Mobile Payment Industry News

Thursday, October 9, 2008

Pumping Gas Just Got Much Riskier - MSNBC

I've been blogging about the dangers of paying at the pump for a long time. The security of the card readers leave much to be desired. Frankly, a decent hacker wouldn't even need a skimming device,..that's for the amateurs. Even when you're not being skimmed by hackers, the banks are putting a hold on your account for up to $100, many times resulting in overdraft charges. ALWAYS pay inside using your PIN, it's a real-time transaction, eliminating overdraft charges and significantly reducing the likelihood of falling victim to a skimscam. For more on the subject of skimming, take a look at "related articles" located at the bottom of this post:

Beware of debit card skimmers - ConsumerMan - MSNBC.com

Secret Service, police warn of 'well-organized' debit card skimmers
By Herb Weisbaum
MSNBC
updated 9:37 a.m. MT, Wed., Oct. 8, 2008

Becki Turner got the call from her bank’s fraud department on Labor Day. The investigator wanted to know if she had withdrawn $500 from an ATM in California over the holiday weekend. She hadn’t. She couldn’t. Turner was home in Puyallup, Wash.

“I was just flabbergasted,” she says. “I had the card with me, the ATM was in another state, and the person using the machine had to have my security code.” Turner worried crooks had gotten into the banking system and stolen her password.

It wasn’t anything that complicated. Puyallup police say thieves snagged her account information — along with the debit card numbers and PIN codes of hundreds of other people — at two gas stations in the area.

They did it by installing their own hard-to-spot card reader, called a skimmer, on top of the card reader built into the pump. The skimmer is able to grab the account information from the card without interfering with the legitimate payment transaction.

The crooks used the stolen data to create (or clone) fake debit cards that were used at ATMs in Washington State over the Fourth of July weekend and in Northern California on Labor Day weekend. The bad guys like three-day holidays because it gives them more time to use the cards before the unauthorized withdrawals are spotted.

“We are looking at a sophisticated, very well-organized group of individuals,” says Detective Jason Visnaw with the Puyallup Police Department. When all the victims from these two incidents are identified, the total loss could reach half a million dollars.

Why steal debit card numbers? “With a credit card you have to go and buy merchandise and then you have to fence it or pawn it,” Det. Visnaw explains. “With a debit card, you’re getting cash money.”

This is not an isolated case. Gas pumps are being compromised in cities across the country. “We don’t view it as an epidemic, but there are cases open in at least a half dozen states right now,” says Ed Donovan, spokesman for the U.S. Secret Service. These investigations are underway in California, Nevada, Pennsylvania, Delaware and Washington.

Donovan tells me the Secret Service believes some of these crimes are inside jobs, involving someone at the service station.

Gas pumps are just the latest target
Skimming credit cards and debit cards is not new. Portable card readers make it possible for anyone to copy the information stored on a card’s magnetic stripe. This information is not encrypted so it’s easy to steal.

“You just run it through the skimmer and it has all the information right there in plain text,” says former White House cyber security advisor Howard Schmidt. “It’s very easy to imprint that data on another magnetic strip and use it somewhere else.”

The first skimming cases were reported at restaurants and stores where dishonest employees ran cards through their reader before ringing up the sale. As technology improved, the bad guys developed skimmers for ATMs. Now they’ve added gas pumps.

The skimmers are designed to slip over the real card reader. They can be hard to spot. And quite frankly, most of us would never look for something like this anyway. We want to pay and go.

So how do they get your PIN number? They can hide a little camera in the skimmer or on the pump. It shows your fingers as you type in the number.

There are also fake keypads that slip over the real keypad that can transmit the PIN code as you enter it.

In Las Vegas, police have discovered even more sophisticated technology – wireless transmitters installed inside the pump. “They can actually sit in the parking lot with a laptop and get real-time information as victims use their card,” explains Lt. Robert Sebby of the Las Vegas Metropolitan Police Department. Because there’s nothing on the outside of the pump, there’s no way you can tell the pump is compromised.

Not a safe way to pay
Nancy and Jim Tew no longer use their debit cards to pay at the pump — and for good reason. They both had their debit card numbers stolen at one of those gas stations in Puyallup, Wash.

Nancy Tew found out about the theft when her card was rejected at the grocery store. “To my astonishment, I had no money in the bank,” she said.

The thieves used her account number at ATMs in Hollywood, Calif., to steal $600. They got $900 from her husband’s checking account. She tells me it was “totally bizarre and really scary” to be targeted like that and not even know it.

The Tews now pay for their gas — with cash or debit card — at the register. That may sound paranoid, but other victims of this skimming attack tell me they now do the same thing.

Police in Puyallup and Las Vegas now advise residents not to use their debit card at a gas pump because there’s no way to be sure it hasn’t been tampered with.

That’s smart advice and here’s why. Debit cards do not offer the same fraud protection as credit cards. If crook armed with a skimmer snags your credit card number and uses it to buy things, you can dispute the charges with the credit card company. You won’t owe a thing while they investigate.

If the crook grabs your debit card number, he can go to a cash machine and pull money out of your checking account. It could take days for the bank to investigate and put that money back into your account. During that time checks could bounce or you might not be able to pay your bills. That’s why the only way I pay at the pump is with a credit card.

