Mobile Payment Industry News

Friday, November 28, 2008

SuiteLinq with Hyatt Regency Woodfield

The Hyatt Regency Woodfield, located in Schaumburg, Illinois, has selected SuiteLinq, Inc. to deploy its digital entertainment solution in all of the property's 470 rooms.

SuiteLinq, a provider of broadband and on-demand solutions for hospitality and extended-stay environments, will be deploying its SuiteCast(TM) and SuiteVOD(TM) services, with the goal of creating a truly home-like experience in each guest room.

The combined solution provides free TV channels and a variety of Video-On-Demand content, delivered in standard and high definition, on 37" and 42" Sharp LCD HD televisions. According to Jim Gould, GM of The Hyatt Regency Woodfield, the decision to deploy SuiteLinq's solution is part of the property's continuing efforts to be totally customer centric.

"It is clear that guests are now ahead of the hospitality industry in terms of their digital entertainment expectations. At home, most of them have hundreds of TV channels, including high-definition ones, as well as access to Video-On-Demand services," states Gould. "But too many other properties are content to give guests an antiquated in-room video entertainment service that contributes nothing to the guest experience. That simply won't do for our customers. Our property and The Hyatt brand are all about creating memorable, personalized experiences that generate true customer satisfaction and guest loyalty. We've realized that solutions like SuiteCast and SuiteVOD are quite simply mandatory. Guests are demanding them and we are listening," he states.

Amidst a challenging economic environment, Joseph Mustilli, SuiteLinq's CEO, actually sees a growing need for integrated guest room digital solutions like those offered by SuiteLinq. "As consumers become more discerning about their travel behavior and purchases, it is critical that properties differentiate themselves from their competitors. SuiteLinq provides a very powerful 'suite' of services designed to make an impact on guests by creating an in-room environment that is just like home - only better. The net effect is that guests check-out with a positive memory of their stay and a stronger intent to return. We are proud to add The Hyatt Regency Woodfield to our expanding list of clients."

For more information about SuiteLinq, contact Darrin Davis at 703-953-2624, or via email at ddavis(at)suitelinq.com

Thursday, November 27, 2008

Happy Thanksgiving to All!

from Everyone at HomeATM!

Wednesday, November 26, 2008

10:25am Black Friday = Busiest Online Shopping Minute

NEW YORK, November 26 /PRNewswire/ -- Retail Decisions (ReD), a payment card issuer and world leader in payment card fraud prevention and payment processing, predicts a bustling Black Friday on November 28 with 10.00 am - 11.00 am being the busiest online shopping hour of the year, with the peak shopping moment at 10.25 am.

December 1, Cyber Monday's busiest hour will be between 9.00 am - 10.00 am. This will be the second busiest online shopping hour of the year with a peak shopping moment at 9.49 am.

ReD is forecasting that volumes will rise by 18% on a like-for-like basis vs. 2007. The Average Transaction Value in the United States will fall by 9%.

"A change in consumer behavior is evident with more and more consumers spending their dollars on 'stay at home' items such as fast food and "Pay As You Go" TV, as vacations are replaced by staycation. The recession has brought a new found frugality that is causing people to shop smarter, budget better and exploit sales," said Carl Clump, CEO of Retail Decisions.

As a global leader in real-time card payment fraud prevention, ReD processes some 16 billion transactions annually, providing a unique perspective on sales, volumes and trends around the world.

Source: Company Press Release

Ramping Up Internet Promos - Bricks and Mortar

As they brace for the worst holiday shopping season in decades, major "bricks and mortar" merchants are ramping up their Internet promotions more than ever in hopes their websites will drive people to shop their brands.

"When times are desperate, this is the cheapest way to try to drive sales," said Sucharita Mulpuru, an e-commerce analyst at Forrester Research Inc. "It's the easiest message that you know is going to work, and certainly retailers are going to try it."

In October, retail sales suffered the largest percentage decline since 1992 - 2.8 percent. And forecasts are just as bleak for the holiday shopping season, the roughly month long period between the Thanksgiving and Christmas holidays when many retailers get as much as a third of their annual sales.

(Click to Read the Entire Story From the Boston Globe in a new window)

Tuesday, November 25, 2008

Brazil E-Commerce Up 35%

Brazil e-commerce to hit nearly USD 3.5 billion at the end of 2008, up 35%

The Brazilian e-commerce market is expected to register a turnover of USD 3.48 billion (BRL 8.5 billion) at the end of December 2008, up 35 percent from the year-earlier period, when the e-commerce market reached USD 2.58 billion (BRL6.3 billion).

