The Green Sheet Online Edition
September 9, 2012 • 12:09:02
Industry Update
#h3 NEWS
ATM execs sentenced
Four ATM company executives were sentenced to prison by a Connecticut federal judge Sept. 4, 2012. The men pled guilty to conspiracy to commit bank fraud and admitted they used their business to steal over $4.8 million from Cranston, R.I.-based Domestic Bank (now Admirals Bank). The defendants were also ordered to repay the money.
According to court documents, Connecticut-based New England Cash Dispensing Systems Inc. contracted to supply ATM services to Domestic Bank in March 2000. NECDS placed the ATM machines with retailers and maintained them. All of the machines in the network were branded with the Domestic Bank logo, but Domestic Bank only supplied cash for some machines; NECDS and merchants supplied cash to other machines in the network.
The FBI said the scheme involved tricking Domestic Bank into supplying more cash for ATMs than was needed. The fraud, which took place over several years' time, was concealed by "floating" excess money appropriated from Domestic Bank (much like when checking account holders write checks before funds are actually in the accounts). When the companies underwent the "periodic replenishment process," it would appear to Domestic Bank that all of its cash was appropriately accounted for, according to the FBI.
NECDS Chief Executive Officer Joseph Sarlo was sentenced to 42 months in prison and four years of supervised release; General Manager John DeMilo received a sentence of 22 months in prison and four years supervised release; Mizra Baig was sentenced to 51 months in prison; and Gary Vestuti received a sentence of 27 months.
MasterCard extends EMV standard to ATMs
MasterCard Worldwide reported Sept. 10, 2012, it will expand its Europay/MasterCard/Visa (EMV) road map to include the ATM channel. The company said beginning in October 2016, a liability shift will occur for ATMs that have not integrated the EMV security standard into the transaction process. "The liability shift will apply to all MasterCard-branded products across all transactions initiated at U.S. ATMs," the company said.
The incorporation of EMV technology into ATMs is part of a global effort to stop fraud in channels not yet protected with the security protocol, according to Mike Weitzman, MasterCard Group Executive for U.S. Markets. "We're providing our issuers, acquirers and ISOs flexibility and sufficient time to manage their ATM technology decisions," he said.
Julie Conroy McNelley, Research Director with Aite Group LLC, said, "An upgrade of existing U.S. ATM systems is a necessary next step in the evolution of financial institutions' tactics to keep pace with fraudsters."
NACHA, Feds examine QR payments
Just as the Federal Reserve was warning consumers to exercise caution when scanning quick response (QR) codes, NACHA's Council for Electronic Billing and Payment reached the Sept. 19 deadline for feedback on its proposed guidelines to facilitate QR code use in consumer bill payments by establishing a single QR code format.
With the growing popularity of QR codes across a range of media, including newspapers, billboards and websites, "the very fact of their ubiquity is creating a big challenge for those agencies and individuals concerned with consumer fraud protection," wrote Cynthia Merritt, Assistant Director of the Retail Payments Risk Forum at the Federal Reserve Bank of Atlanta, on the forum's website. "The real problem with this large number of QR code scans is that consumers have no way to detect the presence of malware in the code before it is too late," she said, adding that it is "perhaps wise" for consumers not to scan QR codes.
Merritt advocates education and threat awareness by security professionals to mitigate risk. She also believes standardization in code development may provide safeguards against malware and offer consumers some assurance that a given QR code comes from a trusted source.
Merritt noted the ease of use with QR codes has driven the payments industry to deploy them in electronic bill payments and recommends visiting NACHA's website to view the industry standards proposal. The proposed guidelines are available at https://cebp.nacha.org/Qrcodes.
Cloud security collaboration
Companies heavily vested in cloud computing formed an alliance to develop best practices and standards for big data security and privacy. The Cloud Security Alliance and Fujitsu Laboratories of America are facilitating the CSA Big Data Working Group. It is being co-chaired by Sreeranga Rajan, Director of Software Systems Innovation at Fujitsu Laboratories of America, Neel Sundaresan, Senior Director & Head of Research Labs at eBay Inc., and Wilco Van Ginkel, Security Strategist for Verizon Enterprise Solutions.