© 2008 MSNBC Interactive

URL: http://www.msnbc.msn.com/id/27085818/

Wednesday, October 8, 2008

Microsoft Launches SearchPerks to Compliment Live's CashBack

Microsoft Corp. has unveiled another reward program for Internet users who search the web using MSN.com's Live Search. Called "SearchPerks," the program awards points to users each time they use MSN Live for a search.

Points can be redeemed for merchandise, music downloads, airline miles and other rewards. Participants get 500 points for signing up and can earn up to 25 points per day.

I have a suggestion..how about 500 points AND a HomeATM Point of Sale Device for signing up for SearchPerks! Then their CashBack Live Search partners can save even more money when their goods are purchased using the more secure HomeATM PIN Debit platform. Yeah...that's the ticket!

Essentially Microsoft is taking the "point system" used at gas stations and airports that gets cardholders prizes after they accumulate a certain number of points, and calling them "tickets" instead of "points." Each search on Live.com, MSN.com, Windows Live Hotmail, or Windows Live Messenger, is worth a ticket. Since searching is free, and people are capable of searching many more times in a day than they purchase gas or flight tickets, the company is limiting the number of tickets that can be earned in a day to 25.

While Microsoft is giving everyone 500 tickets as a bonus for signing up, the more attractive prizes still take quite a lot of searching to get; an Xbox 360 Wireless Controller costs, for example, 5,500 tickets—200 days of max Live Search usage. Among the examples that MSN provides, 525 tickets equal 5 music downloads, 1,800 tickets equal 1,000 airline miles, 1,100 tickets equal a T-shirt, 3,400 tickets equal a cookbook. Users must sign up before Dec. 31; the promotion ends April 15, 2009.

The new program joins MSN's 4-month-old Cashback initiative, which rewards shoppers with rebates when they start a search through the Live Search Cashback portal. That initiative appears to be enjoying at least limited success, reports Hitwise, an Internet site monitoring and measurement company.

While noting that the Cashback initiative does not appear to have moved the needle on market share vs. other search engines, Hitwise reports that the share of MSN users who go to the Cashback section has increased from 3.75% 11 weeks ago to 6.29% last week.

Hitwise notes that the program may have at least stopped Microsoft's MSN.com Live Search from losing further market share to Google. "Everyone is aware that the share of searches on Google has continued to increase, but over the past three months, the share of searches on MSN"s search properties has remained consistent," says Heather Dougherty, director of research at Hitwise. 55% of MSN Cashback users are women, 22% were 25 to 34 years old and 27% were 35 to 44. Just under one-fifth had annual household incomes over $100,000.

Alternative Payments Growing Threat to Cards - Bank Technology News

Altern ative Payments Growing Threat to Cards - 10..2008 - Bank Technology News Article

Talk about piling on. Just as payments industry players were absorbing eBay’s eye-popping $945 billion acquisition of Bill Me Later this week, Celent unleashed a report Tuesday predicting that alternative e-commerce payment schemes threaten to take away up to $1.7 billion in potential transactions from card brands and issuers by 2015.

PayPal, Bill Me Later, Google Checkout and Amazon Payments are the lead mercenaries who will diminish credit cards to under 50 percent of total online transaction volume within two years, compared to more than 60 percent in 2005. Even with rising debit card usage, all card-based volume will be around 70 percent in 2010, according to Celent (down from nearly 80 percent currently).

Despite their dominance and acceptance ubiquity, Celent notes, “payment cards have a number of serious weaknesses.” Chief among them is security, as 40 percent of consumers dislike providing credit card information online, despite new PCI security standards from the card industry and the long-standing zero-liability fraud protections in place for unauthorized transactions. Then there are the merchant irritations with interchange, which have prompted wider e-store adoption of Bill Me Later and Amazon Payments options on checkout pages and encouraged wider use of ACH-based transactions.

What makes many of the alt-payment companies stand out, says Celent, is the role they play in encouraging purchases. Consumers attracted by discount or promotional financing through the preferred payment method, discounts, and—most prominently with Google—closely tying together payment services with marketing opportunities.

“Alternative payments players are starting to differentiate themselves via their ability to induce payments,” wrote senior banking analyst Red Gillen.

“In other words, those players that are likely to succeed and pose the greatest disruptive threat to payment cards are those that have evolved from simply enabling payments to actually creating sales lift.”

Editor's Note: An example would be taking the savings derived from HomeATM's lower PIN Debit interchange rate and applying it towards a loyalty-rewards platform in combination with an existing platform. By participating in a co-op rewards platform, the offerings to consumers would be more attractive than a single rewards offering.

40 Billion Debit Transactions by 2010...Doubling that of 2005

It's estimated that by 2010, a whopping 40 billion consumer transactions will be completed using debit cards - that's double the number from 2005.

Recognizing that explosive growth, banks are working hard to make money off these transactions. (Translation: Banks are working hard to devise sneaky, underhanded, non-ethical but legal ways to make money off these transactions) Thus, it's up to consumers to watch out for wayward fees that can make using a debit card an expensive proposition. 5 secrets to smart debit card use

Citibank PIN Code Hackers in Court

When using HomeATM's patented solution, PIN codes ARE SACROSANCT so we encrypt them from the "very millisecond" they are tapped into the PIN Pad. When processed properly there is NO safer transaction than a PIN based transaction, which is why they boast the lowest interchange rates of all...

