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Table of Contents

Lead Story

Payments' place in the retail playbook - Part 2

Dale S. Laszig

News

Industry Update

Retailers challenge PCI, seek federal intervention

Data breaches, EMV advance new fraud trends

CFPB to processors: Don't turn blind eye to fraudsters

CFPB seeks public comment on 'payday' loan guidance

Features

U.S. credit card users like installments. A lot

Open-loop prepaid will play a role in next loyalty move by Starbucks

Aaron Mercurio and John Grund

Be vigilant about data vulnerability

MCX pulls plug on CurrentC

Views

The misguided 'kill the check' chorus

Brandes Elitch
CrossCheck Inc.

Guide your startup so it won't implode

Ken Musante
Eureka Payments LLC

Education

Street SmartsSM:
The alternative financing rebrand wrap up

John Tucker
1st Capital Loans LLC

Think PII, not just PCI

Fran Sachs and Ross Federgreen
CSR Professional Services Inc.

Paper reports, online portals can coexist

Steven Feldshuh
Merchants' Choice Payment Solutions East

Consolidation in acquiring

Adam Atlas
Attorney at Law

How integrated, complementary technologies lift valuations

Adam Hark
MerchantPortfolios.com

Company Profile

Upserve

New Products

Brandable, EMV-certified mobile payments

AprivaPay Plus
Apriva LLC

Biometrics for enhanced, selfie authentication

Eyeprint ID
EyeVerify Inc.

Inspiration

The pursuit of large merchant accounts

Departments

Letter from the editors

Readers Speak

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

June 27, 2016  •  Issue 16:06:02

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Industry Update

RETAIL BRIEFS

ANNOUNCEMENTS

Blackhawk recognizes prepaid innovators

Blackhawk Network Inc. named the winners of its 10th annual Hawk Awards, which recognize the prepaid industry's most innovative leaders. "We congratulate all the winners and finalists for their outstanding achievements this year," said Talbott Roche, Chief Executive Officer and President of Blackhawk Network. Among those recognized were JPMorgan Chase for greatest industry achievement; Stockpile for largest, most strategic industry innovation; Ahold for best overall prepaid program; Gift Card Impressions and GAP Inc. for best promotional program, small company and large company, respectively; The Cheesecake Factory for best card design; Kroger for best omnichannel program; and Sport Chek for best international program.

Cardtronics expands CTA partnership

Cardtronics Inc. signed a new ATM services contract with the Chicago Transit Authority, the nation's second largest public transportation system. Extending and expanding a relationship established in 2013, the renewal agreement places Cardtronics ATMs at more than 80 CTA train and bus stations. As part of the agreement, Cardtronics will place nearly 40 ATMs at numerous CTA passenger stations, replacing existing equipment at those locations.

EPC, CUNA laud possible Durbin repeal

The Electronic Payments Coalition praised Rep. Jeb Hensarling, R-Texas, for introducing legislation that would repeal and replace the 2010 Dodd-Frank Act. According to Hensarling, who is Chairman of the House Financial Services Committee, the Financial CHOICE (Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs) Act would eliminate taxpayer-funded bailouts and relieve financial institutions of certain regulations, one of which is the Durbin Amendment.

The Electronic Payments Coalition praised Hensarling for the proposed legislation. "Of critical importance to the coalition is repealing the harmful federal price controls of the Durbin Amendment, and we look forward to working with the Chairman on ending this failed policy," said Molly Wilkinson, EPC Executive Director. Credit Union National Association also voiced support for repealing Durbin. Hensarling's proposed legislation would also require a cost-benefit analysis and congressional approval for all financial regulations before they take effect.

Harbortouch receives investment capital

Searchlight Capital Partners LP reported that it made a significant investment in Harbortouch Payments LLC in partnership with Harbortouch founder and CEO Jared Isaacman. The investment goal is to support the company's next phase of growth. "We look forward to working with Jared and the Harbortouch team as they continue to innovate, enter new markets, and enhance the customer experience for both merchants and distribution partners," said Eric Zinterhofer, co-founder of Searchlight.

Intellicheck receives patent

Intellicheck Mobilisa Inc. was awarded a U.S. Patent that governs the two-factor fingerprint biometric identity process that authenticates an identity card with embedded fingerprint biometric information and the live biometric information of a person presenting the card. The patent has implications, as it covers the process of the leading biometric fingerprint technology that assures compliance with The Federal Information Processing Standard.

