Speculation on Microsoft Internet Payment Platform...

A deal with a payment processing firm has sparked speculation the firm is to launch its own branded checkout service.


Microsoft has signed an agreement with a payment processing firm that experts have said could be a precursor to it launching an online checkout service. The agreement with Symmetric Systems will give the software giant access to the firm's online transactional platform, VitalPay.

VitalPay provides regulatory-compliant payment services, including mail and telephone order facilities and card-not-present transactions, to retailers and merchants, as well as travel and airline companies.

Microsoft refused to comment on why it had struck the deal with the firm or how it would link Vital Pay's capabilities with its own. But the software vendor has a variety of point-of-sale, customer relationship management (CRM) and web-based software offerings that could potentially integrate an online payment facility with.

It does not have its own payment facility, which could provide a way of capturing the internet consumer according to Martha Bennett, research director of financial services technology at Datamonitor.

"It's a pretty appropriate deal when you look at it in a wider context," Bennett told IT PRO. "Microsoft has been pretty desperate to capture the online consumer, if you look at recent activities concerning Yahoo. MSN isn't really a main competitor in search and Passport was a disaster. And, apart from the Internet facility on the X-box, it has been an also-ran when it comes to capturing Internet consumers."

She also said it was technically feasible for Microsoft to link with VitalPay to create a potential rival to Google's Checkout and Papal, particularly given its customer base of retailers using its Dynamics retail software suite. "The integration would be nice to have, but it will only be any good if it brings the merchants with it," she said.

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Posted by John B. Frank Friday, June 6, 2008 0 comments

Debit Card Use Continues to Grow

DEBIT CARD PURCHASES STILL INCREASING, STUDY FINDS:


Chip and Kerching
Debit card use at the point of sale continues to grow, with cardholders who use both PINs and signatures completing more total debit transactions than those who use one method or the other, according to a First Data Corp. study released Thursday.

Seventy-four percent of 2007 study respondents had used their debit card at the point of sale in the previous 30 days, an increase from 70% of respondents in 2006 and 62% in 2005, according to the study.

Cardholders using both PINs and signatures performed more debit transactions during the previous 30 days than those using only PINs or signatures, according to the study.

Cardholders using both methods completed 23.3 transactions during the previous month, while PIN-only users completed 12.2 and signature-only users completed 17, according to the study.

Greenwood Village, Colo.-based First Data conducted phone interviews with roughly 3,500 adults in November and December 2006 and between October and December 2007.

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More on Australia's PEN or PIN Program

Credit card users will be given the option of entering a PIN as an alternative to signing their name to authenticate a transaction under a banking industry initiative scheduled to start today. (June 4th)

Simon Greig, principle for Phoenix IT&T Consulting — contracted by the industry to manage the transition to the 'Pen or Pin' project for credit card transactions — says all of the banks are ready for the move. The main impetus for the initiative, led by Mastercard and Visa, is convenience and not necessarily security, he said. "The objective here is to provide a choice for cardholders," he said. "Australian consumers have been using PIN numbers for decades on their EFTPOS cards, and now they will have that option on their credit cards." "This is not a fraud-related activity," he said. "'It's simply about an option of convenience for cardholders that would like to use a PIN.

And for the retailer, they don't have to use their discretion to judge a signature." The initiative is unrelated, Greig said, to chip and PIN technology being pitched by some banks to reduce credit card fraud. Most Australian banks — including Westpac and the Commonwealth Bank, are trialing chip and PIN technology — which replaces the magnetic strip of a credit card with a microchip — and requires customers to enter a PIN number. It is deemed to be a far more secure approach to today's credit card transactions.

A spokesperson for the Commonwealth Bank told ZDNet.com.au that the bank does expect 'Pin or Pen' to "afford the customer additional [security] protection", but believes the real gains in security terms are more likely to be addressed by chip and PIN. "[Commonwealth] Bank takes card security very seriously and is currently working on its chip card solution," the spokesperson said.

 Upon introduction in the UK, chip and PIN security faced its share of teething problems. However, the UK experience, says Greig, involved consumers that had rarely used PIN numbers engaging in a "massive leap" into chip and PIN. He doesn't expect such issues to arise in Australia, where consumers "have been using PIN numbers since the seventies. He also doesn't see 'Pen or Pin' being used as an excuse by banks to transfer liability for fraudulent transactions onto merchants and users, as UK banks have aimed to with chip and PIN. Greig said that under the new 'Pen or Pin' option, cardholders and merchants will be bound by the same rules and regulations using a PIN number as they would if a signature option was used."I have not heard of anybody changing their terms of use," he said.

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It's PIN...It's Smart...It's Embedded into the Future of Payments

GemaltoMONTREAL — Digital technology is putting the power of a computer onto credit and debit cards to help cut down on fraud. Cards are being embedded with a microchip, or a tiny computer. That means the traditional swiping of a credit or debit card and signing a credit card slip won't be necessary.

Visa Canada, MasterCard Canada Inc. and Interac Association are moving to bring Canada in line with card technology that's already in use in much of Europe and parts of Asia and Latin America.

"The key driver for this is really on the security side," said Michael Stephenson, Visa's senior business manager of the chip initiative.

The three are involved in a pilot project in which credit and debit chip cards are being tested at businesses and financial institutions in Ontario's Kitchener-Waterloo region, west of Toronto.

Quebec-based financial institution Desjardins is leading a test in St-Jerome, north of Montreal. It's expected that Canada will move to chip technology over the next three years or so. However, the magnetic stripe is expected to remain on some cards to allow them to work in jurisdictions where chip technology isn't available.

Some test results have shown that transactions with chip cards are 40 per cent faster, Stephenson said. Instead of cards being swiped, shoppers insert them into a small chip-reading terminal.

