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Table of Contents

Lead Story

Healthy relationships build vibrant businesses

Dale S. Laszig

News

Industry Update

Fed accelerates fast payments in 2017

Payments industry addresses ADA compliance

OCC considers controversial fintech charter

Retail, payments find unity at NRF 2017

Features

Emerging markets fuel smart-device surge

Views

Mobile and the democratization of banking, payments

Patti Murphy
ProScribes Inc.

Interview with industry pioneer Bill Melton

Brandes Elitch
CrossCheck Inc.

Payment trends for 2017

Kirsty Tull
BillPro Pty Ltd.

Education

Street SmartsSM:
Understanding merchant processing

John Tucker
1st Capital Loans LLC

Know the risks before processing overseas

Theodore F. Monroe
Attorney at Law

Lessons from the past that apply today

Jeff Fortney
Clearent LLC

Your EMV transition: It gets better

Bob Olson and Naga Jagadeesh
ThoughtFocus

Company Profile

Electronic Payments Inc.

New Products

Enterprise-scale, adaptable mPOS solution

iSMP4 Companion
Ingenico Group

Self-service payout solution for global ecommerce

Hyperwallet Pay Portal
Hyperwallet Systems Inc.

Departments

Letter from the editors

Readers Speak

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

February 13, 2017  •  Issue 17:02:01

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Industry Update

RETAIL BREIFS

ANNOUNCEMENTS

Ameranth patent cases proceed

Ameranth Inc. obtained an order from the District Court for the Southern District of California lifting the stay of more than 30 long-delayed patent infringement cases associated with the company's '077 patent. The patent covers multiple technologies for food and drink ordering, reservations, ticketing and payment processing, including mobile and web functionality as part of a synchronized system. Ameranth can now enforce the patent and seek damages and payment for unauthorized uses of the company's data synchronization inventions.

Ayannah earns top honors at Fintech Finals 2017

Ayannah, a provider of digital financial services, was named Best in Show by judges at the Fintech Finals 2017 competition. Twenty-three startups had six minutes on stage in front of judges and a live audience of fintech professionals and media. Ayannah received a $10,000 prize and was invited to Visa Inc.'s Innovation Center in Singapore for a co-creation engagement with a team of subject-matter experts from across Visa's business.

Mastercard, UniRush penalized for RushCard failures, Green Dot to acquire UniRush

On Feb. 1, 2017, the Consumer Financial Protection Bureau took action against Mastercard and UniRush LLC for October 2015 breakdowns that the bureau determined had left tens of thousands of economically vulnerable RushCard users unable to access their own money to pay for basic necessities. The CFPB action occurred one day after news broke that Green Dot Corp. would acquire UniRush, the operating company for RushCard.

The CFPB ordered UniRush and Mastercard to pay an estimated $10 million in restitution to customers who were harmed by the breakdowns, which the bureau concluded were preventable. It also fined the companies $3 million. As of press time, Green Dot's acquisition of UniRush for $147 million, plus a minimum $4 million annual earn-out payment for five years post closing, was expected to close before the end of the first quarter of 2017, subject to customary closing conditions.

Feds extend cyber risk comment period

To allow interested parties additional time to analyze and prepare comments on proposed enhanced cyber risk management standards, The Federal Reserve Board, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. extended the comment period past the initial January 17 deadline. The standards address cyber risk governance, cyber risk management, internal dependency management, external dependency management, incident response, cyber resilience and situational awareness.

FTC lauds Privacy Shield Framework

In a statement following the adoption of a Swiss-U.S. Privacy Shield Framework, Federal Trade Commission Chairwoman Edith Ramirez issued a statement commending the effort. "The FTC has a robust privacy enforcement program, both domestically and internationally, and we will continue our vigilant approach to enforcement of the new Framework," Ramirez said.

iPayment implements agreement

iPayment Inc. signed an agreement for comprehensive refinancing with the holders of approximately 79 percent of the company's outstanding 9.50 percent Senior Secured Notes. The company believes the refinancing, once consummated, will result in substantial deleveraging and enable it to expand its services and product offerings. The refinancing is expected to close in the first quarter of 2017; the notes are due in 2019.