Citibank must like shortcuts, because their machines in convenience stores across America were the target of the biggest and most effective remote PIN code theft scam in US banking history about three months ago. And they shouldn't have been. No excuses. In addition to bringing the hackers to court, maybe the individual who made the decision to make ATM's easier to breach should be there too.

The Citibank/7-Eleven hack does NOT reflect PIN Debit as a whole. It relates specifically to Bank ATM machines, more specifically, ATM's that employ a remote diagnostic capability designed to repair them. (which can also apparently "leak information.") Details of the fraud have only now been made public, as the case makes its way through the US District Court for the Southern District of New York.

The following information is from several different articles over the last couple months. Feel free to browse through the "related articles" I've included at the bottom of this post. Let me begin by explaining why PIN Debit has always enjoyed the lowest Interchange Rates of all the payment mechanisms: The biggest and foremost reason is that...

PIN codes have always been the most closely guarded secrets in banking transactions. They are supposed to be encrypted from the very second they are tapped into a keypad. Until recently, it was virtually impossible to get at them without physically looking over someone’s shoulder as they punched in their digits to withdraw money. I've posted many times here about scams involving strategically placed mirrors or tiny video cameras have become something of a common threat for banks. That's enough to be concerned about. Here's more than enough...

"Technology for ATM's has changed over the past few years. The infrastructure is now built on Microsoft’s Windows operating system, and the ATM cash machines themselves can be remotely diagnosed and repaired online. Unfortunately, this means that PIN codes have started to “leak” along the way — suggesting that industry guidelines on encryption are not always being followed." Here's the part where you can say: "Well that's just great. In order to save the expense of sending out an ATM Repair Man, they put everybody's checking and savings account at risk" (and play with /tarnish the reputation of PIN Debit in the marketplace, I might add.) What is Citibank thinking? And they're one of the "survivors" of this banking fiasco?

“PINs were supposed be sacrosanct,” says Avivah Litan, a distinguished security analyst with the Gartner research firm. “What this shows is that PINs aren’t always encrypted like they’re supposed to be. The banks need much better fraud detection systems and much better authentication.”

ATM fraud is growing exponentially. I've posted several times about this in the recent past, including fraudsters setting up fake keyboards and mini-camera's to glean PINs — or PIN codes that have been obtained through “phishing” scams. According to one article, it is not clear how many Citibank customers were affected by the hackers. The bank has nearly 5,700 Citibank-branded cash machines inside 7-Eleven stores, but it does not own or operate any of them. The maintenance of the machines is carried out by two companies: Cardtronics, based in Texas, and Fiserve, based in Wisconsin.

The alleged hackers — Yuriy Rakushchynets, Ivan Biltse and Angelina Kitaeva — are accused of stealing at least $2 million through the PIN scam and have been indicted on two counts each of conspiracy and fraud. It is thought that a much larger sum of money might have already been transferred to Russian bank accounts — and there are suggestions that the actual hacking was performed by another party, with the defendants simply using second-hand information to make cash withdrawals. The wording of the indictment against them is vague.

The ring-leader of the three suspects is Mr Rakushchynets, a 32-year-old Ukrainian and a regular contributor to underground online credit card fraud forums. When he was arrested by the FBI — he was already under investigation for his suspected role in a separate $5 million hacking scam — agents found $800,000 of cash at his Brooklyn home, most of it stuffed into rubbish bags.

It remains unknown or at least undisclosed, exactly how the hackers infiltrated the closely guarded computer network, although it has been confirmed that they broke in through a server at a third-party processing company. Once they obtained the PIN codes, the hackers could then simply make card clones (See my post and a video on how easy it is to clone a card: "Card Cloning Quickly Becoming a Global Affair") and use them to withdraw funds from compromised accounts at virtually any cash machine in the country.

Don Jackson, director of threat intelligence for the computer security company SecureWorks, said he had seen an “alarming” spike in the number of attacks on back-end computers for cash machine networks over the past year. “What makes this case unique is the sheer luck of happening upon these guys and catching them red-handed,” he said. “But there are a whole lot of other and PIN compromises going on that aren’t reported.”

Citibank has declined to comment on the details of the case, saying only that it has notified affected customers and issued them with new debit cards. “We want our customers to know that, consistent with legal requirements, we do not hold them responsible for fraudulent activity in their accounts,” it said in a statement. Cardtronics has said it is co-operating with authorities, while Fiserv insists the intrusion did not happen on any of its servers.

“Fiserv is confident in the integrity and security of our system,” said a spokeswoman.

Credit Card Fees Squeezing Profits? Switch to PIN Debit

Credit-card fees squeeze profits - El Paso Times

Greg Matthews tries to discourage customers at his East Side pharmacy from using credit cards to pay for prescriptions because transaction fees on cards cuts into his already slim profit margin.

"A lady the other day paid her $80 co-pay" on a $120 prescription with a credit card. "I was going to make $3.48," but the credit-card fee took $1.98 so Matthews only made $1.50 on the transaction, he said. The other day a customer was going to pay a $1.05 prescription payment with a credit card, and "I said, 'Forget it.' I just gave it to him" because of the credit-card fee, he said.

