Wednesday, April 27, 2011

Shipments of NFC-Enabled Handsets Are Forecasted To Increase From Less Than Two Million Units In 2010 To 400 Million Units In 2015

April 26, 2011 12:37 PM Eastern Daylight Time

DUBLIN--(BUSINESS WIRE)--Research and Markets has announced the addition of Berg Insight AB's new report "Handset Connectivity Technologies - 2nd Edition" to their offering.

Shipments of GPS-enabled GSM/WCDMA handsets grew 97 percent in 2010

According to a new research report by Berg Insight, global shipments of GPS-enabled GSM/WCDMA handsets increased almost 97 percent in 2010 to 295 million units. Growing at a compound annual growth rate (CAGR) of 28.8 percent, shipments are forecasted to reach 940 million units in 2015. The attach rates for wireless connectivity technologies in handsets including GPS, Bluetooth and WLAN are increasing steadily as the adoption of smartphones accelerates. These connectivity technologies are already a standard feature on high-end smartphones. Adoption of GPS and WLAN will also increase rapidly in the medium- and low-end smartphone segments. The attach rate for WLAN connectivity in handsets reached 20 percent in 2010. Berg Insight forecasts shipments of WLAN-enabled handsets to reach 900 million in 2015.

There are numerous compelling use cases for WLAN in mobile phones, ranging from offloading data traffic from increasingly congested mobile networks to media synchronisation and hybrid navigation services, said Andr Malm, Senior Analyst, Berg Insight. Hybrid navigation technologies are necessary to enable reliable positioning indoors. New multi-mode GPS receivers that also support the Russian GLONASS satellite system are already available in handsets. When using the two systems in combination, more visible satellites will increase the chance to receive sufficiently strong signals to get a fix in urban canyons. He adds that further performance increases will come from hybrid location technologies that fuse signal measurements from multiple satellite systems, cellular networks and WLAN, together with data from various forms of sensors such as accelerometers, gyroscopes and altimeters. Starting in the second half of 2011, more handsets supporting the Near Field Communication (NFC) standard for short-range wireless point-to-point communication will also become available. When deployed in mobile phones, NFC can be used for countless applications such as information exchange, electronic ticketing and mobile payments. Shipments of NFC-enabled handsets are forecasted to increase from less than two million units in 2010 to 400 million units in 2015.

When will NFC become mainstream in mass-market handsets? Berg Insight forecasts that 24 percent of mobile handsets sold in 2015 will feature NFC. In the same year, the attach rates for Bluetooth, GPS and WLAN are forecasted to be 85, 61 and 53 percent respectively. Find out more about these future handset connectivity technologies in this 120+ page strategic research report from Berg Insight.

Handset Connectivity Technologies is the second consecutive report from Berg Insight analysing the latest trends on the worldwide market for GNSS, Bluetooth, WLAN and NFC technologies in mobile handsets.

This report in the NGT Research Series provides you with 120 pages of unique business intelligence including 5-year industry forecasts and expert commentary on which to base your business decisions.

This report answers the following questions:

What is driving the adoption of GPS technology in GSM/ WCDMA handsets?
What are the benefits with Assisted-GPS, A-GNSS and hybrid location technologies?
How will Bluetooth evolve in the future handset environment?
What is the roadmap for integration of WLAN in mass-market mobile phones?
When will NFC become a widespread handset connectivity technology?
Which connectivity technologies are being adopted by the main handset manufacturers?
What impact will new technologies have on the wireless chipset value chain?
How is the greater diversity of radios affecting wireless chipset and handset design?
Who are the leading developers of cellular and connectivity chipsets?

For more information visit http://www.researchandmarkets.com/research/4812c1/handset_connectivi

Wi-Fi Security Flaw Makes Smartphones Dumb, Can Expose Credit Card Numbers

	Wi -Fi security flaw for smartphones puts your credit cards at risk
	(from Guardian on 4-26-2011)
	Millions of smartphone users and BT customers who use Wi-Fi wireless internet "hotspot" connections in public are vulnerable to fraud and identity theft, a Guardian investigation has established. security Experts were able to gather usernames, passwords and messages from phones using Wi-Fi in public places. In the case of the best-selling Apple iPhone 4 and other smartphone handsets, the information could be harvested without the users' knowledge and even when they were not actively surfing the web if the phone was turned on..... read more»

eCrime Web Sites’ Abuse of Subdomain Services Nearly Doubles in the Second Half of 2010

April 27, 2011 06:15 AM Eastern Daylight Time

Free Domain Name Registration Services Also Proving To Be a Significant, Emerging Resource for eCrime Gangs to Establish Domains for Criminal Enterprise

KUALA LUMPUR, Malaysia--(BUSINESS WIRE)--A new phishing survey released by the Anti-Phishing Working Group (APWG) at their conference here reveals that malicious use of subdomain services by phishers nearly doubled in the second half of 2010, with phishing gangs using these services about as often as they register domain names.

