Wednesday, December 1, 2010

Consumers Have Role in Future of Internet PIN Debit Payments,, and

Here are some excerpts from an article written by Will Hernandez for American Banker where he takes a closer look at Internet PIN Debit.  To read the entire article, click here.

Future of Web PIN Payments Still Rests with Consumers

By Will Hernandez, American Banker

More electronic funds transfer networks are supporting Internet PIN payments to capture transactions otherwise lost to alternative payment methods that use the automated clearing house system for settlement.

Merchants should be eager to accept PIN debit transactions online to reduce transaction costs, thanks to lower interchange rates and decreased chargeback risk, executives from companies offering these products said.  At least one independent sales organization said it believes Internet PIN debit already has helped it gain business it would have lost to competitors.  However, the determining factor for consumers might rest with their comfort in entering PIN codes in an environment other than at the point of sale or an automated teller machine.
Acculynk Inc.'s PaySecure service has sprinted to the front of the pack in the race to determine which product gains universal acceptance among consumers and merchants.  Nine EFT networks support PaySecure — Accel/Exchange, Alaska Option, Credit Union 24, Maestro, NetWorks, NYCE, Pulse and Shazam. A thousand merchants accept PaySecure transactions.

MasterCard/Maestro Goes with Acculynk
Acculynk enables consumers to use PIN debit cards to make purchases online by integrating its PaySecure software into a merchant's online checkout system. Cardholders enter their four or six digit PINs into a virtual PIN pad that appears on-screen.


Card-not-present signature debit rates set by Visa Inc. and MasterCard Inc. typically range from 1.64% to 2.2% of the sale, depending on the type of transaction, according to Acculynk. The final price to the merchant for PaySecure typically is 20% to 40% lower than what they would pay for card-not-present signature debit, Acculynk has said in the past.

The EFT networks set the PIN debit interchange rates, which determine how much the issuer receives from the merchant's bank for the transaction.

The acquiring bank then passes the expense along to the retailer as part of the discount rate, which also covers costs for processing and other services, including those provided by the supplier of the PIN debit payment service.

In April, Acculynk launched an ISO reseller program to enable companies to sell signature and Internet PIN debit processing as a package and to pursue the card-not-present and Internet merchant markets strategically, said Nandan Sheth, Acculynk's president.

The Atlanta company's expanded product, PaySecure Plus, includes credit and debit card processing and Internet PIN debit transaction processing.

Elavon Inc., an Atlanta processor owned by U.S. Bancorp, is providing card processing services for Acculynk, Sheth said.

JetPay LLC of Dallas is one of the few merchant services providers to publicly promote itself as a PaySecure supporter. JetPay has offered PaySecure to merchants since September and determined that the product gives the company an advantage in the marketplace, claims its chairman, Trent Voigt. JetPay mostly deals with Internet-based businesses.

Internet PIN debit's allure forced one merchant to rethink a commitment it was about to make with a bigger transaction processor that did not offer PaySecure, Voigt said. JetPay also is a processor.

"Some accounts we didn't win because we weren't the bigger company," Voigt said. "Now we can go back to those accounts, ask them if they want to do [Internet] PIN debit and process those transactions."

EFT network executives seem to be comfortable with PaySecure, and some networks have been testing the product for more than a year.

Last year, Fiserv Inc.'s Accel/Exchange became the first to roll out the service.

"We like this model because it doesn't cut out the bank," said Michael Kelly, the general manager of Accel/Exchange. "There are a couple of other networks that have aligned with PayPal, but we don't think that is the right model."

Signature Debit might have higher fraud, but it also makes more money for the banks
so they push it over the more secure PIN Debit.  Many feel that's about to change.
In April 2009, Javelin conducted a survey that found 80% of participants would use PaySecure if a trusted merchant presented it as a checkout option.  Javelin surveyed 500 signature debit card users who had made online purchases in the previous year.  Survey participants used PaySecure for a mock online purchase and then answered questions about their experience using the product.

One aspect Internet PIN debit technology has in its favor is that consumers already are familiar with the transaction process, said Dan Kramer, Shazam's senior vice president of marketing and merchant services.

