Payment Systems

ARivas — Fri, 16 Mar 2012 02:07:42 +0000

I have nothing but good things to say [about] their fee’s, excellent customer service, and the quality processing they provided my business…I will recommend you to everyone I know – Santa’s Pizza (3+ year customer)

Mobile Payments: Not a Game Changer Yet?

aphillips — Wed, 15 Feb 2012 00:57:45 +0000

In March, PayPal will enable its users to pay through their mobile phones, tablets or iPads at 2,000 Home Depot stores across the U.S., and by the end of the year at 20 other national retailers. Mobile payments are rapidly gaining popularity, but large scale adoption will depend on consumer perceptions of security and the pricing of such services, according to Wharton faculty.

A subsidiary of online shopping portal eBay, PayPal last year exceeded expectations with $4 billion in mobile payments volume, and the company predicts that figure will reach $7 billion in 2012, company spokesperson Anuj Nayar told Knowledge@Wharton Today. Last November, mobile payments were 538% higher on Black Friday than on the same day in 2010, according to PayPal. The firm’s latest encouragement comes from a pilot program it launched in January at 51 Home Depot stores, mostly in the San Francisco Bay area.

Mobile payments are a small fraction of the net payments of $118 billion that PayPal put through in 2011. Even so, Shawndra Hill, a Wharton professor of operations and information management, finds PayPal’s mobile initiative “exciting,” although she doesn’t think it is “a game changer just yet.” Before wide scale adoption occurs among consumers, “mobile solutions need to prove that they are as secure as…

PCI Moves Into 2012, But Are Businesses Left Behind?

aphillips — Wed, 15 Feb 2012 00:55:13 +0000

Last week the PCI council announced its new chairperson among plans for a new certification.

Alongside these announcements, the PCI Security Standards Council (PCI SSC) confirmed its key aims for 2012 as:

Engaging the PCI community with new opportunities for participation and a dedicated period for collecting and sharing feedback

Delivering guidance on ecommerce security, cloud computing and risk assessment through PCI SSC Special Interest Groups (SIGs)

A continued focus on technologies that offer PCI-DSS scope reduction for merchants, including point-to-point encryption and tokenisation

Expanding the current PCI SSC training programme to continue to increase payment card security expertise globally.

Perhaps a priority for the council should be to promote version two of its requirements. Initially announced in August 2010, the requirements became apparent in January 2012, and as research proved, some respondents were completely unaware of the changes even then.

I spoke with Anthony Hall, IT manager of Move With Us, who was talking to SC Magazine along with security vendor Quarri Technologies, a provider of secure session software that prevents…

IRS Backs Down on Reconciliation Requirement

aphillips — Wed, 15 Feb 2012 00:46:57 +0000

Under pressure from retailers and Congress, the Internal Revenue Service confirmed on Feb. 9, 2012, it will not require merchants to reconcile actual gross transaction receipts reported on their 1099-K forms with the aggregate gross receipts they report on their taxes.

The Housing and Economic Recovery Act of 2008 requires merchants to report the gross amount of yearly transactions to the IRS on form 1099-K. The reporting requirement went into effect Jan. 1, 2012. In October 2011, the IRS added a line to business tax returns requiring merchants to reconcile actual gross receipts with the aggregate gross receipts on their 1099-K report.

NFIB objection

The National Federation of Independent Business said it strongly objected to the new reporting requirement because small businesses often don’t have the kind of sophistication in their accounting systems needed to reconcile the gross receipts reported on the 1099-K form with the actual gross sales.

As an example of the difficulties small merchants might encounter in reconciliation, the NFIB noted that merchants often give cash back to customers using a credit or debit card. Gross receipts in this case may be overstated by the difference between the actual sale and the cash back. In another example, merchants often give customers cash reimbursements for returned merchandise. The gross receipt would not account for the returned item and refund.

Congressional objection

Legislation introduced by Rep. Aaron Schock, R-Ill., and Rep. Bobby Schilling, R-Ill., on Feb. 1, 2012, would prohibit the IRS from requiring merchant transaction reconciliation. Mirror legislation was introduced Feb. 9, 2012, in the Senate by Sen. John Thune, R-S.D., and Sen. Maria Cantwell, D-Wash.

