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NF Edition #518 - 8/12/16
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Highlights this week...

TSG's Gateway Enterprise Metrics (GEM)

TSG's GEM program is an industry first independent performance program with gateways in the North American payments processing market. Contact Chuck Fillinger to learn more.

Others Are In - Are You?
Launching in September, TSG has already received commitments from multiple gateways that account for a large share of the U.S. market. Don't get left behind.

Oracle MICROS Hackers Breach Five More Cash Register Companies

Forbes | 8.11.16

Hackers have breached at least five cash-register providers that supply hundreds of thousands of businesses in the United States, FORBES has been told. After investigative reporter Brian Krebs reported a compromise of Oracle's MICROS unit earlier this week, it now appears the same allegedly Russian cybercrime gang has hit five others in the last month: Cin7, ECRS, Navy Zebra, PAR Technology and Uniwell. Together, they supply as many as, if not more than, 1 million point-of-sale systems globally.

Hack Brief: Hackers May Have Breached Oracle’s Cash Register System
Wired | 8.09.16

Oracle’s MICROS systems handle credit card payments at some 330,000 cash registers worldwide. And they’ve fallen victim to a major breach, possibly spearheaded by a group of Russian cybercriminals. That could put a whole lot of personal information at risk. At this point the extent of the damage isn’t entirely clear. Certainly any business that uses the MICROS support portal should consider its credentials compromised. Oracle is requiring all MICROS customers to change their account passwords.

Related: Data Breach At Oracle’s MICROS Point-of-Sale Division

Big Banks Team Up to Fight Cyber Crime
The Wall Street Journal | 8.09.16

May require subscription. Big banks are revving up efforts to combat cybercriminals targeting the financial-services industry. Eight of the largest U.S. banks are forming a group that seeks to tackle the growing cyberthreat. It includes J.P. Morgan Chase & Co., Bank of America Corp.and Goldman Sachs Group Inc.,among others. While still in its early stages, the big banks expect the group members will share more information with each other about threats, prepare comprehensive responses for when attacks occur and conduct war games designed for the issues facing the biggest institutions.

Visa Reminds Thunder Bay That It’s Still Around as Its Standoff With Wal-Mart Continues
Digital Transactions | 8.11.16

Visa Inc. and Wal-Mart Stores Inc. say there is no news in their standoff that began July 18 with Wal-Mart kicking Visa out of its three stores in Thunder Bay, Ontario. But Visa over the past several weeks has run a marketing campaign to remind residents of the Lake Superior city that it’s still around, and academics are speculating that Wal-Mart is losing sales and having second thoughts about not accepting the biggest payment card brand.

Envisioning Bitcoin’s Technology at the Heart of Global Finance
The New York Times | 8.12.16

A new report from the World Economic Forum predicts that the underlying technology introduced by the virtual currency Bitcoin will come to occupy a central place in the global financial system. A report released Friday morning by the forum, a convening organization for the global elite, is one of the strongest endorsements yet for a new technology — the blockchain — that has become the talk of the financial industry, despite the shadowy origins of Bitcoin.

US Consumer Coalition States CFPB Takes Operation Choke Point Mantle
The Green Sheet | 8.11.16

US Consumer Coalition (USCC) President Brian J. Wise issued the following statement today in response to a Consumer Financial Protection Bureau (CFPB) lawsuit against Intercept, a Fargo, N.D. payment processor that processed transactions on behalf of payday lenders. In this lawsuit, as highlighted in American Banker, "the CFPB asserted that a payment processor is a 'covered person' under the Consumer Financial Protection Act." "For three years, the US Consumer Coalition has led the fight against Operation Choke Point. USCC uncovered the secretive program, then spearheaded by the Justice Department and FDIC, that pressured banks and payment processors to shut down accounts of lawful businesses in specific industries.

Debit Begins Its Shift to More Secure Types of Transactions
Discover | 8.09.16

The 2016 Debit Issuer Study, commissioned by PULSE, takes stock of the debit industry’s shift to chip (EMV) cards and mobile payments. As a result of the October 2015 liability shift, financial institutions have begun their chip debit card roll-out in earnest with optimism about the technology’s potential for enhancing the security of payment card transactions. The study also details financial institutions’ move to support more mobile payment options as competition grows among mobile wallet providers.

Square Gives Loans to Restaurants Outside Network With Upserve
Bloomberg | 8.10.16

Square Inc. is joining with restaurant technology startup Upserve to offer loans to eating establishments, extending credit for the first time to businesses that operate outside of its own payments processing system. Working with Upserve gives Square access to more than 7,000 restaurants across the country. The startup manages more than $8 billion annually in transaction volume and is adding 200 to 250 restaurants every month, according to the company.

