Wednesday, February 9, 2011

Visa to Acquire PlaySpan



SAN FRANCISCO--(BUSINESS WIRE)--Visa Inc. (NYSE: V) today announced an agreement to acquire PlaySpan Inc., a privately held company whose payments platform handles transactions for digital goods in online games, digital media and social networks around the world. The acquisition of PlaySpan complements Visa’s 2010 CyberSource acquisition and extends the company’s capabilities into one of the fastest-growing segments of eCommerce – digital and mobile commerce.
PlaySpan provides a Monetization-as-a-Service™ platform that allows merchants to monetize their content using a broad suite of payment and commerce-related solutions in fraud and risk management, analytics, merchandizing and global payment connectivity. Merchants use PlaySpan’s technology to enable their consumers to make safe and convenient purchases online for items such as game credits, premium memberships and digital goods.
Last year, global eCommerce sales reached an estimated $948 billion1 and they remain a significant growth opportunity for Visa. Approximately 45 percent2 of U.S. online spend takes place on Visa’s network today. For Visa’s fiscal first quarter 2011, the company reported 25 percent year-over-year growth in eCommerce payment volumes globally.
Within the eCommerce category, PlaySpan is a leader in the relatively new segment of digital goods, which generated an estimated $25 billion in consumer spending globally in 2010, a figure expected to reach $280 billion by 20143.
Visa will pay approximately $190 million in cash, plus additional consideration for performance milestones. PlaySpan is based in Santa Clara, California. The acquisition is expected to be completed in Visa's fiscal second quarter 2011, pending satisfaction of customary closing conditions including regulatory approvals. The acquisition is expected to be slightly dilutive to Visa’s earnings per share in its fiscal year 2011 ending September 30, 2011.
PlaySpan is backed by top-tier venture funds including Easton Capital, Menlo Ventures, Novel TMT Ventures, STIC Investments, Silicon Valley Bank Capital, Softbank China & India, TimeWarner Investments, Vodafone Ventures and GE Asset Management.


About Visa
Visa is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable digital currency. Underpinning digital currency is one of the world’s most advanced processing networks—VisaNet—that is capable of handling more than 20,000 transaction messages a second, with fraud protection for consumers and guaranteed payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa’s innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, ahead of time with prepaid or later with credit products. For more information, visitwww.corporate.visa.com.
About PlaySpan
PlaySpan is the trusted partner in global monetization solutions for leading publishers and developers of digital media, online games, mobile apps and social networks. Its patent-pending in-game digital goods commerce and Monetization-as-a-Service (MaaS)™ platform enables publishers and developers to generate new revenues, acquire new users, and extend the loyalty of existing users.
It provides a global payments solution through its UltimatePay product, which enables users to make safe, convenient and friendly in-app purchases using over 85 global payment methods in 180 countries. UltimatePay includes PlaySpan's Ultimate Game Card®, the #1 selling multi-game prepaid card, available in more than 50,000 retail locations across North America and a growing list of countries worldwide.
PlaySpan is headquartered in Silicon Valley, with offices in Ohio, Virginia, and Mumbai. Investors include Easton Capital, Menlo Ventures, Novel TMT Ventures, Silicon Valley Bank Capital, STIC, Softbank, Vodafone and GE Asset Management. The company has won over 13 awards during the past three years. It was honored as one of the 2010 OnMedia Top 100 and AlwaysOn Global 250, its CEO won the 2010 E&Y Entrepreneur of Year Award for Northern California, and it was named to Business Insider’s Digital 100 for 2010.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by the term “expected” and similar references to the future. Examples of such forward-looking statements include, but are not limited to, the timing of the completion of the acquisition and its prospective dilutive effect on Visa’s earnings per share. By their nature, forward-looking statements: (i) speak only as of the date they are made, (ii) are neither statements of historical fact nor guarantees of future performance and (iii) are subject to risks, uncertainties, assumptions and changes in circumstances that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from those forward-looking statements because of a variety of factors, including the pace of regulatory approval, the risk that the new business will not be successfully integrated with Visa's, the costs associated with the acquisition, slowed growth of eCommerce and the other factors discussed under the heading "Risk Factors" in our most recent Annual Report on Form 10-K and our most recent Quarterly Report on Form 10-Q. You should not place undue reliance on such statements. Unless required to do so by law, we do not intend to update or revise any forward-looking statement because of new information or future developments or otherwise.
1 JP Morgan Chase Research; Electronic Banking Options, Mobile Payment Forecast 2010 - 2014, August 10, 2010
2 comScore Q4 2010 data
3 PwC Global entertainment and media outlooks 2010-2014; Forrester Research Forecast

