Wednesday, April 20, 2011

Shoppers Squeezed by Spat over Debit Card Use

Licensed to ePaymentNews by the Washington Times:

Consumers are finding themselves squeezed in a heavyweight bout between the nation's big banks and big retailers over the "swipe fees" imposed when shoppers use their debit card at the register. And both sides warn the little guy will suffer if the other side wins...

The Washington Times. Licensed for 1 month on April 20, 2011, for display at 

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2011 Interchange Rates Rise (Again)

Merchants have been complaining about Interchange Fees for years.  Back in 1991 (simpler times?) there were 4 Interchange rates for Visa and 4 for MasterCard.   Today there are over 300 collectively.  (see illustration below)  Last week, Visa and MasterCard raised the fees yet again...

MasterCard and Visa Raise Interchange Swipe Fees – Again - from Stiel Blog

MasterCard and Visa increased the percentage it takes from merchants and consumers at the point-of-sale, effective April 15th. Merchants have no choice except to pass the higher cost along to every customer in the form of higher prices.

Effective last week (April 15), MasterCard will increase the “base rate” interchange rate for its World Merit III card from 1.73% + $0.10 to 1.77% + $0.10. Merchants actually pay higher fees because the “base rate” is marked-up to merchants based on the type of merchant and their credit card volume. That means many small merchants could pay over 3% to 9%, once all fees are added to the base rates.

Other “base rate” interchange increases disclosed by MasterCard included:

  • World Full UCAF (the rate for a world card e-commerce credit transaction conducted with merchant security and cardholder verification) will increase from 1.83% + $0.10 to 1.87% + $0.10.
  • World Merchant UCAF (the rate for a world card e-commerce credit transaction conducted with merchant security only) increased from 1.73% + $0.10 to 1.77% + $0.10.
  • The Supermarket Base and Enhanced Supermarket Base rates will increase from 1.48% + $0.05 to 1.48% + $0.10.
  • In addition, MasterCard will increase the assessment fee (a flat transaction fee added to the cost of processing each credit card sale) from 0.11 percent to 0.12 percent on consumer and commercial credit volume for transactions of $1,000 or more. 
For a complete list of interchange and fee changes released by MasterCard in April, please go to .

Visa Inc. also increased fees with its Interregional Super Premium Card with a base rate of 1.97% per transaction. It also added four new Interregional Full Chip Cards with a “base rate” interchange rate of 1.10%. The new cards also add a 0.40% and 0.45% international service and acquirer fees.

Visa and MasterCard increase fees collected from merchants regularly in order to compete among themselves and encourage banks to issue their brand of cards to the hundreds of millions of Americans who pay with plastic. One bank president told us that the “decision over what card to issue is largely based on which one pays us the highest interchange fees.”
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Nokia Teams with Proxama for NFC on Nokia C7

From Martin James on the NOK NOK Blog:

Near Field Communication (NFC) technology is big news for Nokia right now, with handsets as far back as the Nokia 6131 NFC having featured the technology on board. However, things have just taken a major step forward with the announcement that Nokia is working with NFC tech specialist Proxama on developing next-gen NFC applications for Nokia smartphones, starting with the Nokia C7.
The Nokia C7 has been earmarked by Proxama to receive a complete NFC-driven service package. This comprises three elements: TagCentre, NFC advertising tags and the PosterTouch campaign manager.
The advertising tags are the sensors that can be programmed with media-rich data and embedded in posters, T-shirts and the like, while the PosterTouch campaign manager allows advertisers and other relevant parties to monitor their NFC campaign’s effectiveness. But for Nokia owners – and Nokia C7 owners in particular – it’s the TagCentre app that’s most important. This piece of software is installed on the phone itself, and decodes raw NFC data into advertisements, movie trailers or whatever else the tag has been set up to link to.
“We are very excited to be at the forefront of the next evolution of the mobile phone,” Nokia’s director of global ecosystems Sixten Sandstrom commented. “At Nokia, we recognise the big impact that NFC is going to have on how people use mobile phones and we plan to fully embrace it.”
Proxama says the first wave of the Nokia-flavoured NFC tech will be focused solely on the Nokia C7, but says its reach will expand over time as NFC starts to take hold and a wider variety of smartphones appear with NFC technology on board.
“Mobile is truly coming of age this year so I am delighted that we have secured a deal that will reap benefits for so many,” Proxama founder and CEO Neil Garner commented.
“We expect take up of NFC activity to grow rapidly with millions of NFC-enabled handsets forecast to be distributed this year. Consumers have increasingly placed more importance on the role their mobile plays in their lives and this is a natural step-change.”

