Visa Issues PIN Attack Security Alert

Visa issues two security alerts:

Personal Identification Number (PIN) Attacks - Reports from financial institutions involving PIN fraud have recently increased. Fraudsters are targeting the automated telephone banking or voice response unit (VRU) systems of financial institutions to change or obtain PIN information. After obtaining a valid PIN, fraudsters can then make unauthorized withdrawals at ATMs.

Click Graphic on Left to Enlarge and Read

Visa also issued  a "Packet Sniffing" security alert on February the 2nd.  Click below to open in PDF format:

Top Vulnerability—Packet Sniffing - This update reflects the latest information from forensic investigations of data security breaches indicating an increasing prevalence of packet sniffers designed to intercept and collect cardholder data.

Click Here to go to Visa's Security Alert page on their corporate website.

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• Signature Debit Wrestles Fraud, Get's PIN'd (pindebit.blogspot.com)
• Top 10 Risks to Banks in 2009 (pindebit.blogspot.com)
• Gartner Names Entrust as 'Leader' in 2009 Web Fraud Detection Magic Quadrant (newswire.ca)

MasterCard Latin America Sees Strong Growth

MasterCard Reports Strong Growth Across the Latin America and Caribbean Region in 2008

MIAMI, Feb. 11 /PRNewswire/ -- MasterCard Incorporated (NYSE: MA) announced its operating results for the fourth quarter and full-year 2008, posting continued growth in both credit and debit (offline and PIN-based) programs.

During the fourth quarter of 2008, MasterCard cardholders in the Latin America and Caribbean region used their MasterCard(R)-branded cards (excluding Cirrus(R) and Maestro(R)) for 635 million purchase and cash transactions, generating gross dollar volume (GDV) of US $44 billion, up 11.4% on a local currency basis, over the same period in 2007.   Additionally, purchase volume reached US $24 billion in the fourth quarter of 2008, increasing 13.3% on a local currency basis, compared to the same period in 2007. GDV represents purchase volume plus cash volume and includes the impact of balance transfers and convenience checks.

The number of MasterCard-branded cards increased 16.6% as of the end of the fourth quarter of 2008, totaling 115 million cards, and MasterCard cardholders could use their cards at 28.5 million acceptance locations worldwide. MasterCard's global PIN-based debit program, which includes Maestro, and MasterCard's ATM-only brand Cirrus, also demonstrated positive results in the fourth quarter of 2008. In Latin America and the Caribbean region, the Maestro brand mark appeared on 126 million cards, up 11.5%  compared to the fourth quarter of 2007.

In 2008, MasterCard cardholders in the Latin America and Caribbean region used their MasterCard-branded cards (excluding Cirrus and Maestro) for 2.35 billion purchase and cash transactions, generating a gross dollar volume (GDV) of US $184 billion, up 16.1% on a local currency basis as compared to 2007. Additionally, purchase volume reached US $96 billion in 2008, increasing 18.6% on a local currency basis as compared to 2007.

"We are very pleased with the positive results achieved during the fourth quarter of 2008, and despite the challenging times facing the global economy, we feel fortunate and optimistic about the road ahead of us and are well positioned in the marketplace to face these challenges," said Richard Hartzell, president, Latin America and Caribbean Region. "The Latin America and Caribbean region will be a driving force in 2009 as the organization turns to economies outside the U.S. to generate significant volume and number of transactions. Electronic payments remain a vital driver for commerce for Latin American consumers and the strong results achieved in our region are further proof that the secular shift from cash and checks to electronic payments will continue."

Source Press Release

Recent Debit Scam Source in Canada ID'd

I've done some posts on the tampering of PED's (HomeATM's PED is tamper-proof) and the fact that some people are stealing and replacing PIN Pads with fake ones.  FYI, to see those posts, you can use the HomeATM Blog Search Bar,   It is located on the right sidebar of this blog. 

Were you to search: tampering,  you would get the results below:

Terminal Disease Boosts Fraud

Dec 17, 2008

Getting the PAN (personal account number) and PIN is so easy (with tampered devices) it's like stealing candy from a baby.However, in these times, it's not the "sweet tooth" that's behind the stealing...it's the Bluetooth. ...

Ouch! Card Swiping Devices Now Being Doctored During Manufacturing

Oct 12, 2008

It's bad enough when point of sale (POS) devices are tampered with at the physical retail location, but now it's getting a little ridiculous. Now... there's reports that the some POS devices are being doctored (by ...

Montreal Men Arrested in London Card Scam

Dec 02, 2008

police said a local business discovered the store's debit pad had been tampered with and called police. The next day, police arrested two suspects at the Greyhound Bus terminal on York Street as dozens of people and media waited for ...

Skim Through this Card Skimming Article ~ PIN Debit Payments Blog

Jan 05, 2009

They've been tampered with, they've had skimmers attached to them, or they've been replaced with clones and then taken back filled with credit/debit card numbers. I am adamant in my beliefs that the safest transaction is ...

Here's the story from the Beacon Herald stating that police in the Stratford area have "PINpointed" where the fake equipment was installed:

Source of debit scam tracked down

Business innocent victim, not being named
Posted By Laura Cudworth, Staff Reporter

The debit scam that emptied thousands of dollars from bank accounts around the city was located at one local business. Stratford police and banking security officers have pinpointed where the fake equipment was installed but won’t name the business.

“The business is a lot of times the victim of this type of fraud. So far in our investigation, they’re innocent parties. We have no reason to believe the owner had anything to do with this at this time,” Insp. Sam Theocharis said Wednesday. However, if the police make an arrest the name of the suspect will be released, he said.

He noted business owners are rarely involved because it’s easy to track down where the fraud originated using pin pads that were modified.  Over the past several months, groups of individuals have been going into businesses, not just in Stratford, distracting employees and stealing pin pads. It takes two of the units to make one modified pin pad.

Most businesses leave PIN pads right out on the counter, so crooks have easy access. “Wherever you go you see PIN pads on the counter,” Insp. Theocharis noted. 