Contacts

Visa Inc.
Will Valentine, 415-932-2564
globalmedia@visa.com
Permalink: http://www.businesswire.com/news/home/20110209006077/en/Visa-Acquire-PlaySpan
www.ePINDebit.com www.e-PINDebit.com www.iPINDebit.com www.PINDebit.mobi
Related articles
Enhanced by Zemanta
Posted by at

First Data Releases January 2011 SpendTrend™



011 Off to a Good Start; Consumer Credit Utilization Bounced Back in January

ATLANTA--(BUSINESS WIRE)--First Data Corporation, a global leader in electronic commerce and payment processing, today released its First Data SpendTrend™ analysis for the full month of January 2011 compared to January 2010. SpendTrend tracks same-store consumer spending by credit, signature debit, PIN debit, EBT cards and checks at U.S. merchant locations.
“Consumer spending during the fourth quarter of 2010 was the strongest in nearly five years, and the momentum from the strong holiday season carried over into January”
As consumer confidence strengthened, more consumers opted to pay with credit cards in January. Transaction growth on credit cards was at a 13-month high in January and year-over-year credit dollar volume growth was the second highest in over a year. Total revolving credit balances increased in December for the first time in over two years and likely increased in January.
Across all card types, January’s total dollar volume growth increased 7.4% year-over-year, up from December’s growth of 6.5%. Transaction growth increased 8.3% in January, an improvement from December’s growth of 7.6%. Increased consumer spending in late 2010 carried over into January with help from payroll tax reductions that took effect Jan 1, 2011 and an improving employment outlook.
Average ticket growth declined -0.8% on a year-over-year basis, although this was a slight improvement from December’s average ticket decline of -1.0%. Most industries were impacted by declining average tickets as consumers continued to be price-conscious and look for bargains.
For the hotel industry, transaction growth was 11.5% and dollar volume growth was 12.5% in January, the largest increases in over a year. Business travel rebounded in January.
“Consumer spending during the fourth quarter of 2010 was the strongest in nearly five years, and the momentum from the strong holiday season carried over into January,” said Silvio Tavares, senior vice president and division manager of First Data Information and Analytics Services.
Jan. Transaction Growth
  
CHANGE
  
Jan. Dollar Volume Growth
  
CHANGE
Credit+5.9%Credit+7.2%
Signature Debit+10.0%Signature Debit+9.7%
PIN Debit+7.6%PIN Debit+5.4%
Check-13.7%Check-10.4%
 
Note: All transactions are same-store growth.
For more information on First Data SpendTrend, visit www.firstdata.com/infoanalytics or call SpendTrend Customer Care at 800-430-0169. A supplementary podcast including further analysis of the SpendTrend January 2011 report is at http://www.firstdata.com/demos/spendtrend/SpendTrend_Jan2011.wmv.
To participate in the SpendTrend conversation, please follow First Data at http://twitter.com/FirstData and join us at http://www.facebook.com/FirstData
Around the world, every second of every day, First Data makes payment transactions secure, fast and easy for merchants, financial institutions and their customers. First Data leverages its vast product portfolio and expertise to drive customer revenue and profitability. Whether the choice of payment is by debit or credit card, gift card, check or mobile phone, online or at the checkout counter, First Data takes every opportunity to go beyond the transaction.
First Data SpendTrend, a macro-economic indicator, is based on aggregate same-store sales activity in the First Data Point of Sale Network. First Data SpendTrend does not represent First Data’s financial performance.

Contacts

First Data
Elizabeth Grice, 303-967-8526
elizabeth.grice@firstdata.com
Permalink: http://www.businesswire.com/news/home/20110209006046/en/Data-Releases-January-2011-SpendTrend%E2%84%A2
www.ePINDebit.com www.e-PINDebit.com www.iPINDebit.com www.PINDebit.mobi
Posted by at

AnywhereCommerce Announces PCI PED 2.1 Certification for its New Rover POS

MONTREAL, Feb 7, 2011 /PRNewswire/ -- 


AnywhereCommerce, a division of HomeATM, a leading provider of innovative payment solutions, announces that its handheld Rover POS is now PCI PED 2.1 certified.  Ensuring the highest level of security, Rover offers end-to-end encryption.