“This is an unnecessary IRS requirement that will only lead to more accounting headaches for businesses,” Schock said. “My concern is that the IRS is asking for flawed information from small businesses by…

Forget the NFC Argument – Look at Payments Behavior

aphillips — Mon, 13 Feb 2012 17:56:07 +0000

The debate about NFC and mobile payments rages on. There’s questions over which handset platform to support, which devices are certified, the lack of real NFC standards, how to enable the secure component on the various cellular networks and so forth? To a novice this all sounds very complex? Shouldn’t we worry about adoption rates? When will mobile hit critical mass? ISYS versus Google Wallet versus Visa’s play versus PayPal, etc, etc?

There are those that will argue that it will be many years before mobile payments is mainstream. You’ll hear figures like 2014, 2016 or even later bandied around as to when mobile payments will hit mass adoption. However, I believe the primary measure to focus on when looking at these sorts of predictions is first and foremost exhibited customer behavior – the predilection to a shift in the way they pay, bank, purchase or shop. If you look at consumer behavior, the story is very simple. The great mass is not only ready for mobile payments, they are racing towards it as fast as they can whenever the opportunity presents itself.

When will Mobile Payments be mainstream?

That’s a question that at worst shows ignorance, or at best a pigeon-holing of mobile payments into a single category around POS-only interactions. I’d strongly argue that mobile payments are already mainstream. Ask yourself this; what constitutes a mobile payment? Surely a mobile payment is simply a payment made from or via a mobile phone.

By that measure alone, anyone who has a smartphone and who has bought an “App” or downloaded digital content via their phone, is already in the habit of…

Study Finds Significant Number of Consumers Who Have Switched to Electronic Billing and Payments Still Receive Paper Statements

aphillips — Fri, 10 Feb 2012 23:07:49 +0000

According to a new White Paper released today by NACHA – The Electronic Payments Association and PayItGreen®, nearly 30 to 40 percent of consumers who receive their financial statements and bills online also receive paper versions. The study, prepared by Javelin Strategy & Research, finds that this trend, known as “double dipping,” surprisingly exists primarily among Gen Y and Early Adopters. Gen Y consumers are those between the ages of 18 and 32 and Early Adopters are those consumers identifying themselves as the first to try new technology.

“‘Double dippers’ present a number of challenges for financial institutions and billers,” said Jim Van Dyke, president and founder of Javelin Strategy & Research. “By not fully disconnecting from paper bills and statements, ‘double dippers’ waste precious resources and create an unnecessary burden on the environment. Additionally, they weaken financial organizations’ ROI and create inefficiencies by requiring twice the amount of service.”

Fortunately for financial institutions and billers, the study also showed that Gen Y and Early Adopters are more likely to respond positively to messages encouraging a complete transition to paperless. According to the study, nearly 20 percent of Gen Y consumers simply forgot to turn off paper statements. The study also showed that 41 percent of Gen Y and 48 percent of Early Adopters would be receptive to the automatic shut-off of paper statements when signing up for online billing and payments.

“These findings present a significant opportunity for financial institutions and billers,” said Janet O. Estep, NACHA president and CEO. “Through targeted educational programs and messaging, organizations of all types can counter the ongoing attachment to paper and encourage the adoption of paperless behaviors. By doing so, they can reduce the impact of…

PayPal Exec Woos Big Retailers with Pricing, Data

aphillips — Fri, 10 Feb 2012 22:57:48 +0000

Don Kingsborough wants PayPal displayed alongside Visa, MasterCard and American Express in retail stores. To get there, he will compete aggressively on price.

As the executive leading PayPal’s push into physical stores, he hopes to tap long-simmering tensions over billions of dollars in fees the payment giants charge merchants each year.

Kingsborough said PayPal plans to subsidize its new service, implying merchants may pay less than they currently do for transactions done through established debit and credit payment processors.

To sweeten the deal and get the world’s top retailers on board, PayPal also plans to share more data on purchases and shopping activity.

EBay Inc, which owns PayPal, has set a public goal of 20 major retailers testing the point-of-sale, or POS, service by the end of 2012. Home Depot, the largest home improvement retailer, is running a test already and Office Depot is planning one.

