Will PIN Debit Become HomeATM's "Signature" Product?

Here's an interesting excerpt from American Banker in which they talk about PIN Debit vs. Signature Debit. The setting is restaurants, however, the point is still valiantly made why PIN Debit is the better of the two types and has a strong future as an Internet Payment Mechanism.

Mr. Rasori said VeriFone's research indicates that between 50% and 70% of all meals at sit-down restaurants are paid through signature debit transactions, which are significantly more expensive to the merchant than PIN debit payments.

According to Mr. Luria of Wedbush Morgan, the difference in transaction costs, depending on the restaurant's arrangement with its acquirer, can be "an order of magnitude." The typical transaction fee is 2.5% for a signature debit transaction and 1% for a PIN debit transaction. "These transactions are priced differently because of the risk," he said.

"A 'PIN card-present transaction' is the lowest-risk transaction you can do — that is why it is priced at the lowest level. For a signature debit or credit transaction, there is higher risk and higher pricing."

However, Mr. Rhodes' position assumes that the difference in transaction fees is matched by the difference in risk. Some industry analysts doubt that this is really the case.

Avivah Litan, a vice president with Gartner Inc., said that despite consumers' stated preference for PIN transactions, banks have been creating incentives for signature debit ones. "There are two reasons why banks like signature better," she said. "One is that they generate revenue through higher fees. Second, if a signature is forged, they can charge the amount of the transaction back to the merchant, but if a PIN is stolen, the bank is on the hook."

Mr. Bergeron says that in the long run he is not worried about efforts by banks to push signature debit over PIN debit. "Banks realize that increasing the size of the overall market is more lucrative than trying to squeeze extra fees out of a fixed market that faces increasing numbers of competitors," Mr. Bergeron said.

"One thing you can be sure of: Banks will always find a way to make money from handling transactions. The biggest issue for them is market share, so the more creative they can be in expanding the use of their cards, or the number of transactions they process, the better off they will be."

Related articles

• When it comes to banking, fees matter more than security, study says [via Zemanta]

Payments News Adds HomeATM Blog to Favorite Blogs

The HomeATM (PINDebit) Blog has been added to the Payments News list of favorite "Payments and Banking Blogs", along with some of the big boys, like The Official PayPal, and Google Checkout Blogs, Javelin Strategy/Research and Jupiter Research to name a few. I'm honored to have the PIN Debit Blog included in this list.

Payments News, from Glenbrook Partners has been a leading edge Payments Blog for a number of years now and HomeATM and I thank Glenbrook's Scott Loftesness for including the "PIN Debit Blog" in their list.

Click this link to visit to Payments News which covers a wide spectrum of payment related news items.

More About Other Payments and Banking Blogs

The list of other payments and banking-related blogs we started last week has just about doubled in size over the last couple of days! We've now got over 25 blogs listed - along with widgets displaying the latest RSS feeds from each blog. You can quickly scan the page for stories that might be of interest and then click through to read the full text of each story. Clicking on the blog's name takes you to that blog's home page. Hope you find this useful and that it's helpful introducing you to some new sources of payments insights!

Other Payments and Banking Blogs

Below is a current summary of the latest content from some of our favorite payments and banking blogs based upon their RSS feeds. Scroll down to view them all - or click on the specific links below to go to a specific blog.

• Aneace's Blog by Aneace Haddad
• Bankervision by James Gardner
• Banking Kismet by George Pasley
• Banking on Customers by Thad Peterson
• Banking Unwired by Ehab Bandar
• The Bankwatch by Colin Henderson
• Catalyst Code by David S. Evans and Richard Schmalensee
• Credit Slips Blog - Credit and Bankruptcy
• The Digital Money Forum Blog by Dave Birch
• The FinanSer by Chris Skinner
• Forte Financial Blog by Erin McCune
• The Official Google Checkout Blog
• Insiden by Denis Vacher
• Javelin Strategy & Research Blog
• The jPOS Blog
• Jupiter Research Consumer Payments by Ed Kountz
• Mobile Banking by Brandon McGee
• Merchant Account Blog by Jamie Estep
• NetBanker by Jim Bruene
• The Official Obopay Blog
• OneTouch Online Purchasing Blog
• Payments Industry Thoughts by Will Burns
• Payment Systems by Andy Orrock
• Payment Systems Blog by David Bergert
• The Official PayPal Blog
• The PIN Debit Blog
  
• WayTooHigh - The Card Interchange Report

Results of First Data's 2007 POS Debit Issuer Cost Study

First Data released the results of their 2007 POS Debit Issuer Cost Study. Highlights include the fact that the cost to support a PIN transaction is, remarkably, 50% lower than signature.

Click either of the screen captures to enlarge and read them.

Pulse EFT 2008 Debit Issuer Study: Continued Debit Growth and Potential

Initial Findings of Comprehensive Survey...