The increase is attributable to the rapidly growing population of online buyers and to the convenience of shopping on the internet. Almost 39 percent of surveyed consumers plan to purchase electronics online this year, spending USD 349 (BRL 850) per purchase, while IT products are to account for 36 percent of total expenditure. The number of online shoppers has increased from 2.6 million in 2003 to 7 million in 2006 and to 9.5 million in 2007. As far as online payment methods are concerned, almost 49.5 percent of Brazil's online shoppers use a credit card for their purchases, as compared to 39 percent who use a banking ticket to buy online and 10 percent who turn to debit or electronic transfer, and payment on delivery.

Data was revealed by the European Travel Commission (ETC).

France: 70% Visit E-Commerce Website in Q3

In France, more than 70% of internet users have visited an e-commerce website in Q3 2008 - study

In Q3 2008, 70.8 percent of French internet users, representing more than 22 million customers, visited one of the country's top 15 online shops every month in Q3 2008.

eBay ranks highest in terms of unique visitors (12.36 million) for the period under review, followed by online retailer PriceMinister with 8.89 million visitors, voyages-sncf.com (a website for online reservations for train tickets) with 8.19 million visitors, Fnac and La Redoute with 7.06 million and 7.01 million visitors respectively. Amazon came sixth, with 6.79 million visitors. As far as online travel agencies across France are concerned, during Q3 2008, voyages-sncf.com was the most visited one, followed by lastminute.com, with 2.9 million visitors, Promovacances with 2.68 million visitors and Nouvelles Frontieres 2.52 million visitors.

Data has been released by Mediametrie.

S.Korea - 34% Online Growth

South Korean online transactions hit record numbers in Q3 2008: USD 110 billion, up 34%

According to data released by the National Statistical Office, in the period ending September 2008, South Korean e-commerce registers a record of USD 110 billion (KRW 167 trillion) in turnover, growing by 34 percent year-on-year and by 6 percent over Q2 2008.

This is the highest increase since data began to be gathered in 2001. The growth is attributable to a climb by 33 percent in business-to-business (B2B) transactions from Q3 2007 to USD 100 billion (KRW 151 trillion), representing more than 90 percent of all e-commerce.

Business-to-government (B2G) deals have registered a higher increase (53 percent), while business-to-consumer (B2C) transactions have jumped 17.5 percent to USD 3.05 billion (KRW 4.6 trillion).

80% Asia Pacific Shops Online Now

80% of Asia Pacific internet users make online purchases - study

Within the past 12 months, almost 80 percent of internet users across Asia Pacific have made an online purchase and spent more than USD 3.000 on average for this purpose, a study indicates.

Of these, almost 60 percent preferred to pay via Visa credit and debit cards. When asked about the advantages of making purchases on the internet, 88 percent of those involved in the study mentioned the ability to shop at any moment, 83 percent referred to best prices and 82 percent cited the possibility to shop easily. In terms of e-commerce categories, digital entertainment ranks highest in terms of consumers' preferences, with 59 percent of Asia Pacific internet users purchasing such products online, followed by travel (51 percent) and fashion (49 percent). Indian internet users were the most avid buyers of digital entertainment, with 76 percent of them buying such products and services. For the period under review, Asia Pacific internet users have spent the highest amount of money (USD 812 on average) for online travel services, such as airline and rail tickets, hotel accommodation and travel packages.

The countries with the most frequent online buyers for the last 12 months are Japan (99 percent) and Korea (93 percent), while Australian and Singaporean internet shoppers have spent the highest amount of money in the region: an average spending of USD 4.160 and USD 3.480 respectively for online purchases. I

n Japan, South Korea and India the average online spending reached USD 3.175, USD 3.027 and USD 2.147 respectively. In terms of cross-border transactions, Hong Kong registers the highest percentage of internet users who have made a purchase on a website from another country (75 percent).

Average online spending in the past 12 months

1. Australia - US $4,160
2 . Singapore - US $3,480
3. Japan - US $3,175
4 . South Korea -US $3,027
5. India - US $2,147
6. Hong Kong -US $1,698

The survey is titled 'E-Commerce Tracking Survey' and it was conducted by Visa.