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Oberthur Technologies Announces the Availability of its First MasterCard® M/Chip(™) Advance Product

NANTERRE, France--(BUSINESS WIRE)--Oberthur Technologies, a world leader in the field of secure technologies, has announced today the availability of its first MasterCard® M/Chip Advanceproduct.
“Cosmo Fly v4 M/Chip™ Advance will allow issuers to deploy value-added solutions, such as ticketing for transport in open payment fare systems”
Following Oberthur Technologies announcement of the development of MasterCard® M/Chip™ Advance in December 2010, the Cosmo Fly v4M/Chip Advance has been fully certified and is now commercially available for Issuers. The Oberthur Technologies M/Chip Advance card provides issuers with a flexible solution for contact and contactless payments.
In addition to numerous payment-related enhancements, M/Chip Advance also offers Integrated Data Storage capabilities to address the increasing demand for ‘one card’ payment solutions for sectors such as mass transit, loyalty, as well as campus and government entitlement programs.
“Cosmo Fly v4 M/Chip Advance is a major achievement for Oberthur Technologies in its commitment to offer its customers the latest innovations in the industry”, said Cédric Collomb, Cards & Services General Manager, Card Systems Division at Oberthur Technologies. “Cosmo Fly v4 M/Chip Advance will allow issuers to deploy value-added solutions, such as ticketing for transport in open payment fare systems”.
Ed McLaughlin, Chief Emerging Payments Officer at MasterCard Worldwide commented:
“Oberthur Technologies has shown continuous commitment to deliver innovative payment products to our joint Issuing customers. We are delighted that Oberthur Technologies is now ready to deliver M/Chip Advance to MasterCard® Issuers. M/Chip Advance paves the way for future innovation, building on the fast-growing EMV infrastructure worldwide“
About Oberthur Technologies
Oberthur Technologies is a world leader in the field of secure technologies: systems development, solutions and services for smart cards (payment cards, SIM cards, access cards, NFC…) and for secure identity documents, traditional and electronic (identity card, passport, health care card), production of banknotes, cheques and other fiduciary documents, intelligent systems to secure cash-in-transit and ATM. Oberthur Technologies has 6,800 employees through 40 countries and 65 sites. The Group posted 2010 sales of €979M.
About MasterCard Worldwide
As a leading global payments company, MasterCard Worldwide prides itself on being at the heart of commerce, helping to make life easier and more efficient for everyone, everywhere. MasterCard serves as a franchisor, processor and advisor to the payments industry, and makes commerce happen by providing a critical economic link among financial institutions, governments, businesses, merchants, and cardholders worldwide. In 2010, $2.7 trillion in gross dollar volume was generated on its products by consumers around the world. Powered by the MasterCard Worldwide Network – the fastest payment processing network in the world – MasterCard processes over 23 billion transactions each year and has the capacity to handle 160 million transactions per hour, with an average network response time of 130 milliseconds and with 99.99 percent reliability. MasterCard advances global commerce through its family of brands, including MasterCard®, Maestro®, and Cirrus®; its suite of core products such as credit, debit, and prepaid; and its innovative platforms and functionalities, such as MasterCard PayPass™ and MasterCard inControl®. MasterCard serves consumers, governments, and businesses in more than 210 countries and territories. For more information, please visit us at Follow us on Twitter: @mastercardnews.


