Tuesday, November 17, 2009

What "Type" of Problems Can HomeATM Solve?

  1. Weak Online Banking Log-in

  2. "Card Not Present" Fraud

  3. Insecure Online Payment Card Transactions

  • Why is that important "Today?"  Because... (see chart below) 





    A product that can secure online banking log-in...

    replicating the same trusted method used to disperse cash in real-time


    A Product that  can Eliminate the Ever Dangerous "Card Not Present" Environment, thus the leading cause of all payments fraud, "Card Not Present" Fraud

    By swiping your card, it captures the data contained on the magnetic stripe, which is then instantaneously 3DES DUKPT encrypted.  Both the Track 1 AND Track 2 data... "inside the device."  Furthermore, our device captures the PVV (PIN Verification Value) and PVKI (PIN Verification Key Index) and 3DES/DUKPT encrypts the PIN data for secure, "outside the browser" transactions.


    A product which works with every bank card, using existing bank rails.

    No Question:

    The fact that Visa, MasterCard, Discover, AMEX and JCB (those entities which comprise PCI)  inspected, analyzed, tested and then provided HomeATM's device with "PCI 2.x PIN Entry Device Certification," demonstrates unequivocally, it's ability to capture the magnetic stripe data, securely encrypt it and transmit the encrypted cardholder data packet securely to it's destination.

    100% Mimics Retail POS Terminal.  The only differentiation being that HomeATM's

    PIN Entry Device takes encryption a step further and also 3DES/DUKPT encrypts the Track 2 data

    Reblog this post [with Zemanta]

    50% of American's Don't Know What Phishing Is

    Once Upon a Cybercrime…

    Editor's Note:  Wow.  50% of American's do not know what phishing is.  That's gonna be a tough hurdle to overcome if banks take the educational vs. elimination approach.

    Also, make a mental note of the fact that keyboards, keystrokes and typing are almost always depicted in a cybercrime illustration...so when do we start swiping and eliminate typing?

    Recently ESET commissioned Competitive Edge Research and Communications, Inc. to conduct a study about attitudes, beliefs, and experiences of Americans with respect to cybercrime. There were some interesting results.

    One of the findings is that most American’s are not aware that cybercrime is linked to organized crime. Viruses and Trojans are no longer the purview of pimple-faced punks who never see the sun. Malware has become a tool of the organized crime, but only about one out of 5 Americans realize it is not the lone wolf who is biting them.

    Not at all surprising is the fact that both PC and Mac users perceive the Mac as being safer, but the statistics show that Mac users are victims of cybercrime just as frequently as PC users. The most probable explanation for this would be confusing viruses as being cybercrime. 57% of Mac users feel it is safe to use their computers without antivirus software where only 27% of PC users feel it is safe to do so.

    Much of the losses associated with cybercrime are related to phishing attacks. Phishing attacks are just as effective on Macs, Linux, Windows, Solaris, and any operating system since they rely on tricking the user and not upon malicious software or any software vulnerabilities. The Mac offers no immunity to phishing attacks and so we see a virtually equal percentage of victim representation across the board.

    A significant part of the phishing problem is ignorance... The survey found that less than 50% of Americans even know what phishing is. It is difficult to defend against something one is not aware of.

    Editor's Note:  "It's difficult to defend against something one is not aware of?"  Ya think?  Why on earth would banks take on the daunting task of teaching individuals what the problem is and how to avoid it, when they have the means to eliminate it completely? 

    If 50% of American's don't even know what phishing is, it's going to be extremely difficult, at best, to get them up to speed.

    Especially considering the fact that "Phishing" expeditions are becoming increasingly sophisticated.   So-so-phisticated that they almost tricked the FBI director, whom I guarantee you, knows more about Phishing than the average bear.  After that experience, he swore off online banking.  

    The writing is on the wall.  You do the math. 
    50% of American's don't even know what phishing is and...according to ACI Worldwide...49% of online banking customers would switch banks if they (or someone they knew) became a victim of card fraud.  Looks like about 50% of American's are going to be switching banks soon.

    If customer acquisition (and retention) is an important factor in a bank's marketing platform,which according to a survey conducted by eMarketer, both top the 2010 list, (see graphic on right) then I have an ideal solution.   

    Rather than "teaching" consumers how to recognize a detail about a subject they are clueless on, how about arming them with a device that completely 100% eliminates phishing.  If we stopped typing our financial details into boxes on websites vs. swiping their bank-issued card and entering their bank-issued PIN, then there would be nothing to phish phor....

    An interesting finding was that it appears that when a Mac user is a victim of phishing they tend to lose more money on average than a PC user. I’m not ready to proclaim this as fact since we can’t explain the finding, but that was the undeniable trend found by this specific study.

    With respect to online banking, 84% of the general public feels it is at least somewhat safe to bank online. When you look at the reasons given for not banking online then you see that well of over half of those people who shun online banking do so because of security concerns.