Visa Introduces 3V Internet Shopping Card in UK

UK'S First Internet Shopping Gift Card Makes Gift Giving Easy

The new 3V Visa Internet Shopping Gift Card means that present givers everywhere can get it right this Christmas. It's the first gift card in the UK that lets the lucky recipient shop on the internet and choose the present that they really want, because the 3V Visa Internet Shopping Gift Card lets you buy anything anywhere online that accepts Visa.

And in these times of economic recession it gives everyone the opportunity to make the most of the great deals that can be had online, so 'present money' goes that little bit further. And because you can pool the money on these gift cards together, recipients can get that dream present they really wanted.

The 3V Visa Internet Shopping Gift Card, with GBP25 of value, is available in high street retailers including, The co-operative, Martin's Newsagent, Martin McColl's and Borders. The card comes in four funky designs ...

Here come the girls ... a fab Sparkly Shoes card for those special, 'can't live without' treats
A sports car model for the Boys Toys card goes straight to the heart of the male psyche
The Space Hopper fun retro-style card is great to bring a smile to anyone's face
Wrapped up with a silver bow image, the Celebration card is the ideal gift for any special occasion, including a simple 'thank you'
3V Visa Internet Shopping Gift Cards can be used to shop online, through mail order or over the telephone, wherever Visa is accepted.

The joy of the 3V Visa Internet Shopping Gift Card is that recipients don't need a credit or debit card, or even a bank account to use it. There is no interest to pay - ever and it's really simple to use. All you need to do when shopping is go to the checkout, click on Visa and then enter the unique Visa number and security details that are sent to you. It's just like using a Visa card to shop online.

The 3V Visa Internet Shopping Gift Card also provides complete security when shopping online because once the Gift Card has been activated a unique Visa number is issued to the recipient and, simultaneously, the security details (3 digit security code and expiry date), so when you shop online you don't reveal any sensitive personal or financial data. In addition, the 3V Visa Internet Shopping Gift Card is backed by Alliance & Leicester.

How to use the 3V Visa Internet Shopping Gift Card. You can use a 3V Visa Internet Shopping Gift Card as soon as you have paid for it in the shop and activated it at http://www.3Vgiftcards.com.

The activation process consists of two simple steps whereby you enter the activation and pin codes on the reverse of the gift card along with a few personal details. It does not take long to complete - about two minutes. Once you have clicked 'activate' at the end of this process you will receive your unique Visa number and at the same time security details (3 digit code and expiry date) will be emailed to you. You can then shop online, over the phone or via mail order, wherever Visa is accepted.

Feds Insure Open, Closed Left Out of Loop

Fed insures open loop cards but leave closed loop alone

In November 2008, the Federal Deposit Insurance Corp.'s board of directors approved its General Counsel's Opinion No. 8 requiring the funds held in FDIC-insured banks that secure open loop, stored value cards be secured up to $250,000. According to the FDIC ruling, "All funds underlying stored value products will be treated as deposits and subject to assessments."

The opinion was proposed in August 2005. Following a comment period required by regulatory agencies to allow feedback from consumers, merchants and financial institutions, the final ruling was implemented after all comments were considered.

Additionally, the approval comes in the wake of three large retailer bankruptcies during 2008 in which consumers lost over $100 million in nonused and invalidated gift cards.

"It's a very good opinion," said Gail Hillebrand, spokeswoman for Consumers Union, the advocacy group that publishes Consumer Reports magazine. "It makes it very clear there is a way now for banks to set up prepaid cards so consumers can get FDIC insurance."

Closed loop left out

According to Holli Targan, Attorney and Partner with the Jaffe, Raitt, Heuer & Weiss law firm, funds covered under FDIC insurance include network-branded payroll and gift card products only. Private label (merchant-branded) cards issued and funded by retailers are exempt.

"Explicitly excluded are funds backing closed loop cards, such as cards usable at a specific merchant or cluster of merchants," Targan said. "This Opinion says that FDIC insurance doesn't cover merchant branded cards, so if that merchant goes under, the consumer has no way of recouping their money.

"On the other hand, open loop cards – under the FDIC's definition – that are issued by a bank are covered if the bank fails. The cardholder could then make a claim and not lose the money that was on the card," she added. Cardholder funds for stored value cards held by an insured bank – as opposed to the pool of funds held by the card distributor with closed loop cards – are individually insured to FDIC limits.

New standards right on

"If you think about these new standards for open loop cards, it's just like a savings account at a bank," Targan said. "Banks sometimes go under, but when they are FDIC insured, you have confidence that your money is protected. Consequently, I think generally this opinion will make prepaid cards more attractive to consumers, which is a good thing for the ISOs and MLSs out there selling them."

