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Table of Contents

Lead Story

Oct. 1, 2011: D-Day for debit cards?

News

Industry Update

New Visa, MasterCard rates take effect

Heartland offers Durbin impact insights

Operation Swiper succeeds, cyber theft continues

World payments growing in recession

Trade Association News

Features

An interview with Douglas Bergeron

Ken Musante
Eureka Payments LLC

Underbanked in America

Patti Murphy
ProScribes Inc.

Research Rundown

Helping to expand services while minimizing costs

Square versus the payments world

Tim McWeeney

ISOMetrics:
Payroll and gen Y

Excelling at social media marketing

Selling Prepaid

Prepaid in brief

First Data powers prepaid for Google Wallet

Prepaid spot-on for incentives

Views

Merchants lack focus, fraud eats profits

Patti Murphy
ProScribes Inc.

Education

Street SmartsSM:
Vertical market tradeshows hold many helpful surprises

Bill Pirtle
MPCT Publishing Co.

Fraud's twists and turns in 2011

Nicholas Cucci
Network Merchants Inc.

Customer longevity in the new commerce chain

Dale S. Laszig
Castles Technology Co. Ltd.

Steps toward efficient IRS 1099-K reporting

Troy Thibodeau
Convey Compliance Systems Inc.

Company Profile

Lead Source Call Center

New Products

A complete online payment center

Transaction Express
TransFirst LLC

Cloud-based POS comes in three flavors

Morris
Moneris Solutions Inc.

Inspiration

It really is about you

Departments

Forum

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

October 24, 2011  •  Issue 11:10:02

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Industry Update

NEWS

New 1099-K merchant reporting forms available

Merchant acquirers must report all merchant card transactions to the United States Internal Revenue Service beginning in January 2012. Each merchant's report must be submitted on IRS form 1099-K, which the IRS has recently revised. The new 1099-K form includes a box for each merchant's IRS merchant category code (MCC).

The IRS MCCs do not match the MCCs used by the payments industry for merchant classification. The revised form is at www.irs.gov/pub/irs-pdf/f1099k.pdf; the IRS MCC list is at www.irs.gov/irb/2004-31_IRB/ar17.html.

Forum approves new NFC protocol

A new protocol for near field communication (NFC) that allows NFC-enabled devices to send and receive messages was adopted by the nonprofit industry association NFC Forum. The new NFC data exchange format (NDEF), called Simple NDEF Exchange Protocol, is a request/response protocol that makes it possible for NFC devices to exchange data - for instance, business cards and advertising can be collected with just the tap of a phone or card.

The new protocol is "agnostic," making no distinction between reader-writer and peer-to-peer operation modes, thus overcoming one of the major barriers to interoperability of NFC applications, the forum said. Developers can now be more creative by easily adding data transfer capabilities to applications without having to write software for that purpose, according to the NFC Forum. More information about the new protocol can be found at www.nfc-forum.org/specs/spec_list/.

S1 surrenders to ACI Worldwide

After rebuffing ACI Worldwide Inc.'s overtures for months, S1 Corp. recently agreed to its acquisition by ACI. Under terms of the agreement, ACI will pay $9.55 per share in cash and shares of ACI common stock. This is an increase of 42 cents over the last ACI offer. In a press release about the acquisition, ACI stated the sale "will create a full-service global leader of financial and payment solutions."

S1 had attempted to merge with the Israeli company Fundtech Ltd. while fending off ACI's acquisition efforts. Fundtech walked away from a proposed merger with S1 in September 2011, opting to merge instead with GTCR Fund X/A LP. S1 Board Chairman John Spiegel said significant improvements in ACI's offer persuaded the company's board to accept it.

Trade groups ask Fed for fraud adjustment increase

In a Sept. 30, 2011, letter to the Federal Reserve, 23 banking, credit union and bank-owned automated clearing house trade groups petitioned the Fed to increase the fraud adjustment in the debit interchange fee cap.

A new rule mandated by the Durbin Amendment to the 2010 Wall Street Reform and Consumer Protection Act cut the debit interchange rate to 21 cents plus no more than 1 cent per transaction for fraud adjustment.

The letter informed the Fed that fraud protection is expensive, costing the industry about $680 million in 2010. The financial institutions said 1 cent is not sufficient to cover the true costs of fraud prevention and that separate PIN debit and signature debit fraud prevention cost adjustments are not needed. The letter is posted on www.cuna.org/download/nn_093011.pdf.

Subway accepts contactless payments

Subway, the sandwich franchise and a registered trademark of Doctor's Associates Inc., will accept MasterCard Worldwide PayPass contactless payments at over 7,000 Subway locations in the United States.

