Is There a PayPal Killer in the House...Home...HomeATM?

Late last week, in a post entitled: Consumers Safer When Left to Their Own Devices, I talked about the simplicity, security and safety of HomeATM's ePayment Solution.

Simply put, HomeATM Provides Online Shoppers With the Ability to Swipe and Process Their Own Credit/Debit Cards, with Their Own Point of Sale (POS) Device Within the Friendly Confines of Their Own Home. My point is this: When online shopping, the "Point" Of Sale is where the consumer is...at home. Therefore, that's where the "SwipePIN" device should be. No home should be without one if they intend to shop and buy online.

Assuming an online shopper desires (and they do) a secure transaction, then typing in their Personal Account Numbers (PAN) is not a good idea...period. Consumers wouldn't write down their account numbers when going to a bricks and mortal retail store, so why do we think it prudent to do it when visiting a virtual one online?

In recent past, we would "hand over" our credit and debit cards, but those days are over as now, those very same cards don't leave our hands. "We swipe our cards ourselves." The reasons for doing so are fraud/security related, so, if consumers want a more secure online transaction, then why wouldn't they do the same thing online? Fact is, they would.

Once a consumer is armed with a personal swiping device which never leaves the safety of their home they've protected themselves against keylogging, screen-scraping, wardriving, skimming and myriad other methods used by hackers to intercept online transactions. PIN Debit, (Swipe and Enter PIN) is the most secure way to purchase online, which is why it offers internet retailers the lowest possible Interchange Rate available. Oh, and did I mention that HomeATM offers about the easiest way in the world to securely send money to anyone anywhere in the world?

Here's an article from BusinessWeek talking about alternative payment methods, and which one might be a "PayPal Killer." The suggestions provided for alternative payments companies have all been met or exceeded by HomeATM's Swipe at Home Solution.

Despite the acceptance of credit cards and services like PayPal, the issue of getting money from one person to another online still offers opportunities for innovation.

Venture firms are continuing to fund startups that hope to offer better ways to pay online, while the growth of Software as a Service (SaaS) in the enterprise has led to a need for new tools in corporate billing management. Further out, buying items over a mobile phone presents a multibillion-dollar opportunity—if someone can make it easy.

Despite the early-mover advantage PayPal has, and the presence of rival offerings from Internet giant Google (GOOG), there are plenty of retailers who only accept credit cards for online purchases. That eliminates their ability to sell to those without credit and those concerned with security online.

There are a few ways rival online payment services can find success against PayPal, wrote Jim Friedland, an analyst at Cowan & Co. earlier this week, citing a few examples: providing a neutral independent platform (PayPal is owned by Web retailer eBay (EBAY)), extending credit to shoppers, and offering lower transaction fees.

Editor's Note: So the few ways rival payment services can find success against PayPal would be to:
  • Create the ability to sell to those without credit cards
  • Provide a more secure transaction
  • Offer lower transaction fees
  • Make it easy.
HomeATM covers all four bases at once:

Those without credit cards have an ATM card or debit card, so credit isn't necessarily needed. Swiping the card provides a highly secure transaction, (covered) and entering the PIN provides dual authentication, which is why Card Present PIN Authenticated transaction fees are significantly lower than the more risky Card Not Present (CNP) rates, (covered) and HomeATM does it with the same methodology consumers are accustomed to utilizing at a retail location...by swiping their card into a POS device. Easy as 1-2-3-4. The article continues...

And startups are still searching for other opportunities online. Just last week online bill pay startup eBillMe raised $12 million from Canaan Partners and New Celtic Ventures. The company offers vendors an alternative to credit cards by allowing shoppers to receive a bill at their online banking portal. This allows shoppers to avoid putting their personal information on the merchant's site and allows for a cash, rather than credit, transaction.

Mobile Payments to Climb

But online sales are no longer limited to the PC. U.S. consumers are starting to use their mobile phones to make purchases, and this could be a growing market in the years to come. But there are challenges ahead. Bigger players such as PayPal and credit-card companies already offer mobile-payment products, and the current U.S. market for mobile-pay services is still small.