Federal regulators, according to Targan, have normally been "sort of hands off" in relation to stored value products and have attempted to allow the market to develop without imposing too many regulatory burdens. However, the failings of Sharper Image Corp., CompUSA Inc. and Linens 'N' Things Inc., coupled with a petition filed by the Consumers Union with the Federal Trade Commission, got regulators' attention.

Consumers caught in between

In September 2008, the Consumers Union asked the FTC to protect consumers from losing money on gift cards when retailers filed for bankruptcy. "Gift cards shouldn't be the gift that stops giving when retailers go bankrupt," said Michelle Jun, Senior Attorney for Consumers Union.

Bankruptcy courts treat unused gift card funds as a debt and determine whether a bankrupt retailer must pay it. The retailer must then petition the court to allow it to continue to accept its gift cards. Consumers may lose the value of their cards if the retailer does not make such a request or if the court denies it. The only remaining option for consumers is to file a claim as an unsecured creditor to the bankruptcy proceeding.

"Gift cards have exploded in popularity in recent years, but consumer protections haven't kept pace with the record sales," Jun said. "With more retailer bankruptcies on the horizon, the FTC should make sure that consumers with gift cards are protected when companies go bust."

Prepaid center of attention

Targan believes the General Counsel's opinion is an indication the FDIC and other government entities know what is going on in the marketplace and will impose regulations when they think it's important to do so. Additional regulations recently imposed in several states require securitization of stored value card funds as well as more transparency with banking regulatory agencies.

"Since the last time the Counsel issued an opinion on this topic in 1996, the banking industry has developed new types of stored value products, and therefore they thought it was time to readdress it," Targan said. "I think this should be good for [financial services] because it will give some comfort to people holding or distributing open loop cards that now have the benefit of federal insurance."

LML Files Patent Infringement Against 19

Patent firm files 19 infringement lawsuits

Vancouver, B.C., Nov. 25, 2008 --

LML Patent Corp. (``LML''), a wholly-owned subsidiary of LML Payment Systems Inc. (the ``Corporation'') filed suit in the U.S. District Court for the Eastern District of Texas against all the payment companies who provide equipment, systems and services that convert paper checks into electronic transactions, including:

JP Morgan Chase
Wells Fargo Company
Wachovia Corp
Citigroup, Inc.
Bank of New York Mellon
HSBC Holdings plc
Capital One Financial Corp.
ABN AMRO Holding N.V
Northern Trust Corp
Regions Financial Corp
National City Corp.
Fifth Third Bank
Citizens Financial Group, Inc. (subsidiary of Royal Bank of Scotland)
M&T Bank Corp.
UnionBanCal Corp.
First National of Nebraska, Inc.,
Deutsche Bank Trust Company Americas (subsidiary of Deutsche Bank AG (Germany)
and PayPal, Inc. (subsidiary of eBay Inc).

In the suit, LML alleges that the defendants infringe U.S. Patent No. RE40220. LML is seeking damages, injunctive and other relief for the alleged infringement of these patents.

"The filing of this lawsuit is consistent with our strategic objective to protect our intellectual property,'' said Patrick H. Gaines, chief executive officer and president of LML Patent Corp. and LML Payment Systems Inc. ``We have awarded several licenses to industry participants in the past and what we will not allow is these defendants to use our intellectual property without a proper license.''

LML is represented by the law firms McKool Smith LLP, Gillam & Smith, L.L.P. and Ward & Olivo.

About LML Payment Systems Inc. (http://www.lmlpayment.com )

LML Payment Systems Inc., through its subsidiaries Beanstream Internet Commerce Inc. in Canada and LML Payment Systems Corp. in the U.S., is a leading provider of financial payment processing solutions for e-commerce and traditional businesses. We provide credit card processing, online debit, electronic funds transfer, automated clearinghouse payment processing and authentication services, along with routing of selected transactions to third party processors and banks for authorization and settlement. Our intellectual property estate, owned by subsidiary LML Patent Corp., includes U.S. Patent No. RE40220, No. 6,354,491, No. 6,283,366, No. 6,164,528, and No. 5,484,988 all of which relate to electronic check processing methods and systems.

Source: Company press release.

PayNet Available in Vietnam

Vietnamese customers can now pay online via local PayPal version: PayNet

An online payment portal called PayNet has been made available to customers across Vietnam.