“Few such services take enough proactive measures to keep criminals from abusing their products in the first place”

Subdomain registration services give customers subdomain “hosting accounts” beneath a domain name the provider owns. These services are sold, managed, and regulated differently from regular domain names. There were 11,768 phishing websites hosted on subdomain services in the second half of 2010, up 42 percent from the first half of 2010, accounting for the majority of phishing in some Top Level Domains (TLDs). The increase during the half was notable, as this number had generally remained stable since the second half of 2008.

The 2H2010 total is slightly less than the 12,971 phish found on maliciously registered domain names purchased by phishers at regular domain name registrars in 2H2010. If included in the total of conventionally established domain names, abusive subdomain names would comprise some 22 percent of all domains deployed for phishing attacks.

Rod Rasmussen, founder and CTO of Internet Identity and co-author of the study, said, “Over the past few years, we have documented many examples of e-criminals finding and heavily exploiting particular DNS-related service providers who were ill-prepared for the onslaught of abuse. Subdomain providers are a particularly tempting target, as they provide full DNS services with no oversight and low-to-no cost services.”

Over 40 percent of attacks using subdomain services occurred on CO.CC, based in Korea, despite the fact that CO.CC is generally responsive to abuse reports. Phishers are probably attracted to CO.CC because CO.CC registrations are free, easy to sign up for, come with DNS service, and there are features to assist with bulk signups. As of this the publication of the report, CO.CC supports more than 9,400,000 subdomains in more than 5,000,000 user accounts.

The report also reveals that two free services were heavily abused by phishers in order to create phishing sites: the .TK domain registration service and the CO.CC subdomain service. Nearly 11 percent of all phishing attacks utilized these relatively little-known services.

“Few such services take enough proactive measures to keep criminals from abusing their products in the first place,” said Greg Aaron, Director of Key Account Management and Domain Security at Afilias and co-author of the study. “Hopefully the Internet can become a place where companies are less reactive and more proactive about e-crime,” said Greg Aaron.

Other findings in the report include:

In 2H2010, the average and median uptimes of all phishing attacks spiked significantly from previous periods, and were higher than any time period since the authors began taking uptime measurements three years ago.
Phishers are attacking Chinese e-commerce sites and banks aggressively, and are distinguished by preferentially registering new domain names, rather than using compromised Web servers like most phishers do.
Shutting down the availability of .CN domain names did not stop phishing that victimizes Chinese Internet users and Chinese institutions. Rather, it seems to have merely shifted the phishing to other top-level domains.

The full text of the report, including tabular data on the most abused TLDs and subdomain services, is available here: apwg.org/reports/APWG_GlobalPhishingSurvey_2H2010.pdf

The authors presented their findings at the fifth annual Counter-eCrime Operations Summit, the world’s premier conference for professionals and researchers who are engaged in combating electronic crime and fraud – and protecting consumers and enterprises from them. The program, running from April 27-29 in Kuala Lumpur, is presented by the APWG, the global cybercrime-fighting association, with co-hosts CyberSecurity Malaysia and MyCERT. Conference sponsors include Hitachi JoHo, Microsoft, Google, and MarkMonitor.

View the full agenda at www.apwg.org/events/2011_opSummit.html#agenda.

About the APWG

The APWG, founded in 2003 as the Anti-Phishing Working Group, is a global industry, law enforcement, and government coalition focused on eliminating the identity theft and fraud that result from the growing problem of phishing, email spoofing, and crimeware. Membership is open to qualified financial institutions, online retailers, ISPs, the law enforcement community and solutions providers. There are more than 1,800 companies, government agencies and NGOs participating in the APWG and more than 3,300 members. The APWG's Web site offers the public and industry information about phishing and email fraud, including identification and promotion of pragmatic technical solutions that provide immediate protection.

APWG's corporate sponsors are as follows:

