Saturday, March 28, 2009

Internet PIN Debit White Paper - HomeATM

HomeATM CEO, Ken Mages (along with one of HomeATM's Engineers, Jimmy Tang) have collaborated on a White Paper outlining why a software approach to bringing PIN Debit to the Internet is not safe. 

To view the White Paper in PDF file, I have included a link below.  

To enlarge the photos of each individual page, you can simply click the picture and it will enlarge to a size large enough to read it.

Suffice it to say that that HomeATM believes that, from a Hardware vs. Software/ Security vs. Convenience standpoint,  Internet PIN Debit transactions done on a PC is...

Doing It Wrong

Page 1
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Page 2
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Google Search = CC#'s, Names and Home Addresses

According to the Telegraph, a Google Search results in credit card numbers, names and home addresses of  British Shoppers.  I posted about this last week in a post entitled: Cybercriminals Cache In (Google)  Here's their story:

Credit Card Details Freely Available on Web
Credit card details of British shoppers have been made freely available on the internet

The data, which includes names and home addresses as well as full card information, was accessible through a simple Google search.

It is believed that the details of thousands of Visa, Mastercard and American Express customers was mistakenly put in the public domain by fraudsters, who planned to sell it on to other scammers.  A spokesman for the banking industry body APACS said that most of the cards on the list had already been cancelled, but there are concerns that their owners were not made aware that they had been leaked online.

Internet security experts said it was very rare for such a complete set of credit card data to be posted on the web for anyone to access.

Nigel Evans MP, chairman of the all party parliamentary group on identity fraud, told the Daily Mail: "This is hugely worrying. The credit card companies have a duty of care to inform all those involved that they are at risk of identity fraud."

A spokesman for APACS said: "The banking industry takes every data breach extremely seriously. We'd like to remind all online businesses of their responsibility to store card details securely."

The data was originally posted on an unsecured server in Vietnam used by criminal gangs. The site was closed down in Febuary but the information remained available on a "cached" version of the page on Google, which stores historical snapshots of websites even after they are removed.  A Google spokesman said that the information had now been removed.

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Prepaid Cash Cards "Swipe your Dollars!"

From the Washington Independent
by Martha C. White

Americans are more conscious of debt than ever. Feeling burned by bank overdraft fees of $30 or more, or by credit-card interest rates that can top 25 percent, a growing number of consumers are turning to prepaid, reloadable “cash cards.”

These cards have confidence-boosting names like “READYdebit” and “UPside.” They feature the logo of Visa, Mastercard or Discover and are issued by companies like Green Dot Corporation and NetSpend. These cards are sold at retail locations as well as check-cashing storefronts and money-wiring outlets.

For a large segment of users, primarily low- and moderate-incomeconsumers, these cards function as ersatz bank accounts. These consumers are referred to as the “unbanked” in card-industry parlance. With a cash card, those with poor credit or too little money to meetbanks’ minimum account balance requirements can participate in theretail transactions most people take for granted: ordering goodsonline, paying for items with a quick swipe, getting cash on demandfrom ATMs.

It’s a fast-growing niche; in 2007, $2.1 billion was placed on reloadable prepaid cards, according to Mercator Advisory Group, a market research company that specializes in the payment industry. By 2011, Mercator predicts that number will jump to $14 billion.

Yeah...and back in April of 2006 I put together a proposal for Pay By Touch to get into the prepaid industry.  But they were too busy burning through $11 million per month to look at an industry (that at that time) was only worth a billion per year.  Of course, Green Dot, (who wasn't a big player then, but sure is now) saw the opportunity...

...Green Dot Corporation, one of the big players in the field, says they’ve seen a whopping 50 percent year over year growth rate in terms of dollars loaded onto their cards.