Telephone: +33 1 55 46 71 23
Card Systems Division:
Stéphanie CAU
Telephone: +33 1 47 85 58 06

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Report: PCI DSS Compliance Trends Study, 2011

Imperva and The Ponemon Institute have completed a second study on the impact of the Payment Card Industry’s (PCI) Data Security Standards (DSS). The 2011 PCI DSS Compliance Trends Study surveyed 670 US and multinational IT security practitioners on how efforts to comply with PCI-DSS affect an organization’s data protection and security. This report is essential for any organization attempting to comply PCI and wants to benchmark their efforts with their peers.
This year's report shows that:
  • The majority of PCI compliant organizations suffer fewer or no breaches, most practitioners still do not perceive the mandate to have a positive impact on data security.
  • About 64 percent of PCI-DSS compliant organizations reported suffering no data breaches involving credit card data over the past two years, while only 38 percent of non-compliant organizations reported suffering no breaches involving credit card data over the same period.
  • Certain technologies are adopted more quickly than others to comply with PCI. For example, code review saw the biggest decline in adoption.
Redwood Shores, Calif., and Traverse City, Mich., April 19, 2011 -- Imperva, the leader in data security, and the Ponemon Institute announced today the results of their second study on the impact of the Payment Card Industry's (PCI) Data Security Standards (DSS). The 2011 PCI DSS Compliance Trends Study surveyed 670 US and multinational IT security practitioners on how efforts to comply with PCI-DSS affect an organization's data protection and security. This year's report shows that while the majority of PCI compliant organizations suffer fewer or no breaches, most practitioners still do not perceive PCI-DSS to have a positive impact on data security.
Compliant Organizations Suffer Fewer Breaches

According to the study, 64 percent of PCI-DSS compliant organizations reported suffering no data breaches involving credit card data over the past two years, while only 38 percent of non-compliant organizations reported suffering no breaches involving credit card data over the same period. When it comes to overall data breaches (general incident or those involving credit card data), 63 percent of compliant organizations suffered no more than a single data breach, compared to 22 percent of non-compliant organizations. Notably, 26 percent of non-compliant organizations suffered more than five breaches over the same time period.

"At the end of the day, we believe that PCI-DSS is one of the most effective data security regulations today and can significantly help companies improve their data security posture," says Amichai Shulman, co-founder and CTO of Imperva. "Most companies who make an effort to comply with the standards are likely to suffer fewer breaches than those who don't, period."
PCI-DSS Perception is Cynical

Despite evidence to the contrary, the study also found that 88 percent of respondents did not support the claim that PCI-DSS compliance has a positive effect on the number of breaches experienced, and only 39 percent mentioned data security improvement as one of the regulation's value propositions for business. In fact, only 33 percent believe that PCI-DSS compliance expenditure is covered by the value it brings to organization.

"Looking at the figures regarding the actual decrease in data breaches and recent figures regarding the cost of data breaches, it seems that many practitioners have a much subverted perception of the value of PCI-DSS compliance," said Larry Ponemon, chairman and co-founder of the Ponemon Institute.
Nonetheless Compliance Is Increasing

This year's report also found that two-thirds of respondents have achieved substantial compliance with PCI-DSS. In the 2009 PCI DSS Compliance Trends Study, the number of respondents who'd achieved similar levels of compliance was only half, and roughly 25 percent of respondents in 2009 had not achieved any level of compliance. Only 16 percent of organizations surveyed in 2011 have not achieved any level of PCI-DSS by comparison.

"Over the past few years, most companies have matured in their understanding of the PCI mandate and have worked to meet strict compliance deadlines," continued Shulman. "We believe this is one of the primary reasons we've seen an overall increase in compliance and also, we believe, a decline in the number of credit card-related data breaches."

"In an era where governments are struggling with the creation of vague yet complex data protection acts, the credit card industry took a bold step towards regulating itself, using plain language, clear goals and a pragmatic focus," said University of Connecticut School of Business Professor Robert Bird. "PCI isn't perfect - but it succeeded by imposing security mandates and forcing attention on data security - all without government regulation."
For a full version of the 2011 PCI-DSS Compliance Trends Study, visit .
About Imperva

Imperva is the global leader in data security. With more than 1,300 direct customers and 25,000 cloud customers, Imperva's customers include leading enterprises, government organizations, and managed service providers who rely on Imperva to prevent sensitive data theft from hackers and insiders. The award-winning Imperva SecureSphere is the only solution that delivers full activity monitoring for databases, applications and file systems. For more information, visit, follow us on Twitter or visit our blog.

