Wednesday, October 8, 2008

Microsoft Launches SearchPerks to Compliment Live's CashBack

Microsoft Corp. has unveiled another reward program for Internet users who search the web using's Live Search. Called "SearchPerks," the program awards points to users each time they use MSN Live for a search.

Points can be redeemed for merchandise, music downloads, airline miles and other rewards.  Participants get 500 points for signing up and can earn up to 25 points per day. 

I have a about 500 points AND a HomeATM Point of Sale Device for signing up  for SearchPerks!  Then their CashBack Live Search partners can save even more money when  their goods are purchased using the more secure HomeATM PIN Debit platform.  Yeah...that's the ticket!

Essentially Microsoft is taking the "point system" used at gas stations and airports that gets cardholders prizes after they accumulate a certain number of points, and calling them "tickets" instead of "points." Each search on,, Windows Live Hotmail, or Windows Live Messenger, is worth a ticket. Since searching is free, and people are capable of searching many more times in a day than they purchase gas or flight tickets, the company is limiting the number of tickets that can be earned in a day to 25.

While Microsoft is giving everyone 500 tickets as a bonus for signing up, the more attractive prizes still take quite a lot of searching to get; an Xbox 360 Wireless Controller costs, for example, 5,500 tickets—200 days of max Live  Search usage.  Among the examples that MSN provides, 525 tickets equal 5 music downloads, 1,800 tickets equal 1,000 airline miles, 1,100 tickets equal a T-shirt, 3,400 tickets equal a cookbook.  Users must sign up before Dec. 31; the promotion ends April 15, 2009.

The new program joins MSN's 4-month-old Cashback initiative, which rewards shoppers with rebates when they start a search through the Live Search Cashback portal. That initiative appears to be enjoying at least limited success, reports Hitwise, an Internet site monitoring and measurement company.

While noting that the Cashback initiative does not appear to have moved the needle on market share vs. other search engines, Hitwise reports that the share of MSN users who go to the Cashback section has increased from 3.75% 11 weeks ago to 6.29% last week.

Hitwise notes that the program may have at least stopped Microsoft's Live Search from losing further market share to Google. "Everyone is aware that the share of searches on Google has continued to increase, but over the past three months, the share of searches on MSN"s search properties has remained consistent," says Heather Dougherty, director of research at Hitwise. 55% of MSN Cashback users are women, 22% were 25 to 34 years old and 27% were 35 to 44. Just under one-fifth had annual household incomes over $100,000.

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Alternative Payments Growing Threat to Cards - Bank Technology News

Alternative Payments Growing Threat to Cards - 10..2008 - Bank Technology News Article
Talk about piling on. Just as payments industry players were absorbing eBay’s eye-popping $945 billion acquisition of Bill Me Later this week, Celent unleashed a report Tuesday predicting that alternative e-commerce payment schemes threaten to take away up to $1.7 billion in potential transactions from card brands and issuers by 2015.

PayPal, Bill Me Later, Google Checkout and Amazon Payments are the lead mercenaries who will diminish credit cards to under 50 percent of total online transaction volume within two years, compared to more than 60 percent in 2005. Even with rising debit card usage, all card-based volume will be around 70 percent in 2010, according to Celent (down from nearly 80 percent currently).

Despite their dominance and acceptance ubiquity, Celent notes, “payment cards have a number of serious weaknesses.” Chief among them is security, as 40 percent of consumers dislike providing credit card information online, despite new PCI security standards from the card industry and the long-standing zero-liability fraud protections in place for unauthorized transactions. Then there are the merchant irritations with interchange, which have prompted wider e-store adoption of Bill Me Later and Amazon Payments options on checkout pages and encouraged wider use of ACH-based transactions.

What makes many of the alt-payment companies stand out, says Celent, is the role they play in encouraging purchases. Consumers attracted by discount or promotional financing through the preferred payment method, discounts, and—most prominently with Google—closely tying together payment services with marketing opportunities.

Alternative payments players are starting to differentiate themselves via their ability to induce payments,” wrote senior banking analyst Red Gillen.

“In other words, those players that are likely to succeed and pose the greatest disruptive threat to payment cards are those that have evolved from simply enabling payments to actually creating sales lift.”

Editor's Note: An example would be taking the savings derived from HomeATM's lower PIN Debit interchange rate and applying it towards a loyalty-rewards platform in combination with an existing platform.  By participating in a co-op rewards platform, the offerings to consumers would be more attractive than a single rewards offering.

40 Billion Debit Transactions by 2010...Doubling that of 2005

It's estimated that by 2010, a whopping 40 billion consumer transactions will be completed using debit cards - that's double the number from 2005.