Credit-card transaction fees, specifically the interchange fee set by credit- card companies and collected by banks that issue the cards, have become a hot issue with retailers in recent years.

For more information: www.unfaircreditcardfees.com; www.electronicpaymentscoalition.org

The Merchants Payments Coalition, a national group of retailers, including supermarkets, drug stores, convenience stores and others, has been campaigning to lower the fees. The coalition is pushing for legislation in the U.S. Congress to set up a mechanism to let retailers negotiate card transaction fees with the credit-card companies. Some members of the coalition also are part of pending lawsuits consolidated into one case in a New York federal court alleging price-fixing of fees by MasterCard, Visa and several banks.

"What we want them to do is negotiate with us (merchants) a price fair for their service," said John Motley, senior vice president for the Food and Marketing Institute in Washington, D.C., a member of the coalition. "The reason the issue is so big for us (grocery stores) is the average profit within the food retailing industry in the U.S. is about 1.2 percent." The credit-card fees increase product costs to consumers, he said.

Interchange fees for credit-card transactions average around 2 percent of each transaction dollar amount, Motley said. Supermarkets were offered a low interchange fee years ago to encourage supermarkets to accept cards, but that "rate is now disappearing" because premium credit cards are becoming more prevalent and have a higher fee, he said. Fees on debit cards used with a PIN number average around one-half percent, which is not as much of a problem, he said.

Gasoline retailers earlier this year began complaining about being hurt by rising credit-card fee costs because customers were charging larger amounts due to rising fuel prices. MasterCard and Visa made adjustments in fee charges for fuel retailers, the companies said in statements issued this year.

Last year, $42 billion in interchange fees were collected, and this year that number is projected to grow to almost $49 billion, Motley said. That is a 16.7-percent increase. Only a small portion of the fees go for transaction costs, he said.

Visa and MasterCard, the nation's two largest credit-card companies, said the companies each set their own card interchange rates, but they receive no revenue from interchange fees.

The interchange rate is what the merchant's bank pays to the cardholder's bank for taking on the risk, said Denise Dunckel, a Washington, D.C.-based spokeswoman for Visa. "Visa makes its money from contracts with banks," she said.

Sharon Gamsin, a spokeswoman for MasterCard's headquarters in the New York City areas, told the El Paso Times in May that MasterCard makes its money from fees it charges banks that issue cards.

The interchange fee is part of a merchant discount fee, which is negotiated between the merchant and its bank for credit-card and debit-card transactions, according to information from MasterCard.

The interchange rate is set high enough for banks to have an incentive to issue credit cards and low enough to encourage businesses to accept the cards, the credit-card companies said.

"I think merchants are getting a good value for what they pay for. The alternative (cash or checks) costs more" to handle," said Linda Echard, president and CEO of ICBA Bancard in Washington, D.C., an Independent Community Bankers of America subsidiary that provides credit-card services to community banks. The interchange and merchant fees are important revenue sources that allow banks to stay in the credit-card business, she said.

In Australia, where the government stepped in and reduced interchange rates, the number of cards being issued has decreased, Echard said. A MasterCard statement said Australian credit- cardholders are now also paying higher interest rates and fees because of the decrease in interchange rates.

First Data to Offer All Major Alternative Payment Brands via CardinalCommerce

Press Release from Cardinal Commerce

DENVER and MENTOR, Ohio, Oct. 8 /PRNewswire/ - First Data, a global leader in electronic commerce and payment services, and CardinalCommerce Corporation, the worldwide leading provider of payment brands, have joined forces to bring First Data merchants a complete eCommerce solution for authentication programs and alternative payment brands.

Through this agreement, First Data becomes the first payment processor with the ability to offer all major alternative payment brands to their 100,000+ eCommerce merchants. This solution provides one of the fastest, easiest technical integrations for merchants, backed up with 24/7/365 support from CardinalCommerce. In addition, First Data will offer payer authentication service that leverages online payment verification offered by both Verified by Visa and MasterCard SecureCode programs.

"First Data is focused on developing robust and secure Software-as-a-Service payment solutions for our expanding online merchant community," said Souheil Badran, senior vice president and general manager, First Data eCommerce Solutions. "We're pleased to add the CardinalCommerce established solution to our scalable suite of services. Our goal is to offer a positive return on our merchants' investment while continually mitigating their fraud risk."

Now First Data merchants will have access to the most comprehensive online payment options available in the marketplace to increase sales and average order values, minimize fraud and the costs of order acceptance, and to help customers make eCommerce purchases with confidence. Through the First Data Global Gateway service, merchants will be able to receive the benefits of Verified by Visa(TM) and MasterCard(R) SecureCode(TM), as well as PayPal(TM), Google(TM) Checkout, and more.

"Cardinal is extremely excited to work with a company as distinguished in their field as First Data," said Mike Keresman, CEO, CardinalCommerce. "We're thrilled that the world's largest payment processor has confidence in our Cardinal Centinel(R) technology and we look forward to assisting their aggressive growth strategies in the eCommerce sector."

