NF Edition #502 - 4/22/16
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Heard at Transact 16...
This week, the Electronic Transactions Association (ETA) held Transact 16 in Las Vegas. The event was host to over 4,000 attendees, 200 exhibitors, and countless announcements.

The Strawhecker Group (TSG), a Gold Sponsor, was present at the show. Afterwards, the team put together commentary to summarize key topics heard at Transact 16:
  • EMV Chargebacks
    • While talking to major acquirers at Transact, the conversation has shifted over the past six months from EMV compliance to EMV related chargebacks. As TSG reported, overall chargebacks increased 15.3% in bank card $ volume YOY and 30.9% of bank card transactions. This topic certainly dominated conversations with some large acquirers as they are attempting to determine the root cause of this increase which is not only increasing expense, but also merchant complaints. More to come on this issue as additional data is analyzed.
  • Big Transactions
    • TransFirst is TSYS – was apparent at Transact with the two companies sharing booth space as well as a new management team, after the transaction closed on April 1. Several TSYS clients commented that it will be an interesting transition for the company.
    • Global Payments’ acquisition of Heartland closed on Thursday, April 21. With both Bob Carr and Bob Baldwin set to retire, the industry is losing two very influential participants that have made an impact.
Continue reading

TSG Press @ Transact 16

  • The Strawhecker Group Celebrates Ten Year Milestone
    • “I wanted to own my own business, and I saw a need in the market,” said Kurt Strawhecker, Founder and Partner at The Strawhecker Group (TSG). This was in 2006, when he and Jamie Savant launched TSG, a consulting firm focused on the global payments industry. Ten years later, their business has grown and the industry has evolved, however their core principles have remained the same. Continue reading.
  • Chargeback Uptick in the SMB Market
    • Some payments companies have been mentioning increases in chargebacks since October 1st. This appears to be true, according to The Strawhecker Group's merchant level database of more than 3.5 million card accepting merchants. The charts illustrate that there were increases in chargeback rates in the SMB market for both transactions and dollar volume throughout much of 2015 with the greatest acceleration occurring in Q4 2015. Continue reading.
  • TSG/ETA Release New Economic Indicators
    • The Electronic Transactions Association, in partnership with The Strawhecker Group, is pleased to release this special report on the U.S. economy, focused within the context of the electronic payments ecosystem. This report is a member benefit provided to the ETA's 500+ worldwide member companies. Please login to ETA and navigate to 'Member-Only Content' to download Economic Indicators.

Heartland Payment Systems Stockholders Approve Merger with Global Payments
Business Wire | 4.21.16

Global Payments Inc., a leading worldwide provider of payment technology services, and Heartland Payment Systems, Inc., one of the nation’s largest payment companies, announced that Heartland stockholders voted to approve the proposal relating to Heartland’s merger with Global Payments. Approximately 29.7 million shares were voted in favor of the merger proposal. The favorable vote represents approximately 99% of the total Heartland shares which voted on the merger proposal and 80% of the total outstanding Heartland share count.

Visa Has a Plan to Cut the Wait for a Chip-Card Transaction to Complete
Ars Technica | 4.19.16

On Tuesday, credit card network Visa announced plans to offer an update to Point of Sale (POS) systems to make using an EMV chip-enabled card faster at the checkout line. (EMV stands for Europay, MasterCard, and Visa, the creators of the credit card specification.) Visa is calling the new specification “Quick Chip,” and it says it will bring the time it takes for a terminal to read the card’s chip down to two seconds. Those seconds mean something. In 2014, Ars argued that the inconvenience of a few extra seconds caused by dipping a card in the terminal at a checkout stand would drive people to use mobile payments like Apple Pay and Android Pay more often.

MasterCard Enters Exclusive Talks Over VocaLink Takeover
Finextra | 4.22.16

MasterCard has entered exclusive talks over a possible $1 billion takeover of VocaLink, the operator of the UK's Faster Payments system and Zapp mobile service, according to a report by Sky News. According to the report, the 13 banks which are shareholders in Vocalink have approved a period of exclusivity within which Mastercard can negotiate a takeover of the company.