Subway expects the new payment system to be fully operational by early 2012, when consumers will be able to tap an NFC-enabled MasterCard PayPass bankcard or device at the register to pay for purchases. Payment is faster with contactless payments because customers do not have to sign receipts for purchases under $50, MasterCard said.

PayPass can be used on a number of devices, including smart phones, cards, key fobs and mobile payment tags. The technology is predicted to be particularly useful in businesses where speed and convenience are priorities, such as at quick service restaurants, retail locations, airports, sports stadiums and arenas, supermarkets, vending machines, and in taxis.

ANNOUNCEMENTS

AdvanceMe taps restaurants for metrics

Merchant cash advance provider AdvanceMe Inc. is asking the restaurant industry to share feedback to be used in a nine-week Restaurant Marketing Tip Series featured on AdvanceMe's blog, at www.advanceme.com/blog. The series is based on three main issues (in order of importance): how can restaurants gain more customers, keep customers happy and get them to return for more meals.

The series will provide advice and ideas to enable restaurateurs to address these issues. The first blog post in the series was released on Sept. 21, 2011, and discussed five ways to know your customers.

Apriva reaches milestone

End-to-end security solutions firm Apriva expanded its roster of POS channel partners to over 500. Apriva's partners - a mix of merchant acquirers, ISOs and wireless communication service providers located in the United States and Canada - resell Apriva's wireless POS payment solutions. Apriva said it has experienced a surge over the past 18 months in channel partners reselling such services as the AprivaPay mobile payment application and the Apriva Vend cashless vending solution.

PBTF receives $50,000 donation

Card Payment Services Inc. and its President, Sam Caine, donated $50,802 to the Pediatric Brain Tumor Foundation. The donation was composed of contributions made by Caine and other ISOs, agents and professionals that were matched by CPS. The donation was presented to PBTF at the October 2011 Ride for Kids event in Grapevine, Texas.

CardWare improves encryption

CardWare International, a registered encryption services organization, introduced FutureX's Secure Key Injector, SKI 9000. The SKI 9000 technology allows for the injection of multiple encryption keys into several PIN entry devices at one time.

eProcessing Network integrates shipping calculator

Houston-based payment gateway operator and software developer eProcessing Network LLC unveiled ePNShip, a real-time shipping rate calculator that integrates into eProcessing Network's online shopping cart service, ePNCart. The calculator allows customers to choose the shipping method that works best for them - United States Postal Service, Federal Express Corp. or United Parcel Service of America Inc.

Meritus makes fastest growing list

Meritus Payment Solutions, a Santa Ana, Calif.-based ISO founded in 2009, ranks number four out of 100 on the fifth annual fastest growing companies list compiled by the Orange County Business Journal. The list ranks companies by revenue growth from June 2009 through June 2011. Meritus reported revenue growth of over 700 percent in that period.

Mobeam secures funding for LBC technology

Mobeam Inc. closed on $4.9 million in Series A venture capital funding for its patented, light-based communications (LBC) technology designed to overcome the technical barrier preventing smart phones from interacting with laser scanners installed at retail POSs. Funding will be used to establish mobeam's LBC technology as an industry standard and accelerate the development of mobile couponing and mobile commerce initiatives.

Payscape Advisors commits to CPP program

Payscape Advisors, an Atlanta-based ISO, made a commitment to support and participate in the Electronic Transactions Association's Certified Payments Professional program. Payscape Advisors is implementing the CPP program throughout its organization and said it will extend CPP to all of its account managers over the next year.

Paysentinel adds new platforms to gateway

Paysentinel LLC made new processing platforms available through its Paysentinel Gateway. The gateway platform now supports the processing platforms of Checkgateway and NACHA - The Electronic Payments Association's Secure Vault Payments, as well as the automated clearing house. In other news, the company said it is working on a new mobile application for the U.S. market that will operate on Apple Inc., Android and BlackBerry smart-phone systems.

Pyramid pinpoints m-payment opportunities

A new research service from Pyramid Research identifies opportunities in mobile payments. Mobile Commerce Landscape Insight Pack allows users to track analytics on current trends and gain insights into best practices and market forecasts for mobile payments in emerging and developed markets. The service includes an in-depth report and live session with a senior Pyramid analyst.

3Delta Systems promotes cyber security awareness

Online credit card processor and data security company 3Delta Systems Inc. observed National Cyber Security Awareness Month by issuing 10 Business Best Practices for Fighting Credit Card Theft and Fraud?, a set of best practices for protecting customer credit card account information and minimizing corporate exposure to online payment scams.

Voltage Security enters Hall of Innovation

Data security firm Voltage Security Inc. was inducted into the JPMorgan Chase Hall of Innovation on Oct. 4, 2011, in Palo Alto, Calif. The award recognizes Voltage for its innovative, data-centric encryption approach to security for data centers, the cloud and mobile devices.