About First Data

First Data is a global technology leader in information commerce. The company processes transaction data of all kinds, harnesses the power of that data and delivers innovations in secure infrastructure, intelligence and insight for its customers. With operations in 37 countries, First Data serves more than 5.4 million merchant locations and more than 2,000 card issuers and their customers. It powers the global economy by making it easy, fast and secure for people and businesses around the world to buy goods and services using virtually any form of payment. The company's portfolio of services and solutions includes merchant transaction processing services; credit, debit, private-label, gift, payroll and other prepaid card offerings; fraud protection and authentication solutions; electronic check acceptance services through TeleCheck; as well as Internet commerce and mobile payment solutions. The company's STAR Network offers PIN-secured debit acceptance at 2.1 million ATM and retail locations. Through First Data's centers of excellence, such as security, analytics, customer loyalty and mobile payments, it offers data-driven commerce solutions for customers around the globe. For more information, visit http://www.firstdata.com.

About CardinalCommerce

CardinalCommerce Corporation is the global leader in enabling authenticated payments, secure transactions and alternative payment brands for both eCommerce and mobile commerce. Cardinal Centinel(R)* enables payment brands such as Verified by Visa, MasterCard(R) SecureCode(R), PayPal(TM), eBillme(TM), Bill Me Later(R), Google(TM) Checkout, MyECheck, NACHA(R) Secure Vault Payments (SVP), Ukash(TM), eLayaway(TM), Ebates(TM), Amazon Payments(TM), RevolutionCard(TM), and more to a network of over 30,000 merchants and merchant service providers. Our mobile commerce platform, branded Cardinal MAX(TM), makes it simple for retailers to sell and market products through the mobile channel. Cardinal's proprietary and easily deployable technology provides consumers, merchants, credit/debit card issuers, and processors the ability to conduct authenticated Internet, wireless and mobile transactions safely and securely. Headquartered in Cleveland, Ohio, with facilities in the United States, Europe and Africa, Cardinal services a worldwide customer base. For more information, visit http://www.cardinalcommerce.com

* Patent # US 7,051,002 B2

SOURCE CardinalCommerce

Amazon Gift Cards 2B Dispensed via ATM's Nationwide

According to a news release, Better ATM Services has reached agreements with Automated Cash Management Systems and APTUS Financial to dispense Amazon.com gift cards at ATMs across the nation.

The two ISOs will be part of a special pilot program in which Amazon.com gift cards will be distributed with a free $25 Restaurant.com promotional card. Dallas–based Columbus Data Services will provide transaction processing services for the program.

Better ATM Services also has become a reseller of Amazon.com gift cards, allowing Amazon.com gift cards to be distributed through ATM networks owned and operated by ISOs throughout the United States. The Amazon.com gift card is immediately valid for use toward purchase of any of the millions of items offered for sale at Amazon.com.

"Tough economic times mean consumers will increasingly demand more value," said Better ATM Services chief executive Todd Nuttall. "Gift cards with coupons and incentives distributed through ATMs provide just that."

Gift cards make up the largest segment of prepaid cards. Boston-based TowerGroup estimates that approximately $80 billion was spent on gift cards in 2006. Based on Mercator Advisory Group research, that total included approximately 600 million cards that were sold in-store.

Tuesday, October 7, 2008

10 Tips to Secure Online Shopping that You Won't Need to Know!

Editor's Note: Before you read this story about 10 tips to prevent hackers from getting your card information when shopping online, I should let you know that ultimately, practicing these tips won't protect you. I will however, show you a simple and logical way to make your online transactions exponentially more secure...ultimately providing you and yours with the peace of mind so many online-shoppers lack, yet desire. Here's how...

Simply place an order for a HomeATM Personal Swiping Device, and you won't ever have to worry about the following 10 tips designed to "help" protect your identity when shopping online.

Even if you were to memorize and practice the art of using all 10 of these tips, you are NOT going to be protected when shopping online. You'll be more protected, but not fully protected. But there is a way to fully protect you when you shop online.

It's simple...compare the two choices:

Choice One (current method): Think about it. Does any part of your mind, intuition, thought process, knowledge, etc. think this is a safe way to purchase anything online? Then why would you enter your card information including your card number and expiration date into a box on a website and then worry hacker will see your data or break into the the retailers system in the future, steal your data and wipe out your bank account?

Choice Two (Our Way): For the cost of shipping and handling, we'll send you our SwipePIN device and you can process your purchases online the same way you do it in retail stores.

Simply take out your card and swipe it yourself in the safety of your own home. See the numbers on the PIN pad? Yes, it even allows you to further secure the transaction with your PIN. (all data is fully encrypted). You should be "SwipePIN your Slider"

This globally patented platform brings the Point of Sale device Home...where the Point of Sale occurs. Better yet, (and here's our direct response TV commercial pitch) "Try HomeATM's SwipePIN device at home FREE for 90 days...just pay shipping and handling ($5.00) and if you're not completely convinced it's the most secure way to make your online purchases, let us know and we'll deactivate it. Otherwise, use it to send us $5.00 dollars for a total cost of only $10.00! You can now shop online safely, securely with the knowledge that both your card and card reader are hack and skim free, respectively. (You can also rest assured it hasn't been tampered with)

Until you start using the SwipePIN method, consider these tips to reduce your risks. But remember, there's keyloggers, hijackers, screen scrapers, hacktivists, wardrivers and myriad other threats that these tips don't protect you against.

Ten Online shopping tips to protect your identity

This holiday season many online shoppers wanting to avoid the hassle of visiting crowded shopping malls will look to the web as a quick and easy to purchase gifts for friends and loved ones. Although the number of Canadians shopping online continues to grow, there are still many consumers who won't shop online for fear they could be victims of identity theft.

