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NF Edition #522 - 9/09/16
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Quick Take: Apple Ditches The Jack Creating a Limp Dongle for Merchants
Commentary by TSG's Jared Drieling

For months, rumors swirled that the new iPhone 7 would ditch the headphone jack, and on Wednesday, during Apple’s special event in San Francisco, the rumors came true. Apple’s Phil Schiller explained that the move away from the long-time industry standard took ‘courage.’ While a very polarizing change to many, users of iPhones outside of audiophiles are affected by this move as well – especially merchants that rely on the jack as a means to power their POS dongle. Below, The Strawhecker Group has compiled a few quick comments on this ‘courageous’ move.

  • Apple will sell an adapter that channels through the lightning port on the phone. With that said, there likely wouldn’t be too much of a concern for current dongle POS users or a need to use an iPad or switch to another brand. Regardless, most dongle POS users are leveraging a tablet device versus a smartphone since signing for payment is much easier for the consumer. Also, it can be quite cumbersome for a consumer to dip an EMV card in a dongle that is leveraging a smartphone versus a tablet.

New eReport - Tablet POS (Smart Terminal) Competitive Snapshot

Content Includes:
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  • Proprietary Versus Open Tablet Systems
  • Tablet POS Competitive Comparison
  • Tablet POS Strength by Industry
  • Tablet POS Strength by Feature
Preview  |  Purchase - priced at $1,495

The report can act as a strategic tool at higher levels within your organization to understand the dynamics of each player to assist in partnership planning or for M&A workouts. The report can also be leveraged to educate front-line personnel such as sales teams to enable them to position their tablet solutions more effectively in the market versus the competition.

PayPal Strikes Deal with MasterCard to Allow Payments in Stores
The Wall Street Journal | 9.06.16

PayPal Holdings Inc. has struck another deal with a payments network, this time MasterCard Inc., as it seeks to carve out a foothold in stores, according to the company. This follows its big deal with Visa Inc. earlier this year. The two deals in quick succession are among the biggest moves so far in the online-payments pioneer’s post-independence strategy after splitting off from eBay Inc. last year. The aim is to end fights with the big card issuers and make PayPal a universally accepted method of payment. This would include in stores at the checkout counter, with MasterCard’s and Visa’s mobile-tap tools, the big new frontier for payments companies.

Related: 

Wells Fargo Fined $185 Million For Opening Accounts Without Customers' Knowledge
Forbes | 9.08.16

In 2015, the city of Los Angeles sued Wells Frgo  for unethical customer conduct, accusing the bank of secretly opening unauthorized accounts that then accrued bogus fees. One year later, Wells is paying for this behavior: the bank announced Thursday that it has reached settlements with city and federal officials totaling nearly $200 million. Wells Fargo said Thursday that it has reached agreements with the Consumer Financial Protection Bureau (CFPB), the office of the Comptroller of the Currency and the Los Angeles attorney office over allegations that it, among other improper activities, opened deposit accounts and transferred funds without customers’ consent. The bank will pay a total of $185 million in fines, plus another $5 million in what it is calling “customer remediation.”

Related: 5,300 Wells Fargo Employees Fired Over 2M Phony Accounts

CardConnect Rang The Nasdaq Closing Bell
Technical.ly | 9.08.16

CardConnect, the King of Prussia-based payment processing firm, got its moment in the spotlight in celebration of its first month as a publicly traded company. “It was an absolute honor and I’m extremely proud to be part of such a passionate, dedicated and hard-working group of individuals,” said Jeff Shanahan, CardConnect’s president and CEO. “It’s this team that gives CardConnect the bright future that it has.”

In case you missed it, TSG recently interviewed Jeff Shanahan.

Congressional Report Slams OPM on Data Breach
KrebsonSecurity | 9.07.16

The massive data breach at the U.S. Office of Personnel Management (OPM) that exposed background investigations and fingerprint data on millions of Americans was the result of a cascading series of cybersecurity blunders from the agency’s senior leadership on down to the outdated technology used to secure the sensitive data, according to a lengthy report released today by a key government oversight panel. The 241-page analysis, commissioned by the U.S. House Oversight & Government Reform Committee, blames OPM for jeopardizing U.S. national security for more than a generation.

