Why Stripe Has Nearly Doubled Its Valuation

The news on Friday (Nov. 25) that Stripe had raised $150 million of new funding on a company valuation of $9 billion has been seen by many as a validation that this is a company at the top of the fintech game.
The news on Friday (Nov. 25) that Stripe had raised $150 million of new funding on a company valuation of $9 billion has been seen by many as a validation that this is a company at the top of the fintech game.

Podcast: Underwriting Payment Facilitators Demystified

This week we’re talking with Rich Consulting president and compliance expert Deana Rich about underwriting payment facilitators. How is it different from underwriting other entities, and what are some of the special considerations?

Acquirers who are thinking about entering a relationship with a payment facilitator need to fully understand the risks and how to control them before making the commitment, Rich said.

This week we’re talking with Rich Consulting president and compliance expert Deana Rich about underwriting payment facilitators. How is it different from underwriting other entities, and what are some of the special considerations?

PSD2 Creates Opportunity for New Wave of European PFs

Europe is undergoing a step change in banking and payment services, leveraging open API technology and new regulatory frameworks to make a historically cumbersome industry more competitive, secure and customer-friendly.

The goal? “Customer first” digital banking and Europe-wide faster payments to drive innovation and increase cross-border trade in a European B2C e-commerce market worth over 425 billion euros.

Europe is undergoing a step change in banking and payment services, leveraging open API technology and new regulatory frameworks to make a historically cumbersome industry more competitive, secure and customer-friendly. The goal? “Customer first” digital banking and Europe-wide faster payments to drive innovation and increase cross-border trade in a European B2C e-commerce market worth over 425 billion euros.

News Roundup: PayPal’s New App, Uber’s Day in Court

In this week’s news roundup, PayPal introduces a new app for business owners, Uber goes to court, and Adobe tracks Black Friday online sales.
In this week’s news roundup, PayPal introduces a new app for business owners, Uber goes to court, and Adobe tracks Black Friday online sales.

PayPal Integrates Voice Commands in Time for Holiday Group Shopping

PayPal recently predicted that more than 17 million P2P transactions will occur during the month of December, as consumers – particularly millennials – pool money for gifts and use P2P payment apps to collect payment from each other.

According to the company’s Holiday Money Habits Study, an online survey of 1,000 American consumers released this week, half of millennials planned to go in on gifts together this holiday season compared to two-fifths of consumers in general.

PayPal recently predicted that more than 17 million P2P transactions will occur during the month of December, as consumers – particularly millennials – pool money for gifts and use P2P payment apps to collect payment from each other.

Shopify Adds Outsourced Fulfillment Services from Shyp

Shyp announced this week that it is providing fulfillment services to merchant customers of leading PF and e-commerce platform Shopify. PFs like Shopify are continually looking for ways to add value for their customers. Shopify sees its relationships with partners such as Shyp as a significant way to provide that value to its sellers.
Shyp announced this week that it is providing fulfillment services to merchant customers of leading PF and e-commerce platform Shopify. PFs like Shopify are continually looking for ways to add value for their customers. Shopify sees its relationships with partners such as Shyp as a significant way to provide that value to its sellers.

Podcast: Was 2016 the Year of the Service Provider Breach?

This week we’re talking with Chris Bucolo, director of market strategy for managed security service provider ControlScan. Last week, Bucolo wrote a guest post for PaymentFacilitator.com in which he talked about how risk is viewed and managed within the payment facilitator space. He expands on the topic in this conversation.
This week we’re talking with Chris Bucolo, director of market strategy for managed security service provider ControlScan. Last week, Bucolo wrote a guest post for PaymentFacilitator.com in which he talked about how risk is viewed and managed within the payment facilitator space. He expands on the topic in this conversation.

News Roundup: Partnerships and Launches from Apple, Airbnb, Stripe and More

In a roundup of this week’s news, AirPlus International and Airbnb are joining forces, NMI has added features to its platform for payment facilitators, and Stripe has rounded up handy tools for its merchants.
In a roundup of this week’s news, AirPlus International and Airbnb are joining forces, NMI has added features to its platform for payment facilitators, and Stripe has rounded up handy tools for its merchants.

Adyen Enables Access to 300 Million Chinese Shoppers

Dutch payment facilitator Adyen has added WeChat Pay to the roster of local payment options available to its merchants. WeChat Pay is the payments feature within the popular Chinese WeChat messaging app.
Dutch payment facilitator Adyen has added WeChat Pay to the roster of local payment options available to its merchants. WeChat Pay is the payments feature within the popular Chinese WeChat messaging app.

GoOpti Expanding its Reach, Getting More Riders Where They Need to Go

Getting to the airport is not necessarily an easy thing to do. Driving yourself isn’t always practical, nor is it always pleasant after a long flight. Public transportation and shuttles can be difficult to schedule; you have to work with available times, and pick-up and drop-off points may not always be nearby.

GoOpti is looking to change all that, in an expanding number of locations across Europe.

Getting to the airport is not necessarily an easy thing to do. Driving yourself isn’t always practical, nor is it always pleasant after a long flight. Public transportation and shuttles can be difficult to schedule; you have to work with available times, and pick-up and drop-off points may not always be nearby. GoOpti is looking to change all that, in an expanding number of locations across Europe.

Payment Facilitators and Risk: How the Market Views Submerchants

There is plenty of evidence that the payment facilitator market will grow significantly over the next few years. There are multiple drivers for this growth, including the belief that the increased complexity of compliance/security requirements for merchants will generate more interest in this payments model.

Although there is general agreement that the growth potential is large, there is a divergent set of opinions on how risky the model is, and how risk needs to be approached.

There is plenty of evidence that the payment facilitator market will grow significantly over the next few years. There are multiple drivers for this growth, including the belief that the increased complexity of compliance/security requirements for merchants will generate more interest in this payments model. Although there is general agreement that the growth potential is large, there is a divergent set of opinions on how risky the model is, and how risk needs to be approached.

Financial Inclusion: Huge Opportunity for Payment Facilitators?

For many micro and small merchants in developing countries, the ability to accept electronic payments is out of reach. Spotty electricity and internet access prevent reliable connectivity to payments infrastructure. The merchants’ low profit margins make buying equipment and paying service providers difficult. And in many cases, their customers prefer to pay in cash.

Yet a recent study commissioned by Visa argues that reliance on cash excludes individuals in the developing world from the wider economy. It says that access to affordable digital services has the potential to help lift individuals and families out of poverty.

For many micro and small merchants in developing countries, the ability to accept electronic payments is out of reach. Spotty electricity and internet access prevent reliable connectivity to payments infrastructure. The merchants’ low profit margins make buying equipment and paying service providers difficult. And in many cases, their customers prefer to pay in cash. Yet a recent study commissioned by Visa argues that reliance on cash excludes individuals in the developing world from the wider economy. It says that access to affordable digital services has the potential to help lift individuals and families out of poverty.

Podcast: WePay’s Aberman on Partner-Driven Expansion

This week’s podcast continues our conversation with WePay Chief Strategy Officer Rich Aberman. Aberman discussed how WePay’s business model as a “partner-driven business” impacts its approach to geographic expansion.
This week’s podcast continues our conversation with WePay Chief Strategy Officer Rich Aberman. Aberman discussed how WePay’s business model as a “partner-driven business” impacts its approach to geographic expansion.

4 Things PFs Need to Know About Anti-Money Laundering

Government regulations laid out by the Bank Secrecy Act and the USA PATRIOT Act require businesses to follow certain practices to avoid facilitating criminal activity, even inadvertently. Together, these regulations form the backbone of anti-money laundering efforts in the U.S.

These government regulations are supported by card brand rules that provide direction on payment facilitators’ specific roles and responsibilities. This is an area that can be daunting to many new and even seasoned payment facilitators.

Dr. Heather Mark, Ph.D., director of compliance for ProPay, shared four critical AML practices the payment facilitators she meets do not always fully understand.

Dr. Heather Mark, Ph.D., director of compliance for ProPay, shares four critical AML practices the payment facilitators she meets do not always fully understand.

Podcast: WePay CSO on How ISVs are Changing Commerce

In this week’s podcast, we talk to WePay’s co-founder and Chief Strategy Officer, Rich Aberman. He shares his perspective on the trends that are impacting ISVs, and the ways ISVs are actually creating trends in commerce.
In this week’s podcast, we talk to WePay’s co-founder and Chief Strategy Officer, Rich Aberman. He shares his perspective on the trends that are impacting ISVs, and the ways ISVs are actually creating trends in commerce.

Digital Wallets: A Deep Dive into the New CFPB Rule

Buried within the 1,689-page Consumer Financial Protection Bureau (CFPB) “final rule,” or Prepaid Access Rule, are provisos that pertain to digital wallets. In a previous article, I shared the basic outlines of the rule itself and how it relates to digital payments. But how worried should payment facilitators who operate a digital wallet be?
Buried within the 1,689-page Consumer Financial Protection Bureau (CFPB) “final rule,” or Prepaid Access Rule, are provisos that pertain to digital wallets. In a previous article, I shared the basic outlines of the rule itself and how it relates to digital payments. But how worried should payment facilitators who operate a digital wallet be?

News Roundup: Square Beats Estimates (Again), Paytm Adds Logistics

In this week’s news roundup, Square reports its 3Q16 earnings, Paytm expands its capabilities, and Alipay expands the availability of its mobile wallet.
In this week’s news roundup, Square reports its 3Q16 earnings, Paytm expands its capabilities, and Alipay expands the availability of its mobile wallet.

Adyen Signs Two New Marketplace Agreements

Both Etsy and Freelancer.com have tapped Adyen to power their payment solutions.

The Etsy partnership covers the U.S., Europe, and “other markets” where Etsy operates, according to the announcement. The company said it has been operating in China, Europe, India and North America for Freelancer.com.

While one marketplace connects buyers and sellers of handmade goods and the other service providers and their customers, in some ways, the payments needs of both are similar.

According to two press releases in as many days from payment facilitator Adyen, the company is actively signing up online marketplaces with global reach. Both Etsy and Freelancer.com have tapped Adyen to power their payment solutions.

DocuSign Sees “Practically Limitless” Opportunity in Payments

Coming to agreement and collecting signatures is often just the first step for many businesses such as property management services, insurance agencies and contractors. The next step is getting paid.

Seeing a massive opportunity to add value for its more than 250,000 business clients, DocuSign is beta testing an integrated payment capability it hopes to officially launch next year.

Coming to agreement and collecting signatures is often just the first step for many businesses such as property management services, insurance agencies and contractors. The next step is getting paid. Seeing a massive opportunity to add value for its more than 250,000 business clients, DocuSign is beta testing an integrated payment capability it hopes to officially launch next year.

Machine Learning Powers Stripe’s New Fraud Prevention Tool

As card transaction volume grows, so does the level of fraud associated with those transactions.

In fact, growth in fraud is outpacing the growth in electronic transaction volume, according to new research from The Nilson Report. The publication said in a press release that global card fraud losses grew by 20.6% to total $21.84 billion last year, while transaction volume grew by 7.3%.

With statistics as grim as this, a smart approach to fraud detection is on many payment facilitators’ minds.

As card transaction volume grows, so does the level of fraud associated with those transactions. In fact, growth in fraud is outpacing the growth in electronic transaction volume, according to new research from The Nilson Report. The publication said in a press release that global card fraud losses grew by 20.6% to total $21.84 billion last year, while transaction volume grew by 7.3%.

European News Roundup: iZettle introduces intelligentpos to Germany, Britons Ditching Their Wallets

In a wrap of news from Europe this week, a payment facilitator expands its POS system outside the U.K., Mastercard released research about what Britons are carrying in their wallets, and Visa announced when it will activate its 3D Secure 2.0 program in Europe.
In a wrap of news from Europe this week, a payment facilitator expands its POS system outside the U.K., Mastercard released research about what Britons are carrying in their wallets, and Visa announced when it will activate its 3D Secure 2.0 program in Europe.

Podcast: What Should Payment Facilitators Know About Money Transmitters?

