Editor's Note: Small Biz Owners being "cautiously optimistic" is good news amidst a flurry of bad...to see the data, click here to download in Microsoft Word Format.
Riverwoods, Ill., Dec. 29, 2008 -- After falling to its lowest measurement ever in November, economic confidence among small business owners rose slightly in December. The Discover(R) Small Business WatchSM rose to 72.8 in December, up 5.3 points from November. The index was buoyed by increased optimism that their own business prospects are improving and an indication that more will increase spending on business development in the next six months.
"While we saw small improvements in economic confidence almost across the board this month, the mood still remains cautious," said Ryan Scully, director of Discover's business credit card. "Most small business owners still believe that it will be at least into 2010 before the economy recovers."
December Key Findings:
21 percent of small business owners believe that economic conditions for their businesses are getting better, up from 15 percent in November, which was the all-time low in the 29-month history of the Watch. Fifty-one percent feel the conditions are getting worse, which is down from 54 percent last month.
24 percent of owners say they plan to increase spending on business development over the next six months. This is an increase from 20 percent who said the same in November. Forty-seven percent say they are planning to decrease spending on business development compared to 51 percent last month.
Cash flow issues decreased slightly in December as 42 percent of owners say they held off paying some bills in the past 90 days. Forty-four percent said the same in November.
63 percent rate the economy as poor, down 2 percent from November; only 6 percent rate the economy excellent or good, the second-lowest rating in this category in the history of the Watch.
12 percent feel the economy is getting better, which is the highest in this category since August 2008. The number of small business owners who think the U.S. economy is getting worse decreased by two percentage points to 70 percent in December; and 14 percent think it is staying the same.
69% of Small Business Owners Think U.S. Recovery Will Take At Least 12 Months
As the new year approaches, small business owners remain cautious about the amount of time it will take the economy to crawl out of its slump. Forty-two percent of owners anticipate that economic recovery will take between 12 and 24 months, while 27 percent believe that it will take longer than 24 months. Twenty-three percent think that the recovery will take less than 12 months.
"Economic confidence has been declining for the past year, and small business owners continue to be resilient by doing whatever it takes, including not relying on credit and taking home less pay," Scully said. "It's not surprising that they seem to be buckling down for a long recovery since more than half of them have been telling us the economy is getting worse every month for the past 22 months."
Government Bailout Support Mixed
Sixty-eight percent of small business owners say they do not expect that government bailout assistance to banks will help their businesses in the next six months.
Fifty-five percent of small business owners do not believe U.S. automakers deserve a chance to qualify for some form of federal bailout assistance, while 33 percent say they would support a bailout for automakers and 12 percent answered "not sure."
When it comes to themselves, 48 percent of small business owners say they should be entitled to federal bailout assistance, while 35 percent didn't think small businesses deserved federal bailout help and 16 percent were not sure.
Decreased Sales Pose Biggest Threat
When asked where they have felt the most negative stress on their business operations in the past year, 30 percent said decreased sales; followed by 23 percent who cited higher operating costs; 17 percent said taxes; 7 percent said financing and credit, and 17 percent said their business has not been under stress in the past year.
It appears fewer small business owners are extending credit to their customers. In December, 25 percent said they extend credit, and 72 percent of those who extend credit say that they have customers who have delayed a payment or asked if they could delay a payment in the last three months. In September 2007, 30 percent of small business owners were extending credit to their customers and 64 percent had received delayed payments or requests to delay payments.
The views and opinions expressed by small business owners and consumers who participate in the Small Business Watch survey are their own and do not necessarily reflect those of Discover Financial Services or its affiliates.
About the Small Business Watch
The Discover Small Business Watch is a monthly index measuring the relative economic confidence of U.S. small business owners who employ less than five employees, a segment that consists of 22 million businesses producing more than a trillion dollars in annual receipts. The Watch is based on a national random survey of 1,000 small business owners. It is commissioned by the Discover Business Card, which strives to offer the best business credit card for American small businesses, and is conducted by Rasmussen Reports, LLC (www.rasmussenreports.com ), an independent survey research firm. The numeric index is calculated by assigning values to responses to a set of six consistent questions. The base value of the Watch was established at 100.0 based on surveys conducted in August of 2006. In addition to generating the index, the Small Business Watch surveys small business viewpoints on key business drivers, and also surveys 4,000 consumers to gauge purchasing behavior and attitudes towards small businesses. For past results and small business survey data, visit www.discovercard.com/business/watch . For information on Discover Business Card, visit www.discovercard.com/business .