Only 1.5 percent of U.S. consumers have ever used their mobile phones to make a payment, but almost 50 percent are aware that they can do so, according to a survey released this week. The research, commissioned by financial firm Mercatus, predicts that with better services and customer education the percentage of people who will make payments from their mobile phones is likely to grow in five years to 15 percent among those age 18 to 30.The growing use of smartphones and shopping sites optimized for mobiles require payment options that are easier than keying in a 16-digit credit-card number. Startups such as angel-backed Billing Revolution and Zong, which launched earlier this month after raising more than $12 million in venture capital, are tackling the problem of buying on your mobile phone. Zong sends purchase information to carriers, which then bill subscribers for their purchases, while Billing Revolution offers a mobile credit-card processing platform. In April, Obopay scored $20 million for its money-transfer-via-mobile efforts.

Enterprise Customers Are an Opportunity

While the opportunity in mobile is still just cresting the horizon, enterprise customers provide an immediate opportunity for startups seeking to streamline transactions. In March, two startups offering an online billing platform for companies delivering SaaS products raised money. Zuora brought in $6.5 million in first-round funding led by Benchmark Capital for its platform. Rival Vindicia announced a $5.6 million round led by DCM and Leader Ventures.

These companies aim to make it easier for SaaS vendors to track and bill all of their customers. They also help customers track and manage multiple software services they might be buying—a task akin to managing household bills from tens or even hundreds of service providers. Tim McAdam, a general partner with Trinity Ventures, says these sorts of billing platforms and ways to track payments still represent a big category and no one has mastered it yet.

With everyone searching for ways to make money online that don't revolve around advertising, offering seamless but secure online payments will go a long way in enabling alternative business models.

Provided by GigaOm


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Posted by John B. Frank Monday, September 29, 2008 0 comments

Cisco Survey: Consumers Trust Online Payment Providers More Than Traditional Banks

Cisco's Internet Business Solutions Group has announced results of a survey finding that "important consumer segments such as baby boomers trust online payment providers more than they trust traditional banks."

"Consumers are demanding the same convenience they receive online when shopping in a brick-and-mortar environment. This dramatic shift in consumer expectations presents a considerable market opportunity for financial institutions that embrace connected commerce. The average incremental value of connected commerce for the top 20 U.S. banks is estimated to reach more than $100 million yearly by 2015.

In an effort to help clients stay competitive and increase their profitability, Cisco IBSG, the company's global strategic consulting arm, surveyed more than 1,500 consumers to better understand how their behaviors and perceptions shape the evolving commerce landscape of shopping and payments. By monitoring what innovative companies are doing to attract and retain customers in retail and related industries, Cisco IBSG helps financial institutions take advantage of leading, innovative practices to remain relevant.

The research reveals that evolving customer preferences among all age groups represent both a challenge and an opportunity for financial institutions. As consumers increasingly use the Internet and mobile devices to make purchases and payments, banks are subject to both customer attrition and revenue loss. The research also shows, however, that banks can reverse this trend and use their connections to merchant and consumer payment data to create new revenue models from advertising, cross-selling and value-added services surrounding points of sale"

"Retail financial institutions are uniquely poised to enable the next evolution of connected commerce," said Jim Greene, vice president and global head of financial services, Cisco IBSG. "The profound shift in consumer shopping preferences, coupled with the pervasiveness of the network, presents a tremendous opportunity for financial institutions to evolve from simply being a provider of the payment element of a purchase, to being a uniting factor among consumers, merchants, advertisers, product manufacturers and payment providers."

Consumers Prefer the Online Channel

Historically, the online shopping experience was designed to imitate the brick-and-mortar experience. The Cisco IBSG survey results show that now, coming full circle, the brick-and-mortar experience must resemble the online channel to meet the shifting expectations of consumers.



The survey suggests that the physical-store experience is increasingly falling short of consumer expectations:


  • 50 percent say the checkout process takes too long
  • 48 percent say items aren't in stock
  • 46 percent say they can't find the items they want
  • 22 percent say they don't always have applicable coupons or offers with them
  • 20 percent say it is hard or time-consuming to keep track of receipts

    As consumers' expectations rise, merchants, advertising agencies and new financial services entrants are all trying to capture consumer attention at the point of purchase and, in some cases, to disintermediate traditional payment players. The threat to existing banks is evident: 87 percent of those who use the services of alternate payment providers (such as PayPal and Obopay) indicated a strong interest in using mobile Short Message Service (SMS) or a similar method to initiate payments in physical stores. The PELORUS Group estimates that by 2010, payments made via emerging methods such as radio frequency identification (RFID), SMS, and biometrics are expected to grow to $400 billion. In addition, 23 percent of all survey respondents expressed interest in using a mobile device to make contactless payments in physical stores, and that number is only expected to grow. Two-thirds of current mobile banking users expressed interest in "swiping" a device embedded with a chip at the point of sale.