Already CE, FCC approved, the new Rover device features 10 numeric keys keypad, and Magstripe card reader. Ensuring the highest level of security, Rover is compatible with iOS, Android, RIM, Symbian, Windows, and Linux operating systems.


Offering end-to-end encryption, the new Rover PoS is compact and measures 3.5 inches long x 1.5 inches wide. It also provided with USB, plug-n-play / DTMF ear-jack audio port cable.
To achieve certification for PCI PIN Transaction Security (PTS) 2.1 requirements, the payment security standard formerly known as PCI PED, the device under observation has to meet the minimum acceptable criteria for the Payment Card Industry (PCI) set forth by PCI security standards council.
This major certification is specifically targeted for AnywhereCommerce's line-busting, mCommerce and field service merchants who want to accept "card present" credit card and PIN debit transactions.  AnywhereCommerce offers a bundled suite of hardware, software apps and processing capability for merchants and direct sellers.  


Rover was designed and built as a universal and ubiquitous payment instrument which seamlessly interfaces with multiple devices including; Apple (iPad, iTouch, and iPhone), Samsung (Galaxy, Tab), BlackBerry, Motorola and all tablet products. Rover crosses a full breadth of operating systems including; iOS, Android, RIM, Symbian, Windows, and Linux.  Rover is compact, measuring 3.5 inches long x 1.5 inches wide, and includes a USB to audio port cable.
First shipments are set to begin in March 2011 to a national retailer and ISO channels.
About AnywhereCommerce-HomeATM
AnywhereCommerce-HomeATM is a global eCommerce and mCommerce payments technology engineering and solutions provider with patented and proprietary suites of hardware and software services for secure online and mobile card present credit card and PIN debit transactions.  HomeATM's universal  "aCommerce" platform is ideal for eCommerce, mCommerce, P2P, retail line-busting as well as traditional field services such as repairman, delivery or taxi services.  HomeATM's PCI 2.1 certified PED and bank grade secure end–to-end ecosystem provides greater security, reliability, convenience and return on investment for consumers, merchants, networks, issuers and acquirers.
SOURCE AnywhereCommerce, a division of HomeATM
Back to top
www.ePINDebit.com www.e-PINDebit.com www.iPINDebit.com www.PINDebit.mobi
Enhanced by Zemanta
Posted by at

ChargeSmart Announces Successful 2010


Year characterized by sustained increases in revenues, company growth
SAN FRANCISCO--(BUSINESS WIRE)--ChargeSmart, an alternative payment solutions provider enabling card acceptance at no cost to billers, announced its 2010 company performance metrics, demonstrating sustained growth in terms of transaction volumes, revenues and introductions of new payment programs to the industry.
ChargeSmart
“Our company’s growth over the past year reflects how modern consumers are increasingly using online channels to pay for items such as utility bills or auto loans”
Last year, ChargeSmart increased transaction volume by more than 400 percent -- supporting growing user demand for new ways to make electronic payments – and now serves more than 300,000 customers nationwide. Much of this growth can be attributed to newly added features and flexibility, such as ChargeSmart’s recurring payment program.
In addition, the company significantly increased staffing levels in its customer service centers (which are exclusively based in the U.S.); grew its established channel partner network in the payments, utilities, auto finance, cards/collections and mortgage industries; and implemented improved fraud screening procedures to its system. ChargeSmart also launched a newly redesigned blog, offering helpful personal finance tips and advice to customers, which can be found at http://blog.chargesmart.com/.
“Our company’s growth over the past year reflects how modern consumers are increasingly using online channels to pay for items such as utility bills or auto loans,” said Tim Brinkman, CEO of ChargeSmart. “By eliminating the expensive interchange fees and technical challenges commonly associated with card acceptance, we allow our biller partners to more easily meet customer demand for a variety of payment options without having to incur the typical associated costs.”
About ChargeSmart
Founded in 2008, San Francisco-based ChargeSmart is an alternative payment solution enabling card acceptance at no cost to the biller, allowing businesses to meet their customers’ card payment preferences without the expensive fees and technical challenges associated with traditional card acceptance programs. For more information, visit the company's website athttp://corp.chargesmart.com/index.html.