Recognizing that explosive growth, banks are working hard to make money off these transactions. (Translation:  Banks are working hard to devise sneaky, underhanded, non-ethical but legal ways to make money off these transactions) Thus, it's up to consumers to watch out for wayward fees that can make using a debit card an expensive proposition.  5 secrets to smart debit card use

Citibank PIN Code Hackers in Court

When using  HomeATM's patented solution, PIN codes ARE SACROSANCT so we encrypt them from the "very millisecond" they are tapped into the PIN Pad. When processed properly there is NO safer transaction than a PIN based transaction, which is why they boast the lowest interchange rates of all...

Citibank must like shortcuts, because their machines in convenience stores across America were the target of the biggest and most effective remote PIN code theft scam in US banking history about three months ago. And they shouldn't have been.  No excuses.  In addition to bringing the hackers to court, maybe the individual who made the decision to make ATM's easier to breach should be there too.

The Citibank/7-Eleven hack does NOT reflect PIN Debit as a whole.  It relates specifically to Bank ATM machines, more specifically, ATM's that employ a remote diagnostic capability designed to repair them.  (which can also apparently "leak information.")  Details of the fraud have only now been made public, as the case makes its way through the US District Court for the Southern District of New York. 

The following information is from several different articles over the last couple months. Feel free to browse through the "related articles" I've included at the bottom of this post.  Let me begin by explaining why PIN Debit has always enjoyed the lowest Interchange Rates of all the payment mechanisms: The biggest and foremost reason is that...
PIN codes have always been the most closely guarded secrets in banking transactions. They are supposed to be encrypted from the very second they are tapped into a keypad.  Until recently, it was virtually impossible to get at them without physically looking over someone’s shoulder as they punched in their digits to withdraw money. I've posted many times here about  scams involving strategically placed mirrors or tiny video cameras have become something of a common threat for banks.  That's enough to be concerned about.  Here's more than enough...

"Technology for ATM's has changed over the past few years. The infrastructure is now built on Microsoft’s Windows operating system, and the ATM cash machines themselves can be remotely diagnosed and repaired online.  Unfortunately, this means that PIN codes have started to “leak” along the way — suggesting that industry guidelines on encryption are not always being followed."  Here's the part where you can say: "Well that's just great.  In order to save the expense of sending out an ATM Repair Man, they put everybody's checking and savings account at risk" (and play with /tarnish the reputation of PIN Debit in the marketplace, I might add.)   What is Citibank thinking?  And they're one of the "survivors" of this banking fiasco?

“PINs were supposed be sacrosanct,” says Avivah Litan, a distinguished security analyst with the Gartner research firm. “What this shows is that PINs aren’t always encrypted like they’re supposed to be. The banks need much better fraud detection systems and much better authentication.”
ATM fraud is growing exponentially. I've posted several times about this in the recent past, including fraudsters setting up fake keyboards and mini-camera's to glean PINs — or PIN codes that have been obtained through “phishing” scams.   According to one article, it is not clear how many Citibank customers were affected by the hackers. The bank has nearly 5,700 Citibank-branded cash machines inside 7-Eleven stores, but it does not own or operate any of them. The maintenance of the machines is carried out by two companies: Cardtronics, based in Texas, and Fiserve, based in Wisconsin.

The alleged hackers — Yuriy Rakushchynets, Ivan Biltse and Angelina Kitaeva — are accused of stealing at least $2 million through the PIN scam and have been indicted on two counts each of conspiracy and fraud. It is thought that a much larger sum of money might have already been transferred to Russian bank accounts — and there are suggestions that the actual hacking was performed by another party, with the defendants simply using second-hand information to make cash withdrawals. The wording of the indictment against them is vague.

The ring-leader of the three suspects is Mr Rakushchynets, a 32-year-old Ukrainian and a regular contributor to underground online credit card fraud forums. When he was arrested by the FBI — he was already under investigation for his suspected role in a separate $5 million hacking scam — agents found $800,000 of cash at his Brooklyn home, most of it stuffed into rubbish bags.

It remains unknown or at least undisclosed, exactly how the hackers infiltrated the closely guarded computer network, although it has been confirmed that they broke in through a server at a third-party processing company.   Once they obtained the PIN codes, the hackers could then simply make card clones (See my post and a video on how easy it is to clone a card:  "Card Cloning Quickly Becoming a Global Affair")  and use them to withdraw funds from compromised accounts at virtually any cash machine in the country.

