Monday, November 3, 2008

DOJ "Steering" Investigation at American Express

Justice Department investigating American Express
NEW YORK – American Express has received a request from the U.S. Department of Justice for information regarding the credit card company's policies related to merchant surcharging, according to a regulatory filing Friday.

The company said it received a Civil Investigative Demand on Oct. 14 from the Justice Department's antitrust division. The department can issue CIDs to anyone it believes may have information related to an investigation, the filing said. Receipt of such a request does not mean that a formal complaint will be filed.

American Express said it intends to cooperate with the department's request for documents and other information regarding the company's policies related to merchant surcharging and its “anti-steering” policies that prohibit merchants from discriminating against the American Express card in favor of other forms of payment.
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25 E-Commerce Tech Terms You Should Know

E-commerce tech terms you should know
By Dale Buss - Forbes
Transacting business seamlessly over the internet means having a decent grasp of how things work, and more importantly, why they don't. That's why, with help form the smart folks at technology publisher O'Reilly Media, we've assembled a glossary of e-commerce-related tech terms that every entrepreneur should know.
Some of that gobbledygook is the province of tech jocks. However, if entrepreneurs want to achieve operational excellence while keeping technology investment in check, they have to be able to at least speak the language. And you don't have to know how to get down and dirty with computer code to understand the implications these issues have on strategy and budgeting.

Online retailers, for example, are trying to move beyond what has become the conventional, rather static consumer experience. One solution: real-time, individualized pricing. A new system, developed by uBee, allows merchants to "sense" what items a shopper is looking for on their websites, and spits out a custom price based on inventory levels and other particulars.

"That," says uBee CEO Bill Carpenter, "can give you personalization between buyer and seller."

The e-commerce platform that UBee plans to launch next month will rely on SOAP, for Simple Object Access Protocol, a technology standard based on using "envelopes" that retailers and uBee use to exchange information quickly enough to make these real-time offers. The "documents" in these envelopes invariably are written in XML, the most common software language in e-commerce, including variants such as XML-RPC and XML Business Reporting Language. (The acronyms are dizzying at first, but you get used to them.)

For all the billions of dollars being spent and collected online, the code at the core of e-commerce remains highly fragmented — and that creates communication breakdowns within the overall system.

"The Internet is still the wild, wild west," said Clint Page, chief executive of Dotster, a Vancouver, Wash.-based provider of Internet-business services. "It's not like more-developed parts of business and commerce where you get standardized platforms."

Take setting up a merchant account with a bank so that you can accept and process online payments. While bricks-and-mortar retailers only have to decide whether to accept checks and major credit cards, e-commerce is open to all sorts of other payment possibilities and transactions in currencies other than the dollar, such as HomeATM's PIN Debit/Credit Platform.

You'll also want to know a thing or two about affiliate programs. Under these advertising arrangements, companies collect cash for driving traffic to your site, and visa versa.

With Google now as much a verb as a company name, search engine optimization (or SEO) — the process of increasing a site's odds of ranking high in the search stacks — is a key consideration for any e-commerce player.

Says Dotster's page: "There is ferocious competition to be on the first two or three pages of each search." Editor's Note:  Do a Google Search on PIN Debit. 

Then there's the problem of security. While millions of consumers have grown comfortable with entering credit-card information into a Web site, reports of massive identity theft continue to crimp online sales. Editor's Note:  Consumers should NOT be comfortable entering their credit/debit card information into a Website. 

The lines of defense begin with authentication programs that determine whether someone signing on under a specific name is actually authorized to use the site via that specific account. Editor's Note: Dually Authenticated HomeATM PIN based transactions allow consumers to swipe their card (eliminating the risk and conveniently saving them from typing their card numbers onto a website). Entering the PIN (non-keystroke) makes for a  highly (dual) secured transaction.   Force users to jump through too many hoops, though, and you risk driving them away. Hence the single sign-on approach, in which either the user's computer or the website "remembers" passwords. Access control beefs up the barricades by granting entry only to specific site functions, such as adding an item to a shopping cart.

Want to make it clear that your site is indeed secure? Use software that adds a padlock icon in the user's browser window. Editor's Note:  Or use HomeATM's globally patented PIN based checkout system!

"Ensuring that your checkout process and, more important, the credit card form are well-secured will guarantee your customers feel safe when transmitting their information," says Pat Kaeowichien, director of information technology for Magnetic, a Tampa-based Web-development firm.

