PIN Your Credit Card Starting June 4th in AU

I came across an interesting article this morning. The reason I found it interesting was how it relates to a specific HomeATM Technology called PIN My Card,. PIN My Card would allow online consumers to attach a PIN number to a credit card or PIN-less debit card and thus formulate the basis for Internet Retailers to be able to process these transactions at a lower "card present" rates.

Here's the release.

Click the graphic on the left to enlarge and read the entire press release.

Australian credit card customers will soon have the option of signing their name or keying in a PIN when shopping.

Pen or PIN project spokesman Simon Greig said the change would make it faster to make a purchase with a credit or charge card.

"Australians are among the most prolific card users in the world, making more than 118 million card transactions per month,'' Mr Greig said. "The introduction of PIN on credit and debit cards will give cardholders a quick and easy alternative to signature authorisation when making purchases in person.''

The change is set to occur on June 4 and will be available to all American Express, Diners Club, MasterCard and Visa customers, at more than 600,000 point of sale terminals across the country.

The introduction of credit card PIN will bring Australia in line with several other countries, including New Zealand, who have been using the system for several years.

More information: www.penorpin.com.au

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Posted by John B. Frank Monday, May 5, 2008 0 comments

Towering Debit Card Growth

Tighter financial markets, new waves of bankruptcies and foreclosures, and economic uncertainty have caused a constriction in the availability of credit. Yet despite current challenges in the credit markets, new research from TowerGroup finds that the debit card’s increasingly dominant position as a payment vehicle will continue through 2009 and beyond. Prepaid cards will also continue their rapid growth as a result of foreclosures affecting credit scores and consumers continuing to require the benefits of payment card access.

Transactions for debit cards in the United States surged three times faster than those for credit cards from 2005 to 2007, as consumers separated purchases into “lending” versus “spending” products.

Debit cards have absorbed a growing share of consumable purchases – such as gasoline, groceries, and other day-to-day consumer expenses – leaving the credit card for durable goods purchases.

As consumers and businesses work their way out of a sluggish economy, TowerGroup projects the weakened economy will continue to erode the rate of credit card transaction growth. Although personal savings rates in the U.S. fell to record lows in 2004, debit card volume continued to grow both steady and aggressively. Even as consumers tightened their budgets or were unable to save discretionary cash, their reliance on payment cards for business transactions is visible.

TowerGroup believes the debit market is primed for growth from channels and relationships beyond the confines of traditional retail banking products. There are several emerging and high-growth debit markets that should carry substantial transaction volume and value as they come to fruition. These include person-to-person payments via the emergence of mobile and “contactless” transactions, micropayments covering low-value transactions, and pre-loaded debit products aimed at the teenage and college markets.

The research report, titled “Crediting Debit: How Debit Cards Will Grow in a Changing Environment,” is authored by Brian Riley, senior analyst in the TowerGroup Bank Cards practice. The report explores why debit cards will continue strong transaction growth regardless of a downturn in the economic climate and its uncertain impact on aggressive credit card lending.

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Posted by John B. Frank 0 comments

The Rise of Alternative Payments - Mercator Study

The rise of alternative payment services - from PayPal to Google Checkout, Bill Me Later, HomeATM and many others - is a response to both consumer demand for an improved online payment experience and merchant need to lower shopping cart abandonment rates, payment processing fees, and raise the appeal of online shopping to specific consumer demographics.

Mercator Advisory Group's latest report, Alternative Payment Services: Moving into Traditional Payment Territory, examines the role and adoption of these competitors to traditional online card-based payments and online merchant acquiring.

The report offers an in-depth look at the principle providers of alternative payment services. The report examines the payment modalities supported by these alternative payment services and the consumer demographics they appeal to. While retail point of sale continues to be the largest area for consumer payments, online consumer spending has yet to reach its potential from the payment perspective.

In 2000 less than 1 percent of sales were via the internet. Today, that spending is likely to be $116 billion in the United States, a full 5% of retail spending.
But this annual growth is predicted to slow from 20 percent to 16 percent by year end and further to 13 percent by 2008. As these rates slow, online merchants must meet their customers "where they are" with the right payment mechanisms to maintain the highest possible growth and the widest possible sales funnel.

