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Table of Contents

Lead Story

Growth by acquisition

News

Industry Update

Visa says Durbin impact 'manageable'

TCF appeal denied

$100 million for Square means change for low-end payments

Cyber security update

Features

An interview with Paul Martaus

Ken Musante
Eureka Payments LLC

Research Rundown

Meet The Expert: Adam Atlas

The accidental advertisement

Selling Prepaid

Prepaid in brief

Law center faults UC card programs

A primer on prepaid's basics

Views

The unbanked: Banks are ceding billions in potential revenues

Patti Murphy
ProScribes Inc.

Mobile payments follow many new paths

Brandes Elitch
CrossCheck Inc.

Education

Street SmartsSM:
Networking groups and referral marketing - Part II

Bill Pirtle
MPCT Publishing Co.

The adaptability of POS terminals

Dale S. Laszig
Castles Technology Co. Ltd.

HIPAA compliance fundamentals for ISOs

Mark Brady and Ross Federgreen
CSRSI, The Payment Advisors

Michaels breach reveals gray areas

Nicholas Cucci
Network Merchants Inc.

Company Profile

Creative Vision Studio LLC

Network Merchants Inc.

New Products

A processor-agnostic payment gateway

PayCommerce gateway platform
PayCommerce Inc.

Inspiration

Breaking up is hard to do

Departments

10 Years ago in
The Green Sheet

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

July 25, 2011  •  Issue 11:07:02

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Industry Update

NEWS

New cybercrime watchdog

A partnership between European law enforcement agency Europol and a new nonprofit group, International Cyber Security Protection Alliance, was initiated to fight international cybercrime. The group will focus on training programs (including accreditation and standards) for law enforcement officials, providing advice and guidance to businesses on securing the Internet, sharing information among enforcement agencies, developing best practices techniques and solutions, and identifying new Internet security threats.

Among the ICSPA group's core founders are Cassidian Systems (an EADS company), Core Security Technologies, McAfee Inc., Shop Direct Group, Transactis, Trend Micro Inc., Visa Europe and Home Delivery Network Ltd.'s Yodel. One of the goals included in the mission statement is to raise money for the crime prevention work from the European Union and several governments around the world - particularly those most concerned with cyber attacks. Former British Home Secretary David Blunkett was appointed ICSPA chairman.

The group promises to "work together to define, coordinate and promote world-class systems of support and sponsorship" to reduce cybercrime damage to businesses and consumers.

Fed publishes bank lists for Durbin regs

Lists of financial institutions that must comply with the new cap on interchange fees, and those that do not, are available from the Federal Reserve Board.

The Durbin Amendment to the Wall Street Reform and Consumer Protection Act of 2010 requires financial institutions with assets of more than $10 billion to comply with new regulations that cap interchange fees at 21 cents plus a modest fee for fraud loss and prevention. The lists are available at www.federalreserve.gov/paymentsystems/debitfees.htm.

eBay's PayPal acquires Zong

PayPal Inc., the payment subsidiary of eBay Inc., expanded into the mobile commerce market by purchasing Zong Inc. for $240 million. Zong technology allows consumers to buy movies, books, news, music, games and other digital content using only 10-digit mobile phone numbers. Zong verifies and confirms accounts and approves or denies transactions in real time. Approved purchases are added to customers' mobile phone bills.

PayPal said it spent 13 years building its way to becoming the world's largest person-to-person payment provider. It has constructed its business model on an e-commerce platform where anyone with an email address can conduct financial transactions without disclosing sensitive banking information. But the world of e-commerce is rapidly moving past email and computers to Facebook and mobile phones, the company stated.

"Our customers love the convenience of paying with their mobile numbers - a number they know by heart, and a device that they always have with them," said Zong Chief Executive Officer David Marcus.

PayPal President Scott Thompson, in a blog published at the time the sale was announced, estimated the market for digital goods - music, movies, books, games, etc. offered online - is worth $20 billion today and will grow "dramatically" in the future. He said PayPal processed $3.4 billion in payments for digital goods in 2010.

Complaints filed against Visa, MasterCard

DataCell EHF, an Icelandic data storage service, and WikiLeaks, the nonprofit news organization noteworthy for publishing leaked documents from governments and corporations, are suing Visa Europe and MasterCard Europe for illegally blocking donations to WikiLeaks.

DataCell hosts WikiLeaks' website and acts as an agent collecting donations for the news organization. In late 2010, WikiLeaks angered many in the international community when it made public thousands of leaked U.S. diplomatic cables.

Shortly after, Visa Europe and MasterCard Europe ordered DataCell's Scandinavian processing gateway, Teller A/S and its agent, Korta HF, to stop accepting processing business from DataCell/WikiLeaks.

