NEWS

Hot topic: Card data security

With bankcard account breaches occurring at several retailers in recent months, the topic of data security is front and center.

If frequent database breaches continue, Congress and state regulators "will put into policy things you cannot comply with," said Mike Quaranta, Chief of Staff for U.S. Rep. Michael N. Castle. Quaranta was speaking at a Visa U.S.A. Security Summit at Harvard University March 8.

"If industry doesn't solve these problems, the government is going to attempt to solve them," said Orson Swindle, Chair of Security Initiatives for the Center for Information Policy Leadership, Hunton & Williams.

Congress could "start regulating and over-regulating. It's going to take every single person in the chain: consumers, retailers and wholesalers. Anywhere data is used, stored or massaged, we've got to take care of it," Swindle added.

Information-sharing between corporate partners could be legislatively restricted, Quaranta said. "It's a confidence issue you don't want to lose.

"Ramp up all the good news, all the important things you're doing to protect people, so they understand that information-[sharing] helps them," he advised.

In a media briefing the following day on the cost of data security, the National Retail Federation criticized a movement to make retailers legally liable for bank costs when credit card data is exposed.

Liabilities among the parties in the bankcard payment "triangle" (issuing and acquiring banks, card Associations, merchants and processors) are already contractually defined.

"It is a private regulatory scheme," said Liz Oesterle of the NRF Government Relations Counsel. "Congress should not be involved in that process." Banks are pushing for legislation as a way to "go around their contract with Visa and MasterCard."

She said smaller banks and credit unions fail their obligation to perform real-time fraud monitoring on the cards they issue.

Large banks, rather than issuing new cards, closely monitor card accounts when informed the card data may have been lost; small banks "panic and close accounts, even if there is no fraud," she said.

StopCheckOutFees.com fights back

Americans for Consumer Education and Competition (ACEC) launched StopCheckOutFees.com, a Web site opposing a push by big retailers to impose checkout fees or surcharges on consumers who pay with plastic.

"Big retailers have spared no expense in their campaign for interchange fee regulation - which really amounts to a push for the ability to pass on the cost of electronic payment processing to consumers in the form of a checkout fee or surcharge," stated Rebecca Reid, Executive Director of ACEC.

"Consumers need to be aware of the movement afoot by merchants who [seek] price controls with no promises to pass the savings on to consumers. The end result is a threat to consumer choice."

The site urges consumers to oppose regulation. With retailers recently posting sales gains, and 70% of shoppers paying with bankcards, retailers are benefiting from consumers' preference for plastic, she added.

ANNOUNCEMENTS

BofA issues prepaid card for emergencies

Bank of America Corp. introduced Emergency Relief cards, a suite of prepaid card products to help corporations and government agencies prepare for catastrophic events.

The special-use cards may be incorporated into contingency plans for times of critical need. Following Hurricane Katrina, BofA provided 200,000 prepaid cards for victim relief.

ISO focuses on gaming industry

1st Federal Financial Inc., headed by Huntley Goldburg, has formed an ISO focused on financial and transactional services for the gaming industry.

Parent company 1st Global Financial Corp. broke into the processing industry in October 2006. 1st Global plans to add key ISOs throughout the United States.

EFunds to become EFD

EFunds Corp., which delivers enterprise payments solutions, will change its name to EFD. During a two-year transitional phase, the company will be known as EFD, eFunds Corp. Its brands include EFD ChexSystems, DebitBureau, DataNavigator, Connex and Prepaid Solutions.

IMS achieves 95% placement of high risk merchants

International Merchant Solutions, which caters to high-risk merchants, celebrated its second anniversary. The company consults with 18 banks, and reports achieving a 95% merchant account placement rate. IMS has signed 200 agents.

Broadband company revamps partner program

New Edge Networks revamped its partner program, offering its channel a direct voice, access to resources, training and incentives for selling high-speed broadband networks to businesses. The company also created an agent council with three members from each of its three operating regions.

Total Merchant Services changes compensation

Total Merchant Services made changes to its compensation plan. The company eliminated risk and BIN basis points; eliminated costs beyond interchange plus assessments for its sales partners; changed its production/conversion bonus payments from monthly to weekly payout; and reduced the approved merchants-per-month requirement from 10 to 5 deals a month for production bonuses.

Security solutions provider recertified

Solutionary Inc. was recertified by the Payment Card Industry (PCI) Security Standards Council as a qualified security assessor, including certification to perform Payment Application Best Practices assessments. Solutionary has been a certified assessor for over five years.

PARTNERSHIPS

1st Federal Financial to offer Charge Anywhere

1st Federal Financial sales representatives will now offer merchants Comstar Interactive's Charge Anywhere POS software for QuickBooks.

The software enables merchants using QuickBooks Pro, Premier or Enterprise Editions for 2005 to 2007 to process credit cards directly through the accounting software.

Chase Paymentech certifies Network Merchants

Network Merchants Inc., which provides transaction processing solutions exclusively to ISO and MSP partners, has been certified on Chase Paymentech Solutions LLC's Tampa platform.

The company is an Internet payment gateway compliant with PCI and Visa's Cardholder Information Security Program.

DTI and Internet provider partner

Direct Technology Innovations and Sky High Speed, a provider of high speed Internet access and wireless technology, have teamed to enable metro hot spots, caf€s and restaurants to perform secure, fast credit card processing.

Sky High Speed's Internet technology combined with DTI's Swipe N' Go program creates opportunities for small vendors.

EPR to process for Procesa USA

Euronet Payments & Remittance Inc. will be the exclusive processor for Procesa USA LLC's cross-border bill-pay transactions sent from the United States to Mexico. In addition to processing transactions for other U.S. companies, EPR will offer Procesa's services under the Veloz brand.