Don Jackson, director of threat intelligence for the computer security company SecureWorks, said he had seen an “alarming” spike in the number of attacks on back-end computers for cash machine networks over the past year. “What makes this case unique is the sheer luck of happening upon these guys and catching them red-handed,” he said. “But there are a whole lot of other and PIN compromises going on that aren’t reported.”

Citibank has declined to comment on the details of the case, saying only that it has notified affected customers and issued them with new debit cards. “We want our customers to know that, consistent with legal requirements, we do not hold them responsible for fraudulent activity in their accounts,” it said in a statement. Cardtronics has said it is co-operating with authorities, while Fiserv insists the intrusion did not happen on any of its servers.

“Fiserv is confident in the integrity and security of our system,” said a spokeswoman.

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Credit Card Fees Squeezing Profits? Switch to PIN Debit

Credit-card fees squeeze profits - El Paso Times
Greg Matthews tries to discourage customers at his East Side pharmacy from using credit cards to pay for prescriptions because transaction fees on cards cuts into his already slim profit margin.

"A lady the other day paid her $80 co-pay" on a $120 prescription with a credit card. "I was going to make $3.48," but the credit-card fee took $1.98 so Matthews only made $1.50 on the transaction, he said. The other day a customer was going to pay a $1.05 prescription payment with a credit card, and "I said, 'Forget it.' I just gave it to him" because of the credit-card fee, he said.

Credit-card transaction fees, specifically the interchange fee set by credit- card companies and collected by banks that issue the cards, have become a hot issue with retailers in recent years.

The Merchants Payments Coalition, a national group of retailers, including supermarkets, drug stores, convenience stores and others, has been campaigning to lower the fees. The coalition is pushing for legislation in the U.S. Congress to set up a mechanism to let retailers negotiate card transaction fees with the credit-card companies. Some members of the coalition also are part of pending lawsuits consolidated into one case in a New York federal court alleging price-fixing of fees by MasterCard, Visa and several banks.

"What we want them to do is negotiate with us (merchants) a price fair for their service," said John Motley, senior vice president for the Food and Marketing Institute in Washington, D.C., a member of the coalition. "The reason the issue is so big for us (grocery stores) is the average profit within the food retailing industry in the U.S. is about 1.2 percent." The credit-card fees increase product costs to consumers, he said.

Interchange fees for credit-card transactions average around 2 percent of each transaction dollar amount, Motley said. Supermarkets were offered a low interchange fee years ago to encourage supermarkets to accept cards, but that "rate is now disappearing" because premium credit cards are becoming more prevalent and have a higher fee, he said. Fees on debit cards used with a PIN number average around one-half percent, which is not as much of a problem, he said.

Gasoline retailers earlier this year began complaining about being hurt by rising credit-card fee costs because customers were charging larger amounts due to rising fuel prices. MasterCard and Visa made adjustments in fee charges for fuel retailers, the companies said in statements issued this year.

Last year, $42 billion in interchange fees were collected, and this year that number is projected to grow to almost $49 billion, Motley said. That is a 16.7-percent increase. Only a small portion of the fees go for transaction costs, he said.

Visa and MasterCard, the nation's two largest credit-card companies, said the companies each set their own card interchange rates, but they receive no revenue from interchange fees.

The interchange rate is what the merchant's bank pays to the cardholder's bank for taking on the risk, said Denise Dunckel, a Washington, D.C.-based spokeswoman for Visa. "Visa makes its money from contracts with banks," she said.

Sharon Gamsin, a spokeswoman for MasterCard's headquarters in the New York City areas, told the El Paso Times in May that MasterCard makes its money from fees it charges banks that issue cards.

The interchange fee is part of a merchant discount fee, which is negotiated between the merchant and its bank for credit-card and debit-card transactions, according to information from MasterCard.

The interchange rate is set high enough for banks to have an incentive to issue credit cards and low enough to encourage businesses to accept the cards, the credit-card companies said.

"I think merchants are getting a good value for what they pay for. The alternative (cash or checks) costs more" to handle," said Linda Echard, president and CEO of ICBA Bancard in Washington, D.C., an Independent Community Bankers of America subsidiary that provides credit-card services to community banks. The interchange and merchant fees are important revenue sources that allow banks to stay in the credit-card business, she said.

In Australia, where the government stepped in and reduced interchange rates, the number of cards being issued has decreased, Echard said. A MasterCard statement said Australian credit- cardholders are now also paying higher interest rates and fees because of the decrease in interchange rates.
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First Data to Offer All Major Alternative Payment Brands via CardinalCommerce

Press Release from Cardinal Commerce
DENVER and MENTOR, Ohio, Oct. 8 /PRNewswire/ - First Data, a global leader in electronic commerce and payment services, and CardinalCommerce Corporation, the worldwide leading provider of payment brands, have joined forces to bring First Data merchants a complete eCommerce solution for authentication programs and alternative payment brands.