APWG's corporate sponsors are as follows: AT&T(T), Able NV, Afilias Ltd., AhnLab, AVG Technologies, BillMeLater, BBN Technologies, Booz Allen Hamilton, Blue Coat, BlueStreak, BrandMail, BrandProtect, Bsecure Technologies, Check Point Software Technologies, Cisco (CSCO), Clear Search, Cloudmark, Cyveillance, DigiCert, DigitalEnvoy, DigitalResolve, Digital River, Easy Solutions, eBay/PayPal (EBAY), eCert, Entrust (ENTU), eEye, ESET, Fortinet, FraudWatch International, FrontPorch, F-Secure, Goodmail Systems, GlobalSign, GoDaddy, Goodmail Systems, GroupIB, GuardID Systems, Hauri, HomeAway, Huawei Symantec, IronPort, HitachiJoHo, ING Bank, Iconix, Internet Identity, Internet Security Systems, Intuit, IOvation, IronPort, IS3, IT Matrix, Kaspersky Labs, Kindsight, Lenos Software, LightSpeed Systems, MailFrontier, MailShell, MarkMonitor, M86Security, McAfee (MFE), MasterCard, MessageLevel, Microsoft (MSFT), MicroWorld, Mirapoint, MySpace (NWS), MyPW, MX Logic, NameProtect, National Australia Bank (ASX: NAB) Netcraft, NetStar, Network Solutions, NeuStar, Nominum, Panda Software, Phoenix Technologies Inc. (PTEC), Phishme.com, Phorm, Planty.net, Prevx, The Planet, SIDN, SalesForce, Radialpoint, RSA Security (EMC), RuleSpace, SecureBrain, Secure Computing (SCUR), S21sec, SIDN, SoftForum, SoftLayer, SoftSecurity, SOPHOS, SquareTrade, SurfControl, SunTrust, Symantec (SYMC), Tagged, TDS Telecom, Telefonica (TEF), TransCreditBank, Trend Micro (TMIC), Tricerion, TriCipher, TrustedID, Tumbleweed Communications (TMWD), Vasco (VDSI), VeriSign (VRSN), Visa, Wal-Mart (WMT), Websense Inc. (WBSN) and Yahoo! (YHOO), zvelo and ZYNGA.

Restaurant Credit Card Sales Increase, Retail Declines

April 26, 2011 11:00 AM Eastern Daylight Time

Restaurant Credit Card Sales Increase While Total Main Street Card Sales Decline

February Card Sales Fueled by Valentine’s Day

SCARSDALE, N.Y.--(BUSINESS WIRE)--Capital Access Network, Inc.’s (CAN) Data Services Division reports that the nation’s “Main Street” brick and mortar retailers, service providers and restaurants experienced a 3.09% decline in same store credit and signature debit card sales in Q1 2011 as compared to Q1 2010. The findings were released today in CAN’s Q1 2011 Small Business Credit Sales Report (SBCS Report). The Q1 2011 drop marks the 14^th consecutive quarter of YoY credit and signature debit card sales declines and marks a reversal of a five-quarter trend of moderating YoY declines.

“While Main Street card sales continue to struggle overall, for the first time in 16 quarters, we saw every restaurant ticket size category increase its YoY card sales.”

“Restaurants are a bright spot in the credit sales trends,” stated Glenn Goldman, CAN’s CEO and president. “While Main Street card sales continue to struggle overall, for the first time in 16 quarters, we saw every restaurant ticket size category increase its YoY card sales.” Goldman continued: “Our nation’s eateries were benefited by Valentine’s Day card spending, which increased almost 1% from the 2010 Valentine’s Day period.”

Positive card usage was also found in “A” – risk level businesses, as designated by CAN’s proprietary risk scoring models. “Main Street businesses also continue to hold onto a larger proportion of the available consumer revolving credit,” said Goldman. Despite these pockets of positive card sales, declines were reported in suburban, rural and urban populations, every “Time in Business” category and all eight regions of the country.

A copy of the Q1 2011 SBCS Report can be viewed at: http://www.capitalaccessnetwork.com/sbcsreport.html.

1. Overall, “Main Street” Q1 2011 same store credit and signature debit card sales declined 3.09% from their Q1 2010 levels. This represents the 14^th consecutive quarter of same store YoY card sales declines. In total, Main Street restaurants, retailers and service providers have not seen an increase in YoY card sales since Q3 2007. For the first time in five quarters, the rate of YoY decline also accelerated in Q1 2011, rising to 3.09% from the 2.56% YoY decline experienced in Q4 2010. For each quarter from Q4 2009 through Q1 2011, same store YoY credit sales declines were 12.21%, 9.16%, 5.60%, 5.06%, 2.56% and 3.09%, respectively.

SPOTLIGHT: Main Street businesses are holding onto a greater share of the declining consumer credit card float nationwide. According to the Federal Reserve’s April 7, 2011 G.19 Release (Consumer Credit), revolving consumer debt fell 5.9% in January and a further 4.1% decline is projected for February. At the same time, YoY card sales in January fell only 3.73% and then another 0.33% in February.

2. Main Street restaurants increased YoY card sales 0.81% in Q1 2011, the second consecutive quarter of YoY card sales gains for the nation’s eating places. However, the increase was not enough to offset the non-restaurant (retail, service and other) YoY card sales decline of 6.04% in Q1 2011. Main Street retailers, service providers and other stores have experienced same store YoY declines in card sales for 16 consecutive quarters dating back to Q2 2007.

