit capture services to a large number of organizations.

CrossCheck applications certified by Dejavoo

Guarantee applications from check processor CrossCheck Inc. have been Class A certified on POS terminals from Dejavoo Systems. Dejavoo is a VAR and developer of next generation POS devices.

Fifth Third enters P2P, encryption and CU relationships

Fifth Third Bank will offer its customers the Popmoney person-to-person (P2P) mobile payment service from CashEdge Inc. beginning in mid-2011. The service will be offered through Fifth Third's online banking platform. Meanwhile, Fifth Third Processing Solutions LLC implemented the MTXEPS ServerEPS Encryption Solution from MTXEPS Inc. to assist merchants with PCI DSS validation. It encrypts track data at the card swipe, maintaining encryption through delivery to Fifth Third.

In addition, three credit unions (CUs) signed card processing agreements with Fifth Third Processing. The new clients are Education First Credit Union, USA One Credit Union and First Cheyenne Federal Credit Union.

Polish banks go with First Data

Gospodarczy Bank Wielkopolski, a cooperative of banks in Poland, chose First Data Corp. for card issuing and processing services for its MasterCard PayPass Fan Card project. The Fan Card can be used as a stadium season ticket as well as a contactless payments card.

Ingenico, Merchant Link team up

Ingenico partnered with Merchant Link LLC to offer to U.S. retailers Merchant Link's TransactionVault tokenization technology with Ingenico On-Guard point-to-point encryption. The combination provides comprehensive data security primarily geared toward integrated multilane merchants.

NAB selects Partner Commerce for affiliate program

North American Bancard, a payment processing company focused on small to midsize businesses, selected Partner Commerce Inc., an affiliate marketing network dedicated to the business-to-business vertical, to build, distribute and manage its affiliate program.

Through the NAB program, affiliates can now offer their customer base free equipment, industry-leading service and support, and the lowest credit card processing rates in the merchant services industry, NAB said.

PPI extends its health care reach

Payment Processing Inc. partnered with AdvancedMD Software Inc., which provides hosted electronic health record and medical billing software.

PPI's PayMover payment platform is integrated with AdvancedMD software, enabling card payments with advanced security features. AdvancedMD software uses MagTek Inc.'s MagnaSafe technology to encrypt card track data.

Brazil bank partners with SafetyPay

SafetyPay Inc. is providing customers of Brazil-based Banrisul bank the ability to pay with their own currency when shopping online with international merchants. Credit card use in Latin America is low due to the use of fraud filters that can prevent card payments there, according to SafetyPay.

MI9 integrates with Shift4 gateway

Shift4 Corp. and MI9 partnered to integrate Shift4's Dollars on the Net payment gateway with the retail MI9 POS and back-office management system. MI9 clients will no longer be required to process or transmit cardholder data or maintain encryption keys.

ACQUISITIONS

Discover expands student loan presence

Discover Financial Services acquired the Student Loan Corp., a private student loan business with assets totaling $4.2 billion. Discover also took on $3.4 billion of SLC's existing asset-backed securitization funding and other liabilities. The takeover expands Discover's presence in the private student loan market. Prior to the deal's closure, Sallie Mae acquired $27 billion of SLC's federal student loans, and Citibank purchased $8.7 billion of SLC's private student loans.

APPOINTMENTS

Ingenico names executives

Ingenico made three new management appointments. Christopher Coonen was named Executive Vice President, Global Solutions Sales and Marketing. Previously, Coonen was Vice President and General Manager for Continental Europe at PayPal Inc. And Michel Leger was appointed President of the company's Europe, Middle East and Africa region. Leger had been General Manager of Netsize.

Additionally, Ludovic Houri was hired as Director of Transaction Services for Ingenico's Single Euro Pay-ments Area operations. Houri had been Vice President for multinational merchants at First Data.

Fiserv appoints Ernst COO

Fiserv Inc. hired Mark Ernst as it Executive Vice President and Chief Operating Officer. Most recently, Ernst was Deputy Commissioner for Operations Support at the Internal Revenue Service. Previously, he was CEO of Bellevue Capital LLC, a private investment firm.

Gumbley joins Wright Express

Wright Express Corp., a global provider of business payment processing and information management solutions, welcomed Gareth Gumbley as Executive Vice President, Wright Express International.

Gumbley will be responsible for international operations and the execution of the company's global expansion strategy.

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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Spotlight Innovators:

North American Bancard | USAePay | Impact Paysystems | Electronic Merchant Systems | Board Studios