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The Green SheetGreen Sheet

The Green Sheet Online Edition

September 24, 2007 • Issue 07:09:02

Industry Update

The Green Sheet, Inc.NEWS

MPI adopts new strategies after FTC action

Following a Federal Trade Commission lawsuit alleging Merchant Processing Inc. used deceptive tactics to sell credit and debit card processing, the Federal District Court in Oregon froze MPI's assets in April 2007.

MPI subsequently took aggressive, remedial steps under the control of Michael Grassmueck, a court-appointed receiver.

The objective is to revise trade practices to ensure absolute transparency, enhance customer service and build a strong merchant base. Key changes made under Grassmueck's direction address staff education and retention and include:

  • A training program focused on underwriting and risk
  • A sales program focusing on customer service and technical support
  • Appointment of Jim Keller as Chief Executive Officer and Porscha Brownfield as Vice President of Sales.

Grassmueck engaged the services of The Strawhecker Group, the largest consulting firm exclusively devoted to the merchant acquiring industry.

RSR calls for overhaul of loyalty programs

Getting Loyalty Programs Back to Loyalty, a new report from Retail Systems Research, indicates retailers must transform loyalty programs from a pay-for-data scheme into something that captures needed customer data, while still providing the kind of value to customers that generates real loyalty.

RSR's report identifies the internal obstacles retailers face as they seek to make the most of their loyalty programs and the methods retail winners use to overcome those obstacles. For a complimentary copy, visit www.retailsystemsresearch.com/_document/summary/247.

Smart Card Alliance spurns long-range RFID

The U.S. Department of Homeland Security and several states, including Arizona, Vermont and Washington, plan to issue enhanced state driver's licenses to be used as alternative documents for crossing U.S. borders.

The Smart Card Alliance is in favor of efforts to boost border security, while facilitating trade and tourism.

However, it has concerns about the proposed long-range radio frequency identification (RFID) technology. These include:

  • Lack of strong cryptographic features
  • Vulnerabilities to infrastructure failures and system security breaches
  • Reliability factors at crowded border crossings
  • Potential for criminals to use inexpensive, long-range RFID readers to detect and usurp identities.

According to the alliance, the only broadly deployed, proven technology that meets the objectives of increased border security, citizen privacy and efficient border crossing is contactless smart card technology.

Further information about the use of RFID and secure, contactless smart card technology in identity applications can be found at www.smartcardalliance.org.

6.3M Ameritrade customers affected by data breach

Retailers aren't the only ones taking the heat for lax data security. Online brokerage TD Ameritrade Holding Corp. notified customers on Sept. 14, 2007, that unidentified code (malware) had been found in a database containing contact information for more than 6.3 million customers.

While the database also contained sensitive infor-mation, such as Social Security numbers, the company assured its clientele this data appears not to have been compromised.

Ameritrade also noted that its asset protection guarantee protected customers from theft occurring due to no fault of their own.

The breach came to light in May 2007, when two Ameritrade customers sued the company because they were receiving spam through e-mail accounts they used exclusively for Ameritrade. The data may have been vulnerable as far back as October 2006.

Ameritrade said it has located the source of the breach and corrected the problem. It also hired ID Analytics Inc., a firm with expertise in identity theft for ongoing monitoring of its servers.

The Green Sheet, Inc.ANNOUNCEMENTS

ACH Direct offers online donation tool

ACH Direct Inc. launched Donate Now, which can be added to any religious or charitable organization's Web site. The new feature processes one-time and recurring donations through an automatic bank withdrawal or credit card charge.

Donate Now is a feature of ACH Direct's Secure Web Pay product. The Web sites of each enrolled organization will display a clickable Donate Now button linked to a customized page on ACH Direct's secure processing site.

AGC adds new gift card displays

American Greetings Corp. unveiled new displays featuring gift cards for 16 food, entertainment and lifestyle retailers, including the Applebee's Neighborhood Grill and Bar restaurant chain, Circuit City Stores Inc., Blockbuster Inc. and Lowe's Companies Inc. The program is the result of AGC's partnership with InComm, the nation's largest marketer, distributor and technology provider for gift cards and pre-paid products.

It's Trustwave now

AmbironTrustWave recently assumed the name Trustwave to more accurately reflect the evolution of the company and its reputation as a global provider of information security and compliance solutions.

Merchant Warehouse launches ISO Web site

Boston-based Merchant Warehouse, a provider of merchant accounts and credit card equipment, launched the Capital Bankcard Web site, www.isoheadquarters.com.

The secure Web site serves as a one-stop shop for the company's ISOs and merchant level salespeople operating under the Capital Bankcard brand. The site is designed to provide agents with up-to-date information on their accounts, residuals and support materials, such as training guides and marketing materials. It also hosts individual ISO/MLS Web sites.

nFinanSe gets level 1 PCI certification

NFinanSe Inc. completed its recent security audit and met the requirements for level 1 Payment Card Industry (PCI) Data Security Standard payment service provider compliance. The company's on-site security audit was conducted by BT INS, a leading provider of security services.Panini inaugurates new partner program

Panini launched Partner Plus, a program for qualified Panini sales channel partners. A regimented set of participation requirements is designed to ensure only qualified Panini partners gain access to the program's benefits and incentives.

These include exclusive sales and marketing resources, program materials and support services, financial rewards and incentives, advanced insight into company strategies, and the ability to directly impact Panini's product development plans.

Smart Card Alliance reports on mobile payments

In the white paper, Mobile Payments: Leveraging NFC and the Contactless Financial Payments Infrastructure, the Smart Card Alliance reported that proximity mobile payment will become the mobile payment technology of choice for U.S. consumers using mobile phones for retail payment transactions.