    Of note, we did find a lower rate of cybercrime victims among people who use both a Mac and a PC. This is probably due to a higher level of computer and internet knowledge. Being educated to the threats and defenses is a quite effective in decreasing the odds of a user becoming a victim of cybercrime.

    Randy Abrams

    Director of Technical Education

    Reblog this post [with Zemanta]

    SNCF and Gemalto Present Ticketing on Contactless Mobile Phones

    Cartes & IDentification, Villepinte, November 17, 2009 — SNCF and Gemalto today presented a new service allowing travelers to purchase and recharge their transport tickets using a contactless mobile phone which incorporates NFC (Near Field Communication) technology. This innovation, in its demonstration phase, will be presented on the Gemalto booth during the Cartes & IDentification 2009 exhibition.

    The widespread integration of NFC technology into consumer mobile phones will allow travelers to purchase or top up transport tickets, at any time, from the online SNCF portal. Travelers who buy pre-paid tickets will also be able to check how many tickets they have remaining. This new service enabling online purchases, in addition to the existing ticket offices and ticket machines, gives travelers greater freedom and flexibility.

    The transport ticket carrying the rights to use the public transport network is stored in the SIM card of the NFC mobile phone. It is used in exactly the same way as any other contactless transport ticket; travelers simply swipe their handset over a reader to open the gates. Similarly, travelers only need to present their phone to the ticket inspector, who checks the ticket validity.

    This new service is the result of a project run jointly by the SNCF Proximités Innovation and Technologies Pole, the SNCF subsidiary RITMx, an expert in ticketing distribution solutions, and Gemalto, the world leader in digital security.

    The project is based on Gemalto’s Trusted Services Management (TSM) dedicated offering of solutions and services. They enable the secure and convenient deployment of day-to-day applications such as transport and payment via a contactless mobile phone. Gemalto’s solution offers secure services for downloading and customizing the Calypso application, which provides a host of functionalities in the phone’s SIM card, such as incorporating transport ticketing. Gemalto also provides the user interface that allows travelers to view and download tickets onto their phones from the RITMx server.

    SNCF is considering offering a bundle of transport-related services on NFC-enabled phones, including ticket purchase and top-up, balance checking, real-time access to travel news and the use of tags (intelligent labels), etc. Phones may eventually become a channel for topping up contactless tickets.

    According to Jean-Pierre Farandou, Managing Director, SNCF Proximités: “Developing new generation services that are simple and offer added value will help make daily journeys easier. Our ambition is to support transport authorities in this proactive approach to continually improve public transports.”

    “Gemalto is proud to be working with SNCF to offer travelers a modern and convenient way of accessing trains using their mobile phone,” said Rémi De Fouchier, Senior Vice President Trusted Services Management at Gemalto. “Gemalto has already carried out over 25 NFC mobile services pilot programs across the world and we are poised for a large-scale roll-out of this new service for travelers, in partnership with SNCF.”

    About SNCF Proximités

    SNCF Proximités is one of SNCF’s fives branches. It operates the TER, Transilien, Intercités, Les Chemins de Fer de la Corse services as well as EFFIA (intermodality management) and Keolis (European urban and inter-urban public transport operator). As a partner to local authorities, SNCF Proximités offers a range of efficient and innovative solutions for every stage of the journey, covering travel preparation, information, ticketing, parking, and multi-modal travel: trains, trams-trains, metro, urban bus, tramways, bicycles, cars, etc.

    SNCF Proximités is innovation-driven and offers a range of solutions designed specifically to address the needs of its customers.

    The Innovation and Technologies Pole designs new media and distribution channels for inter-modal ticketing solutions that aim to make life easier for public transport users.

    SNCF Proximités works hand-in-hand with delegated authorities to ensure the regional roll-out of its ticketing solutions, which are already in place in 13 regions. SNCF Proximités also offers wide-ranging expertise in marketing, communications and consultancy services designed to assist local authorities in their missions.

    About Gemalto

    Gemalto (Euronext NL 0000400653 GTO) is the world leader in digital security with 2008 annual revenues of €1.68 billion, and 10,000 employees operating out of 75 offices, research and service centers in 40 countries.

    Gemalto is at the heart of our evolving digital society. The freedom to communicate, travel, shop, bank, entertain, and work—anytime, anywhere—has become an integral part of what people want and expect, in ways that are convenient, enjoyable and secure.

    Gemalto delivers on the growing demands of billions of people worldwide for mobile connectivity, identity and data protection, credit card safety, health and transportation services, e-government and national security. We do this by supplying to governments, wireless operators, banks and enterprises a wide range of secure personal devices, such as subscriber identification modules (SIM), Universal Integrated Circuit Card (UICC) in mobile phones, smart banking cards, smart card access badges, electronic passports, and USB tokens for online identity protection. To complete the solution we also provide software, systems and services to help our customers achieve their goals.

    As the use of Gemalto’s software and secure devices increases with the number of people interacting in the digital and wireless world, the company is poised to thrive over the coming years.

    For more information please visit www.gemalto.com.

