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Table of Contents

Lead Story

Outside forces impinge on payments in 2011

News

Industry Update

California Lucky's unfortunate breach

Experts discuss the future of mobile payments

NRF sues Fed over Durbin regs

Features

SMBs: Security must become serious

Bill Farmer
Mako Networks

An interview with Marc Abbey

Ken Musante
Eureka Payments LLC

ISOMetrics:
Status report: U.S. economy Q3 2011

Selling Prepaid

Prepaid in brief

Will prepaid pivot with Green Dot's purchase?

'Smart' gifting gears up

Views

Thinking outside the bank

Patti Murphy
ProScribes Inc.

Education

Street SmartsSM:
EMV's time is nigh

Bill Pirtle
C3ET Credit Card Consortia for Education & Training Inc.

QR codes - the new call to action

Stephen Enfield
POS Supply Solutions

Fraud trends 2012: Like 2011, only more so

Nicholas Cucci
Network Merchants Inc.

Crisis management as opportunity

Dale S. Laszig
Castles Technology Co. Ltd.

ISOs welcome in the POS waters

Jerry Cibley
United Bank Card Inc.

Parlay tradeshow costs into social media bonanza

Alan Kleinman
Meritus Payment Solutions

Company Profile

PayLeap

New Products

All-in-one payment platform

fasttransact
FrontStream Payments Inc.

Inspiration

Use your human gifts

Departments

10 Years ago in
The Green Sheet

Forum

Resource Guide

Datebook

Miscellaneous

2012 Calendar of events

Skyscraper Ad

The Green Sheet Online Edition

December 26, 2011  •  Issue 11:12:02

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Industry Update

NEWS

AmEx leads with payment SDKs

American Express Co. said it is the first payment network to offer global processing services with payment software development kits (SDKs). Payment SDKs are designed to allow merchants, third-party processors, gateway operators and POS manufacturers to connect to the AmEx payment ecosystem.

AmEx explained SDKs as offering "a full complement of authorization and submission solutions for vendors and merchants across the globe looking to process transactions directly with AmEx." The card brand said SDKs will reduce development time, enhance certification efficiency, and ease access to AmEx solutions such as SafeKey and Enhanced Authorization.

The company believes payment SDKs will integrate merchants faster and more efficiently, while driving innovation among digital partners and speeding payment solutions to market.

Consumers see no savings from Durbin

Consumers are apparently not only not seeing savings from implementation of the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, but prices are actually on the rise. That is the finding of new research from the Electronic Payments Coalition, a consortium of credit unions, banks and payment card networks.

The Federal Reserve Board, at the direction of the Durbin Amendment, capped the interchange fee paid by merchants for debit card transactions at 21 cents plus a small amount for fraud prevention - about half what it was before Durbin went into effect in October 2011.

To test whether Durbin savings were passed on to consumers, the EPC took 84 shopping trips to 21 stores across the country. In each case the same products were purchased during the four trips to each retailer - one trip prior to Durbin going into effect and three trips following the Durbin implementation.

The study found 16 of 21 retailers, about 76 percent, either raised prices or kept them the same after Durbin went into effect. Overall, the study found customers paid an average of 1.7 percent more for their purchases after Durbin. The study cited Heartland Payment Systems Inc. as having passed on $33 million in savings to merchants after Durbin's implementation.

Mobile payments going mainstream

A new study from Fiserv Inc., a provider of financial services technology solutions, demonstrated consumers are adopting mobile payments. The 2011 Billing Household Survey found consumers use different bill payment methods every month, with nearly one out of five households changing the way they pay bills monthly.

More than 6 million Americans chose to use smart phones to pay bills in the past year, the study said. Electronic billing is also on the increase. Furthermore, bill payers, particularly those needing to immediately pay utility, telecommunication and insurance bills, visited service provider websites for last minute and one-time billing needs.

Fiserv suggested billers pay close attention to mobile bill payers as 30 percent of online consumers used smart devices to visit biller sites and access monthly bills. The survey discovered two-thirds of consumers visited biller sites - mostly for billing and to make payments. Fiserv also found increasing consumer interest in electronic billing in 2011 - 22 percent of those surveyed said they were interested, up from 17 percent last year.

Dwolla drops fee for micropayments

Social media payment provider Dwolla Corp., a company supported by financial institution payment processor The Members Group, said it will no longer charge a 25 cent transaction fee for purchases of less than $10. The company promises no change in product or service after the fee drop. Merchants will receive the same benefits at no cost on small transactions.

Brian Day, Dwolla Product Leader at TMG, explained the new strategy, saying, "Financial institutions are adding Dwolla to their product mix to attract young, tech-savvy customers who want to make everyday financial transactions quickly and inexpensively. Waiving the fee on micropayments will ultimately attract more merchants to Dwolla."

Merchants were willing to pay the quarter on small transactions because they believe they get value for their money, according to Day. "A customer buys a coffee with Dwolla and instantly 150 of his Facebook friends are exposed to the name of the coffee shop," he said.