The paper describes the current proximity mobile payments landscape and discusses the needs and roles for all stakeholders involved. It is available at no charge on the Web at www.smartcardalliance.org.

WesPay honors Cardini

The Western Payments Alliance honored Frank Cardini with the George E. Lowther Award for Outstanding Payments Industry Service at its Payments Symposium 2007. The event recently took place in Las Vegas.

Cardini is Vice President, General Services Manager for Pacific Capital Bancorp in Salinas, Calif. He has served on the WesPay Board since October 1985 and as Chairman of the organization's board since 1997.

The Green Sheet, Inc.PARTNERSHIPS

BlueStar chooses O'Neil's wireless printer

BlueStar Inc. now distributes O'Neil Product Development Inc.'s OC3 Wireless Portable Thermal Label Printer. The printer is the newest member in O'Neil's mobile printing solution line.

It is designed to print labels and receipts up to 3 inches wide and uses Flash memory to adapt to changing business requirements. It offers a number of optional features, including networking capabilities, increased wireless security and built-in magnetic stripe card reader.

NMI adds First Data to processor list

Network Merchants Inc. added First Data Omaha to its growing list of certified payment processors.

NMI provides payment processing solutions exclusively through a network of ISO partners and leading financial institutions. It does not deal directly with merchants. The company's gateway can be privately labeled, offering a completely transparent solution.

The Green Sheet, Inc.ACQUISITIONS

AmbironTrustWave acquires One-SEC Ltd.

AmbironTrustWave acquired London-based One-SEC Ltd., the leading provider of Payment Card Industry (PCI) Data Security Standard compliance solutions for businesses and organizations in Europe, the Middle East and Africa (EMEA). The deal is closed, and its terms are confidential.

One-SEC operations will merge with London-based AmbironTrustWave Ltd., a wholly-owned subsidiary of AmbironTrustWave.

As a result, businesses and organizations in the EMEA region will have access to AmbironTrustWave Ltd.'s data security and compliance management solutions.

Newtek acquires Axeus portfolio

Newtek Business Services Inc., a direct distributor to small to medium-sized businesses, purchased a substantial merchant portfolio from Axeus, a leading provider of technology products and services.

This transaction, involving approximately 1,000 retail merchants nationwide, had a purchase price in excess of $2 million.

The Green Sheet, Inc.APPOINTMENTS

Feray joins First American

First American Payment Systems L.P. named John W. Feray Senior Vice President and Chief Financial Officer. Most recently, Feray served in several executive positions at Haggar Corp. Previously, he worked in public accounting for Arthur Anderson LLP.

Pay By Touch appoints Hughes, Kokaram to key posts

Pay By Touch Payment Solutions Inc. appointed Jonathan Hughes Director of Premier Sales and Lincoln Kokaram Director of Sales Support for its Premier Sales Channel.

Before joining Pay By Touch, Hughes was Vice President of Sales and Marketing of First American Payments. He also held senior leadership positions with Retriever Payment Systems (now NPC).

Kokaram previously held senior management positions with Wells Fargo & Co., First Data Corp., Heartland Payment Systems Inc. and Retriever.

Ridder named to ETA advisory committee

Brian Ridder, First National Merchant Solutions Vice President of Service and Products, was appointed to the Electronic Transactions Association's ISO advisory committee.

A 17-year veteran of FNMS and parent company First National Bank of Omaha, Ridder sits on the Visa U.S.A. processors' roundtable. He is also an Adjunct Professor at Nebraska Wesleyan University.

Siembieda to chair ETA membership committee

The ETA appointed J. David Siembieda to a second term as Chairman of its membership committee.

Siembieda has been President and CEO of CrossCheck Inc. for over six years. In addition to serving on the ETA's board, he is a member of NACHA - The Electronic Payments Association's Electronic Check Council.

IMS taps Smith, Kazor

International Merchant Services founder and CEO Christopher Kazor is now IMS' board Chairman. Industry veteran and Kazor appointee Donald Smith has been named IMS President and Chief Operating Officer. Kazor founded IMS in 1993. Smith, founder of PayEx, a payments advisory firm, has worked with IMS as a strategic advisor for the past three years.

RBS Lynk selects Sommerio

RBS Lynk, the U.S. payment processing arm of The Royal Bank of Scotland Group, appointed Nicholas J. Sommerio CFO. Most recently Sommerio held several leadership positions with Global Payments Inc.

Prior, he was Vice President, Finance with First Data Corp., and CFO of Chase Merchant Services LLC.

He worked previously with KPMG in Washington, D.C., and Barnett Banks, now part of Bank of America Corp.

CO-OP Financial Services appoints Wolter

Gary Wolter, President/CEO of the Alabama Credit Union League (ACUL), was appointed to the Board of Directors of CO-OP Financial Services.

Wolter, who was elected President/CEO of the ACUL in 1966, has served as Chairman on multiple boards.

He currently sits on the governmental affairs committee of Credit Union National Association.

He was Chairman of the American Association of Credit Union League Executives and was also Chairman of the U.S. Central Credit Union.

Wolter is now Vice Chairman of Credit Union Services Corp., which recently became a CO-OP subsidiary.

The Green Sheet, Inc.BOTTOM LINES

  • A recent Financial Times survey revealed that U.S. retailers are increasingly concerned about the effect of Wall Street's credit squeeze on customers' spending.

    Asked what they thought would have the biggest impact on their businesses, 25% of the140 Chief Financial Officers cited the weak housing market; 19% said high interest rates; 15% cited the subprime mortgage crisis.

  • Take-out food services from convenience stores, supermarkets and other retail outlets has grown faster than at restaurants over the past two years, according to market research firm NPD Group.

    Purchases of prepared meals are up 5% at retail stores during that time, compared with 3% growth at restaurants.

end of article

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