Kingsborough, head of retail and prepaid products at PayPal, was even more confident in a recent interview with Reuters.

“We are going to do it with the greatest brands in the world — Home Depot and every other top-100 retailer,” Kingsborough said. “There isn’t a major brand who we haven’t talked to,” he added, while declining to identify other retailers.

There is a lot riding on this. PayPal is already a payment leader online, but e-commerce still accounts for less than 10 percent of…

Global Mobile Payment Market Revenues to Rise to $998.5 Billion in 2016

aphillips — Fri, 10 Feb 2012 20:28:56 +0000

IE Market Research Corporation, a Canada-based provider of market intelligence services, says its latest Global Mobile Payment Market Forecast shows that as more and more telecom operators, banks and retailers are team up to offer mobile payment solutions around the world, the global mobile payment market is growing rapidly.

“Globally, we are expecting mobile payment revenue to rise from $47.2 billion in 2011 to $998.5 billion in 2016. Compound Annual Growth Rate (CAGR) from 2012 to 2016 will be 83.7%,” said Nizar Assanie, Vice President (Research) at IEMR. “Among different categories of mobile payment, we expect that digital purchases will be the largest category with…

Compliance Automation Portal Offers Centralized Management For Information Security Compliance Initiatives

aphillips — Fri, 10 Feb 2012 19:15:15 +0000

CompliancePoint, a PossibleNOW company, announces the launch of the Compliance Automation Portal, a SaaS-based solution that centralizes the management and documentation of information for security compliance initiatives. The Compliance Automation Portal’s correlation engine eliminates duplication of activities by mapping similar control items across multiple industry and regulatory requirements for companies who must manage multiple compliance programs. The Portal establishes an easy-to-use compliance management system that delivers audit readiness and compliance status monitoring.

“During our information security consulting engagements, we found that most companies had no means to centralize and coordinate their compliance activities,” explains Jerry Wyble, VP & Practice Manager of CompliancePoint. “Information security compliance is a time-consuming and tedious activity. Each regulatory requirement may have hundreds of tasks associated with it. Management needs to know who is responsible for each task and when the task is due. This process becomes even more complex when there are multiple compliance regulations that may share common security control items.”

The Compliance Automation Portal offers centralized views which enable simplified compliance status monitoring. The Portal’s Task Manager lets users easily monitor control item activities and due dates. Control items are organized into logical groups that reduce the complexity for storing, linking and managing evidentiary documentation. Multiple industry and regulatory compliance programs with similarly defined requirements are correlated and mapped per control item. The Portal supports compliance initiatives for…

New POS Technology Available to Retailers in 2012

aphillips — Thu, 09 Feb 2012 22:59:41 +0000

There are a variety of new technologies that will become available throughout 2012 to small business owners looking for ways to process credit and debit cards. In the past, business have had to rely on costly terminals purchased from merchant account providers who charged not only for the equipment, but also for the processing of the cards used by a business’ customers.

This year, however, there will be a number of new technologies introduced on the market that will make the old system of credit card processing obsolete. POS or point-of-sale technologies have been getting a lot of press coverage because of how these technologies will change the way small business operate.

Perhaps the most talked about advance in POS technology is the use of mobile card readers. These devices are usually given away for a small fee or for free by merchant account providers and easily connect to a smartphone or tablet computer. These card readers are typically less than two inches long by two inches wide, making them easy to carry and connect. The devices are capable of scanning the magnetic strip of any credit or debit card run through the device, essentially making a card reader out of any mobile device.

An application that is downloaded onto the mobile device allows a small business owner to send the card information to a credit card processor, store the purchase information for later, and even provide his or her customer with a receipt. Since the devices are used with mobile technology, they can process cards anywhere the device can connect to a network. This means that a business such as landscapers and plumbers can collect payments from customers in the field. Businesses that routinely operate from different locations, such as traveling craft fairs, will be able to accept credit card payments from customers at every stop along their tour routes.

The fees that are charged to businesses utilizing this technology can offer significant savings over traditional point of sale units. Rather than pay high fees every month or year for equipment rental and access to the processing system, many of these devices simply charge businesses a flat percentage fee of the total…