In Vietnam, there are over 60 million mobile subscribers, 15 million bank accounts and more than 20 million people using the internet.

Based on technology provided by electronic payment systems company OpenWay’s Way4, the service allows online shoppers to make transactions without the need for bank accounts or Visa and MasterCard-branded cards.Way4 is a payment processing framework for banks, processors and mobile operators, incorporating WAY4 Switch, WAY4 Card and Merchant Management, WAY4 Smart Card Personalisation, WAY4 Loan Management, WAY4 Behaviour Loyalty services.

Customers who are interested in paying online with PayNet must set up an account with a private code number. The money that shoppers have put into such an account is to be transferred to sellers and then deposited into banks. All the money that buyers put into the account will be deposited into banks after being transferred to sellers. All transactions are to be followed up with an email or SMS mobile phone message.

Text Scams Coming

Text scam tries to fool bank customers

Nov 25, 2008 (Kerrville Daily Times - McClatchy-Tribune Information Services via COMTEX) --

Don't give out personal information to an unknown source. That's the message from Bank of the Hills Regional CEO Harold Wilson after area cell phones owners were inundated with text messages stating that Bank of the Hills debit cards had been deactivated.

According to Wilson, the text messages were sent out beginning Friday to Verizon and Sprint customers, and blanketed the area.

The Kerrville Police Department received two reports of the scam as of Monday afternoon. The text message reads: "Bank of the Hills alert. Your debit card has been deactivated. Please contact us at (830) 448-0088 to reactivate your card." Callers to the number are offered two options -- to activate the card or to change the PIN number. After choosing an option, callers are prompted to give personal information, such as their debit card and personal identification numbers.

KPD spokesman Paul Gonzales said one of the victims' bank accounts was cleared out the day after responding to the text.

"After providing both the debit card and PIN number and further research, it was discovered that the text was a fraud, also known as a phishing scam," Gonzales said. "One victim's account was changed immediately resulting in no loss, while the second victim's account was depleted of approximately $1,500."

Bank of the Hills posted a warning on its Web site Friday about the scam, and Wilson said steps are being taken to identify from where the texts originated. "Scammers usually do this kind of activity on a Friday so they can have all weekend to use the information," Wilson said. This is the second phishing scam this year to use Bank of the Hills' name. In May, bank customers were targeted by both e-mails and phone calls asking for account information. Wilson said Bank of the Hills or any other bank would never try to solicit account information over the phone or by e-mail, especially PIN numbers.

"The advice is simple. No bank would ever ask anybody to reveal their PIN number," he said. "We don't know it, and we don't want to know it.

"Anytime someone is asking for a PIN number, it's a scam," Wilson added. Gonzales advised that text messages, e-mails, telephone calls or letters requesting bank account or other personal ynformation should be ignored and turned over to the police.

SafePass from Bank of America

Bank of America Introduces SafePass

Yesterday, in a Finextra article, it was announced that PayPal has introduced it's 6 digit SMS program. Now Bank of America has announced the release of the SafePass(R) Card - a "new wallet-sized card essentially builds on SafePass, a one-time-use, six-digit code sent as a text message to consumers' mobile devices to authorize and help safeguard sensitive transactions."

"The introduction of the SafePass Card extends this additional layer of security to customers who prefer to receive it through a card instead of their mobile phone," said Lance Drummond, e-Commerce and ATM executive for Bank of America. "Now, customers have an additional way to access security products that help them to manage their finances safely on-the-go."

The SafePass Card is available for a one-time fee of $19.99, while the mobile-phone-based SafePass is still a free service to all customers.

For more information on SafePass and the SafePass Card, visit http://www.bankofamerica.com/privacy/index.cfm?template=learn_about_safepass

Monday, November 24, 2008

Retail E-Commerce Growth Dropping

Retail E-Commerce Growth Drops Sharply - eMarketer

Retail E-Commerce Growth Drops Sharply
NOVEMBER 24, 2008

Online sales are still growing, but far more slowly.

2008 had already been shaping up to be the weakest holiday season yet for retail e-commerce. Based on just-released Q3 e-commerce data from the US Department of Commerce (DOC), eMarketer is predicting even more anemic growth—both for the holiday and the year.

The DOC estimated that e-commerce sales grew only 4.6% in Q3 2008, compared with Q3 2007.