Among the topics the committee will address are the impact of the velocity, volume, and variety of big data on security and privacy issues. Yasunori Kimura, President and Chief Executive Officer of Fujitsu Laboratories of America, called for more companies from around the world to join the research effort to identify scalable techniques for addressing big data security and privacy problems.
"Every day, 2.5 quintillion bytes of data are being created, resulting in a myriad number of data security and cloud-computing security concerns," Rajan stated. "By collaborating as a global community of thought leaders and researchers, we are not only looking to help the industry overcome these challenges, but also to leverage new opportunities for the monitoring and detection of security threats enabled by big data."
#h3 ANNOUNCEMENTS
CrossCheck expands to Phoenix
Check guarantee and electronic check processing service provider CrossCheck Inc. is opening a sales office in Scottsdale, Ariz., under the direction of Jason Lindell, CrossCheck Director of Sales, who will be responsible for recruitment and training in the new office.
NATSO rejects interchange settlement
The National Association of Truck Stop Operators, a trade association for the U.S. travel plaza and truck stop industry, said it will join Wal-Mart Stores Inc. and a prominent list of other national retailers and retail associations in rejecting the proposed settlement of the antitrust action brought against Visa Inc. and MasterCard over the card companies' interchange fees. (For more details on objections to the settlement, see "NRF will try to block settlement" on page 26 of this issue's News section.)
payvia processes for Obama campaign
Mobile and online payments provider payvia Inc. is the exclusive vendor for carrier billing political contributions for the Obama for America campaign. Donations made via short message service are then charged on users' mobile or online carrier bills.
SecurityMetrics' instant TIN check
Merchant data security and compliance provider SecurityMetrics Inc. released its On-the-Spot TIN Check tool for validating merchant Internal Revenue Service tax identification numbers to meet the agency's reporting requirements. SecurityMetrics said the tool is an affordable solution for its clients that don't have the resources to validate new merchants or changes in legacy accounts.
Alliance opens EMV forum
The SmartCard Alliance, a multi-industry association working for the adoption of smart card technology, opened membership in its EMV Migration Forum with hopes of attracting organizations unfamiliar with smart card technology. The forum will help organizations make the transition from mag stripe technology to the EMV standard and technology.
Central Payment makes Inc. 5000
TSYS Merchant Solutions LLC joint venture partner Central Payment Co. was named one of the fastest growing companies in the United States by Inc. Magazine. It marks the third consecutive year Central Payment has made the list.
VeriFone unveils SAIL developer portal, serves Boy Scouts
POS terminal manufacturer VeriFone Inc. launched a developer portal to give software application developers access to tools and application programming interfaces to facilitate integration with Verifone's SAIL, an open mobile payment platform.
Verifone said initial integrations include accounting platforms, offers and marketing providers, inventory management services and front-end POS platforms.
In addition, the Dan Beard Council of the Boy Scouts of America is using VeriFone's SAIL for its annual popcorn sale fundraiser. According to VeriFone, troop leaders can instantly sign up for merchant accounts and assign multiple users to run card transactions on Apple Inc. iOS and Google Inc. Android devices using a free SAIL card reader.
WePay online payment buttons
Online payment platform provider WePay introduced a series of payment buttons that will allow merchants to accept payments online without having to write their own code or redirect customers to other web pages. Pricing for processing payments is 2.9 percent plus 30 cents for credit cards, and 1 percent plus 30 cents for bank payments. Merchants can also elect to include "Add to cart," "Donate" and "Register" buttons.
#h3 PARTNERSHIPS
CO-OP, CUSN expand partnership
Credit union services provider CO-OP Financial Services is expanding its partnership with Credit Union Service Network LLC to deliver additional products and services, which include offering electronic funds transfer processing.
EMVCO, NFC Forum team on testing
EMVCO LLC, a group managing EMV integrated circuit card specifications for payments, and the NFC Forum, a nonprofit association of companies involved in mobile technology, collaborated to optimize development and testing of near field communication- (NFC) enabled devices. The joint research is expected to reduce products' time to market and decrease certification costs.