SPOTLIGHT: Every restaurant category saw increased card spend in Q1 2011 as compared to Q1 2010. “Fine dining” (average tickets greater than $100) reported card sales growth of 0.06% on a YoY basis, followed by restaurants with average ticket sizes less than $25, which saw a 0.46% increase; restaurants with average ticket sizes between $25 and $50, which saw a 0.75% increase; and restaurants with average ticket sizes between $50 and $100, which experienced a 1.54% increase. The last time all categories showed same store YoY increases in card sales was Q2 2007.

3. During the Valentine’s Day period, defined as February 11-15, restaurants showed a YoY card sales increase of 0.99% compared to the 2010 Valentine’s Day period. This uptick helped drive the February restaurant numbers overall. For all restaurants, February 2011 saw same store card sales increase 2.82% compared to the February 2010 levels.

4. Consumers in more rural areas of the country (MSA population less than 100,000) and those in larger urban areas of the country (MSA population 1+ million) are slowing their credit and signature debt purchases more rapidly than their suburban counterparts (MSA populations 100,000-249,000 and 250,000-999,999). In Q1 2011, YoY card sales fell 2.10% and 2.70%, respectively, in areas with populations between 100,000 and 249,999 and those with populations between 250,000 and 999,999. Rural MSAs saw credit sales decline 3.98% and larger urban MSAs declines of 3.50% in Q1 2011 as compared to Q1 2010. This is the third consecutive quarter that both rural and larger urban MSAs have reported larger declines than the other MSA groups.

5. All regions posted card sales declines in Q1 2011 as compared to Q1 2010. Relative credit and signature debit usage continued to be strongest in New England for the fourth straight quarter. New England YoY card sales were essentially flat in Q1 2011, declining only 0.12%. The Rocky Mountain Region and Southeast Region reported the severest YoY card sales declines of 4.01% and 4.22% respectively.

6. All “Time in Business” categories again posted YoY card sales declines in Q1 2011, ranging from a 0.50% decline for Main Street businesses in operation less than five years to a 4.61% decline for businesses in operation 5 to 7 years. This is the first time since Q1 2009 that the newest businesses (less than five years in business) have had YoY same store credit sales figures stronger – on a relative basis – than their more experienced counterparts.

7. Card sales grew for the fourth consecutive quarter among CAN’s “A” businesses (those considered to represent the lowest risk band on an “A”-“D” scale). “A” risk businesses saw card sales increase 2.41% in Q1 2011 from Q1 2010 levels. “B” risk businesses saw Q1 2011 card sales decline 3.04%, “C” risk businesses experienced a 4.52% decline, and “D” risk concerns lost 11.24% of their card sales – in each case compared to Q1 2010 card sales levels.

Sponsored by Capital Access Network, Inc.’s Data Services Division

The Small Business Credit Sales (SBCS) Report is a quarterly report highlighting credit and signature debit card sales trends within small to mid-sized businesses nationwide. Sponsored by the Data Services Division of Capital Access Network, Inc. (CAN), a New York-based financial technology company, the SBCS Report features analysis of credit and debit card sales trends based on same store card sales data housed in CAN’s data warehouses, which retain 12 years of data and include more than 50,000 businesses and the “daily” card sales data collected from more than 80,000 working capital and loan transactions. Most same store sales retail reports focus on or include data from big-box retail and nationwide/regional department stores, either ignoring or obscuring the trends of the majority of small and mid-sized businesses. The SBCS Report was designed to assist business owners, the processing industry, associations, analysts and media interested in tracking and benchmarking credit and debit card sales trends among small and mid-sized businesses. Data published may include:

• Average Same Store Credit Sales - Overall

• Average Same Store Credit Sales - by Population Size

• Average Same Store Credit Sales - by Industry and Ticket Size

• Average Same Store Credit Sales - by Geographic Region

• Average Same Store Credit Sales - by Time in Business

• Average Same Store Credit Sales - by Risk Category

Data Notations

Merchants included in the data sample represented in the SBCS Report are drawn from 97 million+ data records collected from over 50,000 businesses and housed in the databases of CAN’s Data Services Division. These businesses are U.S. based, small to mid-sized and represent approximately 385 Standard Industrial Classification (SIC) codes. All represented businesses accept credit and debit cards as a form of payment. The pool from which the businesses are selected represents up to $78 million in current quarterly processing transactions. The SBCS Report is based on data from businesses with the following characteristics:

• Average Annual Gross Sales of approximately $785,000 (typical range of $98,000 to $4,000,000)

• Average Monthly Processing Volume of approximately $24,000 (typical range of $2,400 to $150,000)

• Average Ticket Size of approximately $150 (typical range of $8 to $1,225)

About Capital Access Network, Inc.