Alternative payment systems are fast becoming an important way for merchants to sustain and accelerate that online sales flow. Highlights of this report include:
  • An overview of the current state of online commerce in the US.
  • A discussion of consumer segments that employ alternative payment solutions.
  • A discussion of the value of alternative payments to both e-commerce customers and online merchants.
  • A review of some of the main providers of alternative payment solutions: Bill Me Later, PayPal (with a specific look at PayPal Pay Later), Google Checkout, Amazon Financial Payment Services, Pay By Cash and Paid By Cash.
  • A brief look at the future of alternative payment solutions.
In Alternative Payment Services: Moving into Traditional Payment Territory, Mercator Advisory Group reviews the current and future roles of alternative payment services.

The report discusses some of the drawbacks and issues of each alternative payment service and its payment modalities in relation to both the consumer and merchant including the IT challenge of integrating multiple payment methods into an e-commerce site.

The report contains 34 pages and 5 exhibits.

Members of Mercator Advisory Group have access to these reports as well as the upcoming research for the year ahead, presentations, analyst access and other membership benefits. Please visit us online at www.mercatoradvisorygroup.com.

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Posted by John B. Frank 0 comments

ATMDirect President's Response to Open Letter

On Thursday, I received a telephone call from Nandon Sheth, the President and new owner of ATMDirect. We had a pleasant conversation and Nandon addressed a few of the issues made in "An Open Letter Letter to ATMDirect".

Regarding the "PIN-OFF" Challenge which HomeATM invited ATMDirect to participate in. Nandon replied that he would rather have the "marketplace" decide which technology emerges to the forefront. We have no argument with that logic as that was the reasoning behind challenging them to the PIN-OFF in the first place.

Apparently a panel of industry experts are not part of the marketplace in his view.

In our view, especially in light of the recent Digital Transactions News article "PIN Debit Meets the Web," a "PIN OFF" would, in fact, be tremendously influential in deciding who, as the graphic on the left states, the next president should be.

A debate sways the marketplace in an election, we just want the super-delegates to be there for this one. Call it our conventional approach to a PIN-OFF.

Personally, I am of the opinion, that a panel of industry experts, (super-delegates in my analogy) comprising of EFT Network representatives from First Data's Star, Metavante's NYCE, and Fisev's Accel Exchange, (along with Industry Analysts, such as Gartner's Avivah Litan or Javelin's Bruce Cundiff) would bring significant attention to both technologies and thus become an "enabler" in terms of letting Internet Retailers know the results.

One doesn't have to win and one fail...both could pass the muster, which, again, would provide Internet Retailers, EFT Networks and Industry analysts, with the information that is obviously lacking, based on the Digital Transaction News article.

Of course, one (or both for that matter) might not "pass the muster" in which case, both entities would at least know what they had to accomplish in order to provide a solution everybody agrees is viable.

So whatever the reason, ATMDirect has "Officially Declined to Participate in a PIN-OFF". That's too bad. Had they agreed and both companies compared technologies, it would have made for some good media and market exposure to both sides. I guess it would safe to assume that, at leaset at this stage, HomeATM is a bit more confident in their technology.

Nandon went on to say that he thinks it would be better to work together with HomeATM rather than "square-off" against each other. As I just mentioned, I am not of the opinion that it is "squaring-off" as much as I believe in furthering the understanding of both technologies to key players in the industry.

With that said, I certainly respect his business philosophy of working together. Both HomeATM and ATMDirect do share a common goal, which is to further enhance the payments landscape by introducing a PIN Debit solution for Internet Retailers. I'm not quite sure how he would propose working together. but HomeATM is certainly available anytime to hear any proposals to that end.

By the way, just so I am clear on the issue. I believe competition is a good thing, as it has always motivated companies to produce better technology, better products and better pricing, thus the end-user is always the ultimate beneficiary in a free marketplace.

Getting back to our conversation...I explained to Nandon that HomeATM doesn't have any type of vendetta or ill-will against ATMDirect. I did tell him that we were however, taken aback by some of the statments made in their press release.

