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Table of Contents

Lead Story

Disrupting the disruptors in payments and banking

Patti Murphy

News

Industry Update

Updated PCI DSS released

Regulatory moves trouble U.S. fintech sector

Innovators chip away at EMV transaction speed

Federal focus on mobile for financially underserved

Features

Sizing up software-oriented distribution for acquirers

Brooke Ybarra

It's (still) hip to be traditional

Digital wallet real estate heats up

Ben Abel

Views

Six ways to leverage MLS expertise

Dale S. Laszig
DSL Direct LLC

Education

Street SmartsSM:
You can fly anywhere you want

John Tucker
1st Capital Loans LLC

Best processor moves

Adam Atlas
Attorney at Law

Marijuana sales: Current state and future opportunity

Brett Husak
National Bank Services

Are automatic electronic loan payments right for my customers?

Ty Kiisel
OnDeck Capital Inc.

Company Profile

Xpress-pay

New Products

Omnichannel, cloud-based POS

paydeo
AnywhereCommerce

Harness the power of barcode beaming technology

Mobeam
Mobeam Inc.

Inspiration

Word play your way to success

Departments

Letter from the editors

Readers Speak

Break away for a day

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

May 23, 2016  •  Issue 16:05:02

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Industry Update

RETAIL BRIEFS

ANNOUNCEMENTS

Amazon found liable in FTC case

A federal judge granted the Federal Trade Commission's request for summary judgment in the agency's lawsuit against Amazon Inc. for billing consumers for unauthorized in-app charges incurred by children. The judge's order in the case, which was initially filed in July 2014, found that Amazon "received many complaints from consumers about surprise in-app charges incurred by children, citing the fact that the company's disclosures about the possibility of in-app charges within otherwise 'free' apps were not sufficient to inform consumers about the charges," the FTC stated.

The order calls for further representations from the FTC and Amazon regarding the precise amount of monetary relief Amazon owes consumers as a result of its unlawful practices. The FTC previously reached settlements with Apple Inc. and Google Inc. regarding unauthorized in- app charges incurred by children; the companies were required to fully refund consumers for such charges, resulting in refunds to consumers totaling over $50 million.

ANX creates PCI focused NuArx

ANXeBusiness Corp. unveiled its spin-off, NuArx Inc., which is dedicated to providing Payment Card Industry (PCI) Data Security Standard (DSS) compliance and secure payment solutions to merchants and premium brands. The company previously operated as a compliance business unit of ANX. "We expect to be the go-to solution for corporate brands and merchants looking to protect their brand equity and simplify their PCI compliance activities," said Rich Stanbaugh, former Chief Executive Officer of ANX and new CEO of NuArx.

Chain releases open blockchain standard

Blockchain technology company Chain Inc. publicly released the Chain Open Standard 1, an open source blockchain protocol developed through an 18-month collaboration between the Silicon Valley company and multiple global financial services firms. The Chain Open Standard is already powering several blockchain projects at leading financial companies and it is now open to the wider financial community, the company noted.

Chain stated that the Chain Open Standard is pioneering a novel consensus model that achieves transaction finality in less than a second, even at high transaction volumes; a privacy solution that encrypts blockchain data and provides selective read access to relevant counterparties and regulators; a smart contract framework and virtual machine that supports simple rule enforcement as well as complete programs with key-value storage; a scalable data model that reduces operational load for network participants; and a rich metadata layer to meet know your customer and anti-money laundering requirements.

Coalfire launches veteran hiring initiative

Coalfire Systems Inc., a provider of cybersecurity risk management and compliance services, in partnership with the national Joining Forces program – an initiative of First Lady Michelle Obama and Second Lady Jill Biden – entered into a five-year pledge to hire and train service veterans and military spouses. Coalfire CEO Larry Jones also joined with other national business leaders at The White House for a public pledge event.

FIME D-PAS terminal accredited by Discover

Discover Financial Services accredited FIME, a consulting, testing and market integration specialist firm, to provide formal approval services for end-to-end terminal certification of Discover Network and Diners Club International acceptance systems using the Discover Payment Application Specification (D-PAS). As a Discover-approved certification services provider, FIME also assists acquirers in preparing their systems for end-to-end certification.