Dear Prudence:

When you hear it put  that way, doesn't it  kind of make you feel it may be more,  well... prudent to stay at home, save gas, maybe some sales tax, make sure you get the best deal,  and use your "very own...very secure (E2EE) personal card swiper with it very own tamperproof PIN Pad?

continue reading

PED, Pin Entry Device, PIN pad, HomeATM

Related article

• Terminal Disease Boosts Fraud (pindebit.blogspot.com)
• Text Scams Coming (pindebit.blogspot.com)
• Gas Station Skimming Becoming More Popular (pindebit.blogspot.com)

Nigeria Leads Blocked eTransaction List

InternetRetailer.com

Internet Retailer is reporting that more than 1 out of 4 e-tailers block orders originating overseas.  The basis for their report comes from a recent report from CyberSource.  Amazingly, 76% of that group rescinds orders which originate in Nigeria.  I've done several posts about Nigeria's InterSwitch and the fact that they are rolling out Chip and PIN, so they obviously have been having some problems at home.  Here's the brief published by Internet Retailer:

Afraid of fraud, 30% of U.S. e-retailers block orders from some countries

International e-commerce can be risky for U.S. and Canadian merchants, says a new report from payment processor CyberSource Corp. During 2008, 30% of merchants that accept international orders online and that CyberSource surveyed stopped taking orders from one or more countries because of high levels of fraud.

76% of merchants in that group shut off orders from Nigeria, 58% from Ghana, and 32% from Pakistan. Other countries blocked in 2008 included Indonesia, 23%, Singapore, 19%, Romania, 18%, China, Russia, and Vietnam with 13% each, and South Korea and Hong Kong with 10% each.

Growth rates beyond U.S. and Canadian borders remain considerably higher than here, so during difficult economic times, expanding international e-commerce is a logical move for many merchants, says Doug Schwegman, CyberSource director of market and customer intelligence. But overall rates of fraud require merchants to exercise great care in handling orders received.

According to the survey, 52% of e-merchants accept orders from abroad, accounting for 17% of their total sales. But merchants report that 4% of international orders turn out to be fraudulent, 3.6 times the domestic rate of 1.1%. The international fraud rate has increased 67% since 2005. CyberSource reports.

In 2008, merchants rejected 11% of international orders compared to 2.9% of orders from the U.S. and Canada.

The survey data also showed leading centers for e-commerce fraud in the U.S. 25% of respondents said New York presented the highest risk of fraud among cities in the U.S. and Canada. Miami was second at 21% and Los Angeles third at 9%

ecommerce, nigeria, homeatm

HomeATM Client Continues Growth with PIN Debit

SmartCard Marketing Systems Inc. Transactions Surpass 3500 for the Weekend with Daily Transactions Surpassing 400 and Steadily Increasing since December 2008

© Business Wire 2009 - 2009-02-11 17:38:04 -

SmartCard Marketing Systems Inc. (PINKSHEETS:SMKG) CEO Massimo Barone Stated "We are pleased with current thresholds of business from Bill Pay and Pin Debit Online transactions (powered by HomeATM) generated from customer usage of Velocitymoney.com, our proprietary offering. Our target remains to get this threshold at an overall daily average of 1200 and weekends above 8,000 by the end of June 2009.

The number of Pre-paid card activations continues to rise moderately to 60 activations per day with the strongest single day of 174 activations. We are very pleased at the results as our structure and technology are proving effective.

We had previously announced that for December 2008 growth compared to the same month in December 2007 was 1700% which resulted in prepaid card and remittance loads of $1.2M USD, our strongest month to date. Additionally as new Merchants receive delivery and commence rollout of our product and services we will continue to enjoy accelerated growth during these difficult times."

About SmartCard Marketing Systems Inc. (PINKSHEETS: SMKG)

The company is leading the way in Prepaid Card Service Program Management, Payment processing of Pin Debit Online (powered by HomeATM) and Bill Pay in North America and Europe. Velocitymoney.com is the proprietary offering of SmartCard Marketing Systems Inc.

We seek safe harbor.

SmartCard Marketing Systems Inc.
Max Barone, CEO, 1-866-774-2555
Maxbarone@gosmartcard.com
www.gosmartcard.com

pin debit, homeatm, smartcard marketing

150+ FI's Affected by Heartland Breach...and Counting/Mounting

According to Bank Info Security, by the latest count, the number of institutions that have informed their card customers and members that they were hit as a result of the Heartland Payment Systems (HPY) data breach has swelled to 157. You can expect that number to rise.  

Here's the list of Banks/CU's and the number of cards they've had to replace so far.