The agreement will enable American consumers to pay bills or top up mobile phones at Veloz's retail locations for family members in Mexico. Procesa is a subsidiary of Grupo Promass/Datalogic, reportedly the largest bill-pay provider in Mexico.

Econo Lube N' Tune accepts Fleet One

Econo Lube N' Tune & Brakes maintenance shops now accept the Fleet One Local card. The chain's 192 sites are now owned by Driven Brands Inc., formerly Meineke Holding. The latter company already contracts with Fleet One LLC to provide fuel cards for its 800 locations.

IADA teams with Global Payments Inc.

Global Payments Inc. will provide payment card and check services to car and truck dealers in the Illinois Automobile Dealers Association. The 1,000-member organization will refer dealers in need of payment processing to Global Payments.

Givex integrated into EZ Card Kiosk

Long Range Systems integrated Givex's gift card program into its EZ Card Kiosk. The kiosk gives merchants' customers the option of self-service and enhances Givex's exposure in the market.

7-Eleven stores add Visa ReadyLink

7-Eleven Inc. will introduce Visa U.S.A.'s ReadyLink prepaid load network to its U.S. convenience stores. The service will allow consumers to add funds to Visa reloadable prepaid cards at 7-Eleven stores.

ReadyLink enables Visa to meet the needs of consumers who lack credit cards and traditional banking relationships.

Pay By Touch teams with POS provider

Pay By Touch teamed with Opticard Payment Services to expand its payment systems.

Opticard's POS solutions, including wireless terminals and software for retailers and restaurants, will enable Pay By Touch resellers to offer a robust solution set.

QuikTrip issues Tempo debit card

Convenience retail chain QuikTrip Corp. will offer its customers a company-branded debit card from Tempo Payments Inc. The card can also be used at 200,000 other retail outlets that accept payments via Tempo, including Wal-Mart, Sam's Club and CVS.

ACQUISITIONS

FDC buys Datawire

First Data Corp. acquired Datawire Communication Networks Inc., which operates the VXN transaction delivery network. VXN connects to payment processors and integrates with many POS applications and devices to provide secure transaction transport across the Internet.

APPOINTMENTS

The Green Sheet Inc. promotes Converse

The Green Sheet Inc. has promoted Karen Converse to Vice President of Editorial. Converse will oversee the editorial content and production of all publications and spearhead new projects.

Dusek joins Fast Transact

Fast Transact Inc. appointed Dave Dusek as its Regional Sales Manager for the Pacific Northwest. With 13 years' outside sales experience, Dusek spent the past five at West Coast Merchant Services.

First Data hires Geppert, Narro

Michael Geppert returned to First Data as President, First Data Solutions. Geppert was Senior Vice President of the unit from 1991 to 1998.

Subsequently, he was President of VideoYellowPages-USA.com. Most recently, he was President of World Media Co. and Director of Marketing, Internet Publishing and Product Management.

Max Narro was named Senior Vice President, Product, Marketing and Industry for First Data Resources. He was most recently President of Credit Processing Services for Fiserv.

PAI hires Hamilton

Payment Alliance International named Dennis J. Hamilton Senior Vice President of the Partner Services Group. He will spearhead the company's expansion into the wholesale ISO business.

Most recently, Hamilton was Director of Business Development for Global Payments Inc.'s Third Party Acquiring Group.

Mattison joins Comstar

Reginald Mattison has joined Comstar Interactive as the Southeast Regional Sales Manager. Previously, he was Business Development Manager for eFunds.

Mattison has also worked at Cynergy Data, Cornerstone Payment Systems, Bank of America and Peachtree Bancard.

WRG hires Owens

WRG Services Inc. has named Sheri Owens its new Service Manager. Owens, formerly of U-Store-It, has experience in customer service, vendor management, project management, help desk and information technology.

Saunders to be Visa Inc. Chairman

Visa named Joseph W. Saunders Executive Chairman of Visa Inc.'s board of directors. He will lead Visa's transition to a global public company and help recruit a chief executive officer and new board members.

Initially, Saunders will be a designated appointee of Visa Inc. He will officially assume the title of Executive Chairman when Visa Inc. is formed later this year. Pending approval, Visa Inc. will be created through a series of mergers involving Visa Canada, Visa U.S.A. and Visa International.

Based in San Francisco, Saunders will report directly to Visa Inc.'s Transition Governance Committee, which has authority over the restructuring process and is comprised of representatives from all of the Visa regions, Inovant and Visa International.

MSNI names Vezinaw VP, Sales

Merchant Support Network Inc. named Charles N. Vezinaw Managing Director and Vice President of Sales. He brings eight years of experience, most recently at First Republic Bank.

BOTTOM LINES

• Effective net interchange income averaged 111 basis points (bps) for signature debit and 46 bps for PIN debit in 2006, according to a survey of issuers conducted by Dove Consulting for the PULSE EFT Association. Issuers report they have a better understanding of interchange on signature debit transactions compared to PIN debit. Fifty-six percent allow overdrafts on debit transactions.

• Of global leaders in payments and financial services surveyed by Edgar, Dunn & Co. and Mobile Payments World, 29% believe mobile payments could happen within two to five years, an increase of 12% over 2006. Seventy percent believe merchant adoption will drive acceptance.

• Shipments of PC-based POS systems grew 8% in 2006, according to IHL Consulting Group's 2007 North American Retail POS Terminal Study, which only looked at PC systems. New specialty retailers and restaurants, as well as grocery stores upgrading to touch screen interfaces, drove sales.