JetPay fulfills Merrick settlement

JetPay Corp. reported that it satisfied its obligations under the Settlement and Release Agreement with Merrick Bank for civil actions in the Federal District Court for the District of Utah. The timely promissory note payoff satisfied JetPay's obligations to Merrick Bank, and each of the Stipulated and Confessed Judgments in connection with the Settlement and Release Agreement are now void, unenforceable and of no effect, JetPay stated.

Nyca closes venture fund

Nyca Partners closed its latest venture capital fund with more than $125 million in total commitments. Since July 2014, Nyca has invested in more than 30 companies across four fintech subsectors: merchant payment solutions, alternative credit, digital advice and financial infrastructure. "This is an exciting time for fintech, and this latest fund will allow us to continue to invest in companies that leverage technology to build platforms that empower consumers," said Hans Morris, Managing Partner at Nyca and former Citigroup banker and Visa President.

Sysnet to open U.S. contact center

Sysnet Global Solutions indicated it will create more than 500 jobs and invest $2 million in a U.S. contact center in the Atlanta area. The new center was devised to help merchant customers of Sysnet clients with securing their businesses and achieving and maintaining compliance with various standards. The center will be operational 24/7 and provide multilingual support, Sysnet said. 

RESEARCH

ACI, Aite report on bill paying

According to an ACI Worldwide and Aite Group LLC report titled How Americans Pay Their Bills, consumers paid approximately 14.7 billion bills in 2016, shelling out about $3.9 trillion. In addition, paying bills now entails a range of transactions involving many different payment methods and channels. The report sizes the channels and methods consumers used to pay their bills in 2016, uncovers insights into how all generations pay bills, and analyzes bill payment volume and gross dollar value across the 29 most popular bill categories. It is based on a third-quarter 2016 Aite survey of 2,429 U.S. consumers.

Episerver studies buyer behaviors

In its report Reimagining Commerce, Episerver found that 92 percent of consumers don't intend to buy the first time they visit a website. A survey of over 1,100 consumers revealed consumers are initially doing research and looking for information when they visit a site and that there is a greater importance for the delivery of relevant and engaging content to support the entire purchase journey. The report also indicated all respondent demographics indicated an expectation of purchasing more online in 2017.

IDC report reveals privacy concerns

A study conducted by International Data Corp. found 84 percent of U.S. consumers are concerned about security of personally identifiable information (PII), and 70 percent indicate a greater concern today than previously. The study measured consumer privacy sentiments across four vertical industries (financial services, healthcare, retail, and government), also finding younger respondents are more concerned than older groups, and consumers are ready to make changes to protect PII.

ITRC, CyberScout report sharp breach increase

An Identity Theft Resource Center and CyberScout LLC report recorded the number of U.S. data breaches in 2016 increased 40 percent over 2015, an all-time high. The report details breaches in five industries. The business sector topped the list with 45.2 percent of total breaches reported; healthcare/medical was the next highest at 34.5 percent, followed by education at 9.0 percent, government/military at 6.6 percent, and banking/credit /financial at 4.8 percent.

Gen Z shopping habits studied by NRF, IBM

A study released by IBM and the National Retail Federation found nearly all members of generation Z (consumers aged 13 to 21) prefer to shop in brick-and-mortar stores. The Uniquely Gen Z study, conducted by the IBM Institute for Business Value, is based on findings from more than 15,000 consumers from 16 countries. According to the report, retailers need to create more interactive engagement around brands to serve the mobile-focused, high-spending, global gen Z population, set to reach 2.6 billion by 2020.

TD Bank issues retail executive poll results

TD Bank N.A. conducted a poll of retail industry executives, and a majority of respondents indicated they met 2016 goals and believe their sales will increase over the next 12 months. The study also found 43 percent of retailers highly value credit promotional finance programs, and 46 percent reported the gen X demographic is the segment with the most members seeking financing.