Green Dot Corporation

For those who lack the discipline or the know-how to manage their money, these cards can be a lifesaver in that they don’t let a user spend more than he or she has. It’s impossible to overdraw and accrue fines, or tap into a line of credit that could spiral into a nightmare of debt. But while these cards may be beneficial for consumers who want to avoid the temptation of spending beyond their means, they are no panacea. Reloadable prepaid cards have several key differences of which users might not be aware.

First, they’re expensive to use. “The basic situation with prepaid debit cards is that they tend to come with a multiplicity of fees, which make them relatively expensive to use,” said Jean Ann Fox, director of financial services for the Consumer Federation of America. With the exception of Wal-Mart’s $3 Moneycard, most cost $9 or $10 to acquire, and most charge maintenance fees of up to $10 per month after that. Since issuers like to advertise the fact that they don’t charge overdraft fees, it could be easy for a consumer to overlook the fact that everything from withdrawing cash at an ATM to calling customer service costs a couple of bucks. Adding more money to a card can also cost $5 or so if the transaction takes place at a retailer or Western Union location; the place doing the reloading takes a cut, too. Some issuers waive the reload fee if a user has their employer direct-deposit their earnings onto the card.

Want to cancel a prepaid card? Even that could cost $15 in fees. If a user has less than that left on a card, the cardholder can either spend what’s left without going over the amount, which would cause the card to be declined, reload it — for a fee— or just abandon the balance. As a rule, most card companies don’t charge for online account activity, but that might not be a viable option for lower-income unbanked consumers.

The unbanked also might not have the financial wherewithal or feel empowered enough to ask some hard questions about the security of their money after they make a deposit on the card, a prospect that worries consumer advocates and watchdog groups. “It’s an important question given the dollar volume flowing into these cards,” said Sarah Jane Hughes, a commercial law professor at Indiana University. “Whether or not there really is something standing behind those cards is very important.”

Americans with money in ordinary bank accounts are protected by the Federal Deposit Insurance Corporation. If the bank goes bankrupt, the government makes good on depositors’ money up to $250,000. Prepaid card users don’t necessarily have that assurance. It’s common for cash card issuers to pool all their customers’ funds into one account, which could easily go over the $250,000 maximum. What’s more, this kind of set-up would make the card issuer rather than their consumers the FDIC beneficiary if the bank failed.

At the request of advocacy group Consumers Union, the FDIC recently clarified that a provision called pass-through insurance would come into play with regard to prepaid cards. Essentially, this means that the cardholder rather than the card company would get paid. However, the FDIC also spelled out a series of steps card issuers have to take for pass-through insurance to be initiated — and there’s no law that says the card companies have to take those steps. According to Gail Hillebrand, senior attorney at Consumers Union, it’s up to issuers to do the right thing when it comes to protecting their users’ cash.

“The great victory is that these funds can be FDIC insured to the individual,” said Michelle Jun, staff attorney at Consumers Union. “The problem now is it’s unclear if all these cards are set up in this fashion, and it’s not entirely clear which ones are FDIC insured.” In other words, it’s buyer beware.

Lastly, although these cards carry the logo of brands like Visa, Mastercard or Discover, they are not credit cards. While this distinction may help users from getting — or staying — in debt, it also means that no matter how judiciously they use their card or manage their money, these efforts won’t go towards raising their credit score. In a marketplace where lenders are demanding high credit ratings, not building a positive credit history can be a real handicap. Relying exclusively on prepaid cards means the unbanked will have a tougher time breaking out of that categorization. As much as Americans want temptation-busting tools that protect them from the lure of expensive play-now-pay-later loans, opting out of the system via prepaid spending devices carries some hefty costs of its own.

Martha C. White is a freelance journalist in New York. She frequently writes on economics.