Credit card firms have taken critical steps to fend off identify thieves, too. In 2006 a consortium including Visa, MasterCard, American Express and Discover helped devise the PCI/DDS standard for providing secure communication for transactions over the Internet. 

"This standard is now in place for all merchants globally who accept credit cards — no exceptions," says Bill Bradley, senior industry marketing manager for Akamai Technologies in Cambridge, Mass. "Non-compliance can mean fines and, for that retailer, a loss of public trust. And that's the main reason people don't buy online in the first place."  Editor's Note:  Ironically, PCI DSS was initially designed for bricks and mortar retail locations, there is no specific WPCI (Web Payments Card Industry) standard...

Keeping them buying: That's what understanding e-commerce — and the technology that drives it — is all about.  Editor's Note:  Keep them buying securely, that's what HomeATM's technology is all about!
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550,000 Web Banking Accounts Breached

Trojan compromises 550,000 web-banking accounts -

RSA FraudAction Research Lab has discovered login information for around 300,000 online bank accounts and 250,000 credit- and debit-card accounts, gathered by a cybercrime gang over the past three years using the Sinowal Trojan.

The account information has been stolen since at least February 2006, uninterrupted, and includes email and FTP accounts, according to RSA.  "This may be one of the most pervasive and advanced pieces of crimeware ever created by fraudsters," according to a blog posted on Friday by RSA, EMC's security unit. 

The Sinowal Trojan infects a computer without the owner's knowledge, surreptitiously planting itself onto a computer while the owner is surfing the web, in an attack dubbed a 'drive-by download'. The malicious code is typically hidden on less familiar websites, often related to porn or gambling, but can also be found lurking on legitimate websites, said Sean Brady, manager of identity protection at RSA.

The Trojan is programmed to execute when the victim visits a particular banking or financial website; it is triggered by more than 2,700 specific URLs, according to RSA. The malware then inserts additional fields into the victim's browser, prompting the victim to type in information such as their PIN and Social Security number, which the website itself does not ask for.

The company has alerted law-enforcement bodies and has provided the compromised account information to the financial institutions involved, Brady said in an interview on Thursday.


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Generation X + Y = Internet Boomers

Where Is Generation X?

They may have grown up listening to Nirvana’s “Smells Like Teen Spirit,” but a lot of things have changed since then. The Internet came along, for one.

Generation X has come of age. No longer the grungy, ripped-jeans kids Time magazine first described in 1990, Gen Xers are in their peak years of product and service consumption. And they are embracing electronic media more fervently than they were even 18 years ago.

According to US Census Bureau statistics, as of July 2007, 83.8 million people were in the 25-to-44-year-old Gen X age bracket. At approximately the same time, the Pew Internet & American Life Project estimated that a full 90% of Gen Xers used the Internet—only one percentage point less than Generation Y.

“Generation X fervently embraces electronic media,” according to the new eMarketer report, Generation X: Coming of Age Online: “Computers, PDAs and mobile phones are ingrained into all aspects of Generation Xers’ lives. They eagerly embrace new gadgets and applications as replacements for existing ones.”

Anderson Analytics places Gen Xers in the number two slot (right after the much-touted boomers) as the most important marketing demographic.  Since most Xers are still earning full salaries, they have money to spend. According to Javelin Strategy and Research, Generation X’s total income was $3.67 trillion in 2007—and that figure is projected to grow to $4.2 trillion in 2017.

But there is a problem: Gen X presents challenges to marketers.  Gen Xers’ media usage is fragmented. They embrace a wider range of lifestyles than previous generations. And weaned on MTV and cable television, they are largely immune to traditional advertising.  Fortunately, after a discussion of Gen X new media usage, eMarketer’s Generation X: Coming of Age Online concludes: “By embracing the growing forms of pinpointed electronic media that Gen X reveres, marketers stand a greater chance of increasing their visibility among this elusive, hard-to-reach generation.”

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Money Transfers to Account for 50% of Mobile Payments by 2013

Money transfers to account for 50 percent of mobile payments by 2013

Mobile money transfer and contactless NFC (Near Field communications) will together account for 50 percent of the overall mobile payment market globally by 2013, according to research.