November SpendTrend hinges on Black Friday

First Data Corp. released its SpendTrend analysis for November 2011. It found year-over-year dollar volume growth in same-store consumer spending was up 7.3 percent compared to November 2010. But it was down from October 2011, where dollar volume growth stood at 9.4 percent.

First Data reported that November 2011 had "tough comparables" because November 2010 was a particularly strong month last year, with dollar volume growth up 8.1 percent. Meanwhile, November 2011 transaction growth was 6.1 percent, according to the analysis.

The findings were attributed to consumers who restrained spending earlier in November in anticipation of Black Friday deals. Additionally, retailers were reluctant to slash prices in November until planned Black Friday promotions began.

Overall year-over-year average ticket growth was 1.1 percent for the month, down from October's growth of 1.8 percent and the smallest increase since July 2011, First Data said. The company believes inflation contributed to the slowdown.

Checks are falling out of favor, however. Check transaction growth was down 10.8 percent and check volume growth was down 7.6 percent in November 2011, First Data found. Regardless, transaction and dollar volume growth was strong in credit, signature debit and PIN debit during the month.

"Despite a good Thanksgiving/Black Friday, year-over-year spending growth was only moderate for the full month of November," said Silvio Tavares, Senior Vice President and Division Manager of First Data Global Information and Analytics Solutions, which publishes SpendTrend.

ANNOUNCEMENTS

Charge Anywhere supports Bluetooth

Mobile payment provider Charge Anywhere LLC released its Mobile Payment Application for Apple Inc. iOS devices. The application supports card reading and receipt printing through a Bluetooth card reader and receipt printer. The company said the product is an all-inclusive, secure, mobile POS solution.

DPT raises heat with parking revenues

Digital Payment Technologies Corp., a designer, manufacturer and distributor of electronic self-service pay stations, management software and online services for the parking industry, said the 29 solar-powered, multi-space parking pay stations it deployed in the village of Port Chester, N.Y., resulted in a 40 percent increase in parking revenues for the village.

EP on Technology Fast 500

Payment processor Electronic Payments Inc. made the Deloitte 2011 Technology Fast 500 list for the second straight year, coming in 69th on the index. Rankings are based on the percentage of revenue growth from 2006 to 2010. EP's revenue grew 1,749 percent during that period.

FTNI adds module

Receivables management solutions company Financial Transmission Network Inc. is marketing a cash processing module for its ETran Receivables Management Platform. FTNI primarily supports check, automated clearing house and credit card processing. It will now be able to offer merchants the ability to reconcile all receipts regardless of payment type or channel.

FrontStream introduces new payment platform

FrontStream Payments Inc. introduced the fasttransact payment management platform, a self-service, enterprise-level payment system. The platform is designed to manage multiple payment input channels, gather and track customer and consumer activity, and stream consumer and financial data to core, client-side business applications.

JetPay among fastest growing in Dallas

Payment processing company JetPay LLC captured the 62nd place in the Southern Methodist University Cox Caruth Institute for Entrepreneurship Dallas 100 list of fastest growing companies in the Dallas area.

Kalemis honored

Alpha Card Services' Chief Executive Officer Lazaros Kalemis was inducted into the Philadelphia 100: 2011 CEO Hall of Fame in conjunction with Alpha Card Services' entry into the Philadelphia 100: 2011 Company Hall of Fame. The awards are the result of Alpha Card Services making the Philadelphia 100 fastest growing companies list for five consecutive years.

Kight gets lifetime achievement award

CheckFree Corp. founder and former chairman Peter J. (Pete) Kight received a lifetime achievement award from TAG FinTech, a society of the Technology Association of Georgia. Kight was given the award for his pioneering work in financial services technology, specifically in electronic funds transfer, online banking, and electronic billing and payment.

Paymetric seeks nominations

Integrated and secure enterprise payment acceptance solutions provider Paymetric Inc. opened the nomination window for the 2012 Paymetric Customer Innovation Awards. The awards honor exceptional and innovative achievements made by companies using Paymetric solutions. Nominations are being accepted at www.paymetric.com/customers/customer-innovation-awards.

SafetyPay expands

Online payment provider SafetyPay Inc. is entering the U.S. airline and travel industry. SafetyPay, which recently partnered with Universal Air Travel Plan Inc. to allow customers to make online payments from bank accounts, will leverage UATP's airline industry reach to offer customers another payment option when buying airline tickets online.

Trustwave's MyIdentity authenticates users

Security and compliance firm Trustwave introduced MyIdentity, a two-factor authentication solution to help users securely connect to network systems and applications.

The cloud-based MyIdentity uses two components to verify identities - user name/password and one of the following options: digital certificates, short message service-based codes, voice call-back, MyIdentity push with confirmation screen or a one-time passcode.

Western Union Small Business Payments

Global payments firm The Western Union Co. released its Western Union Small Business Payments, an online payment acceptance and accounts receivable service built for small-to-midsized businesses. The solution includes payment processing, automated invoicing, recurring billing, and customer management and reporting.