In this week’s podcast, we talk to attorney Theo Monroe about money service businesses, also known as money transmitters. He says that payment businesses can sometimes engage in activities that qualify as money transmission activities under federal or state law – possibly without realizing it.

Federal and state authorities view money transmitters differently, which means that payment facilitators must understand and navigate varying regulations to make sure they are operating within the law, he says.

In this week’s podcast, we talk to attorney Theo Monroe about money service businesses, also known as money transmitters.

Are APIs Vulnerable? Two Crucial Places PFs Should Focus Now to Help Mitigate Risk

In the payment facilitator world, APIs are everywhere you look. In many cases, they’re the mechanism that allows the system to work – enabling payments infrastructure to integrate with other functions in a way that solves businesses’ unique problems.

So not surprisingly, API security is a hot topic. Does the use of APIs leave merchants more vulnerable to fraud? What are the special security considerations?

Not surprisingly, API security is a hot topic. Does the use of APIs leave merchants more vulnerable to fraud? What are the special security considerations?

How High Could Payment Facilitator Market Go? New Research Ventures an Estimate

A new white paper that will be released by Double Diamond Group on Thursday (Oct. 20) argues that the payment facilitator market holds significant potential for independent software vendors looking to generate new revenue.

The big names operating as payment facilitators already have used the PF model to garner a significant chunk of payment processing volume. According to the paper, large companies such as PayPal. Stripe and Square already collectively process hundreds of billions of dollars a year in gross payment volume. This number has the potential to go much higher as other companies enter the market.

A new white paper that will be released by Double Diamond Group on Thursday (Oct. 20) argues that the payment facilitator market holds significant potential for independent software vendors looking to generate new revenue.

Healthcare PF InstaMed Connects Payers, Providers and Patients

Healthcare in the U.S. is a complicated mix of people and organizations both large and small. Patients navigate through small practices and large healthcare systems as well as individual and employer-provided insurance. Further adding to the complications are very specific regulations protecting patient data and the need to protect the patients’ payment information.

As a payment facilitator, InstaMed strives to connect those disparate parts through a single network. The company claims to connect more than two-thirds of the healthcare market and process tens of billions of dollars a year in healthcare payments.

Healthcare in the U.S. is a complicated mix of people and organizations both large and small. Patients navigate through small practices and large healthcare systems as well as individual and employer-provided insurance. Further adding to the complications are very specific regulations protecting patient data and the need to protect the patients’ payment information.

Podcast: Comprehensive Resources for PFs in New Guidelines from ETA

In this week’s PaymentFacilitator.com podcast, we talk to Jason Oxman, CEO of the Electronic Transactions Association. On Thursday (Oct. 20), the organization is releasing its new payment facilitator guidelines at its 2016 Strategic Leadership Forum in Palm Beach, Fla.

The document is intended to serve as a toolkit for best practices related to fraud detection and prevention, Oxman said.

In this week’s PaymentFacilitator.com podcast, we talk to Jason Oxman, CEO of the Electronic Transactions Association. On Thursday (Oct. 20), the organization is releasing its new payment facilitator guidelines at its 2016 Strategic Leadership Forum in Palm Beach, Fla.

European PF Klarna Continues UK Expansion

An increasing number of online shoppers in the UK can now indulge in their shopping desires today and pay for them over time, by financing their purchase when they check out. Swedish payment facilitator Klarna is expanding availability of its ecommerce financing solution to reach more UK consumers through new agreements with Worldpay, BigCommerce, Shopify and CyberSource.
An increasing number of online shoppers in the UK can now indulge in their shopping desires today and pay for them over time, by financing their purchase when they check out.

News Roundup: Mobile Payments Making Inroads, Somewhat

Two new research reports out this week give us the latest on consumers’ attitudes toward mobile and their overall usage of different payment methods. A product announcement also showcases broader digital wallet adoption.
Two new research reports out this week give us the latest on consumers’ attitudes toward mobile and their overall usage of different payment methods. A product announcement also showcases broader digital wallet adoption.

Leading PF Shopify Turns Customer Service into Sales for Its Merchants Using Facebook Messenger

Part of the beauty of shopping in a brick-and-mortar store is the ability to speak with a person who can help you solve a specific problem or just help you find what you’re looking for. What if you could make that personal engagement happen for your merchants’ e-commerce customers as well? By integrating with Facebook Messenger, Shopify is doing just that.
Part of the beauty of shopping in a brick-and-mortar store is the ability to speak with a person who can help you solve a specific problem or just help you find what you’re looking for. What if you could make that personal engagement happen for your merchants’ e-commerce customers as well?

Don’t Get Tangled in New CFPB Rule

Have you finished reading all 1,689 pages of the Bureau of Consumer Financial Protection (CFPB) “final rule” regarding prepaid cards and digital wallets? Probably not, but you’ve undoubtedly heard a wide variety of opinions about whether this is good or bad for those in the payments business. My advice: screen out the emotional reactions, focus on the facts, and let’s figure out where we go from here.

Of particular interest to many payment facilitators is how the rule impacts the growing world of digital payments.

Have you finished reading all 1,689 pages of the Bureau of Consumer Financial Protection (CFPB) “final rule” regarding prepaid cards and digital wallets? Probably not, but you’ve undoubtedly heard a wide variety of opinions about whether this is good or bad for those in the payments business.

Europe News Roundup: Mobile Payments Have Taken Off

A look at European payments news this week reveals that financial technology is alive and well across Europe. Visa released statistics on explosive growth in mobile payments, and several new partnerships are expanding the ways Europeans – and visitors – can pay.
A look at European payments news this week reveals that financial technology is alive and well across Europe.

The Latest Fraud Panacea: 3D Secure 2.0! Well, We’ll See

The line between fraud prevention and bad customer experience continues to be a tightrope the payments industry has to walk. While the correct balance hasn’t yet been struck, industry watchers are bracing for another attempt when EMVCo releases 3DSecure 2.0 later this year.

EMVCo, a technical body overseen by its six member organizations – American Express, Discover, JCB, Mastercard, UnionPay, and Visa – is currently collecting industry feedback on a draft version of the revised specification, with the final version expected to be released this year. But will it be an improvement? And what should payment facilitators be watching for?

The line between fraud prevention and bad customer experience continues to be a tightrope the payments industry has to walk. While the correct balance hasn’t yet been struck, industry watchers are bracing for another attempt when EMVCo releases 3DSecure 2.0 later this year.

Podcast: Mastering Compliance for PFs

Innovation and compliance are two terms that are not often heard together. But as Heather Mark, director of compliance at ProPay explains, payment facilitators bring a unique perspective to bear on the traditional payments industry. This can sometimes make things interesting, even for seasoned compliance professionals.
Innovation and compliance are two terms that are not often heard together. But as Heather Mark, director of compliance at ProPay explains, payment facilitators bring a unique perspective to bear on the traditional payments industry.

Discouraged by Banks, Small Merchants Increasingly Turn to PFs for Capital

As small business lending continues its slow rebound from the recession, many small businesses are still experiencing frustration when they try to obtain funding to grow their businesses. In an analysis it conducted last year, the Wall Street Journal reported that small loans to businesses in 2014 remained down about 38% from their high in 2006.

In a move that builds on the payment facilitator model’s strengths in this challenging market, London-based Paysafe announced a relationship with lender IOU Financial last week. The agreement expands the global PF’s offerings beyond payment processing into an area it says will help it fuel the growth of North American small businesses.

As small business lending continues its slow rebound from the recession, many small businesses are still experiencing frustration when they try to obtain funding to grow their businesses.In a move that builds on the payment facilitator model’s strengths in this challenging market, London-based Paysafe announced a relationship with lender IOU Financial last week. The agreement expands the global PF’s offerings beyond payment processing into an area it says will help it fuel the growth of North American small businesses.

Despite PF Advantage on New Mastercard Merchant Fee, Some PFs Preach Caution

In the payments world, few things are as confusing or as controversial as network fees. The economics of a transaction routed over Visa or Mastercard rails could amount to a college-level course.

Rates for interchange, the amounts that the networks collect from retailers on behalf of card issuers, are often on merchants’ minds as they look for the most economical transaction routing options. But in recent years, the fees that the networks keep for themselves have generated plenty of ink.

In the payments world, few things are as confusing or as controversial as network fees. The economics of a transaction routed over Visa or Mastercard rails could amount to a college-level course.

Mastercard Launches “Selfie Pay” in Europe

Finally, a good use for selfies.

This week Mastercard announced that it is officially rolling out its biometric authentication technology, what it’s unofficially calling “Selfie Pay,” in Europe. Following on the heels of pilots in the Netherlands as well as the U.S. and Canada earlier this year, Mastercard is introducing the technology in 12 countries across Europe.

Finally, a good use for selfies. This week Mastercard announced that it is officially rolling out its biometric authentication technology, what it’s unofficially calling “Selfie Pay,” in Europe. Following on the heels of pilots in the Netherlands as well as the U.S. and Canada earlier this year, Mastercard is introducing the technology in 12 countries across Europe.

Mastercard Study: Consumers are Hungry for More Innovation. But in Europe, Not So Much.

While European consumers are happily embracing technology, they are a bit more cautious about their payment technology than their counterparts in developing areas. In other countries across the Middle East and Africa, the attitude is more “bring it on.” This is according to Mastercard’s Impact of Innovation Study, a survey of consumers across 23 countries that measured their attitudes about digitization and its impact on their lives.

The study looked at consumers’ readiness to adopt payment innovations, including mobile payments and beyond, and found interesting differences between the more and less developed markets. Despite their differences, however, consumers overall expressed positive feelings about the effect of digitization on their lives. This is good news for software-as-a-service companies thinking about becoming payment facilitators – they are likely to find receptive consumers willing to engage with technology.

While European consumers are happily embracing technology, they are a bit more cautious about their payment technology than their counterparts in developing areas. In other countries across the Middle East and Africa, the attitude is more “bring it on.”

Podcast: Square Finds Success Building on its Base

As Rick Oglesby argues in this week’s PaymentFacilitator.com podcast, Square is clearly evolving beyond its roots to a company that is able to grow along with its customers’ needs. The way it’s going about it offers some interesting perspectives for other PFs to consider.

Oglesby, principal of AZ Payments Group and a partner of Double Diamond Group, discusses why invoicing is a significant opportunity for Square, what gives the company “hooks” to help it keep customers for the long haul, and how Square benefits from a “test and learn” strategy.

As Rick Oglesby argues in this week’s PaymentFacilitator.com podcast, Square is clearly evolving beyond its roots to a company that is able to grow along with its customers’ needs. The way it’s going about it offers some interesting perspectives for other PFs to consider.

Is Square Changing Its Stripes? APIs Target Stripe and Braintree Approach to ISVs

In a wide-ranging presentation to investors and other audience members at the Jefferies 2016 West Coast Payments Conference on Tuesday (Sept. 27), Square CFO Sarah Friar commented on the company’s growth plans and future opportunities for expansion.

Her remarks make one thing clear: Square sees its reach as expanding far beyond accepting payments with a little white card reader. And it sees working with other software providers as one way to provide its products and services to more merchants.

In a wide-ranging presentation to investors and other audience members at the Jefferies 2016 West Coast Payments Conference on Tuesday (Sept. 27), Square CFO Sarah Friar commented on the company’s growth plans and future opportunities for expansion.

Wirecard Helps Bring Alipay to London, Teams with Commerzbank

Alipay is expanding its mobile wallet into the U.K. with help from Wirecard, a Munich-based payments processor, the company announced Wednesday (Sept. 28).

The Body Shop, a skin care retailer, will allow shoppers from China to use the Scan Alipay App in three London locations beginning Oct. 1. The launch coincides with the beginning of a week-long national holiday in China, during which thousands of Chinese tourists are expected to visit London, according to the press release.

Alipay is expanding its mobile wallet into the U.K. with help from Wirecard, a Munich-based payments processor, the company announced Wednesday (Sept. 28).

Podcast: The Small Merchant’s Response to a Breach is to Pretend It Didn’t Happen

Of the seven stages of grief, the most remembered is denial. It's certainly remembered by small merchants, who often bizarrely gravitate to denial when they are told that they have been breached. At least that's how Chris Geron, chairman of the MAC Government Relations Committee, sees it.