    About RITMx

    Set up in September 2008, RITMx specializes in the design and integration of ticketing distribution solutions, enabling purchase and top up of pre-paid transport tickets in France and abroad.

    RITMx offers a centralized system that is multi-service (rail, bus and parking), multi-channel (ticket machines, internet, mobile phones and ticket offices), multi-media (ISO tickets, smart cards, USB keys and contactless mobile telephony) and multi-distributor (sale via transport operators or accredited third parties), and multilingual.

    RITMx’s clients are primarily French local authorities (regions, departments, boroughs, cities) and public transport professionals.

    Smart Card Alliance Study on EMV/Chip in Brazil and Mexico

    This new study from the Smart Card Alliance and Visa examines the current state of EMV migration and the long-term growth of the EMV market in Brazil and Mexico. The study is available at the site listed in the release, and the organizations will host webinars on the findings -- more details below. The Alliance is at Cartes this week in booth 4 K 065.

    Smart Card Alliance Study on EMV/Chip in Brazil and Mexico

    Finds that Payments Fraud Reduction is Top Driver for Adoption

    Organizations to host webinar to discuss findings

    Cartes & IDentification, Villepinte, France, November 17, 2009 – Reducing payments fraud is the top driver for issuers and acquirers to adopt EMV/chip in Brazil and Mexico, according to a new study from the Smart Card Alliance Latin America (SCALA), produced in participation with Visa Inc., available for sale today. Other important findings: respondents are also driven to adopt EMV/chip cards in order to position themselves as innovators and technology leaders, and they all expect to have 100 percent of their credit and debit card portfolios migrated to EMV/chip within one to five years.

    SCALA and Visa commissioned First Annapolis Consulting to survey issuers and acquirers in Brazil and Mexico on the current state of EMV migration and the long-term growth of the EMV market. The resulting report, “EMV Migration Study and Market Analysis on Mexico and Brazil,” is available for purchase by both Smart Card Alliance members and non-members by visiting http://www.smartcardalliance.org/pages/publications-scala-emv-market-study.

    The organizations will host English, Portuguese and Spanish language webinars on the study findings. The English language webinar will take place on December 1st at at 11:00 A.M. eastern standard time, while the Portuguese and Spanish webinars will take place on December 8th at 11:00 A.M. eastern standard time and 12:00 P.M. eastern standard time, respectively. Registration for the webinars is available at http://www.smartcardalliance.org/pages/publications-scala-emv-market-study.

    “With the global payments industry migrating to chip technology for credit and debit cards, it’s important to understand the drivers and best practices for implementation. Mexico and Brazil are ideal markets to study, as they are well on their way to full migration,” said Edgar Betts, associate director, Smart Card Alliance Latin America. “The number of respondents that said fraud reduction is the main driver for adoption was overwhelming; almost all survey respondents claim a marked reduction in overall fraud rates, particularly with domestic counterfeit fraud. We also found it exciting that the respondents see contactless, loyalty programs, and multiple applications as a natural evolution for the cards.”

    In addition to the detailed review of the adoption drivers, the report also reviews implementation considerations, migration strategies, business impact and evolution for Brazilian and Mexican issuers and acquirers. The study forecasts the size of the EMV/chip market in Brazil and Mexico through 2015, including chip cards, point-of-sale terminals and transactions.

    “Visa has been spearheading the migration to EMV/chip worldwide as a solution to prevent fraud, especially card skimming, but also as a great platform for added services,” said Jurgen Wassmann, head of emerging products and channels for Visa Latin America and the Caribbean. “In the markets where issuers, acquirers, merchants, brand networks, industry groups and the government collaborate, EMV/chip adoption efforts have accelerated the fastest.”

    The study reports results from surveys and interviews with 13 issuers and acquirers in Mexico and Brazil, which captured perspectives from a wide variety of organizations that had direct experience with implementing EMV/chip cards. The study addresses these questions and more:

    • What were the key factors influencing the adoption of EMV/chip cards and EMV-compliant merchant terminals for issuers and acquirers in Mexico and Brazil?

    • What challenges were encountered during the EMV/chip migration process?

    • How are organizations leveraging EMV/chip technology to improve performance, introduce new products and services, and capture new market opportunities?

    • What is the "next wave" in the evolution of the EMV market?

    • What is the business impact of EMV/chip adoption for issuers and acquirers?

    • What is the EMV/chip market size in Mexico and Brazil through 2015?

    For more information on “EMV Migration Study and Market Analysis on Mexico and Brazil” and webinar from SCALA and Visa, please visit http://www.smartcardalliance.org/pages/publications-scala-emv-market-study.

    About the Smart Card Alliance Latin America (SCALA)

    The primary mission of the Smart Card Alliance Latin American chapter is in line with the overall goal of the Alliance: to stimulate the understanding, adoption, use and widespread application of smart cards. The Alliance plans to use specific projects such as bilingual education programs, market research, advocacy, industry relations and open forums to keep Latin American chapter organization members connected to industry leaders and innovative thought.