About The Ponemon Institute

The Ponemon Institute© is dedicated to advancing responsible information and privacy management practices in business and government. To achieve this objective, the Institute conducts independent research, educates leaders from the private and public sectors and verifies the privacy and data protection practices of organizations in a variety of industries. Visit the Ponemon Institute at .

Web Site:


Source: Company press release.

First Data to Release Q1 2011 Results on May 4th

First Data to Release First Quarter 2011 Financial Results

ATLANTA--(BUSINESS WIRE)--On Wednesday, May 4, 2011, First Data Corporation will release its first quarter 2011 financial results. The release will be available at
The company will host a conference call and webcast on Wednesday, May 4, 2011, at 10 a.m. EDT to review the first quarter 2011 financial results. Ray Winborne, First Data chief financial officer, will lead the call.
To listen to the call via teleconference, dial 866-804-6923 (U.S.) or 857-350-1669 (outside the U.S.), pass code 33578587. The call will be webcast on the “Investor Relations” section of the First Data website at and a slide presentation to accompany the call will also be available on the website.
A replay of the call will be available through May 18, 2011, at 888-286-8010 (U.S.) or 617-801-6888 (outside the U.S.), pass code 85132052, and via webcast at
Around the world, every second of every day, First Data makes payment transactions secure, fast and easy for merchants, financial institutions and their customers. First Data leverages its vast product portfolio and expertise to drive customer revenue and profitability. Whether the choice of payment is by debit or credit card, gift card, check or mobile phone, online or at the checkout counter, First Data takes every opportunity to go beyond the transaction.


First Data
Chip Swearngan, 404-890-3000

ProPay Named a Finalist at the Stoel Rives Awards

April 20, 2011 09:00 ET

ProPay's Social M-Payment Application, Zumogo, Named a Finalist at the 2011 Stoel Rives Innovation Awards

LEHI, UT--(Marketwire - Apr 20, 2011) - ProPay (, an industry leader in Merchant Services, End-to-End Payment Security, credit card processing, and electronic payment services, is pleased to announce ProPay's Zumogo has been named a finalist at the Stoel Rives Utah Innovation Awards™. The annual Utah Innovation Awards are presented by Stoel Rives LLP and the Utah Technology Council. The program recognizes significant innovations and the Utah companies that created them. Winners of the Innovation Awards will be announced at a luncheon on May 3, 2011.
Zumogo (pronounced "Zoo-MOE-Go") is a social mobile payment platform that enables a new connection between merchants and consumers. Using bi-directional communication and geo-location, Zumogo enables commerce through social technology.
"Zumogo marries the best of secure mobile payment platforms and social media, enabling communication and payment between the consumer and the merchant," stated Chris Mark, Executive Vice President of Emerging Markets at ProPay. "The ability to communicate with a merchant before you are in the store is priceless. Zumogo allows this social functionality to occur and ProPay is excited to lead the market."
Zumogo is a new mobile payment technology allowing Smartphones to be used, not only as a payment device, but also as a social technology allowing merchants and consumers to communicate with each other in real-time. Additionally, the social m-payment platform allows the consumer to find merchants, contact them for information, and make payment all from the same device. Zumogo eliminates sensitive information from the transaction process, meaning no payment data is passed through the merchant's system or stored on the consumer's Smartphone.
"ProPay is proud to have been named a finalist in the Utah Innovation Awards," said Gary Goodrich, ProPay's Chief Executive Officer. "Our company takes pride in offering products and services that help companies keep pace with technological trends in the market place. Our selection as a finalist for the Awards is a valuable recognition of our efforts and we are excited to bring Zumogo to the market."
About ProPaySince 1997, ProPay ( has provided simple, secure, and affordable payment solutions for organizations ranging from the small, home-based entrepreneur to multi-billion-dollar enterprises. ProPay is a leading provider of complete End-to-End Payment Security solutions that reduce, and may even eliminate, an organization's risk of having sensitive payment data compromised. ProPay is the recipient of the prestigious 2010 ETA ISO of the Year award. ProPay is a privately held company, headquartered in Lehi, Utah. For information, visit For more information about Zumogo, please visit