Summary:

• Survey Sample Represents 28 Percent of Debit Cards Issued in U.S.
• Issuers Experienced Transaction Growth of More Than 14 Percent in 2007
• “Best-in-Class” Issuers Outperform Market, Demonstrate Tremendous Potential in Debit
• Fraud Remains Top Concern
  
  HOUSTON--(BUSINESS WIRE)-- Highlighting consumers’ increased use of debit, U.S. financial institutions experienced continued growth in debit card transactions in 2007, according to a new study commissioned by PULSE. The 2008 Debit Issuer Study also revealed superior performance by “best-in-class” issuers, suggesting significant untapped potential in debit for many financial institutions.
  
  The study, conducted by Oliver Wyman, provides new data and comparisons to the results of the 2007 Debit Issuer Study, released in February 2007. This comprehensive study offers a revealing look at debit issuer performance in key metrics, recent debit card fraud trends and debit issuers’ outlook for the industry in 2008.
  
  Overall, the issuers surveyed experienced debit transaction growth of 14.4 percent in 2007, comprising a 15 percent increase in signature debit transactions and 14 percent growth for PIN debit. Although transaction growth remained strong in 2007, it was lower than the 18 percent growth rate experienced in 2006 by participants in the previous PULSE study.
  
  “Despite having a strong year in 2007, issuers are implementing a number of programs aimed at improving the performance of their debit card programs in 2008,” said Cindy Ballard, PULSE executive vice president. “These efforts center on rewards programs, targeted cardholder promotions and expansion into new products and new merchant categories.”
  
  A total of 62 financial institutions participated in the study, including large banks, community banks and credit unions that collectively issue more than 74 million debit cards, or 28 percent of the debit cards in the U.S. The institutions also represent 46,000 ATMs and are balanced across institution size, type, geography and network participation.
  
  Issuer Benchmark Performance
  
  The issuers surveyed by Oliver Wyman indicated that 86 percent of their debit cards are signature-capable, with 14 percent being ATM/PIN-only cards. This is essentially unchanged from the 2007 study. In addition, approximately 20 percent of survey respondents said they are planning to convert at least some portion of their ATM/PIN-only cards to dual-capability (PIN and signature) cards during 2008.
  
  Of the debit transactions conducted by the issuers’ cardholders in 2007, 65 percent were signature authorized and 35 percent were PIN authorized. This ratio has fluctuated within a fairly narrow band since the original study was conducted in 2005.
  
  The study revealed an average debit card penetration rate of 73 percent for respondents in early 2008, compared to 72 percent in 2006, when the previous study was conducted. Respondents’ card activation (defined as the card being used for one signature debit transaction within the last 30 days) averaged 59 percent in early 2008 versus 56 percent in 2006.
  
  On average, active cardholders performed 16.6 point-of-sale (POS) transactions per month in 2007, an increase over the 16.1 transactions per active card seen in 2006. Respondents reported an average ticket size of $43 for PIN debit and $38 for signature debit, compared to $42 and $40, respectively, in the previous study.
  
  The survey also revealed that 9 percent of PIN debit purchases included cash back. ATM cash withdrawals exceeded PIN debit cash-back withdrawals by a ratio of 9 transactions to 1, and by a ratio of 30 to 1, in terms of dollars withdrawn.
  
  Of the issuers surveyed, 25 percent reported charging a PIN debit transaction fee at the point of sale to at least some cardholders. This is a decline from 28 percent in 2006, and from 32 percent in 2005. Per-transaction fees averaged $0.53 but affected only 0.6 percent of cardholders, compared to 5 percent in the previous survey.
  
  Best-in-Class Issuers
  
  While 2007 marked an easing of debit card transaction growth rates, best-in-class issuers – defined as the top 25 percent in each performance measurement – were as much as 50 percent more effective in key metrics, compared to the average for all respondents.
  
  Results for best-in-class issuers exceeded averages for all respondents by:

• More than 20 percent in debit card penetration;
• More than 30 percent in transactions per active cardholder per month; and
• More than 42 percent in signature transactions per active cardholder per month.
  
  Best-in-class issuers also achieved more than 55 percent lower fraud losses per gross dollar value.
  
  Best-in-class issuers are not always large financial institutions, noted Tony Hayes, an Oliver Wyman partner, who served as project lead on the study. “In the area of fraud, for example, credit unions and community banks tend to lead large banks,” he said. “This is likely due in part to differences in account holder profiles among the institution types.”
  
  Fraud
  
  Debit card issuers’ fraud loss rates were higher for 2007 than for 2005, the period studied in the previous PULSE survey. Issuers surveyed lost 5.40 basis points (0.054%) per dollar spent through signature debit transactions in 2007 and 1.09 basis points (0.0109%) through PIN debit transactions.
  
  Data breaches, stolen cards and phishing were the mostly commonly reported points of compromise for debit card fraud involving card information only. For incidents in which PINs were also obtained, ATM tampering, data breaches and “friendly fraud” (unauthorized transactions conducted by the cardholder’s family or friends) were the most common points of compromise.
  