The justifications for this denial are many, Geron said in this week's PaymentFacilitator.com podcast, a re-run from May 25. Some cling to the absurd belief that being granted a letter of PCI compliance means "that it's not possible to be breached," Geron said. Other small merchants react negatively to a notification from a cardbrand, bank or processor. "Small retailers often believe that if the information has not been shared with them by law enforcement, that the allegation of a breach is not true," Geron said. And some smaller store chains believe that only large chains get breached, he said, despite the fact that the opposite is true. But the most likely reality-denying aspect is financial.

Of the seven stages of grief, the most remembered is denial. It's certainly remembered by small merchants, who often bizarrely gravitate to denial when they are told that they have been breached. At least that's how Chris Geron, chairman of the MAC Government Relations Committee, sees it.

ETA Has PFs’ Backs, Supporting Bill to Ease Regulation for Fintech Startups

Rep. Patrick McHenry (R-NC) introduced a bill last week (Sept. 22) designed to help encourage financial technology innovation in the U.S.

We’ll be watching debate over this bill as it progresses, but we hope it opens up a dialogue about the best way to balance the need for regulatory oversight to protect consumers with the need to develop new products and services that meet rapidly changing demands.

Rep. Patrick McHenry (R-NC) introduced a bill last week (Sept. 22) designed to help encourage financial technology innovation in the U.S.

New CFPB Lawsuit Reminds PFs: Use Frictionless Underwriting for High-Risk Merchants at Your Peril

Last week (Sept.23), the Consumer Financial Protection Bureau filed a lawsuit against a credit repair company called Prime Marketing Holdings.

In a press release announcing the complaint, CFPB Director Richard Cordray said, “We are taking action against Prime Marketing Holdings for luring consumers with misleading claims about its ability to repair credit files and then charging illegal fees.” This case is a reminder to PFs that, when you’re dealing with merchants in high-risk categories, frictionless onboarding is not the way to go.

Last week (Sept.23), the Consumer Financial Protection Bureau filed a lawsuit against a credit repair company called Prime Marketing Holdings. This case is a reminder to PFs that, when you’re dealing with merchants in high-risk categories, frictionless onboarding is not the way to go.

Unregistered Third Party Regpack’s Exposure Of 324,000 Transactions Proves A Cautionary Tale For PFs

A July exposure of transaction records from 899 submerchants serviced by payment facilitator BlueSnap highlights an important lesson for PFs.

In addition to making sure their own houses are in order, they bear responsibility for their submerchants and service providers as well. PFs who control all aspects of the card entry, where it’s impossible for a transaction to enter outside of their interface, may be able to certify compliance on behalf of all their submerchants. However, if any submerchant or service providers could conceivably get access to card data, the PF must ensure they are certified and registered. BlueSnap had to learn that the hard way.

A July exposure of transaction records from 899 submerchants serviced by payment facilitator BlueSnap highlights an important lesson for PFs.

Strong Authentication? Unanimous, But Many Say EU Proposed Rules Risk Sacrificing Innovation And Growth

As the European Union nears the creation of new rules on payments providers for consumer authentication, many question their utility.

The European Banking Authority's proposed rules say that service providers have to choose two of three verification methods: knowledge (such as a password), possession (a card, phone or wearable) and/or inherence (fingerprints, voice or iris scan, for example).

As the European Union nears the creation of new rules on payments providers for consumer authentication, many question their utility.

Tipalti Acts Like A PF In More Ways Than Taking Payments

Tipalti does a lot of things a PF does, except take credit card payments. The B2B accounts payable software service accepts six payment methods and does pre-payment checks against AML and OFAC lists and enables global payments, herding 26,000 payments rules and 120 currencies while streamlining supplier onboarding and providing everything but tax returns to its clients.

Tipalti just got $14 million in funding and chief marketing officer Rob Israch says accepting card payments is most likely in its future. It's another example of a perfect candidate to become a PF, but Israch says because it uses so many partners to do what it does, when it offers card payments to suppliers, freelancers, etc., the facilitation would most likely be outsourced. The company helps pay approximately 750,000 suppliers and remits $2 billion annually.

Tipalti does a lot of things a PF does, except take credit card payments.
The B2B accounts payable software service accepts six payment methods and does pre-payment checks against AML and OFAC lists and enables global payments, herding 26,000 payments rules and 120 currencies while streamlining supplier onboarding and providing everything but tax returns to its clients.

Podcast: MAC Regional Meeting Brings Together Hundreds Of Years Of Experience

In Dallas Sep. 27 the Merchant Acquirers Committee (MAC) hosts its Midwestern Regional Training meeting, one of its three regional gatherings packed with presentations and networking. Non MAC members are welcome to the all-day event that features seven sessions on topics presented by company executives from Visa, Mastercard, Rich Consulting, Mitigator, Kount, and Aperia.

Jim Bibles, vice president and chief compliance officer at Aperia and a MAC director, said in this week's paymentfacilitator.com podcast that the day is capped by a roundtable moderated by himself and Rich Consulting president Deana Rich. They enable the audience to ask questions that most times are answered by someone in the room, either a moderator or audience member.

In Dallas Sep. 27 the Merchant Acquirers Committee (MAC) hosts its Midwestern Regional Training meeting, one of its three regional gatherings packed with presentations and networking. Non MAC members are welcome to the all-day event that features seven sessions on topics presented by company executives from Visa, Mastercard, Rich Consulting, Mitigator, Kount, and Aperia.

Exploding Internet Access Plus Ubiquitous Smartphone Use Equals Digital Payments Boom

All the digital payments innovation will pay off in some crazy numbers soon, says a report from non-profit think tank The Demand Institute, which is run by Nielsen and The Conference Board.

That strengthens the future of PFs worldwide, as cashless payments could result in over $10 trillion in additional consumer spending over the next 10 years, the report says. That figure is hand in hand with the report's assertion that by 2020, the Internet will be available to over 1.2 billion more people than use it today. Much of that access will be through smartphones.

All the digital payments innovation will pay off in some crazy numbers soon, says a report from non-profit think tank The Demand Institute, which is run by Nielsen and The Conference Board.

Podcast: M&A Expert Says PFs Have ‘Upside Potential’

Preston Todd Advisors is an advisory firm for companies who want to merge, acquire or sell, specifically in the payments sector. Adam T. Hark is a managing director and principal of the Boston-based company, and has much to say about the payment facilitator niche in this week's edition of the paymentfacilitator.com podcast.

Hark says he thinks the traditional acquirer/ISO model is dead, and in its stead will be a model using new technologies enabling business management solutions and schemes. He says payment facilitation is not a 'segment killer,' replacing integrated POS or the traditional acquiring model.

Preston Todd Advisors is an advisory firm for companies who want to merge, acquire or sell, specifically in the payments sector. Adam T. Hark is a managing director and principal of the Boston-based company, and has much to say about the payment facilitator niche in this week's edition of the paymentfacilitator.com podcast.

Guest Post: Britannia Waives The Rules As Brexit Makes Waves For PFs

Three months have passed since the referendum on June 23rd that set course for the UK, the EU’s second largest economy, to leave the European Union. Yet there is still considerable uncertainty on how this event will impact the payments industry and payment facilitators.

In this article, we look at the key considerations for U.S. PFs with an existing UK presence or those looking to set up a EU company to expand into European markets.

Three months have passed since the referendum on June 23rd that set course for the UK, the EU’s second largest economy, to leave the European Union. Yet there is still considerable uncertainty on how this event will impact the payments industry and payment facilitators.

Call Center Fraud Potential Keeping Consumers From Paying By Phone

Over half percent of UK consumers, 69 percent of U.S. consumers, and 60 percent of Australian consumers say they are becoming hesitant to make payments by phone.

A consumer survey by Syntec, one of the UK’s leading call center systems specialists, reveals that consumers in the U.S.and Australia agree with UK consumers: to decrease fraud, call centers should use the latest technology to hide payment card data from call center agents and call recordings.

Over half percent of UK consumers, 69 percent of U.S. consumers, and 60 percent of Australian consumers say they are becoming hesitant to make payments by phone.

Banks’ Consumer Misdeeds May Spell Concern For Small Merchants

Google "Wells Fargo scandal" and you get a choice of three: 2016, 2015, 2013, all of which may effect how SMBs view banks.

The public didn’t hold banks in high esteem to say the least after the high risk mortgage crisis of 2008 led to government bailouts, but the blatant practice and prolific number of fake accounts created between 2011 and 2015 shocked even the most jaded and cynical observers. Coincidentally, or not, Wells Fargo's stock doubled in the same time period. Wells Fargo of course is just the latest big bank to run afoul of regulators; HSBC drew charges of foreign exchange trade violations a week before the Wells Fargo scandal broke.

Google "Wells Fargo scandal" and you get a choice of three: 2016, 2015, 2013, all of which may effect how SMBs view banks.

Innovation In ID Technology Speeds KYC In India

Indian payment facilitator Paytm will be onboarding customers for its payments bank with eKYC enabled by India's voluntary national identification program, Aadhaar.

As of Sep. 5, 2016, 87 percent of India's 1.2 billion people had registered for the unique 12-digit number. To register, residents have to bring three forms of identification (proof of identity, proof of address, proof of birthdate) to an enrollment center, where their fingerprints and irises will be scanned.

Indian payment facilitator Paytm will be onboarding customers for its payments bank with eKYC enabled by India's voluntary national identification program, Aadhaar.

Facebook Dives Deeper Into Payments Under David Marcus, Competing As A PF, Again

The only thing separating Facebook from being a true payment facilitator is it registering as one. The social media giant today announced users of its Messenger app can now send payments from within the app to make purchases from sites who interface with the app using bots.

Facebook is working with Stripe, Braintree and PayPal, but also appears to be directly enabling acceptance of Visa, Mastercard, and American Express to make this happen, and Messenger users can store their card info in Messenger for use at checkout. This can be combined with the ability of brands being able to buy ads that take clickers into Messenger where their card info is saved. David Marcus, Facebook's vice president of messaging and a former payments executive, has raised the Messenger user base from 700 million monthly active users to 1 billion in a year.

The only thing separating Facebook from being a true payment facilitator is it registering as one. The social media giant today announced users of its Messenger app can now send payments from within the app to make purchases from sites who interface with the app using bots.

Guest Post: Be Prepared – Cyberfraud Is Stronger Than Ever

There has been a 50 percent increase in global cybercrime attacks, with 1 out of 10 new account applications now being rejected. This reflects the dual challenge of a rising threat as well as the potential for considerable impact on customer experience. These statistics come from a ThreatMetrix report named "ThreatMetrix Cybercrime Report," and it gives a number of other powerful warnings:

*A larger supply of stolen identities not surprisingly leads to a growing number of attacks based on those identities. As those identities are shared, sold, and further distributed, the risk multiplies; the report shows a 250 percent year over year increase.

There has been a 50 percent increase in global cybercrime attacks, with 1 out of 10 new account applications now being rejected. This reflects the dual challenge of a rising threat as well as the potential for considerable impact on customer experience. These statistics come from a ThreatMetrix report named "ThreatMetrix Cybercrime Report," and it gives a number of other powerful warnings:

Mastercard And Visa Gain Strength, But Did PayPal?

The deal between Mastercard and PayPal announced Sep. 6 was different for a day than the Visa-PayPal partnership announced in July. Mastercard spokesperson Robyn Cottelli says being a payment choice in PayPal's checkout is crucial, but not the only draw.

"Our thoughtful approach to the partnership with PayPal was not just focused on prominence as a payment option, but going beyond what we’ve seen Visa announce to drive further value for Mastercard and our partners," Cotelli tells paymentfacilitator.com.

The deal between Mastercard and PayPal announced Sep. 6 was different for a day than the Visa-PayPal partnership announced in July. Mastercard spokesperson Robyn Cottelli says being a payment choice in PayPal's checkout is crucial, but not the only draw.