About Discover Financial Services
Discover Financial Services (NYSE: DFS) is a leading credit card issuer and electronic payment services company with one of the most recognized brands in U.S. financial services. The company operates the Discover Card, America's cash rewards pioneer. Since its inception in 1986, the company has become one of the largest card issuers in the United States. Its payments businesses consist of the Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation's leading ATM/debit networks; and Diners Club International, a global payments network with acceptance in 185 countries and territories. For more information, visit www.discoverfinancial.com .
Amazon had it's "best season ever." (results from Macy's 2008 holiday season results have yet to be released) But make no doubt about it. Macy's is in trouble. Sure, they just negotiated looser terms on its $2 billion in currently unused bank loans, but...
There's about $950 million of debt coming due in 2009 and the company still has $226 million of debt maturing in 2010, $650 million coming due in 2011 and $1.3 billion payable in 2012, along with its bank line of revolving credit. So the "paradigm shift" I've been blogging about for months, could, in this case, be called a "parade-igm" shift.
Will we see the annual Macy's Thanksgiving Day Parade shift into the Amazon or Costco Day parade? Don't be "amazed" when/if they put Amaz-on it.
Consider the following press release from Amazon on it's "best ever" holiday season...
(SEATTLE) — Online retailer Amazon.com Inc. called this holiday season its "best ever," saying Friday that it saw a 17 percent increase in orders on its busiest day — a rare piece of good news in a season that has been far from merry for most retailers, including online businesses.
Amazon customers ordered more than 6.3 million items on Dec. 15, compared with roughly 5.4 million on its peak day last year, the company said. It shipped more than 5.6 million products on its best day, a 44 percent surge over 2007, when it shipped about 3.9 million on its busiest day.
Amazon's best-sellers included the Nintendo Wii game console, Samsung's 52-inch LCD HDTV and Apple Inc.'s iPod touch.
Analysts agreed Amazon's report was good news for the online shopping giant, but they were divided over whether the results indicate strength in online commerce in general.
Forrester Research analyst Sucharita Mulpuru said Amazon's experience shows the current economy is favoring discount retailers, both online and offline. "The Amazon story doesn't surprise me because Amazon has always traditionally been a leader on price, and they're one of the first places consumers go when they're looking for things online," Mulpuru said. "In many ways they're like the Wal-Mart of the online world."
Holiday sales typically account for 30 percent to 50 percent of a retailer's annual total, but rising unemployment, home foreclosures, the stock market decline and other economic worries led many shoppers to slash their shopping budgets this year.
SpendingPulse — a division of MasterCard Advisors — said its preliminary data show that online sales fell 2.3 percent compared with the 2007 holiday season, while retail sales overall fell 5.5 percent to 8 percent, including sales of cars and gasoline. The decline was 2 percent to 4 percent when auto and gas sales are excluded.
Online shopping may have gotten a boost from winter storms during last two weeks before Christmas, which made travel to brick-and-mortar stores more difficult.
And, although Amazon's orders rose, the company didn't say whether orders were, on average, worth more or less than last year. Spokeswoman Sally Fouts said the company would release revenue results in its fourth-quarter earnings report, due in about a month. But she said this was Amazon's "best season ever."
Orders to Amazon on the peak day of its holiday season have jumped in the double-digit percentage range for at least the past 5 years, according to data released by the Seattle, Wash.-based company since 2002. Last year, Amazon's orders spiked 35 percent to 5.4 million at their peak, from 4 million in 2006.
The Wall Street Journal reports on a dismal holiday season for retailers. Based on the fact that the holiday season constitutes upwards of 30% of annual sales for some bricks and mortar retailers, this is indeed bad news. Combined with the credit crisis, this could be the a death blow for some. But it doesn't surprise me in the very least. The paradigm shifting in consumer shopping behavior would have dealt a nasty blow to some bricks and mortar retailers in a mediocre economy. In this one, you can start writing the obits...
Here's a snippet from WSJ...
Online sales held up better than the rest of the retail market during the dismal holiday period, but the season is still likely to go down as one of the worst on record for the traditionally booming e-commerce sector.
While online spending was down just 2% from Nov. 1 through Christmas Eve compared with a drop of 5.5% to 8% for retail as a whole, e-commerce strength wasn't widespread. Instead, it was clustered around several big-name Web sites such as Amazon.com Inc., Apple Inc. and Wal-Mart Stores Inc. Online sales were also fueled by discounts that aren't likely to continue.
Overall, in a sector where sales have historically increased 20% annually, this is the first holiday season where online sales haven'tgrown. E-commerce sales were "not amazing by any stretch," says JohnAiken, managing director and head of equity research for Majestic Research.