    "Consumers not only recognize the conveniences enabled by the Internet but now also require the totality of their shopping experiences to afford those same benefits," said Greene. "Given their current interaction with both consumers and merchants, banks are in a unique position to provide these 'connected' propositions and the insight that leads us into 21st-century commerce."

    How Financial Institutions Can Compete

    Through the study and its proven success working with 80 of the 100 largest global financial services organizations, Cisco IBSG identified the consumer segments with the highest likelihood of engaging with banks for connected commerce services. The survey also identified the most important ways in which financial institutions need to change their interactions with consumers in order to remain relevant in today's market. To increase their competitiveness, banks must:
  • Provide superior commercial services with greater transparency, security, speed and flexibility
  • Use their relationships with, and access to, both merchants and consumers to provide new revenue sources to the merchants and value-added services to consumers
  • Help consumers make sense of their spending patterns and provide guidance and recommendations
  • In collaboration with the merchant, provide advertisers and product manufacturers with access to consumers at or near the point of sale so that the advertisers and manufacturers can offer real-time, targeted promotions gleaned from the customers' profiles, transactions and behavior analytics
  • Manage loyalty programs to lower the cost of running these programs for merchants and to improve the ease of use and benefit accumulation for consumers
  • Build a subscriber-referral model for merchants to bid for customer attention
  • Provide customized payment terms or offer "matching" terms at the point of purchase

    "In this changing landscape, banks must continually evaluate their long-term competitive position to take advantage of new opportunities and mitigate threats presented by the connected consumer at point of sale," said George Tubin, senior research director, Tower Group.

For more information on the Cisco IBSG retail financial services survey, please visit http://www.cisco.com/go/ibsg/financialservices.

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PCI SSI Community Meeting in Orlando

A 1976 ad promoting the change of name to VISA...Image via Wikipedia

The Green Sheet 2.0 :: Newswire
PCI SSC meeting attendees help guide payments' future

The PCI Security Standards Council (PCI SSC), a global, open industry standards body providing management of the Payment Card Industry Data Security Standard (PCI DSS), PIN Entry Device (PED) Security Requirements and the Payment Application Data Security Standard (PA-DSS), today announced that more than 550 attendees from over 325 organizations met at the Council’s second annual Community Meeting, in Orlando, Florida, to provide input and analysis of the newly released 1.2 version of the PCI DSS and other payment card security standards. This represents a 71 percent increase in attendance from 2007. The highly anticipated event, held from Sept. 23-25, welcomed the Council’s participating organizations and assessment community contributors.

The Council also is pleased to announce that in addition to its rapidly growing assessment community members, there are more than 500 participating organizations from around the world that actively contribute to the standards setting process, up from approximately 240 in 2007. Participating organizations provide the backbone of feedback and support for the PCI security standards and cross a wide spectrum of industries and locations. Participating organizations are the only group in the Council that receive early versions of draft standards and documentation, provide feedback and direction on the PCI standards, and receive regular communications and opportunities to work with the Council on cardholder data security. The list of current participating organizations can be found at https://www.pcisecuritystandards.org/participation/member_list.html .

Topics discussed at the Orlando meeting included the release of the PCI DSS version 1.2, updates to the PA-DSS and PED Security Requirements, special interest group reports on wireless and payment card pre-authorization security, the introduction of a quality assurance program for the QSA community along with keynote addresses from the Department of Justice and Forrester Research. These interactive sessions gave participants key information as they continue with their PCI standards implementation.

Because of the dramatic increase in participation in the Council, this year’s community meeting in Orlando will be followed up with a second community meeting in Brussels, Belgium, October 21-23, 2008. This second meeting will enable participating organizations and the PCI assessment community to engage with the Council at an additional venue. More than 120 delegates have already registered for this additional meeting.