Adams Bank & Trust, Grant, NE; (15)
Alerus Financial, Grand Forks, ND;
Alpine Bank, Aspen, CO (3,500);
Alva State Bank, Alva, OK;
Amboy Bank, Old Bridge, NJ;
American Bank Montana, Bozeman, MT;
American National Bank, Denver, CO (2,500);
American Riviera Bank, Santa Barbara, CA;
Apple Valley Bank, Cheshire, CT (100);
Arkansas County Bank, Stuttgart, AR;
Arvest Bank, Mountain Home, AR;
Association of Vermont Credit Unions, VR (6,000);
Baker Boyer Bank, Walla Walla, WA;
Bangor Federal Credit Union, Bangor, ME (3,000);
BancFirst, Oklahoma City, OK;
Bangor Savings Bank, Bangor, ME (18,000);
Bank of America, St. Louis, MO;
Bank of Bridger, Bridger, MT (80);
Bank of Oklahoma, Tulsa, OK;
Bank of the Ozarks, Little Rock, AR;
Bank of Utah, Ogden, UT; (245)
Bank Plus, Graettinger, IA;
BBVA Compass, Birmingham, AL;
Beacon Credit Union, Wabash, IN (4,500)(See what Beacon told their members about the Heartland Breach);
Bellwether Community Credit Union, Manchester, NH;
Big Horn Federal Savings Bank, Greybull, WY (650);
Bremer Bank, St. Paul, MN (See what Bremer Bank told its customers about the Heartland breach) (7,800)
Bermuda Bank, Bermuda;
Butterfield Bank, Bermuda;
Canadian Tire Financial Services, Niagara, Ontario, Canada (15,000);
Cape Cod Cooperative Bank, Cape Cod, MA (3,600);
Capitol Federal, Topeka, KS (14,000);
Central National Bank, Enid, OK;
Central Savings Bank, Sault Ste. Marie, MI (300);
Chase Bank, Utah;
Citizens Bank of Newburg, Rolla, MO;
Colorado Federal Credit Union, Grand Junction, CO;
Community Bank, Alva, OK;
Community Bank of The Red River Valley, Grand Forks, ND;
Community First National Bank of Mountain Home, Mountain Home, AR;
Core First Bank, Topeka, KS;
CU Community Credit Union, Springfield, MO; (16)
Cumberland Security Bank, Pulaski, KY;
Dollar Bank, Pittsburgh, PA;
Dupaco Community Credit Union, Dubuque, IA;
DuTrac Community Credit Union, Dubuque, IA;
East Dubuque Savings Bank, Dubuque, IA;
Eastman Credit Union, Kingsport, TN;
Elliott Federal Credit Union, Jeanette, PA (100);
El Paso Employees Federal Credit Union, El Paso, TX (1,000);
Extraco Banks, Killeen, TX (9,000);
Family Community Credit Union, Charles City, IA;
Farmers and Merchants Bank, Stuttgart, AR;
Farmers State Bank, West Bend, IA;
Fifth Third Bank, Cincinnati, OH;
First & Farmers National Bank, Pulaski, KY;
First Bank, Azle, TX (3,000);
First Bank of Delaware, Wilmington, DE;
First Bank Blue Earth, Blue Earth, MN;
First Cheyenne Federal Credit Union, Cheyenne, WY (500);
First Citizens National Bank, Charles City, IA;
First Community National Bank, Steelville, MO;
First Enterprise Bank, Oklahoma City, OK;
First Federal Bank, Harrison, AR;
First National Bank of Colorado, Ft. Collins, CO
First National Bank of Hutchinson, KS (1,000);
First National Bank Pratt, Pratt, KY;
First Security Bank & Trust, Charles City, IA (1,400);
1st Source Bank, South Bend, IN;
First State Bank of Illinois, Carthage, IL;
First State Bank, Nora Springs, IA;
First State Bank of Scottsbluff, Scottsbluff, NE (200);
First Tech Credit Union, Portland, OR;
Five Points Bank, Hastings, NE (200);
Forcht Bank, Kentucky; (8,500);
Franciscan Skemp Credit Union, La Crosse, WI;
Gate City Bank, Fargo, ND;
GECU, El Paso, TX (25,000);
GFA Federal Credit Union, Gardner, MA;
Great Southern Bank, Springfield, MO;
HealthFirst Federal Credit Union, Waterville, ME; (261)
Heartland Bank, St. Louis, MO;
Heritage Bank, Hastings, NE (50);
Home Federal Bank, Treasure Valley, ID (1,800);
Huntington Bank, Ashland, OH;
Idadiv Credit Union, Nampa, ID;
Indiana University Credit Union, Bloomington, IN;
Industrial Credit Union of Whatcom County, Bellingham, WA;
Innovations Federal Credit Union, Bay County, FL (400 cards);
Integra Bank, Evansville, IN;
Iowa State Bank, Ruthven, IA;
Iowa Trust and Savings Bank, Emmetsburg, IA (700);
Kennebec Savings Bank, Augusta, ME; (1,500);
Kennebunk Saving Bank, ME (7,000);
Kootenay Savings, Trail, British Columbia, Canada;
Lassen County Federal Credit Union, Susanville, CA (600);
Laurens State Bank, Emmetsburg, IA;
Legence Bank, Evansville, IN;
Liberty Bank, Cheshire, CT;
Marine Bank and Trust, Carthage, IL;
Mercy Family Credit Union, Mason City, IA;
Mid America Bank & Trust Co., Rolla, MO; (200)
MidFirst Bank, Tulsa, OK;
Mid-Oregon Credit Union, (4,000);
Monroe Bank & Trust, Monroe, MI;
M & T Bank, Buffalo, NY;
Nebraska Land National Bank, NE (150);
North Country Savings Bank, Canton, NY;
North Iowa Community Credit Union, Mason City, IA;
Notre Dame Credit Union, South Bend, IN (2,000);
Bee Credit Union, Tumwater, WA; (See what O Bee told its members: http://www.obee.com/)
Oklahoma Central Credit Union, Tulsa, OK;
Old National Bank, Evansville, IN;
Oregon Territory Federal Credit Union, Salem, OR;
Patriots Bank, Kansas City, MO;
PeoplesChoice Credit Union, Saco, ME. (500);
Pinnacle Bank, NE;
Pinnacle Federal Credit Union, Edison, NJ;
Platte Valley National Bank, Scottsbluff, NE; (388)
Premier Bank, Dubuque, IA;
Provident Bank, Baltimore, MD;
Public Service Credit Union, Denver, CO;
Regions Financial Corp., Birmingham, AL;
Rivermark Credit Union, Portland, OR;
Simmons First National Corp., Pine Bluff, AR;
South Central Credit Union, Jackson, MI (650);
Sovereign Bank, Northeast U.S.;
Spokane Media Federal Credit Union, Spokane, WA; (330)
State Employee's Credit Union (SECU), Raleigh, NC; (60,000)
St. Mary's Bank, Manchester, NH;
Stockman Bank, Billings, MT;
Summit Federal Credit Union, Rochester, NY (500 cards);
Surrey Bank & Trust, Mount Airy, NC;
TD Bank, Portland, ME;
TD Bank North, Portland, ME;
The Bank of Fayetteville, Fayetteville AR;
The Bank of Guam, Territory of Guam;
The Central National Bank and Trust Company of Enid, Enid OK, (1600);
The Citizens Bank of Swainsboro, Swainsboro, GA;
Tinker Federal Credit Union, Enid, OK;
Triangle Credit Union, Nashua, NH;
TrustCo Bank Corp., Glenville, NY;
Trustmark Bank, Jackson, MS; (75,000)
Tulsa Teachers Credit Union, Tulsa, OK;
United Mississippi Bank, MS (200);
United Savings Credit Union, Fargo-Moorehead, ND, (450);
University of Wisconsin-Oshkosh Credit Union, Oshkosh, WI;
U.S. Bank, St. Louis, MO;
Valley Bank & Trust, Gering, NE (16).
Valley View Bank, Kansas City, MO;
Warren Federal Credit Union, Cheyenne, MT; (1,400)
Washington State Employees Credit Union, Olympia, WA (4,000)
Wells Fargo, Utah
Wells Federal Bank, Wells, MN; (160)
West Iowa Bank, West Bend, IA
Western Illinois Credit Union, Macomb, IL;
Wright-Patt Credit Union, Dayton, OH; (17,200)

Related articles by Zemanta:

• Credit Card Processor Says Some Data Was Stolen
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• Canadian Tire cancels credit cards after U.S. company's security breach
• Heartland sued over data breach
• Heartland reveal massive credit card scam
• Payment Processor Heartland Reports Breach

heartland breach, cards reissued, pin debit payments

RBA Gives PayPal Double Whammy

The Reserve Bank of Australia just gave PayPal (eBay) a double whammy.  The end result, is if you choose PayPal as a payment method in the land down under, the price you pay will be in the land of up and over what it's been in the past...  The second whammy is that the RBA is also making a move to prevent eBay from prohibiting customers from using cheaper payment methods on their site.