PayJunction opens office in Santa Barbara

PayJunction opened a new office in Santa Barbara, Calif. The company noted that its original State Street headquarters and new Carillo Street office, combined, comprise 15,000 square feet of prime downtown Santa Barbara real estate. "We value a healthy work-life balance, and I'm proud to see the new location furthering our heritage and positively impacting the community," said Randy Modos, President of PayJunction.

Payveris receives investment capital

Payveris LLC received $7.5 million in funding from new and existing investors in a round led by San Francisco-based Mosaik Partners. Additional investors participating in the round include a group of individual financial technology investors represented by Nick Cayer, as well as existing institutional investors. The funds will enable Payveris to continue its rapid growth and development of new payment platform features in the coming year, the company said.

Pypestream receives Red Herring award

Red Herring named Pypestream Inc. as a Top 100 North America winner, an award celebrating the most innovative private companies, startups and technologies across their respective industries. Red Herring Top 100 America spotlights outstanding entrepreneurs and promising companies. It selects the award winners from approximately 1,200 privately held financed companies each year in the United States and Canada.

SinglePoint enters into securities agreement

SinglePoint Inc. entered into a securities purchase agreement with Blackbridge Capital LLC for up to $3 million of the company's common stock alongside its initiative to acquire undervalued companies, assets and operations to build shareholder value. Also, as part of an overall arrangement, it will receive an immediate capital infusion of $60,000 to expedite requirements for Securities and Exchange Commission registration and overall increased productivity.

Science Committee seeks info on breaches

U.S. House Committee on Science, Space and Technology Chairman Lamar S. Smith, R-Texas, and U.S. House Science Subcommittee on Oversight Chairman Barry Loudermilk, R-Ga., expressed their concerns about data security to U.S. Federal Reserve Chair Janet Yellen. This followed reports that the Federal Reserve had detected more than 50 cyber breaches between 2011 and 2015. The concerns were presented in a letter noting that said breaches identified by the Federal Reserve's National Incident Response Team involved suspected hackers or spies who were responsible for multiple incidents.

TSG moves headquarters office

The Strawhecker Group, a management consulting firm focused on the payments industry, moved its Omaha, Neb. headquarters to a new location within the city, which is one of the industry's geographic hubs. "To accommodate the firm's growth, and to better serve its clients, TSG has relocated to a larger space to continue providing the payments industry with unmatched advisory services," said Kurt Strawhecker, Partner and co-founder of TSG.

Visa reports reduced fraud with VTA

Visa Inc. recently presented a report on Visa Transaction Advisor (VTA), a service devised to help reduce fraud at the gas pump. According to Visa, more than 35,000 gas stations are using the service in the United States, and on average, VTA users have seen fraud decline by more than half – a 54 percent decline in counterfeit fraud rates and a 51 percent decline in lost and stolen fraud chargeback rates. "The results we're seeing in the fuel sector attest to the power of predictive analytics for many of our merchant partners," said Mark Nelsen, Visa Senior Vice President of Risk Products.

Wal-Mart Canada severing ties with Visa

Wal-Mart Canada Corp. stated in a June 2016 press release that fees applied to Visa credit card purchases "remain unacceptably high." Having been unable to reach an agreement with Visa on fees, the company said, "[W]e will no longer accept Visa in our stores across Canada, starting with our stores in Thunder Bay, on July 18, 2016. This change will then be rolled out in phases across the country." The company noted that it "pays over $100 million in fees to accept credit cards each and every year." Lowering such costs "is necessary for us to be able to keep our prices low and continue saving our customers money," Wal-Mart added.

RESEARCH

BRP issues commerce report

According to Boston Retail Parners' 2016 Customer Experience/Unified Commerce Survey, 51 percent of retailers noted creating a seamless experience across channels is their top priority. To support this, 23 percent of the retailers surveyed stated they have already implemented a single, unified commerce platform; another 52 percent said they plan to implement one within the next three years. The survey asked North American retailers to share what they are undertaking to understand the current state and future plans of unified commerce.

FIME issues merchant ebook on EMV

Payment consultancy FIME released an ebook guide to help merchants, value-added resellers, ISOs and independent software vendors achieve EMV (Europay, MasterCard and Visa) certification faster. The ebook, A Management Guide to Accelerating EMV Chip Card Acceptance, outlines best practices to shorten implementation cycles and push EMV-enabled products to market more quickly.