Contacts

For ChargeSmart
Sarah Wroble, 678-781-7236
Permalink: http://www.businesswire.com/news/home/20110209006072/en/ChargeSmart-Announces-Successful-2010
www.ePINDebit.com www.e-PINDebit.com www.iPINDebit.com www.PINDebit.mobi
Posted by at

Sage Launches New Mobile Payments Product, Says 'No' to Mobile Processing Fees


Feb 07, 2011 10:06 ET

Turns 400+ Mobile Phones and Tablets Into Secure Payment Terminals, Will Integrate With Many Business Management Systems

MCLEAN, VA--(Marketwire - February 7, 2011) - Small and midsized businesses (SMBs) can now cost effectively and securely process mobile payments, with no additional transaction fee surcharges and planned seamless integration to a wide range of business management systems.
Sage Payment Solutions, the payments division for Sage North America, today announced general availability for Sage Mobile Payments. The Payment Card Industry (PCI) compliant mobile payments product comes bundled with a Sage merchant account to allow SMBs to expand their payment options by accepting credit and debit cards on 400+ types of mobile phones and computing devices, across all major wireless carriers. Sage Payment Solutions is offering Sage Mobile Payments for a nominal set-up fee, a monthly fee as low as $10.95, and no incremental mobile processing or transaction fees. The product is also available with an optional, end-to-end encrypted card reader (card swiper).

"SMBs need to look at total cost of ownership when it comes to selecting a mobile payments solution," said Greg Hammermaster, president of Sage Payment Solutions. "Some competing mobile payments offerings add 1 percent plus upwards of 37 cents to the processing fees, which can easily turn into well over $130 in extra fees for every $10,000 in credit card volume. While this pricing is good for individuals that don't process a lot of credit card transactions, it can be quite costly for businesses using their mobile device to process credit cards on a regular basis."
Sage Payment Solutions believes that the most cost-effective mobile payments offering for an SMB customer consists of a reasonable monthly fee and no additional transaction fee surcharges. "In the end, we don't view the mobile device as a profit center," said Hammermaster. "Mobile payments is an important solution in our suite to help customers expand their sales channels and generate revenues."
Sage Mobile Payments is available with an optional card reader (card swiper), with end-to-end encryption from the card reader device to the application. "End-to-end encryption for any payment transaction is now a requirement in the business community, and Sage Payment Solutions is committed to meeting that demand," said Hammermaster.
Sage Mobile Payments is PCI compliant, and adheres to the highest possible standards in the payment industry. All customer data flowing through Sage Mobile Payments is encrypted before it leaves a customer's cell phone; no personal data is retained on the phone or mobile computing device.
Sage Mobile Payments will soon seamlessly integrate to Sage Exchange, a secure, Payment Card Industry (PCI) certified payments platform that can automatically update a numerous Sage-developed accounting, enterprise resource planning (ERP), fundraising, medical practice management, and billing and time tracking systems with payments data to help eliminate the cost, hassle, and inaccuracy associated with manual data entry. Sage Exchange also integrates with a number of third-party business management products and services.
The SMB Group, a research firm focused exclusively on researching and analyzing the highly fragmented SMB market, is currently conducting a Small and Medium (SMB) Business Payment Solutions Study. Preliminary data from that study shows that 3 percent of SMBs accept mobile payments today, and suggests that this number will increase to 7 percent in the next 12 months, and 16 percent by the end of 2012.
"A business of virtually any size can benefit from the ability to process mobile payments," said Sanjeev Aggarwal, founder and partner of The SMB Group. "From larger companies with employees in the field, to micro-businesses exhibiting at trade fairs, all need to process payments and do business on-the-go. Sage Payment Solutions seems to have figured out that mobile payment products are business tools, not gadgets. The company is providing small and midsized businesses with an affordable solution, without charging a premium for using it."
As announced in October 2010, Sage Payment Solutions has partnered with ROAM Data, an industry leader in mobile commerce solutions, to bring Sage Mobile Payments to market. The product works with Apple's iPhone and iPad, Motorola's DROID phones, and Research in Motion's BlackBerry, plus hundreds of other mobile devices. Using Sage Mobile Payments, businesses and organizations can:
  • Quickly and securely process credit and debit card orders, with real-time authorization;
  • Use an optional low-cost, secure card reader;
  • Log cash orders, download reports online, and email receipts to their customers;
  • Rapidly change applications or add features to mobile apps that may benefit them; and
  • Experience seamless integration with their Sage accounting, ERP, fundraising products, plus other third-party products.
Pricing and AvailabilitySage Mobile Payments is currently available for U.S. businesses and organizations with a Sage Payment Solutions merchant account. Sage Mobile Payments is being offered for a nominal set-up fee, a monthly fee as low as $10.95, and no incremental mobile processing or transaction fees.
Additional InformationFor more information on Sage Mobile Payments, please visit www.sagemobilepayments.com or call 800-652-2370.
About Sage Payment SolutionsSage Payment Solutions, the payments division for Sage North America, has been providing businesses and organizations with electronic payment systems for more than 20 years. The company makes electronic payment processing easy for more than 155,000 merchants, allowing them to accept multiple forms of payment, including credit and debit cards, electronic checks, Check21, gift and loyalty cards, and automatic recurring payment. Sage Payment Solutions provides a wide range of secure standalone and integrated payment processing solutions. Sage Exchange, its PA-DSS certified payments platform, integrates with many Sage software products to maximize the value of customers' business systems with automatically updated credit and debit card transaction information. Future Sage Exchange releases will offer additional integrated payment capabilities, including advanced point-of-sale (POS) device integration, payment origination solutions, and cash management applications. For more information about Sage Payment Solutions, please call 800-261-0240, or visit www.sagepayments.com.
About Sage North AmericaSage North America is part of The Sage Group plc, a leading global supplier of business management software and services. Sage North America employs 4,000 people and supports 3.2 million small and midsize business customers. The Sage Group plc, formed in 1981, was floated on the London Stock Exchange in 1989 and now employs 13,400 people and supports 6.3 million customers worldwide. For more information, please visit the website atwww.sagenorthamerica.com.
Press Contact:Cynthia Sutton
Sage North America
(703) 793-2700 x 3032
cynthia.sutton@sage.com