The Autopsy on the Collapse of $2.7B Powa Technologies is Out
Business Insider | 4.18.16

Deloitte has released its insolvency report into what exactly went wrong at Powa Technologies, the London payment company that blew up spectacularly in February after blowing through hundreds of millions in investor money. The company autopsy reveals Powa's ultimate controlling company raised £143.94 million ($203.7 million) in debt and equity funding from 2013 onwards, as the company was valued on paper at $2.7 billion. But only the most senior secured debtors are likely to ever see any money returned. Even those will get only a fraction of what they lent back. Equity investors will get nothing.

Eye on Data Breaches: A ‘Scary’ Legal Standard; Details Released on the Coming PCI Update
Digital Transactions | 4.21.16

As federal regulators increasingly zero in on data breaches, lawyers at a payments conference on Wednesday warned that organizations that suffer breaches are likely to have a tougher time avoiding legal liability in the years ahead. And the PCI Security Standards Council disclosed some of the major changes in its upcoming version 3.2 of the Payment Card Industry data-security standard, including a requirement for multi-factor authentication by anyone with administrative access to cardholder data.

Banks and Fintech in 2025: An Unlikely Alliance
Tech Crunch | 4.20.16

Banking as we know it is in the midst of its first fundamental remaking in centuries. What’s driving this transformation? Two major shifts: our transition to interacting with money digitally instead of physically, which opened finances to tech disruption, and a tech wave that has changed the way consumers define ease and convenience. In just 10 years, we can expect banks (and other financial institutions) to look, from the outside, like a vastly different organization: a technology startup.

PayPal Just Backed An Investment App For Millennials
Fortune | 4.21.16

The startup raised $30 million from the payments giant and Japanese e-commerce company, Rakuten. Jeff Cruttenden had been investing since he was 11. As the son of an investment banker, he was taught as a teenager the value of growing money by investing in mutual funds and stocks. But when he arrived at college, he realized he was one of the few of his classmates who knew anything about investing. Most of his classmates didn’t invest their savings, and were overwhelmed with how to even get started.

Samsung Pay Partners with Global POS Providers to Accelerate Mobile Payments Adoption
BusinessWire | 4.19.16

Samsung Electronics Co., Ltd announced new partnerships with the world’s largest POS makers, including Verifone, Ingenico Group, First Data and Clover, PAX Technology, Equinox, ID TECH, MagTek, USA ePay and OTI Global, to accelerate mobile payment adoption by ensuring the best possible user experience at merchants’ point-of-sale (POS) systems during checkout. Samsung Pay is the only contactless payment solution that works at over 90 percent of the top 250 retailers and the vast majority of merchants, including small, local businesses.

Related: Samsung Announces Launch Date for Samsung Pay in Singapore

Plastiq iPhone App Lets Users Take a Photo to Pay Bills with Cards
Finextra | 4.21.16

Startup Plastiq has launched its free iPhone app that lets people in the US and Canada pay bills with their debit and credit cards by snapping a photo. Once an image of a paper or email bill is captured, Plastiq identifies the biller, their preferred means of receiving payments, the amount due, and the due date.

Giant Food Sees Giant Card Fraud Spike
Krebs on Security | 4.20.16

I had no idea this was a new thing at Landover, Md.-based Giant, which operates 169 supermarkets in the Washington, D.C. metro area.  That is, until I encountered a couple of large new “attention” stickers in the checkout line at a local Giant in Virginia recently. Next to the credit card terminal were big decals with the warning: “Attention Gift Card Customers: Effective immediately, all purchases of Visa, MasterCard, American Express Gift Cards and all General Purpose Reloadable or Prepaid Cards may only be made with Cash or Bank Pin-based Debit.”