  All of the 62 financial institutions surveyed had debit cards potentially compromised in data breaches in 2007. At the same time, more than 80 percent of survey respondents reported implementing new fraud tools within the past year.
  
  “Although tools such as CVV/CVC checking and neural networks have proven effective, fraud continues to be a significant challenge for financial institutions, and constant vigilance is required to combat increasingly sophisticated techniques,” said Hayes. “Most of the issuers surveyed believe the next step in the continued evolution of fraud management is to improve collaboration among key constituencies in the industry: issuers, networks, processors and merchants.”
  
  Industry Implications
  
  Respondents pointed to maintaining debit transaction growth and managing fraud losses as significant challenges for 2008. Despite these concerns, Hayes believes there is still plenty of upside potential for debit card issuers. Based on the most commonly used definition of “active cards,” for example, in any given month 41 percent of cards are not being used by cardholders to make debit purchases.
  
  The survey indicated that issuers are planning to take a variety of steps to improve the results of their debit card programs. These include:

• Re-tooling debit card rewards programs;
• Using customer segmentation to target promotions to selected cardholder groups;
• Focusing on business debit; and
• Increasing debit card usage in small-ticket environments, as well as for bill payments.
  
  The study results demonstrate significant reason for continued optimism among debit issuers.
  
  “The 2008 Debit Issuer Study revealed compelling differences between best-in-class issuers and the average for all respondents,” said Ballard. “These key distinctions can be vital for counteracting the challenges of slightly slower growth and increased fraud. By sharpening their focus on debit, issuers have the opportunity to raise their game to the level of best-in-class performers.”
  
  About PULSE
  
  PULSE is one of the nation’s leading ATM/debit networks, currently serving more than 4,500 banks, credit unions and savings institutions across the country. PULSE is owned by Discover Financial Services (NYSE: DFS). The network links cardholders with more than 265,000 ATMs, as well as POS terminals at retail locations nationwide. The company is also a valued resource for industry research related to electronic payments and is committed to providing its participants with education on evolving products, services and trends in the payments industry. For more information, visit www.pulse-eft.com.

Online with their Target

HomeATM's "target" market is the Internet Debit space, specifically the PIN (online) Debit Internet Space.

It is good they are "online" with their target because from everything that I've both been told and (gathered independently) since I was a youth was that... When aiming to hit your target it's "not good to be "off-line".

Thus, it is pragmatic to conclude that HomeATM is, in fact, "on target" with both their desire and technology that will finally bring "online debit" well...online. I know it sounds kind of stupid,... the concept of actually making "Online Debit available "online"...imagine that!

Furthering my risk of sounding "moronic", I guess the "Less-On" here is to be, well...uh..."more-on". I guess it all works somehow as "PIN-Heads" are also sometimes known as "Morons." Speaking of which, here's some "Moron" Online Internet PIN Debit...

According to a Celent Analysis, the Relative Value Proposition of Online Alternative Payments (see illustration on the right) PIN-Debit for the Web looks like a pretty good target market to be online with.

Even moron the background of PIN vs. Signature Debit...

Q: The terms "PIN-based" and "Signature-based" often come up in discussions about debit card acceptance. What do these expressions mean? And how do the payment options differ?

A: The terms refer to the two distinct ways in which debit payments are processed: Online and Offline. Online debit transactions call for customers to endorse payments by submitting their Personal Identification Numbers (PINs) at the point of sale, while Offline transactions require shoppers to sign sales receipts

Back in the 1980s, we had a simple, bifurcated world: there were credit cards (PIN-less and tied to a credit line); and there were ATM cards (always requiring a PIN and tied to a bank account).

Muddying the waters was the advent of the so-called 'check card,' which can be thought of as a 'dual mode' card - it can be used without a PIN as sort of a 'secured' credit card ('secured' in the sense that the cardholder is dipping into real money in a bank account) or with a PIN as a debit card.

Now, we get into some rather misleading definitions that this muddying has caused...

• When you use that check card with a PIN, it's called Online Debit. For those of you familiar with ISO8583, that PIN-ed request is going to result in you (as the acquirer) formatting an 0200 (the typical MTI used for a Purchase/Sale) request to the Debit/EBT gateway.
  
  
• The card issuer (or its authorizer) authorizes that request and treats it as the 'letter of record' to debit the account in its nightly posting cycle.
  
  
• The Debit/EBT gateway may or may not require the inclusion of that Debit transaction in a nightly extract/settlement file (prepped and sent by the acquirer). As a case in point: the FDR North implementation requires that you put Debit/EBT transactions into a combined settlement file; the FDR Nashville (formerly 'Envoy' before parent Concord/EFS was scooped up by FDR) implementation has no associated extract requirement for Debit/EBT. [Same company...go figure.] Even for FDR North, those Debit/EBT transactions in the settlement file aren't there for issuer posting purposes; instead, they provide the basis for gateway-to-acquirer settlement, and they also feed into a 'suspense' process.
  