Many traditionally strong ecommerce sites also ended up losing visitors in what is typically their busiest period. Internet auction site eBay Inc.'s traffic dropped 16% between early November and mid-December, while Best Buy Co.'s site experienced a 17% decline in visitor traffic, according to comScore Inc., which tracks Internet activity. The number of visitors to e-commerce Web sites during the period grew less than 1%, compared with growth of about 5% typically. continue reading at WSJ
Amazon overtakes eBay as most-visited retail site, Nielsen says
For the first time, Amazon.com passed eBay.com in November as the most popular retail destination on the Internet, according to Nielsen Online. Kmart had the highest percentage gain in "unique visitors", up 35% while Overstock's had 7 million less unique visitors compared to last year, a 36% drop. (wonder what caused that?)
In addition to Kmart's 35% upswing, other double digit gainer's included Wal*Mart (13%) Sears (10%) Netflix (13%) Kohl's (26%) and the Home Depot (15%) Dell (-10%) and Circuit City (-13%%) joined Overstock as the only double-digit losers.
Here are the top 15 retail web sites in November, with unique visitors in millions this year and last and the percentage change. Double digit growth is bold, regression is in red, double digit losers are red bold...
Paul Beverly, President of Gemalto North America, in an article published in Contactless News, is calling for the US to follow the lead taken by the rest of the world and implement EMV standards here in the US.
Editor's Note: The name EMV comes from the initial letters of Europay, MasterCard and VISA, the three companies which originally cooperated to develop the standard. EMV is a standard for interoperation of IC cards ("Intergrated Circuit (Chip) cards") and IC capable POS terminals and ATM's, for authenticating credit and debit card payments. To learn more about Gemalto, click their logo above left...
He questions whether there's such a thing as "acceptable fraud losses" amidst the rising tide of criminal activity associated with "magstripe" cards.
Here's what Mr. Beverly has to say: He starts us out with some some interesting statistics from 2008:
The Federal Trade Commission estimates that as many as nine million Americans have their identities stolen each year.
The Privacy Rights Clearinghouse estimates 245 million records have been compromised due to security breaches since January 2005.
The sting operation by security software provider Symantec showed stolen credit card accounts are sold like commodities online, at a quantity discount of one dollar if you buy 100 or more. These are for full packages with name and address, card expirations and CVV2 security numbers.
Gemalto’s own “Digital Trust Barometer” survey showed 57% of Americans are afraid someone will steal account passwords when banking online, 38% do not trust online payments, 74% are afraid of identity theft and 44% are afraid of online bank account hijacking.
I think it’s time executives in financial services; retail and online services start questioning a well-worn mantra that fraud losses are an acceptable cost of business.
When fraud and fear are undermining consumer confidence in e-commerce, as it is today, at some point that logic becomes bad business. (continue reading at Contactless News)
Editor's Note: I agree and the same "well-worn mantra" is hurting consumers as much, if not more, than it's hurting etailers. (The only winner's here are Visa/MC and the banks who profit more from an unsecure transaction because of the higher interchange fees that come with them. )
Starting an EMV initiative here in the US would take years and cost billions. Starting an Internet PIN debit initiative would take months and save millions. What's unacceptable is online debit for online shopping. Fraud losses can be significantly reduced by making PIN based transactions "acceptable."
Click here to read what I consider to be a fantastic story "on Wired (One Hacker's Audacious Plan to Rule the Black Market in Stolen Credit Cards) about one Max Butler, better known amongst security researchers as "Max Vision" who's about to (yet again) see what happens when subjected to "blind justice." At the end of the day, you can steal all the credit card information you want, but if you don't know the PIN code, you wouldn't be able to use them...except online, where PIN debit is frightening absent. HomeATM aims to correct this faux pas with "it's vision" of bringing PIN based transactions to the web...
Apparently Max isn't quite the visionary he thought he was...because most everyone elsewould've seen this coming from a million miles away.
Speaking of seeing something coming from a million miles away...let me take a crack at being a visionary...
The way I see it Max is positioned to become the next Frank Abagnale Jr. Unlike Frank Abagnale, Max Vision was a renowned security consultant first, but got played by the FBI (see Max Vision...FBI Pawn?) and, in what I'm guessing was an act of rebellion, evolved into "Evil Max" after his release from jail. His "storied" hacking past (dating back to May 1998 when he penetrated a series of Defense Department computers) makes for a novel book idea and even merits some big screen potential. The stars are aligned...2009 is predicted to be the "Year of the Hacker" so I suspect he'll get some maximum exposure, being one of the original super hackers.
Ironically another "Max", former PayPal founder, Max Levchin rubs elbows in Hollywood, (he was Executive Producer for Thank You For Smoking , which BTW was absolutely hilarious) Given his "payment processing" background, combined with the fact that Evil Max wanted to "rule the black market world in stolen payment cards" he'd be the ideal person to bring this to the silver screen.
Speaking of movies, click below to see how professional card counterfeiting differs from card cloning, which the Today Show ran last week.