In addition to the more than 500 participating organizations, the Council has 147 approved scanning vendor (ASV) companies and 164 qualified security assessor (QSA) companies that help ensure continued compliance with the PCI DSS. The Council also approves payment application QSAs (PA QSAs) as part of the PA-DSS program. Together, the assessment community and participating organizations, at the community meeting and throughout the year help define and evolve the security standards to protect payment cardholder account data.

“As we meet at our community meetings it is especially important that the Council reflects the broadest spectrum of payments system players,” said Bob Russo, general manager, PCI Security Standards Council. “The tremendous and rapid growth of our participating organization program and assessment ecosystem, as well as the increased attendance at our community meetings, is a testament to the payment industry’s commitment to protecting cardholder data while ensuring that the standards we manage truly reflect global industry desires and needs.”

For More Information:

More information on the PCI Security Standards Council and becoming a participating organization please visit www.pcisecuritystandards.org , or contact the PCI Security Standards Council at www.participation@pcisecuritystandards.org .

About the PCI Security Standards Council

The mission of the PCI Security Standards Council is to enhance payment account security by driving education and awareness of the PCI Data Security Standard and other standards that increase payment data security. The PCI Security Standards Council was formed by the major payment card brands American Express, Discover Financial Services, JCB International, MasterCard Worldwide and Visa Inc. to provide a transparent forum in which all stakeholders can provide input into the ongoing development, enhancement and dissemination of the PCI Data Security Standard (DSS), PIN Entry Device (PED) Security Requirements and the Payment Application Data Security Standard (PA-DSS). Merchants, banks, processors and other vendors are encouraged to join as Participating Organizations.

Source: Company press release.
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Consumers Safer When Left To Their Own Devices

The U.S. Census Bureau reports that U.S. retail eCommerce sales for the second quarter of 2008 totaled $34.6 billion (U.S.), an increase of more than 9% over the same period in 2007, while total retail sales increased by only 2.5%. Statistics Canada reports that, “Online sales increased at a double-digit pace for the sixth consecutive year in 2007. Total private and public sector Internet sales hit an estimated $62.7 billion, up 26% from 2006.”

While these figures still represent a relatively small percentage of the retail market, the numbers are staggering. eCommerce is big business.

But there's a problem inherent within the system.

Credit and debit cards, the primary payment system for online transactions, are really designed to be used face-to-face. In electronic purchasing there are too few ways for the merchant to be certain the credit card is being used by its owner, and no way for the purchaser to be sure their private information will not be disclosed by the merchant to a third party.

One obvious solution would be personal devices, such as the ones provided by HomeATM.

Consumers would swipe their own card - in their own home...and verify the transaction with a PIN. This solution provides double authentication to the merchant, and to V/MC, making it a more secure transaction.

Two more important things happen with a personal swiper.

The fact that the consumer "swiped" their own card transformed what would've been a "Card Not Present" or CNP transaction, into a "Card Present" or CP transaction. CP Transactions have a signficantly lower Interchange rate.

Secondly, after they entered their PIN, what would have been a CP transaction further evolves into a CP with PIN authentication transaction, further reducing the Interchange fees, because it further secures the transaction.

Obviously, by not having to type your personal account number into a box provided by the merchant, you eliminate the potential for screen scraping, keylogging, or other methods used by hackers.

Another big benefit that lies within this scenario is that because consumers are inserting their own personal cards into their own personal device vs. a computer or merchant key pad – the vendor would never have access to the customer’s PIN. This would further protect the customer in the event a merchant's e-commerce website data is breached.

Obviously, there would be no effect and it wouldn't affect consumer's who utilized HomeATM's personal swiping device...because their data wouldn't be there to be hacked in the first place.

Thus, when consumers are left to their own devices, it's a win-win situation for all involved.

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Posted by John B. Frank Friday, September 26, 2008 0 comments

Neiman Marcus Growth Driven by e-Commerce

It was clearly the web and e-commerce that drove sales growth at The Neiman Marcus Group Inc. for the 2008 fiscal year.