New Report Cites Fraud as Key Driver for EMV in the US, Sees Risks in Current Approach
Lets Talk Payments | 4.22.16

Squaring the Circle: Driving EMV Migration in the USA, a report commissioned by omnichannel payment platform solution provider, Worldnet, and launched last night at TransAct 16, has found that payments industry professionals in the United States overwhelmingly view fraud as the key factor driving EMV migration in the US.The report also found that issuers, acquirers and merchants have all struggled with a lack of packaged software and firmware solutions to facilitate migration to EMV, and that the card industry urgently needs to work together more closely to communicate the benefits of EMV to merchants and consumers.

Merchants Payments Coalition Refutes Faulty Swipe Fee Study
NACS | 4.20.16

The recent paper “Out of Reach: Regressive Trends in Credit Card Access” by two researchers at Harvard’s Kennedy School uses bad data and faulty logic to reach the wrong conclusion. “The research in this paper would not only get students a failing grade at Harvard, but in their second-grade social studies class,” said Lyle Beckwith, senior vice president of government relations at NACS, in a press release. NACS is a founding member of the Merchants Payments Coalition, a group of retailers fighting for a competitive and transparent market in the fees that banks charge retailers to process card transactions.

'Black Box' ATM Attacks: An Emerging Threat
Bank Info Security | 4.20.16

Although skimming attacks remain the No. 1 ATM fraud concern in the United States, so-called "black box" attacks loom as a growing threat. Black box attacks against ATMs already are on the rise in Europe, according to two new alerts from ATM manufacturer NCR Corp. In a black box attack, criminals cut holes into the fascia or top of the ATM to gain access to its internal infrastructure. From there, the ATM's cash dispenser is disconnected and attached to an external electronic device - the so-called black box.

Hackers Behind Billion Dollar SpyEye Malware Jailed
Finextra | 4.21.16

Two hackers have been sentenced by a US court to a combined 24 years and six months in prison for developing and distributing the notorious SpyEye malware, which has infected more than 50 million computers and caused nearly a billion dollars in harm to people and financial institutions around the world.

Online Fraud Attack Rates Soar Since October
PYMNTS | 4.19.16

It’s official. Since the cutover to EMV in October, fraudsters have moved their business online. And we can tell you just how much. The Global Fraud Index, a PYMNTS and Forter collaboration, shows that online fraud attacks have jumped by 11 percent since the shift. Digital goods retailers have suffered the worst of all as those merchants (think games, songs, movies) have seen a more than 300 percent increase in fraud attacks since the liability shift.

Jobless Claims Fall to 42-Year Low
Market Watch | 4.21.16

New applications for unemployment benefits sank to the lowest level in 42 years, pointing to continued improvement in the labor market. Initial claims fell by 6,000 to 247,000 in the seven days ended April 16, the Labor Department said. This is the lowest level since the week of Nov. 24, 1973. Economists were expecting claims to move higher to 265,000. Some were expecting a pick up in claims due to the strike at Verizon Communications Inc.

Americans Give the Economy a "C" Grade
CNN Money | 4.18.16

Ask someone on Wall Street how the U.S. economy is doing and the response is likely to be "pretty good." Ask someone on Main Street and they will probably tell you it's crummy. In a new CNNMoney/E*Trade survey of Americans who have at least $10,000 in an online trading account, over half (52%) gave the U.S. economy as a "C" grade. Another 15% rated the economy a "D" or "F."

Economy Remains Stuck in Mud
The Wall Street Journal | 4.21.16

This just in: the economy is not growing, but very dully. How concerned you are with that probably is directly related to the composition of your portfolio. With stock indexes rising again and pressing against their record highs, it’s putting a brighter sheen on everything. The bulls once again are driving momentum. Yet, the economy remains hampered by low, sluggish growth. The latest data from two regional Federal Reserve banks illustrated that.