Fraudsters rack up millions of dollars in merchandise using fake credit cards with legit numbers hacked off the Internet. Detective Bob Watts of Newport Beach PD shows how it's done.
More on Max Vision:
Max Vision charged with hacking -- again Sep 12, 2007 ... Federal prosecutors charge former security consultant Max Butler, better known amongst security researchers as "Max Vision," alleging that ...
Max Vision: FBI pawn? May 5, 2001... FBI agents called him 'the Equalizer': a security expert and confessed hacker who infiltrated the electronic underground to help the Bureau. www.securityfocus.com/news/203 - 34k
A 'White Hat' Goes to Jail "Max Vision," a renowned hacker, security expert and FBI informant, is sentenced to prison in a case that angers many in the hacking and cracking community.
On Christmas Eve, there were 10.4 million pinpas (pin debit card) transactions, the highest number ever recorded in the Netherlands on a single day. The figures come from Equens, the company which operates the electronic payments. Christmas Eve smashed the record set only the day before, Tuesday, when the cards were used 9.7 million times.
There were many more pinpas transactions during the last four days before Christmas, 39 million, than in the same period last year, 30 million. The fact that the cards were used more this year does not necessarily mean that more money was actually spent.
Editor's Note: I can't help wondering if there were really only 5.2 million purchases made, but it wound up double that because they "go dutch" on everything...one dinner bill but two separate debit transactions :-)
PC's are insecure and hackers constantly exploit flaws in their security. This article provides some insight as to why software based solutions designed to run on a PC are sitting ducks for potential hackers... which, once again, is why HomeATM has taken a personal swiping device approach to bringing PIN debit to the web. It's how they've done it in the stores, and it's how it should be done online. Keep in mind that the Internet was not designed for eCommerce, it was originally designed as the "information highway."
With our approach, the transaction is done "outside" the browser space, therefore "man-in-the-browser" attacks are nullified, as are keylogging, screen capturing and a symposium of other hacking methods designed to drain data from your PC.
Someone's eventually going to be swipin' your credit/debit card data...shouldn't you be the one doing the SwipePIN? Any doubts? See how easy it is..."to hack a PC"
This, from the Wired Blog Network:
Image via WikipediaHardly anyone runs a PC without known holes that hackers can exploit, a Danish security company reports. Of those who run the company's free security-scanning tool, nearly half have more than 11 out-of-date programs.
Secunia Software's Personal Software Inspector checks programs installed on a user's computer to see if the latest, patched version is installed. More than 98 percent of users had at least one program that wasn't the latest version, the company found in a study of 20,000 users of its software.
The sobering statistics are not surprising, but they come as malware makers turn from simply exploiting easy holes in Windows.
In addition, hackers have been finding vulnerabilities in browsers, media players and file-reading software as a way into other people's computers.
While it may not seem likely that a hacker would rig a website to exploit a patched hole in a lesser-known media player like VLC, hacking tools make it increasingly easy for an infected webpage to check for many vulnerabilities in a person's computer.
Number of insecure programs per PC/user: 0 insecure programs: 1.91% of PCs 1-5 insecure programs: 30.27% of PCs 6-10 insecure programs: 25.07% of PCs 11+ insecure programs: 45.76% of PCs
Secunia's Mikkel Winther says the study shows that its just as important to keep programs up to date, as it is to have a good firewall and anti-virus programs. He also says the real numbers in the general populace are likely worse, because their sample is of people who have looked for security software.
"The results are shocking and prove as well as emphasize the need for a patching solution for private users," Winther said. Keeping up with software updates can be quite tedious and annoying, even as software makers like Microsoft and Mozilla have built better update tools. Those who don't care to download Secunia's software can try it's online scanner, though it only checks version numbers on a hundred or so programs.
Secunia does not sell security software to individuals, but does market a networked version of this scanner to companies.
In the previous post I featured eMarketer's report on e-Commerce projections in the UK through 2012...here's their projections for Canadian eCommerce...
Canadians Are Warming Up to Online Shopping
In 2007, Canadian retailers sold C$13.8 billion ($12.9 billion) of consumer products and travel bookings online. But by 2012 eMarketer projects that Canadian business-to-consumer (B2C) e-commerce sales will reach C$22.8 billion ($22.2 billion).
That means that between 2007 and 2012, Canadian B2C e-commerce sales will show a compound annual growth rate (CAGR) of 10.6%. Not bad numbers in a tough economy.
But the numbers could be better.
“Until Canadian consumers show a larger appetite for buying big-ticket physical goods online, such as home furnishings and consumer electronics, the Canadian e-commerce market will remain small compared with other G-7 countries,” says Jeffrey Grau, eMarketer senior analyst and author of the new report, Canada B2C E-Commerce.
Consumers in Canada are avid online product researchers, on par with their US counterparts. But they are much more likely to make a subsequent purchase in-store rather than on a Website.