The truth is that identity theft is a relatively rare occurrence and most identity theft occurs in using low tech off-line methods therefore most experts agree that shopping online is very safe provided consumers use some common sense when shopping online.

To help make shopping online more safe and secure, Digital Home presents the following Ten Tips for Secure online holiday shopping:

1. Only provide personal information if you're on a secure Web site. Once you are logged in, make sure the Web address starts with "https"("s" means it's secure). For added safety, check for a site certificate before submitting information on a secure page. Confirm the owner of the certificate by clicking on the padlock icon at the bottom of most browsers. You should see the owner listed as well as the site address. This address should match the Web site address at the top of the page; if they do not match, you may be at a fraudulent Web site and should not enter personal data.

2. Never respond to emails asking you to "confirm" recent transactions after you shop. These likely are "phishing" scams sent to lure private information from you.

3. Maintain a paper trail. Print and save records of your online transactions, including the product description and price, the online confirmation/receipt, and copies of any email(s) you exchange with the seller.

4. Do not share your passwords with anyone and never provide your social insurance number, birth date, or mother's maiden name in an email.

5. Make sure all of your security software is up-to-date before you do your online shopping. That includes anti-virus software, anti-spyware, and firewalls.

6. Check a company's privacy policy before doing business with it. A company should allow you to know what personal information its Web site is collecting, why and how it will be used. If you can't find a privacy policy -- or if you can't understand it -- consider taking your business to another site that's more security-conscious and accommodating to customers.

7. Consider using a separate email account for your online shopping. You can set up a free email account online through several different services.

8. Check your bank and visa accounts regularly for any activity you did not initiate. This is especially needed during the busy holiday shopping season. You should be able to log on quickly and check to see if there is any unusual activity in your bank or credit card account that you did not initiate. If there is, contact your bank immediately.

9. Do business with companies you know and trust. Research a company before revealing personal or financial information online. Confirm an online seller's physical address and phone number in case you need to get in touch with them. If you get an email or pop-up message from the seller while you're browsing that asks for financial information, don't reply or click on the link in the message. Legitimate companies don't ask for this information via email or pop-ups.

10. Watch out for fake "look-alike" sites. Some con artists disguise their Web site as a well-known company's site. Check your browser's address bar to make sure you're always using the correct Web site address. If the Web site seems suspicious, leave it immediately and call the company.

Finally and perhaps the most important piece of common sense when shopping online is one that is true when shopping offline - Never let anyone see your card numbers and never hand your card over.

US Consumer Payments Study: PIN Debit Continues to Gain in Popularity

Hitachi Consulting: News Article

Electronic Payments Now Account for Majority of Consumer Payments

DALLAS - Oct. 6, 2008 - Consumers are increasingly using electronic payments at the expense of cash and checks, according to a new nationwide consumer payment preferences study conducted by BAI and Hitachi Consulting. The research was sponsored by First Data Corporation and its STAR® Network, Harland Clarke, MasterCard Worldwide, Metavante, and PULSE.

The 2008 Study of Consumer Payment Preferences found that 63 percent of all consumer purchases are made using electronic payment methods. Electronic payments now account for the majority of payments across all three major payment venues-including bill payment. Internet payments have always been predominantly electronic, almost by default. For in-store payments, the balance between paper and electronic payments shifted in 2003, leaving bill payment as the last bastion of paper-based payments. This is no longer the case, however, as paper-based payments' share of bill payments shrank from 55 percent in 2005 to 38 percent in 2008.

"Bill payment has historically been a stronghold for checks," said Ajay Nagarkatte, managing director of Syndicated Research at BAI. "But increases in the adoption and usage of online bill payment over the past three years have significantly eroded the number of paper checks being mailed to pay bills."

Retail store purchases account for the majority of consumer payments. For in-store purchases, the migration to electronic payments continues to be driven by the increasing popularity of card-based payments, particularly debit. PIN and signature debit now account for 37 percent of consumers' in-store purchases, up from 21 percent in 1999.

Checks and now cash are giving way to card-based payments at the point of sale. Checks' share of in-store purchases has declined from 18 percent in 1999 to 8 percent in 2008, and after holding relatively steady for the past several years, cash has dropped to 29 percent. Contrary to robust forecasts, gift/prepaid card's share of purchases has not increased significantly over the past three years.

Looking forward, electronic payments will likely continue to erode the share of payments made using paper-based methods. As one young consumer observed when answering the survey, "paper is old school!", and over the next two years, consumers expect to increase their use of debit and decrease their use of checks and gift/prepaid cards.

"I expect the shift from paper to electronic payments to continue as consumers increase their use of cards and new forms of electronic payments gain traction," said Chris Allen, director of consulting services in the Financial Services Practice at Hitachi Consulting. "Although the proliferation of payment methods increases the complexity of managing payments, it also creates opportunities for financial institutions and payment service providers. There are a lot of changes taking place, and it's an exciting time to be in the industry."