    About the Smart Card Alliance

    The Smart Card Alliance is a not-for-profit, multi-industry association working to stimulate the understanding, adoption, use and widespread application of smart card technology.

    Through specific projects such as education programs, market research, advocacy, industry relations and open forums, the Alliance keeps its members connected to industry leaders and innovative thought. The Alliance is the single industry voice for smart cards, leading industry discussion on the impact and value of smart cards in the U.S. and Latin America. For more information please visit http://www.smartcardalliance.org.

    About Visa Inc.

    Visa Inc. operates the world's largest retail electronic payments network providing processing services and payment product platforms. This includes consumer credit, debit, prepaid and commercial payments, which are offered under the Visa, Visa Electron, Interlink and PLUS brands. Visa enjoys unsurpassed acceptance around the world, and Visa/PLUS is one of the world's largest global ATM networks, offering cash access in local currency in more than 200 countries and territories. For more information, visit www.corporate.visa.com.

    About First Annapolis

    First Annapolis is a management consulting firm focused on the financial services industry, with specialties in merchant acquiring, electronic commerce, credit card issuing, commercial card and private label card programs, and mortgage banking. With over 50 professionals, First Annapolis specializes in advising clients on strategic and tactical matters across all major payment products and services including credit cards, deposit access products, and commercial payment vehicles. First Annapolis brings an unparalleled level of expertise in traditional and emerging payment market segments. For more information, visit www.firstannapolis.com.


    Reblog this post [with Zemanta]

    MasterCard Launches MasterCard Mobile Payments Gateway to Spark Mobile Commerce Globally

    Mastercard financial servicesImage by jamesks via Flickr

    Itau Unibanco, Redecard are the first financial institutions to utilize new mobile payments processing platform

    PURCHASE, N.Y., Nov. 16 /PRNewswire-FirstCall/ -- MasterCard today announced the introduction of the MasterCard Mobile Payments Gateway, a mobile payments processing platform that enables financial institutions and mobile network operators to deliver end-to-end mobile payments solutions through the MasterCard Worldwide Network.

    Itau Unibanco and Redecard, along with mobile network operator Vivo, will be the first to use the MasterCard Mobile Payments Gateway to deliver mobile payment solutions to the banks' customers in Brazil. The service will give consumers the ability to use their phone as a mobile wallet and link their existing credit, debit or prepaid MasterCard or Maestro card accounts to their mobile phone to fund mobile-initiated payments.

    The Mobile Payments Gateway is a turnkey mobile payment processing platform that allows issuers, acquirers, merchants and mobile network operators to quickly and cost-effectively provide customized mobile solutions in developing payments markets by tapping into the MasterCard Worldwide Network, the payments industry's only fully globally integrated network. As a result, banked and unbanked mobile consumers gain access to a wide range of MasterCard Mobile payments solutions that provide greater payment convenience and security over cash--using their mobile phone to make purchases, send and receive money between family and friends, transfer funds between accounts, pay bills, deposit funds such as payroll or social benefits, top up mobile airtime, load value to prepaid accounts, get cash from ATMs, and keep track of their balances and activities with mobile alerts.

    MasterCard is working with Smart Hub, Inc. (SMART HUB, a subsidiary of Philippine-based Smart Communications, Inc.) to leverage its mobile payments technology to develop the MasterCard Mobile Payments Gateway. Requirements for development of a mobile payments infrastructure vary from market to market. By integrating SMART HUB's capabilities, MasterCard has created an open mobile payment processing platform through the MasterCard Payments Gateway to facilitate the launch of MasterCard Mobile payment solutions in developing markets.

    MasterCard is helping to transform financial services with mobile innovation to fulfill a global market need. Consultative Group to Assist the Poor (CGAP), an independent policy and research center housed at the World Bank, and the GSMA Association report that there are more than 4 billion people worldwide who have a mobile phone, but far fewer mobile phone users have a bank account- with the number to grow from 1 to 1.7 billion by 2012(1). The Mobile Payments Gateway enables them to benefit from secure and convenient mobile payment services that were previously unavailable to them. At the same time, participants in the mobile payments value chain can realize the significant potential for mobile growth outside of the markets they traditionally serve--providing opportunities for financial institutions to introduce payment and financial services to unbanked consumers and mobile network operators to offer value-added services for mobile payments.

    "The Mobile Payments Gateway will help to make mobile payments a way of life for mobile phone users around the world," said Joshua Peirez, group executive of Innovative Platforms for MasterCard Worldwide. "Through our global, integrated payment network we are efficiently connecting financial institutions, merchants and consumers together to mobilize MasterCard payment solutions in a way that truly reflects today's on-the-go lifestyles."

    "We are pleased to introduce a mobile payments solution that reinforces our innovative positioning in the market," said Fernado Teles, managing director, Itau Unibanco Holding. "For Itau, it is important to not only bring cutting-edge products but also ensure that it offers our customers the security and convenience they expect from a banking transaction."