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Small Businesses Do Not See Themselves as Cybercrime Targets

Survey Sponsored by Visa Inc. and National Cyber Security Alliance Finds 85 Percent of Small Business Owners Believe Their Companies Are Less of a Target than Large Companies

Washington D.C., November 30, 2010 /PRNewswire/ — Small business owners increasingly believe investments in cybersecurity are not justified by actual online threats and the majority of cybercrime is focused on attacking large companies, found a new study sponsored by Visa Inc. and the National Cyber Security Alliance (NCSA).
early 50 percent of all small business owners believe the high cost in time and money to fully secure their business is not justified by the threat. This attitude is manifested in practice as 75 percent of owners said their employees have received less than three hours of network and mobile device security training in the past year, with 47 percent saying their employees received zero hours of training.
“The greatest threat to a company’s cybersecurity is complacency,” said Michael Kaiser, executive director of the NCSA. “We encourage small business owners to take the necessary precautions to protect their customers, employees and their businesses.”
According to the survey, more than 85 percent of small business owners believe that they are less of a cybercrime target than large companies, and 54 percent believe they are more prepared to secure sensitive customer and corporate data than large businesses. In addition, 84 percent agree that they have the policies and procedures in place for keeping data and computer systems secure.
The findings are surprising in light of growing concern from security experts and law enforcement that hackers and cyber criminals are honing in on small businesses as their new targets. Last month, Ukraine authorities arrested five individuals who allegedly stole $70 million from U.S. bank accounts in an elaborate scheme targeted at U.S. small and medium-sized businesses.
“Cybersecurity investments are critical to protecting a company’s brand and reputation,” said Rosetta Jones, head of public affairs for Visa. “We are focused on partnering with small businesses to ensure that they fully understand the business benefits of running a cyber secure operation.”
Small businesses can find basic help online at as well as more detailed guidance at Visa’s cardholder data security site,, or at the Payment Card Industry Security Standards Council’s (PCI SSC) small business site,
According to Jones, small business owners can take an important step toward better security, in a matter of moments, by making sure their payment system software is not working against them. The PCI SSC maintains a list of payment applications that have been validated as complying with the Payment Application Data Security Standards (PA-DSS). Validated software applications use secure coding procedures to guard against common attack methods and prevent the retention of prohibited data.
The study was an online poll of 1,000 small business owners conducted by Zogby-463.

About The National Cyber Security Alliance

The National Cyber Security Alliance is a nonprofit organization. Through collaboration with the government, corporate, non-profit and academic sectors, the mission of the NCSA is to empower a digital citizenry to use the Internet securely and safely protecting themselves and the technology they use and the digital assets we all share. NCSA works to create a culture of cyber security and safety through education and awareness activities. Visit for more information.

About Visa Inc.

Visa Inc. is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable digital currency. Underpinning digital currency is one of the world’s most advanced processing networks—VisaNet—that is capable of handling more than 20,000 transaction messages a second, with fraud protection for consumers and guaranteed payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa’s innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, ahead of time with prepaid or later with credit products. For more information, visit

Media Contacts:

Aimee Larsen-Kirkpatrick
National Cyber Security Alliance
(202) 570-7431

CardinalCommerce and IP Commerce Announce eCom/Mobile Payments Partnership

CardinalCommerce and IP Commerce Announce Partnership Enabling Rapid Integration of Any Payment Method for eCommerce and Mobile