EU privacy laws to impact U.S. businesses

American companies doing business in Europe directly or online are subject to new data privacy regulations enacted by the European Union. The regulations are due to go into full effect in two years and according to the International Association of Information Technology Asset Managers Inc. CEO Dr. Barbara Rembiesa, "These are sweeping changes to how personal and corporate data is to be handled and they have far-reaching implications for many aspects of U.S. businesses."

Net Element closes financing round

Mobile payment technology solutions provider Net Element Inc. reported that it successfully renewed and increased to $15 million a credit facility (a type of business or corporate loan) from RBL Capital Group LLC and entered into a debt exchange agreement with Crede CG III Ltd., a wholly owned subsidiary of Crede Capital Group LLC. Under the agreement, the company can exchange up to $5 million of indebtedness under certain promissory notes through Dec. 31, 2016.

Passport secures $8 million in funding

Passport Parking Inc., a mobile payment software provider for the parking and transit sector, closed an $8 million Series B funding round led by MK Capital with participation from existing investors Grotech Ventures and Relevance Capital. This investment brings Passport's total funding to $17 million. "The additional capital will enable us to accelerate our company's growth and expand our team to support our product roadmap and serve our clients' needs," said Bob Youakim, CEO at Passport.

TMG saves clients $40 million

The Members Group reported that its fraud detection and prevention strategies saved its financial institution clients more than $40 million in potential fraud losses in 2015. While some of the increased fraud savings were attributed to the growth of TMG's client base and its clients' portfolios, TMG Fraud Prevention Manager Ashley McAlpine stated that the unprecedented number of merchant compromises in 2015 also contributed to the large level of client fraud savings they were able to facilitate for clients.

ESBC program a success

The Every Swipe Benefits Charity (ESBC) give-back program reported that in two years' time, it generated more than $100,000 in donations to a carefully vetted group of more than 25 local and national charities. "We are so excited to have raised so much money for our very worthy charities in such a short period of time," said Renee VanHeel, founder and President of Pay it Forward Processing, which created the program.

Vantiv introduces BizBuz

Vantiv Inc., in connection with National Small Business Week, launched a small business community called Vantiv BizBuz. The free, online community will provide educational resources and information, as well as engagement with other business owners, to help small to midsize businesses (SMBs) succeed. As a trusted payments partner, Vantiv supports National Small Business Week, the annual event promoting America's entrepreneurs and SMBs.

"More than half of all Americans either own or work for a small business, so this is a huge segment of the population," said Michele Herron, Vice President, SMB Strategic Market Leader at Vantiv. "It is also a segment that often feels underserved and overlooked. We want to help these small business owners capture evolving information on business trends and payments options, and plot their path to success, through smarter, faster and easier payments."

RESEARCH

ATMIA publishes anti-skimming manual

The ATM Industry Association published a new best practice manual for preventing skimming and card data compromises at ATMs. This followed a recent FICO card alert reporting a 546 percent increase in ATM skimming between 2014 and 2015 in the United States. Mike Lee, CEO, of ATMIA, urged all its U.S. members, in particular, to study the updated manual to help stop the rising tide of fraud resulting from skimming.

CO-OP, TMG seek Mercator assistance

CO-OP Financial Services and TMG commissioned a body of work by Mercator Advisory Group Inc. on blockchain technology to help credit unions make wise decisions regarding this emerging digital ledger technology. The first study will be completed by late summer 2016, just in time for credit unions to use during their 2017 budget planning processes, the companies stated. Both CO-OP and TMG will be sharing the resulting white paper with their respective clients.

HRC studies ecommerce impacts on stores

Ecommerce is slowly chipping away at in-store sales, according to Antony Karabus, CEO of Hilco Global's HRC Advisory business unit. The finding was revealed as part of Karabus' latest retail industry study, which reported that "operating earnings as a percent of sales has declined by up to 25 percent due to a shift from in-store to online sales, combined with ecommerce and omnichannel investments, and the high cost of fulfilling ecommerce transactions." Karabus added that retailers "need to recalibrate and fine-tune their economic business models to reflect today’s new variable cost-oriented online model. Those who can engage customers and meet their heightened expectations, while offering complete visibility of inventory availability, can be lucrative in reducing markdowns and improving inventory productivity."

The study further found that the pace of online sales growth has decelerated, online returns are expensive, ecommerce volumes are not sufficiently high to justify store closures and price-matching should not be a "one size fits all" approach.