About the Study

The 2008 Study of Consumer Payment Preferences is the definitive guide to how consumers pay in different venues, why, and how their payment habits are likely to evolve going forward. The study provides insights into consumer behavior and preferences across three important payment venues: retail point-of-sale (in-stores), Internet purchases, and bill payments. Findings from the 2008 Study are based on an online survey administered by Harris Interactive, and completed by a nationally representative sample of 3,308 U.S. consumers in June 2008. The sampling error for the national sample was +/- 1.7 percent at a 95 percent confidence interval.

This study is the fifth in a series of studies tracking consumers' payment habits, preferences and their migration from paper to electronic payments, and is a follow on to studies conducted in 1999, 2001, 2003, and 2005 by Dove Consulting (which was acquired by Hitachi Consulting in 2005) in conjunction with the American Bankers Association. To inquire about purchasing the study, please call Chris Allen, director of consulting services, Payment Strategy Group, Hitachi Consulting, at 617-753-9250 or Ajay Nagarkatte, managing director, Syndicated Research, BAI, at 312-683-2486.

Finextra: Americans shun paper for e-payments - survey

Nearly two thirds of all US consumer payments are now made electronically as Americans increasingly turn away from cash and cheques, according to research from BAI and Hitachi Consulting.

A poll of 3308 US consumers - sponsored by First Data, Harland Clarke, MasterCard, Metavante and Pulse - found electronic payments are now the majority across all three major venues - bill, Internet and in-store.

Until recently bill payments were the last bastion of cash and cheques - with the two forms of payment accounting for 55% of total bill payments in 2005 - but this has slipped to 38% in 2008.

"Bill payment has historically been a stronghold for cheques," says Ajay Nagarkatte, MD of syndicated research at BAI. "But increases in the adoption and usage of online bill payment over the past three years have significantly eroded the number of paper cheques being mailed to pay bills."

PIN and signature debit cards continue to gain in popularity for in-store payments, accounting for 37% of purchases in 2008, compared to 21% in 1999.

In contrast, the use of cheques to pay for in-store purchases has declined from 18% in 1999 to eight per cent in 2008. After holding relatively steady for the past few years, the use of cash has now dropped to 29%.

However, the survey shows that contrary to robust forecasts, gift and pre-paid cards have not seen a significant increase in take up over the last three years.

Chris Allen, director, consulting services, financial services practice, Hitachi Consulting, says: "I expect the shift from paper to electronic payments to continue as consumers increase their use of cards and new forms of electronic payments gain traction."

Earlier this year a US study released by TowerGroup forecasted a continuing decline in cheque volumes - from 22.1 billion items in 2006 to 17.9 billion by the end of 2009 - as consumers turn to electronic payments.

Figures from TowerGroup and the Federal Reserve show that cheques have lost their dominance in the US payments market, shrinking from a 46% share of total non-cash payment volume in 2003 to 31% in 2006.

TowerGroup says this fall has been driven by a desire among consumers to be able to pay bills and make purchases in faster and more convenient ways.

Amazon to Bill Me Later...And Your Done?

Editor's Note: My initial thought on this deal was that the founder and shareholders of Bill Me Later bailed because of the upcoming consumer credit crisis. In today's economic climate, if they adjust the amount of credit it offers customers the way credit card companies are, then eBay chose very unwisely with this buy. I'm reading articles all over the Internet about credit card companies lowering credit limits, raising interest rates, etc. etc. I think that Bill Me Later got the best of this deal. (Look in "related articles" below for the one from TechCrunch)

Will Amazon Ditch Bill Me Later After eBay Takes Over?

Yesterday eBay said it would spend $945 million to buy online payment company Bill Me Later, but the folks over at Amazon.com aren’t likely to welcome eBay as Bill Me Later’s new corporate overlords. Amazon holds an equity stake in the payment processing company and is its top customer — with competitor eBay moving to buy it, Amazon has some thinking to do.

Amazon doesn’t have a board seat at Bill Me Later, and as such was probably not involved in the acquisition talks. The question now is whether it will continue to offer Bill Me Later as a payment option. As far as merchants go, Bill Me Later is cheaper than credit cards. But so far Amazon.com, which previously scorned PayPal because of its ties to eBay, has been non-committal about its plans. It said in a statement, “Currently, Bill Me Later is still available as a payment option on our site, but I can’t speculate as to whether we’ll continue to offer them going forward.”

From a payments perspective, eBay has chosen wisely with this buy. PayPal is a debit-oriented program, while Bill Me Later caters to those who are shy about using their credit cards online but don’t want to deal with the hassle of PayPal by offering them credit after they enter their information. While that may seem downright foolish in this economic environment, Bill Me Later investor Mike Kwatinetz of Azure Capital Partners says the company is able to quickly adjust the amount of credit it offers customers.

PayPal has the largest number of the top online retailers using its service, but Bill Me Later has an opportunity to process more transactions, according to data issued last month by research firm Cowen & Co. PayPal’s penetration rate of the top 300 U.S. e-commerce companies rose to 35 percent as of September from 28 percent at the end of last year, but Bill Me Later has $31.6 billion in addressable sales, compared to $26.1 billion for PayPal. Bill Me Later’s top customers (other than Amazon) include OfficeMax, Apple, Newegg, and QVC. Underscoring Amazon’s eBay aversion? All of those merchants also accept PayPal.

Monday, October 6, 2008

Online Shopping/Online Debit...What's the Alternative?