Related: GOP Report: OPM Failed to Detect 2nd Hacker in Breach

Why Payments M&A Won’t Cool off
Digital Transactions | 9.06.16

The Strawhecker Group, an Omaha, Neb.-based payments-advisory firm, says it has performed “hundreds” of valuations in the past five years. Payments companies remain attractive to investors for multiple reasons. “Payments is [a] growth industry,” says Mike Strawhecker, principal at the firm. “Payments feed off of organic economic growth and increased consumer usage,” Strawhecker says. He adds that the industry provides services beyond payments to merchants, and has a plethora of salespeople. Another factor is the fragmentation of the industry, which could favor an investor with a rollup strategy, Strawhecker says.

Retail POS Service Green Bits Wants To Revolutionize The Budding Marijuana Industry
TechCrunch | 9.06.16

With the sale of marijuana either for recreational or medicinal purposes becoming legal in more and more states, new and existing retailers are struggling to find ways to keep track of inventory while remaining compliant with various state and federal laws. Former Outright co-founders, a cloud-based financial management application, are tackling this problem with their next venture, Green Bits. Green Bits launched in the Startup Battlefield at Disrupt 2015 and is an iPad-based pot-focused point of sale (POS) solution.

MasterCard Facing Damages Claim of $18 Billion Over High Swipe Fees
The Wall Street Journal | 9.08.16

MasterCard Inc. is facing a damages claim of £14 billion ($18.72 billion) on behalf of U.K. consumers who were allegedly charged higher prices because of the card giant’s high swipe fees. The claim, filed Thursday in the Competition Appeal Tribunal, was described as the biggest in U.K. legal history by former Chief Financial Services Ombudsman Walter Merricks, who is bringing the claim. It is also only the second to be filed under the Consumer Rights Act of 2015 which allows a collective damages claim to brought on behalf of a class with consumers automatically becoming claimants unless they explicitly opt out.

Why Small Banks Need Big Data
BTN | 9.06.16

Attention community bankers: it is time to dip your toes in the sea of data if you're not doing so already. More than ever, banking is as much an information business as it is a financial business. With the vast amount of data banks have on customers and transactions and spending habits, those that aren't effectively mining this data risk falling into irrelevance. For some small banks, investing in data analytics remains a tough call. Margins are already thin from the operating environment. Tech budgets are consumed with bridging the gap between running legacy technology and offering digital products. 

Apple Pay Comes to Japan, New Zealand and Russia This Fall, Hits The Web on September 13
Tech Crunch | 9.07.16

Apple Pay will arrive in three more countries this fall: Japan, New Zealand and Russia, and will hit the web alongside the launch of iOS 10 on September 13th. The web version of Apple’s payments service will be made available to Safari users on any Mac introduced from 2012 on, which is also running the latest operating system, macOS Sierra. The company detailed the Japan launch of Apple Pay on stage today at its iPhone 7 event, noting in particular how the service had to be made compatible with a different version of contactless tap-to-pay technology used in the country, FeliCa.

Square Cash Will Guarantee Instant Deposits - For A Fee
Recode | 9.08.16

Square Cash, Jack Dorsey’s rival to the popular money-transfer app Venmo, is still a money-loser. It is trying to change that. Starting today, people who receive a payment via Square Cash can cash out the money to a bank account instantly if they’re willing to pay a 1 percent fee. Previously, some Cash users got instant deposits for free, but Square never promised that speed and couldn’t guarantee it for all users. Going forward, those who don’t want to pay the fee will see deposits post to their account on the next business day.

iZettle Buys U.K. Tech Firm, Expands Services
ISO & Agent | 9.07.16

Sweden’s iZettle is following a now-familiar playbook to fuel its expansion in Europe with its acquisition of intelligentpos, a company specializing in business-management tools popular with restaurants and other small to midsize businesses. It’s a strategy many other providers of mobile card readers, including the niche’s pioneer, Square, say helps to deepen relationships with customers by adding a raft of services to drive additional revenue. Square simultaneously is laying groundwork to invade iZettle’s home market via a new European base.