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comScore Releases the "The 2010 Online Credit Card Report"

Cash Back among Most Important Rewards for Cardholders

comScore Releases New Online Credit Card Report

Competitive Features and Rewards Important as Consumers Shop for New Cards
During the past twelve months, 20 percent of all cardholders reported shopping for a new card. Among consumers who reported feeling more confident about the economy, this stood at a higher 34 percent.
"As we see consumer economic sentiment improve, we're also seeing a corresponding increase in retail and e-commerce spending along with increased card shopping, especially among those in the subprime sector," said Sarah Lenart, comScore vice president of financial services. "With shopping and card applications expected to continue to increase in 2011, consumers are likely to place even greater emphasis on competitive card features and offerings as well as enticing rewards programs."
Low interest rates, the lack of annual fees, and rewards programs were regarded as the most important features by most cardholders, with low interest rates deemed most important by 40 percent of consumers. Rewards programs rank third in importance to cardholders but represent an opportunity to incentivize consumers to increase their overall use of credit as opposed to using a debit card or cash.
Most Important Credit Card Features to Cardholders
(% Ranked Highest on a Scale from 1 to 8)
December 2010
Total U.S. 
Source: comScore Credit Card Survey
Credit Card Feature
% Ranking This Feature Highest
Low APR/Interest Rate
No Annual Fee
Rewards or Points
Card Accepted at Most Merchants
High Credit Limit
Reputation of the Issuer
Customer Service
Low APR for Balance Transfers

The most important credit card reward offerings were cash back (57 percent of respondents), merchant rewards (13 percent), flexible points (13 percent) and airline miles (10 percent).
Most Important Credit Card Reward Types to Cardholders
(% Ranked Highest on a Scale from 1 to 6)
December 2010
Total U.S. 
Source: comScore Credit Card Survey
Credit Card Reward Type
% Ranking This Type Highest
Cash Back
Merchant Rewards
Flexible Points
Charitable Donations

Issuer Websites Gain Importance as a Channel for Servicing Cardholders
As card issuers continue to develop websites and mobile applications as a way to engage with cardholders, a noticeable shift can be seen in consumers' use of these channels as opposed to more traditional channels. In 2010, 76 percent of cardholders reported accessing their accounts online, up 5-percentage points from a year ago.  One in five cardholders who also own a mobile phone report having used their mobile device to manage their accounts over the past 12 months.
While mobile applications and sites are not used to the same extent as other channels, they are gaining popularity. Among cardholders with mobile phones, 16 percent reported accessing their issuer's site through a mobile browser and 13 percent reported accessing their accounts through mobile applications.
Channel Usage for Completing Transactions Among Cardholders Who Have a Mobile Phone
December 2010
Total U.S. 
Source: comScore Credit Card Survey and Mobile Financial Services Advisor Survey
% Using This Method
% Using This as Primary Method
Call Company on Phone
Go Online to Financial Institution's Site
Via Mobile Browser
Via Mobile Application
Via Mobile Text Message Alerts

"As people increasingly rely on digital channels to manage their credit card accounts, it's important to understand to what degree consumers are using them and how these access methods create value for issuers' key customer segments," added Ms. Lenart.
To download a complimentary copy of the comScore Online Credit Card Report 2010 Edition, please visit:

Date: April 19, 2011
Speaker: comScore, Inc.
Event: comScore Whitepaper
The 2010 Online Credit Card Report provides a comprehensive look at the U.S. online credit card industry over the past year, focusing on shifts in the industry related to improving perceptions of the economic environment. Among its findings, the study reveals a greater percentage of card shopping activity among consumers who reported having a more positive view of the economy.
The report draws its analysis from comScore’s research panel of 1 million U.S. consumers and a comScore survey of nearly 2,000 U.S. Internet users conducted in December 2010, and provides insight into card features and rewards programs most likely to influence card shopping decisions. In addition, the study discusses the growing importance of online servicing for issuers and opportunities to provide more value for consumers using digital channels to engage their issuers.

About comScore
comScore, Inc. (NASDAQ: SCOR) is a global leader in measuring the digital world. For more information, please

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