For the year, Neiman Marcus, grew web sales by 13.1% to $564.5 million from e-commerce sales of $499 million in fiscal 2007. In comparison, total revenue increased by 4.8% from $4.39 billion in fiscal 2007 to $4.6 billion in FY 2008. Store sales rose year-over-year by 4.9% to $3.85 billion from $3.67 billion. Neiman Marcus posted operating earnings of $466.4 million from operating earnings of $476.8 million in fiscal 2007.

Overall the web accounted for 12% of total revenue, but generated 62% of growth across all channels, including stores, catalog and the Internet.

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Canadian Retailers Getting Riled by Interchange

Last week (Use a PIN to "Stop Sticking It to Us") I blogged about the Retail Council of Canada's new campaign against high interchange fees. In it, I mentioned that if all these organizations made the same effort to have their customers use PIN Debit, they would stop sticking it to themselves.

Apparently, the Retailer Council of Canada sure has the backing of Canada's major Retail Association's behind them.

I could see the very same transpiring on the Internet Retailing front. 100% of the Top 500 Internet Retailers would: increase the security of their transactions and save millions annually on the significantly reduced Interchange Fees, reduced because of the security of a PIN-based transaction.

Maybe call it "Start Sticking It To Us - With a PIN"

Here's more on the coalition from Canada.com:


Credit card companies pulling in record profits while retailers suffer - Mark Anderson, Canwest News Service
A shop-owner forwarded an e-mail from the Retail Council of Canada the other day. It appears the council, which represents some 40,000 storefronts across Canada, is attempting to organize opposition to ongoing increases in credit-card fees, the "interchange fees" card companies charge retailers for the right to conduct business though Visa, MasterCard, American Express or any other credit cards.

As it stands, Canadian retailers fork over about two per cent of the cost of any credit card transactions to card companies: if a customer purchases a lamp from a furniture store for $100, $2 goes to the card company; if the customer purchases a bedroom set for $10,000, $200 goes to the credit card company, and so on.

The retail council says interchange fees already amount to $4.5 billion annually and have been escalating of late with the introduction of "premium" cards that provide lavish awards points to card users, the catch being that the cards come with higher interchange fees, which means retailers and ultimately consumers end up paying for those incentive programs.

On top of that, the card companies charge retailers fees to rent the credit card processing equipment and software necessary to conduct card-based transactions, as well as a variety of additional fees, to the degree that one retailer told me he ends up shipping about one per cent of his annual $6-million in revenue directly to Visa, MasterCard and the like.

Fine, you might say, the cost of doing business. Except the retail council argues that Canadian interchange fees are already among the highest in the industrialized world; Canada is one of the only jurisdictions that doesn't regulate interchange fees; the fees should be charged on a flat fee basis not as a percentage of the total sale cost; and the fees are being increased in an arbitrary and non-transparent way. (My retail contact, who doesn't want to be named for fear of reprisals from card companies, says extra charges related to the issuance of premium cards came "out of the blue" and raised his average Visa interchange fees from about 1.7 per cent to 2.3 per cent).

The most important point is that as their margins get squeezed by interchange fees, retailers have no choice but to pass the costs on to consumers in the form of higher prices for goods and services, leaving less money in the hands of everyone except the card companies.

Profit at Visa Inc., for example, rose 28 per cent to $314 million US in its most recent quarter. Few retailers can boast that kind of quarterly performance in an economic down-cycle.

Rubbing salt in the wound is the fact that Visa has set aside $3 billion from the record $18 billion US it raised when it went public in March in order to settle potential lawsuits stemming from allegations the company conspired to stifle competition and fix prices.

So the Retail Council of Canada has joined with the Canadian Booksellers Association, the Canadian Convenience Stores Association, the Canadian Federation of Independent Grocers, the Hotel Association of Canada, the Canadian Independent Petroleum Marketers Association and others -- more than a dozen organizations representing more than 120,000 businesses -- to say enough's enough.

They call themselves, not unreasonably, the StopStickingItToUs Coalition, and they've vowed to make escalating interchange fees an election issue by encouraging consumers to sign petitions and retailers to contact their members of Parliament and demand that party leaders and candidates take a stand on the issue.



What if, I asked my retail contact, you all just stopped accepting credit cards? "We couldn't do that," he said. "Interchange fees are still better than bounced cheques."