Related: Square is Chasing Growth by Expanding its Lending Business to Non-Square Merchants

TSG in Nerdwallet: How Credit Card Issuers Define ‘Travel’
Nerdwallet | 8.09.16

In the early days of credit cards, payment networks categorized purchases using the federal government’s Standard Industrial Classification codes, says Chuck Fillinger, a Senior Associate at The Strawhecker Group, a banking consulting firm. As more merchants started accepting credit cards, categories expanded beyond the old government-based system and became more specific. There are now 795 MCCs, Fillinger says. As new card-accepting merchants emerge, more categories will likely be added. “Travel is probably the most confusing, with a variety of MCCs, as there are so many different aspects. You have trains, buses, airlines, hotels and Uber and Lyft,” Fillinger says.

TSG/ETA Release U.S. Economic Indicators
TSG | 8.11.16

The Electronic Transactions Association, in partnership with The Strawhecker Group, is pleased to release this special report on the U.S. economy, focused within the context of the electronic payments ecosystem. This report is a member benefit provided to the ETA's 500+ worldwide member companies.

ETA Member Login - Please login and navigate to 'Member-Only Content' to download Economic Indicators. Forgot your password? Click here.

Report Highlights:

  • American consumers are still cautious
    • Consumers are opting to squirrel away their extra gas savings amid uncertainty in financial markets, particularly due to the Brexit vote, as well as the upcoming elections
    • Consumers are expected to rev up their spending in the latter half of 2016
  • Payments volume is consistently on the rise
    • Over $4.9 trillion spent via Visa, Mastercard, American Express, Discover, and PayPal in the U.S. in 2015
    • U.S. consumer spending via electronic payments methods continues to be very strong at a 9% CAGR, driven by organic growth of the economy as well as consumer usage and merchant acceptance of credit/debit cards
  • Public Payments companies (TSGPX) continually outperform the S&P 500
    • The TSGPX has a 22.9% CAGR versus 8.9% for the S&P 500
    • A $100 investment in the TSGPX in Q1 2011 would now be valued at $328, as compared to $164 if invested in the S&P 500
  • The POS and its capabilities are evolving
    • 27% of U.S. merchants utilize a tablet-based point of sale system
    • The mPOS market in North America is expected to increase 156% by 2019

Apple Blasts CBA, NAB and Westpac for Forming a 'Cartel' Against Apple Pay
International Business Times | 8.11.16

Apple has lashed out at three of Australia’s biggest banks for refusing Apply Pay and attempting to access iPhone’s digital wallet access. Commonwealth Bank of Australia (CBA), National Australia Bank (NAB) and Westpac Banking Corp want their own digital wallets access on iOS, but Apple has argued against it. The three banks have appealed to the Australian Competition & Consumer Commission to allow them to challenge Apple’s monopoly of its iPhone digital wallet. They want the ACCC to intervene on their behalf and force Apple to open the access to its NFC antenna.

CVS Pharmacy Launches its Own Mobile Payments and Loyalty Solution, CVS Pay
Tech Crunch | 8.11.16

CVS Health today is launching its own mobile payments solution that will allow customers to pay for products, pick up prescriptions, earn ExtraCare loyalty rewards, as well as pay – just by scanning the barcode in the CVS mobile app. The idea, the company explains, is to eliminate the number of steps it takes today to complete a checkout, which today is a very manual process.

Related: This New App Proves Mobile Payments Are a Mess

Rio Olympics: Visa Tests NFC-Enabled Wearables for Mobile Payments
RCR Wireless | 8.09.16

Payments using near field communication technology have been a promise for a while, but until now no application has been popular or good enough to replace plastic cards. With about 4,000 points of sale equipped with NFC, Visa is using the Rio de Janeiro Olympics to showcase the use of the short-range wireless connectivity standard to allow visitors and athletes to use rings, bracelets and watches to make purchases by tapping them at any NFC-compatible payment terminal.

CSI Consumer Survey: Nearly 3 in 10 Consumers Willing to Use Mobile Wallets in the Next Six Months

Yahoo! Finance | 8.10.16

Although mobile wallets are a relatively new form of payment, nearly 3 in 10 consumers (29 percent) expressed a willingness to adopt this emerging payments alternative in the next six months, according to recently released results from a consumer survey by Computer Services, Inc., a leading provider of financial technology solutions.

Alibaba Makes VR Payments Play
Finextra | 8.10.16

Chinese web behemoth Alibaba is working on bringing its payments clout to VR, developing technology that will let people buy goods in a virtual world by making physical gestures. The company's Ant Financial unit is developing a system that could let shoppers strolling through a VR mall make purchases with a nod of the head.

