Have Cybercriminals Hacked Visa/MC 3-D Secure?

From InfoSecurity Magazine:

You're probably familiar with the 3-D Secure system of card security for online transactions - aka Verified by Visa (for Visa) and SecureCode (for MasterCard) - but now a security researcher is reporting that cybercriminals may have found a way around the online transaction security. According to former Washington Post security researcher Brian Krebs, a dashboard panel in a cracking utility he accessed online has a tab labelled `Arcot.' "Arcot Systems is the company whose software powers the authentication system used by MasterCard’s SecureCode and Visa's Verified by Visa programs", he says in his latest security blog. "What's interesting is that the thieves could defeat these security systems by gathering personal data on victim card holders, which they appear to have done here", he adds.  <>

Related: Verified by Visa: "Textbook Example of How NOT to Design an Authentication Protocol" -ePayments News Blog

International Payment News Roundup

From VRL/Cards International

McDonalds LatAm set to deploy VeriFone's PAYware

Wed, Mar, 23 2011

E-payments solutions provider VeriFone will supply its PAYware merchant card payment and settlement hosted service to Latin American restaurant operator Arcos Dorados – manager of the McDonald’s brand in the region.Free

LatAm virtual goods market to double by 2012

Wed, Mar, 23 2011

Latin America’s virtual goods market is set to increase by more than 50% to $517m by 2012, according to research by online monetisation platform PlaySpan.Free

Fed passes amendment to CARD Act

Tue, Mar, 22 2011

The Federal Reserve’s proposed amendment to Regulation Z of the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 may have drawn many critics but the controversial rule has been passed.Free

CyberSource launches real-time fraud detection

Tue, Mar, 22 2011

Payments management company Cybersource has developed ‘Decision Manager’ - a real-time fraud detection radar for online merchants.Free

Nokia and UBI take advantage of NPCI's switching fee

Mon, Mar, 21 2011

The National Payments Corporation of India (NPCI) has reduced its proposed switching fee for mobile money transfers from 25 paise to 10 paise in a bid to encourage the use of m-payments.Free

UnionPay strengthens presence in Russia

Mon, Mar, 21 2011

Russian bank Gazprombank will launch Chinese credit-card organisation UnionPay’s card payment service at its ATMs and merchants by the end of the year.Free

Google to test NFC m-payments

Wed, Mar, 16 2011

Google plans to team up with e-payments technology provider VeriFone to begin testing m-payments using near-field communication (NFC) technology in retail locations around the US.Free

Visa announces 2010 LAC results

Tue, Mar, 15 2011

Visa’s payments volume grew by 23.2% in the Latin America and Caribbean (LAC) region last year reaching $270bn, according to the network’s 2010 year-end results.Free

Apple shuns NFC for iPhone

Mon, Mar, 14 2011

The future of contactless m-payments looks shaky once again as tech giant Apple confirms it will not include near-field communication (NFC) chips in its iPhone 5 due for release this year.Free

US consumers eye credit cards in 2011

Mon, Mar, 14 2011

Young consumers in the US are said to be showing more interest in credit cards as the economy gradually starts to pick up, according to a study by the Auriemma Consulting Group (ACG).Free

Conference to Examine Impact of Fed’s Proposed Debit Card Regulations

Banks, Merchants and Consumer Groups Wrangle Over Likely Outcome of Controversial Change to Debit Card Fee Structure

REPEATING...