In May 2008, eMarketer projected that retail e-commerce sales growth would drop to 14.3% this year compared with 2007. Benchmarked against the new DOC data, eMarketer predicts 2008 will now be the first year of single-digit growth of the decade.

Online sales (excluding travel) will total nearly $137 billion in 2008, up 7.2% year-over-year, compared with last year’s 19.8% growth rate.

eMarketer expects that consumers will spend only $30.3 billion online in November and December this year. Its May number was a mere 10.1% growth over last year’s holiday spending. But the new estimate is for just 4% growth.

The weak economy is placing downward pressure on e-commerce sales this season. Online shopping growth had already been slowing naturally as part of the channel’s maturation; the economy is slowing growth even more.

“Hopefully, we’re nearing the bottom of this,” says Jeffrey Grau, eMarketer’s e-commerce analyst. “People are going to be more frugal this holiday season."

Bank of Terrorism

Terrorists are increasingly turning to credit cards, according to an expert on terrorist financing...

Credit cards serve two key terrorist functions, providing both operational funding and as a means of distributing money to group members. “Credit card exploitation and fraud has become a growth industry for terrorists,” writes IPSA International’s Dennis Lormel in a white paper entitled, “Terrorism and Credit Card Information Theft - Connecting the Dots

Lormel is a managing director with investigative consulting services provider IPSA. According to Lormel: “Credit card information theft and fraud represents a lucrative funding stream for terrorists and consequently poses a serious threat to our national security.”

While Lormel writes that there is no exact data on the amount of credit card use by terrorists, there are “ample” reports showing that terrorists do rely on credit card information in helping to reach their goals.

Terrorist reliance on credit cards appears to be on the rise. “I think it’s taken an upward path over the last few years,” Lormel says via phone, meaning “a limited number of people can do an incredible amount of damage.”

Continue reading at………….. http://www.creditcards.com/credit-card-news/terrorist-credit-cards-theft-1282.php

Terrorism and Credit Card Information Theft - Connecting the Dots
Summary of Key Points, Issues, Conclusions:

Although no empirical statistical data establishes a connection between credit card exploitation and terrorism, there are ample anecdotal case studies demonstrating terrorist reliance on credit card information to further heinous acts. Within this white paper, two cases are presented. Terrorist groups require financial support in order to
achieve goals and credit card information theft and fraud represents a lucrative funding stream for terrorists and consequently poses a serious threat to our National Security. Lormel suggests that terrorist financing training should focus on factors to
include:

• Types of terrorist groups
• Funding capacities
• Mechanisms for fundraising and operations
• Individuals and cells
At least twelve areas of systemic weaknesses allow for terrorist exploitation to raise and move funds. Of those, at least five of those areas involve credit card information and fraud: identity theft and fraud, credit cards, criminal activity, internet, and cyberfraud.

Lormel recommends best practices for detection and prevention of credit card information theft and fraud by terrorists:

• Identifying risk
• Understanding terrorists adaptability
• Vigilance
• Training
Name of Researcher: Natalie Prendergast
Institution: Integrated Center for Homeland Security, Texas A&M University
Date Posted: November 12, 2008

PayPal Introduces Text Authentication

Finextra: PayPal introduces SMS-based authentication

PayPal introduces SMS-based authentication

Person-to-person online payments outfit PayPal has introduced an optional SMS text message-based two factor authentication system for customers logging into their accounts.

The PayPal SMS Security Key sends a six-digit code to users' mobile phones before they log in to their accounts. The customer then uses the code, along with their username and password, to sign in.

The system uses the same infrastructure as PayPal's Security Key offering. Developed by VeriSign and rolled out in the US last year, this provides customers with a small authentication token which displays a new one-time six-digit password every 30 seconds. (Editor's Note: I believe these are classified as "short-codes...here's some more info on "short codes")

Public Knowledge are "confusing text messaging and provision of common short codes," Verizon said in its filing. Short codes are not a transmission-based service, and are not subject to the Communications Act, Verizon said. Short codes are six-digit numbers used for text messaging. Ever voted for American Idol on your cell phone, texted Google for directory assistance, or signed up for one of those monthly horoscope, ringtone or joke services advertised on TV? Chances are you typed in a short code instead of a full-length phonen. There are two different types of short codes – standard and premium rates.

Michael Barrett, chief information security officer, PayPal, says: "PayPal was built from the ground up with security in mind, and we've always been committed to using cutting-edge technology to protect our customers' accounts. Now, we're taking the additional protection provided by two-factor authentication and delivering it to something most people don't leave home without - their mobile phones."