    "The MasterCard Mobile Payments Gateway is complementary with the existing Redecard solutions and we are honored to be part of this project," says Roberto Mediros, President and CEO of Redecard. "This platform reinforces our leadership in mobile payments solutions. This is a breakthrough for mobile payments around the globe. Democratization and innovative solutions have always been priorities for Redecard and the MasterCard Mobile Payments Gateway is precisely aligned."

    "Vivo, the largest mobile operator in Brazil with over 48 million customers, is a natural choice for this partnership, due to its installed user base and broad service outreach, in more than 3,400 cities nationwide," according to Hugo Janeba, Vivo's Executive Vice President of Marketing and Innovation. "This is an important service we are glad to offer to our customers, empowering their connectivity so they can make the most out of their mobile phones. The mobile payments market is an expanding opportunity in the local scenario and we are sure this initiative will be a success."

    "While in the region there are some mobile payments solutions in the market that help unbanked mobile users transfer money or top-up prepaid accounts, these solutions have been limited in providing the breadth of payment transaction services for the underserved consumer to completely manage their finances," said Richard Hartzell, president, Latin America and the Caribbean region, MasterCard Worldwide. "I am pleased that the Latin America and Caribbean region will be the first to offer the MasterCard Mobile Payments Gateway, which will benefit every constituent in the payments ecosystem--helping financial institutions and mobile network operators reduce their mobile operating expenses and costs to serve consumers while enabling merchants to cost-effectively expand payment acceptance using their mobile phone. This will allow consumers to enjoy a more robust suite of mobile payment services that makes their lives easier."

    Following the launch in Brazil, MasterCard will introduce MasterCard Mobile payments solutions through the Mobile Payments Gateway in select markets around the world.

    "Successful growth of mobile payments around the world requires participation, communication and collaboration among all members of the mobile payments value chain," says Napoleon L. Nazareno, President and CEO of Philippine Long Distance Telephone Company and Smart Communications, Inc. "We are excited to build upon a successful history with MasterCard to advance mobile payments innovation in the industry by delivering compelling solutions that combine the global MasterCard brand and world-class payment network with our extensive digital telecommunications capabilities and world-first wireless data services."

    (1) CGAP-GSMA Mobile Money Market Sizing Study, June 2009

    About MasterCard Worldwide

    MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes approximately 21 billion transactions each year, and provides industry-leading analysis and consulting services to financial-institution customers and merchants. Powered by the MasterCard Worldwide Network and through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercard.com.

    About Itau Unibanco

    The Brazilian bank Itau Unibanco Holding, one of the 15 largest banks in the world, offers a full range of services to its local and institutional clients around the world. These include alternative investments, investment banking, asset management, brokerage and investment structure. Today, Brazil has a growing domestic market supported by strong fundamentals with all time low interest rates and historically low unemployment rates. Fiscal and monetary reforms have led to stable economic conditions with a growing middle class and a housing and construction boom. The 2014 Football World Cup and 2016 Rio Olympic Games will demand strong infrastructure investments for the next few years supporting increased economic activity.

    About Redecard

    Redecard is responsible for the capture and transmission of transactions on credit cards of the MasterCard® Diners Club International flags and debit cards of MasterCard Maestro, among others. The company accredits and promotes commercial establishments and it also partners for banks and several segments in the retail market. Developing ultimate technology in the area, Redecard deals with the installation and management of a chain of electronic terminals throughout Brazil to offer security and agility considering the 1.8 million transactions the company processes every year.

    About Vivo

    Vivo Participacoes (NYSE: VIV) provides mobile telecommunication services, cellular phone data transmission and mobile internet services throughout Brazil. Brazilian market leader in cellular telephony, Vivo is the brand of a joint venture between Portugal Telecom and Telefonica, which started in 2002. Covering more than 3.5 thousand municipalities, the company has the country's largest network and it is also the largest mobile telephony group in the South Hemisphere.

    Vivo's main goal is to provide more and better services for customers to be able to connect themselves - whenever they wish, however they wish, from wherever they wish, every time more. Thus, it manages to stimulate the network society, which brings along a huge source of opportunities for people to develop progress and live better. Accordingly, Vivo feeds a virtuous cycle which is reflected on the self-sustainable evolution of its own business.

    About Smart Communications, Inc.

    Smart Communications, Inc. (SMART) is the Philippines' leading wireless services provider with 38.5 million subscribers on its GSM network as of June 2009. SMART has built a reputation for innovation, having introduced world-first wireless data services, including mobile commerce services such as Smart Money, Smart Load and Smart Padala. SMART also offers 3G and HSPA services. Its Smart Link service provides communications to the global maritime industry. Smart Broadband, Inc., a wholly-owned subsidiary, offers a wireless broadband service, Smart BRO. SMART is a wholly-owned subsidiary of the Philippines' leading telecommunications carrier, the Philippine Long Distance Telephone Company (PLDT). For more information, visit www.smart.com.ph.
    Reblog this post [with Zemanta]

    CyberSource eCommerce Fraud Report

    Image representing Cybersource as depicted in ...Image via CrunchBase

    Merchants Hit Back at eCommerce Fraud

    • Projected dollar losses to U.S. and Canadian eCommerce in 2009 are $3.3 billion(1), down from $4 billion in 2008.