Capital Access Network, Inc. (CAN) leverages leading edge data, systems and technology, combined with a unique and highly effective Daily Remittance Platform ™, to deliver innovative financial products and services geared to small and mid-sized businesses (SMBs) and SMB capital providers. The Financial Technologies Group (FinTech Group) offers SMB lenders, credit card issuers and other capital providers customized platforms and hosted services that enable Daily Remittance-powered financial products, improving underwriting decisioning and delivery, extending customer lifecycles, controlling costs and enhancing portfolio performance. The Data Services Division draws upon the data gathered by CAN’s subsidiaries through more than a decade of collecting and analyzing the sales trends and firmographics of tens of thousands of SMBs. CAN also provides merchant capital options powered by Daily Remittance Platform through its wholly-owned subsidiaries: AdvanceMe, Inc, the leader in Merchant Cash Advances, and NewLogic Business Loans, Inc. Headquartered in New York, CAN and its subsidiaries currently employ 390 people in four locations in New York, Georgia, Massachusetts and Costa Rica. Learn more at www.CapitalAccessNetwork.com.

Contacts

For Capital Access Network, Inc.
Andrew McCaskill, 678-781-7210
or
Anna Stanley, 251-990-3559

TSYS Reports First Quarter 2011 Results

April 26, 2011 04:00 PM Eastern Daylight Time

COLUMBUS, Ga.--(BUSINESS WIRE)--TSYS (NYSE: TSS) today reported results for the first quarter 2011 with total revenues of $429.4 million, an increase of 3.9% over 2010. Excluding termination fees in 2010, total revenues increased 10.0%. Basic EPS from continuing operations was $0.25. Excluding termination fees in 2010, basic EPS from continuing operations increased 35.1%.

“The economic momentum generated during the last two quarters continues to move us forward, and has reinforced our enthusiasm for 2011. Our same-client cardholder transaction volumes increased 9.6%, marking the sixth consecutive quarter of growth. Organic revenue growth continues to improve with the first quarter at 3.9%. We are in-line to achieve our financial guidance for 2011,” said Philip W. Tomlinson, chairman of the board and chief executive officer of TSYS.

“We continue to enhance shareholder value through our deployment of capital through acquisitions and share repurchases. We completed the purchase of the remaining 49% interest in TSYS Merchant Solutions in January for a net purchase price of $169.5 million. In addition, we purchased 2 million shares of stock during the quarter under our share repurchase plan, bringing the total purchased over the past three quarters to 5 million shares,” said Tomlinson.

Conference Call

TSYS will host its quarterly conference call at 5:00 p.m. ET on Tuesday, April 26. The conference call can be accessed via simultaneous Internet broadcast at tsys.com by clicking on the link under "Webcasts" on the main homepage. The replay will be archived for 12 months and will be available approximately 30 minutes after the completion of the call. A slide presentation to accompany the call will be available by clicking on the link under "Webcasts" on the main homepage of tsys.com.

Non-GAAP Measures

This press release and the financial highlights section of this release contain the non-GAAP financial measures of revenues and basic EPS excluding revenues from termination fees and the impact of revenues and operating results on a constant currency basis, respectively, to describe TSYS’ performance. Management uses these non-GAAP financial measures to better understand and assess TSYS’ operating results and financial performance. TSYS believes these non-GAAP financial measures provide meaningful additional information about TSYS to assist investors in understanding and evaluating its operating results.

Additional information about non-GAAP financial measures and a reconciliation of those measures to the most directly comparable GAAP measures are included on pages 10 and 11 of this release.

About TSYS

TSYS (NYSE: TSS) is reshaping a new era in digital commerce, connecting consumers, merchants, financial institutions, businesses and governments. Through unmatched customer service and industry insight, TSYS creates a better experience for buyers and sellers, supporting cross-border payments in more than 85 countries. Offering merchant payment-acceptance solutions as well as services in credit, debit, prepaid, mobile, chip, healthcare, installments, money transfer and more, TSYS makes it possible for those in the global marketplace to conduct safe and secure electronic transactions with trust and convenience.

TSYS’ headquarters are located in Columbus, Georgia, with local offices spread across the Americas, EMEA and Asia-Pacific. TSYS provides services to more than half of the top 20 international banks. For more information, please visit us at www.tsys.com.

Poland is the Leader in Smartphone Adoption Across CEE, Finds Pyramid

CAMBRIDGE, Mass., April 26, 2011 /PRNewswire/ -- Smartphones will account for 35 percent of total handset sell-through in Polandin 2011, according to Pyramid's upcoming smartphone forecast and a new research note, Poles Go on a Smartphone Diet.