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How to Capture $21B of Lost eCommerce Sales - Security

Consumer Confidence Critical in Capturing $21B of Lost eCommerce Sales - eBillme

WILMINGTON, Del.—March 25, 2009— In response to consumer demand for peace of mind at the checkout and to help merchants capture a portion of the $21 billion of lost sales due to consumer hesitation, the eBillme Buyer Protection Program has expanded to offer coverage unmatched by traditional credit, debit cards or other alternative payment providers. According to a consumer study of online shopping fears conducted by Javelin Strategy and Research and co-sponsored by eBillme, the most secure payment option that enables consumers and small businesses to use online banking to pay now, pay securely and use available funds, 83 percent of consumers say the most motivating factor to shop online is assurance that their payment and personal information is secure, followed by guarantees that the purchase will meet their expectations for quality at the lowest price possible.

The new and improved eBillme Buyer Protection Program, announced today, includes more protection for shoppers on consumables such as over-the-counter medications, vitamins, non-prescription medical supplements, cosmetics, and non-perishable food items. Additionally, computer software, DVDs and CDs, automotive accessories, watches, perfumes, and more are now also covered. For complete details on the buyer protection coverage, visit

“The Javelin study found that online shopping fears cost online retailers billions throughout 2008,” says Marwan Forzley, President and CEO of eBillme. “It is clear that payment and purchase protection remain top priorities for online shoppers. By not requiring the release of any financial information at checkout while offering shipping protection, best price, fraud, and satisfaction guarantees, eBillme helps online retailers deliver the most secure cash checkout experience that will increase sales and attract return customers. We know how important security is for the online retail industry, which is why we have expanded our buyer protection program even further to respond to the increasing consumer demand for a more secure way to pay cash online.”

eBillme’s buyer protection program, provided at no cost to shoppers and retailers, has the same or a better level of buyer protection than premium credit cards. Protection features include a return guarantee, price guarantee, in-transit protection, and fraud protection. Consumers can shop with confidence knowing their eBillme transaction is guaranteed and protected.

eBillme is easy to use. Because shoppers pay directly from their online bank account, they don’t release any financial information online. This helps consumers manage their spending and debt, while better safeguarding themselves from identity theft and fraud risks. When shoppers choose the option at checkout, their order is confirmed with an eBill sent to their e-mail address. Consumers simply pay the eBill through their online checking or savings account—the same way they pay utilities, loans, insurance, and other bills. The transaction occurs securely, bank to bank, with no personal or financial information required or transmitted over the Internet.
eBillme will be sponsoring a Webinar with Javelin Strategy and Research on Wednesday, April 8th at 1PM EST, to discuss the consumer study and findings. To register, please visit

ABOUT eBillme
eBillme™ is the only online payment solution that extends the convenience of online banking to the merchant’s checkout, reduces the security risks of shopping online, and enables merchants to increase sales while reducing transaction costs. No financial data is exposed and the payment transaction is securely transferred from the customer’s bank to the retailer’s bank. Consumers can shop online, by catalog or through call centers, and pay for their purchases at their bank, credit union, or bill pay portal using the security and convenience of online banking. eBillme gives retailers access to the over 110 million Americans who use online banking. For more information, please visit or eBillme’s Online Debt-Free Shopping Mall,


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Public wants more controls on credit cards: poll

Most Quebecers, like most Canadians, support tighter controls on the credit card industry, according to a survey released Friday by the Canadian Federation of Independent Business.

In Quebec, 48 per cent of respondents strongly supported more rules, while 34 per cent were somewhat supportive, nine per cent somewhat opposed and six per cent strongly oppose the idea.

Across Canada, 51 per cent of respondents said they strongly support tighter rules on how credit card companies treat card-holders and merchants. Another 31 per cent are somewhat supportive while six per cent are strongly opposed and eight per cent somewhat opposed to the idea.

The federation, which has been waging its own battle against Visa and MasterCard over fees charged to merchants, said the survey showed “small business owners are very much in step with the general public in wanting greater oversight on this industry.”

The telephone poll of 1,524 credit card holders across Canada was conducted by Environics Research between March 5 and 8. The results are considered accurate to within plus or minus 2.5 per cent, 19 times out of 20.

Montreal Gazette
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