Reserve Bank gives the OK to surcharge for PayPal
by Stewart Carter - eCommerceReport.com

You’ll pay more if you choose to pay by PayPal. That’ll be the result of a Reserve Bank of Australia (RBA) initiative allowing Australian merchants to surcharge for PayPal transactions. Currently, PayPal rules prohibit businesses from recovering the extra costs of PayPal transactions by adding them on to the price.

But the RBA’s move is intended to get PayPal to abolish that rule, in much the same way as the RBA forced credit-card companies to accept surcharging.

And if that weren’t enough bad news for the eBay owned company, the RBA is also moving to stop eBay prohibiting customers using cheaper payment options.

The two moves were announced on the RBA’s website following a meeting of its Payment Systems Board under the heading “No-surcharge rules in PayPal.”

“Over recent months, the Board has received a number of comments on the no-surcharge and no-steering rules that apply to payments using the PayPal system as well as the mandated acceptance of PayPal on eBay’s auction site.”

Where no-surcharge and no-steering rules have existed in other systems, the Board has encouraged their removal on the grounds that these rules can diminish competition in the payments system.

Consistent with this, the Bank will shortly be holding discussions with PayPal with a view to seeking the removal of these rules.”

PayPal released a statement to eCommerce Report on behalf of PayPal CEO, Andrew Pipolo, pointing out that it couldn’t really say anything ahead of the talks with the RBA. “We do not intend to speculate, nor comment pre-emptively, on what the outcome of these discussions might be.” Pipolo’s statement also said PayPal would continue to be a good and co-operative corporate citizen. “PayPal will continue to cooperate with the Reserve Bank of Australia during discussions relating to PayPal’s no surcharging policy. 

continue reading

paypal, australia, pin debit

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Another Day Another Hack - FAA Breached

Washington Headquarters Press Release

For Immediate Release

Contact: Laura Brown
Phone: (202) 267-3883
FAA Notifies Employees of Personal Identity Breach

WASHINGTON, D.C. – The FAA today notified employees that an agency computer was illegally accessed and employee personal identity information was stolen electronically. All affected employees will receive individual letters to notify them about the breach.

The FAA is moving quickly to prevent any similar incidents and has identified immediate steps as well as longer-term measures to further protect personal information. The agency is also providing a toll-free number and information on the employee website for those who believe they may be affected by the breach.

Two of the 48 files on the breached computer server contained personal information about more than 45,000 FAA employees and retirees who were on the FAA’s rolls as of the first week of February 2006.

The server that was accessed was not connected to the operation of the air traffic control system or any other FAA operational system, and the FAA has no indication those systems have been compromised in any way.

Appropriate law enforcement agencies have been notified and are investigating the data theft.

Taobao - China eTransaction Volume up 131%

Taobao Shows Strong Ecommerce Growth in China Last Year - AuctionBytes.com - Ina Steiner

Taobao.com, China's largest online shopping marketplace for consumers in China, reported on Tuesday that its transaction volume (gross merchandise volume) reached RMB 99.96 billion (US$14.62 billion) in 2008, a 131 percent increase over the previous year.

Taobao's transaction volume for 2008 exceeded the sales volume of China's largest mass retailer, and equaled approximately 1% of China's total retail trade in 2008, according to statistics released by the Chinese government.

Taobao had over 1 million online merchants, and a total of 98 million registered users as of December 31, 2008, of which 48 percent were between the ages of 25 to 32, and 35 percent were between the ages of 16 to 24.  (continue reading)

taobao, ecommerce, homeatm

$37 Billion Savings if You PrePay?

I found the following Aite report to be interesting, especially in the wake of MasterCard's recent joint venture with Accor.  Allow me to provide a backgrounder.  A couple of days ago MasterCard and Accor Services, Europe's largest hotel chain, set up a joint venture to target Europe's fast growing prepaid market. 

MasterCard now hold a 33% stake in Accor's subsidiary, PrePay Technologies...which they acquired last year.  PrePay Technologies has issued more than 20 million pre-paid cards in the UK and holds a license to issue e-money in 17 European countries.  While Accor will continue to go after the corporate and public sector markets, it is believed that MasterCard will tout the pre-pay opportunity to member banks.  That's where it got interesting for me.

The problem that I see with offering a prepay opportunity to banks is simply  that banks make "way too much" money on overdraft charges (ODC) they derive from signature debit and checking accounts. 

A prepaid card would be declined, showing insufficient funds were available, the way debit cards originally did.  This would take a huge bite out of the $37 billion in overdraft, and ironically, overdraft "protection" charges. (ODP)   How many billion? Yes, I said 37 of those bigboys.

I get my data from a new study by management consulting firm Bretton Woods which found that banks and credit unions collected a staggering $37 billion in non-sufficient funds and overdraft fees in 2008.  This represents an increase of 97% over the past 3 years.  In fact, while I'm on the subject, I'll share some more data from that report.  It's amazing:  

• Bank and credit union income from non-sufficient funds (NSF) and overdraft program (ODP) fees exceed $37 billion.
• The national annual NSF cost per household with checking accounts is approximately $368.
• Active households pay $1,472 in annual NSF fees.
  (defined as the 20.2 million households with bank or credit union accounts)
• The average United States household with a banking account incurs 12.7 NSF fees per year.
• Bank and credit union data used in Bretton Woods’ modeling was determined from 1.28 billion separate check and electronic NSF items.

So why mess with a good thing?  Prepaid cards, as the Aite reports suggests, may be a "very credible" alternative to checking acccounts for consumers, make that..."consumme'rs. (Soups On!)  Banks are the real "consumers" here as they're the one's eating us alive with $37 billion worth of ODC.  It's okay...we'll bail 'em out, they've had our babyback for years. 