Editor's Note: This article by Alex Rampell from E-Commerce times is subtitled "Expert Advice" but I should think that the idea of Internet Retailers offering a more secure transaction at a lower cost, would be labeled "Common Sense."

Here's some expert advice: Stop calling platforms such as HomeATM's globally patented PIN Debit and Credit offering, an alternative payment. Alternative to what? Paying Visa and MasterCard's exorbitant fees?

In the bricks and mortar world, PIN Debit is labeled as the fastest growing, most secure and most preferred payment platform outside of cash. (Gartner Research)

So where's the logic in calling "the fastest growing most preferred payment method " an alternative payment method? The fact is, PIN debit being labeled as an "alternative" payment platform would be akin to calling online shopping. "alternative shopping." I base this on the fact that the only truly alternative name for PIN debit is "online debit."

So to call HomeATM, which provides online debit online, an alternative payment platform is, at best, a misnomer. In the face of the Duopoly known as Visa and MasterCard, anything other than using their platforms somehow got labeled as an "alternative payment." I say au contraire...

In the here and the now, there's no better alternative for online shopping than using online debit. I say, provide consumers with HomeATM's SwipePIN device in the future and "card not present" transactions become a thing of the past. The point I'm making is that the card IS present, at the point of sale. It's the ability to be SwipePIN at home that's missing. So bring the POS device to the point of sale...bring it home. There's no place like home...atm.

Here's the article:

"As consumers tighten their budgets, some e-commerce retailers may feel the pinch. To avoid being buried under a mountain of abandoned shopping carts, online vendors should consider offering alternative payment options that give the buyer more convenience, flexibility and security, writes TrialPay CEO Alex Rampell.

The U.S. economy has entered a vicious cycle where housing, employment and financial troubles are forcing consumers to tighten their purse strings and closely evaluate their every purchase. Retailers are also feeling the grip of a tightening economy as they compete aggressively for a diminishing number of buyers' dollars.

In response, innovators in e-commerce have introduced creative marketing models and alternative payment systems that offer more security than credit cards, no interest, and free products or purchase incentives. These methods are especially attractive to online merchants because they actually increase a customer's willingness to buy and create new revenue streams.

PayPal was a pioneer in this space, and its $12 billion valuation shows just how valuable alternative payment methods are. The current success of some companies' innovative marketing models, as well as firms like Bill Me Later and TrialPay, indicate that alternative payment platforms will soon become a mainstream player in the multi-billion dollar payments industry.

Integrating Alternative Payment Options

Any company that conducts business online should consider integrating alternative payment platforms. With unlimited earnings potential, minimal integration costs, and lower rates and more perks than credit cards, these alternative options attract tens of thousands of top-tier merchants across virtually all industries. In fact, a recent survey conducted by First Annapolis Consulting found that, of 83 mid-sized e-commerce retailers, 41 percent accept alternative payments.

Unlike traditional ways to pay, alternative payment models create new revenue streams. They generate sales from transactions that otherwise would have resulted in abandoned shopping carts, unfulfilled subscription renewals or sign-ups for free trials. They allow online marketers to evolve with the demands of today's discerning consumer. And they offer no-brainer, cost-per-acquisition opportunities to attract valuable advertising dollars.

The current state of the economy has encouraged widespread adoption of alternative payment platforms by online retailers and shoppers alike. However, the relevance and popularity of these payment methods extend beyond a down economy. The multi-billion dollar payments industry is undergoing a transformation, and soon these "alternative" payment methods will be considered mainstream competition for credit cards and even cash. Just as the Internet has changed the way people shop, innovative payment methods are changing the way people pay."

eBay Pays Now for Bill Me Later

Image via CrunchBaseImage via CrunchBase

Ebay announced two acquisitions—spending over $1.3 billion altogether—this morning designed to shore up its other parts of its business in the face of declining profits and stagnant traffic at its primary online auction site. The company also finally addressed layoff rumors and said that it is indeed cutting 10 percent of its 15,000-person workforce. The company said about 1,000 full-time jobs will be affected, in addition to several hundred temporary workers and the elimination of open positions. The two acquisitions and the layoffs were summarized in a single release, with two others containing additional details.

The San Jose, CA,-based company says it has struck a definitive agreement to acquire Pay Pal rival Bill Me Later for approximately $820 million in cash and about $125 million worth of outstanding options, net of option exercise proceeds. The company will be combined with PayPal, which eBay already owns. The deal is expected to be completed by the end of the year. Click here for the Bean Investor Deck

Danish acquisitions: As part of its goal to increase its online classifieds holdings, eBay has turned to Denmark to buy Den Bla Avis and BilBasen for $390 million (about 2.1 billion Danish Kroner). The prices for the two weren’t broken out individually. eBay, which has a minority stake in Craigslist—the two are currently in the midst of a wide-ranging legal battle—has indicated that it wants to expand its focus on the online classifieds business. Den Bla Avis and BilBasen is added to eBay’s global portfolio of such sites, including the Netherlands’ Marktplaats, Spain’s LoQUo, the U.K.’s Gumtree, Germany’s mobile.de and Kijiji, which is stronger in Europe, but has been working on building up its U.S. presence lately as a competitor to Craigslist.

Thursday, October 9, 2008

Wednesday, October 8, 2008

Tuesday, October 7, 2008

Monday, October 6, 2008

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