What if you stopped accepting credit cards for a day? All 120,000 of you. And advertised widely in advance, apologizing to customers for the inconvenience and explaining the boycott's being done for their benefit and the benefit of the Canadian economy at large?

"That," he said after a moment, "could be very interesting indeed."

© The Vancouver Sun 2008
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Posted by John B. Frank Wednesday, September 24, 2008 0 comments

Internet Retailer Releases 2009 Guide to E-Commerce

Research On E-Commerce Vendors
From the Authority in E-Retailing

Buying E-Commerce Technology in 2009? Buy This First!

Guide Next year will be very competitive in e-retailing. Who isn’t trying to expand their share of this market—the only growth segment in all of retailing. But as online merchants look to be more competitive in 2009, they are going to employ more robust e-commerce solutions and services to capitalize on the spectacular growth of online retailing. Trouble is, there are now more than 700 e-commerce solutions vendors and service providers. How do you pick the right ones for you that make the most of your investment? It is a difficult and high-stakes proposition.

Now there’s a way to vastly simplify and empower your search for e-retailing technology and services—our just published 2009 Edition of the Guide to E-Commerce Technology, a 368-page directory from Internet Retailer, e-retailing’s leading information provider. Priced at only $59 plus shipping, this all-new Guide provides valuable independent research on e-retailing solutions providers you will not find anywhere else—the results of six-month's journalistic study of all segments of the e-commerce technology market. In this comprehensive report, you will find completely updated details and all new staff-written profiles of 700 providers of e-commerce technology and services organized into 22 market segments. Vendors

These are not paid listings provided by e-commerce vendors but rather independently researched profiles of the leading e-commerce vendors. Each vendor profile includes the following new and updated information: Guide

Strategic Analysis of Their Business
 Description of Products/Services
 Primary Technology Category
 Key Management Contacts
 Date Established

List of Major Retail Clients
 Typical Pricing of Products/Services
 Key Features and Functions
 Corporate Information
 URL

In addition to this key information on all 700 e-commerce vendors, the Guide to E-Commerce Technology includes the following up-to-the-minute analysis and data on the e-commerce product and services market:

Check Comprehensive overview of the current and future state of web retailing technology and the strategies top e-retailers are using to improve their return on technology investment.

Check Five all-new feature articles by top consultants on how to select technology providers and applications that are right for you, choose between on-demand or off-the-shelf applications, develop and manage a growing e-commerce technology infrastructure, and use customer feedback to implement new technology effectively.

Check Focused analysis on key emerging technologies such as video, advanced personalization and mobile commerce.

Check An exclusive survey of e-retailer plans for e-commerce technology spending in 2009 and beyond

Check Contact data on 1,800 top executives at America’s most prestigious e-commerce solutions companies—all organized by company into an easy-to-read guide

Check Details on more than 30 e-commerce technology reports by key research firms

Check Synopses of 100 books on e-retailing strategy and technology.

Even if you purchased the 2007 edition of this Guide, the completely updated and new information contained in the 2009 Edition Guide to E-Commerce Technology makes it an essential research tool for e-retailers looking to be more competitive in 2009 and beyond.

How to Order: All this research on e-commerce vendors is available in one 368-page volume for only $59 plus shipping. Supplies of the Guide to E-Commerce Technology are limited but can be ordered online now.


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Posted by John B. Frank Tuesday, September 23, 2008 0 comments

USA most Hacktive - China Second

Study: Vast number of cyber attacks 'Made in the USA' • The Register
By Dan Goodin in San Francisco
Posted in Security, 23rd September 2008 03:48 GMT

When it comes to cybercrime, Eastern Europe, China, and Brazil may get the lion's share of press attention, but a new study shows a vast proportion of attacks come from computers in the United States.

Security firm SecureWorks has counted 20.6 million attacks against its customers that originated inside US borders so far this year. China ranked No. 2 on the list with 7.7 million, and Brazil and South Korea came in third and fourth, with 166,987 and 162,298 respectively. The study, which was released Monday, is a strong indication that there's no shortage of compromised computers on US soil.