Juniper issues prediction for mPOS

A new study from Juniper Research Ltd. indicates smartphone and tablet-based mobile POS (mPOS) terminals will take on a significant role in businesses, handling 40 percent of all retail transaction value by 2021. In the research document, titled Worldwide mPOS Markets: Devices, Technologies & Growth Opportunities 2016-2021, Juniper forecasts the use of mPOS systems will account for more than 1 in 3 POS terminals by 2021, driven by larger retailers adopting mPOS equipment and software as part of an array of POS options.

Strategic Treasurer finds weak security prevalent

Fifty-seven percent of more than 300 respondents to a recent survey conducted by Strategic Treasurer, and underwritten by Bottomline Technologies Inc., say they have no formal framework in place to protect their organization from payment fraud. The global survey was completed during the first quarter of 2016. According to the findings, payment fraud attacks are on the rise, and companies are also experiencing a rise in wire fraud.

Walker Sands unveils retail study

There has been a steady increase year-over-year in the frequency of consumer online purchases, according to Walker Sands Communications' 2016 Future of Retail Study. Thirty-one percent of consumers now shop online at least once a week, up from 22 percent in 2015, and nearly three-quarters do so at least once a month. Furthermore, the number of consumers who make an online purchase less than once per month has dropped from 38 percent to 27 percent year over year.

PARTNERSHIPS

Allianz teams with PassportCard

Through a partnership with PassportCard, Allianz Global Assistance Canada will test a new way for travelers to pay for medical claims. The solution is designed to allow for payment of eligible outpatient medical expenses in real-time, eliminating out-of-pocket expenses, paperwork and the claim process. PassportCard will be offered with select products on a limited basis, and once proven successful, Allianz Global Assistance will distribute the product on a broader scale, the companies said.

Focus POS partners with Sterling

Focus POS partnered with Sterling Payment Technologies to offer a comprehensive EMV solution to businesses in the hospitality industry. The EMV solution offers restaurants the capability to accept payments from mobile wallets thanks to near field communication and tokenization technologies. This semi-integrated solution protects electronic payments, so Focus POS doesn't directly handle sensitive customer data, and information is less likely to be stolen, Focus noted.

Fragmob strikes alliance with CardFlight

Fragmob LLC partnered with mPOS technology provider Cardflight Inc. According to the companies, their partnership brings payment acceptance into the Fragmob direct selling mobile platform, allowing independent sales representatives to securely conduct business on their smartphones. "Together with Fragmob, CardFlight will be able to enable the direct selling company's sales rep to accept mobile EMV payments from anywhere, at anytime," said Derek Webster, founder and CEO of CardFlight.

FuturePay, SAP Hybris reach certification

FuturePay Inc. reported that its FuturePay Extension 1.0, achieved certified integration with the SAP Hybris Commerce solution, noting that when integrated with SAP Hybris Commerce, the FuturePay solution provides enterprise retailers with the ability to add an instant credit financing option to checkout. "SAP Hybris is one of the most well-known and reputable ecommerce brands in the world; this is a fantastic achievement for us," said Bobbi Leach, CEO of FuturePay.

Govolution aligns with Ytel

Govolution LLC and Ytel forged a partnership through which Ytel will provide its customers with new payment features powered by Govolution's Velocity Call Center Payments platform. The new features will be included in Ytel's X5 Cloud Contact Center solution. New features will provide Ytel customers with the ability to accept payments through interactive voice response, self-service web, and agent-assisted payments, the companies stated.

MPI, Vend POS team up

Mercantile Processing Inc. began a partnership with Vend POS in an effort to better align with merchant needs. Vend POS is an iPad cloud-based POS system that allows merchants to accept payments, track inventory, conduct ecommerce, and offer rewards programs to increase revenues. MPI has completed a PCI certified method for accepting EMV, Apple Pay and magnetic strip cards using the Vend POS system.

NCR, Re-Vision join together

NCR Corp. and Re-Vision formed a strategic partnership that will reinvent the checkout experience through the introduction of NCR's FastLane Mobile Shopper Powered by Re-Vision. This application gives retailers the ability to offer consumers a scan-as-you-shop option using either a store-provided device or the consumer's own iOS or Android mobile phone. Consumers can choose to pay with debit, credit, or cash; or simply finish on the device using their mobile wallet.

PayPortal launch aided by PowerPay

The startup venture PayPortal plans to deliver a flat-rate, online and wireless credit card payment processing product. In partnership with PowerPay, PayPortal will offer the flat rate product at 2.79 percent plus $0.30 per transaction, with no hidden fees that can inflate and complicate monthly bills, the company said. PayPortal also noted that the launch of PayPortal will eliminate startup fees, early termination fees, tiered pricing and PCI fees, as well as offer a free payment gateway.