The fastest-growing operator in the Polish market, Play, reports that in the first quarter 50 percent of all handsets it sold were smartphones. Thanks to Android, the devices have become cheaper and more affordable to people that would have purchased a slightly fancier feature phone in years past. "In Poland, a strong handset subsidization culture is present – people got used to paying 1zl (US$0.33) for handsets – and the mobile operators had to apply the same logic to smartphones, which partially explains why Poland is the leader in smartphone adoption across CEE," notes Sylwia Boguszewska, Analyst at Pyramid Research.

Read the full Pyramid Point, Poles Go on a Smartphone Diet: http://www.pyramidresearch.com/points/item/110425.htm?sc=PRN042611_PP.

Pyramid Research continues to follow the Polish telecom market closely and will provide new, in-depth analysis on smartphone sales in our upcoming Smartphone Forecast for Poland, due for publication this month. For more information about the Smartphone Forecast, click here: http://www.pyramidresearch.com/SmartphoneForecasts.htm?sc=PRN042611_PP.

Written by Pyramid analysts, Pyramid Points are complimentary online notes that provide insight into market, business and regulatory developments in the global telecom industry, based on key findings from Pyramid's renowned forecast services. View all Pyramid Points here: http://www.pyramidresearch.com/points.htm.

Tuesday, April 26, 2011

Will Durbin Amendment Cripple Contactless, Hurt NFC?

If this picture offends, then at least the Feds
are successful at one thing...instituting "Political Correctness"

Besides the obvious fact that the Federal Government doesn't know what they are doing when it comes to running this country, (maybe "ruining" but not running) let alone trying to regulate the payments industry, there are now rumblings that the Durbin Amendment could hurt, no make that "ciripple" crucial developments in the contactless and NFC industry. I have a suggestion. Why not try and figure out how to run the Post Office in order to effectively compete with UPS and Fed Ex before they start messing with something they don't even understand? Then again, I'm guilty of that as well, since I'm messing with Durbin while failing to understand why on earth he is involved in the first place. Digital Transactions has the scoop:

A Little-Noted Durbin Provision Could Cripple Contactless, Hurt NFC, Experts Say
Apr. 26, 2011

Could a little-noted provision in the Durbin Amendment strangle the nascent U.S. contactless-payments market in its crib? It’s a very real possibility, says a pair of researchers, and the consequences could deal a blow to the prospects for mobile payments that depend on a promising technology called near-field communication (NFC). “I see this as having a chilling effect on NFC,” says Andy Schmidt, research director for global payments at Needham, Mass.-based researcher TowerGroup. “It could short-circuit the value proposition behind millions of dollars of investment [in NFC].”

White Paper: Empower Your Customers And Your Associates With The Power Of Contactless Near Field Communications (NFC)

Source: Motorola

The Near Field Communications (NFC) contactless transaction and payment revolution is here. Businesses and government agencies alike can benefit from the true touch-and-go transaction simplicity that this 13.56 MHz RFID technology enables. How can you take advantage of this next generation of convenient, efficient and secure payment technology? With the Motorola MC75A HF mobile computer. This lightweight yet rugged handheld device makes it easy to deploy a world of new HF mobile applications that benefit customers as well as workers.

In the fraction of a second, workers can use the MC75A HF to securely process a ticket or transit card for a commuter bus, train or concert — or read NFC-enabled cards, tickets, tokens or tags on passports, employee badges and other business assets.

The NFC-based business processes improve service levels, while rapid and automatic transaction and payment processing keeps lines and wait times down. And many processes inside enterprises and government agencies can be performed faster and more accurately, improving employee productivity and eliminating costly errors that could compromise workplace and citizen security and safety.

Download the Whitepaper

To access this content, Register or Sign In.

MSNBC: What Does NFC Mean for Mobile Payments?

You can use your phone to buy train tickets or candy from vending machine

By Sebastian Anthony
For the last few years, cell phone innovation has been all about long-range speed. 3G brought us mobile Internet and video calling, and the creeping emergence of 4G will eventually result in download and upload speeds that are faster than cable and DSL. The truth is, while both 3G and 4G are great, they're only really useful for surfing. Browsing the Web from your smartphone is just the tip of the omnipresent mobile computing iceberg.

Near field communication

Google's Nexus S phone can act as both an NFC reader and target.
Apple, Nokia and RIM, which makes BlackBerrys,
are expected to come out with NFC-enabled phones this year.

Near field communication (NFC) is a wireless technology that allows for very short range communication between just two devices. The general idea of NFC is that you have a target, which is usually an inanimate object of some kind, like a library book or credit card, and a reader, which reads data from the target. Targets don't require power — they don't need batteries — which is why they can be embedded in inanimate objects. The target, believe it or not, gets its power from a nearby reader; it extracts power from the wireless signal, "turns on," and then sends data back to the reader.