www.ePINDebit.com www.e-PINDebit.com www.iPINDebit.com www.PINDebit.mobi
Posted by at

Tuesday, February 8, 2011

Electronic Funds Transfer Association Launches Information Portal on Federal Reserve Debit Card Rules



EFTA website provides information on Durbin Interchange Amendment and proposed Federal Reserve debit card regulations and interchange fees

FAIRFAX, Va.--(BUSINESS WIRE)--The Electronic Funds Transfer Association has launched an informational website to provide public information on issues surrounding the implementation of the Federal Reserve’s proposed new regulations governing debit card interchange fees. The new rules were mandated by the Durbin Interchange Amendment, part of 2010’s Wall Street Reform and Consumer Protection Act.
http://www.efta.org
“could force the biggest restructuring of the electronic payments industry in 30 years”
www.durbininterchangeamendment.org is designed to provide news, opinions and analysis on those issues that are critical to understanding the changes that will result from the law including the Fed’s effort to cap debit card interchange fees.
Debit card interchange fees are what banks charge retailers for authorizing consumer debit card payments.
The site provides access to a library of information related to the Federal Reserve’s proposed cap on debit interchange fees, as well as a blog and commentary providing opinions and analysis of the issue.
The new Fed interchange fee rules “could force the biggest restructuring of the electronic payments industry in 30 years,” according to Kurt Helwig, president and CEO of the Electronic Funds Transfer Association. “The purpose of the Durbin Interchange Amendment site is to provide one more tool for organizations to understand the implications of that restructuring and to help manage it.”
The Federal Reserve is currently accepting comments on its proposed regulations covering debit card interchange fees, which were unveiled on December 16. Public comment is due no later than February 22. The new rules are scheduled to be completed by April 21 and go into effect July 21.
About the Electronic Funds Transfer Association
The Electronic Funds Transfer Association is a leading trade association for organizations involved in electronic payments or commerce. Its mission is to inform and educate the public on issues of importance to the electronic payments industry and to objectively promote the adoption of electronic payments and commerce.