Certainly I would expect for banks to come up with new ways to nickle  and dime  us to death on a prepaid solution, but compared to $35 a pop, nickles and dimes are "insufficient funds" and won't add up to $37b.  So the question is can they craft a $37 billion dollar way to ream prepaid card users?  That 's going to be tougher.  Of course, if bank customers want to take a bite out of, or eliminate overdraft charges altogether,  they  can simply enter their PIN...which transforms the transaction into a real-time debit.

PIN Based transactions are the equivalent of saying to the banks..."No Soup for You!"    

Prepaid Debit Cards: A Credible Alternative to Checking Accounts

Aite Group reveals that at least 14% of bank customers would be better off using prepaid debit cards than checking accounts. 

Boston, MA, February 11, 2009 – A new report from Aite Group, LLC argues that prepaid debit cards represent a competitive threat to banks' checking account relationships. It also provides insights into how banks, prepaid debit card providers, payday lenders and other parties can take advantage of prepaid debit cards.

For years, banks in the United States have viewed unbanked and underbanked consumers as a promising segment they could address through traditional checking account relationships. Few banks have realized that new technology and financial products may actually render the checking account relationship less attractive to this customer segment. In fact, at least 14% of checking account holders would be better off switching to a prepaid debit card.  

"This is not just doom and gloom for banks," says Gwenn Bézard, research director with Aite Group and author of this report. "The most sophisticated among them could profit on the appeal of prepaid debit cards, as can other obvious stakeholders such as prepaid debit card marketers and payday lenders. For example, banks could rapidly gain market share by striking co-brand deals with leading prepaid debit card marketers that have a head-start in this race."

This 29-page Impact Report contains 24 figures. Clients of Aite Group's Retail Banking service can download the report by clicking on the icon to the right.

Related Aite Group Research:

• Debunking the Myths About the Unbanked and Underbanked
• Nine for '09: Opportunities and Challenges for Banks in 2009
• Branded Prepaid Card Issuing: The Issuers' Voice
• Prepaid Cards: The State of the Industry

Related articles by HomeATM Blog

• Get in the Loop (pindebit.blogspot.com)
• Pre-Loaded Benefit Cards Nickle And Dime Unemployed [Fees] (consumerist.com)
• Alternative Payments Continue Torrid Growth (pindebit.blogspot.com)

How to Hack an ATM

Use an "ATM" BOMB:

Finextra: Australian ATM explosion gang strike again

Australian police are appealing for information after a gang of thieves blew up a St George ATM and escaped with an undisclosed sum of money in the early hours in Sydney.

Witnesses have told police four men fled the scene in two cars, a silver/grey Audi and a black BMW station wagon.

The crime is the latest in a spate of explosive attacks on cash machines in Australia.

In November thieves blew up four St George Bank cash machines with acetylene gas in Sydney, successfully stealing money from one. Police say they are investigating reports of seven successful attacks dating back to July this year.

In December, police arrested a couple in connection with the explosion of a Bank of Queensland cash machine in the city of Brisbane.

The crimewave has prompted the formation of a special police task force and rewards of up to $150,000 for information leading to convictions.

homeatm, pin debit, payments

Data Security Summit Host Says Don't Type...Swipe!

ProPay, who by the way, also apparently believes you should be "Swiping instead of Typing" is hosting the 2009 Data Security Summit.

Here's ProPay's press release on the Summit.

Industry experts address payment trends at Data Security Summit

Orem, Utah, Feb. 10, 2009 -- ProPay is gathering the brightest minds in the digital transaction industry to educate attendees about the latest trends and best practices to protect sensitive customer data at the 2009 Data Security Summit on March 18-19, 2009, at the Snowbird Resort in Salt Lake City, Utah.

Headlining the Summit’s speakers are Bob Russo, General Manager, PCI Security Standards Council; Chris Mark, CPISM/A, CISSP, CIPP, Founder, Society of Payment Security Professionals; Dr. Heather Mark, CPISM, CISSP, CIPP, Executive Director, Society of Payment Security Professionals; and Michael Dortch, Founder and Managing Editor, DortchOnIT.com. Speakers will address the latest in PCI compliance, risk mitigation, security, and other relevant topics pertaining to the payment industry.

Bob Russo, General Manager, PCI Security Standards Council

Mr. Russo brings more than 25 years of high-tech business management, operations and security experience to the PCI Security Standards Council. Most recently, he served as the vice president of Commercial Sales for Secure Info, a provider of security, risk and compliance services and software. He was also a founder of a number of software and security companies including Network-1 Software & Technology and ATC Security, a security compliance company created to assess compliance of payment industry stakeholders, later acquired by Ambiron LLC.

Chris Mark, CPISM/A, CISSP, CIPP, Founder, Society of Payment Security Professionals

Chris is an experienced information security professional and recognized payment card industry security expert. Chris is a co-founder of The Aegenis Group and the Society of Payment Security Professionals. From 2007-2009, the Aegenis Group was the worldwide trainer for all Qualified Security Assessors (QSA) and trained over 2,800 QSA. Additionally, the company contracts with Visa Inc. to conduct PCI related training internationally to merchants and banks. Chris has conducted PCI and payment security training in over 10 countries on 5 different continents.

Dr. Heather Mark, CPISM, CISSP, CIPP, Executive Director, Society of Payment Security Professionals

Dr. Mark is an experienced information security and privacy professional that is both well known and respected within the Payment Services industry. Prior to joining Halcyon, Dr. Mark co-founded a Qualified Security Assessment Company and worked at various technology companies supporting PCI efforts. Dr. Mark helped to develop a variety of assessment methods and practices that assisted companies in achieving compliance in a cost-effective, timely manner.

Michael Dortch, Founder and Managing Editor, DortchOnIT.com

Michael Dortch is Founder and Managing Editor of DortchOnIT.com, and has been an IT industry analyst, consultant, evangelist, speaker, writer, and "information entrepreneur" for more than 30 years, focused on enabling and emerging technologies and their effects on business value. Before starting DortchOnIT.com, Michael was a Senior Research Analyst at Aberdeen Group, and Director of IT Infrastructure Management Strategies and Executive Editor for Robert Frances Group. Michael has worked with IT users and both established and start-up vendors to help them align their strategies with business goals. He has been widely quoted and is a frequent and popular speaker at industry events. He began his career in the 1970s at The Yankee Group after attending the Massachusetts Institute of Technology (M.I.T.). He lives and works in Santa Rosa, CA, approximately an hour north of San Francisco.

Representatives from the various card brands and payment industry companies, as well as experts from law enforcement agencies and the FBI will be on hand to network with attendees and talk about the latest from their businesses and organizations.