Southeast Asian Roundup Includes Big Names: Google, Alibaba, Jack Ma, Mastercard and Visa

The Asia Pacific region continued this past week to provide evidence of its explosive potential for payments, as Mastercard reshuffled management for the area and a country asked the founder of a global powerhouse payments company to advise it on ecommerce.

Indonesia would like Alibaba founder and chairman Jack Ma to help it grow an ecommerce market that is attracting global attention from investors. The multi-island nation has the fourth highest population in the world and the fifth-largest internet using population (over 100 million), and has recently committed to a multi-million-dollar project enhancing internet speeds throughout the country by 2019.

The Asia Pacific region continued this past week to provide evidence of its explosive potential for payments, as Mastercard reshuffled management for the area and a country asked the founder of a global powerhouse payments company to advise it on ecommerce.

Podcast: Cozy A Great Example Of A Could-Be PF

Cozy, a platform to streamline interactions between property managers and renters, just secured what it hopes is its last round of funding, an $8.5 million Series B led by American Family Ventures. The four-year-old company strives to make the renting process between independent landlords and renters simple, secure and intuitive.

In three years Cozy has worked with three payment processors –BancBox, Balanced Payments, and currently Stripe--and vice president of engineering Rob Galanakis shared on this week's paymentfacilitator.com podcast the company's trials and tribulations with the churn and the decision whether to become a payment facilitator.

Cozy, a platform to streamline interactions between property managers and renters, just secured what it hopes is its last round of funding, an $8.5 million Series B led by American Family Ventures. The four-year-old company strives to make the renting process between independent landlords and renters simple, secure and intuitive.

Could the Horrendous Consumer Experience With Chip Cards Boost Mobile Payments in U.S.?

Payments experts have predicted that the U.S. could head to mobile payments much faster than other developed regions have, bypassing the use of contactless cards that the U.K., Canada and Australia have embraced. While mobile usage remains outside the mainstream for now, forces at work in the current environment could help push consumers in that direction.

We surmised a couple weeks ago that while the U.S. use of chip cards has gotten off to a slow start due to retailer infrastructure, slow certification, and consumer behavior, it could be a strong market for the use of phones in contactless in-person transactions.

Payments experts have predicted that the U.S. could head to mobile payments much faster than other developed regions have, bypassing the use of contactless cards that the U.K., Canada and Australia have embraced. While mobile usage remains outside the mainstream for now, forces at work in the current environment could help push consumers in that direction.

When Treasury Speaks, PFs Should Listen

The U.S. Treasury clarified its anti money laundering regulations regarding foreign correspondent banks Aug. 30 and the attention it got was a reminder how weighty the Treasury's words are to those in the payments world. Any time the Treasury speaks about AML PFs should listen, says Deana Rich, president of Rich Consulting.

Rich, a compliance expert, says KYC and AML and transaction monitoring are all practices that the technology companies who become payment facilitators are not used to overseeing, so attention to detail is highly recommended.

The U.S. Treasury clarified its anti money laundering regulations regarding foreign correspondent banks Aug. 30 and the attention it got was a reminder how weighty the Treasury's words are to those in the payments world. Any time the Treasury speaks about AML PFs should listen, says Deana Rich, president of Rich Consulting.

Podcast: iClassPro Shares PF Lessons Learned

Chris McNabb didn’t set out to run an online registration tool for children's activity centers, he just wanted a better way to register kids for classes at his gymnastics facility. A techie but not a developer, he shopped his cloud-based solution at tradeshows around the turn of the century and in 2008 founded iClassPro.

Then, he used third party payment gateways but the hassles of the multiple gateways and extra friction "was weighing us down," he says. Three years ago iClassPro became a payment facilitator and McNabb gained peace of mind and business growth. In this week's edition of the paymentfacilitator.com podcast, McNabb explains the switch: what it solves, what the change entailed, how it has helped, and what the future holds.

Chris McNabb didn’t set out to run an online registration tool for children's activity centers, he just wanted a better way to register kids for classes at his gymnastics facility. A techie but not a developer, he shopped his cloud-based solution at tradeshows around the turn of the century and in 2008 founded iClassPro.

Banks Are Investing In Potential PayPals

If you can't beat 'em, buy 'em, or maybe incubate 'em.

This is corporate banking's attitude toward the fintech that is competing with them, making traditional banking and its customers things of the past. Slower to innovate, bound by regulations and size, banks are increasingly investing money and time in fintech startups to benefit from the agility and creativity of outsiders who have grown up digital.

If you can't beat 'em, buy 'em, or maybe incubate 'em.

Is Google Trying To Steal Venmo Users Or Score New Customers for Android Pay?

Google Wallet has Venmo (and Square Cash and maybe Facebook and Snapchat) in its crosshairs with its latest app update, the ability to have person to person transfers go directly to a user's bank account. But is the competition for share or for users who don't yet have a P2P app? One analyst says attracting new customers for Android Phones and Android Pay is the goal.

The P2P game is played best with less friction and more speed and Google wants more people to play it with Wallet, then try transacting with Android Pay, says Gil Luria, head of technology research at Wedbush Securities.

Google Wallet has Venmo (and Square Cash and maybe Facebook and Snapchat) in its crosshairs with its latest app update, the ability to have person to person transfers go directly to a user's bank account. But is the competition for share or for users who don't yet have a P2P app? One analyst says attracting new customers for Android Phones and Android Pay is the goal.

Visa, Mastercard Expectations High But Maybe Not High Enough

Clearly, Visa is a believer that grass doesn't grow on a rolling stone. It's harder to stay at the top than it is to get there.

A recent article lauded Visa but wondered if it wasn't being overvalued. We report but don't comment here on the stock market or individual stock performance but we are a big fan of the card brands and would like to compile the reasons Visa has a bright future.

Clearly, Visa is a believer that grass doesn't grow on a rolling stone. It's harder to stay at the top than it is to get there.

Podcast: Beneficial Ownership Defined And Analyzed

As Rich Consulting president Deana Rich explains in this week's paymentfacilitator.com podcast, the Treasury’s beneficial ownership rule announced in May will require banks to perform KYC on all owners with more than 25 percent ownership as well as the person that manages or runs the business, and banks will likely turn that extra work over to ISOs or PFs underwriting merchants or submerchants.

There are different impacts to banks and their PF partners based on the size and ownership/operation structure of the merchant. The largest category of submerchants are sole proprietors or owned by one person, who also runs the business. All PFs are performing KYC on these owners and therefore there is no change to this category.

As Rich Consulting president Deana Rich explains in this week's paymentfacilitator.com podcast, the Treasury’s beneficial ownership rule announced in May will require banks to perform KYC on all owners with more than 25 percent ownership as well as the person that manages or runs the business, and banks will likely turn that extra work over to ISOs or PFs underwriting merchants or submerchants.

Millennials, Seeking Uniqueness, Flock To Klarna To Pay Their Way

Millenials' decreasing use of credit cards and increasing use of debit opens doors for companies like Swedish company Klarna, a payment facilitator that offers mobile and online buyers the choice of traditional payments – charge now—or within 14 days or in installments.

Klarna works seamlessly at checkout, says Klarna North America CEO Brian Billingsley—an email address and zip code is all a shopper needs if not paying immediately. Once that info is inputted it doesn’t need to be entered again at Klarna merchant partners. Billingsley says Klarna gives millennials a little of what they're looking for when shopping, control and uniqueness.

Millenials' decreasing use of credit cards and increasing use of debit opens doors for companies like Swedish company Klarna, a payment facilitator that offers mobile and online buyers the choice of traditional payments – charge now—or within 14 days or in installments.

Tech Mobile Contactless Marketing Could Turn The U.S. EMV Frown Upside Down

More than a decade after the U.S. payments community tried and failed to make contactless payments work, EMV resentment and a well-funded mobile payment app movement may make U.S. contactless payments not merely viable, but vibrant—perhaps as soon as late 2018.

One result could be that the U.S. adopts mobile contactless payments before and in higher numbers than chip cards as tech giants like Apple and Samsung and Google blitz consumers with mobile payment app marketing that was not a factor when the country tried contactless a decade ago.

More than a decade after the U.S. payments community tried and failed to make contactless payments work, EMV resentment and a well-funded mobile payment app movement may make U.S. contactless payments not merely viable, but vibrant—perhaps as soon as late 2018.

Meet The New RBI Boss; Same As The Old Boss?

The change in governors of the Reserve Bank of India is no small news, as India is well known for its governmental help with the furtherance of technology in general and fintech in particular.

Under the outgoing governor, Raghuram Rajan, RBI decided to give 11 companies licenses to set up payment banks for the underserved population of the country and this is expected to give rise to an increase in the use of digital banks and wallets. RBI also recently put together a working group of RBI, banking and payments executives to study regulatory issues related to digital banking and fintech.

The change in governors of the Reserve Bank of India is no small news, as India is well known for its governmental help with the furtherance of technology in general and fintech in particular.

If Chargebacks And False Declines Are The Problem, PFs Are A Solution

Chargebacks and false declines present many problems to merchants and issuers alike but where there's complications, there's payment facilitator opportunity, says one risk management expert.

"Whereas merchants may not be familiar with all aspects of payment processing and risk management controls, payment facilitators provide affordable accessibility to systems, knowledge and focused expertise that may otherwise be unattainable," says Marcus Smith, the senior vice president of risk management for processor iPayment Inc. "Due to scale and buying power, payment facilitators can also allow merchants to benefit from their data acquisition, proprietary and third party technology and other value added service that meet the needs of their aggregate clientele. Ultimately, payment facilitators can eliminate various administrative costs and distractions allowing merchants to place their money, time and attention on managing and growing their business."

Chargebacks and false declines present many problems to merchants and issuers alike but where there's complications, there's payment facilitator opportunity, says one risk management expert.

Podcast: A PF Platform Is Born

The payment facilitator model is exploding because of the vast number of small to medium sized merchants who like their lives uncluttered by multiple partners trying to help them run their business, including those that enable them to accept electronic payments. They want the simplicity of valuable services as well as payment ability, and not from two vendors.

But becoming a payment facilitator is no picnic; who's there to help potential payment facilitators who are hesitant to take on the maze of underwriting, compliance, fraud risk, and monitoring despite the growing evidence that market share and revenue can be gained?

The payment facilitator model is exploding because of the vast number of small to medium sized merchants who like their lives uncluttered by multiple partners trying to help them run their business, including those that enable them to accept electronic payments. They want the simplicity of valuable services as well as payment ability, and not from two vendors.

Is $75 Billion In 2016 Mobile In-Store Payments Realistic?

At least one research firm thinks in-store mobile payments, mobile wallets usage, is set to explode in the U.S., despite accounts of slow uptake by consumers and crawling installation of NFC terminals by retailers.

The Business Insider Intelligence's 2016 Mobile Payments Report predicts volume of in-store mobile payments will hit $75 billion this year and $503 billion by 2020. The authors say despite the hurdles of consumer habit and spotty availability, wallets' benefits to both retailers and shoppers, such as security, speedier checkout process and app integration will boost usage quickly and heavily.

At least one research firm thinks in-store mobile payments, mobile wallets usage, is set to explode in the U.S., despite accounts of slow uptake by consumers and crawling installation of NFC terminals by retailers.

EMV Roundup: Security Flaw? Mobile Device Approval And Requirements Update

There was a host of stories last week on the occasion of the 10-month anniversary of the Oct. 15, 2015 EMV migration date. While there have been extensions to the date of transfer of liability from issuers to non-EMV enabled merchants, apparently the story writers couldn’t wait for the more traditional annual lookback. Major data thus far: the U.S. is the only region in the world where chip card usage is lower than chip card deployment and adoption, and is last by far of the globe's six regions in both deployment and use.

Some real developments around EMV took place this past week though, as the pursuit of a more robust infrastructure and consumer acceptance continues:

There was a host of stories last week on the occasion of the 10-month anniversary of the Oct. 15, 2015 EMV migration date. While there have been extensions to the date of transfer of liability from issuers to non-EMV enabled merchants, apparently the story writers couldn’t wait for the more traditional annual lookback. Major data thus far: the U.S. is the only region in the world where chip card usage is lower than chip card deployment and adoption, and is last by far of the globe's six regions in both deployment and use.