    • Merchants say they will lose 1.2% of their online revenue to fraud in 2009, the lowest percentage in the 11 year survey history.

    • In 2009 merchants accepted a greater percentage of incoming orders and experienced a lower fraud rate in the process.

    • Success factors include the increase in use of sophisticated tools, better management of orders in manual review, and better measurement of outcomes.

    • Fraud rates on international orders declined by 50% this year, from 4% in 2008 to 2% in 2009. International rates still show double the risk of domestic orders, however.

    • Merchants say fraud is more sophisticated than ever before--60% cite focus on improving automated detection and sorting capabilities in 2010.

    MOUNTAIN VIEW, Calif., Nov. 17 /PRNewswire-FirstCall/ -- Results of the eleventh annual CyberSource Corporation (Nasdaq: CYBS) survey of eCommerce fraud, released today, show that merchants in 2009 were fighting back against fraud, and seeing considerable evidence of success. U.S. and Canadian merchants expect to lose about $3.3 billion to eCommerce fraud this year, down from $4 billion last year. This is the first drop in estimated revenues lost since 2003. The percentage of revenue merchants predict they will lose in 2009, on average, is 1.2%, the lowest estimate in the 11-year history of the survey.

    "The eCommerce fraud picture has typically been one of worsening merchant losses," said Doug Schwegman, CyberSource Director of Market and Customer Intelligence. "This year, merchants have won back some ground. In an economy where many predicted fraud challenges would increase, eCommerce merchants in the U.S. and Canada fared better than they have in the past against fraudulent online payment. There are still many ongoing challenges, including better and more sophisticated efforts on the part of fraudsters, but it is a pleasure to report on progress made."

    Gains a result of better tools, merchant effort

    The survey suggests merchant success has come as a result of many factors, including greater use of automated decision tools to sort orders (67% used these in 2009, vs. 56% the year before). As one example, device fingerprinting, a means of identifying the source of orders by a computer's operating characteristics (its "fingerprint"), almost tripled in use among merchants that do more than $25 million in online sales per year. 18% of those merchants used device fingerprinting in 2009, and nearly half the sample of large merchants (45%) say they will implement the technology in 2010. One-third of survey respondents this year said they had changed their procedures to respond to fraudsters and 68% now track the success of orders they have manually reviewed to get a better understanding of their fraud management and a means of improving results. Last year, only 54% of merchants tracked those successes and failures.

    Significant challenges remain

    Vigilance is still key for merchants in an arena that will give up over $3 billion to fraud. One in five respondents said that fraud schemes were increasingly complex this year, and almost half say fraudulent orders appeared "cleaner" (more like valid orders) than in the year preceding. Mid-sized merchants, those with eCommerce revenues of $5 million to $25 million, were hardest hit in 2009, with 1.3% of accepted orders resulting in a fraud loss. And while all industries showed the impact of fraud, by far the most challenged was consumer electronics with its abundance of small, typically expensive, easily "fenced" products. This segment had more than double the rejection rate (orders rejected due to their appearance of fraud) of the next highest group, rejecting 6.6% of orders received. Consumer electronics also reported the highest fraudulent order rate of any industry segment at 1.5%--67% higher than average.

    Merchants hitting stride internationally

    Fifty-four percent of merchants now accept orders originating from outside the U.S. and Canada, up from 51% in 2008. Among that group, international orders comprise 21% of order volume--demonstrating the opportunity for online merchants not yet selling beyond U.S. and Canadian borders. Fraud has long been an inhibitor to companies looking to sell product or services abroad, but this year's survey brings optimism. Fraud rates on international orders dropped 50% this year and order rejection rates dropped 30%. Though the fraud rate has gone down, it's still double the domestic rate and order rejection rates are 7.7%, over three times the rate for domestic orders.

    Manual review still major hurdle

    Seventy-two percent of merchants manually review orders and, on average, review 28% of the orders they process. But automation pays. Larger merchants use more automated tools than their smaller counterparts (7.3 tools this year, vs. 4.7 for the overall sample), and achieve lower manual review rates (15%). Companies with products that sell for $200 or more are less likely to allow automated systems to reject orders without manual review.

    Looking to 2010--more automation

    When asked about priorities for the year ahead, 60% of merchants with eCommerce sales greater than $5 million said their top priority was improving the automated detection and sorting capabilities of their systems. Twenty percent said they were looking to improve their process analytics capabilities, and 16% are focused on streamlining the tasks and workflow around manual review.

    "This isn't a battle that can ever be won outright," continued Schwegman. "But we're certainly going to make life difficult for the bad guys."