Chase Visa Cardholders Can Now Use Android Pay
BusinessWire | 9.07.16

Chase Visa® consumer credit and debit cardholders can now use Android Pay™ to make simple and secure payments in stores and in mobile apps. Chase customers with Android Pay-enabled devices can make purchases with their phone at millions of store locations nationwide that accept contactless payments, and within many Android apps. Chase cardholders maintain all of the rewards, benefits and services they have come to expect when using their Chase Visa credit and debit cards.

Related: Tap. Pay. Yes! Android Pay Welcomes Chase and More

Shell Is Getting New Point of Sale Registers At Its Gas Stations
Fortune | 9.08.16

Revel Systems, a company that sells an iPad point of sale register to merchants, has signed up a big new customer—gasoline giant Shell. Revel, which has raised over $100 million in venture funding from Intuit and others, has developed a point of sale system that lets merchants accept credit cards through card readers that connect to iPads, similar to Silicon Valley rival Square. But the system differs from Square in that it varies based on the type of merchant.

400+ Retailers Urge Congress to Protect Debit Card Reforms
NACS | 9.07.16

A coalition of 408 large and small retailers urged Congress this week to uphold debit card reforms. Debit swipe fee reform, also known as the Durbin Amendment, was signed into law in 2010 as part of the Dodd-Frank Wall Street Reform Act. Debit reform limits price-fixing by the card networks and largest issuers by setting a reasonable fee for those with $10 billion in assets or more (approx. 1.6% of banks). Debit reform also fosters competition among debit networks by obligating banks to allow merchants to choose their own network routing option for each debit transaction.

Nashville Hotel Suffered POS Breach for Three Years
Bank Info Security | 9.05.16

The string of cyberattacks striking point-of-sale systems at hotels continues unabated, as a Nashville, Tenn.-based hotel says POS malware compromised its customers' payment card details for more than three years. The disclosure underscores the continuing problems facing merchants as they attempt to keep their payment card transactions secure. Cyberattackers are still finding low-hanging fruit and have stepped up their attacks to include the networks of POS vendors, which make the hardware and software used for processing card transactions.

Hayden: Consumers Can’t Look to the Government to ‘Save’ Them from Fraudsters
Digital Transactions | 9.06.16

The payments industry’s efforts to protect sensitive cardholder data and transactions are moves in the right direction. They’ll have to be, because solutions to the epidemic of data breaches and online fraud are going to have to come from the private sector and from consumers’ own precautions. That’s the assessment from Michael Hayden, former director of the Central Intelligence Agency and the National Security Agency, who will be the keynote speaker at the Electronic Transactions Association’s Strategic Leadership Forum taking place Oct. 19-21 in Palm Beach, Fla.

Why State-by-State Fintech Oversight Doesn't Work
BankThink | 9.06.16

The Office of the Comptroller of the Currency is considering allowing financial technology (or fintech) firms to become special purpose banks. This new status would allow them to largely avoid the state-by-state regulation that currently applies to them, but not to their bank competitors. Unsurprisingly, this prospect is not popular with state regulators, as reported in a recent American Banker story. They argue that such a move would weaken consumer protection and increase risk.

Clouds Gathering on U.S. Economy? ISM Surveys Seems to Say So
MarketWatch | 9.06.16

All the major forecasts for the U.S. economy predict lots of sunshine in the third quarter, but a pair of surveys of business executives suggest some gray clouds are moving in. Manufacturers and service-oriented companies that employ nearly all Americans reported sharply weaker business conditions in August than in July, according to surveys conducted by the Institute for Supply Management. The results surprised Wall Street.

Just 7% of Households Lack Bank Accounts Now
The Washington Post | 9.08.16

As the economy improves, more people are landing jobs and using traditional bank accounts, a new survey shows. The share of consumers who were unbanked fell faster than expected last year to 7 percent, down from 7.7 percent in 2013, according to a new report from the Federal Deposit Insurance Corporation. That percentage has been dropping since it peaked at 8.2 percent in 2011 and is now the lowest it has been since the survey was started in 2009.