One had to do with the number of patents they claimed to have bought from Pay By Touch. Nandon informed me that maybe I didn't see the complete documentation (I don't know how that would have happened) and that they have accomplished a lot since taking over ATMDirect 30 days ago, but couldn't elaborate or "pin it down" for me on account of the fact that it was Intellectual Property and we are the competition.

Regarding the statement made by Rajiv Grover, an investor in ATMDirect who said. “Our intention is to own Internet PIN debit" Nandon replied that Rajiv was overly enthusiastic and, in hindsight, maybe should've toned down his enthusiasm a little bit. I understand enthusiasm. If there was a top ten list of the people enthusiastic about bringing PIN Debit to the Web, I am certainly, without a shadow of a doubt, on it.

Let me remind you, that I did the Pay By Touch Blog from December 2005 through March of this year when they closed their doors. Go ahead and visit PBT's Blog site and do a search for ATMDirect. I have consistently praised their intention of bringing PIN Debit to the Web and even went so far as to go on the record that ATMDirect could potentially be Pay By Touch's "Cash Cow." I was probably one of their biggest supporters.

Let me also remind you, that because of my enthusiasm for both the market and the potential, I looked at acquiring ATMDirect. I certainly had the backers to come up with $600k, even more, but the one thing that concerned me is apparently the same issue that concerns one industry analyst. (click picture on left to read her analysis)

In fairness to ATMDirect, another industry analyst, said that he believes the floating PIN pad is secure and that people he knows "have signed off" on it. Hmmmm. there certainly seems to be some confusion in the marketplace. I wonder if that could be alleviated with published results of a "PIN-OFF"?

In hindsight, instead of calling it a "PIN-OFF" maybe we should have called it "The Show Case". That may have been something that Nandon would have been more willing to participate in. Indeed, we will be "showcasing" our technology, as will he, to quite a few interested parties in the near future. Why not have a professional upfront evaluation already a matter of record for all interested parties to see?

For the record...HomeATM is game as we feel our technology is at the PINnacle!

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Posted by John B. Frank Saturday, May 3, 2008 0 comments

PIN Debit Meets the Web is DTN Cover Story



Digital Transaction News Cover Story for the month of May is "PIN Debit Meets the Web".

I'll have more on this later in the day, but if you'd like to read the article in it's entirety, you can either subscribe to Digital Transaction News for Free by clicking here

or:

You can download the entire May Issue of Digital Transaction News in Adobe PDF format by clicking here.

I've been a subscriber since for a couple years now and it's a great publication, I would highly recommend subscribing.


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Posted by John B. Frank Friday, May 2, 2008 0 comments

Supermarket ATM/Card Reader Rigged with Illicit Scanner


Some shoppers at a supermarket in Los Gatos, Calif., got more than they bargained for in the past week: Over 100 have become victims of identity theft after the debit- and credit-card reader at the checkout was rigged to siphon off their debit- and credit-card information.

The perpetrators used the card information and PIN numbers to churn out cloned cards, which then were used to withdraw cash from the victims’ accounts and to incur fraudulent charges on their credit cards. The customers of the Lunardi’s grocery store in Los Gatos have been reporting cases of identity theft to authorities since last Sunday evening, and reportedly have been losing an average of $1,000 from their bank accounts, according to a published report .

"What we have here is more than one person -- they've been able to get in there (Lunardi's) and switch out the ATM card reader," said Los Gatos-Monte Sereno police Sgt. Tam McCarty in an article in the San Jose Mercury News. "Once they've done that, they can read the card and PIN numbers and either make a temporary card or sell the numbers over the phone."

It’s unclear so far whether the scam was perpetrated by an outside criminal or was an inside job. The Lunardi’s supermarket has since replaced its old ATM card readers with new ones that lock to prevent tampering.

Scanner tampering has long been a subject of concern for security researchers, who have demonstrated the ease of ATM machine hacks, as well as of smart card scanners for physical security.

The stolen card account incident at Lunardi’s follows a similar one in Los Altos in March at an Arco gas station’s payment machine.