Electronic Billing Provider ‘Transactis’ Raises $30M From 5 Largest US Banks
LTP | 4.20.16

Transactis recently raised a funding of $30 million from five of the largest US commercial banks—Capital One, Fifth Third, PNC, TD and Wells Fargo. Along with Safeguard, each bank invested an equal amount in Transactis as part of its Series E round, demonstrating the banks’ continued leadership in payments innovation. Transactis’ technology reaches more than 100 million households and businesses in North America.

First Data Launches Clover Online Store, An All-In-One eCommerce Solution
First Data | 4.20.16

For many people, their first interaction with a company is a virtual connection. That first impression – typically in the form of a website – says a lot about a business and must convey professionalism, competence, and security. Small business owners understand the importance of an online presence, but the thought of building and maintaining a website can be daunting. That’s why First Data is launching Clover Online Store, a comprehensive online solution that manages everything from website design to creating a virtual shopping cart, all while facilitating safe, secure transactions.

Shift4 Achieves Milestone of 33,000 Customers
Shift4 | 4.19.16

Shift4 Corporation, provider of the DOLLARS ON THE NET® payment gateway, announced that it has surpassed the milestone of 33,000 customers. What began as a solution to help one customer integrate a new credit card processing system has evolved into an innovative company of more than 200 employees that processes more than half a billion secure transactions annually – over $50 billion worth of transactions.

New comScore Study Shows PayPal Online Checkout Conversion is 87.5%, Outperforms Competitors by 36%
Business Wire | 4.19.16

PayPal announced that a comScore study shows PayPal converted online buyers at a rate of 87.5%*. PayPal had a higher overall conversion rate than all competitors with the next payment option scoring 36.4% lower than PayPal on average*. “This comScore study shows that shoppers are completing their purchases with PayPal, at almost twice the rate of legacy systems,” said Bill Ready, senior vice president of product and engineering, PayPal. “As more commerce moves to mobile, having an easy way to checkout moves from a nice-to-have to a must-have. Last quarter, our customers made more than 15 million transactions a day on the PayPal platform, with 28% of them from mobile devices.”

Visa Inc. Reports Fiscal Second Quarter 2016 Results
Visa | 4.21.16

Visa Inc. announced financial results for the Company’s fiscal second quarter 2016. GAAP net income for the quarter, inclusive of a non-recurring, non-operating gain related to currency forward contracts, was $1.7 billion, or $0.71 per share. All references to earnings per share assume fully-diluted class A share count unless otherwise noted.

American Express First Quarter EPS of $1.45, Full Year Outlook Reaffirmed
Amex | 4.20.16

American Express Company reported first-quarter net income of $1.4 billion, down 6 percent from $1.5 billion a year ago. Diluted earnings per share was $1.45, down from $1.48 a year ago. First-quarter consolidated total revenues net of interest expense were $8.1 billion, up 2 percent from $8.0 billion a year ago. FX-adjusted consolidated total revenues increased 4 percent, reflecting a rise in net interest income, Card Member spending and net card fees.

Related: Strong Cardholder Spend Helps Amex Beat the Street

Discover Global Network Signs with Computop to Increase International E-Commerce Merchant Acceptance
Discover | 4.19.16

Diners Club International, a wholly owned subsidiary of Discover Financial Services and part of the Discover Global Network, and Computop, a leading international payment service provider, announced an agreement that will increase e-commerce acceptance for Discover, Diners Club and Alliance Partner cards. This agreement is part of Discover Global Network’s ongoing effort to increase global acceptance, both online and in-store, through partnerships with leading payment service providers.

EVO & Verifone Partner To Smooth EMV Migration For Restaurants And Service-Oriented Merchants
Business Solutions | 4.19.16

At restaurants and other service-oriented merchants in the U.S., consumers are used to paying for their purchases and “tipping” by handing over their cards for authorization, and then later adding a tip to the authorized amount on the receipt along with their signature. But this is problematic with EMV, which typically prevents tip adjustments after the initial payment has been authorized. recently, EVO Payments International and Verifone announced a solution to ease the EMV migration for restaurants and other merchants in the U.S. by enabling them to execute post authorization tip adjustments similar to how they are handled with traditional non-EMV cards.