  
• The Debit/EBT gateway may or may not require the inclusion of that Debit transaction in a nightly extract/settlement file (prepped and sent by the acquirer).
  
  
• When you use the same card without a PIN, it's called Signature Debit, i.e., because you sign for the transaction like a credit card - of course, new regulations muddy the waters further: at some merchant categories, a signature is no longer required for purchases of less than $25, a regular experience at fast food outlets like McDonald's.
  
  Now, the ultimate in misleading definitions: Signature Debit is often called Offline Debit, this despite the fact that 99 times out of 100 (you're not obligated to authorize these, but you open yourself up to chargebacks), the acquirer sends an online transaction request to get an approval decision (for ISO8583-savvy folks, you send an 0100 - the auth MTI - in these situations). Where the 'offline' designation comes from is that this online auth is not the letter of record. In these situations, you (as the acquirer) are obligated - assuming the transaction isn't subsequently reversed - to put these 'offline debit' transactions into the settlement/extract file. And it is these items that the Issuer uses to debit the related bank account. In other words, the 'offline' appellation here refers to the manner in which the bank account ultimately gets debited, not whether you sent an online request at the time of purchase.
  
  
• Okay, to further complicate matters: this Offline Debit transaction is often referred to as a Credit . What? Well, you AUTH it via a 0100, like credit. And, when you stick the related entry into the nightly extract file, you format it as a Credit record. For example, in the FDR North extract file, these transactions get formatted as the Credit 'D' record, not the Debit/EBT 'Q' record. Indeed, from the perspective of a host-based payment system, you can't tell the difference between a purchase conducted with a 'true' credit card and one conducted with check card in PIN-less mode.
  
  Are we clear ? ... or is this something only a PIN-Head would understand?

Strong Growth in Debit Card Use for Bill Payment

Study finds many debit card users keeping higher checking account balances, and displaying stronger loyalty than they show to credit cards.

SALISBURY, Md.--(BUSINESS WIRE)--Phoenix Payments, a Phoenix Marketing International practice, today announced the results of its 2007 Consumer Payments Preferences and Usage Study: Debit Card Opportunities and Challenges. The study findings include a detailed report on debit card issues, covering consumer preferences, attitudes, and usage of debit cards as well as debit’s relationship to other payment methods.

Roughly three-fourths of U.S. consumers have one card association-branded debit card that is tied to their primary bank account. The debit card is therefore at “top of wallet” for these consumers, making them unlikely to switch debit cards for a “better offer” as they more readily do with credit cards. Debit activity gives the primary bank opportunities to increase loyalty and wallet share.

“To some extent, debit card usage has replaced check writing,” states Leon Majors, President of Phoenix Payments. “But debit is also replacing cash and credit cards. Increased debit card transactional activity is requiring cardholders to maintain larger bank account balances to draw upon for their payments.”The preference for debit cards over credit cards to pay bills is strongest among middle-aged and lower-income consumers. Older consumers and those with incomes above $100,000 are evenly divided in their preferences for the two card types.

“As the customer’s debit card use increases, transactional activity with the primary bank increases as well,” continues Majors. “Debit card usage at point-of-sale will continue to grow. PIN debit has particularly strong growth potential at walkup centers and for recurring bill payments.”

Phoenix’s annual Consumer Payments Preferences Study was conducted online in late 2007, surveying slightly more than 2000 consumers with a national representation of the online U.S. population. Phoenix Payments will present its detailed findings at the NACHA Conference in Las Vegas May 18-21. For an executive summary of the research, please visit http://www.phoenixmi.com/pdf/PhoenixConsumerStudy-ExecSummary.pdf.

About Phoenix Payments Practice

Phoenix Payments Practice is one of the most comprehensive financial consulting and research firms in the US; having the only integrated payments program that tracks the entire 200 billion plus financial transaction market through large-scale quantitative research, specializing in issues that are of strategic importance to retail and corporate financial services and technology vendors.

About Phoenix Marketing International (www.phoenixmi.com)

Founded in 1999, Phoenix Marketing International is one of the fastest growing marketing services firms in the United States and partner to many of the largest companies in the financial services, consumer package goods, automotive, healthcare, and travel and leisure industries worldwide. With national offices, Phoenix offers advanced advertising, brand measurement, and direct marketing expertise.

Where's the PIN? HomeATM has the Beef!

I'm curious as to why Wells Fargo would specifically quantify (in red below) the rates for Internet "Non-PIN Debit Card Sales"

By the way, those very same "Non-PIN Debit Card Sales" have the exact rates as "credit card sales...which is probably another reason I see to avoid even making the distinction.

Does Wells Fargo find it necessary to post NON-PIN Debit Card Sales rates unless they also, in tandem, had and provided a solution, and thus rate, for Internet "PIN Debit Card Sales."