PARTNERSHIPS

ABS, Payment Data Systems form alliance

Applied Business Software Inc. partnered with Payment Data Systems Inc. to offer enhanced functionality for processing electronic payments via automated clearing house, and processing check or credit and debit card payments online. The solutions are available through The Mortgage Office, a collection tool that enables ABS users to process electronic payments from borrowers by phone or via ABS's subscription-based web portal, which is available 24/7, the companies stated.

BRP partners with QuickPivot

QuickPivot Corp. formed an alliance with Boston Retail Partners designed to combine QuickPivot's cross-channel campaign management platform with BRP's strategy, integration and implementation services to help retailers realize the benefits of faster, smarter marketing decisions, the partners said. "QuickPivot's marketing suite aligns well with BRP's vision for a complete, contemporary marketing hub designed for omnichannel retailers," said Walter Deacon, Principal and founder of BRP.

Chase, Intuit team up on data sharing

To enhance consumer data security, control and convenience, JPMorgan Chase & Co. and Intuit Inc. signed an agreement to share data between platforms. The companies said they will use technology that will allow customers to authorize Chase to electronically share financial data securely with Intuit's financial management applications, such as Mint, Turbo Tax Online and QuickBooks Online. Planned enhancements include open authentication. Both companies also plan to pursue similar agreements with other industry players, the partners stated.

Discover aligns with PayPal at POS

Discover Financial Services and PayPal Inc. signed an agreement providing PayPal access to Discover's tokenization services and enabling PayPal customers to pay with Discover cards when purchasing from contactless-enabled merchants who accept Discover cards. Discover cardholders will also be able to view and use their available cashback bonuses while using PayPal to pay for all or part of a purchase.

Ethoca, FICO partner on fraud

Ethoca Ltd. partnered with Fair Isaac Corp. to enable card issuers using the FICO Falcon Fraud Manager to connect to Ethoca's Global Collaboration Network to maximize recovery of card-not-present (CNP) fraud losses and prevent chargebacks. The partners said the joint solution enables issuers to evaluate and combat fraudulent CNP transactions through Ethoca's alert system that immediately distributes to more than 5,000 merchant customers globally, covering over 194,000 merchant descriptors.

FAPS aligns with DonorSnap

First American Payment Systems L.P. stated it partnered with DonorSnap to deliver a secure and robust payments solution integrated into DonorSnap's fundraising and donation software platform. The payments module in DonorSnap includes integrated credit, debit and automated clearing house (ACH) processing. The software also allows nonprofits to accept online and recurring donations, making it easy for customers to donate to the organization in a number of ways, the companies said.

OneView, IBM Watson integrate

OneView Commerce partnered with IBM and integrated its Inventory Management solution with IBM's Watson Commerce Insights. The integration is designed to provide retailers with real-time, actionable analytics about product performance, inventory availability, prices, and promotions across ecommerce and store channels. The integration allows retailers to interpret and act on changes in customer demand within a unified commerce experience, according to the companies.

Samsung partners with iQmetrix

Samsung Corp. rolled out an endless aisle project with iQmetrix that includes 200 retail locations. The project involves implementing self-serve endless aisle kiosks in third-party retail locations to open up a new channel for Samsung to showcase such premium product lines as Samsung Gear and connected home products. According to Samsung, the solution helps overcome the challenges of limited retail space, cost of inventory, rapidly changing product and brand message consistency.

Verifone teams with FIS on loyalty

Verifone and FIS collaborated to enable consumers to pay with loyalty points linked to their credit or debit cards at the POS. Verifone developed a new application called Verifone Points Redemption, which connects to the FIS Premium Payback Network to provide a secure, easy way for third party loyalty programs to participate; merchants are able to download the free app to their device and eligible cardholders swipe, dip or tap their card at a participating retailer to pay for purchases with points, according to the partners.