Revel Systems reports on POS

Revel Systems released key findings from the April 2016 commissioned study, Step Up The In-Person Experience, conducted by Forrester Consulting on Revel's behalf. Researchers studied and reported on the current state of digital experiences for retailers and restaurants, the challenges they face, and what technological issues prevent them from improving operations and creating a better customer experience.

RSR issues report on mobile retail

Retail Systems Research's Mobile In Retail: The New Normal report contains analysis of the business drivers, opportunities and organizational constraints associated with retailers' mobile operations. It also offers baseline recommendations for navigating this realm for retailers. The report is part of RSR's ongoing efforts to provide market intelligence on retail technology trends.

Verizon releases annual data breach report

According to the Verizon 2016 Data Breach Investigations Report, cybercriminals are continuing to exploit human nature as they rely on familiar attack patterns such as phishing, while also increasing their reliance on ransomware, a scheme through which data is stolen and encrypted, and a ransom is demanded. This year's report also found 89 percent of all attacks are financially driven, and vulnerabilities in security and behavioral practices continue to be highly exploited.

PARTNERSHIPS

3dcart pursues Vantiv integration

Shopping cart software provider 3dcart partnered with Vantiv Inc. to bring flexible ecommerce payment processing choices to more than 20,000 active online stores. As an option for payment processing on 3dcart online stores, Vantiv will offer efficient core payments processing capabilities – including traditional card processing, international, and alternative payment options – along with several value-added protection, revenue, and analytics, reporting, and operations solutions, the companies stated.

Alibaba, CommGate team up for SMBs

Enterprise software solutions provider CommGate Pte Ltd. signed a strategic partnership agreement with Alibaba E-commerce and Alibaba Cloud, the international business and cloud computing arms of ecommerce giant Alibaba Group. Through the partnership, Alibaba E-commerce merchants have special privileges to subscribe to CommGate's suite of integrated CloudERP solutions, which include inventory management, customer resource management, invoicing, POS systems, and real-time analytics to enhance productivity and scale ecommerce and retail businesses.

GlobalPlatform signs with FIDO

GlobalPlatform and the Fast IDentity Online Alliance executed a memorandum of understanding. The two organizations are working to ease FIDO authenticator development on GlobalPlatform-based secure component products. This is expected to enable service providers to efficiently incorporate user authentication features – such as voice recognition and biometrics – as part of their GlobalPlatform-secure deployments.

Ingenico wins exclusive with Tidal

Ingenico ePayments, the online and mobile commerce division of Ingenico Group, reported the music- and video-streaming platform Tidal selected Ingenico ePayments as its exclusive partner to help manage the increasing demand for its services and optimize the payment experience for customers. Together, Ingenico ePayments and Tidal offer Tidal users around the world a range of payment and currency options, tailored to their local payment preferences, Ingenico noted.

NFC Forum works with GCF

The NFC Forum and the Global Certification Forum entered into a cooperation agreement that allows both GCF and NFC Forum labs to run NFC Forum analog and near field communication (NFC) tag test cases and recognize test results across both organizations. According to the forums, this agreement represents a major step toward the objective of providing interoperable, contactless, public transport access and ticketing using a broad range of NFC-enabled devices worldwide.

Priority Payments, e|tab extend partnership

Priority Payment Systems and its strategic partner e|tab extended their partnership and showcased how the e|tab solution has improved the operating efficiency of Stefanina's St. Louis Pizzeria and increased the restaurant's online ordering volume by 400 percent. e|tab's self-service ordering application leverages Priority's integrated payment platform to process payments for orders that come directly from customers' smartphones, tablets or personal computers.

SoarPay.com teams with Chargeback Defense

High-risk merchant services provider SoarPay.com and Chargeback Defense Solutions, a chargeback mitigation provider, integrated the Soar Payments high-risk payment gateway and Chargeback Defense Solution's alerts and front-end transaction fraud filtering technologies. The direct integration allows merchants using the Soar Payments payment gateway to receive automatic chargeback alerts, pre-determine actions to be taken on those alerts, as well as automatically risk-score individual transactions, the companies stated.

Starmount, Aurusto align

Starmount Inc. entered into a strategic partnership with Aurus Inc. to deliver a new service devised to allow retail customers using Starmount solutions to implement an omnichannel payment solution to process both in-store and ecommerce transactions. Through the partnership, retail customers using Starmount solutions will be able to incorporate payment-as-a-service with their Starmount POSs to securely manage consumer payments and POS transaction data.