Windfall forms alliance with USPAY

Windfall Inc., a group purchasing organization, and USPAY Group disclosed that they have partnered to deliver exclusive discounts and access to cutting-edge credit card processing options for small to midsize businesses and associations throughout the United States. Windfall members receive exclusive discounts on payment processing and merchant services, including free equipment, a free LUCY virtual terminal gateway setup and a free Vimas online management portal. They also receive negotiated American Express pricing and faster deposits, the companies said.

ACQUISITIONS

i3 Verticals purchases Axia

i3 Verticals LLC acquired Axia Payments LLC, headquartered in Santa Barbara, Calif. Axia, founded in 1999, provides electronic payment processing services to a broad range of business, government and non-profit organizations. Greg Daily, founder and CEO of i3 Verticals, remarked, "In addition to being our largest acquisition to date based on payment volume, Axia strengthens our presence in a range of existing vertical markets."

Midigator assumes B4 Enterprises

Midigator LLC acquired B4 Enterprises Inc., a reseller of Ethoca Ltd. and Verifi Inc. chargeback prevention technologies. This acquisition, combined with the 20 plus years experience of B4's owners, Ben Butcher and Bryan Baumgartner, puts Midigator at the forefront of the chargeback and risk management industry, the company said. The acquisition offers Midigator access to more useful data that supplements its world-class prevention technology, with features such as interactive and real-time analytics.

PayNearMe buys Prism Money

Electronic cash payment network PayNearMe acquired consumer financial management app Prism Money, enabling the company to offer businesses and financial institutions in-app bill presentment and the ability for consumers to make bill payments via automated clearing house or credit, debit or prepaid cards. These capabilities augment PayNearMe's existing cash payment processing offerings and a wide range of enterprises from banks to business to government agencies can now offer their consumers the same Prism Money features.

PFSweb completes Conexus purchase

PFSweb Inc. completed the acquisition of Conexus Ltd., a U.K.-based ecommerce system integrator. Conexus will become a wholly owned subsidiary of PFSweb and will initially operate under the name "Conexus, a PFSweb Company." Conexus Managing Director Paul Lynch stated, "PFSweb shares our commitment to providing the world's leading brands and retailers with best-in-class commerce solutions."

TSYS Managed Services now wholly owned

Total System Services Inc. (TSYS) acquired the remaining 45 percent ownership share in its TSYS Managed Services EMEA joint venture with Dimension Data. TSYS Managed Services is now a wholly owned TSYS company focused on providing outsourced business process, contact-center services and support to TSYS' international clients. TSYS Managed Services EMEA will continue to be led by its Chief Operating Officer, Mark Cleary.

APPOINTMENTS

Baich elected by FSSCC

The Financial Services Sector Coordinating Council elected Rich Baich as its new Chair. Baich will succeed Russell Fitzgibbons, Executive Vice President and Chief Risk Officer of The Clearing House, whose term as FSSCC Chair ends on July 27, 2016. Baich serves as Chief Information Security Officer at Wells Fargo, where he oversees the company's security vision, strategy, and programs designed to secure customer and company information.

Courtneidge joins myPINpad

myPINpad appointed Robert Courtneidge to its Board of Directors. Courtneidge brings over 25 years' experience in the payments industry and has worked closely with the Payments Services Regulator, HM Treasury, the Financial Conduct Association, and other compliance and industry bodies. He has been included in the Payments Power 10 for the last three years and was named a Top 10 Payments Lawyer by Paybefore.

Shopkick hires Demas

Bill Demas signed on as CEO at Shopkick Inc. The company said the appointment comes at a time when Shopkick is experiencing tremendous growth in its consumer base. "I'm excited for the outstanding growth potential of the company, with its expanding user base, best-in-class technology, and blue chip roster of retail and brand partners," Demas said.

Rowan appointed by YapStone

YapStone Inc., a global provider of online and mobile payment solutions for global marketplaces and large vertical markets, hired Peter Rowan as Vice President of International Operations and Global Customer Support. Rowan brings a tremendous breadth of experience to YapStone, having worked extensively in payments for global markets for over 30 years. Formerly, Rowan was Global Director of Trust and Safety at Twitter.

Schwartz given interim role at Spindle

Spindle Inc. named Michael J. Schwartz as its Interim CEO. Schwartz replaces Bill Clark who has held the CEO role since 2011. Schwartz, a 27-year payments veteran, has held numerous executive roles in which he has been responsible for vision and strategy creation, solving complex functional and technical problems, building high-performing teams, and managing and leveraging capital wisely.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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