DENVER--(BUSINESS WIRE)--IP Commerce, the industry leader in Platform-as-a-Service for Commerce providing an open API platform and workflow engine, and CardinalCommerce, the global leader in enabling alternative payment brands for eCommerce and mobile commerce, today announced a partnership between the two companies focused on the delivery of alternative payment acceptance and traditional payment methods to the software development community.“The Cardinal partnership reaffirms our commitment to an open development platform for commerce. In the era of the API, it is important to recognize that the value of a Platform lies not only in the development tools (APIs) but in the ability to deliver multiple services to targeted market segments”
This partnership facilitates the delivery of these payment services both through the Cardinal Centinel® platform and the IP Commerce Managed Services Platform.
This relationship effectively connects the infrastructure used for electronic point-of-sale payments to the infrastructure used for remote commerce transactions. Payment brands and methods used online, in mobile commerce or for point of sale transactions can now be enabled with a single family of APIs. The importance is that merchants, merchant service providers, payment brands and those part of the financial service supply chain can leverage their existing systems to not only enable the brands for today but long into the future. It is the fastest, easiest and most simple way to enable payments.
"The Cardinal partnership reaffirms our commitment to an open development platform for commerce. In the era of the API, it is important to recognize that the value of a Platform lies not only in the development tools (APIs) but in the ability to deliver multiple services to targeted market segments," said Alfred 'Chip' Kahn, IV, CEO of IP Commerce. "This partnership will not only drive value to each of our respective customers, it will enable the software development community to obtain all tools and support required to streamline their development process. This one-stop shop simple integration, layered with authentication, business rules and governance, will provide the software market and their customers a simple and secure method to integrate traditional and alternative payments.”
The combination of both companies’ respective technologies, know-how, intellectual property, patents and patents pending make it hard to imagine how those in the industry wouldn’t benefit from the use of this technology. Together there are 13 issued patents and over 70 pending.
For more information on this partnership, and the benefits to the software development and payment communities, please contact us.
About CardinalCommerce
CardinalCommerce Corporation is the global leader in enabling authenticated payments, secure transactions and alternative payment brands for both eCommerce and mobile commerce.
The Cardinal Centinel® software platform enables payment brands, such as Verified by Visa, MasterCard® SecureCode™, Amazon Payments™, Bill2Phone™, Bill Me Later®, ClickandBuy®, Cred-Ex®, Ebates™, eBillme™, eLayaway™, Google™ Checkout, Green Dot® MoneyPak®, Mazooma™, Moneybookers, MyECheck, NACHA® Secure Vault Payments (SVP), NYCE® SafeDebit™, OneTouch Online Purchasing™, Paymate, PayPal™, Paysafecard, RevolutionCard™, Rialto Pay℠, SafetyPay™, TeleCheck®, Ukash™, and Universal Pin Debit Service to thousands of merchants and merchant service providers worldwide. CardinalCommerce is headquartered in Cleveland, Ohio.
With facilities in the United States, Europe and Africa, Cardinal services a worldwide Customer base. For more information, visit
About IP Commerce
Based in Denver Colorado, IP Commerce, Inc. provides the first cloud-computing platform for commerce - a highly flexible family of payment, data, value-added service, and Federated Identity APIs coupled with workflow, commercialization, and governance resident in the Platform - built to ignite application developer innovation and enable payment service providers to focus on innovation and growth through integrated payments.
Whether developing a payment application, or addressing the needs of a community of Software Companies as a payment service provider, the Platform provides a white-labeled approach to integration, promotion, acquisition and activation.
IP Commerce maintains partnerships with some of the world’s most respected financial institutions and software companies. Leading investors, including Meritage Funds, Venrock, Total Technology Ventures (TTV) and Iron Gate back the company. For more information visit,


IP Commerce, Inc.
Tyler Hannan, 720-377-3700 x827
Platform Evangelist
CardinalCommerce Corporation
Christopher G. Brown, CFO, 440-352-8444 x107
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Understanding the New Credit Card Rules

Credit cards.From BNet's "ask the experts"...

The National Retail Federation (NRF) says debit cards will be the go-to payment system for 43 percent of holiday shoppers; that’s up from about one-third who used debit cards for their holiday spending in 2005. At the same time, the NRF survey says less than 30 percent of holiday shoppers intend to put their purchases on credit cards, the lowest level since 2002.

The Creditcardless: A Fast Growing GroupThe shift from credit to debit card usage isn’t some seasonal aberration. The TransUnion credit bureau announced yesterday that 8 million Americans stopped using bank-issued credit cards this year, on top of the 70 million who were already card-free. Of course, plenty of those card-eschewers had their cards cut up for them as banks have aggressively closed down their riskiest credit card accounts in the wake of the financial crisis. But according to TransUnion, this isn’t just about shutting down subprime card accounts: “[C]onsumers with higher incomes were just as likely as consumers with lower incomes to suspend their use of this payment option.” TransUnion VP Ezra Becker added that the expanding ranks of the credit cardless is “one of the fastest growing consumer segments.”

Indeed, in yet another survey, Javelin Research says credit card usage is at an all-time low, with the number of people using them falling from 87 percent of consumers in 2007 to 56 percent in 2009. And once the year-end 2010 data rolls in, Javelin says we could officially become a debit and prepaid card nation as it expects credit card usage to dip below 50 percent.  <>

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FBI Warns Of Mobile Cyber Threats

Criminals will target holiday shoppers with SMS text and voice mail scams, or smishing and vishing, said the agency. 

Inside DHS' Classified Cyber-Coordination Headquarters
(click image for larger view)
Slideshow: Inside DHS' Classified Cyber-Coordination Headquarters
As if online phishing scams aren't enough to worry about, people also should be wary of criminal efforts targeting their cell phones, the FBI is warning.
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