The Strawhecker Group recently surveyed the merchant acquiring industry to determine the prevailing line item pricing rates for the cost of third-party processing in the U.S. market. The study included merchant acquirers who use third-party providers for front-end authorization and back-end settlement services.
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In total, information was gathered from 83 front-end authorization portfolios and 78 back-end settlement relationships, providing each volume band with ample data points. The chart that follows shows the distribution of data across the volume bands, along with the aggregate monthly transactions for each category.
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Venmo, the hugely popular peer-to-peer payment service owned by PayPal, is under investigation by the Federal Trade Commission. Its parent company acknowledged the situation today in an SEC filing. "On March 28th, 2016, we received a Civil Investigative Demand (CID) from the Federal Trade Commission as part of its investigation to determine whether we, through our Venmo service, have been or are engaged in deceptive or unfair practices in violation of the Federal Trade Commission Act," the filing reads.
Related: Venmo is Growing Ridiculously Fast
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Wendy's data breach that began last fall has spawned a lawsuit seeking class-action status. A Pennsylvania credit union filed the suit in U.S. Federal Court on Monday, alleging that Wendy's failed to secure customer payment data and that banks have so far footed the bill to make consumers whole. First Choice Federal Credit Union, located in New Castle, Pennsylvania, alleges in the suit that the data breach lasted for almost five months, from late October to early March. The credit union cites credit-card issuer Visa as the source of that information and says that financial institutions stand to lose millions of dollars.
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PayPal Holdings Inc. said it is expanding newer services such as Xoom and Venmo as it seeks more ways to stand out from a bevy of emerging mobile payments tools. The San Jose, Calif., company’s shares rose about 2% in after-hours trading, after it announced that its total payments volumes were $81 billion for the quarter, up 29% from a year ago, and ahead of analyst expectations of $79 billion for the quarter. PayPal revenues also grew, but more slowly. Revenue in the first quarter was $2.54 billion, up 19% from a year ago, and just ahead of analyst forecasts of $2.5 billion.
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Citigroup (C.N) has puts its Asia payment processing business on the block as part of a ongoing global plan to exit non-core operations, people familiar with the matter told Reuters. Citi's merchants acquiring business provides credit and debit card payment processing services to about thousands merchants in Asia and it generates around $400 million of gross revenues, these people added. About 70 percent of the business comes from Hong Kong, Singapore and India, they added.
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The “wallet” in the modern sense of “flat case for holding paper currency” dates back almost 200 years. The word itself goes back 700 years, and the concept (minus paper currency) for millennia. Leather wallets were not “smart,” of course; they were atom agnostic, payment type agnostic, even, as credit cards and the like started proliferating in the mid 20th century. But today the payment type is almost a pointer — in computer science vernacular — to a source of money. And the wallet itself is the master pointer, used for opening and closing a transaction, and choosing which sub-pointer to assign.
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Most of the new EMV card readers are also designed to accept mobile wallets, such as Apple Pay, Samsung Pay and, my personal preference, Android Pay. These payment methods are speedier than card-based EMV payments and just as secure. They are slowly becoming mainstream: About 28% of smartphone owners surveyed said they had used mobile payments in the 12 months prior to the survey, according to a 2015 study from the Federal Reserve. “There’s somewhat of a perfect storm brewing,” says Jared Drieling, a manager at The Strawhecker Group. “I think with the EMV process of having a consumer insert or dip that card, and the whole process taking a little longer, it essentially lowers the bar now for mobile wallets to take off.”
Related: More Than 1 in 3 Consumers Still Experiencing Friction Using EMV-enabled chip Cards In-Store
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The Electronic Transactions Associations, a trade group based in Washington, D.C., that represents the merchant-services industry, has opened an office in San Francisco, its first outside of the nation’s capital. The move is indicative of Silicon Valley’s growing presence within the payments industry and, specifically, within merchant services, says Jason Oxman, chief executive of the association.
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A troubling gap is growing between the promises being made around mobile payments to consumers and merchants, and what payments technology providers are actually delivering, according to PayPal’s Bill Ready. “People really are demanding and expecting to get much better services through the mobile channel,” said Ready, senior vice president of product and engineering at PayPal, during a speech last week at the Electronic Transactions Association’s annual gathering in Las Vegas.
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MasterCard unveiled M/Chip Fast, a new application of the company’s existing technology to help speed EMV transactions and shoppers through checkout lines. Developed on the principles of contactless or ‘tap-and-go’ technology, M/Chip Fast effectively prioritizes the parts of transactions that are critical to security. Cardholders can expect to experience speeds closer to the familiar magnetic stripe transactions with the added security of EMV.