Rob Enderle, president of Enderle Consulting, says this is yet another type of card-scanning scam. “It speaks strongly for the need for strong multifactor authentication over anything dealing with confidential data, particularly financial data“Attacks like this are likely to spread ,and it is relatively easy to search on the Web and find the parts you need to build one of these things," Enderle says. "I’ll bet there are sites in Eastern Europe where you can order the entire solution custom designed for the attack a criminal wants to make."

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Posted by John B. Frank 0 comments

An Open Letter to ATMDirect Executives

With less than 13 days remaining, we still have yet to hear from ATMDirect even though our CEO, Kenneth Mages, has made them aware of it from the beginning. However, in the interest of complete and unbiased fairness, this morning I sent them the following. Word on the street is that they have no intention of participating in the PIN-OFF, but let's give them every opportunity I say.

An Open Letter to ATMDirect Executives

Mr. Nandon Sheth - President - ATMDirect
Mr. Tom Wilkerson - Vice-President Business Development -ATMDirect
cc: Ms. Danielle Duclos - Director of Marketing - ATMDirect

As you are surely aware, from daily emails sent by Kenneth Mages, HomeATM's CEO to your President, Nandon Sheth, as well as various coverage in both the blogs and the newswires, we have challenged ATMDirect to compare technologies.

I was a founding member of the former ATMDirect owner, Solidus Networks, and was the author and Editor of the "Pay By Touch Blog" since 2005 until it's final post on March 20th. I am a firm believer and staunch supporter of bringing PIN Debit to the Web (in fact, query ATMDirect on the Pay By Touch Blog and you'll see myriad posts praising the potential of Internet PIN Debit. As such, I personally inquired about acquiring ATMDirect.

However, after reviewing the materials sent to me by Ron Carter, and speaking with several "insiders" including Eric Bachman, (who, by the way speaks highly of Tom Wilkerson) former COO of PBT, I decided that there was much that remained to be done before it could be considered anything more than an "early stage startup" to quote Eula Adams. So I passed and instead, I've joined forces with HomeATM, whose technology I felt could stand up to the demands that are required for PIN Debit to work on the Internet.

I saw ATMDirect's recent Press Release claiming the purchase of Pay By Touch's "25 Global Patents". Frankly, from the materials that were sent to me during my acquisition inquiry, I know only of one. However, that is not the point of this communication. Our patent attorney, Donald E. Stout, has sent a letter to your president regarding our patent. The point of this e-mail is to invite ATMDirect to what we've called a "PIN-OFF".

Upon reading your press release and hearing the patent claims you're making, we would like to "call you" on these claims as well as the one made that you intend to "Own PIN Debit on the Internet". If, in fact, you feel that ATMDirect's technology can stand up to the scrutiny of an independent "Internet PIN Debit Payment Panel" we would welcome ATMDirect's participation by accepting our invitation. We have extended the courtesy of allowing you 30 days to respond.

I've sent out "Internet PIN Debit Payment Panel" participant invitations to Paul Green, "The GreenSheet", John Stewart, "Digital Transaction News" Scott Loftesness, Payment News, Gwen Bezard, Aite Research Group, Avivah Litan, Garnter Research, Bruce Cundiff, Javelin Strategy & Research, David Brietkopf at SourceMedia and Evan Shuman, the former retail technology editor for eWEEK.com, PCMagazine, and CIOInsight, who are now all aware of HomeATM's PIN-Off Challenge to ATMDirect. We are all awaiting your acceptance/non-acceptance to this Internet PIN Debit challenge.

Please advise as to whether you plan on accepting, or forfeiting this opportunity to "showcase your technology". I'll await your response, along with other industry insiders who are "privy" to our so-called "PIN-OFF." My contact information is below...


John B. Frank
Executive Advisor
HomeATM e-Payment Solutions
Phone: 480-816-9578
Cell: 612-432-6980
JFrank@HomeATM.net
www.PINdebit.blogspot.com


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Posted by John B. Frank Thursday, May 1, 2008 0 comments

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Kapersky Calls for Mass Adoption of Card Readers

Kapersky Calls for Mass Adoption of Card Readers