Related: Alibaba Posts Record Growth as Mobile Revenue Tops Desktop for First Time

Walmart Buying Jet.com for $3.3B to Take on Amazon
CNN Money | 8.08.16

Walmart announced that it has agreed to buy Jet.com, a much-hyped e-commerce site trying to take on Amazon directly, for $3 billion in cash, with another $300 million in stock kicked in for good measure. The deal may help Walmart reinvigorate growth in its online shopping business, which has slowed in recent quarters. Meanwhile, Amazon's overall sales have rocketed above $100 billion annually.

Hacked Companies Still Prioritize Innovation Over Cybersecurity
CIO | 8.08.16

Eight out of 10 executives surveyed acknowledge that their companies had been compromised by cyber attacks in the past two years, according to a new study by KPMG. Yet less than half of the 403 CIOs, CISOs and CTOs the firm surveyed said that they had invested in information security in the past year. We’re still seeing companies taking a passive or reactive approach toward cybersecurity, when in fact cyber should be a top-line business issue thought about and practiced company-wide," says Greg Bell, leader of KPMG's U.S. cyber practice.

Samsung Pay Hack Lets Attackers Skim Cards to Make Fraudulent Payments
The Verge | 8.09.16

Contactless mobile payments come as standard in Samsung's latest Galaxy smartphones, but a hacker has found a way to intercept their signals. In a presentation given at Defcon, Salvador Mendoza outlined a number of attacks targeting Samsung Pay, with the smartphone maker responding that it knew about this flaw, but that such attacks are "extremely difficult" to pull off. The attacks outlined by Mendonza focus on intercepting or fabricating payment tokens — codes generated by the user's smartphone that stand in for their credit card information.

Related: Samsung Denies Samsung Pay Can Be Hacked Via The Tokenization Process

How Secure Is Cryptocurrency?
Bank Info Security | 8.08.16

In the wake of the recent hack of the Bitfinex bitcoin exchange in Hong Kong, the Ethereum hack earlier this year and the Mt. Gox hack in 2014, the stability and security of cryptocurrency is being questioned. Cryptocurrency expert Robert Schwentker says these attacks could raise questions about whether regulatory oversight of bitcoin exchanges is needed.

Self-Checkout Services Make Theft More Likely
StarTribune | 8.10.16

Self-service checkout technology may offer convenience and speed, but it also helps turn law-abiding shoppers into petty thieves by giving them “ready-made excuses” to take merchandise without paying, two criminologists say. In a study of retailers in the U.S., Britain and other European countries, professor Adrian Beck and Matt Hopkins of the University of Leicester in England said the use of self-service lanes and smartphone apps to make purchases generated a loss rate of nearly 4 percent, more than double the average.

Credit-Card Use Increasing Among People with Low Credit Scores
The Wall Street Journal | 8.09.16

The credit card is coming back, even among people with the lowest credit scores. In the second quarter, total household debt increased by $35 billion to $12.3 trillion, according to the New York Fed’s latest quarterly report on household debt. That increase was driven by two categories: auto loans and credit cards. While auto loans have been rising at a steady clip for the past six years, rising credit-card balances are a new development. After the recession, households cut back on credit-card use until 2014. Since then, card balances have risen by about $70 billion.

The U.S. Economy Is Suffering From the Same Old Problem
Bloomberg | 8.09.16

A pair of better than expected non-farm payrolls reports affirms that the U.S. economy doesn't have a new problem, that is, a rapid slowdown in job growth — just the same old one: sluggish productivity. And monetary policymakers will be aiming to ensure that this blight on the U.S. economy disappears as labor slack continues to diminish, according to a Deutsche Bank AG team led by Dominic Konstam. That's because continued low productivity growth likely entails that businesses aren't boosting capital spending to increase output at a time when another input to the production process — labor — is becoming more scarce and more expensive.

NAB Adds New Tools to Tackle Remote Payments ID Risk
ISO & Agent | 8.08.16

The National Australia Bank will partner with digital identity proofing company iSignthis to provide advanced card services to merchant customers in Australia and New Zealand. The two companies plan to make the service – an integration of NAB's card acquiring services and the identity, payment processing and authentication solutions by iSignthis –available in December. NAB will act as the acquirer for transactions processed by iSignthis. Both will take a share of the merchant fee, iSignthis said in a news release, though further details were not disclosed.