In essence, NFC is all about scanning objects with a reader. It's very similar to scanning barcodes, but infinitely more flexible and secure.

NFC with smartphones

Over the last few years, near field communication (NFC) has been spreading like wildfire in almost every domain — every domain except consumer electronics. You might have a credit card with an NFC chip, and new passports also contain NFC technology. Now, however, with the arrival of the Nexus S smartphone, which can act as both an NFC reader and target, things are about to get rather exciting indeed.

Now, while the imminent onslaught of other phones and tablets with NFC capabilities is likely, it's worth noting that the Nexus S is the only currently available smartphone in the United States and Europe with NFC capabilities. The iPhone 5, which is expected out later this year, is rumored to contain NFC technology, and both Nokia and BlackBerry will bring out NFC-enabled phones before the end of 2011.

Mobile payments

Just for a moment, think about how many purchases you make in a single day, either with cash or card. Train tickets. Car parking tickets. Breakfast. Coffee. Lunch. Candy from a vending machine. Dinner. Imagine if you had the option of never using a credit card ever again — imagine if you could do away with cash and the banal counting of change.

Well, that's what NFC technology can offer. Your smartphone can become your credit card; your smartphone can replace your cash. Instead of sliding in your card and keying in your PIN, you can simply hold your phone near a reader. With NFC readers in every shop, ticket machine, and vending machine, you would never carry money ever again — you would simply carry your smartphone.

There's more!

It gets better. Not only can NFC-enabled smartphones replace money, but they can also replace almost every piece of paper. Think about it — you buy your train ticket with your smartphone, but instead of printing a ticket, your phone becomes the ticket; simply swipe your phone over the NFC reader when you get to the turnstile! The same goes for any other significant piece of paper: concert or airline tickets, police tickets, doctor's prescriptions, school reports... In theory, every single one can be replaced with smartphones and NFC.

Become an early adopter

If you want to try out near field communication payments, your options are rather limited. In the United States, Google is working with MasterCard and Citigroup to bring NFC payments to New York and San Francisco, but that's about it. Starbucks, with a stroke of retro genius, recently rolled out mobile payments — but using barcodes, rather than NFC.

In the United Kingdom, Orange, Barclaycard, and MasterCard are planning a wide-scale deployment of NFC payment systems for the second half of 2011.

Still, don't be disheartened: Take a look at a list of every NFC-related trial currently being conducted. NFC has caught the attention of smartphone makers, mobile carriers, banks, and credit card companies. It's not a question of if NFC payments will replace cards and coins — it's simply a matter of when.

Pulse Releases 2011 Debit Issuer Study and Durbin Amendment Looks Like Signature Debit Killer

Back in August, I wrote a post (Featured Post: Does Durbin Amendment Position "PIN Debit" as "Signature Debit" Killer?) whereby I projected that the Durbin Amendment would result in the demise of Signature Debit. Some disagreed, other's thought "my perspective was enlightening"

Peter Guidi

Director, Petroleum Sales at VCMG Fort Myers, Florida Area Retail
John B. Frank adds excellent commentary on the impact of the Durbin Amendment joining with those who see the imminent death of signature debit as one early results of the legislation. His perspective is enlightening.

From the ePayment News Blog: " The writing is on the wall. The recent passing of the Durbin Amendment signifies the "future passing" (demise) of signature debit. Here's why: The two biggest reasons signature debit existed in the first place have now been eliminated...

Reason Number 1: It created recurring revenue to banks in the form of overdraft charges

Reason Number 2: It created recurring revenue to banks in the form of higher interchange fees.

Well, today, Pulse released their annual Debit Issuer Study today and it looks like I'll be standing by my analysis that signature debit is "Dead Debit Walking." According to the report:

“Many issuers indicate they will encourage increased use of PIN debit instead of signature debit, contrary to what many have done in the past. Following implementation of the proposed rules, with interchange rates for PIN and signature debit transactions likely being the same for regulated issuers, PIN transactions will have a better bottom-line contribution for issuers."

Here's the press release:

April 26, 2011 09:00 AM Eastern Daylight Time Despite Exemption, Small Issuers Expect Significant Decline in Interchange Revenue After Implementation of Durbin Amendment Provisions Initial Findings from 2011 Debit Issuer Study Show Small Issuers Question Effectiveness of Interchange Cap Exemption HOUSTON--(BUSINESS WIRE)--The 2011 Debit Issuer Study, commissioned by PULSE, finds that small debit card issuers, including community banks and credit unions, on average expect a 73 percent decrease in debit interchange revenue as a result of pending interchange fee rules. While these issuers with less than $10 billion in assets are exempt from the regulations proposed by the Federal Reserve Board, they are critical of the interchange cap and skeptical that the exemption will be effective.