Middle Market Firms Surging in Leading Industry Sectors
American Express | 9.08.16

The growth of U.S. middle market firms (companies between $10 million and $1 billion in revenues) is outpacing the national average, with an 87% increase in number of firms, a 103% surge in employment, and a 100% rise in revenue since 2011, according to the latest Middle Market Power Index: A Detailed Look at Top Industries from American Express and Dun & Bradstreet.

PayPal’s Braintree to Offer Visa Checkout – Expanding Choice for Merchants and Consumers
Visa | 9.06.16

Visa and PayPal announced that Visa Checkout will soon be available as a payment service for Braintree merchants. Braintree, a PayPal company that powers payments for companies like Airbnb, Eventbrite, Pinterest and Uber, offers simple solutions that enable merchants to accept a variety of payment options online, in app and in-stores, and soon Visa Checkout will be available as one of Braintree’s payment options. The online payment service allows Visa cardholders to pay on any connected device, in just a few clicks, using their Visa account. Visa Checkout is already part of the shopping experience at many leading online retailers including Starbucks, Walgreens and Best Buy.

Ingenico Shares Slump on US Sales Warning
Finextra | 9.06.16

Shares in French eftpos terminal supplier Ingenico slumped in early morning trading after the firm revised revenue guidance due to a "sudden and significant decline" in US sales. Ingenico cut organic revenue growth prospects for the year from 10% to seven percent, citing a sales slowdown in the US and difficult macroeconimic conditions in the Brazillian market. The warning caught investors by surprise, who moved swiftly to offload the stock causing a 14% fall in the vendor's share price.

Related: After Striking VeriFone, the U.S. EMV Revenue Bug Hits Ingenico

Papa John's Serves up Secure Payments Processing with Vantiv
Vantiv | 9.07.16

Vantiv, Inc., a leading provider of payment processing services and related technology solutions for merchants and financial institutions of all sizes, announced it has been chosen by Papa John's International, Inc., the world's third-largest pizza delivery company, to provide payment processing for its 3,300 retail locations in the United States, as well as the company's eCommerce business. "We are thrilled to work with Papa John's to provide our Vantiv expertise, which encompasses rewards, resources, support and care," said Royal Cole, group president, merchant and financial services at Vantiv.

Shift4, Multidev and Ingenico Group Deliver Powerful EMV Solution to Retailers
Yahoo! Finance | 9.08.16

Payment gateway provider Shift4 Corporation and Multidev Technologies, an industry leader in developing omnichannel software for retailers, today announced the successful installation of EMV at Opening Ceremony retail locations in New York and Los Angeles. The installation uses EMV-ready, smart terminals from Ingenico Group, the global leader in seamless payment.

Over 80% of Merchants in the US Accept UnionPay Credit Cards
PR Newswire | 9.06.16

It is learnt on September 1 that almost all the ATMs in the US accept UnionPay cards for cash withdrawal and over 80% of the local merchants accept UnionPay credit cards. In tourists' favorite destinations like New York, Hawaii, San Francisco, Los Angeles, Orlando and Chicago, UnionPay's acceptance coverage in well-known shopping centers and Outlets has exceeded 90%. With one UnionPay debit card and one UnionPay credit card (card numbers both start with 62), cardholders can pay with ease and benefits in the US.

Masterpass Adoption Delivers Simple and Secure Digital Payment Experiences for Consumers, Issuers and Merchants Around the World
Mastercard | 9.07.16

The continued transformation of Mastercard to an even more digital company continues to be driven by the rapid growth, support and success of Masterpass, the company’s digital payment service. As part of this momentum, Mastercard today announced issuers and merchants around the globe that are making Masterpass available to their customers, enabling fast, simple and secure digital payment experiences across devices and channels – online, in-app and in-store.

CardFlight Launches New Bluetooth Mobile POS Solutions with EMV Chip Card and NFC Contactless Payment Acceptance
PR Newswire | 9.07.16

CardFlight is launching the Bold B550 and Bold B500, a new family of mobile card readers that communicate with iOS and Android devices by Bluetooth technology. The launch follows Apple's announcement of the iPhone 7, a revolutionary smartphone that does not contain an audio jack. CardFlight clients who want to use new smartphone and tablet devices can accept payments using the latest mobile payment technologies, including EMV chip cards, contactless NFC payments and mobile wallets such as Apple Pay, Android Pay and Samsung Pay, with the new readers that connect via Bluetooth, instead of an audio jack.