“The fact that Canadian Web retailers are required to charge sales tax is certainly a disincentive to online buying,” says Mr. Grau.
Because of the tax structure, Canadian shoppers have never seen much of a price advantage to buying online. This is one reason why Canadian e-commerce has grown at a more gradual pace compared with the explosive growth that occurred in the US.
“The upside of this is that the Canadian market is enjoying a longer period of solid growth,” says Mr. Grau, “albeit on a much smaller scale.”
Another factor that has depressed the growth of B2C e-commerce in Canada is the lack of product selection online. In fact, many prominent Canadian retailers have not found the ROI compelling enough to run an online sales channel.
“While Canada has about one-tenth the population of the US, the cost of running a transactional Website is about the same,” says Mr. Grau. “This creates a challenge for small to medium-sized retailers with fewer financial resources.”
Nevertheless, Canadian retailers are in a better position than foreign merchants to understand the needs and interests of local consumers. And like consumers across the world, those in Canada prefer to shop with indigenous retailers.
According to eMarketer, Business 2 Consumer E-Commerce in the UK will continue it's strong growth pattern. The tough economic climate will not affect e-commerce as much as it will bricks and mortar retail. Here's their analysis:
UK e-commerce revenues will remain strong in 2009, as Internet stores continue to weather the recessionary storm better than their brick-and-mortar counterparts. In September 2008, eMarketer forecast that UK business-to-consumer (B2C) online sales in 2009 would be worth £68.4 billion ($127.9 billion), and we have seen no reason to alter that forecast.
B2C E-Commerce: UK, 2007-2012
Major online retailers that upgrade to offer true multichannel shopping and delivery/return options, as well as value for money, will gain market share while a number of second-rank e-shops stagnate or go out of business. But market leaders will spend more than in 2008 to ensure they attract and keep consumers’ attention.
Most online retailers will continue to court shoppers with money-off promotions and discounted delivery charges, and at least one supermarket chain will experiment with large-scale e-mail distribution of promotional coupons for grocery products bought in-store.
Mobile marketing will take significant steps next year—albeit from a small base—as more UK advertisers, heartened by the growing number of high-specification (3G) mobile users, move to exploit this always-on medium. Data from the Office for National Statistics suggested that 19% of adults ages 16 and older accessed the Web via their mobile phone in the three months prior to polling in early 2008—and this was before the highly successful UK launch of the 3G iPhone in July.
The 2009 mobile growth spurt will take two main forms: increasingly sophisticated usage of SMS, short codes and bar codes in direct-response campaigns, and microsites designed for mobile users. November 2008 research by mobile marketing agency Sponge found that 40% of UK e-retailers polled already had a transactional Website that was mobile-friendly. Another 50% said they planned to create such a site in the next 12 months. Moreover, one in five online retailers reported having used mobile microsites to drive promotions during 2008.
There is a disturbing development brewing in the payments world. It's bad enough when a retailer's computer security is breached but now we've got us a completely different ballgame. When hackers penetrate the computer systems of major acquirers and processors, well to use a famous quote, "We've got a problem Houston."
This could turn out to be a "Royal pain in the ***" for Visa and Mastercard themselves because acquirers like Royal Bank of Scotland link directly into their networks.
On the surface, this appears to be "one small step for hackers but it's "one giant step" for hack-kind."
According to reports I've read this morning, according to Gartner Research analyst Avivah Litan, this could be the beginnings of the mother of all hack attacks... “It’s very bad news,” says distinguished analyst Avivah Litan. Unlike retailers’ computer systems, processors’ systems connect directly to the networks of Visa Inc. and MasterCard Inc. “An attacker that breaks into a processor conceivably can get into the heart of the system,” and attacks on acquirers and processors are increasing."
Here's the press release:
RBS WorldPay Announces Compromise of Data Security and Outlines Steps to Mitigate Risk
ATLANTA, Ga. – December 23, 2008 – RBS WorldPay (formerly RBS Lynk), the U.S. payment processing arm of The Royal Bank of Scotland Group, today announced that its computer system had been improperly accessed by an unauthorized party. RBS WorldPay has urgently taken a number of important steps to mitigate risk in response to this situation.
The issue, which affected pre-paid cardholders and other individuals, was identified on November 10 and law enforcement agencies and federal regulators were notified by RBS WorldPay shortly thereafter. RBS WorldPay’s internal security professionals and outside experts are working with federal and state law enforcement authorities in an investigation of this event. The affected pre-paid cards include payroll cards and open-loop gift cards. Personal information associated with certain payroll cards may have been improperly accessed. PINs for all PIN-enabled cards have been or are being reset.
Affected individuals are being notified and information has been posted on the RBS WorldPay Web site, www.rbsworldpay.us.