In fact, Visa and MasterCard have banned their processors from processing WikiLeaks donations. WikiLeaks founder Julian Assange estimated the company has lost at least $15 million in donations since the ban went into effect in December 2010.

DataCell and WikiLeaks filed a complaint with the European Commission in Brussels, Belgium, claiming Visa and MasterCard are abusing their dominant market position and are engaging in anticompetitive activities by denying WikiLeaks access to donations and by denying DataCell the ability to do business, which violates European competition rules.

A spokeswoman from Visa responded to The Green Sheet request for comment by saying, "An acquirer briefly accepted payments on a merchant site linked to WikiLeaks.

"As soon as this came to our attention, action was taken with the suspension of Visa payment acceptance to the site remaining in place."

Pocket Kings in investors' pockets

European investors have agreed to buy a majority stake in Ireland's Pocket Kings Ltd. Pocket Kings owns Full Tilt Poker, one of the popular online gaming sites banned in the United States in April 2011.

Full Tilt Poker was accused of setting up fake Internet businesses to use as fronts to defraud banks into processing illegal gaming transactions. When the operation was shut down, the gaming company held approximately $150 million owed to U.S. gamers. The new investment is reported to be large enough to cover that debt.

Meanwhile, Full Tilt Poker, which is licensed in Alderney, the most northernly of the U.K.'s Channel Islands, had its worldwide operations suspended in July 2011 pending a regulatory hearing.

Rubin under indictment for poker scheme

A poker processing scheme involving a "shell company" in Wyoming was detailed in a Reuters special report. Ira Rubin, currently under indictment in New York State for attempting to hide illegal payments to poker sites, reportedly created a shell company in Wyoming in 2004 to hide his illegal processing of online gaming and pharmacy revenues.

Rubin was sued by the Federal Trade Commission in 2006 for creating and using 18 different front companies to hide his credit card processing scheme for illegal gambling and pharmacy websites.

He allegedly offered high interest rate credit cards to poker players who paid for the cards upfront with debit cards, but Rubin reportedly never delivered the credit cards.

According to Reuters, Elite Funding, Rubin's Wyoming shell corporation, was used to open bank accounts at Wells Fargo & Co., where over $300,000 was deposited.

ANNOUNCEMENTS

AprivaPay app earns certification

AprivaPay's mobile card payment application for the Google Android smart phone earned the appSecure certification from viaForensics. To qualify for certification, the app underwent a full forensic audit, leveraging advanced forensics and security techniques to ensure protection of sensitive customer data. AprivaPay's full-featured payment application, designed for smart phones and browser-based mobile phones, integrates with a variety of printers and readers.

ARTS releases digital receipt standard

The Association for Retail Technology Standards, an international membership organization that is part of the National Retail Federation, issued version two of its digital receipts standard. The new version includes full alignment with the retail transaction log standard, support for multiple recipients, delivery types and receipt formats, and a receipt identifier to promote data integrity across various applications including smartphones. Among ARTS members are Third Solutions Inc., ViVOtech Inc., CellPoint Mobile Inc., Escalate Inc., Sasktel Labs, IBM Corp., Lowe's Companies Inc., Verizon Business and Wincor Nixdorf Internat-ional GmbH.

ControlScan's Herbig honored

ControlScan Inc. Chief Executive Officer Joan Herbig was honored with an induction into the University of Kentucky College of Engineering Hall of Distinction. The award is given to alumni who have shown professional accomplishments, outstanding character and a commitment to community service. ControlScan is a provider of Payment Card Industry (PCI) Data Security Standard (DSS) compliance software for small to mid-sized merchants.

First Data Q2 product releases

First Data Corp. recently added to its information and analytics solutions, as well as its payment acceptance product lines. The product line now includes SpendTrend Web, an online version of its consumer spending tracker, and Business Track, a web-based program for monitoring credit, debit, prepaid and check payment streams. Also added were First Data Global Gateway e4 for e-commerce payments, new online PIN debit payment capabilities and a new, token-based security solution.

Furthermore, with the addition of VeriFone's PAYware Mobile platform, First Data now offers VeriFone's mobile payment solution to merchants through its alliance partners. The platform enables merchants to accept electronic payments, obtain real-time reports and perform transaction searches in a secure environment.

Jack Henry pilots EMV chip and signature

Jack Henry & Associates Inc.'s Payment Processing Solutions division will offer Visa Inc.-branded Europay/MasterCard/Visa (EMV) chip and signature cards to its credit union members. The EMV cards, popular outside the United States, contain an embedded microchip for enhanced fraud protection in card-present transactions. PPS is currently pilot testing its EMV card deployment with Sunnyvale, Calif.-based Star One Credit Union.