“There is a possibility that we will push PIN over signature, since there is no income differential and PIN costs less in terms of fraud and back-office processing,” said a regulated issuer.”

“The study results support broad industry consensus that the proposed interchange cap will likely affect even exempt issuers. However, the impact small issuers say they are expecting is greater than many anticipated,” said Steve Sievert, senior vice president of PULSE, which has commissioned the industry benchmark Debit Issuer Study for the past six years.

One exempt issuer in the 2011 Debit Issuer Study responded, “We see no impact in 2011, but over time (in 2012-2013), we expect interchange income will decrease due to marketplace pressures lowering the interchange rate.” Another exempt issuer commented that, “Even if a network were to offer a two-tier pricing schedule, the shift in market conditions would eventually require the interchange rate for exempt institutions to be reduced.”

In addition, issuers believe the Federal Reserve’s proposed network exclusivity provisions are unnecessary given the interchange cap. Almost all issuers prefer the alternative that would require two unaffiliated networks on each debit card, given that many are already compliant with the requirement. Issuers also stated that the alternative requiring two network choices for each method of authorization – two for PIN and two for signature – would create major operational challenges without providing any value to consumers.

Impact on Demand Deposit Accounts

Given the anticipated decline in interchange revenue, issuers expect the Durbin Amendment to significantly impact their demand deposit account (DDA) business. Financial institutions believe the economics of the DDA require a fundamental re-evaluation – even more so with recent changes to Regulation E regarding debit-initiated overdrafts – and several issuers are considering elimination of certain programs and services, as well as charging consumers additional fees to recoup lost revenue.

Among surveyed issuers, 54 percent of regulated institutions and 27 percent of exempt issuers report they are evaluating additional fees or reducing benefits. Exempt issuers report they are considering reducing rates on high-yield checking accounts, eliminating ATM fee rebates and charging account holders for the service of having a checking account.

One product many issuers are assessing is debit rewards. Both regulated and exempt issuers expect to eliminate or significantly reduce benefits provided by their current rewards programs.

“We are planning to reduce the earn rate, raise the annual fee and eliminate the first year annual fee waiver,” said one regulated issuer.

Additionally, many issuers indicate they will encourage increased use of PIN debit instead of signature debit, contrary to what many have done in the past. Following implementation of the proposed rules, with interchange rates for PIN and signature debit transactions likely being the same for regulated issuers, PIN transactions will have a better bottom-line contribution for issuers.

“There is a possibility that we will push PIN over signature, since there is no income differential and PIN costs less in terms of fraud and back-office processing,” said a regulated issuer.

Issuer Outlook

The expectations of issuers surveyed suggest the impact of the Durbin Amendment will be far-reaching, regardless of the interchange exemption granted to issuers with less than $10 billion in assets. Consumers will no doubt feel the effects of this new legislation, but it is unclear if they will ever realize the positive impact projected by the authors of the legislation.

“There is unanimous agreement among financial institutions we surveyed that the Durbin Amendment will adversely impact consumers,” said Tony Hayes, the Oliver Wyman partner who served as project lead on the study. “To recoup lost revenue, issuers will charge higher fees for banking services, reduce debit card benefits – such as rewards and zero liability protection –and introduce restrictions on how debit cards can be used.”

About the Study

The 2011 Debit Issuer Study is the sixth installment in the study series. Additional findings from the study will be released in May. The study provides an objective fact base on debit card issuer performance and financial institutions’ outlook for the debit card business. Fifty financial institutions – including large banks, credit unions and community banks – participated in the 2011 study, conducted by Oliver Wyman. Collectively, the participants issue 50 million debit cards and operate 36,000 ATMs. The sample is representative of the U.S. debit market in terms of institution type, location and debit network participation.

About PULSE

PULSE, a Discover Financial Services (NYSE: DFS) company, is a leading debit/ATM network, serving more than 4,400 banks, credit unions and savings institutions across the United States. The network links cardholders with ATMs and POS terminals at retail locations nationwide. Through its global ATM network, PULSE provides worldwide cash access for Diners Club and Discover cardholders through hundreds of thousands of ATM locations. The company also is a source of electronic payments research and is committed to providing its participants with education on emerging products, services and trends in the payments industry. For more information, visit www.pulsenetwork.com.

Contacts

PULSE
Steve Sievert, 832-214-0111
ssievert@pulsenetwork.com
or
GolinHarris
Tara Hanney, 713-513-9561
thanney@golinharris.com

Wednesday, April 27, 2011

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