Millenials Will Charge Back Into Charging

Recent attention has been paid to lower use of credit card by millennials but the snapshot is worse than the movie, says one analyst.

A survey commissioned by Bankrate and compiled by Princeton Survey Research Associates International shows that more than 60 percent of millennials do not own a credit card. Conversely, 70 percent of people over 30 years old do have at least one credit card. Are card brands panicking, or are their recent moves toward ACH (PayPal/Visa, Mastercard/VocaLink, clearXchange and both brands) a response by diversifying?

Recent attention has been paid to lower use of credit card by millennials but the snapshot is worse than the movie, says one analyst.

India Is Digital Payments Dynamite

India is set to explode in digital payments based on several key metrics: population, number of mobile phone users, Internet users, and smartphone users.

The Boston Consulting Group and Google recently collaborated on a study named Digital Payments 2020: The Making of A $500 Billion Ecosystem In India, painting a bright future in digital payments for several reasons: technology; 10-fold growth in merchant acceptance; rise of data-driven consumer benefits; consolidation leading to simplification; a unified payments interface (UPI) stokes widespread adoption of digital payments; national ID system eases KYC; and non-cash transaction volume will continue to accelerate, surpassing cash transactions by 2023.

India is set to explode in digital payments based on several key metrics: population, number of mobile phone users, Internet users, and smartphone users.

Tribute to Ken Elderts: Mahalo to a Great Friend

The payments world lost a favorite when Ken Elderts passed away Aug. 6.

When he wasn't a payments executive for the Western States Acquirers Association, VeriFone, TASQ Technology, Dejavoo Systems, and most recently AnywhereCommerce, Elderts loved fastpitch softball, airplanes and new technology. Elderts was known for his mentorship, warmth, smiles and hugs.

The payments world lost a favorite when Ken Elderts passed away Aug. 6.

Allpago Grows Using Location Location Location

allpago, one of Latin America's leading payment facilitators, is using a real estate golden rule to achieve stunning growth, mirroring PF growth in the region. Enabling companies globally to do business and accept payments across Latin America, allpago uses locally-preferred credit cards and alternative payment methods via location-based checkout, and recently achieved 150 percent annual growth in transaction volume.

Double Diamond Group president Todd Ablowitz says allpago's dominance is further proof of the power of payment facilitators.

allpago, one of Latin America's leading payment facilitators, is using a real estate golden rule to achieve stunning growth, mirroring PF growth in the region. Enabling companies globally to do business and accept payments across Latin America, allpago uses locally-preferred credit cards and alternative payment methods via location-based checkout, and recently achieved 150 percent annual growth in transaction volume.

Consumers And Card Brands Moving At The Speed Of Money, So Merchants Will Follow

First, Visa and PayPal scratched each other's backs, and industry observers expect it won’t be long until Mastercard and maybe American Express align similarly with PayPal. Then Mastercard announced the purchase of most of U.K. ACH king VocaLink. August 2, Early Warning Services announced that both Visa and MasterCard joined its clearXchange peer-to-peer network.

What will happen next in the maneuvering of card brands gaining major footholds in the world of banking, peer-to-peer payments and ACH?

First, Visa and PayPal scratched each other's backs, and industry observers expect it won’t be long until Mastercard and maybe American Express align similarly with PayPal. Then Mastercard announced the purchase of most of U.K. ACH king VocaLink. August 2, Early Warning Services announced that both Visa and MasterCard joined its clearXchange peer-to-peer network.

Podcast: Transaction Laundering — How Not To Get Taken To The Cleaners

One of the cyberthief's favorite tactics these days is transaction laundering, where the bad guy takes their bad transactions—usually for drugs, gambling, counterfeit goods or human trafficking—and runs them through seemingly good web sites, ones ostensibly trying to sell innocuous products.

There are things that a payment facilitator can do to thwart such efforts and that is the focus of this week's podcast, a re-run from March 30, featuring Deana Rich, president of Rich Consulting.

One of the cyberthief's favorite tactics these days is transaction laundering, where the bad guy takes their bad transactions—usually for drugs, gambling, counterfeit goods or human trafficking—and runs them through seemingly good web sites, ones ostensibly trying to sell innocuous products.

PIN Is Not A Win. Merchants Don’t Get That

Don't pin your hopes on PIN. That's the advice of a report from the Aite Group, which claims that the cost of having to implement PIN for all card transactions, especially for merchants who don’t already have PIN pads, may just not be worth the expense considering the limited impact on fraud and merchant liability.

The report "Chip Cards in the United States: The PIN, PINless, Debit, Credit Conundrum" says because merchants misunderstand fraud and their own liability risks, a large majority (65 percent of those surveyed) are in favor of implementing chip and PIN in EMV card transactions. None of the issuers surveyed were in favor of it.

Don't pin your hopes on PIN. That's the advice of a report from the Aite Group, which claims that the cost of having to implement PIN for all card transactions, especially for merchants who don’t already have PIN pads, may just not be worth the expense considering the limited impact on fraud and merchant liability.

Appealing To Lots Of Merchants Can Be An Awful Strategy

It can't be said enough: If you want to be special, specialize.

The way to success in payment facilitation is not to appeal to as many merchants as possible, it's to appeal to as many of a certain kind of merchants as possible. There are exceptions like bill.com, which targets any business that pays employees, but even then it specializes in one part of what merchants need: to streamline accounts payable and receivable.

It can't be said enough: If you want to be special, specialize.

Take A Deep Breath PFs, Beneficial Ownership Rule Is Not So Bad

First things first: In our opinion, the Treasury's May 11 FinCEN rules are going to impact ISOs and Payment Facilitators alike, in that banks are going to make them follow these new rules.

Although the rule does not speak to ISOs or PFs underwriting merchants or submerchants, we fully believe if you are required to do KYC now -- and ISOs and PFs are required to do KYC now -- they will be required to do the increased KYC under the new rules.

First things first: In our opinion, the Treasury's May 11 FinCEN rules are going to impact ISOs and Payment Facilitators alike, in that banks are going to make them follow these new rules.

Slower Payments Force SMBs To Reluctantly Eat Interchange Costs. Result: PFs Become Saviors

With the average Paydex Index score dropping fast, SMBs are biting the interchange bullet and encouraging payment cards—all to accelerate payments. In step payment facilitators, who know a few things about fast payments and reducing interchange.

Paydex, a Dun & Bradstreet credit rating for businesses, fell 3 percent during the first half of this year from the last six months of 2015, and that followed a 1 percent increase at the end of last year when compared with the first half of 2015. The decline means companies are taking longer to pay their B2B bills, and to compensate, the waiting businesses ask their customers to use credit cards for payments either in full or as deposit so faster consumer payment fills the void left by slower partner payments.

With the average Paydex Index score dropping fast, SMBs are biting the interchange bullet and encouraging payment cards—all to accelerate payments. In step payment facilitators, who know a few things about fast payments and reducing interchange.

PFs See Market Validation In Square’s Soaring Revenue

When Square’s stock price soared from $10.44 during trading Aug. 3 to $11.51 in after-hours trading, it was a powerful harbinger for the PF community. Square has been aggressive, but what the nation’s largest PF has done is a prototype for others to follow. Square can be seen as the standard bearer for all PFs; their success can be a sign of success for PFs worldwide.

"(The stock price) changed because Square reported earnings that proved their strategy and tactics, which were frowned on by Wall Street, actually worked in the quarter," says Todd Ablowitz, president of Double Diamond Group. "Square is doing exactly what we expected. Their massive investment in sales is paying off. I fail to see any segment of their business disappointing."

When Square’s stock price soared from $10.44 during trading Aug. 3 to $11.51 in after-hours trading, it was a powerful harbinger for the PF community. Square has been aggressive, but what the nation’s largest PF has done is a prototype for others to follow. Square can be seen as the standard bearer for all PFs; their success can be a sign of success for PFs worldwide.

India’s Razorpay Onboards A Month Faster Than Rivals

Onboarding merchants in less than a week, nearly a month quicker than what the CEO says is the industry standard, Indian payment facilitator Razorpay has used that impressive stat to sign up more than 8,000 Indian merchants, including mom-and-pops and global chains such as Papa John’s. Not bad for a company that wasn’t even a Mastercard payment facilitator until last year.

A member of Mastercard's Start Path program since 2015, Razorpay is precisely how the card brand envisions signing 40 million merchants by 2020. The challenges are as plentiful as the opportunities.

Onboarding merchants in less than a week, nearly a month quicker than what the CEO says is the industry standard, Indian payment facilitator Razorpay has used that impressive stat to sign up more than 8,000 Indian merchants, including mom-and-pops and global chains such as Papa John’s. Not bad for a company that wasn’t even a Mastercard payment facilitator until last year.
Mastercard has aggressive goals-and has failed to show how they will meet them. That's one of several reasons for the card brand's reliance-nay, dependence-on payment facilitators. PFs are not helpful to MC's strategy: They are the only thing that gives it a chance to work.

Payment facilitators are absolutely crucial to Mastercard's stated goal of adding 40 million micro and small merchants to its base in five years. Banks can't provide the tech necessary to onboard so large a number, says Double Diamond Group president Todd Ablowitz in this week's podcast, and onboarding—speedy onboarding—is a specialty of payment facilitators.

Mastercard has aggressive goals-and has failed to show how they will meet them. That's one of several reasons for the card brand's reliance-nay, dependence-on payment facilitators. PFs are not helpful to MC's strategy: They are the only thing that gives it a chance to work.

Microsoft And An Australian Mum; The Next PFs?

Small business is booming; sometimes it needs a payment facilitator and sometimes it becomes one. Sometimes huge business takes the plunge too.

Microsoft this past week introduced a Microsoft Office Service named Microsoft Bookings, designed to ease scheduling of appointments for business owners between themselves, employees and customers. It's a short leap to see that businesses could ask customers making appointments to pay first or lock in a date with a deposit. MindBody comes to mind, with its focus on wellness businesses and appointment bookings and payment enabling.

Small business is booming; sometimes it needs a payment facilitator and sometimes it becomes one. Sometimes huge business takes the plunge too.

#Brentrance: Mastercard Buys VocaLink, Now Rules Britannia ACH

MasterCard thinks the U.K. is a jolly good place to do business. With its $920 million purchase of processor VocaLink, the card brand gets a firm owned by 13 U.K. banks that did 11 billion transactions in 2015, but that gaudy number might be the milk and sugar in the cup of tea that is a platform it coveted.

The same day Visa made an ACH-related move by partnering with PayPal so the two mega brands putting their money in bank accounts is no coincidence. ACH represents 50 percent of total electronic payment flows across the world's 50 largest countries.

Mastercard thinks the U.K. is a jolly good place to do business. With its $920 million purchase of processor VocaLink, the card brand gets a firm owned by 13 U.K. banks that did 11 billion transactions in 2015, but that gaudy number might be the milk and sugar in the cup of tea that is a platform it coveted.

PF Podcast: PayPal-Visa Deal Is A Win-Win For Fintech

PFs, make sure your PayPal and Visa relationships are strong. PF giant PayPal and card brand titan Visa each struck digital gold from a partnership announced last week: PayPal can be used with contactless payments because it gets access to Visa's tokenization feature, while Visa gets access to PayPal's 188 million users and can sell issuers on a differentiator the other brands don’t have.

Rick Oglesby, principal of AZ Payments Group and a partner of Double Diamond Group, says on this week's paymentfacilitator.com podcast that frictionless speedy payment processes drives the deal on both ends. PayPal has the signups to cut down a step at checkout while Visa has the rails to decrease the time it takes for PayPal to get paid by banks.

PFs, make sure your PayPal and Visa relationships are strong. PF giant PayPal and card brand titan Visa each struck digital gold from a partnership announced last week: PayPal can be used with contactless payments because it gets access to Visa's tokenization feature, while Visa gets access to PayPal's 188 million users and can sell issuers on a differentiator the other brands don’t have.