Two CUs sign with Vantiv

General Electric Employees Federal Credit Union of Milford, Conn., and Wemelco Credit Union of Springfield, Mass., signed contracts with Vantiv LLC. Fifth Third Processing Solutions was recently rechristened Vantiv. The processing services Vantiv will provide for the two credit unions include ATM and debit card processing, ATM driving, card production and network gateway access.

Trustwave's Percoco receives award

Nicholas Percoco, Senior Vice President and head of Trustwave's SpiderLabs, won the Best Information Security Researcher Award by SC Magazine Canada. The recognition came for Percoco's leadership in the information security sector. Percoco leads SpiderLabs advanced security team, offering clients expertise in application security, incident response and forensics, penetration testing and security research to identify and anticipate cyber security attacks before they happen.

PARTNERSHIPS

New team for education payments

KEV Group Inc. and Moneris Solutions Co. are partnering in a venture to provide payment solutions in the education arena. KEV Group offers School Cash, an education product suite providing management tools and security for school activity funds. Moneris will integrate its payment platform with School Cash. Schools will have the ability to process all forms of electronic payment, including credit, debit and automated clearing house transactions.

Discover, Mazooma venture up

Discover Financial Services and Mazooma Inc. are partnering in an e-commerce venture that will allow online consumers to use Discover cards to pay cash online for purchases without disclosing credit card numbers or other sensitive personal or financial information.

Mazooma links personal bank accounts to online retailers using just the online banking personal identification and password the customer normally uses when logging into bank accounts. Because Mazooma is already affiliated with a number of major U.S. banks, most customers can use existing accounts.

NXGEN in U.K. taxis for Olympics

NXGEN International, the merchant level service provider for Elavon Inc., is partnering with several British taxi companies to provide debit and credit card processing services. The partnership will allow taxis to add chip and PIN payment technology. Cabs in London and surrounding cities will be equipped with the new technology in time for the 2012 Summer Olympic Games.

Alliance for health care payments

PPI Solutions and Bell & Howell Co. formed a strategic alliance to provide secure document solutions and credit card production in the health care industry's health insurance, employee benefits and prescription benefits sectors. The partnership combines PPI's CampaignRX with Bell & Howell's solutions to deliver digital content, smart cards, and postal compliance and management.

Regions Bank joins ZashPay for P2P service

Birmingham, Ala.-based Regions Bank and ZashPay, a division of Fiserv Inc., inked a deal for person-to-person payments. The new service, called Regions Personal Pay, allows online bank customers to send or receive payments electronically anywhere in the United States. An email address or a mobile phone number are all that is needed to set up money transfers.

ACQUISITIONS

Intuit acquires Citi-SK technology

Intuit Inc. purchased the mobile web platform jointly developed by Citigroup Inc. and SK Telecom, a South Korean telecommunications company. Intuit, previous to its purchase, had been licensing the technology. Analysts speculate Intuit may use the technology to develop a mobile wallet.

NCR buys Radiant Systems

NCR Corp., a maker of ATMs, purchased POS software maker Radiant Systems Inc. for $1.2 billion. NCR stated that its product sales will be enhanced by Radiant Systems' ability to deliver quick POS service and "table service" to restaurants, specialty retailers and entertainment venues.

APPOINTMENTS

CoCard executive board change

Dan Brattland was elected Chairman of the Board of Nashville, Tenn.-based CoCard Marketing Group LLC. Also elected to the board were Scott Do, Ray Raya and Matthew Dore. Malcolm Carnahan was elected President of the ISO.

Elections will be scheduled for three to four more board openings, and the company said it will add committees for marketing, vendor relations and recruiting/sales training.

Two re-up with Merchant Cash & Capital

Michael Caronna and Michael Hollander rejoined Merchant Cash & Capital LLC as Business Develop-ment Managers. The two will focus on recruitment, business development and relationship management for the cash advance funding company, which has provided an estimated $350 million in cash advances to small businesses. Previously at MCC, Hollander worked in underwriting and Caronna served in the renewals division.

How named Terapeak president

Terapeak.com, the e-commerce market research and payment analytics company, formerly known as Advanced Ecommerce Research Systems Inc., appointed Colin How as President. How previously served as the company's Chief Operating Officer and acting Chief Executive Officer. How has also worked as a Managing Partner at Applied Human Capital Inc., and was a co-founder of H2ST.

Malnar appointed CFO

John Malnar is the new Chief Financial Officer for Payment Processing Inc. Malnar is responsible for financial operations and reporting, capital structure, budgeting and keeping relations with investors. Malnar has previously worked as a director in Black Rock Inc.'s Corporate Ventures Group and as part of the Merrill Lynch investment banking team

SignaPay's Meadows promoted

Andy Meadows was named Vice President of Sales for SignaPay Ltd. Meadows will be responsible for recruiting strategic partners and leading merchant retention programs. Meadows previously served as Inside Sales and Operations Manager for Fifth Third Processing Solutions (now Vantiv).

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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