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Goldman Sachs Group Inc.’s new online bank, acquired from General Electric Co. last week, caps a decade-long shift by the firm and Morgan Stanley to lean more on deposits for funding -- efforts that will help them comply with a U.S. rule unveiled Tuesday. Goldman Sachs took over $16 billion of deposits from the online business it bought from GE Capital. It merged the platform with its GS Bank USA unit and is offering 1.05 percent interest on savings accounts opened online. That’s adding to a deposit base that’s already grown almost seven-fold since 2007.
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Turkey is introducing a new electronic card payment clearing system called TROY, the InterBank Card Center (BKM) announced on Thursday. "We are ready. Since April 1, 2016, TROY has been available at all swiping machines and ATMs," Soner Canko, chairman of the card center, told a press conference.
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With over 1,000 attendees representing every segment of the payments eco-system, the opportunity to learn, network and collaborate is unbeatable; here's why...
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Apple just snagged itself another 5 million potential Apple Pay customers, after the tech giant announced a new partnership with one of Australia's largest banks, ANZ. The move firmly establishes Apple in the mature Australian market, where contactless and mobile payments already make up the majority of everyday transactions (60 percent of card transactions in Australia are now contactless). The partnership will also help Apple gain a further foothold in the growing Asian market: ANZ bills itself as "Australia's leading bank in Asia" as well as the leading bank in New Zealand and the South Pacific.
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Some consolidation afoot in the world of mobile payments: today Groupon- and BBVA-backed SumUp and Rocket Internet’s Payleven — two of the several European startups that cropped up in the wake of Square with their own smartphone accessories to make debit and credit card transactions — have announced that they are merging, creating a business with 1 million customers in 15 countries. The two companies — both founded by Berliners and both based out of London — are not putting a price on the deal of any kind, in keeping with how both have declined to talk about valuations and sometimes the size of funding rounds in years past.
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Samsung Pay can now be used to withdraw cash from ATMs in South Korea, the company has announced, adding another useful feature to the growing mobile payment system and bringing it one step close to removing the need for physical bank card. The ATM feature is currently limited only to customers of the Woori Bank, and Samsung hasn’t stated if or when this option will arrive for other bank customers. Even so, this is another technological win for the service. Samsung Pay’s Magnetic Secure Transmission technology, which allows the service to work with older card readers, already gave Samsung’s option an advantage over its Apple and Android Pay rivals.
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Affirm, a San Francisco-based startup best known for providing small loans to its customers as a credit card alternative, is beginning to expand into personal finance management. On Wednesday the company revealed it has acquired Sweep, a small startup that last fall released a mobile app that helps users track and manage their bills, spending, and savings. Most of Sweep’s team is joining Affirm’s and its app will be shut down on May 26, the company said. Terms of the deal were not disclosed, though Affirm did acquire Sweep’s technology as well.
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Mumbai-based digital payment startup TranServ has raised $15 million in Series C funding led by IDFC SPICE Fund and Micromax Informatics, along with existing investors Nirvana and Faering Capital India Evolving Fund. In a statement, the company said the fresh capital will be utilised towards accelerating business growth and investing in new product lines, including micro-credit. It will also enhance the Udio product suite including the Android/iOS apps for consumers and application programme interface (API stack) for business partners.
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Hundreds of security threat reports come out every year from security vendors. We see at least two a month. Most focus on the single type of threat that the sponsoring vendor happens to offer protection against and are thinly veiled marketing pieces. Verizon's Data Breach Investigation Report is different. The telecom giant creates it in concert with more than 67 organizations, government agencies among them. This year's report covers more than 64,199 incidents, of which 2,260 were confirmed data breaches. About 1,368 of the incidents and 795 of the confirmed breaches occurred in the financial services industry.
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The PCI Data Security Standard version 3.2 released Thursday not only includes new requirements to safeguard payment data, including multifactor authentication, but also “advocates that organizations focus on people, process and policy, with technology playing an important role in reducing the overall cardholder data footprint,” PCI Security Standards Council General Manager Stephen Orfei said in a release. The council's chief technology officer (CTO), Troy Leach, said the time has come for multifactor authentication, which the updated standard requires of anyone that has administrative access to card data.