US Payments Forum Publishes Update to Payment Networks Minimum Requirements for US EMV Chip Deployment
Nasdaq | 8.11.16

As U.S. issuers, merchants, acquirers and processors continue their migrations to EMV chip technology for more secure payments, many stakeholders may ask: “What is the least complex way to deploy chip for my organization?” To help merchants and acquirers develop their strategies for implementation, payment network members of the U.S. Payments Forum (formerly the EMV Migration Forum) have updated the guide outlining their minimum requirements for chip deployment, including changes to incorporate requirements for the recently announced faster EMV solutions from American Express, Discover, MasterCard and Visa.

Vantiv Wins Vendor Award of Excellence at 2016 RetailNow
Vantiv | 8.08.16

“We are humbled and grateful to our partners who voted for us for this award. It is the eighth consecutive year we have won - first as Mercury Payment Systems and now as Vantiv Integrated Payments,” said Matt Taylor, group president of integrated payments and emerging channels at Vantiv. “This honor reflects the commitment to, and value of the partnerships we have with the integrated point of sale ecosystem of software developers and resellers.”

Apple Pay Coming to Vending Machines across Canada via a Partnership between the Canadian National Vending Alliance and PayRange

PR Newswire | 8.08.16

The Canadian National Vending Alliance (CNVA), a coalition of the largest vending operators across Canada, announces that it has partnered with PayRange to bring mobile payment across 100% of its vending machines coast-to-coast. he mobile payment capabilities at the core of the patented PayRange platform are allowing CNVA to bring cashless payment acceptance to their vending machines without the expense or complexity of installing card readers and network connections. The vending machine only needs the BluKey™ dongle which installs in seconds.

BlueSnap Integrates Visa Checkout to Bring Frictionless Checkout to the Masses
BusinessWire | 8.08.16

BlueSnap, a global payments technology company, announced that Visa Checkout now available in its Powered Buy Platform to give merchants the frictionless checkout experience they need to reach global shoppers and solve checkout abandonment with higher payment conversions. “We are thrilled to make Visa Checkout available in our Platform to give our merchants the power to offer a frictionless online checkout experience for global, mobile shoppers. We think the wallets are critical for online merchants to capture the most mobile shoppers,” said Ralph Dangelmaier, CEO of BlueSnap.

HSBC and Bank of America Merrill Lynch Use Hyperledger Project for Blockchain-based Trade Finance
International Business Times | 8.10.16

Bank of America Merrill Lynch, HSBC and the Infocomm Development Authority of Singapore (IDA) are using a blockchain prototype to streamline the paper-heavy world of global trade. The consortium used the Linux Foundation open source Hyperledger Project blockchain fabric, supported by IBM Research and IBM Global Business Services.

Mastercard Helps Chinese Students Pay U.S. Tuitions
Mastercard | 8.10.16

Mastercard is offering cardholders in China the ability to use local credit and debit cards to pay U.S. tuitions and other costs through a first-of-its-kind online payment service found at www.plastiq.com/mcuni. Largely created for Chinese students studying abroad, the site addresses international payment challenges, including limited payment methods and currency exchange. Many U.S. schools only accept payment via check or electronic bank transfer which can be difficult to manage overseas.

Cayan Teams with Blue Sage Software
Green Sheet | 8.10.16

Blue Sage Software, a leading provider of software to the automotive aftermarket, announced their latest integration to Cayan's Genius Platform, a cloud-based payments solution that mitigates the business challenges associated with integrating payment to the point-of-sale (POS). As a result of this partnership, users of Blue Sage's PaceSetter™ solution will be able to provide customers with a faster, more flexible and engaging EMV payment processing solution at the point-of-sale.

First American Payment Systems Wins the ATSI Call Center Award of Distinction For the Fourth Year in a Row
PRWeb | 8.10.16

First American Payment Systems has won the Association of TeleServices International’s (ATSI) coveted Call Center Award of Distinction for the fourth year in a row. "This award highlights our dedication to our merchants and providing them an exceptional customer experience,” said Latiffa Sharpe, Vice President of Merchant Services for First American Payment Systems. “As we continue to serve our merchants with a best-in-class customer service team, this award demonstrates the level of service we are providing is truly outstanding. We are honored to win this award for the fourth time.”

Cash-Wa Distributing Co. Selects FTNI’s ETran Integrated Receivables Platform for Advanced RDC and Online Payment Solutions
FTNI | 8.09.16

Financial Transmission Network, Inc. (FTNI) announced that Cash-Wa Distributing Co. selected it to provide advanced Remote Deposit Capture (RDC) and Fully-Hosted Online Payment Portal solutions. Cash-Wa, a top-twenty broadline foodservice distributor, and FTNI, a leader in truly integrated receivables solutions, are on schedule to roll out these advanced receivables processing technologies early in Q3 2016.

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