Cayan Announces New Payment Platform for SMBs and Retailers
Market Wired | 4.18.16

Cayan, announced Genius STX, a new non-integrated version of its Genius Platform. For smaller retailers who do not have a point-of-sale (POS) system, Genius STX enables a sophisticated checkout, similar to what many consumers encounter with major retail chains, including acceptance of mobile payments like Apple and Android Pay via NFC/QR codes and chip cards (EMV).

Revel Systems Integrates Verifone’s Solution to Simplify Payments for Merchants
Payment Week | 4.19.16

Revel Systems has teamed up with payments and commerce solutions leader Verifone—a partnership that will see the integration of Verifone Point Classic, a comprehensive payment services solution, into Revel’s iPad Point of Sale (POS). With the integration, Revel clients can choose Verifone to manage their payment systems. Verifone Point Classic will empower Revel to focus on further innovation on its iPad POS solution and provide faster access to payment innovation such as loyalty programs and mobile wallets.

MasterCard, Western Union Join bKash To Make Cross-Border Money Transfers Into Mobile Phones A Reality For 22 Million Bangladeshis
MasterCard | 4.18.16

MasterCard, Western Union, bKash, one of the world’s leading mobile financial service (MFS) providers and BRAC Bank launched a new, international remittance receiving service in Bangladesh. The new service enables bKash’s registered customers to use their mobile phones to receive remittances from abroad directly into their bKash accounts.

Ingenico Launches Tech for Mobile App Developers to Accept EMV
ISO & Agent | 4.19.16

Ingenico Group has begun offering tools to address some of the complex challenges in developing EMV-enabled mobile point of sale applications. The French terminal manufacturer unveiled Ingenico Mobile Solutions mPOS EMV software development kit, a new developer-friendly mobile point of sale product that enables software vendors and developers to integrate EMV payment acceptance within their applications, Ingenico announced in a news release Tuesday.

Merchants' Choice Payment Solutions Announces New Operations Center
Benzinga | 4.18.16

Merchants' Choice Payment Solutions, a top U.S. Merchant Acquirer and the leading platform provider for Independent Sales Organizations (ISO's), announces the opening of their new 30,000 square foot operations center. The new facility, located in Shenandoah, Texas, will provide increased capacity for customer support and operating efficiencies. The new center boasts "state of the art" workstation design and operating technology.

TNS, Bluefin Align PCI-Validated P2PE
The GreenSheet | 4.20.16

Industry-leading payments solutions provider, Transaction Network Services (TNS), is partnering with Bluefin Payment Systems to provide Bluefin's Decryptx™ PCI-validated Point-to-Point Encryption (P2PE) solution within its Managed POS Encryption suite. TNS’ Managed POS Encryption service has been designed to provide merchants and processors with a fully managed solution for the transport of encrypted credit, debit and other card-based payment transactions over TNS’ PCI DSS certified network. It also includes support for VeriFone’s VeriShield Total Protect and Ingenico’s On-Guard solutions.

FIS and The Clearing House Prepare Real-Time Payments to Go Nationwide
FIS | 4.18.16

The United States’ first-of-its-kind, real-time payments system, available to all financial institutions nationwide, is nearing reality thanks to FIS, a global leader in financial services technology, and The Clearing House Payments Company L.L.C. The companies are preparing to launch a pilot with early-adopter financial institutions, initially focusing on the bill payment use case, using FIS technology and operating via the TCH real-time payments platform. Already under development, the pilot will go live in the first quarter of 2017, and bring payments that clear and settle in real-time to the pilot financial institutions.

iPayment, Inc. Announces Addition Of Industry Veteran OB Rawls To Executive Leadership Team
Business Solutions | 4.19.16

iPayment Inc., a premier provider of payment solutions and processing services, announced the hiring of industry veteran OB Rawls. A senior level executive with more than 25 years of sales, strategic development and leadership experience, Rawls joins iPayment as Co-President. In this newly created role, Rawls will be responsible for all of iPayment’s revenue generating activities with a key focus on driving incremental bottom-line earnings, cultivating new partnership opportunities, and enhancing relationships with key supplier partners.