This from Wells Fargo's Internet Merchant Account Site:

Internet Merchant Account Pricing

One-Time
Set-Up Fee1	$99.00 per location
Monthly
Monthly Service Fee (per location)	$31 per month
Annual Compliance Support Fee2	$40 per year
Payment Gateway Fee	Included
Online Reporting	Included
Statement Billing Fee3 (paper statement)	$7.50 per month
Processing Fees
Discount Rate4 — Visa®, MasterCard®, Discover® Network	2.40% on Gross Credit Card Sales
Discount Rate4 — Visa, MasterCard, Discover Network	2.40% on Gross Non-PIN Debit Card Sales
Authorization/EDC Fee5 — Visa (Credit and Non-PIN Debit), MasterCard (Credit and Non-PIN Debit), Discover Network (Credit and Non-Pin Debit)	$0.30 per attempt
Non Bank Card Authorization (American Express)	$0.27 per attempt
Non Bank Card Capture Fee (American Express and American Express — split dial)	$0.03 per attempt
Voice Authorization Fee	$0.75 per attempt
Address Verification Fee6	$0.01 per attempt
Chargeback Fee7	$25.00 per chargeback
Voice (Manual) Address Verification Fee	$2.00 per attempt

2007 Online Retail Sales Surge to $175 Billion

Online retail sales in 2007 reached $175 billion, a 21% increase over $144.6 billion in 2006, according to a new report from Forrester Research Inc.

This is the first drop in growth after years of around 25% growth. And according to Forrester Research projections, it will be far from the last. The firm forecasts: $204 billion in online retail sales in 2008, 17% growth over the previous year; $235.4 billion in 2009, 15% growth; $267.8 billion in 2010, 14% growth; $301 billion in 2011, 12% growth; and $334.7 billion in 2012, 11% growth.

“While on the surface, declining year-over-year growth percents for online commerce may represent a maturation of the e-commerce industry, it is important to also recognize the industry will add approximately $30 billion in additional revenue every year for the next five years. This is a sizable amount,” says Sucharita Mulpuru, principal analyst, retail, at Forrester Research, and lead author of the report, “U.S. E-commerce Forecast: 2008 to 2012.”

The growth rate remains significant. And a variety of factors are driving it. “E-commerce continues its double-digit year-over-year growth rate in part because sales are shifting away from stores and in part because online shoppers are less sensitive to adverse economic conditions than the average U.S. consumer,” the report says.

But challenges lie ahead. The report cites three major hurdles e-retailers face as the growth rate of online sales decreases: most consumers still prefer stores, the web channel is becoming increasingly seasonal, and online shoppers tend not to browse.

“The in-store experience is, for most customers, categorically better: It is immediate, tangible and social. And by shopping in stores, consumers can touch and feel items, avoid issues surrounding returns, and avert pesky shipping costs,” the report says. “And seasonal businesses have notorious challenges in managing every aspect of their business, from their merchandise to their employees to their cash flow. These conditions could prove to be choppy waters for online retailers as the industry matures.” And while web stores offer a wide variety of products, online shoppers generally are not browsers, the report adds. “While catalogs can often serve to drive customers to new products or stores,” it says, “the spear-fishing mentality of most online shoppers means there is less opportunity for retailers to effectively drive higher average order values or units per transactions.”

To continue to grow their sales as the overall growth rate of online sales decreases, e-retailers must devise new strategies, Mulpuru says.

“Growing international sales is one opportunity, especially given the weakness of the dollar at this point in time,” she says. “And retailers still need to fix the user experience, employing more tools like rich Internet applications or alternative payments or more robust cross-sell tools. The user experience online still is largely subpar and improvement there alone can help many e-retailers grow.”

875 Million (and growing) Potential HomeATM Users!

Over 875 million consumers shopped online worldwide in 2007, according to a survey by The Nielsen Company.

This represents a 40 percent increase in the number of Internet shoppers over the last two years, the U.S.-based market research firm says.

“When Nielsen conducted its first global survey into Internet shopping trends two years ago, around 627 million people had shopped online,” Bruce Paul, Vice President of Customized Research at Nielsen U.S., says. “Within two years, this number has increased by 40 percent to 875 million.”

According to Nielsen’s survey, which was conducted in October 2007, over 85 percent of the world’s online population has used the Internet to make a purchase. Globally, more than half of Internet users made at least one purchase online in January 2008, Nielsen estimates.

Among Internet users worldwide, the highest percentage shopping online is found in South Korea. Nielsen says 99 percent of South Korean Internet users have shopped online, followed by the UK, Germany and Japan in joint second place, each with 97 percent. The U.S. came eighth, with 94 percent of Internet users having shopped online.

Credit cards are by far the most common method of payment for online purchases. Nielsen says that 60 percent of global online consumers used their credit card for a recent online purchase, while one in four online consumers chose PayPal. Of those paying with a credit card, more than half (53 percent) used Visa, Nielsen says.

ATMDirect Has (as of yet) Still Not Accepted the "PIN-OFF" Challenge...