Through this agreement, First Data becomes the first payment processor with the ability to offer all major alternative payment brands to their 100,000+ eCommerce merchants. This solution provides one of the fastest, easiest technical integrations for merchants, backed up with 24/7/365 support from CardinalCommerce. In addition, First Data will offer payer authentication service that leverages online payment verification offered by both Verified by Visa and MasterCard SecureCode programs.

"First Data is focused on developing robust and secure Software-as-a-Service payment solutions for our expanding online merchant community," said Souheil Badran, senior vice president and general manager, First Data eCommerce Solutions. "We're pleased to add the CardinalCommerce established solution to our scalable suite of services. Our goal is to offer a positive return on our merchants' investment while continually mitigating their fraud risk."

Now First Data merchants will have access to the most comprehensive online payment options available in the marketplace to increase sales and average order values, minimize fraud and the costs of order acceptance, and to help customers make eCommerce purchases with confidence. Through the First Data Global Gateway service, merchants will be able to receive the benefits of Verified by Visa(TM) and MasterCard(R) SecureCode(TM), as well as PayPal(TM), Google(TM) Checkout, and more.

"Cardinal is extremely excited to work with a company as distinguished in their field as First Data," said Mike Keresman, CEO, CardinalCommerce. "We're thrilled that the world's largest payment processor has confidence in our Cardinal Centinel(R) technology and we look forward to assisting their aggressive growth strategies in the eCommerce sector."

About First Data

First Data is a global technology leader in information commerce. The company processes transaction data of all kinds, harnesses the power of that data and delivers innovations in secure infrastructure, intelligence and insight for its customers. With operations in 37 countries, First Data serves more than 5.4 million merchant locations and more than 2,000 card issuers and their customers. It powers the global economy by making it easy, fast and secure for people and businesses around the world to buy goods and services using virtually any form of payment. The company's portfolio of services and solutions includes merchant transaction processing services; credit, debit, private-label, gift, payroll and other prepaid card offerings; fraud protection and authentication solutions; electronic check acceptance services through TeleCheck; as well as Internet commerce and mobile payment solutions. The company's STAR Network offers PIN-secured debit acceptance at 2.1 million ATM and retail locations. Through First Data's centers of excellence, such as security, analytics, customer loyalty and mobile payments, it offers data-driven commerce solutions for customers around the globe. For more information, visit

About CardinalCommerce

CardinalCommerce Corporation is the global leader in enabling authenticated payments, secure transactions and alternative payment brands for both eCommerce and mobile commerce. Cardinal Centinel(R)* enables payment brands such as Verified by Visa, MasterCard(R) SecureCode(R), PayPal(TM), eBillme(TM), Bill Me Later(R), Google(TM) Checkout, MyECheck, NACHA(R) Secure Vault Payments (SVP), Ukash(TM), eLayaway(TM), Ebates(TM), Amazon Payments(TM), RevolutionCard(TM), and more to a network of over 30,000 merchants and merchant service providers. Our mobile commerce platform, branded Cardinal MAX(TM), makes it simple for retailers to sell and market products through the mobile channel. Cardinal's proprietary and easily deployable technology provides consumers, merchants, credit/debit card issuers, and processors the ability to conduct authenticated Internet, wireless and mobile transactions safely and securely. Headquartered in Cleveland, Ohio, with facilities in the United States, Europe and Africa, Cardinal services a worldwide customer base. For more information, visit

* Patent # US 7,051,002 B2

SOURCE CardinalCommerce

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Amazon Gift Cards 2B Dispensed via ATM's Nationwide

According to a news release, Better ATM Services has reached agreements with Automated Cash Management Systems and APTUS Financial to dispense gift cards at ATMs across the nation.
The two ISOs will be part of a special pilot program in which gift cards will be distributed with a free $25 promotional card. Dallas–based Columbus Data Services will provide transaction processing services for the program.
Better ATM Services also has become a reseller of gift cards, allowing gift cards to be distributed through ATM networks owned and operated by ISOs throughout the United States. The gift card is immediately valid for use toward purchase of any of the millions of items offered for sale at
"Tough economic times mean consumers will increasingly demand more value," said Better ATM Services chief executive Todd Nuttall. "Gift cards with coupons and incentives distributed through ATMs provide just that."
Gift cards make up the largest segment of prepaid cards. Boston-based TowerGroup estimates that approximately $80 billion was spent on gift cards in 2006. Based on Mercator Advisory Group research, that total included approximately 600 million cards that were sold in-store.
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