Non-Profit PFs Won’t Like This – Facebook, The Latest PF, Is Going To Take Your Share

Facebook is charging back into the payments space but this time charging hard -- taking 5% on every donation it processes through its recently launched non-profit features, announced to page administrators Tuesday. Facebook introduced a Donate button for 19 select non-profits in 2013, but didn't charge a fee, instead sending 100 percent of donations to the charity. The social media giant says of each donation made through Donate buttons that keep donors on a non-profit's page:

"We’re committed to building products that make it as easy and safe as possible for people to contribute to the causes they care about. To make this possible, starting in August, 2% of contributions will be used to cover a portion of the costs of nonprofit vetting, security, and fraud protection, operational costs and payment support and 3% of contributions will go to payment processing. The remaining 95% will go straight to the nonprofit. Facebook's goal is to create a platform for good that’s sustainable over the long-term, and not to make a profit from these charitable giving tools.”

Facebook is charging back into the payments space but this time charging hard -- taking 5% on every donation it processes through its recently launched non-profit features, announced to page administrators Tuesday. Facebook introduced a Donate button for 19 select non-profits in 2013, but didn't charge a fee, instead sending 100 percent of donations to the charity. The social media giant says of each donation made through Donate buttons that keep donors on a non-profit's page:

On China’s Payments SuperHighway, Regulators Stomp The Brakes And AsiaPay Hits The Gas

When you drive on rough roads you don't have to slow down, but you do steer more carefully, guiding your car to smoother surfaces. Chinese payment facilitator AsiaPay is welcoming China's recent regulation tightening as a move to help clean up the country's payments industry's fraud-infested reputation. AsiaPay is reading the new road sign as it zooms by, according to our interview with its CEO Joseph Chan, a key player in the massive payments market that is China.

How massive? In their 2015 report on global payments, Capgemini and the Royal Bank of Scotland said China's non-cash transaction volume growth in 2013 led the world's countries at 37 percent, with the region they call Emerging Asia (India, China, Hong Kong and other Asian countries) leading global regions with more than 21 percent growth. Alipay and WeChat are the dominant third party service providers in the online and mobile payments. ApplePay and SamsungPay have entered the market as well, though they use NFC rather than the QR code conduit favored by Alipay and WeChat.

When you drive on rough roads you don't have to slow down, but you do steer more carefully, guiding your car to smoother surfaces. Chinese payment facilitator AsiaPay is welcoming China's recent regulation tightening as a move to help clean up the country's payments industry's fraud-infested reputation. AsiaPay is reading the new road sign as it zooms by, according to our interview with its CEO Joseph Chan, a key player in the massive payments market that is China.

Hug a Payment Facilitator, Save A Tree

Payment facilitators are helping to save the planet. By enabling electronic and mobile payments for all sorts of markets – like lunch money and rent and race registrations-- that used checks and cash before, less paper is being used, and less paper needed means more trees left standing to produce more oxygen. That's not a stretch at all.

One such example of a new marketplace is Bill.com, which allows small- and medium-sized companies to electronify the entire accounts payable and accounts receivable process, chopping waiting times for both parties using it. And while Bill.com facilitates payments, it is not a payment facilitator, also not a stretch.

Payment facilitators are helping to save the planet.
By enabling electronic and mobile payments for all sorts of markets – like lunch money and rent and race registrations-- that used checks and cash before, less paper is being used, and less paper needed means more trees left standing to produce more oxygen. That's not a stretch at all.

Global Mobile Brew Is Strong

Turkish coffee is almost as strong as Turkish use of mobile devices for banking and shopping and payments, but not as strong as the payments industry action in Europe. The Turks led a group of 15 countries in most of the categories of questions asked about mobile device usage for a recently released report on mobile banking, mobile shopping and mobile payments conducted for ING International by Ipsos.

The report is titled ING International Survey Mobile Banking 2016 but as ING economist Ian Bright explains, one thing has led to another, as it usually does in fintech, and banking only scratches the surface now, four years after its first mobile banking report.

Turkish coffee is almost as strong as Turkish use of mobile devices for banking and shopping and payments, but not as strong as the payments industry action in Europe. The Turks led a group of 15 countries in most of the categories of questions asked about mobile device usage for a recently released report on mobile banking, mobile shopping and mobile payments conducted for ING International by Ipsos.

Podcast: MAC Wants YOU To Learn Payment Facilitator Mastery

If you want to hang out at the Federal Reserve Bank of Atlanta, exchanging payment facilitator information and battle scars, you only need to join the Merchant Acquirers Committee (MAC). New and veteran payment facilitators can climb their steep learning curve with help from the members of the MAC; experienced peers, vendors, lawyers, government representatives and card brands exchange information and lessons learned to advance the cause of the payments industry.

"Membership in MAC is a huge opportunity because you can apply your questions to a wealth of knowledge from years and years of experience," said Dione Hodges, MAC's senior director of risk management. "From a payment facilitator standpoint, what you've found challenging today someone has already experienced previously."

If you want to hang out at the Federal Reserve Bank of Atlanta, exchanging payment facilitator information and battle scars, you only need to join the Merchant Acquirers Committee (MAC). New and veteran payment facilitators can climb their steep learning curve with help from the members of the MAC; experienced peers, vendors, lawyers, government representatives and card brands exchange information and lessons learned to advance the cause of the payments industry.

Podcast: The Forming Of A PF Platform

The payment facilitator model is exploding because of the vast number of small to medium sized merchants who like their lives uncluttered by multiple partners trying to help them run their business, including those that enable them to accept electronic payments. They want the simplicity of valuable services as well as payment ability, and not from two vendors.

But becoming a payment facilitator is no picnic; who's there to help potential payment facilitators who are hesitant to take on the maze of underwriting, compliance, fraud risk, and monitoring despite the growing evidence that market share and revenue can be gained?

The payment facilitator model is exploding because of the vast number of small to medium sized merchants who like their lives uncluttered by multiple partners trying to help them run their business, including those that enable them to accept electronic payments. They want the simplicity of valuable services as well as payment ability, and not from two vendors.

Chargeback Mitigation Date Is Nigh For Visa While MasterCard Says It Has Already Begun

July 22 is TVIF --Thank Visa It's Friday – for non-EMV compliant merchants, especially small merchants and the payment facilitators who target them. That day Visa will ease the burden on merchants not yet compliant with EMV hardware and/or certification of that hardware by blocking all U.S. counterfeit fraud chargebacks under $25 until April 2018.

It's a big deal that the giant brand is paying attention to the little guys, who not only win financially but also save time and headaches involved with chargebacks.

July 22 is TVIF --Thank Visa It's Friday – for non-EMV compliant merchants, especially small merchants and the payment facilitators who target them. That day Visa will ease the burden on merchants not yet compliant with EMV hardware and/or certification of that hardware by blocking all U.S. counterfeit fraud chargebacks under $25 until April 2018.

Alipay To Begin Conquest Of Munich And Beyond

In two weeks, Chinese tourists landing at Munich Airport will be able to use coupons sent to them through their mobile devices by retailers in the terminals. They will get a notification, directions to the retailer with the coupon, then once they bring the item to the POS, have a bar code scanned without worrying over currency conversion.

Alipay, a mobile payment app run by Alibaba partner Ant Financial, will be accepted in all POS terminals run by German processor Wirecard, which struck a deal with the company that operates 69 shops inside the airport. Markus Eichinger, head of mobile services at Wirecard, which is acting as both acquiring bank and processor for Alipay, gave an interview to paymentfacilitator.com just after coming from the partnership's final testing session.

In two weeks, Chinese tourists landing at Munich Airport will be able to use coupons sent to them through their mobile devices by retailers in the terminals. They will get a notification, directions to the retailer with the coupon, then once they bring the item to the POS, have a bar code scanned without worrying over currency conversion.

The Payments Standard Bearers Are Waking Up To The Payment Facilitator Opportunity (And Threat)

There is growing realization among researchers that the payment facilitator model is a rocket ship, and that old models in the payments industry have slowed their rolls at the PFs' expense. Major players are now saying what we’ve been shouting from the rooftops for years.

In the past three years, I said: "We are seeing more ISOs looking to do frictionless on-boarding and move into aggregation. Support for the aggregation model among acquirers is also increasing."

There is growing realization among researchers that the payment facilitator model is a rocket ship, and that old models in the payments industry have slowed their rolls at the PFs' expense. Major players are now saying what we’ve been shouting from the rooftops for years.

It Was Hip To Be Square In Portland

Not only can small merchants ride the coming wave of mobile payments, they can make more in tips. That was part of the fun learned from a two-month Square promotion in Portland, Ore., that ended last week. The drive highlighted the company's NFC/chip readers in a marketing siege of a city chosen for the tactic because of its high implementation of the new Square hardware and its commerce counterculture.

Apple got in on the techfest because its wallet Apple Pay is the other side of the two-way connection Square needs to boost not only wallet use but comfort with wallet use. Apple hosted a merchant tutorial on Apple Pay in one of its stores one day during the Square campaign.

Not only can small merchants ride the coming wave of mobile payments, they can make more in tips. That was part of the fun learned from a two-month Square promotion in Portland, Ore., that ended last week. The drive highlighted the company's NFC/chip readers in a marketing siege of a city chosen for the tactic because of its high implementation of the new Square hardware and its commerce counterculture.

Podcast: Vantiv’s Danner Calls Payfacs ‘Epitome of Tech Companies’

Chuck Danner, GM of Payfacs for processor Vantiv, admires not only the software expertise of payfacs but also their creative nature in finding new verticals to help with their value-adds and efficiencies. "We're reliant on these companies for new ideas," Danner said in this week's edition of the PaymentFacilitator.com podcast.

Danner said payfacs are ideal for emerging markets that were either less complicated, non-existent or not tech-enabled, such as healthcare, ride-sharing, crowd funding and vending machines. Because the payfac model is so young, the need and opportunities for payfacs are outpacing the supply. "Growth is phenomenal," Danner said, but closing that gap will take "maturity and time."

Chuck Danner, GM of Payfacs for processor Vantiv, admires not only the software expertise of payfacs but also their creative nature in finding new verticals to help with their value-adds and efficiencies. "We're reliant on these companies for new ideas," Danner said in this week's edition of the PaymentFacilitator.com podcast.

Visa Puts Signature On Skirmish With Retailers

Visa filed a suit against Walmart June 30, the latest volley in a legal shootout with large retailers over EMV, chip-and-PIN and signature policies. "To me, it’s a clear escalation in the battle, said Rick Oglesby, president of AZ Payments Group and a partner at Double Diamond Group. "It’s never a good thing to be wrapped up in a public dispute with one of your largest and most influential customers, and the networks versus Walmart has been ongoing for many years."

The suit claims Walmart surreptitiously tested a process in which shoppers were not given the choice to verify their Visa debit card purchases with a signature. It's the most recent salvo in a battle among Visa and large retailers over the use of either signatures or PINs to verify transactions.

Visa filed a suit against Walmart June 30, the latest volley in a legal shootout with large retailers over EMV, chip-and-PIN and signature policies. "To me, it’s a clear escalation in the battle, said Rick Oglesby, president of AZ Payments Group and a partner at Double Diamond Group. "It’s never a good thing to be wrapped up in a public dispute with one of your largest and most influential customers, and the networks versus Walmart has been ongoing for many years."

Master Caveats In UK MasterCard Mega Payout Story

Here's a few examples of sensational headlines from July 6: "MasterCard faces £19bn claim over excessive fees; UK card users could claim hundreds in compensation"; "MasterCard facing £19bn rip-off payout: Millions could each get £450 back following case over charges imposed for processing payments"; "MasterCard could be forced to pay back £450 each to millions of customers - are you one of them?"

Here's one example of sober reckoning from a UK payments consultant: "It is a little early for consumers to be spending their £400 ‘windfalls’ just yet," said Tim Buckingham, a lawyer and director of Payment Services Consulting Ltd., a company providing risk and legal advice to the payments community. "This is certainly not the obvious ‘win’ that is being portrayed in the British press who have, in recent years, found it increasingly easy to attack the UK’s beleaguered banking system."