The fraud that has been identified to-date is associated with RBS WorldPay’s computer system supporting its U.S. pre-paid and open-loop gift card issuing business. Actual fraud has been committed on approximately 100 cards. Cardholders will not be responsible for unauthorized activity associated with this event. Certain personal information of approximately 1.5 million cardholders and other individuals may have been affected and, of this group, Social Security numbers of 1.1 million people may have been accessed.
RBS WorldPay is offering impacted individuals whose Social Security numbers may have been affected a complimentary one-year membership in a national subscription credit monitoring service that provides access to individuals’ consumer credit reports and daily monitoring of their credit files from all three national consumer reporting agencies.
Gift cards that have already been purchased retain their value and can be used wherever they are accepted by merchants. Those gift cards that had not been purchased have been deactivated and are being removed for destruction from stores as an additional precaution.
Ben Barone, president and CEO of RBS WorldPay, said, “Privacy is important to RBS WorldPay and we regret any inconvenience this may cause affected individuals. We have taken important, immediate steps to mitigate risk and none of the affected cardholders will be responsible for unauthorized activity on their account resulting from this situation. We are working closely with leading computer security firms to further safeguard our system, and with law enforcement agencies, which we hope will result in the criminals being brought to justice.”
Providing more evidence of the increasing importance of the online channel to retail chains, the e-commerce site of nationwide chain Kohl's Department Stores showed the sharpest year-over-year growth in the number of unique visitors, at 53.1%, in a recent survey of 10 sites. Amazon.com posted the second-large increase, up 48.5%, while Macy's was up 36.1%.
The survey, conducted by Compete Inc., was based on unique visitor totals from Nov. 1 through Dec. 13, 2008, the latest day for which data was available, compared to the same period of 2007. Overall, the number of unique visitors at the 10 surveyed sites rose 25.6% to 765.99 million visitors.
The year-over-year changes were affected, however, by the later start of the 2008 peak holiday shopping season. Thanksgiving, typically the official kickoff of peak holiday shopping, fell on Nov. 27 this year, compared to Nov. 22 in 2007.
Following are the 10 sites surveyed by Compete with their year-over-year rise in unique visitors and their total number of visitors (in millions) for the period Nov. 1 through Dec. 13, 2008:
As I mentioned in a post on December 5th, Morgan Stanley apparently had "secret talks" with Visa behind Discover's back and now they are suing each other over the $2.75 billion take that Discover collected from Visa in an antitrust lawsuit. What was Morgan Stanley thinking?
Bottom line is that Discover says it's not paying a dime to Morgan Stanley because they tried to sabotage the settlement talks behind their back and thus forced them to settle for less than they would have. Kind of puts a new twist on antitrust, and once again Visa is involved. Morgan Stanely should have just left well enough alone, but since they were capped at 1.5 billion, Discover claims they had no vested interest in seeing the case go to trial.
As the title of this post suggests, my guess is that Visa played Morgan Stanley in order to reach a lower settlement...and it worked. Now there's a whole new court case that is arising out of the settlement of another. It's a crazy world, but that's life, and life accepts Visa! Apparently, Visa is worthy of forever being associated with antitrust...
I'll continue to follow the case here on the PIN Debit blog. As it looks right now, the case won't reach trial until the end of 2009, but I'm sure there will be some interesting tidbits in the meantime, and I'll cover those tidbits here.
From todays New York Post:
"The negotiations with Visa and MasterCard dragged on, and the two sides were set to go to trial this October.
But the weekend before the trial was to start, Discover claims that it learned for the first time that Morgan Stanley was talking separately to Visa and MasterCard to try to settle case before it moved to trial. Fearing that Morgan Stanley had in some way compromised its trial strategy, Discover says that it was forced to settle the case for much less than what it might have gotten at trial.
Discover then refused to pay Morgan Stanley its cut of the settlement, claiming that Morgan Stanley violated the terms of their agreement that Discover had sole negotiating power.
Morgan Stanley sees things quite differently. It has sued Discover to get its $1.3 billion cut of the $2.75 billion payout.
Morgan Stanley claims that Discover always knew it was speaking with Visa and MasterCard in order to work out a deal. It even gave up $100 million of its cut to get Visa to sign on to the $2.75 billion, nonnegotiable figure proposed by the arbiter of the case.
Discover has now countersued, claiming that Morgan Stanley’s attorneys were under pressure from John Mack, Morgan Stanley’s chief executive, to settle the case quickly. Discover claims that since Morgan would not get a penny over $1.5 billion, it had no interest in seeing the case go to trial, where Discover could have reaped more cash
TSYS Hires New Business Development Director for Turkey
Columbus, Ga. and London, 22 December 2008 — TSYS today announced Bulent Senver as Business Development Director for its entry into the Turkish payments market.