Moneris Partners with talech to Offer U.S. Merchants an mPOS and Business Management Solution via Banks
EON | 4.20.16

Moneris Solutions Corporation, one of North America’s leading credit and debit card processors, and talech Inc., an industry leading tablet POS, announced at TRANSACT 16 that the companies have formed a strategic partnership and referral agreement. As part of the partnership, talech’s mobile point-of-sale (mPOS) solution will be offered to merchants exclusively via Moneris bank channels. The solution offers small to medium-sized businesses (SMBs) in the U.S. an mPOS solution that accepts payments and improves business management.

New NCR Channel Management Software Makes Daily ATM Cash and Transaction Balancing Easier for Bank Operations Staff
NCR | 4.18.16

NCR Corporation, the global leader in consumer transaction technologies, introduced new software to help financial institutions reconcile their cash transactions and replenishments across their self-service device network.  NCR Reconciliation, highly flexible data reconciliation software, automates the daily balancing activities of the ATM cash network, helping banks and credit unions improve operational performance and reduce risk.

For Convenience or in an Emergency, CardFree Cash From Fiserv Enables Cardless Access to Cash at the ATM
NCR | 4.21.16

Fiserv, Inc., a leading global provider of financial services technology solutions, announced the launch of CardFree Cash, ushering in the evolution of access to cash in the digital age by delivering an immediate, cardless way to withdraw funds at thousands of ATM locations nationwide. Patent-pending and already award-winning CardFree Cash changes the way cardholders access their money - allowing them to withdraw cash from an ATM without a physical card or surcharges.

TriSource Signs Chesapeake Bank
The Green Sheet | 4.18.16

TriSource Solutions, LLC, a leading provider of payment processing services to Banks and Independent Sales Organizations announced today that it has signed a long-term agreement with Chesapeake Bank. Under the agreement, Chesapeake will utilize the TriSource proprietary clearing and settlement platform for processing their merchant card transactions. They will also use the TriSource system to support and enhance their current internal underwriting, data entry, customer support and risk functions.

Total Merchant Services Opens Its EMV Chip Card Payment Technology to All Developers
PR Newswire | 4.19.16

Total Merchant Services, a leader in payment services and solutions, made its Groovv Software Development Kit (SDK) for semi-integrated payments available to software and app developers. The plug-and-play capability of Groovv SDK makes it easy and less costly for developers to ensure that their users comply with EMV and payment card industry (PCI) data breach prevention and mitigation requirements.   

North American Bancard Holdings Adds Inovio Payments to Its Suite of Offerings
PR Web | 4.19.16

North American Bancard Holdings (NAB), an award-winning industry leader in payment processing, has announced the launch of Inovio Payments (Inovio), a global online payment processing service that provides a superior fusion of cutting edge payment solutions for online enterprises and small businesses. With the addition of Inovio, NAB expands its product offerings to a wider scope of businesses and industries across a greater number of markets.

Chargent Integrates to the linked2pay Bank Centric Payments Platform Bringing AvidiaPay to Salesforce
Business Wire | 4.18.16

linked2pay announced that Chargent, the leading payment processing solution on the Salesforce AppExchange, has integrated with the Bank Centric Payments platform powered by linked2pay. This new payments gateway option is expected to become a favorite among B2B and B2C merchants looking for a more bank direct method to provide their customers with a seamless ACH and credit card payment experience.

ControlScan Enhances PCI External Vulnerability Scanning Service
ControlScan | 4.19.16

ControlScan, a security, compliance and risk management partner to hundreds of merchant service providers representing millions of businesses, announced today that it has enhanced its PCI External Vulnerability Scanning service to make it even easier for businesses to eliminate payment security vulnerabilities in compliance with the Payment Card Industry Data Security Standard (PCI DSS).

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