--(BUSINESS WIRE)--PYMNTS.com:

“What’s the Problem, What’s the Solution, Who Wins, Who Loses”

Host:					PYMNTS.com
What:					A half-day conference will examine the potential impact of proposed Federal Reserve Board regulations on debit card interchange fees. Under the proposed regulations, bank debit card fees charged to merchants for debit card transactions would drop by some 80%. Banks have expressed dismay over what would be a massive revenue loss, while merchants applaud the proposal. The conference will examine what the rules ultimately could mean for consumers, banks and economic efficiency. A final decision by the Fed is expected on April 21, 2011, unless Congress passes legislation to postpone the deadline to allow for further study.
Who:					Economists, law professors and representatives from banks, networks, merchants and consumer groups. Participants will include John Buhrmaster, chairman and president of 1st National Bank of Scotia; Mallory Duncan, senior vice president, general counsel, National Retail Federation; Chris McWilton, president, U.S. Markets, MasterCard Worldwide; and Travis Plunkett, legislative director, Consumer Federation of America.
When:
					Tuesday, March 29, 2011, 9:00 a.m. – 2:30 p.m. ET
					9 a.m., “Reasonable Regulation of Debit Card Fees,” Martin Neal Baily, Bernard Schwartz Senior Fellow in Economic Studies, Brookings Institution, and Chairman of the Council of Economic Advisors under President Clinton.
					10:15 a.m., “The Economic Impact of Durbin on Consumers and Small Businesses,” Richard Schmalensee, professor of Economics, Management and Dean Emeritus, MIT Sloan School of Management, and a member of the Council of Economic Advisors under President George H.W. Bush.
					11:00 a.m., “What’s the Problem, What’s the Solution, Who Wins, Who Loses,” Panel discussion with law professors Adam Levitin (Georgetown), Ronald Mann (Columbia), and Todd Zywicki (George Mason), and economist James Miller III (former OMB Director), moderated by Douglass Eliott (Fellow at Brookings Institution).
					12:30 p.m., Debit Card Stakeholder Roundtable
Where:
					Willard InterContinental Hotel
					1401 Pennsylvania Ave., NW
					Washington, D.C. 20004

About PYMNTS.com

PYMNTS.com is an online media channel that captures user-generated and expert-driven commentary, information, news, and analysis on “what’s next” in the payments sector worldwide. The site provides a platform for industry professionals to share content related to company and product developments, to tap into the collective commentary and analysis from experts, bloggers and industry pundits, and to interact with industry thought leaders and other influencers on topics of critical importance to the future of the sector. A joint venture of Business Wire, a Berkshire Hathaway Company, and Market Platform Dynamics, PYMNTS.com redefines the ways in which B2B news and information is both generated and distributed.

Contacts

Healy Corporate Communications
Sean Healy, 201-857-2520
sean@healycorp.com

Permalink: http://www.busin

VRL: New VRL Research Looks At Contactless Cards Take Up

March 25, 2011 10:59 AM Eastern Daylight Time 

Latest report from VRL highlights a lag between contactless card issuance and merchant acceptance of this form of payment

LONDON--(BUSINESS WIRE)--Top financial and professional services information provider VRL has released a new report ‘Contactless Cards: Tentative Steps’ which examines market take up of contactless card across the US, Europe and Asia Pacific. While there has been significant media attention around the growth of contactless cards, this report looks at whether there is real momentum behind this payment technology.

The picture that emerges is one of fragmentation and complex commercial models, with the majority of merchants unlikely to fund migration to contactless payments unless a clear business case can be identified. This is particularly evident in the US where there are 100 million contactless cards in issue, yet only two percent of merchants are reported to accept this form of payment.

In the report, industry specialist Sarah Richardson-Clarke examines worldwide trends finding that in countries such as Turkey and the UK, card issuers and payment processing companies are paying for the introduction of the required technology to encourage growth. Outside the US, UK card providers are the most proactive, with over 11 million cards in circulation by the start of 2011.

Adoption of contactless cards is most prevalent in the retail convenience market where speed of service is vital. Global companies in this space using contactless cards include McDonald’s and Starbucks. Outside the large convenience retailers however there is little take up. The report also found that contactless and PIN-less payments are capped at £15 in the UK and $25 in the US, above which a PIN or signature is required which somewhat defeats the purpose.