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Cybercrime can pay very well. The challenge, of course, is staying out of jail long enough to spend one's ill-gotten gains. To wit, malware kingpin Vladimir Tsastin, 35, an Estonian national, has been sentenced to serve more than seven years in prison after pleading guilty in July 2015 to running a massive click-fraud scheme that earned $14 million in profits via more than 4 million victims across 100 countries. U.S. District Judge Lewis A. Kaplan this week sentenced Tsastin to serve 87 months in prison, followed by one year of probation, calling his crimes "brazen, sophisticated and outrageous," according to the U.S. Department of Justice.
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A longtime reader recently asked: “How do online fraudsters get the 3-digit card verification value (CVV or CVV2) code printed on the back of customer cards if merchants are forbidden from storing this information? The answer: If not via phishing, probably by installing a Web-based keylogger at an online merchant so that all data that customers submit to the site is copied and sent to the attacker’s server.
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Consumer spending barely rose in March as Americans continue to pocket steady gains in their incomes. Americans increased spending by a scant 0.1% last month, the government said Friday. The increase was below Wall Street expectations: economists surveyed by MarketWatch had forecast a 0.2% increase. Incomes, meanwhile, advanced a sharp 0.4% last month, the Commerce Department reported.
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The nation’s gross domestic product advanced at a mere 0.5 percent annual growth rate during the first quarter after a mediocre increase for the final quarter of 2015, the Commerce Department reported on Thursday, suggesting that the economy is stalled. But the job market, according to Labor Department figures released in recent months, appears to be at its healthiest point since the boom of the late 1990s. Which picture is right?
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The U.S. economy expanded in the first quarter at the slowest pace in two years as American consumers reined in spending and companies tightened their belts in response to weak global financial conditions and a plunge in oil prices. Gross domestic product rose at a 0.5 percent annualized rate after a 1.4 percent fourth-quarter advance, Commerce Department data showed Thursday. The increase was less than the 0.7 percent median projection in a Bloomberg survey and marked the third straight disappointing start to a year.
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First Data Corporation, a global leader in commerce-enabling technology and solutions, reported financial results for the first quarter ended March 31, 2016. Consolidated revenue for the first quarter was $2.8 billion, up 3% versus the prior year period, or up 5% excluding currency impacts. Segment revenue, which modifies consolidated revenue for pass-through items and other impacts, was $1.7 billion for the quarter, up 2% versus the prior year period, or up 5% excluding currency impacts. For the first quarter 2016, the net loss attributable to First Data was $56 million, which compares to a net loss of $112 million in the prior year period.
Related: First Data Beats Street, Eyes US Merchant Acquirer Business Gains
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MasterCard Incorporated announced financial results for the first quarter of 2016. The company reported net income of $959 million, a decrease of 6%, or 2% on a currency-neutral basis, and earnings per diluted share of $0.86, down 3%, or up 1% on a currency-neutral basis, versus the year-ago period. As expected, earnings per diluted share were unfavorably impacted by $0.08 due to the non-recurrence of a discrete tax credit and balance sheet remeasurement related to Venezuela in last year’s first quarter. Net revenue for the first quarter of 2016 was $2.4 billion, a 10% increase versus the same period in 2015.
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Vantiv, Inc. announced financial results for the first quarter ended March 31, 2016. Revenue increased 16% to $819 million in the first quarter as compared to $706 million in the prior year period. Net revenue increased 15% to $431 million as compared to $374 million in the prior year period, reflecting strong growth in both business segments. On a GAAP basis, net income attributable to Vantiv, Inc. was $40 million or $0.25 per diluted share as compared to $19 million or $0.13 per diluted share in the prior year period.
Related: Vantiv Makes Executive Leadership Appointments
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TSYS reported results for the first quarter of 2016 and raised its guidance after the acquisition of TransFirst, which closed on April 1, 2016. TSYS’ results for the first quarter do not include the results of TransFirst. “Our financial performance for the first quarter was outstanding across all four of our segments. These results reflect exceptional execution by the TSYS team as we progress toward achieving our vision to become the leading global payment solutions provider and to deliver outstanding returns to our shareholders,” said M. Troy Woods, chairman, president and chief executive officer of TSYS.
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Visa celebrated the 100 day milestone to the Rio 2016 Olympic Games. In its 30th year as the exclusive payment provider of the Olympic Games, Visa is creating and managing the entire payment system infrastructure and network throughout all venues including stadiums, press centers, point-of-sale (POS), the Olympic Village and Olympic Superstores. This year Visa will implement 4,000 POS terminals across key Olympic venues, as well as 11 ATMs in partnership with Bradesco. Visa also extends the value of its sponsorship to Olympic Games host cities, facilitating the development and advancement of payment infrastructure in those markets.