Contacts

for Electronic Funds Transfer Association
Chaddsford Planning Associates, LLC
Bob Bucceri, 610-918-1161
Permalink: http://www.businesswire.com/news/home/20110208006639/en/Electronic-Funds-Transfer-Association-Launches-Information-Portal
www.ePINDebit.com www.e-PINDebit.com www.iPINDebit.com www.PINDebit.mobi
Related articles
Enhanced by Zemanta
Posted by at

MasterCard BOD Announces .15 cent Quarterly Dividend

MasterCardImage via Wikipedia

MasterCard Board of Directors Announces Regular Quarterly Dividend

PURCHASE, N.Y.--(BUSINESS WIRE)--MasterCard Incorporated (NYSE: MA) today announced that its Board of Directors has declared a quarterly cash dividend to holders of shares of its Class A common stock and Class B common stock. The cash dividend of 15 cents per share will be paid on May 9, 2011 to holders of record of its Class A common stock and Class B common stock as of April 8, 2011.
Additionally, the company announced that its annual meeting of stockholders will take place at its corporate headquarters on June 7, 2011.
About MasterCard Incorporated
As a leading global payments company, MasterCard Incorporated prides itself on being at the heart of commerce, helping to make life easier and more efficient for everyone, everywhere. MasterCard serves as a franchisor, processor and advisor to the payments industry, and makes commerce happen by providing a critical economic link among financial institutions, governments, businesses, merchants, and cardholders worldwide. In 2010, $2.7 trillion in gross dollar volume was generated on its products by consumers around the world. Powered by the MasterCard Worldwide Network – the fastest payment processing network in the world – MasterCard processes over 23 billion transactions each year and has the capacity to handle 140 million transactions per hour, with an average network response time of 140 milliseconds and with 99.99 percent reliability. MasterCard advances global commerce through its family of brands, including MasterCard®, Maestro®, and Cirrus®; its suite of core products such as credit, debit, and prepaid; and its innovative platforms and functionalities, such as MasterCard PayPass™ and MasterCard inControl™. MasterCard serves consumers, governments, and businesses in more than 210 countries and territories. For more information, please visit us at www.mastercard.com.

Contacts

MasterCard Incorporated
Investor Relations:
Barbara Gasper, 914-249-4565
Investor_Relations@mastercard.com
or
Media Relations:
Jennifer Stalzer, 914-249-5325
Jennifer_Stalzer@mastercard.com
Permalink: http://www.businesswire.com/news/home/20110208006674/en/MasterCard-Board-Directors-Announces-Regular-Quarterly-Dividend

www.ePINDebit.com www.e-PINDebit.com www.iPINDebit.com www.PINDebit.mobi
Enhanced by Zemanta
Posted by at

Third of European Computers Infected by Virus or Trojans

Third of European Computers Infected by Virus or Trojans
(from cellular-news at 7-2-2011)
Across the 27 countries that make up the European Union, nearly a third (31%) of computers connected to the internet were infected by a computer virus or similar problem, according to Eurostat, the statistical office of the European Union. The highest shares of internet users who caught a virus or other computer infection were found in Bulgaria (58%), Malta (50%), Slovakia (47%), Hungary (46%) and Italy (45%), and the lowest in Austria (14%), Ireland (15%), Finland (20%) and Germany (22%).... read more»
www.ePINDebit.com www.e-PINDebit.com www.iPINDebit.com www.PINDebit.mobi
Posted by at

Identity Fraud Fell 28 Percent in 2010 According to New Javelin Strategy & Research Report