The mobile payments market, now dominated by purchases of digital goods such as ringtones, music, and games, is expected to be driven by mobile money transfers and NFC for purchases in the future. According to research, this will drive the overall mobile payments market to grow by a factor of ten between now and 2013.

Researchers also expect mobile wallets to incorporate NFC to enable people to use their mobile phones to pay for small value items. The top 3 regions for this sector will be the Far East & China, Western Europe and North America, which together are estimated to account for over 70 percent of mobile money payments on a gross transaction basis by 2013. Nonetheless, NFC handset availability, workable business models and financial legislation are identified as the main obstacles to be addressed for the market to reach its tipping point.

The report is titled ‘Mobile Payments Markets: Strategies & Forecasts 2008-2013’ and was produced by research firm
Juniper Research.

Chase Paymentech Completes Transition As Well

Logo used by Chase prior to rebranding and its...Image via Wikipedia

Chase Paymentech has also (see previous story on First Data) announced the completion of its transition from a joint venture with First Data Corp to a wholly-owned unit of JPMorgan Chase. The assets of the joint venture owned by JPMorgan Chase have been integrated into the bank as a part of its card services division and will continue to operate under the name Chase Paymentech.

“We are enthusiastic about what the future holds for Chase Paymentech now that we’re wholly owned by JPMorgan Chase,” said Mike Duffy, president of Chase Paymentech. “The payment industry is very dynamic and is undergoing a significant evolution at the moment. Our new position within JPMorgan Chase gives us a global reach and resources unmatched in our industry. This means we can continue to deliver to our customers the high-quality service they have come to expect, while expanding the available range of global payment and data solutions.”

As part of its new ownership, Chase Paymentech retains its state-of-the-art payment processing platform and operations, the majority of the joint venture’s employees and 51% of the client base, which includes customers representing approximately half of all global e-commerce and Internet transactions.

“We are committed to being the leader in the global payments industry,” Duffy said. “Merchants are looking beyond the services offered by most payment processors. They want a merchant acquirer that provides expanded services, such as cash flow management, alternative payments and advanced analytics. We fully expect to be at the forefront of the industry.”

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First Data Transitions Chase Paymentech Portfolio

First Data Seamlessly Transitions Chase Paymentech Portfolio Merchants to Benefit from First Data's Continued Focus on Product Innovation

First Data, a global technology leader in electronic commerce and payments, today announced the successful termination of its joint venture, Chase Paymentech Solutions(TM), with JPMorgan Chase. Both companies now operate separate payment businesses.

First Data's core business is providing data-driven solutions and insight to both brick-and-mortar and e-commerce merchants through market-leading services and technologies that advance global electronic payments. First Data's investment in its portfolio of product offerings from loyalty programs to data analytics and mobile commerce solutions will enable merchants to differentiate themselves in the marketplace.

"Ensuring there was no disruption to our allocated merchant partners or employees during this transition was a priority for First Data and JPMorgan Chase," said Brian Mooney, president of First Data's Merchant Services group. "As the payments industry evolves, the value proposition to merchants becomes more about delivering new technologies that enhance the consumer experience wherever they may choose to buy and First Data has the breadth and depth of solutions to do just that."

First Data has assumed its 49 percent share of the merchant portfolio which includes management of the full-service ISO and Agent Bank unit of the JV. First Data has also completed the integration of its proportionate share of the JV's assets and a portion of the JV employees into its existing merchant acquiring business. First Data will continue to provide processing services for a segment of the business allocated to JPMorgan Chase.

Today, First Data provides processing and acquiring services to more than 5.4 million merchant locations globally and processed $1.5 trillion of payment transaction dollar volume on behalf of U.S. merchants in 2007.

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

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Javelin 2008 Year in Review Webinar

imageWednesday, November 12, 2008
10:00 AM - 11:00 AM PST

Javelin Analysts Talk Research, 2008 Highlights and What to Expect in 2009

Click Here to Register

You need to make your research dollars work for your business. Learn what some of the largest financial institutions, card issuers and technology companies agree upon—a subscription to Javelin’s research is key to their business.


• 2008 key topics and findings for each coverage area—payments, financial services and security and fraud.
• Get a preview of our 2009 planned research topics.
• How does analyst inquiry integrate into your research needs?
• Javelin’s core competency in rigorous data analysis makes our forecasting models more accurate.
• Educational webinars enable you to share research with colleagues.

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