“The landscape of the payment industry is ever-changing and the need to educate the market on best practices and the latest technology to protect businesses is essential to the survival of every company,” said Greg Pesci, ProPay Executive Vice President of Business Strategy. “This Summit is a great opportunity to bring experts and non-experts together to educate each other on the trends in the market and the pains customers and businesses are experiencing in regards to digital transactions.”

For more information about the 2009 Data Security Summit and how to register, please visit www.propay.com/summit or e-mail Jennifer McClintock at events@propay.com.

About ProPay

Since 1997, ProPay has led the market in providing simple, safe and affordable credit card processing and electronic payment services for businesses ranging from the small, home-based entrepreneur to multi-billion-dollar enterprises.

ProPay understands the unique needs of these businesses and has created merchant services specifically for them. With ProPay, merchants can set up accounts online and begin accepting credit cards without buying special equipment or making long-term commitments or investments. ProPay leads out in educating merchants about how to reduce or eliminate the risk of touching or holding sensitive cardholder data. The company also leads the payments market in the development of secure end-to-end solutions for protecting sensitive data and of alternative payment options that significantly reduce business costs.

ProPay is a privately held company, headquartered in Orem, Utah. For information, visit www.propay.com/pressroom .

Source: Company press release.

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PayPal Says Don't Type...Swipe

I've been saying that for  about a year now, you know..."You Should Be SwipePIN instead of Typin'." 

Apparently PayPal, Magtek and Dell all agree as today they announced the new Magtek personal swiping device for use with PayPal.  You can buy it at Dell.

You may purchase the Magtek personal swiping device from PayPal here for $86.99 WITHOUT a PIN Pad. 

Or,  you can get ours WITH a PED (PIN Entry Device) which also enables you to carry out  a secure P2P (person to person) money transfer.  The HomeATM Slider can be yours for much less money.  One more thing...you don't have to download any software for our to work, which is not the case with the MagneSafe Secure Card Reader. 

Here's today's press release:

PayPal Virtual Terminal Safeguards Merchant Transactions with MagneSafe Secure Card Reader from MagTek

SEAL BEACH, Calif.  February 10, 2009 - MagTek®, Inc., a global leader in secure electronic payment technology, today announced that users of PayPal Virtual Terminal can save time and reduce errors by using the MagneSafe Mini secure card reader from MagTek. Designed to provide superior card data privacy as well as authentication for credit and debit card transactions, the MagneSafe Mini helps merchants avoid keying errors and speeds card transaction processing.

The MagneSafe Mini easy-to-use card reader plugs directly into a computer’s USB drive, and provides maximum security for all face-to-face transactions. The reader can be used anywhere there is a computer, Internet access, and a customer’s debit or credit card. With one quick swipe, the MagneSafe Mini reader captures the customer’s name, card number, expiration date, and card type and they are then all posted automatically to the merchant’s PayPal Virtual Terminal order form.

"PayPal Virtual Terminal is a powerful solution to help merchants expand their business, save money and deliver faster products and services for their customers, " said Doug Free, Vice President, Retail Business Unit for MagTek. "By using the MagneSafe Mini reader merchants can take the value of their Virtual Terminal services one step further with the assurance of encrypted data for enhanced security and PCI compliance."

Merchant benefits of the MagneSafe Mini secure card reader include:

• Increased data accuracy: By swiping credit and debit card information, instead of typing, merchants can avoid keying errors and speed up the credit card payment process.
• Assured security: Encryption provides increased security for credit card information and reduces risk relating to opportunity for stolen card data at PayPal merchant locations.
• PCI Compliance: The MagneSafe Mini secure card reader meets PCI DSS requirements for secure cardholder data encryption.

"Today’s online merchants are looking for ways to shorten transaction processing times without risking information accuracy," said Rahul Bhargava, senior director of merchant solutions at PayPal. "The MagneSafe Mini secure card reader, in combination with PayPal Virtual Terminal, is a great solution because it saves time, reduces errors and gives merchants confidence that their customers’ data is always safe and secure."

About the MagneSafe Mini Secure Card Reader

At just 100mm in length, the MagneSafe Mini secure card reader has been specifically designed to meet PCI DSS requirements to secure cardholder data via 3 DES DUKPT encryption. Self-powered through a USB port, the secure reader can be connected to any PC or terminal with a USB interface. The device features MagnePrint card authentication technology that enables secure transactions for magstripe documents including credit cards, debit cards, gift cards, ATM cards and ID cards.

Pricing and Availability

The MagneSafe Mini is available now by ordering direct from Dell. Pricing starts at $79.99 USD. For more information, please visit: www.paypal.com/vtswipe

About MagTek
Founded in 1972, MagTek, Inc. is the leading provider of technology that makes electronic transactions safer, speedier and more comfortable. With its secure card readers, dependable check scanners, instant card personalization, robust PIN management, and identity verification systems, the company’s products and components are used today in thousands of companies around the world. Every day at supermarkets, gas stations, banks and credit unions, restaurants, casinos and hotels, on airplanes and time clocks, in ATMs, kiosks and POS terminals you may not see the MagTek logo, but the odds are great that you are using one of its products. Based in Seal Beach, California, MagTek has sales offices throughout the United States, Europe, and Asia, with independent distributors in over 40 countries.

Source: Press Release

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CashEdge Executes $50 Million in Online Transfers

Bank Customers Transfer Nearly $50 Billion Online in 2008 Using CashEdge Intelligent Money Movement(TM) Products

Volume Up Over 32 Percent from 2007

NEW YORK, Feb. 10 /PRNewswire/ -- CashEdge Inc. (www.cashedge.com), the leader in Intelligent Money Movement(TM) products for financial institutions, announced today that in 2008, the Company executed nearly $50 Billion in online transfers, a more than 32 percent increase over 2007 volume. Furthermore, the Company reported an over 30 percent growth in the number of end users accessing its services, indicating a continued growth in user demand for online funds transfer services. The transfers were initiated through CashEdge's Intelligent Money Movement(TM) solutions that are currently in use at hundreds of leading financial institutions, including the majority of the nation's largest banks.

"This transaction volume and the significant increase in use of online funds transfer services demonstrate the demand in the market for solutions that enable consumers and small businesses to easily and safely move their money online," said Sanjeev Dheer, CEO, CashEdge. "With CashEdge's online transfer and payment products, including Me-to-Me Transfers and Third Party Transfers, financial institutions can meet this growing demand using solutions that are supported by industry-leading risk management tools, including fraud detection and prevention. As demand continues to grow, we expect to see additional transfer solutions - such as person-to-person payments - being offered by banks as well."