 
“Friendly Fraud” and Consumer Costs on the Rise; Non-Credit Card and New Account Fraud Also Increased Findings Underscore Need for Continued Vigilance
SAN FRANCISCO--(BUSINESS WIRE)--The 2011 Identity Survey Report, released today by Javelin Strategy & Research (www.javelinstrategy.com), reports that in 2010 the number of identity fraud victims decreased by 28 percent to 8.1 million adults in the United States, three million fewer victims than the prior year. Total annual fraud decreased from $56 billion to $37 billion, the smallest amount in the eight years of the study. While overall fraud declined, consumer out-of-pocket costs rose significantly, mainly due to the types of fraud that were successfully perpetrated and an increase in “friendly fraud.”
“The financial services industry, businesses and law enforcement have been working harder than ever to crack down on fraud and to educate consumers about how they can protect themselves, and this year’s study clearly indicates these efforts are having a positive impact”
Now in its eighth consecutive year, the comprehensive survey is independently produced by Javelin Strategy & Research and sponsored byFiserv, Intersections Inc. and Wells Fargo & Company, companies dedicated to consumer fraud prevention and education. It is the nation’s longest-running study of identity fraud, with 37,929 respondents over the past eight years. Identity fraud is defined as the unauthorized use of another person’s personal information to achieve illicit financial gain. From September through November of 2010, 5,004 telephone interviews were conducted with U.S. consumers to identify important findings about the impact of fraud and to uncover areas of progress and areas in which consumers must exercise continued vigilance.
“Identity fraud underwent a marked decline and shift over the past year. This great news is a testament to the significant efforts businesses, the financial services industry and government agencies are making to educate consumers, protect data, and prevent and resolve identity fraud,” said James Van Dyke, president and founder of Javelin Strategy & Research. “Economic conditions also appear to have contributed to this year-over-year decline, as well as increased security measures and some significant law enforcement successes. However, the rise in out-of-pocket costs carries a warning. Consumers cannot put their finances on autopilot or ignore important safeguards. Simple safeguards may dramatically reduce fraud risk, such as frequently monitoring banking, credit and other financial activities, securing computers and paper records, and activating electronic alerts to help prevent fraud and address the situation quickly when it occurs.”
Key Survey Findings
The survey found five overall fraud trends:
  • Overall identity fraud incidents decreased in the United States in 2010—The number of identity fraud incidents decreased by 28 percent over the past year, which brought them down to levels not seen since 2007. The mean fraud amount per victim declined from $4,991 in 2009 to $4,607. One likely contributing factor was the significant drop in reported data breaches according to industry reports: 404 in 2010 with 26 million records exposed, compared to 604 in 2009 with 221 million records exposed.
  • Consumer fraud costs increased in 2010—While fraud incidents decreased, the mean consumer out-of-pocket cost due to identity fraud increased 63 percent from $387 in 2009 to $631 per incident in 2010. This may be attributable to changes in the types of fraud perpetrated in 2010, including new account and debit card fraud, highlighting the need for continued consumer vigilance. Consumer fraud costs include costs incurred by the victim towards payoff of any fraudulent debt as well as fees (legal or otherwise) to resolve fraudulent claims.
  • New account fraud was most damaging—Although all types of fraud declined over the past year, new account fraud was responsible for the greatest fraud amount ($17 billion). New account fraud, in which accounts have been opened without the victim’s knowledge, is harder to detect and is the most likely to severely impact the victims. Existing card fraud amounts declined by 38 percent to $14 billion from $23 billion in 2009.
  • “Friendly fraud” is on the rise—Friendly fraud - fraud perpetrated by people known to the victim, such as a relative or roommate - grew seven percent last year, with consumers between the ages of 25-34 most likely to be victims of this type of fraud. People in this age group are most likely to have their Social Security number (SSN) stolen—with 41 percent of fraud victims in this group reporting theft of their SSN.
  • Fraud inversely mirrors retail sales—The Javelin study found an interesting correlation between retail sales and fraud incidence, with the amount of fraud almost perfectly inversely mirroring retail sales over the past seven years. When retail sales have increased, fraud has decreased, which points to economic hardships as an overall contributor to fraudsters committing identity crimes.
Understanding the Findings
Approximately three million fewer adults were victimized by identity fraud in 2010, compared to 2009. This is the largest single-year decrease since Javelin started tracking data in 2003 and exceeds the combined decline from 2003-2007, when identity fraud started to increase again. The largest drop previously was 800,000 consumers between 2003 and 2004.
Some factors leading to this decline include the more stringent criteria financial institutions are applying to authenticate users and determine credit risk; as well as more Americans monitoring accounts online and using monitoring protection services that can provide updates to mobile devices. Additionally, according to industry data, reported data breaches dropped significantly, with just seven percent of the U.S. population receiving notifications that their information was exposed in a data breach.
Account takeover was one of the most common forms of identity fraud. When examining account takeover trends, the two most popular tactics for fraudsters were adding their name as a registered user on an account or changing the physical address of the account. In 2010, changing the physical address became the most popular method, with 44 percent of account takeover incidents conducted this way.