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Deutsche Bank is creating a 'digital factory', bringing together some 400 software developers, IT specialists and banking experts to develop new products and services as it struggles to reposition the bank for a digital future in the face of challenging market conditions. The creation of the digital unit was previewed by John Cryan, co-CEO of the giant German bank as he reported a first quarter revenue decline of 22% year-on-year in the face of a "challenging" environment and the impact of strategic decisions to downsize and exit certain businesses.
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Ecommerce platform Shopify is getting into the money lending business today with the launch of Shopify Capital, a service that gives merchants cash advances to invest back into their companies. Founded out of Ottawa, Canada in 2004, Shopify offers a cloud-based commerce platform designed to make it easier for companies to set up shop online, though it also caters to in-store transactions with a point-of-sale system to accept card payments.
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The Alibaba Group of China has become a colossus in the global Internet world, with a market value of nearly $200 billion. Now its online payment affiliate is aiming for a similarly lofty financial goal: becoming one of the most valuable privately held technology companies in the world. The affiliate, known as the Ant Financial Services Group, said on Tuesday that it had raised $4.5 billion from investors. The private financing round suggests that the company is now valued at about $60 billion — or more than $10 billion over the market value of PayPal Holdings, its closest analogue.
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Wells Fargo will soon roll out eyeprint verification for its commercial customers using its mobile banking platform. The $1.6 trillion-asset bank plans to deploy Eyeprint ID software by the end of the second quarter, Angenette Maniego Lau, a spokeswoman for the bank, confirmed Wednesday. The offering will allow commercial customers to replace their Wells Fargo token if they choose. The software reads pictures of the users' eyes, which they take with their smartphones, and translates veins and other physical detailing in the images into digital codes that are matched against a stored template.
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International Bancard, an industry-leading credit card processing and payment acceptance solution provider, announced today that Gary Rutledge, a payments expert with more than 30 years of experience, will assume the role of President on May 02, 2016. In this role, Rutledge will report to and work with the company’s founder and Chief Executive Officer, David A. Iafrate, to integrate and oversee execution of the company’s vision and strategic plan. Rutledge will have direct oversight and leadership of the company’s two teams: the revenue team and the revenue support team.
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The CNP Expo is proud to announce an industry-first partnership with the United States Secret Service. The Secret Service is the U.S. government agency tasked with getting e-commerce, identity thieves and credit card fraudsters off the street and they can’t do it without great information. They have teamed up with CardNotPresent.com and the CNP Expo to open a dialogue with merchants about their fraud issues. Agents from the Secret Service will be on site at the CNP Expo and they want your help fighting back. Your experience and information can help put fraudsters behind bars. If you would like to schedule a meeting with Dana Chmiel, Special Agent, U.S. Secret Service, please click here.
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Visa Inc. announced the opening of its Singapore innovation center, the first in a network of new regional innovation centers that Visa is launching globally. The new 7,000 square foot Singapore facility will serve as a destination for clients, partners and developers, across the region, to work alongside Visa experts and jointly create the next generation of payment and commerce applications.
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Global Payments Inc., a leading worldwide provider of payment technology services, announced that it has entered into an accelerated share repurchase (ASR) agreement with Goldman, Sachs & Co. to repurchase an aggregate of $50 million of the company's common stock. Under the terms of the ASR, the company expects to receive an initial delivery of shares having a value of approximately $40 million. The total number of shares ultimately repurchased under the agreement will be determined upon final settlement and will be based on the volume-weighted average price of the company's common stock during the repurchase period.
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U.S. Bank has launched Deal Local, a new mobile app designed to help local businesses attract new customers and build loyalty with their existing customers through deals and rewards. Exclusive to Lawrence as a pilot, the app is live in the Apple and Google Play app stores and is already being used by Mass St. favorites Weaver’s, Milton’s Café and Hobbs, among others. “We designed Deal Local to help locally-owned small businesses grow and connect with their customers,” said Dominic Venturo, chief innovation officer for U.S. Bank.
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The Industrial and Commercial Bank of China (ICBC) USA launched its first U.S. credit cards in New York on Tuesday, aiming to serve consumers who travel frequently between the world's two largest economies. The largest bank and card issuer in China is offering new credit cards featuring two brands, UnionPay and Visa, for the needs of newcomers to the United States who seek to find bank services and those travelling to China who find it difficult to make payments without cash.
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