The growth in online transfers was also illustrated in the 2008 CashEdge Consumer Survey, which indicated that consumers are moving more money online and demanding additional funds transfer services, including the ability to transfer funds to their friends and family. In the survey, 88 percent of consumers polled expressed interest in direct account-to-account funds transfers to other people, such as friends and family, in lieu of cash or check, using account information provided by the recipient.

CashEdge's industry-leading products include TransferNow(R) for Consumers, TransferNow for Small Businesses and OpenNow(R)/FundNow(R) for new account opening and funding. The TransferNow for Consumers Product Suite includes Me-to-Me Transfers and Third Party Transfers, which enable financial institutions to offer their customers secure funds transfer services for inter-institution transfers between their own accounts or directly to third parties. The TransferNow for Small Businesses Product Suite is comprised of several offerings that can be used as either stand-alone services or as part of a cash management suite, including Small Business Invoicing and Payments, Employee Payments and Vendor Payments, and Small Business Me-to-Me Transfers.

All TransferNow modules leverage industry-leading risk management tools that satisfy all business, risk and compliance requirements, thus enabling safe and secure transfers between accounts held at over 23,000 banks, credit unions and brokerages via the ACH network.

To learn more about CashEdge's Intelligent Money Movement services, visit www.cashedge.com.

About CashEdge

CashEdge is the leader in Intelligent Money Movement(TM) services that enable financial institutions to engage customers in new ways. CashEdge's Intelligent Money Movement services provide a single point of access, through an online banking portal or mobile application, for multiple easy-to-use consumer and small business transfer routes. CashEdge's industry-leading products include OpenNow(R)/FundNow(R) for new account opening, TransferNow(R) for Consumers which includes Me-to-Me Transfers and Third Party Transfers, and TransferNow for Small Businesses which includes Invoicing and Customer Payments, Employee Payments and Vendor Payments, and Me-to-Me Transfers. These products are supported by industry-leading risk management capabilities that leverage comprehensive, proprietary technology, helping institutions mitigate risk and decrease fraud exposure.

CashEdge currently serves hundreds of leading financial institutions, including the majority of the nation's largest banks. The Company has offices in New York, Silicon Valley and India. For more information, visit www.cashedge.com.


SOURCE CashEdge Inc.

pin debit payments blog

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Less Than Half Strongly Support UAE's Move to Chip and PIN

Joanna Hartley writes for Arabian Business.com that a little less than half of those polled welcome the UAE's recent Chip and PIN move.

Poll shows 50% support chip and PIN move in UAE - Banking & Finance - ArabianBusiness.com

Almost half of all responders to a poll have said they think the new chip and PIN idea that is to be rolled out across the UAE is a great idea that will have a major impact on fraud.

Last week's announcement by the UAE Central Bank that all banks in the country will be required to move to chip and PIN technology called widespread debate, with some experts citing the move as useless against the type of fraud residents suffered last summer at the hands of international gangs.

However, Arabian Business’s online survey showed that 48.6 percent strongly welcomed the move, with just 10.4 percent thinking it would be a better to invest in more advanced biometric tests, such as eye scans, to stop fraud.

continue reading

Hacker Breaches Kapersky - Dark Reading

Hacker Lays Claim To Breaches Of Two Security Vendors' Websites

SQL injection attack conceded by Kaspersky U.S.; subsequent attack on BitDefender Portugal still awaiting confirmation
 

By Tim Wilson -DarkReading

A single Romanian hacker claims he has broken through the Website defenses of two prominent security vendors in an attempt to show vulnerabilities in their security.

Kaspersky, one of the industry's best-known antivirus and security software makers, today gave a press conference confirming that a Romanian hacker had launched an SQL injection attack on its newly implemented U.S. customer support site, exposing a potentially data-threatening vulnerability in its Website. The attacker did not publish any sensitive data, even though he could have gained access to it, Kaspersky said.


The hacker, known as "unu," claims to have launched a similar SQL injection attack on the Website of security vendor BitDefender in Portugal. "It seems Kaspersky aren't the only ones who need to secure their database. Bitdefender has the same problems," unu said in an online message. As of this posting, BitDefender had not confirmed whether unu's claims were accurate.

continue reading

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InterSwitch Introduces Africa's First Chip and PIN Card

InterSwitch introduces Africa’s first chip and PIN card

InterSwitch, Nigeria’s premier payment transactions switching company has launched the first African branded MasterCard MChip4 payment card brand into the vibrant e-payment market in Nigeria . This is in line with the Central Bank of Nigeria’s (CBN) directive which mandates all banks to convert all existing magnetic stripe cards to a more secure Chip and PIN platform by the end of 2009. The new product, Verve is accepted and being used across all available payment channels in Nigeria . Verve Cardholders can carry out payment transactions on over 11, 000 Point of Sale (PoS) terminals, 7, 300 Automated Teller Machines (ATMs), 200 Web merchants sites, and on 50, 000 mobile phones.

Mitchell Elegbe, chief executive officer (CEO) of InterSwitch, who spoke to newsmen at the verve media parley, noted that the CBNs directive is in the best interest of banks, merchants and cardholder as it is in tandem with global best practices.

This, he said, is because existing magnetic stripe cards have limited storage capabilities, offer little flexibility for business development and are easy to duplicate. He disclosed that the company has launched a campaign tagged “Get More Out of Life” to educate and enlighten Nigerians about the features of the verve card brand.


Elegbe explained that the Verve Chip and PIN card is specially designed by Nigerians for the world. Commenting on InterSwitch contribution to the development of the Nigerian e-payment space, Elegbe said: “Today, there are over 7, 300 ATMs on our network, over 12, 000 PoS terminals as at the last day of January, we have all the 24 banks in Nigeria connected to the switch while 19 state governments rely on the platform for the collection of internally generated revenue. There are over 28 million InterSwitch enabled cards active on the network as at today”.

He pointed out that despite the global switch to Chip and PIN cards the company and its partner banks in 2003 opted for the simple magnetic stripe technology because of its adaptability and cost at that point in time.