From today's "Payment Daily News Digest"

HomeATM Prepared to Prove ATMDirect is Vaporware:

After reading this public "let's take it outside" challenge by HomeATM's CEO, there is little question that ATMDirect is either going to have to accept the challenge and prove their functionality or sue for libel. Reading between the lines, Ken Mages is frustrated with prospective clients holding up sales as they say they first want to check out the ATMDirect offering before making a decision. - Payment Daily News Digest

Editor's Note: It's not that HomeATM is looking to prove that ATMDirect is Vaporware. It's more along the lines of settling, once and for all, who has the superior Internet PIN Debit/Credit technology, in terms of functionality AND security. This is precisely the reason HomeATM has offered to have the "PIN-OFF" implemented by a panel of payment specialists. In addition to it's technology, HomeATM also feels that it's patent is strong enough to hold up in the face of any and all scrutiny.

Regarding the libel statement. Libel is defined as a: "a written or oral defamatory statement or representation that conveys an unjustly unfavorable impression b: a statement or representation published without just cause and tending to expose another to public contempt.

There is nothing that has been said or written by HomeATM or this blog that is either "unjust" or "without just cause." I have, indeed, "questioned" the merit of their recent press release, but the reason for doing so is based on my background as a founding member of Pay By Touch. I "justly" questioned the merit of the press release because I was sent ATMDirect's confidential documentation, which was sent to all prospective bidder's prior to the ATMDirect auction. I saw absolutely no mention of "25 Global Internet PIN Debit Patents."

Of course, if there was indeed 25 global internet patents, and Iif missed that part in going and when going over the materials, I still believe it's "justifiable," (certainly not unjust) to question how strong they were since Acculink was able to obtain those patents (and the $500k-$750k worth of IBM Blade Servers)...for only $600k.

Although there is an occasional "deal" when acquiring a company through a bankruptcy auction, the purpose of an auction, especially a court supervised bankruptcy auction, is to obtain the highest possible bid. Therefore, the price the company receives at a bankruptcy auction is usually pretty close to it's value. So no libel here...just an "open invitation" to "PIN-OFF."

As I've stated before, ATMDirect claimed to "own PIN Debit on the Internet" so why would they not accept the challenge unless, as Payment Daily News Blog, so eloquently stated, they've got vaporware.

Personally, I don't necessarily believe ATMDirect is "vaporware", I simply am of the option that it's "nowhere" near the level of HomeATM's technology.

So...with that said, there's 23 days (and counting) remaining and we're still all waiting for ATMDirect to accept the PIN-OFF. They can name the time, and even the place, and do so by clicking here: ATMDirect Accepts HomeATM's PIN-OFF Challenge!

BTW: Nominations are now being taken by "Wired" for their 10th Annual Vaporware Awards ...if you can think of a nominee!

External Link: http://allpaynews.com

HomeATM Named Top 30 Innovating Elite - Blast from the Past

In an effort to bring HomeATM Blog readers up to date on some featured news articles about HomeATM, I am pleased to introduce our "Blast from the Past" feature.

Today's "Blast from the Past" features an article from last fall's Investors Daily News, recognizing HomeATM as one of Canada's Top 30 Innovating Elite Company's.

Here's the article from late last August...

MONTREAL, Aug 30, 2007 /PRNewswire via COMTEX/ -- Intent on showing its global entrepreneur and investor resources the "WOW" factor from North of the Border's innovative technology sector, Red Herring is holding its first Canadian conference--Canadian Innovation Illuminated -in Montreal.

Showcasing early stage disruptive technologies -- "Made in Canada" -- the event will feature a well-rounded list of guest speakers as well as "presentations from the country's the Top 30 innovators."

HomeATM -- the Montreal headquartered owner of a global patent for PIN debit and PIN credit card use in a browser environment -- has been chosen to present its paradigm shifting technology as a proud member of the Elite 30 Canadian Company Presentations group.

A very pleased Kenneth G. Mages -- Chairman and CEO of HomeATM -- announced the news today by saying, "We welcome the opportunity to have been selected to present our web-based 'trusted e-money eco-system' on not only a Canadian, but also an international, stage." Mr. Mages went on to say, "The HomeATM value proposition -- sustainable over the long term -- will be extremely compelling to the VC community and demonstrate our unique bottom-up Alternative Web Payment Solution business model, as well as our top-down next generation follow-up.

Taking Kenneth Mages' comment one step further, HomeATM COO Mitch Cobrin stated, "The rapid increase in internet penetration is fuelling a variety of consumer internet services and e-commerce opportunities witnessed by the rapid growth of such payment solution providers as PayPal and Bill Me Later. As customers and merchants seek a trusted, secure and convenient method to transact over the WWW this sector should see double digit growth through the next decade."

Canadian Innovation Illuminated is being held at Montreal's Hyatt Regency Hotel from September 5th through September 7th 2007.

About HomeATM:

Owner of the PIN-debit and PIN-credit authentication space in a browser environment through its global patent and of its patent pending 2nd generation wPCI(C) version aiming to turn any Internet-enabled device into a fully secured, bank "standard" transaction device, HomeATM can justifiably aspire to be a significant player in online financial services, payment solutions and remittance. Indeed, the solution is well suited to cannibalize market share from existing online payment processes, significantly expand the user base and increase FSI player presence in the online transaction space. More information is available at www.homeatm.net.