American Express Names Nancy Testa as Chief Diversity Officer
American Express | 9.07.16

American Express today announced the recent appointment of Nancy Testa as the chief diversity officer, overseeing the company’s global diversity and inclusion efforts. She will also continue to serve as vice president and HR business partner for the Global Merchant Services & Loyalty Group. As chief diversity officer, Testa will be responsible for ensuring American Express remains an employer of choice among top diverse talent and enables innovation by continuing to develop an inclusive and collaborative work environment.

Revel Systems Announces Partnership with Punchh
BusinessWire | 9.06.16

Revel Systems, the world's leading iPad Point of Sale management solution for brick-and-mortar retail, food businesses and more, today announced they are partnering with Punchh, the premier provider of Mobile Engagement, CRM and Marketing Automation technologies for enterprise restaurant chains. Advanced technology has allowed for companies to enhance the customer experience through personalized features, making it a unique experience for each client.

JetPay Partners With Womply to Offer JetPay Insights
MarketWired | 9.07.16

"JetPay is committed to offering new, innovative solutions to our customers to help them grow and manage their businesses," says Diane Faro, CEO of JetPay. "Our partnership with Womply allows our merchants the opportunity to gain insight into their customers, gather market intelligence, and become more competitive. JetPay is focused on adding value to every business we serve, and offering Insights demonstrates this commitment to our merchants."

Crimson Transaction Technologies and Equinox Payments Introduce EMV-Certified Payment Solution
Equinox | 9.07.16

Crimson Transaction Technologies, an innovative provider of point-of-sale (POS) software specializing in retail, government and park fee collection, and Equinox Payments (“Equinox”), a leading provider of payment terminals, applications and support services,  announced the availability of an integrated payment solution to help ISVs and VARs quickly and easily offer EMV-certified technology to their customers.

FIS and CO-OP Bring Cardless Cash to Credit Unions Nationwide
FIS | 9.09.16

FIS Cardless Cash, the market-leading mobile solution that avoids using a plastic card at the ATM to withdraw funds, continues to expand its availability for consumers. Already possessing one of the nation’s largest mobile phone-to-ATM networks, FIS, a global leader in financial services technology, has partnered with CO-OP Financial Services to expand Cardless Cash to CO-OP ATM’s menu of Terminal Driving services.

ACI Worldwide Powers Payments for Erste Bank Hungary
ACI | 9.06.16

ACI Worldwide, a leading global provider of real-time electronic payment and banking solutions,  announced that Erste Bank Hungary (EBH) will utilize ACI’s market-leading UP Retail Payments Solution to drive continued growth across Europe. UP Retail Payments combines the control, choice and flexibility of BASE24 and UP BASE24-eps, ACI’s market-leading retail payment platforms, and UP Framework—which orchestrates any payment type, channel, currency or network—into a powerful end-to-end solution that banks and processors can customize quickly and easily to fit their payments needs.

MoneyGram Launches new Online Money Transfer Service Platform with Walmart
PR Newswire | 9.06.16

"We are pleased to be a part of this exciting opportunity to help Walmart deliver a true omni-channel experience. For nearly 20 years MoneyGram and Walmart have worked together to provide our customers with the highest quality and most convenient financial services," says Juan Agualimpia, MoneyGram's chief marketing officer and Walmart senior leader. "This new offering is a testament to our combined commitment to our customers."  

TNS Strengthens Australian Payments Infrastructure with Connectivity to APCA Coin Network
EON | 9.05.16

Transaction Network Services is giving the payments industry efficient, secure and reliable connectivity to the Australian Payments Clearing Association’s Community of Interest Network. TNS’ successful bid to join the COIN enhances TNS’ already extensive network to include many new financial host endpoints, such as Cabcharge, that demonstrate a strong preference for or mandate the use of the COIN as a means of connecting.

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