Friday, June 6, 2008

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.

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

"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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Debit Card Use Continues to Grow


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 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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