ACQUISITIONS

Aurionpro purchases Spikes

Aurionpro Solutions Ltd., provider of enterprise security, digital innovation and banking solutions, signed a definitive agreement to acquire Spikes Security, a provider of network-based web malware isolation products. According to Aurionpro, the merger initiative unlocks synergies that address the two most difficult security problems: protection from advanced malware attacks and data breaches caused by fraudulent or unauthorized access to enterprise resources and data.

Bango inks deal with BilltoMobile

Bango acquired the BilltoMobile carrier billing service and associated contracts from Danal Inc. Bango said the acquisition positions it as the leader in carrier billing in the U.S. market and consolidates its position as a leading provider of carrier billing for app stores. As a result of the acquisition, Bango added, it is now the only processor of carrier billing transactions across all four major U.S. mobile network operators.

Veras acquires JDA POS brands

JDA Software Group Inc., and Zoftec LLC, DBA Veras Retail, a long-time JDA alliance partner, reported that Veras Retail purchased JDA Store Point-of-Sale, JDA Win/DSS Point-of-Sale and JDA CRM solutions. Veras Retail noted that it will expand its products and services offerings in this area to help retailers maximize profitability and provide a meaningful shopping experience to consumers.

APPOINTMENTS

Evans, Haddock, Kelley join TransCard

TransCard Payments expanded its leadership team with the addition of Ann Evans as Vice President of Corporate Solutions, John Haddock as its new Chief Financial Officer and Ed Kelley as Vice President of Financial Institutions. "The wealth of knowledge John, Ed and Ann bring to the team puts TransCard in a great position to grow and expand our footprint within the financial and corporate disbursement industries," said Greg Bloh, President of TransCard.

JetPay names new CEO

JetPay Corp. appointed Diane (Vogt) Faro as its CEO. Bipin C. Shah, the company's former Chief Executive Officer, will continue in his role as the company's Chairman and member of its board. Faro has been a member of the JetPay board since 2014. She has held numerous leadership positions in the payments industry, including President of Global Merchant Services at First Data Corp. and Chief Executive Officer of Chase Merchant Services LLC.

Vantiv expands roles of Ferris, Heimbouch

Vantiv expanded the roles of two key executives. Mark Heimbouch, the company's Chief Operating Officer, is now also responsible for Vantiv's product organization. Stephanie Ferris was promoted to Chief Financial Officer and appointed to the company's Executive Committee. She will report directly to Heimbouch.

Fredriksen to join Global Forum

Gene Fredriksen, Global Information Security Officer at Pacific Service Credit Union, was selected to help represent the nation's credit unions in the Global Forum to Advance Cyber Resilience. The forum is dedicated to enhancing and maintaining critical infrastructure resilience against all cyber risks. It endeavors to lead the advancement of cyber resilient service management through collaborative innovation, securing and strengthening critical infrastructure across every government and industry sector worldwide.

"The Global Forum to Advance Cyber Resilience is the first of its kind targeting operationalizing standards and practices focused on the critical issue of cyber resilience," Fredriksen said.

Kratzberg assumes Epson executive role

Epson America Inc. reported that John Lang, its President and CEO, will retire effective June 30, 2016. As part of a planned succession, Senior Vice President Keith Kratzberg will assume post of Lang's positions immediately following Lang's departure. Lang served Epson as President and CEO for 14 years. Kratzberg joined Epson in 1996 and has held positions of increasing responsibility in product development, marketing, sales, strategy and general management.

Nealon appointed by Vyze

Vyze Inc. introduced Keith Nealon as the company's new CEO. In his new role, Nealon will draw on 20 years of experience with high-growth public and private technology companies to help scale Vyze as the company continues to simplify the financing experience at the POS for both retailers and manufacturers, Vyze noted. "Keith is a versatile leader, having demonstrated success in management, sales, marketing, and technology roles," said Vyze Chief Marketing Officer Doug Filak.

Rutledge joins International Bancard

International Bancard Corp. appointed Gary Rutledge to the position of President. In this role, Rutledge reports to and works with the company's founder and CEO, David A. Iafrate, to integrate and oversee execution of its vision and strategic plan. Rutledge has direct oversight and leadership of International Bancard's revenue and revenue support teams.

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 | Harbortouch | USAePay | Humboldt Merchant Services | Impact Paysystems | Electronic Merchant Systems