‘Contactless Cards: Tentative Steps’ includes detail on worldwide contactless card schemes including Visa payWave and MasterCard PayPass, and outlines the future evolution of contactless cards, suggesting that contactless mobile payments will likely be the way forward.

For further details on how to purchase a copy of the report or for more information please call Jeannie Lam on +44(0)20 7563 5605 or email info@vrlfinancialnews.com.

VRL industry reports provide the analytical intelligence needed to make better-informed business decisions. Reviewing the most pressing issues and trends impacting on the world of finance, VRL reports cover a broad range of topics.

For more details visit: http://www.vrl-financial-news.com/reports.

Contacts

C8 Consulting Ltd
Cathy O’Neill
01189-001135
cathy@c8consulting.co.uk

A World's First at International CTIA 2011 - CHARGE Anywhere Enables Google®'s Nexus Phone to Accept MasterCard PayPass and Visa Blink NFC Payment Cards - Turning Nexus Phone into an NFC Payment Acceptance Terminal!

SOUTH PLAINFIELD, N.J., March 23, 2011 /PRNewswire/ -- CHARGE Anywhere®, LLC, a leading provider of Mobile Payment solutions and payment gateway services, announced today a revolutionary, technological break-through for NFC mobile payments. CHARGE Anywhere's mobile payment software can now transform Google's Nexus S™ into an NFC payment acceptance terminal.

CHARGE Anywhere's mobile payment application for Android™ platform enables any business to process credit card, check and ACH payments in the field. Now, with this advancement, CHARGE Anywhere can empower any business to take the leap into the future by accepting NFC payments in the field with their Nexus S smartphone. CHARGE Anywhere intends to expand its portfolio of NFC mobile payment acceptance solutions as additional smartphones are released.

"CHARGE Anywhere continues to push the envelope of technological innovation by providing businesses with access to the most advanced and feature rich payment acceptance technology. The CHARGE Anywhere payment platform has always stayed ahead of the payment technology curve and by adding NFC payments ensures that our partnering financial institutions, mobile network operators and distributors always have the most competitive advantage in delivering secure payment technology," said Paul Sabella, President and CEO of CHARGE Anywhere.

CHARGE Anywhere's mobile payments solutions are winners of the 2010 BlackBerry Super App Challenge - Regional Selection, the 2010 CTIA E-Tech Awards in the Mobile Applications - Mobile Payments Category, the 2010 Mobile Merit Awards for Best Overall Enabler Application, the 2009 Best of Interop-PCI Security Solution Award and the 2009 Electronic Transaction Association Technology Innovation Award.

About CHARGE Anywhere, LLC

CHARGE Anywhere is the developer of proprietary Payment Card Industry (PCI) PA-DSS validated CHARGE Anywhere® v2.0.0 Mobile Payment/POS software and PCI DSS Level 1 compliant ComsGate® Payment Gateway. For more information contact them atwww.chargeanywhere.com, or (800) 211-1256.

©2011 CHARGE Anywhere, LLC. All trademarks, service marks, and trade names referenced in this material are the property of their respective owners. Android is a trademark of Google Inc. Use of this trademark is subject to Google Permissions.

SOURCE CHARGE Anywhere, LLC

BOKU Partners with O2 and mpass in Germany for Direct Mobile Billing

March 24, 2011 03:01 AM Eastern Daylight Time 

The mpass system driven by O_2, Vodafone and Deutsche Telekom allows merchants to accept payments for virtual, digital and physical goods.

SAN FRANCISCO & MUNICH--(BUSINESS WIRE)--Telefónica O₂ Germany, a leading provider of broadband and mobile services, and BOKU Inc., the global leader in online mobile payments, today announced a direct carrier billing relationship. O₂ customers can now use BOKU’s payment platform to purchase virtual and digital goods ranging from .09 Euros to 30.00 Euros. O₂ customers pay for goods by entering their mobile number and charging directly to their mobile phone carrier bill.