“Therefore, the next level for us is to begin to replace the 26 million cards out there with this new technology that is
more secure and customer friendly. After an extensive research and design that spans over two and the half years, we have come up a card that delivers more security features, more channels, more reward, more value to cardholders, banks and merchants”, he added. In terms of security, the Interswitch MD boasted that the company’s Chip and PIN smart card is one of the smartest cards around. “We have woven a number of security features and fraud management solutions incorporated into it. These fraud initiatives were developed to address various types of fraud which have been observed in the last couple of years.”

They include: Fraud Aware (this is the Cardholder Awareness initiative – aimed at educating cardholders about the importance of safeguarding their PINs), Fraud Insure – card fraud Insurance, Money Guard – SMS alert and response system.Also, Data Guard – this ensures that international standards such as PCI DSS standards, ISO 27001, Identity Guard – a token for two-factor authentication, Chip Authentication Program (CAP), Fraud Watch – a portal and email for fraud reporting.

Author of this article: Ben Uzor Jr

January E-Commerce Shows Some Bright Spots

Order dollar value up

January was a month of casual browsing, with limited purchases at online retailers, according to a report from marketing firm Coremetrics.

The number of online sessions in which consumers browsed a Web site, viewing at least one product page, stayed largely flat compared to December 2008. The number of sessions in which consumers actually completed an order was down 21 percent.

The only categories that saw increases were intimate apparel (up 5.5%) and office supplies retailers (up 8%). Specialty retailers reported a 56 percent drop in online orders, the largest decrease in any retail category tracked by Coremetrics.

"Our data suggest that consumers are very nervous about the economy and that an economic recovery fueled in large part by online consumer spending has not happened yet," said John Squire, chief strategy officer for Coremetrics. (pictured on right)

"It isn't all doom and gloom, however. Some categories are actually doing a good job of attracting consumers. And when we look at the average number of items per online order, we see that those consumers who actually decided to buy online bought more items for a higher total dollar amount."

Compared to December 2008, the average number of items that consumers purchased per order increased 23 percent in the online retail category as a whole. The average dollar value of those orders also rose by 8 percent.

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Mazooma Launches Alternative Payment

Here's an article from Digital Transaction News on the launch of Mazzoma, which purports to allow consumers to pay for online purchases in real time directly from their bank. 

A downward-spiraling economy is accelerating what had already been a rapidly developing trend for startups to introduce online payment methods as alternatives to bank cards. Indeed, one such company, Miami-based Mazooma Inc., launched a cash-based commercial service on Tuesday with the premise that consumers are looking for ways to buy online without using credit. “It’s a Zeitgeist product right now,” says Sean Kelly, chief executive of Mazooma and a former retail entrepreneur, referring to what he sees as a consumer trend toward cash and frugality. “If you don’t have the money you don’t want to spend it [on credit].”

Kelly says 12-employee Mazooma currently processes for seven online sellers, but expects to bring on another 20 to 25 that are in the “integration queue.” Helping in the effort to attract merchants is Mazooma’s inclusion in the widely used Centinel platform managed by CardinalCommerce Corp. The platform, which features a number of alternative-payment and online-authentication products, allows client merchants to more readily adopt new payment methods. Mazooma is seeking more such deals with gateways and third-party processors, Kelly says.

But Mazooma is entering a crowded market that seems to attract more companies by the week. Just last week, Amazon.com Inc. launched the commercial version of its Flexible Payments Service, a product that allows wide-ranging customization by merchant developers and handles payments through multiple channels (Digital Transactions News, Feb. 5). And this week, Noca Inc., a startup founded and run by a former Visa Inc. executive, announced its beta version of a service that relies on the automated clearing house network.

The challenge for Mazooma, as well as for its many competitors, is getting consumers to change ingrained behavior patterns while online. “From a branding and behavior-change perspective, it’s going to be difficult in the early going,” says Bruce Cundiff, director of payment research and consulting at Pleasanton, Calif.-based Javelin Strategy & Research.

Mazooma is betting on more than the sour economy to attract consumers and merchants. Its service allows consumers to use their online-banking programs to pay merchants by authorizing a transfer from their demand deposit accounts to a holding account maintained by Mazooma. The company then wires payments to merchants, with next-day settlement. Transactions are authorized and authenticated through the online-banking system used by the consumer, but Mazooma doesn’t offer a funds guarantee to the merchant. “It’s extremely difficult for the consumer to repudiate [these transactions],” Kelly says. “It’s not guaranteed, but it’s as close as possible without being guaranteed.” The fee to the merchant starts at 1% for very high-volume retailers and goes up from there. A merchant in the range of $30 million to $40 million in annual sales would pay about 1.5% plus 20 cents, Kelly says.

To make the system work with as many consumer accounts as possible from the start, Mazooma offers connections to 14 major banks representing what Kelly says amounts to 70% of the country’s checking accounts. “And it’s growing,” he says. Unlike other payments systems that rely on online-banking programs—for example, the Secure Vault Payments product now in a pilot sponsored by NACHA, the regulator of the ACH—Mazooma’s service establishes no formal ties to the banks. Instead, it uses consumer log-in credentials to initiate an automated session with the chosen bank program to verify identity and funds availability. “We act as an intelligent agent for the consumer,” says Kelly. Mazooma’s servers, he says, do not store these credentials. “There’s nothing to breach,” Kelly says. As a result, Mazooma is designed for spontaneous online transactions rather than functions like recurring bill payments

To use Mazooma, consumers at checkout click on a Mazooma button with the tag line, “Would you like to pay directly from your bank account?” First-time users are asked to fill in five fields of information, including name, address, and date of birth, and to create a password. After that, Mazooma handles the log in to consumer accounts in the background and returns a confirmation to the consumer and merchant. Merchants must integrate a Mazooma application programming interface, a process Kelly says can take five hours, more for some merchants. With the system in place, consumers are briefly redirected to Mazooma’s servers but believe they are on the merchant site throughout the session.

The “intelligent agent” model may make for a smooth consumer experience, but it could present complications with consumers worried about malware that could enable links that appear to be legitimate but aren’t. The Mazooma model is “a double-edge sword,” says Cundiff. “How do I know I’m really connected to [my bank] right now? I’m popping my log-in in there, and I don’t know what I’m popping it into.”

Still, Kelly says Mazooma’s timing may have been just right. “The credit crisis is terrible, but we’ve had a ton of attention over the past few months,” he says. “Mazooma is a great product for the time.”

mazooma, homeatm, pin debit, e-commerce, alternative payments