MoneyPass now in Wal-Mart
MoneyPass, a network of Elan Financial Services., teamed with Wal-Mart Stores Inc. to offer surcharge-free ATM access in more than 2,000 Wal-Mart stores through Wal-Mart's MoneyCenter Express ATMs.
Regal Payment, ICG partner on POS
Payment processor Regal Payment Systems LLC formed a partnership with retail and hospitality software solutions provider ICG Software to deliver the HioPOS Plus All-In-One POS System in the United States. HioPOS is a self-installable POS system manufactured under the partnership agreement, the companies stated.
#h3 ACQUISITIONS
Acculynk acquires PayLeap
Acculynk, manufacturer of the PaySecure PIN pad for securing online and mobile debit transactions, purchased e-commerce gateway provider PayLeap to form Acculynk Direct, an Internet PIN debit service for small and midsize merchants. Terms of the deal were not disclosed.
Bottomline purchases Albany Software
Cloud-based payment solutions company Bottomline Technologies Inc. acquired U.K.-based payment processor Albany Software Ltd. Bottomline reportedly paid $32 million for Albany Software.
Burroughs buys Absolute ATM
Check scanning technology firm Burroughs Inc. bought ATM equipment supplier Absolute ATM Services Inc. Absolute ATM Services will be integrated into Burroughs. Terms of the deal were not revealed.
MasterCard acquires Truaxis
MasterCard purchased Truaxis Inc., a credit/debit card-linked offers provider. MasterCard said the integration of the Truaxis platform with its network will deliver real-time offers and analytics to consumers and merchants. Terms of the deal were not released.
#h3 APPOINTMENTS
Barach joins Jumio
Payment technology developer Jumio Inc. hired Marc Barach as its Chief Marketing Officer. Barach was formerly CMO of Ingenio Inc., where he helped pioneer a multibillion-dollar advertising market with pay-per-call advertising technology, and he served as CEO of mobile apps developer Emotive Inc .
He brings over 20 years of marketing, leadership and operational experience in the technology and financial sectors to Jumio.
Bigcommerce appoints Boopathy
Bigcommerce Pty. Ltd. named Asok Boopathy to the position of Vice President of Product. Boopathy joins the e-commerce platform provider after serving as an executive at PayPal Inc., where he led the development of global multichannel, cross-channel and omni-channel retail strategies.
Clearent taps Hignight
Payment processor Clearent LLC appointed Jim Hignight to its ISO sales team as Vice President, Business Development, Independent Sales. Hignight will focus on developing partnerships with ISOs and agents across the country. Hignight comes to Clearent from TransFirst, where he served as Regional Vice President of Sales.
PayPal's Mahadevan to focus on Asia
PayPal appointed Rohan Mahadevan its new Vice President for Asia. Mahadevan was formerly PayPal's Vice President of Global Cross Border Trade and Vice President of Latin America. In his new role, he will be responsible for growing the company in Asian markets, especially in the e-commerce and m-commerce sectors.
Moss promoted by CCS
Merchant services provider Charge Card Systems Inc. promoted Adam Moss to Chief Operating Officer. He previously served as Vice President of Sales, National Sales Manager for CCS. In his new job Moss will manage sales and marketing, and oversee the growth of the company.
SCS signs Smith
ISO Signature Card Services hired Halima Smith to be its National Sales Coordinator. Smith was previously at Intuit Merchant Services. Smith will be responsible for leading post-sale maintenance and support for SCS partners. The company said it is also hiring additional sales directors and sales support personnel for its national sales team.
#h3 RETAIL BRIEFS
- The U.S. Census Bureau estimated U.S. retail e-commerce sales grew to $54.8 billion during the second quarter of 2012, an increase of 3.3 percent from the first quarter.
- BIGinsight reported consumers' big-ticket purchase intentions increased in August 2012 versus August 2011. The computer category rose from 14.4 to 19.2 percent of respondents; furniture, from 9.4 to 11.8 percent; and home appliances, from 6.5 to 9 percent.
- Research and Markets' Clothing Stores report projected the U.S. clothing stores industry of approximately 100,000 stores generates about $165 billion in annual revenue.
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