“Understanding customer needs and merchant requirements in regards to our payment products is essential for continuing our success story in the mobile payment area. A close collaboration with BOKU ensures we position ourselves closely to the key players in the market”

O₂ is part of Telefónica, a leading global provider of broadband and mobile services, and the second largest carrier group in the world. O₂’s mpass system allows direct carrier billing for the purchase of virtual, digital and physical goods.

This new partnership integrates the BOKU mobile payments platform into O₂ Germany’s operator billing interface, enabling the following advanced features:

• Support for one-off and subscription payments in Germany
• Full pricing granularity from .09 Euros to 30.00 Euros
• Authorization and Capture APIs with refund support
• In-App Billing support
• Web Billing support

The Boku service offers consumers a quicker and easier way to pay online when compared with existing credit card solutions.

“This agreement opens up the opportunity for BOKU merchants to offer payment for physical goods as well as virtual and digital goods,” said James Patmore, Managing Director, BOKU in EMEA. “Our partnership with O₂ confirms our vision of evolving online mobile payments into a range of new vertical markets.”

“Understanding customer needs and merchant requirements in regards to our payment products is essential for continuing our success story in the mobile payment area. A close collaboration with BOKU ensures we position ourselves closely to the key players in the market,” said Michiel van Eldik, Managing Director Wholesale and Partner Management, Telefónica O₂ Germany.

“We want to provide our customers with a safe, reliable, and convenient payment solution to pay for goods, be they virtual or physical,” continued O₂’s van Eldik. “BOKU’s mobile payments platform has the right blend of technology and finance-grade infrastructure to mesh well with O₂ customer needs.”

BOKU’s bank-grade mobile payment service is available to online merchants and publishers on a global scale. The BOKU service enables merchants and publishers to drive incremental revenue by offering carrier billing as a payment option to their customers. BOKU is connected to 230 mobile operators in more than 65 countries, and provides access to more than 2.5 billion potential customers who can pay by mobile.

About BOKU:

BOKU is the standard for online payments using your mobile phone, making it easy to purchase goods and charge to your mobile operator bill. BOKU brings bank-grade payments technology and mobile users together on the web, creating a trusted, accessible market for consumers, publishers and carriers alike. Based in San Francisco with offices in Europe and Asia, BOKU reaches over 2.5 billion consumers worldwide. With localization in 28 different languages, BOKU operates in 64 different countries, across 230 different carriers globally. Leading Silicon Valley entrepreneurs and venture capitalists fund BOKU including Benchmark Capital, Index Ventures, Khosla Ventures, DAG Ventures and Andreessen Horowitz. For more information visit: www.boku.com

BOKU and Pay by Mobile are registered trademarks or trademarks of BOKU, Inc., and/or its subsidiaries. All other brand names, product names, or trademarks belong to their respective holders. BOKU reserves the right to alter product offerings and specifications at any time without notice.

About mpass:

mpass is the mobile internet payment system provided by the German telecommunication companies Telekom Germany, Vodafone Germany and O₂ Germany. Since 2008, more than 20 million potential mobile customers with a bank account in Germany are preregistered for this comfortable and secure payment method. The service is not only available to customers of Telekom, Vodafone and O₂, but to all mobile users who are customers of German mobile telecommunication providers. With mpass, Telekom, Vodafone and O₂ have expanded their innovative technology and services range by the additional mobile payment portfolio. Detailed information is also available at www.mpass.de

About Telefónica O₂:

Telefónica O₂ Germany GmbH & Co. OHG belongs to Telefónica Europe and is part of the Spanish telecommunication group Telefónica S.A. The Company offers its German private and business customers postpaid and prepaid mobile telecom products as well as innovative mobile data services based on the GPRS and UMTS technologies. In addition, the integrated communications provider also offers DSL fixed network telephony and high-speed internet. Telefónica Europe has about 55 million mobile and fixed network customers in Great Britain, Ireland, the Czech Republic, Slovakia and Germany.