ACQUISITIONS

Clarus buys Anaraq assets

Clarus Merchant Services acquired the merchant processing assets of Anaraq Holdings LLC, a portfolio company of Altpoint Capital Partners. "As the electronic payment processing sector continues to evolve, we believe that a partner such as Clarus will bring the technology offerings, scale and geographic reach to efficiently continue to grow the Anaraq merchant portfolio assets," said Andrew Grapkowski, Partner and Managing Director at Altpoint and Chairman of the Board of Anaraq.

Clearent aquires PAI merchant services holdings

Clearent LLC entered into a definitive agreement to acquire Payment Alliance International's Merchant Services Division. Clearent said the acquisition will add a complementary telesales channel, strategic association partnerships, and $4.2 billion in processing volume to Clearent's portfolio. The combined entity will have more than 45,000 merchants and $14 billion in processing volume, the company added.

Net1 becomes Bank Frick stakeholder

Net1 UEPS Technologies Inc. agreed to acquire a 30 percent interest in Bank Frick & Co AG. Completion of the investment is subject to approval from the Liechtenstein Financial Market Authority. Following completion, Net1 will have a two-year option to acquire a further 35 percent interest in Bank Frick. "We have agreed with Bank Frick that approximately USD 30 million of its free equity will be utilized as seed capital for a fund dedicated to our future activities," said Serge Belamant, Chairman and CEO of Net1.

APPOINTMENTS

NRF elects HSNi's Grossman

The NRF elected HSN Inc. CEO Mindy Grossman as Chairman of the NRF Board of Directors, succeeding Kip Tindell, co-founder and Chairman of The Container Store. In addition, seven new members were elected to the board, and Neiman Marcus Group President and CEO Karen Katz was named Chair of the NRF Foundation. Grossman, who will serve a two-year-term, was elected as the board held its annual winter meeting in New York.

Finicity selects Laukka

Tim Laukka joined Finicity Inc. as the company's Chief Financial Officer. He has more than 25 years' comprehensive business and financial services experience. Most recently, he was CFO of Optum Bank Inc., which specializes in financial services for the healthcare industry. In his new role, Laukka will be responsible for managing human resources in addition to financial operations.

HMS promotes Lemos

Humboldt Merchant Services promoted Rhonda Lemos to General Manager. Lemos joined HMS in May 2016 as Director of Strategic Initiatives. In her new position, Lemos will continue to foster HMS growth and implementation of strategic initiatives. Her main focus will be on enhancements to the company's operational infrastructure and processes. Lemos brings more than 20 years of experience in the payments industry, the company said.

McHugh to lead TSYS Merchant Solutions

Total System Services Inc. named Philip McHugh as Senior Executive Vice President and President of Merchant Solutions, effective May 1, 2017. He will report directly to Pam Joseph, the company's President and Chief Operating Officer. McHugh comes to TSYS with more than 20 years of experience in international banking and payments. Most recently he served as CEO of Barclaycard Business Solutions.

Penebre new PointOS leader

PointOS appointed Dylan Penebre as its CEO. The company stated that in 2011, it brought Penebre on board due to his extensive POS-industry experience and payment processing background, and he subsequently revamped operations and increased annual revenue fivefold. Under Penebre's leadership, the company expects to continue to meet industry demand for EMV (Europay, Mastercard and Visa) technology, Payment Card Industry Data Security Standard-compliance, 24/7 support and subscription pricing options.

Thompson tapped by PaySimple

PaySimple hired Marc Thompson as its CFO. He will be responsible for supporting the company's growth initiatives, driving its capitalization strategy and overseeing the finance and accounting organizations. Thompson has over 25 years of investment banking, private equity, and operational experience. Most recently, he was Co-Head of Investment Banking at Oppenheimer & Co. Previously, he was a Managing Director at CIBC Capital Partners and served on several portfolio company boards, advising on acquisitions and debt financing, PaySimple noted.

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

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