Here's a few examples of sensational headlines from July 6: "MasterCard faces £19bn claim over excessive fees; UK card users could claim hundreds in compensation"; "MasterCard facing £19bn rip-off payout: Millions could each get £450 back following case over charges imposed for processing payments"; "MasterCard could be forced to pay back £450 each to millions of customers - are you one of them?"

J.P. Morgan To Incubate FinTech Talent

Private fintech companies attracted almost $6 billion in funding in the first quarter of 2016, according to a CB Insights report. Nearly half of that global number was from three deals, but it's clear there's investment to be had with the right idea, software, gadget or app. J.P. Morgan is investing too, this week (June 30) announcing In-Residence, a program to help fintech startups develop their work using J.P. Morgan's resources.

Each residency is for six months, with a rolling application process, according to Brian Marchiony, managing director of communications for J.P. Morgan. Applicants can expect a decision in six weeks or less, according to the In Residence website.

Private fintech companies attracted almost $6 billion in funding in the first quarter of 2016, according to a CB Insights report. Nearly half of that global number was from three deals, but it's clear there's investment to be had with the right idea, software, gadget or app. J.P. Morgan is investing too, this week (June 30) announcing In-Residence, a program to help fintech startups develop their work using J.P. Morgan's resources.

Podcast: Brexit Effect and Kroger-Visa Battle

Payfacs can benefit from any complications caused by the Brexit referendum result because more confusion and regulatory conundrums will drive merchants to find a third party to navigate the maze, says Evan Schuman, editor in chief of PaymentFacilitator.com in this week's podcast. Schuman detailed the fallout from the Brexit vote that's throwing the Old World into a tizzy.

Payfacs can benefit from any complications caused by the Brexit referendum result because more confusion and regulatory conundrums will drive merchants to find a third party to navigate the maze, says Evan Schuman, editor in chief of PaymentFacilitator.com in this week's podcast. Schuman detailed the fallout from the Brexit vote that's throwing the Old World into a tizzy.

Schuman also authored a look into the recent Kroger lawsuit involving Visa over an EMV kerfuffle. Schuman says it's another example of a major retailer putting up its fists over rules and policies.

Payfacs can benefit from any complications caused by the Brexit referendum result because more confusion and regulatory conundrums will drive merchants to find a third party to navigate the maze, says Evan Schuman, editor in chief of PaymentFacilitator.com in this week's podcast. Schuman detailed the fallout from the Brexit vote that's throwing the Old World into a tizzy.

MasterCard Small Merchant Expansion Commitment Should Shake Up PF Game

Payment facilitators and payment facilitators to be: on your marks, get set…Go!

MasterCard on Monday (June 27) announced a plan to add 40 million micro and small merchants to its base in five years. Double Diamond Group president Todd Ablowitz said that spells huge opportunity for both existing payment facilitators and near-term startups. "This is staggeringly important," Ablowitz said.

Payment facilitators and payment facilitators to be: on your marks, get set…Go!

MasterCard on Monday (June 27) announced a plan to add 40 million micro and small merchants to its base in five years. Double Diamond Group president Todd Ablowitz said that spells huge opportunity for both existing payment facilitators and near-term startups.

"This is staggeringly important," Ablowitz said.

Kroger Details Its Fun-Filled Visa Negotiations

Have retailers suddenly started developing backbones, in terms of pushing back on payments companies? On Monday (June 27), Kroger sued Visa about how it was implementing EMV, in much the same way that Walmart and Home Depot have done. This follows Walmart kicking Visa out of Canada and a major German company rejecting PayPal after PayPal apologized and reinstated it. Did somebody spike the NRF water fountains with super-caffeine or something? Or have merchants decided that they can push back on payments giants with little risk of meaningful pain?

EMV rules seems to have been the PIN straw that broke the POS camel's back, as even Apple Pay has suffered performance degradations following EMV migrations. The big picture arguments about security—that it's blindingly obvious that PIN is far more secure than signature—are obscured by the reality that this is really a fight about interchange fees. And the EMV argument that the path to PIN must be glacially slow or else American consumers will freak out from the change, despite the fact that most are quite used to PINs from ATMs and debit cards, is frighteningly valid. And here it is in the land of EMV rules that grocery giant Kroger makes it stand.

Have retailers suddenly started developing backbones, in terms of pushing back on payments companies? On Monday (June 27), Kroger sued Visa about how it was implementing EMV, in much the same way that Walmart and Home Depot have done. This follows Walmart kicking Visa out of Canada and a major German company rejecting PayPal after PayPal apologized and reinstated it. Did somebody spike the NRF water fountains with super-caffeine or something? Or have merchants decided that they can push back on payments giants with little risk of meaningful pain?

For Brexit Payments, A Big PF Opportunity

In the aftermath of the Brexit vote in the U.K., some payments professionals were panicked given the huge number of European Union payments regulations at play. A U.K. that went its own way on payments—just as it did with monetary policy when it stuck with the Pound and never embraced the Euro—could cause confusion and other problems with cross-border transactions.

This issue is critical for payment facilitators for two reasons. First, one of the biggest values offered by PFs is that PFs offer a way for merchants to sidestep payments complexities. With all of this uncertainty throughout the European payments world, confusion could easily make merchants far more open to the idea of bringing in a PF, as a guard against having to deal with a wide range of potentially changing payments rules. Secondly, the other dominant value offered by PFs are services for merchants that go way beyond what is currently offered. Those services include a wide range of offerings, but ways to effortlessly manage cross-border payments in a post-EU payments world would certainly be among them.

In the aftermath of the Brexit vote in the U.K., some payments professionals were panicked given the huge number of European Union payments regulations at play. A U.K. that went its own way on payments—just as it did with monetary policy when it stuck with the Pound and never embraced the Euro—could cause confusion and other problems with cross-border transactions.

PayPal Reinstates German Company, Apologizes. Company: Thanks, But No Thanks

On Wednesday (June 22), a German company that had been cut off from payments from PayPal because of German privacy rules lashed back at PayPal. PayPal had backed down, apologized and reinstated the company, but the German firm said it was too angry with PayPal to necessarily return.

This started out as a tale of regulatory disclosures gone wacky and ended up as a story about companies deciding there is only so much payments guff they'll take before rebelling. That second tale started with Walmart's payments heresy move, as it stopped accepting Visa in Canada. The beginning of this tale happened last week, when PayPay insisted on information from the file-sharing company, Seafile, that the company couldn't provide due to German privacy rules.

On Wednesday (June 22), a German company that had been cut off from payments from PayPal because of German privacy rules lashed back at PayPal. PayPal had backed down, apologized and reinstated the company, but the German firm said it was too angry with PayPal to necessarily return.

Gaming Payments Gets Serious: Tencent Drops $8.6 Billion On Game Firm

Of all of the various payments hotspots that payment facilitators need to focus on, gaming—and all of its in-app potential—may be the one of the most lucrative. Witness Tencent Holdings Ltd., which this week confirmed plans to drop $8.6 billion to buy an 84 percent slice of the Finnish maker of the Clash Of Clans mobile game.

Games generate one payment for the initial purchase—which, for a popular game, is tantalizing enough on its own—and then a potentially unlimited number of follow-on purchases as players purchase new weapons or characters or cheats or various upgrades. Game companies are generally great at creating the games, but they need help facilitating effortless payments within those games. Enter PFs.

Of all of the various payments hotspots that payment facilitators need to focus on, gaming—and all of its in-app potential—may be the one of the most lucrative. Witness Tencent Holdings Ltd., which this week confirmed plans to drop $8.6 billion to buy an 84 percent slice of the Finnish maker of the Clash Of Clans mobile game.

Will Police Take Payments During Traffic Stops?

For the payments geeks among us, transaction processing can be arresting. But in a bizarre twist, some police are doing both: arresting and processing payments and doing them both in the middle of a traffic stop on the side of the road. Will the familiar flashing-red-light refrain soon be "License, registration and Visa card, please?" In Oklahoma City, the answer might be "yes."

This all comes from a bid request that started with the Oklahoma Department of Public Safety to a Fort Worth supplier named ERAD Group Inc., which specializes in payment offerings for law enforcement.

For the payments geeks among us, transaction processing can be arresting. But in a bizarre twist, some police are doing both: arresting and processing payments and doing them both in the middle of a traffic stop on the side of the road. Will the familiar flashing-red-light refrain soon be "License, registration and Visa card, please?" In Oklahoma City, the answer might be "yes."

How To Get Cracking On Your PayFac-ing

There are at least two great reasons to jump into the payment facilitator game-- increased revenues and market share—and many many tools to help. One of those tools is advice from the hard-won success achieved by those who have made the leap.

In a session on the ins and outs of starting a payfac at the second annual Payment Facilitator Day at Transact16 in April, Kevin Harris of RunSignUp said training people was more of a challenge than software concerns, and David Weiss of Yapstone shared the difficulties of international expansion. Nick Starai of gateway tech company NMI told the audience to concentrate on the business they know best rather than focus on technological bells and whistles. The highlights of the discussion fill this week's paymentfacilitator.com podcast, the next best thing to having been there.

There are at least two great reasons to jump into the payment facilitator game-- increased revenues and market share—and many many tools to help. One of those tools is advice from the hard-won success achieved by those who have made the leap.

Fraud And Compliance And Rules, Oh My!

The pain of keeping all the rules and regulations straight for a payment facilitator is only exceeded by the pain of not keeping them straight. A PF has to protect itself from merchant problems with underwriting and monitoring, while adhering to the mandates from card brands and acquirers. It's a lot now, but as everyone knows, there's more coming.

As heard in this week's edition of the PaymentFacilitator.com podcast, the best PFs can do to mitigate excessive regulation from without is to do more within, said Rich Consulting president Deana Rich, moderator of the session Emerging Threats Cage Match: Compliance v. Fraud at the second annual Payment Facilitator Day at Transact 16 in April.

The pain of keeping all the rules and regulations straight for a payment facilitator is only exceeded by the pain of not keeping them straight.

A PF has to protect itself from merchant problems with underwriting and monitoring, while adhering to the mandates from card brands and acquirers. It's a lot now, but as everyone knows, there's more coming.

Apple Pay Announcement Looks Like A Zero But Could Be A Hero

As exciting as Apple’s annual World Wide Developers Conference can be, the news from Monday’s keynote seemed on its face sort of ho-hum for payment facilitators. The new abilities within the upcoming release of the iOS 10 mobile and macOS desktop software updates are for now merely more options that PFs have to consider along with their merchant clients. The long term view of these Apple payment moves is scintillating however, given the higher incomes of iOS and MacOS users and the huge gap between what they spend on apps compared to Android users.

The features will allow merchants to add Apple Pay to their Safari browser shopping portal’s payment suite, and for merchants to develop apps for iMessage users to use for P2P transactions. In the short term, there are challenges. Shoppers with desktops must have not only a Mac, for communicating with the iPhone or Apple Watch that authenticates the payment, but the Safari browser that Apple owns.

As exciting as Apple’s annual World Wide Developers Conference can be, the news from Monday’s keynote seemed on its face sort of ho-hum for payment facilitators. The new abilities within the upcoming release of the iOS 10 mobile and macOS desktop software updates are for now merely more options that PFs have to consider along with their merchant clients. The long term view of these Apple payment moves is scintillating however, given the higher incomes of iOS and MacOS users and the huge gap between what they spend on apps compared to Android users.

BIN There, But Many Forgot To Done That

The BIN is such a critical part of transactions today that it's taken for granted. And even though it's been said ad nauseum for many years that we're running out of BIN numbers and that a new approach is needed. And ISO's imminent 8-digit BIN standard is intended to address the problem, but the deep integration of BIN means that the transition won't be easy.

Double Diamond President Todd Ablowitz is arguing that this could prove calamitous—necessary but calamitous. The potential damage could be severe, but relatively short-lived. It will be short-lived because updating systems will be relatively straight-forward. The disastrous part is he fears that a very large number of people won't initially realize how critical the BIN change is and then will get hit with oceans of declined transactions until they realize it's all about the BIN change. "People aren't taking actions because they don't realize how much this is actually a really big deal," Ablowitz said. "Because the BIN is used for so very much, if you don't have your BIN set properly, you're not going to know until it's too late."