Mr. Senver brings more than 25 years experience and extensive knowledge of the Turkish banking and card payments industry. He has worked with more than 20 Turkish and foreign banks in an advisory role as a management consultant and as a senior executive in the bank environment, a position in which he was named 'Banker of the Year' by the Turkish Press Institution.
Kelley Knutson, executive vice president of Global Services for TSYS, said, "TSYS is very pleased to welcome Bulent as Business Development Director for Turkey. He has helped achieve many milestones in his respective market, including the first photo credit card, the first soccer club debit card and the first telephone banking system. He has in-depth knowledge of the payments industry and local market requirements, and embodies the service excellence and integrity associated with the TSYS brand."
"With a strong, stable economy, growing population and rising income levels, we believe that the Turkish card market shows tremendous potential for further growth. It is a key, strategic market to TSYS and we are fully committed to investing long-term in the region," added Knutson.
The Turkish payments market has grown at an accelerated rate during the last five years and is now the third-largest card market in Europe. In terms of payment options and product differentiation, Turkey is one of the most sophisticated and innovative markets in the world.
TSYS, which grew its international operations 33 percent in 2007, confirmed its intent to participate in the Turkish marketplace with its unique value proposition, TS Prime, an efficient server-based issuing and acquiring card management platform adopted by more than 100 financial institutions worldwide.
TSYS supports more than 300 clients in 75 countries and has been a leader in the global payments industry for more than 25 years. Its market presence extends to 18 offices supported by more than 8,000 personnel.
About TSYS TSYS (NYSE: TSS) is one of the world's largest companies for outsourced payment services, offering a broad range of issuer- and acquirer-processing technologies that support consumer-finance, credit, debit, debt management, healthcare, loyalty and prepaid services for financial institutions and retail companies in the Americas, EMEA and Asia-Pacific regions. For more information, contact news@tsys.com or log on to www.tsys.com. TSYS routinely posts all important information on its website.
Decision to switch based on recent hack and rise in card related fraud.
Many banks across the UAE experienced a concerning rise in the instances of card related fraud in the latter part of this year.
Much of the fraud involved card “skimming” which is when a device is attached to an ATM or a Point-Of-Sale card reader and details are copied from the card’s magnetic strip. Details copied would include the card’s PIN number making it possible for fraudulent transactions to be made.
To help combat this Lloyds TSBMiddle East has taken the decision to launch Chip and PIN cards – a more protected system for cards.
Chip and PIN cards contain a chip, making them more difficult and more expensive to counterfeit. Signatures can easily be forged and are often not checked carefully. So entering your PIN at a till instead of signing a receipt helps to prevent someone else from using your card.
One of the World's biggest banking groups, today announced that the bank will launch its Chip and PIN offering in January 2009. Following the increase in card-related fraud activity across the UAE, Lloyds TSB Middle Easthas accelerated the launch of its Chip and PIN credit and debit cards to ensure their customers' banking experience is even more secure.
"We are committed to delivering excellent customer service and protecting our customers", said Richard Musty, Consumer Banking Director. This is why we have brought forward the launch of our Chip and PIN credit and debit cards. These cards will offer our customers a more secure way to pay and improved protection against card-related fraud. Furthermore, our sophisticated fraud monitoring system will give us an early warning signal to potential fraudulent activity so we will be able to proactively tackle it.
Cards will be issued to existing customers on a renewal basis
Visa Inc. (NYSE:V) today reported that it has deposited $1.1 billion into the litigation escrow account previously established under the company's retrospective responsibility plan (the "Plan").
Under terms of the Plan, when Visa funds the litigation escrow its U.S. financial institutions, the sole holders of Class B shares, bear the expense via a reduction in their as-converted share count.
"This transaction not only adds the necessary funds to our litigation escrow, but effectively acts as a $1.1 billion Class B share repurchase program," said Joseph Saunders, Visa's chairman and chief executive officer. "It has always been our stated intent to return excess cash to our shareholders in the form of dividends and share repurchases. We are obviously pleased that our strong financial position and excess cash flow allows us to do this."
The Plan was established at the time of Visa's initial public offering. It provides coverage and a payment mechanism for judgments or settlements in specific U.S. legal cases, protecting Visa and its Class A and Class C shareholders from any direct losses.
The deposit of the funds into the escrow account reduces the conversion ratio applicable to Visa's Class B common stock outstanding from 0.7143 per Class A share to 0.6296 per Class A share. On a converted basis, the 245,513,385 Class B shares currently outstanding are equal to 154,566,658 Class A shares of common stock.
The deposit of loss funds has the effect of a repurchase of 20,800,824 Class A common share equivalents from the Company's Class B shareholders. The amount paid per share represents the volume weighted average price (VWAP) of the Company's Class A common shares for the 15-day trading period December 1, 2008 to December 19, 2008.