PARTNERSHIPS

Private-label card agreement inked

Alliance Data Systems Inc., through its bank subsidiary, will provide private-label credit card services for home decor retailer Pier 1 Imports Inc. ADS will supply account acquisition, multichannel marketing and customer service for Pier 1 Imports. The portfolio conversion from Pier 1 Imports' current private-label credit card provider is expected to occur early in 2012.

First Data, Associated Bank renew partnership

First Data Corp. and Green Bay, Wisc.-based Associated Bank N.A. renewed their merchant services agreement. Under the new contract, First Data will continue to provide merchant processing services to the bank's business clients nationwide.

About the renewal, First Data Senior Vice President Neal Korzekwinski said, "Our ability to provide mission critical products and services to the commercial clients of Associated Bank has been the cornerstone of our enterprise. We look forward to our continued growth together."

Fiserv, AFCU partner

Payment software provider Fiserv Inc. and America First Credit Union teamed to allow AFCU to use Fiserv's Mobiliti, an application that allows customers to access accounts via text message, mobile browser and mobile app. More than 25,000 users reportedly enrolled in AFCU's mobile banking service within five weeks of the launch.

Vantiv, AmeriMerchant partner for working capital

Vantiv LLC and AmeriMerchant LLC joined to offer merchant cash advance (MCA) services. Vantiv will refer merchants looking for working capital to AmeriMerchant. Vantiv subsidiary National Processing Co. will make the MCA program available through its partners and agents.

ACQUISITIONS

Heartland gains School-Link Technologies

Heartland School Solutions, a division of Heartland Payment Systems Inc., acquired School-Link Technologies Inc., a privately held provider of comprehensive school nutrition and POS solutions for schools serving kindergarten through twelfth-grade (K-12) students. Heartland said it also acquired three other providers in the K-12 space over the past 10 months:

LunchBox, an integrated school nutrition and POS management application; Comalex Inc., software for school nutrition programs and POS systems; and MySchoolBucks.com, a website and online service for parents to pay for their children's school meals and student activity fees using a credit or debit card or via electronic check.

Heartland reported it now serves more than 19,000 K-12 public schools across the United States, representing almost 20 percent market share.

TransFirst acquires USMS

Trans First LLC purchased RST Ventures Inc., a company doing business as US Merchant Services in Cypress, Calif. US Merchant Services has worked as a sales partner with TransFirst since 2004. RST Ventures' USMS is not related to US Merchant Services Inc. in Port St. Lucie, Fla.

U.S. Travelex division buys Pay 24-7

Travelex Global Business Payments Inc. purchased Pay 24-7, a subsidiary of ParentPay Ltd. that provides an online payments system to universities and higher education institutions in the United Kingdom., North America, Europe and Asia. The program reduces the banking and administrative costs of collecting fees from overseas students and enables a speedier payments process.

APPOINTMENTS

Cole takes CMO job at Trustwave

Leo Cole joined information security and compliance solutions company Trustwave Inc. as Chief Marketing Officer. Cole was formerly Vice President of Marketing for Guidance Software Inc. Cole will be in charge of Trustwave's global marketing strategy.

Fiserv hires Gupta as group president

Rahul Gupta was appointed Group President of the Digital Payments Group at Fiserv Inc. Gupta joined Fiserv in 2006 after serving as President of U.S. Operations at eFunds Corp.

In his new position, Gupta will be responsible for overseeing electronic bill payment and presentment, biller solutions, card services and global payment solutions.

Krugel joins Visa's global mobile team

Gavin Krugel joined Visa Inc. as Head of Customer Strategy and Market Activation for Fundamo. Krugel, formerly a Senior Director at telecommunication industry association GSMA, will be in charge of developing markets in Asia Pacific, Central Europe, Middle East and Africa via Fundamo, a South Africa-based mobile payments platform acquired by Visa in June 2011.

Krugel's responsibilities include supporting activation of Fundamo mobile money programs for unbanked consumers in developing economies.

Leehy accepts ATMIA position

John J. Leehy, President and Chief Executive Officer of ISO and ATM provider Payment Alliance International Inc., was appointed to the ATM Industry Association Board of Directors. At PAI, Leehy oversees a network of nonaffiliated ATMs placed in over 56,000 locations.

Van de Pavert, Panyasiri go to eMerchantPay

International payment processor eMerchantPay Ltd. added two members to its executive team. Bartek van de Pavert was named Vice President of International Sales.

Van de Pavert previously headed the travel and e-retail business at Paysafecard.com Wertkarten AG. Additionally, Stephane Panyasiri was named the company's Executive Vice President of Business Development Global Gaming Market. He formerly managed business development for payment solution companies123Ticket and BilltoMobile.

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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