Verifone Squares Off

Here's and interesting ad placed by Verifone via Google Adsense.  
Obviously they are claiming that their solution is better... (runs circles around square), and they invite Square users to trade in their card reader and get a "SECURE" one free.  Interesting.   Want a secure card reader WITH a PIN Pad?  One that's been PCI approved by Visa/MasterCard/Amex/Discover and JCB?  

Visit:  www.HomeATM.net 

Related articles

• VeriFone Keeps Up FUD Campaign Against Square With Pathetic Facebook Ads (techcrunch.com)
• Will Verifone's public diss of Square backfire on Verifone? (stiel.org)
• VeriFone calls out Square (Not surprisingly its also one it's biggest competitors in the mobile payment market) (saintel.wordpress.com)
• VeriFone Demands Recall of Square Credit Card Readers (mashable.com)
• VeriFone Takes The Gloves Off, Accuses Square Of Serious Security Hole (techcrunch.com)
• Verifone Thinks It's Fine To Detail Security Holes...In Competitors' Products (PAY) (businessinsider.com)
• Square hits back at VeriFone: "not a fair or accurate claim" (slashgear.com)
• VeriFone accuses Square of offering an insecure card skimming device (geek.com)
• VeriFone flags Square 'security holes' (mobile-ent.biz)
• Verifone Practices Irresponsible Disclosure (ashimmy.com)

Alarming News About Chip and PIN (Being Broken Again)

Here's why I say again...

Chip and PIN is Broken say Researchers (from Finextra at 22-3-2011) In a presentation at the CanSecWest security conference earlier this month, the researchers from InversePath declared that chip and PIN is "definitely broken" and skimming will become "extremely appealing" to fraudsters.   The group built a prototype skimming device which it says can be easily installed at any POS terminals or ATMs, is virtually impossible to spot and uses the machines to power itself. EMV cards talk to payment terminals via application protocol data unit (APDU) messages for reading records and issuing commands. InversePath says skimmers can intercept and read every part of the terminal-ICC exchange.  Crooks can then download the data with a special card recognised by the skimmer and use it to perform online transactions that do not require users to give the CVV numbers on the back of their cards. Download the document from Finextra now2 mb (PDF File)

Related articles

• Chip and PIN compatibility leads to insecurity (nakedsecurity.sophos.com)
• Chip and PIN flaw means stolen cards 'can be used without security code' | Mail Online (mbcalyn.wordpress.com)
• Cambridge university refuses to censor student's thesis on chip-and-PIN vulnerabilities (boingboing.net)
• Chip and PIN flaw that banks tried to censor: Cambridge scientist exposed security failures (dailymail.co.uk)

Discover Reports Q1 Net Income of $465m

March 22, 2011 04:15 PM Eastern Daylight Time 

Discover Financial Services Reports Record First Quarter Net Income of $465 Million or $0.84 Per Diluted Share

Increases the Quarterly Dividend to $0.06 Per Share

RIVERWOODS, Ill.--(BUSINESS WIRE)--Discover Financial Services (NYSE: DFS) today reported net income for the first quarter of 2011 of $465 million, as compared to a net loss of $104 million for the first quarter of 2010.

“Our results this quarter represented record earnings for any first quarter in Discover's history, driven by on-going improvements in credit performance and accelerating growth in Discover card sales as well as third party payments volumes”

First Quarter Highlights

• Discover card sales volume was $24 billion in the quarter, an increase of 7% from the prior year.
• The company acquired The Student Loan Corporation, adding student loans with a fair value of $3.1 billion to its private student loan portfolio. Total loans grew 3% year over year, including the student loan acquisition.
• Credit quality continued to improve as the credit card net charge-off rate declined sequentially 99 basis points to 5.96%, and credit card loans over 30 days delinquent declined 47 basis points to 3.59%.
• Payment Services had record pretax income of $43 million, up 16% from the prior year. Transaction volume for the segment was $43 billion in the quarter, an increase of 21% from the prior year.