In other news, Western Union launched an electronic affidavit that allows customers who meet government requirements to send money to individuals in Cuba from Western Union outlets in the United States.

PARTNERSHIPS

Alaric, ISN partner in Latin America

U.K.-based fraud prevention specialist Alaric Systems Ltd. teamed with Chile-based Integradores de Soluciones de Negocio S.A. to sell Alaric's payment and fraud solutions to ISN international retail and financial clients. Alaric will also distribute its electronic funds transfer authorization and switching system through ISN.

ControlScan teams with Paradigm Merchant Services

ControlScan Inc. and St. Paul, Minn.- based ISO Paradigm Merchant Services will provide Paradigm merchants with tools to achieve Payment Card Industry (PCI) Data Security Standard (DSS) requirements. The partnership is expected to reduce merchant compliance costs.

ExoIS and NetBenefit partner for compliance

U.K.-based managed hosting provider NetBenefit Ltd. and California-based PCI compliant software-as-a-service provider ExoIS Inc. formed a PCI compliance services partnership for Level 1 to Level 4 merchants. The service operates on the ExoIS PeepSafe software. NetBenefit provides the infrastructure layer for PeepSafe in the U.K. and Europe. PeepSafe is said to be a fully managed, fully customizable, secure portal environment for processing.

Genpact, PreCash agree to work together

Business process and technology management firm Genpact Ltd. agreed to work with PreCash Inc., a processor specializing in expedited payments. Genpact will help PreCash to meet the increasing processing demands that have accompanied accelerated growth, PreCash said. PreCash will also have access to Genpact's data analytics to help PreCash broaden its products and services.

Ingenico, MasterCard collaborate in Turkey

POS manufacturer Ingenico SA is collaborating with MasterCard Worldwide to introduce a new card payment system for public transportation in Eskisehir, Turkey. The new product utilizes MasterCard M/Chip Advance to start the Esparacard project, a first-of- its-kind payment card system, the companies said.

Lo-Q, MasterCard help theme parks

Lo-Q Plc, a provider of virtual queuing systems for theme parks, signed an agreement with MasterCard to develop a new contactless payment solution for theme parks that combines MasterCard's Tap & Go PayPass payments technology with Lo-Q's queuing software.

Open Solutions, TNS multiyear agreement

Open Solutions Inc., a provider of integrated technologies for financial institutions, agreed to a pact with Transaction Network Services Ltd. The deal calls for TNS to support Open Solutions' Canadian payment transaction processing solutions.

Paymentwall, Mazooma join for '2-click' option

Global payment platform provider Paymentwall Inc. joined with micropayment solution provider Mazooma Inc. to allow customers using Paymentwall's digital payment platform the option of paying for digital transactions using Mazooma's payment solution. Mazooma's payment service will be integrated directly into Paymentwall's 2-click payment system.

T-Mobile, Square partner

Media sources reported T-Mobile USA Inc. is giving a free Square Inc. mobile payments credit card reader to business users who opt for a 4G smart phone upgrade. This is reportedly the first promotion of Square by a mobile carrier.

ACQUISITIONS

Ingenico buys Xiring

Ingenico purchased all outstanding shares of Xiring, a security solutions provider for remote transactions in the banking, health care and transportation markets. Xiring manufactures portable smart card readers with embedded software applications, as well as providing secure transaction services.

Fundtech merges with F.T. Israeli Mergerco

Financial institution software services provider Fundtech Ltd. merged with F.T. Israeli Mergerco Ltd., a subsidiary of US FT Parent Inc. Both F. T. Israeli Mergerco and US FT Parent were formed by GTCR Fund X/A LP. GTCR paid $388 million for FundTech, which is now a wholly-owned subsidiary of US FT Parent. The combined company has 1,300 employees and estimated 2011 revenues of $200 million.

APPOINTMENTS

Herbert named USA Technologies CEO

Stephen P. Herbert is the new Chairman of the Board and Chief Executive Officer of USA Technologies Inc. Herbert joined USA Technologies in 1996. Prior to his new appointment, he served as President and Chief Operating Officer of the wireless, cashless payment and mobile-to-mobile telemetry solutions company.

In other news, USA Technologies' board of independent directors elected Steven D. Barnhart to the post of Lead Independent Director. He is the first person to hold the position, which was created to enhance corporate governance.

Hinderman new VP at Nxgen International

Tim Hinderman became Vice President of Global Marketing and Sales for Nxgen International. Prior to joining Nxgen, Hinderman was the owner/manager of Northwest Holdings LLC and Vice President of Operations for Schweitzer Mountain Resort. Hinderman will be responsible for sales and marketing in his new job.

Rogers to ABC Financial

Cheryl Rogers joined ABC Financial Services Inc. as Regional Sales Director - Canada. Rogers was formerly an acquisitions specialist with digital media software company Roxio, a division of ROVI Corp., for 11 years prior to coming on board at ABC Financial. She will be responsible for leading ABC Financial Services' Canadian expansion.

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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