About Red Herring:

Red Herring magazine is a sophisticated insider's guide to the business of technology, featuring unparalleled insights on the emerging technologies driving the economy, from the Internet to wireless communications and digital entertainment. Red Herring's journalists report on how innovation and entrepreneurship are transforming business and how the business of technology is transforming the world, providing readers with a deep understanding of venture capital and capital markets. Recognized as an essential resource in today's fast-changing business world, Red Herring gets the right answers before anyone else even thinks to ask the questions. More information on Red Herring is available on the Internet at http://www.redherring.com.

For Information, please contact:

HomeATM: Mitchell Cobrin, COO mcobrin@HomeATM.net
Tel: 514-207-5000

Red Herring: Farley Duvall, Executive Director fduvall@redherring.com
Red Herring Tel: 41.44.445.3490

SOURCE HomeATM
http://www.homeatm.net

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FTVentures Closes $512 Million Fund

Press Release from FTVentures

FTVentures announced on April 16th, the closing of its third and largest fund to date, FTV III, at $512 million. FTVentures will continue its strategy of investing in software and business services companies that derive value from the firm’s unmatched Global Partner Network, which includes the world’s leading financial institutions. Founded in 1998, FTVentures has over $1 billion in committed capital and has offices in San Francisco and New York.

“We greatly appreciate the continued support of our core strategic limited partners,” said Richard Garman, FTVentures Managing Partner. “We are also delighted to have new, highly respected institutions acknowledge our track record and unique model by joining our institutional limited partner group. The addition of traditional investors and new strategic investors to our existing investor network will allow us to continue to deploy our proven model with more diversified sources of capital.”

Consistent with the investment strategy of its previous funds, FTV III will typically invest $10 million to $60 million in software and services companies seeking to finance organic expansion, recapitalizations, build-ups, and buyouts.

The firm’s portfolio companies target the financial services industry as a key customer vertical and leverage FTVentures extensive Global Partner Network in developing commercial relationships.

New limited partners from the financial services industry include Liberty Mutual, Skandia Insurance, Nordea, PartnerRe, Capital One, Fannie Mae and Barclays Global Investors. New traditional limited partners include New York City Retirement Systems, RHM Group, New York State Common Retirement Fund and Kamehameha Schools.

FTVentures is known for the strength of its financial services industry network which includes the following limited partner institutions from the financial industry: AIG, AXA, Bank of America, Barclays Global Investors, BNP Paribas, Capital One, Charles Schwab, CIBC, Citigroup, Comerica, Credit Suisse, DBS, Deutsche Bank, Fannie Mae, Fidelity National Financial, Fifth Third Bank, First Republic Bank, Freddie Mac, GE Capital, Goldman Sachs Asset Management, The Hartford, HSBC, ING, JPMorgan Chase, KeyCorp, Lehman Brothers, Liberty Mutual, Lloyds TSB, Morningstar, National City, Nomura, Nordea, PartnerRe, People’s United Bank, PNC Bank, RBC Royal Bank, Sallie Mae, SEB, Skandia Insurance, Standard Chartered, Travelers, SunTrust, SVB Financial Group, USBancorp, Visa, Wachovia, Washington Mutual, Wells Fargo and Zions Bancorporation.

FTVentures previous successes include Actimize (acquired by NICE Systems), Corillian (IPO/acquired by Checkfree), ExlService (NASDAQ: EXLS), KVS (acquired by VERITAS), PowerShares Capital Management (acquired by AMVESCAP), and Verus (acquired by The Sage Group).

Current FTVentures portfolio companies include Aveksa, Cloudmark, Coremetrics, Covario, Financial Engines, GigaSpaces, GMI, Managed Objects, Rezolve Group, Capital H Group, CMS Holdings Group, Daylight Forensic & Advisory, ETF Securities, Freeborders, Intrepid Learning Solutions, Mavent, MedSynergies, Presidio Reinsurance Group, and ProfitLine.

The FTVentures partners are: Brad Bernstein, Eric Byunn, Ben Cukier, Richard Garman, Jim Hale, David Haynes, Bob Huret, Derek Lemke-von Ammon and Chris Winship.

Contacts
FTVentures
Karen Derr Gilbert, 415-229-3000
kgilbert@ftventures.com
www.ftventures.com

HomeATM Payments News Headlines Ending 4/18

Brought to you via Glenbrook's "Payment News" Website, which was responsible for the compilation and posting of the following links. Clicking on any of the links below will bring you to www.paymentsnews.com where you can read the story in full.