• The company declared a first quarter dividend of $0.06 per share, representing a restoration of the dividend to the pre-financial crisis level.

"Our results this quarter represented record earnings for any first quarter in Discover's history, driven by on-going improvements in credit performance and accelerating growth in Discover card sales as well as third party payments volumes," said David Nelms, chairman and chief executive officer of Discover. “I am optimistic that our additional student loan capabilities, additional marketing investments and the gradually improving economy will further contribute to profitable loan growth in the future."

Segment Results:

Direct Banking

Direct Banking pretax income of $677 million in the first quarter of 2011 was an $885 million improvement from the first quarter of 2010. Pretax income included $30 million related to The Student Loan Corporation.

Total loans ended the quarter at $51.7 billion, up 3% compared to the prior year, reflecting the acquisition of $3.1 billion in private student loans partially offset by a decline in credit card loans. Credit card loans ended the quarter at $44.3 billion, a 3% decline from the prior year, driven by an increase in the payment rate partially offset by a 7% year over year increase in Discover card sales volume.

Net interest margin increased 21 basis points from the prior year to 9.22%, principally due to a decrease in funding related costs, which resulted in a $25 million increase in net interest income. Net interest income increased $46 million from the prior quarter, primarily driven by an increase in total loan balances related to the student loan acquisition.

The delinquency rate for credit card loans over 30 days past due declined to 3.59%, an improvement of 180 basis points from the prior year, and 47 basis points from the prior quarter. The credit card net charge-off rate decreased to 5.96% for the first quarter of 2011, down 304 basis points from the prior year and 99 basis points from the prior quarter.

Provision for loan losses of $418 million decreased $969 million from the prior year, driven by lower charge-offs and a reduction in the allowance for loan losses. Improvement in the outlook for credit performance over the next 12 months led to a reduction in the loan loss reserve rate, which resulted in a reserve release of $271 million in the first quarter of 2011 versus a reserve build of $305 million in the first quarter of 2010.

Other income increased $6 million, or 1%, from the prior year. The increase reflects a purchase gain of $16 million and transition services revenue related to the acquisition of The Student Loan Corporation. This was partially offset by a decline in late fees and the discontinuance of overlimit fees beginning in February 2010.

Expenses were up $115 million, or 26%, from the prior year, reflecting increased marketing and advertising spending, higher compensation expense and costs related to The Student Loan Corporation acquisition. The first quarter of 2010 included a $23 million benefit related to a dispute settlement.

Payment Services

Payment Services pretax income of $43 million in the quarter was up $6 million, or 16%, from the prior year driven principally by an $11 million increase in revenues.

Payment Services dollar volume was a record $43.2 billion for the first quarter, up 21% from the prior year, driven by higher PULSE, Diners Club International and third-party issuer volume. The number of transactions on the PULSE network increased 29%.

Effective Tax Rate

The company's effective tax rate declined to 35.4%, reflecting the resolution of a number of state tax matters.

Dividends

The company’s board declared a cash dividend of $0.06 per share of common stock, payable on April 21, 2011, to stockholders of record at the close of business on April 7, 2011.

Conference Call and Webcast Information

The company will host a conference call to discuss its first quarter results on Tuesday, March 22, 2011, at 4:00 p.m. Central time. Interested parties can listen to the conference call via a live audio webcast at http://investorrelations.discoverfinancial.com.

About Discover

Discover Financial Services (NYSE: DFS) is a direct banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company operates the Discover card, America's cash rewards pioneer, and offers personal and student loans, online savings accounts, certificates of deposit and money market accounts through its Discover Bank subsidiary. Its payment businesses consist of Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation's leading ATM/debit networks; and Diners Club International, a global payments network with acceptance in more than 185 countries and territories. For more information, visit www.discoverfinancial.com.

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• Discover posts 1Q profit as payment habits improve (sfgate.com)