Both the SMS code and security token systems are available to PayPal customers in the US, Australia, Austria, Canada and Germany.

PayPal says it does not charge for delivery of security codes to handsets but the mobile provider's standard text messaging charges will apply. Editor's Note: Technically, PayPal can say they're not charging for delivery, but there's a revenue sharing plan I'm sure they are set up for, so don't believe that they aren't making anything. AT&T's standard rate is .20 cents per message, so if you buy something for $10.00 on PayPal, you're paying a 2% fee. I'd like to learn more to see if they charge premium short code rates. Anyway...the Finextra article continues:

The firm has been a popular target for cybercriminals. Back in 2006 IT security firm Sophos reported that over 75% of all phishing e-mails were aimed at users of PayPal or its parent company eBay.

Debit Card Use Rises 547% in South Africa

Credit card fraud cost South Africa R420-million in the past year and has increased by 146 percent, the South African Banking Risk Information Centre (Sabric) said on Monday.

"It is a frightening picture, it really is," said Sabric chief executive Kalyani Pillay.

"Fraud on RSA issued credit cards has increased by 146 percent between 2005/2006 and 2007/2008. This increase should be understood in the context of a huge rollout of cards by South African banks into the market."

It was estimated in 2006 that there were more than 25,5 million debit cards and 7,2 million credit cards in circulation in South Africa. The amount of money spent using credit cards at point of sale devices increased by 101 percent between 2004 and 2007. The amount of money spent using debit cards soared by 547 percent in the same period.

Most fraud occurred with criminals using lost and stolen cards. However, fraud with counterfeit cards caused the most losses in money terms.

"This card fraud type is the single biggest contributor to overall card fraud losses in 2007/2008," said Pillay, adding that it amounted to R118,3-million in the past year, up from R57,2-million in 2006/2007. Vigorous prevention programmes from banks saw a 67 percent drop in the number of false credit card applications. Fraud valued at R420-million was committed on South African issued credit cards, mainly in South Africa, between 2006/2007 and 2007/2008, said Pillay.

"South Africa mirrors the credit card fraud trends in the UK... Counterfeit card fraud remains the biggest driver of total card fraud losses both in the [United Kingdom] and RSA...

"The total card fraud losses in the UK in 2007 stood at 535,2 million pounds and in RSA it was R420-million between 2006/2007 and 2007/2008."

However, the banking industry prevented fraud valued at R573-million in 2007/2008.

Also, the retrieval of hand-held skimming devices, electronic devises used to steal card data from magnetic strips, increased by an average of 45 percent year-on-year since 2005. "A total of 254 hand-held skimming devices have been retrieved since 2005."

Pillay said these devices were small and easy for criminals to hide. Consumers must never lose sight of their credit cards, she emphasised. (continue reading in a new window)

Wireless Identity Theft - More on Hackers 11

In an article published on IBLS (Internet Business Law Services) the author talks about wireless hacking (See WarDriving 101), Hackers 11 and possible changes in laws relating to cybercriminal behavior...

Identity Theft from Wireless Networks : Internet Business Law

IBLS Editorial Department Staff Attorney
Monday, November 24, 2008

Identity theft is the unauthorized use of an individual's personal information, such as a social security number or bank accounts, for fraudulent purposes or to commit a crime. While the usual form of identity theft refers to the unauthorized use of personal information obtained from databases, another form has evolved; this form uses sophisticated hacking techniques over wireless networks to acquire the necessary private information. In this form of identity theft, hackers typically breach security systems and install programs to obtain personal and financial data that is then either sold to a third party, or used by the hackers for personal gain.

In August 2008, the U.S. Department of Justice filed charges against 11 individuals who allegedly obtained identity information over wireless networks from nine major U.S. retailers, resulting in the theft and sale of more than 40 million credit and debit card numbers. The hackers apparently garnered tens of millions of dollars from a broad-based scheme that involved citizens of the United States, Estonia, Ukraine, China and Belarus. Attorney General Michael Mukasey said, "so far as we know, this is the single largest and most complex identity theft case ever charged in this country, which they then allegedly sold to others or used themselves. And in total, they caused widespread losses by banks, retailers, and consumers."