Consumers using chip cards need to type in a PIN number when making a purchase instead of signing their names. If a card is lost or stolen, a thief shouldn't know an individual's PIN number.

Client information on a card's magnetic stripe can be copied by fraudsters to make fake credit cards, causing millions of dollars in losses to businesses and financial institutions.

Jack Jania of international digital security company Gemalto said it is more difficult to copy a chip card because the data and the transaction are encrypted. This brings a higher level of security to a transaction, said Jania, vice-president and general manager, secure transactions, for Gemalto in North America.

Gemalto is known as the world's largest provider of smart cards and develops operating systems for the cards. It's involved in the Canadian project to help implement the international standard known as EMV (Europay, MasterCard, Visa) standard.

"There's a secret key inside the computer chip that makes that card unique," said Jania, who's based in the Austin, Tex., area. Jania said the chip card randomizes how things are stored in its memory. He also warned: "If you try to pry open the card and take it apart, you expose the device to light and it automatically dumps its memory." The chip is encased in "very hard black epoxy" and will be damaged if taken apart, he said. "It's designed to be extremely tamper-resistant to ma\ sure the inherent data that's in that little computer is secure."

Waterloo Regional Police Staff Sgt. Wally Hogg said while it's too soon to say what impact the chip cards have had, it will be difficult to extract information from them. "There shouldn't be any concern about having the card double-swiped," said Hogg, who's in the fraud branch.

Interac Association's Kirkland Morris said consumers shouldn't have any privacy concerns about the switch to chip technology, but the move will take time.

"All of the debit and all of the banking machines have to be upgraded or replaced to chip (technology) before the end of 2012," said Morris, vice-president of enterprise strategy. "And all of the merchant terminals have to be upgraded by 2015. It's absolutely a multi-year exercise."

MasterCard Canada's Oliver Manahan said France was the first country to move to chip technology about 18 years ago and its fraud rates fell to almost zero. "Here's technology that can be used for the greater good of protecting payments and keep money out of criminals' hands," he said.

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Posted by John B. Frank Thursday, June 5, 2008 0 comments

Latest Malta-Pull...PIN Replacing Signature Debit

Heterodontus galeatus. Malta

The Bank of Valletta in Malta announced that it has issued the first EMV Chip and PIN Cards through its systems.

“This is an important milestone in the process that will see us issuing EMV Chip and PIN Debit and Credit Cards to our customers over the coming weeks,” said Tonio Depasquale, CEO at Bank of Valletta. “By the end of the current year, we would have replaced most of the existing cards with the new EMV Chip and PIN Cards,” he added, explaining that this is a complex logistical exercise that is seeing the bank implement this new technology for the benefit of its customers.

“We are delighted to have reached this stage whereby, over the coming weeks, we will be starting the process of replacing the debit and credit cards of our customers who will be able to benefit from the new generation cards that we will be issuing,” added Mr Depasquale.

The new EMV Chip and PIN Cards that Bank of Valletta will be issuing over the coming weeks offer customers a number of benefits over the cards that are currently in circulation, including improved security and a more efficient payment process. In fact, when using the new EMV Chip and PIN Cards, the cardholder authorizes the transaction by entering his PIN on the keypad of the Electronic Point of Sale Terminal (EPOS). This is faster and more secure than the system in place today where the customer signs a receipt generated by the EPOS to authorize the transaction. The new technology also provides additional security and process-related benefits to the merchants.

Malta, officially the Republic of Malta (Maltese: Repubblika ta' Malta), is a small and densely populated island nation comprising an archipelago of seven islands, three of which are inhabited. It is located in the Mediterranean Sea in Southern Europe just 93 km (58 mi) south of Sicily, giving the country a warm, Mediterranean climate, and 288 km (179 mi) to its south is North Africa.

Throughout much of its history, Malta has been considered a crucial strategic location due in large part to its position in the Mediterranean Sea.[3] It was held by several ancient cultures including Sicilians, Romans, Phoenicians, Byzantines and others. The island is commonly associated with the Knights of St. John who ruled it. This, along with the historic Biblical shipwreck of St. Paul on the island, ingrained the strong Roman Catholic legacy which is still the official and most practised religion in Malta today.

The country's official languages are Maltese and English, the latter a legacy from Malta's period as a British colony – the United Kingdom is the most recent outside ruling power. Malta gained independence in 1964 and is currently a member of the Commonwealth of Nations, as well as the European Union which it joined in 2004.

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Subscribe to ThoughtKey's Monthly Bulletin: PCI Today

ThoughtKey's President, Susan Kohl puts together a monthly bulletin designed to help understand the complex rules and programs surrounding PCI compliance with a focus on PIN Debit.

If you would like to subscribe to ThoughtKey's monthly newsletter please go to ThoughtKeyInc.com.

You may also mail your subscription request to information@thoughtkeyinc.com

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Posted by John B. Frank Tuesday, June 3, 2008 0 comments

NYCE Numbers

Nyce logo

Study shows that from December 2007 until March 2008, Canadian shoppers have spent an average of over USD 68 per Cross-Border Debit transactions, up 45 percent than the average US debit purchase within the same period. The Cross-Border Debit service is offered as a result of the partnership between US debit card payments network NYCE Payments Network and payment services developer Acxsys. Since the service launch, the Canadian average has surpassed the US average by 33 percent.

The transaction number have jumped 94 percent in New York and Washington during November and December 2007, while for March 2008 the same states report 92 and 102 percent increases respectively in transactions alone over 2007.

NYCE is the first and only U.S. payments network to enable widespread PIN debit access at the point of sale for purchases initiated with debit cards issued by participating Canadian financial institutions.
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Kapersky Calls for Mass Adoption of Card Readers

Kapersky Calls for Mass Adoption of Card Readers