New account fraud is the most damaging to consumers, and the study found that fraudsters are changing their patterns to make it harder to detect. There was a shift to fraudulent opening of non-bank and non-card accounts, such as health club memberships, home phone and cable subscriptions. This type of fraud will not necessarily be caught by checking credit reports. To detect them, consumers should carefully examine financial statements, and consider using a service that monitors public records.
New account fraud was also the type of fraud most likely to be perpetrated by “friendly fraudsters,” and accounted for roughly 30 percent of new account fraud for which the cause was known. While existing card information would appear to be easy to obtain from acquaintances, existing card fraud was less than half as common as new account fraud.
Retail Sales and Identity Fraud
Notably, for at least the past seven years, the state of retail sales has had a direct, inversely proportional correlation to identity fraud. This strongly indicates that as retail sales grow, fraud incidents decrease. This may indicate how the state of individuals’ financial conditions correlates to their likelihood to perpetrate identity fraud.
Financial Services, Business and Law Enforcement Working Together to Protect and Educate Consumers
“The financial services industry, businesses and law enforcement have been working harder than ever to crack down on fraud and to educate consumers about how they can protect themselves, and this year’s study clearly indicates these efforts are having a positive impact,” said Steve Cox, president and CEO, Council of Better Business Bureaus. “In order to retain consumer trust and confidence, businesses must continue to take all steps necessary to safeguard data and educate customers about how to protect themselves and respond to incidents. Now is not the time to let up. Consumers should remain vigilant and be careful not to expose personally identifiable information over social networks and to acquaintances.”
Six Safety Tips to Protect Consumers
Prevention
1. Keep Personal Data Private—At home or work, secure your personal and financial records in a locked storage device or behind a password. In 2010, 14 percent of all identity fraud crimes were committed by someone previously known to the victim when the method was known. Avoid mailing checks to pay bills or to deposit funds in your banking account. Instead, use online bill payment. Continue to use the shredder for information that contains your personal information as well as any non-online statements.
2. Don’t Overshare on Social Networks—While people connect with friends and acquaintances on social networks, sometimes they share too much information (full birthdate, pet’s name, etc.). For example, the AARP found that 27 percent of people age 50+ use social networks, but the Javelin research found that 36 percent of people aged 65+ do not use the privacy settings on their network,1 potentially exposing crucial information to fraudsters. The good news is 89 percent of 25-34 year olds were actively using the privacy settings on social network sites.
3. Use Your Debit Card Wisely—With the declining use of credit cards and the rise of debit cards, debit card fraud returned to 2006 levels. Obtain credit and debit cards from financial institutions that provide zero liability protection if a card is ever lost, stolen or used without authorization. Report lost or stolen cards, or suspected fraud, immediately.
Detection
4. Be Vigilant—Monitor your accounts regularly online at bank and credit card websites, ATMs or by phone, and set up alerts that can be sent via e-mail and to a mobile device. The study found that 48 percent of all reported identity fraud cases are first detected by consumers. At a minimum, consumers should review their credit report no less than once per year.
5. Learn About Identity Protection Services—There are services for consumers who want extra protection and peace of mind. These include credit monitoring, fraud alerts, credit freezes and database scanning, some of which can be obtained for a fee and others at no cost. These services can detect much of the fraud that a credit report does not detect.
Resolution
6. Report problems immediately—Work with your bank, credit union or protection services provider to take advantage of resolution terms, loss protections and methods to secure your accounts. A fast response can enhance the likelihood that losses are reduced, and law enforcement can pursue fraudsters so they experience consequences for their actions.
For Additional Educational Tips, Consumers Should Visit:
To take an identity fraud safety quiz and download a free consumer version of Javelin’s identity fraud report, and get additional safety tips, visit www.idsafety.net.
Law Enforcement Professionals who are interested in obtaining a copy of the complete report, please contact: etravers@javelinstrategy.com.
About Javelin Strategy & Research
Javelin is the leading independent provider of quantitative and qualitative research focused exclusively on financial services topics. Based on the most rigorous statistical methodologies, Javelin conducts in-depth primary research studies to pinpoint dynamic risks and opportunities. Javelin helps its clients achieve their initiatives through three service offerings, including syndicated research subscriptions, custom research projects and strategic consulting. Javelin’s client list includes some of the largest financial institutions, technology enterprises and security firms.
For more information on this project or other Javelin studies, visit www.javelinstrategy.com/research.
All trademarks are the property of their respective owners.

Contacts

Javelin Strategy & Research
Elizabeth Travers, 925-225-9100 ext. 15
etravers@javelinstrategy.com
or
For Javelin Strategy & Research
Julie Goldman or Michael McDonough, 781-684-0770
javelin@schwartzcomm.com
Permalink: http://www.businesswire.com/news/home/20110208005626/en/Identity-Fraud-Fell-28-Percent-2010-Javelin
www.ePINDebit.com www.e-PINDebit.com www.iPINDebit.com www.PINDebit.mobi
Posted by at
Subscribe to: Posts (Atom)

Disqus for ePayment News