About Visa: Visa operates the world's largest retail electronic payments network providing processing services and payment product platforms. This includes consumer credit, debit, prepaid and commercial payments, which are offered under the Visa, Visa Electron, Interlink and PLUS brands. Visa enjoys unsurpassed acceptance around the world and Visa/PLUS is one of the world's largest global ATM networks, offering cash access in local currency in more than 170 countries. For more information, visit www.corporate.visa.com .
They had planned to present their findings at Defcom, but instead were sued by the Massachusetts Bay Transit Authority. The MBTA took legal action just before the students were scheduled to discuss: "generating fare cards","reverse-engineering magnetic stripes", and "hacking the RFID technology in the cards".
Instead, a judge issued an injunction ordering them to refrain from doing so. Now they've been "hired" by the MBTA. Ironically, yesterday I wrote a post entitled "Who Says Crime Doesn't Pay" and today, I saw this article that the MBTA had "hired" the three hackers who broke into their system.
So apparently it also pays to hack into a system and threaten to publicly share the results in a presentation at a hack convention.
It's a different world out there...the only "Hack" I ever heard of as a kid was "Hack Wilson" who set the record for most RBI's in a season (191) in 1930 for the Chicago Cubs.
Anyway, it's been an interesting turn of events so here's a follow up on the Sorry Charlie series from Yahoo news.
SAN FRANCISCO - A trio of Massachusetts Institute of Technology students who found a way to hack into the Boston subway system's payment cards have agreed to partner with transit officials there to make the system more secure.
The Electronic Frontier Foundation announced the agreement Monday, two months after the Massachusetts Bay Transportation Authority dropped a lawsuit against the students, who were represented for free by the EFF, a civil-liberties group that frequently takes up cases involving security researchers and computer hackers. The transit agency had sued to stop the students from presenting findings at a computer-security conference.
The students — Zack Anderson, R.J. Ryan and Alessandro Chiesa — have argued all along they were trying to help the MBTA by giving it advance notice of their planned talk last summer and keeping specific details of their hack secret. But the MBTA worried of widespread fare fraud if students discussed how they were able to add hundreds of dollars in value to MBTA's two primary payment cards — CharlieCard and CharlieTicket.
Before they could take the stage at the DefCon hacker conference in Las Vegas in August, the students were slapped with a lawsuit and a restraining order preventing them from giving the talk. Everyone found out what they were going to say anyway: All 87 slides of the students' presentation were already online, having been given out to conference attendees on CDs before the lawsuit was filed.
The MBTA argued it needed time to fix the problems, but the issue touched off a legal battle about whether the students' free-speech rights were violated and prompted the EFF to take up the students' case.
The judge eventually lifted the gag order and the transit agency dropped its lawsuit in October. The two sides have been working since then on how they would collaborate to make the fare system more secure and have the students' work taken seriously, said Jennifer Granick, the EFF's civil liberties director.
Discover reports economic confidence improves among small merchants![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_s45L-AzEnLs0CGxqcFfT7PAvXi6xWkiFrXk-N0u6tUwMBDvUsPOTTTSu0kH05rTh5j3lhd41jQ2uMMzBvu96OVr7JYatMJazYYySGpzHx-F-Unpn-y-mx9qZt3jeNPfAvOsJDMKySe3Y1FLoasfdSc=s0-d)
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According to Internet Retailer Kohl's enjoyed the sharpest rise in holiday traffic this season...
The survey, conducted by Compete Inc., was based on unique visitor totals from Nov. 1 through Dec. 13, 2008, the latest day for which data was available, compared to the same period of 2007. Overall, the number of unique visitors at the 10 surveyed sites rose 25.6% to 765.99 million visitors.![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_uwyb7kg37PyunguhfRxEVwzFhzitKTUEjRLjMSqYew-JGauDimw88V2_BLGKBN2IPTIso8TfSrSWYx4tQQJJHu5npRBhDK--V7J7ReQL-sLImnYeqT9TbowLfOFnxKhW5TP2NtMlX8q_O1FOUwB7ze=s0-d)
As I 
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Visa Inc. (NYSE:V) today reported that it has deposited $1.1 billion into the litigation escrow account previously established under the company's retrospective responsibility plan (the "Plan").![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_vaEVxWYFy6svMQDGGUpvLjNUngQ2LlomJoqr8CElQQe3AuZ3o0JDhjvjkNOazzrzfkVKttG9hpwqxFQ4FoeYZu7ZoaBW3lJrtRXOIDcSaP2oAV3iXoRkmyb9dURvhk4hoBcnGv2OKDvVDM3KwTmPLA=s0-d)
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