• Accceptance News
  
  • Discover Financial Services announced plans to acquire the Diners Club International Network from Citigroup to expand acceptance of Discover Cards worldwide. (See more Discover news.)
• Processor News
  
  • Mastercard Introduced a new debit card processing platform named MasterCard Integrated Processing Solutions (IPS) (See more MasterCard news.)
  • HomeATM Challenges ATMDirect's Technology
    
  • TSYS announced n>gen - calling it "a new business paradigm that makes it easy for TSYS clients to efficiently and thoroughly manage all their complex payments-related business needs with point-and-click ease." (See more TSYS news).
• Mobile Payments News
  
  • Obopay selected iovation for anti-fraud services on the Obopay mobile payments platform. (See more Obopay news).
  • PayMate introduced GiftMate mobile vouchers for instant gifting to friends and relatives in India. (See more PayMate news).
  • Fundamo, a South Africa-based mobile banking provider, pursues international expansion out of Africa.
  • CyberSource and mPoria announced a strategic channel partnership for mPoria's GoMobile! m-commerce technology.
    
• US Payment Card Interchange Fee News
  
  • The sponsors of the Credit Card Fair Fee Act legislation (Rep. John Conyers and Rep. Chris Cannon) responded to the Wall St. Journal's earlier editorial arguing against the act.
  • The National Association of Convenience Stores complained that "the industry's credit card fees are now more than double the industry's pretax profits." (See more Interchange Fee news).
  • On Friday, the AP published a survey story about merchant concerns with credit card interchange fees.
• New Services
  
  • HSBC and Loyalty Lab formed an alliance to offer advanced loyalty and customer retention marketing (CRM) capabilities to retailers.
  • Bank of America announced the Bank of America Visa Supply Shelf card, a prepaid debit card for teachers. (See more Bank of America news).
  • Vesdia announced the expansion of its merchant-funded rewards network.
    
• Merchant Acquiring News
  
  • Frontier Airlines filed Chapter 11 bankruptcy late Thursday blaming its credit card processor, First Data Corp., for imposing holds on funds that necessitated the filing.
  • The ETA Annual Conference and Expo is being held at the Mandalay Bay in Las Vegas next week. Glenbrook's Allen Weinberg will be there.
• Commercial Card News
  
  • Wells Fargo announced that it will offer proprietary single-use accounts to its commercial card customers for business-to-business (B2B) purchases. (See more Wells Fargo news.)
  • SunTrust announced the launch of its Enterprise Spend Platform - "an industry-leading end-to-end commercial card management solution." (See more SunTrust news.)
  • The US Government Accountability Office published a report on abuses associated with US Government purchasing cards.
• Fraud News
  
  • PayPal published a paper titled "A Practical Approach to Managing Phishing" describing the techniques PayPal has used to significantly reduce phishing attacks on PayPal customers. (See more PayPal news.)
• Organizational News
  
  • Visa named Tim Wilson as Head of Visa Canada, succeeding retiring Derek Fry.

Online Debit Growth Expected to Climb to $93.9 Billion by 2012 - Javelin

As the illustration on the left graphically depicts, PIN Debit is most secure form of debit and HomeATM has positioned itself as a prominent force as online debit is set to skyrocket on the web. The following is from Javelin Strategy and Research...

Alternative payments will account for an increasing percentage of U.S. online transactions by 2012, according to a recent study from Javelin Strategy and Research.

As I reported last week, Debit card online transaction volume will increase to $93.9 billion by 2012, up from $38.8 billion in 2007, accounting for about 26% of total U.S. online transactions, Javelin says. Online debit volume is expected to grow at a compound annual growth rate of 19.3% through 2012.

(Click the illustration to the right to enlarge it, then hit backspace to return)

The growth in online use of debit cards is primarily attributable to the growth in debit card usage in general, although younger consumers are opting for debit cards as a primary online payment option, Javelin says. The emergence of rewards programs linked to signature debit may contribute to growth, according to the study.

Javelin also estimates that online volume from e-mail payment accounts, such as PayPal, will increase to $40 billion by 2012, up from $7.8 billion in 2007, and will represent 11% of total online transaction volume. E-mail account volume, dominated by PayPal, will have a compound annual growth rate of 38% through 2012. Javelin forecasts that the average PayPal transaction at a retail site will reach $40 in 2012, up from $32 in 2007.

Stored-value products—merchant-specific gift cards and network-branded products—will grow at a 43% compound annual growth rate to $32.1 billion in 2012 from $5.4 billion in 2007, Javelin estimates. Stored-value cards will account for about 9% of total U.S. online volume by 2012, propelled by increased growth in multi-channel usage of in-store programs.

In addition, online private label payment card transactions are expected to total $23.7 billion by 2012, up from $5.3 billion in 2007, representing 7% of total online U.S. transaction volume, Javelin says. Private-label transactions will grow at a compound annual growth rate of 35% through 2012.

Editor's Note: If ATMDirect is going to "Own Online PIN Debit" as they mentioned in their "patently absurd" press release, I'd suggest they take little baby steps, the first one being "Acceptance of HomeATM's invitation for a "PIN-OFF" As of right now, they have 27 Days:6 hours and some minutes left to accept. ATMDirect...we're still waiting!