    To obtain a copy of the survey results -- for journalists: please call or email Bruce Frymire (650-965-6042, bfrymire@cybersource.com). For all others: please visit www.cybersource.com/fraudreport2010 .

    The eleventh annual CyberSource fraud survey was commissioned by CyberSource Corporation. The survey was fielded September 10 through October 7, 2009 and yielded 352 qualified and complete responses. The sample was drawn from a database of companies involved in electronic commerce activities. Incentives to respondents included a summary of the research.

    About CyberSource

    CyberSource solutions enable electronic payment processing for Web, call center, and POS environments. CyberSource also offers industry-leading risk management solutions for merchants accepting card-not-present transactions. CyberSource Professional Services designs, integrates, and optimizes commerce transaction processing systems. Approximately 284,000 businesses use CyberSource solutions, including half the companies comprising the Dow Jones Industrial Average. The company is headquartered in Mountain View, California, and has sales and service offices in Japan, the United Kingdom, and other locations in the United States including Bellevue, Washington and American Fork, Utah. For more information on CyberSource please visit www.cybersource.com or email info@cybersource.com. For more information on Authorize.Net small business solutions, please visit www.authorize.net or email sales@authorize.net.

    ©2009 CyberSource Corporation. All rights reserved. CyberSource is a registered trademark in the U.S. and other countries. All other brands and product names are trademarks or registered trademarks of their respective companies.

    1. 2009 Loss estimates are based on Forrester Research 2009 U.S. online market size estimates as published in their U.S. eCommerce and Online Travel forecasts of February and January 2009 respectively.

    SOURCE CyberSource Corporation

    Reblog this post [with Zemanta]

    Federal Reserve Moves to Restrict Fees on Gift Cards

    Reuters Group Limited

    WASHINGTON (Reuters) — The Federal Reserve stepped up its consumer protection efforts for the second time in less than a week Monday, proposing to limit the ability of gift card issuers to impose excessive fees.

    The Fed proposed banning any fees for the first year and limiting gift card issuers to one fee a month if the card was not used for at least a year. It also requires clear disclosure to consumers about penalties.  Last week the central bank banned overdraft fees on banks’ automated teller machine and debit card transactions unless consumers had actively chosen to use an overdraft protection service.

    The rules would also prohibit the cards from expiring before five years had passed from the date the card was issued or five years from the date additional funds were added to the card. The rules would be not be put in place until August 2010.

    Reblog this post [with Zemanta]

    VeriFone Announces VeriShield Protect for EMV Smart Cards

    End-to-End Data Encryption Solution Complements EMV Smart Card and Contactless Payment Standards

    PARIS--(BUSINESS WIRE)--VeriFone Holdings, Inc. (NYSE: PAY), today announced that its VeriShield Protect end-to-end encryption solution for card payment security will be available for use with the EMV smart card standard and will also support contactless payments.

    First introduced in the U.S. to help merchants and acquirers secure cardholder information and comply with PCI data security requirements, VeriShield Protect is now being expanded for use worldwide in support of all card payment types. VeriShield Protect with full EMV and contactless capability is now being introduced in the UK and for other regions beginning in spring 2010.

    “With Visa International and MasterCard now both mandating global compliance with the PCI Data Security Standard by the end of 2010, the authentication and anti-card skimming benefits of EMV is no longer sufficient—merchants and acquirers also need to protect the integrity of cardholder data,” said Jeffrey Wakefield, VeriFone vice president and general manager, Global Security Solutions. “VeriShield Protect provides that data security element, and its unique format-preserving encryption technology makes it easy to implement within the existing infrastructure.”

    VeriShield Protect eliminates usable cardholder data from a retailer's POS applications, networks and servers by encrypting it end to end, so that even in the event of a security breach no usable data could be compromised and any stored data is secure. Real-time monitoring of payment transactions ensures that organizations can respond immediately to mitigate any attempted breach.

    VeriFone’s exclusive, format-preserving VeriShield Hidden Encryption (VHE) uses sophisticated AES encryption and enables existing payment applications to deal with encrypted cardholder data that is unusable by hackers, but does not impact existing transaction message formats. That makes it possible to integrate VeriShield Protect without costly changes to existing POS, back-office and acquirer software.

    In addition, VeriFone’s VeriShield Secure Device Management Service (VSDMS) provides real-time, actionable security alerts regarding breaches or use of non-compliant devices or systems for timely mitigation.

    “VeriShield Protect now supports the broadest range of card payments, whether they are magstripe, contactless or EMV-based,” said Wakefield. “As all of these payment acceptance methods will continue to co-exist in the foreseeable future, merchants and acquirers can now seamlessly protect all cardholder information that enters their enterprise.”

    Additional Resources: www.verifone.com/verishield-protect.

    About VeriFone Holdings, Inc. (www.verifone.com)

    VeriFone Holdings, Inc. (“VeriFone”) (NYSE: PAY) is the global leader in secure electronic payment solutions. VeriFone provides expertise, solutions and services that add value to the point of sale with merchant-operated, consumer-facing and self-service payment systems for the financial, retail, hospitality, petroleum, government and healthcare vertical markets. VeriFone solutions are designed to meet the needs of merchants, processors and acquirers in developed and emerging economies worldwide.