The hackers used a tactic known as "wardriving" that involves driving around with a laptop computer and trying to access wireless networks in the range of the car. After hacking into the networks, the hackers use programs to locate card numbers and PIN passwords that are then sent to servers in the U.S. and Eastern Europe for online sale. The stolen numbers are "cashed-out" by encoding them on magnetic strips of blank cards to steal money from ATMs.

The Identity Theft and Assumption Deterrence Act of 1998 (18 U.S.C.S. § 1028) makes identity theft a federal crime, carrying penalties of up to 15 years imprisonment and a maximum fine of $250,000. The December 2007 amendments to the above Act provide that a person whose identity was stolen is a "true" victim; previously, only the credit grantors who suffered monetary losses were considered victims. This recent revision of the legislation also allows an identity theft victim to seek restitution if there is a conviction, and it establishes the Federal Trade Commission as a central agency to act as a clearinghouse for complaints and to assist victims of identity theft.

On a State level, in recent years, nearly 40 States have criminalized identity theft, with most making it a felony.

Some experts claim that the noticeable drop in identity theft cases in recent years makes additional state laws unnecessary. Others, however, claim that the current requirement that information must be stolen by means of interstate or foreign communications in order to be prosecutable under federal law, may provide a window of escape to many identity thieves. This is particularly significant because experts say that in the majority of identity theft cases, the victim knows the perpetrator personally. Experts have further warned that cyber-criminals will continue to find unique ways to steal personal information, and that the current laws do not carry particularly significant penalties to promote adequate deterrence.

Legal commentators have suggested that additional laws could make it a felony to damage ten or more computers through the use of spyware or keyloggers. Spyware -software that secretly gathers personal information about an online user while navigating the Internet- and keyloggers -a hardware device that can monitor a user's individual computer keystrokes- are among cyber-thieves' most effective identity theft tools. Another improvement could be to include cyber-extortion cases, where the criminal removes malicious software from a user's computer in exchange for payment, within the definition of identity theft crimes.

Look at Prepaid Processors - Javelin Strategy & Research

Javelin Strategy & Research has announced results from a study of how a prepaid card issuer should assess and choose a processing partner in order to obtain the greatest success from prepaid card programs. According to Javelin, the processor choice is often overlooked and undervalued by prepaid program managers - but growth in the complexity of prepaid products underscores the importance of selecting the right processor.

Results have been published in a white paper titled: Choosing a Prepaid Processor in an Evolving Market: A Study on Issuer and Program Manager Needs and will be presented during a complimentary webinar session on Wednesday, December 3rd, 2008 at 11:00am Pacific Standard Time.

Registration for the webinar can be accessed at https://visa.webex.com/visa/onstage/g.php?t=a&d=662825557. Attendees will be provided a link to access the materials, including the paper.

“Companies that want to enter or expand their prepaid card presence face important business decisions,” said Bruce Cundiff, (pictured at right) Director of Payments Research and Consulting at Javelin. “Using a thorough methodology to choose the right processor is integral to achieving success and a reliable return on any prepaid card program.”

There are, according to Javelin, 4 key components to an effective prepaid processing program. These include:

Managing the card
Serving the cardholder
Executing the transaction
Getting the most from the platform.
A detailed discussion of each component provides decision-making guidance to prepaid issuers chartered with managing a program. The study also takes on several of the common misconceptions about the processor selection criteria, dispelling myths and setting the record straight based on perspectives from practitioners and current market trends

How to Start

Don’t start with the solution, start with the business objective. Find an experienced and consultative processor who can help crystallize your short-term and long-term needs and configure a tailored solution.

Look for holistic processing. Companies entering the prepaid arena need to look at the full range of capabilities a processor offers and clearly understand how each component, from the platform to cardholder support, satisfies your operating requirements for the most effective program.
Let customer preferences drive product innovation. As issuers develop new, niche products, find a processor with the flexibility and options to help satisfy customer needs expediently and reliably.
Security and risk management are paramount. In prepaid card issuance, both with respect to fraud mitigation and also in terms of the scrutiny that issuers face to comply with money-laundering and homeland security standards, risk and compliance management can’t be overlooked.
Plan for growth, anticipate evolution. As the market continues to mature, growth and change will follow. Prepaid issuers must look for a processor who has the foresight, scale and track record to help minimize growing pains.
Cundiff continues, “The evolution of the prepaid card segment will be driven by consumer needs and technology innovation that enhances functionality and security. Processors that continuously expand their offerings and essentially provide flexible solutions, will enable prepaid card issuers to strengthen and deepen their relationships with cardholders.”

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