The findings have important implications for organizations trying to fend off denial-of-service attacks and other net-based assaults. Namely, that they need to be aware of the threat that US-based machines pose. In August, after Russia invaded the Republic of Georgia, many Georgian IT staff members sought to secure their networks by blocking Russian IP addresses. They ended up getting clobbered anyway because they failed to block hostile computers from Turkey and the US, said Don Jackson, SecureWorks's director of threat intelligence.

Whereas many of the compromised machines in the US are under the control of people outside of the country, that is not generally the case in China. Entire university networks in that country remain under the control of hackers there, often with the help of insiders. Miscreants in Japan and Poland use much the same approach.

In related news, Chinese hacktivists have begun defacing the websites of several companies involved in the distribution of tainted milk. According to this post on the Dark Visitor blog, targets include the Sanlu Milk Company and the Mongolian Milk Corporation.

"When an infant with kidney stones lies weeping in a hospital bed, can the factory owners intuitively sense the condemnation?" one defacement reads. "In order to gain profit you have gone so far as to devastate these young lives!"

The defacements are designed to protest the shipping of baby formula containing melamine, a toxic chemical used illegally to make the milk appear it has more protein - and hoodwink food testing agencies. ®
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Worlds Fastest Internet Belongs Seouly to S. Korea

Web boom in English-obsessed Korea on Yahoo! News
By Park Ju-minMon

Armed with the world's fastest Internet and an even stronger desire to learn English, South Koreans are using the latest Web resources to master a language that is the economic and emotional focus of their education.

On any given day, students ranging from kids learning their alphabet to adults preparing for job interviews sign in on their Internet messengers, fire up their webcams and wait for English teachers to appear -- from faraway continents.

They hope one-on-one chats with foreigners will help them fix pronunciation, get rid of native accents and feel more comfortable with a foreign language. The country's official teaching methods, based on grammar exercises and vocabulary lists, have consistently failed to deliver such benefits.

South Korea's average score in the Test of English as a Foreign Language (TOEFL) is below the world average despite having the largest number of students taking the test.

"It is really nice to look at my English teacher through the computer screen and feel like having a chat with a new friend outside the country," said Oh Sun-young, who takes a Web-camera English course on Skype with her Philippine instructor.

Web English is the latest hit in South Korea's booming English education market, enabled by handy gadgets and widespread fiber-optics networks.

The new service, along with more traditional conversation courses offered by phone, is one of the fastest growing segments in South Korea's private English education industry, which is estimated at 15 trillion won ($13 billion) a year -- almost half of the country's annual education budget.

About 150 to 200 companies are in the market offering phone and Web English tutoring.

"Students who are very inexperienced with English may initially find the classes challenging, but within three months, there is a tremendous improvement in most of the students' speaking ability," said Tara McKibben, a phone English tutor who has been teaching over seven years from the United States.

KT Corp, South Korea's dominant fixed-line and broadband operator, provides a service called "Hello ET" cooperating with a South Korean English education company.

"We provide Web-cameras to our videophone English customers so that they can log on the website and have live chat with instructors," said Kang Joo-hyun, a "Hello ET" spokeswoman.

One-on-one conversation in English is technically close to real-live talk, held in Web phone service such as Skype. A message board opens adjacent to the conversation browser, so that participants can check the spelling of a word or start writing if they struggle to understand each other.

Internet portal SK Communications runs "Spicus" which includes a job interview drill on a video-chat platform. Applicants hand out their completed English resume before the drill. An interviewer stages a simulation interview through webcam, looking through resumes, and later provides feedback on logical speaking and communication skills.

"Interviewers are former officials in human resources department of big U.S. (companies) such as IBM," Ryu Hee-jo, a spokeswoman for SK Communications, said.

CHEAP AND CREDIBLE

Good English test scores and speaking skills are considered an indispensable key for success in South Korea. In their quest for fluent English, a great deal of wealthy South Koreans simply flee their country's school system and its rigid teaching methods.

South Korea ranks No. 1 in the number of international students in the United States, ahead of more populous India and China, according to U.S. Student and Exchange Visitor Information System.

However, for those who cannot afford thousands of dollars a month in learning English abroad or spare time for look for meeting arrangements, video chat at home fulfills their aspiration at much cheaper prices. A three-times-a-week Web English course can be covered for about 100,000 won a month.

($1=1151.0 Won)

(Editing by Rhee So-eui and Derek Caney)
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