    MasterCard Worldwide to Strengthen Global Economic Connections with MoneySend Platform

    MasterCard® MoneySend(TM) to Make Money Transfers Simpler and Easier for Banks and Cardholders Worldwide

    PURCHASE, N.Y., Nov. 17 /PRNewswire-FirstCall/ -- MasterCard Worldwide today announced that starting in 2010, MasterCard customer financial institutions will have the capability to offer MasterCard cardholders money transfers from any MasterCard or Maestro card to any other MasterCard or Maestro card. The global card-to-card money transfer service will expand the usability and value of MasterCard products and global payments network by providing its customers with a convenient and cost-effective money transfer platform enabling person-to-person payments and cross-border remittances.

    For the over 197 million foreign workers worldwide(1) who are sending their pay packets home to their families, MasterCard MoneySend will help banks fulfill the market need for a money transfer platform that gives cardholders control over their money. The platform will support cardholder remittance payments enabling cardholders to send money that is quickly accessible to the recipient.

    "We are focused on developing convenient and secure solutions for the day-to-day financial realities of consumers around the world," said Joshua Peirez, Group Executive, Innovative Platforms, MasterCard Worldwide. "As the flow of money between global workers and their families continues to grow, MasterCard MoneySend provides a valuable, convenient and reliable money transfer option for consumers."

    Peirez added, "That we now offer a better alternative for sending and receiving person-to-person payments is a significant expansion of the functionality of our network. It will help our customers capture greater global remittance processing share."

    By offering a money transfer option that addresses concerns about the cost, quality and reliability of available money transfer platforms, MasterCard is delivering a viable solution to financial institutions. The MasterCard Worldwide Network provides the infrastructure enabling all transactions to be processed through cardholders' issuing banks and the MasterCard global payment network. This will give banks access to the $456 billion(2) global remittance opportunity while fostering deeper relationships with their cardholders. Asia Pacific, the Middle East and Africa comprise over 46% of the world's remittance volumes(3).

    "MasterCard MoneySend removes barriers impeding the transfer of money around the world and provides the global economy with a robust infrastructure that supports growth in international transfers as consumers continue to remit funds globally," said Walt Macnee, President, International Markets, MasterCard Worldwide. "This platform, built on the strength of the MasterCard Worldwide Network, is a clear example of MasterCard delivering upon its mission to advance global commerce by giving banks and cardholders access to secure and convenient money transfers."

    MasterCard MoneySend
    Enables Functional, Reliable Global Money Transfer

    The MasterCard MoneySend platform offers the network infrastructure for the development of a robust global marketplace enabling value, convenience and reliability for global money transfer. Currently, MasterCard MoneySend supports money transfer services in 17 countries. The global availability of the MoneySend card-to-card money transfer service will build upon these ongoing initiatives utilizing the key insights, including consumer attitudes and needs and partner integration and interoperability, learned in these markets to deliver the best possible solutions to all financial institution customers globally.

    New and existing MasterCard financial institutions can participate and offer the money transfer platform to their MasterCard cardholders through their online banking websites. The MoneySend platform offers participating customer financial institutions real-time authorization resulting in faster disbursement of funds.

    MasterCard MoneySend

    • In 2009, MasterCard goes live with fully-integrated, on-demand person-to-person mobile payment platform for issuers in the United States. With the new platform, MasterCard participating bank customers in the United States are able to offer Mobile MasterCard MoneySend P2P payments to their customers.

    • In 2008, Punjab National Bank in association with MasterCard introduced MasterCard MoneySend, enabling money transfers from MasterCard or Maestro accounts held at Punjab National Bank to any MasterCard or Maestro account at participating banks across India.

    • In 2008, DBS Bank Ltd (DBS) and MasterCard launched MasterCard MoneySend, enabling DBS customers to make remittances to participating banks in Indonesia, Malaysia, Philippines, Thailand and India.

    • In 2007, MasterCard Worldwide along with State Bank of India (SBI) announced the launch of MasterCard MoneySend, allowing consumers to conveniently send intra-country person-to-person money transfers using the ATM channel.

    About MasterCard Worldwide

    MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes approximately 21 billion transactions each year, and provides industry-leading analysis and consulting services to financial-institution customers and merchants. Powered by the MasterCard Worldwide Network and through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercard.com.

    (1) World Bank (2005)
    (2) The Aite Group, projected estimate by 2010 in USD (March 2007)
    (3) World Bank (2005)
    Contacts:  Erica Harvill, MasterCard Worldwide
    Erica_harvill@mastercard.com, 914-249-6848

    Kaitlin Jaxheimer, Weber Shandwick Worldwide
    kjaxheimer@webershandwick.com, 212-445-8261
    SOURCE MasterCard Worldwide

    Disqus for ePayment News