The BIN is such a critical part of transactions today that it's taken for granted. And even though it's been said ad nauseum for many years that we're running out of BIN numbers and that a new approach is needed. And ISO's imminent 8-digit BIN standard is intended to address the problem, but the deep integration of BIN means that the transition won't be easy.

Alibaba-Backed PayTm Struggles With Global Payments. What Chance Do Others Have?

A brutal reminder of how convoluted and treacherous mobile cross-borders are today was shared by Paytm on Friday (June 10). That's when the Alibaba-backed wallet said that it can't be used for overseas payments based on current regulations, requiring instead that wallet users pay in Indian rupees.

Let's be clear. Paytm is no slouch among mobile wallets and it's backed by Alibaba—the multinational's multinational. If Paytm and its partners can't navigate payments from country to country, that's frightening. "While the mobile technology can create lower cost and friction free alternatives for cross border small value payments, the same is subject to licensing under FEMA (Foreign Exchange Management Act, 1999). Any cross border payments services by the payments bank will be offered subject to FEMA authorizations and RBI approvals. As such, the current Paytm Wallet cannot be used for overseas payments," the Paytm statement said. "As per the existing authorization, the wallet can only be used in India and any impression that the existing Prepaid Payment Instruments (PPI) semi closed wallet can directly used offshore/for cross border transactions is unintentional."

A brutal reminder of how convoluted and treacherous mobile cross-borders are today was shared by Paytm on Friday (June 10). That's when the Alibaba-backed wallet said that it can't be used for overseas payments based on current regulations, requiring instead that wallet users pay in Indian rupees.

Square Finally Settles Its Ren Holding Lawsuit

After seven years of back-and-forth legal bickering and on the eve of a civil trial, Square on Friday (June 10) blinked and finally settled with Ren Holdings 3 and Robert Morley. The case was the quintessential Silicon Valley founder tiff, involving arguments over who really came up with the key parts of the idea that launched the now-powerful payment facilitator player. (Why do we never see pitched legal battles over who came up with the idea for companies that quickly fizzled and died? Just asking….)

The particular ideas that were mostly at issue were the patent for Square's payment card reader—seems that glass art business owner Jim McKelvey's name was left off, after he allegedly pointed out the payment flaw that was the essence of Square's raison d'etre—and other mobile payment approaches. The argument is that McKelvey came up with the idea and that he discussed it with Jack Dorsey—now the CEO of Square and, in his spare time, Twitter—and Morley. These arguments are classic Silicon Valley. Whose implementation idea is it? The person who noticed the problem and had a vague idea how to make it work, the more technical person who figured out a precise way to make it work, the specialist (in this case, payments expertise) who amended all of the above to work best with the rules and infrastructure of existing reality or the business person who figured out the way to let it generate revenue and profits? It's usually something close to a true collaboration—which makes splitting up the money later more challenging. Also, these interactions are rarely transcribed, beyond some e-mails and texts. If key meetings happened in person, egos and greed-fueled memories dominate. Hello, judge and jury.

After seven years of back-and-forth legal bickering and on the eve of a civil trial, Square on Friday (June 10) blinked and finally settled with Ren Holdings 3 and Robert Morley. The case was the quintessential Silicon Valley founder tiff, involving arguments over who really came up with the key parts of the idea that launched the now-powerful payment facilitator player. (Why do we never see pitched legal battles over who came up with the idea for companies that quickly fizzled and died? Just asking….)

CFBP Wants Payments Firms To Police Consumers

In a telling lawsuit, the U.S. Consumer Financial Protection Bureau (CFPB) on Monday (June 6) sued processor Intercept Corp. and two of its executives for"enabling unauthorized and other illegal withdrawals from consumer accounts by their clients" and ne having "turned a blind eye to blatant warning signs of potential fraud or lawbreaking by its clients."

This move is interesting in that it places processors—and, presumably, others in the payments arena—in the role of quasi-law-enforcement. Is a mobile carrier to blame if customers use their phones to make obscene phonecalls, sell drugs or arrange murders? Is a hardware store to blame if someone buys a hammer and uses it to attack someone?

In a telling lawsuit, the U.S. Consumer Financial Protection Bureau (CFPB) on Monday (June 6) sued processor Intercept Corp. and two of its executives for"enabling unauthorized and other illegal withdrawals from consumer accounts by their clients" and ne having "turned a blind eye to blatant warning signs of potential fraud or lawbreaking by its clients."

Feds Peer Into Payments Regulatory Crystal Ball—And Get Headaches

For whatever consolation it offers, the feds overseeing payments-related regulatory issues are as apprehensive as payment facilitators. As the payments world is undergoing massive change in new and different ways of handling payments—an area where PFs lead—Justice and Treasury top brass are struggling to figure out the right ways to execute oversight.

Indeed, there's even talk of adopting a European-like saferoom approach, where startups have a limited window to explore and innovate without worrying about regulators cracking down. It's a saferoom in the sense that no idea is too risky to not be explored, even for a limited period of time. In other words, regulators are toying with the idea of whether it's sometimes best to not regulate at all.

For whatever consolation it offers, the feds overseeing payments-related regulatory issues are as apprehensive as payment facilitators. As the payments world is undergoing massive change in new and different ways of handling payments—an area where PFs lead—Justice and Treasury top brass are struggling to figure out the right ways to execute oversight.

NRF Mounts An Impressive Takedown Of PCI

The National Retail Federation (NRF) has never been a huge fan of the PCI Security Council. But in a detailed note sent to the U.S. Federal Trade Commission (FTC) late last month, NRF's lawyers crafted an impressive takedown of PCI, arguing that PCI represents a monopoly-like attempt by the card brands to control retailers.

The trigger for the FTC letter appears to be concerns that the FTC might incorporate PCI compliance with recommendations it is preparing—a move that would solidify and increase PCI's leverage and power. This is one of these arguments that is best articulated in the abstract. At the legal abstract hypothetical level, NRF makes an impressive-sounding case that PCI is indeed a powerplay by the cardbrands.

The National Retail Federation (NRF) has never been a huge fan of the PCI Security Council. But in a detailed note sent to the U.S. Federal Trade Commission (FTC) late last month, NRF's lawyers crafted an impressive takedown of PCI, arguing that PCI represents a monopoly-like attempt by the card brands to control retailers.

PF Day 16: Value Adds And New Verticals Are The Tickets To Vast Opportunities

One of the six sessions at last month’s 2nd Annual Payment Facilitator Day at the ETA TRANSACT 2016 in Las Vegas was titled “New Verticals in Payments: Why The PF Model Makes It Happen,” and featured Double Diamond Group president Todd Ablowitz and executives who have successfully added payment facilitating to their toolboxes.

As heard on this week’s PaymentFacilitator.com podcast, Ablowitz provided eye-popping growth numbers and made it clear just how many software as a service vendors could benefit from becoming a payment facilitator: nearly 13,000 that could add not only value to merchants but boost their margins.

One of the six sessions at last month’s 2nd Annual Payment Facilitator Day at the ETA TRANSACT 2016 in Las Vegas was titled “New Verticals in Payments: Why The PF Model Makes It Happen,” and featured Double Diamond Group president Todd Ablowitz and executives who have successfully added payment facilitating to their toolboxes.

PFs May Not Know Mobile Wallet Users As Well As They Think

When the new Auriemma Consulting Group Mobile Pay Tracker report was released on Tuesday (May 31), it delivered some surprises. For example, most mobile wallet consumers do not have their favorite (aka most used) card as the default card in their mobile wallet. Even in April 2016, most mobile users (57 percent) don't have the technology to do almost any mobile payments. The report also detailed the higher incomes of iOS users compared with Android.

Even one of the non-surprising details of the report—that tech brands are more trusted than financial brands-is interesting in its scope, with "banks/financial institutions" getting roughly one-third of the trust points awarded to Apple and performing only slightly better when compared with Google and Samsung. (Note: The exact phrasing of the question is unclear. If the choice was literally "banks/financial institutions," that might not be fair to compare a nameless vertical against specific brands. Had they, however, compared Chase and Wells Fargo to Apple and Google, that would have been more, please forgive me, apples-to-apples.)

When the new Auriemma Consulting Group Mobile Pay Tracker report was released on Tuesday (May 31), it delivered some surprises. For example, most mobile wallet consumers do not have their favorite (aka most used) card as the default card in their mobile wallet. Even in April 2016, most mobile users (57 percent) don't have the technology to do almost any mobile payments. The report also detailed the higher incomes of iOS users compared with Android.

New Treasury Rules Mean Huge PF Changes

A new set of rules announced by the U.S. Treasury Department in May will force payment facilitators to reveal not only who owns a company, but also whoever controls and/or manages it. This will mean a lot more information will have to be revealed about charities, non-profits and other PF-friendly businesses. The new rules requires that each owner who has more than 25 percent of ownership must be identified, along with anyone who controls or manages the operations, whether or not they are an owner. On the plus side, these rules are not retroactive and won't even start kicking in until July 11, 2016, with required implementation not happening until May 11, 2018.

What are the key PF implications? "PFs that deal in small mom and pops will have no change when there is one owner and she/he is in control," said Deana Rich, head of Rich Consulting. "PFs will have a big change if there are two owners—such as a husband and wife each with 50 percent. In the past, only one was necessary. Now it will be two. But there's an added string. If their kid runs the business, now (the son/daughter) will be required to be IDed as well."

A new set of rules announced by the U.S. Treasury Department in May will force payment facilitators to reveal not only who owns a company, but also whoever controls and/or manages it. This will mean a lot more information will have to be revealed about charities, non-profits and other PF-friendly businesses.

A Scary Peek Into Square’s New Privacy Policy

Most privacy policies and terms of service—especially with payments companies—are indeed about privacy. The company's privacy, meaning that they want to keep their customers from knowing it to the extent possible. To that end, most are filled with legalese, are overly long and used the smallest and most difficult to read font as possible.

Square's may be no different in that regard, but on Tuesday (May 31), they announced a slightly different way to deliver it. It was a slight nod to transparency by making both the privacy policy and its terms of service somewhat shorter. No, it didn't surrender any protections. But it created several different versions of each document, crafted for its different kinds of customers. The theory is, in effect, why burden consumers with rules that only apply to merchants? So we decided to dig deep into what these new privacy policies said, Buyer beware.

Most privacy policies and terms of service—especially with payments companies—are indeed about privacy. The company's privacy, meaning that they want to keep their customers from knowing it to the extent possible. To that end, most are filled with legalese, are overly long and used the smallest and most difficult to read font as possible.

PFs Are No Longer Flying Under The Radar

One of the six sessions at last month’s 2nd Annual Payment Facilitator Day at the ETA TRANSACT 2016 in Las Vegas was titled “What You Should Ask Your Payments Attorney: Yes, You Need an Attorney for This Stuff,” and featured Heather Mark, Director of Compliance for ProPay; Holli Targan, partner, at the law firm Jaffe Raitt Heuer & Weiss; and Marc Liner, senior vice president and associate general counsel for Bank of America Merchant Services.

The panel cautioned payment facilitators and prospective payment facilitators that regulators are slowly and steadily noticing the payment facilitator model. It is a must to be aware of the rules now, and how they change as the model grows, as you’ll hear from this week’s PaymentFacilitator.com podcast. “We are no longer flying under the radar,” said Targan.

One of the six sessions at last month’s 2nd Annual Payment Facilitator Day at the ETA TRANSACT 2016 in Las Vegas was titled “What You Should Ask Your Payments Attorney: Yes, You Need an Attorney for This Stuff,” and featured Heather Mark, Director of Compliance for ProPay; Holli Targan, partner, at the law firm Jaffe Raitt Heuer & Weiss; and Marc Liner, senior vice president and associate general counsel for Bank of America Merchant Services.

EMV Really Screwing Up Apple Pay

Oh, what a tangled web we weave when EMV data we receive. As more major retail chains fully accept EMV payments, Apple Pay is being dealt some serious experience setbacks, such as being asked twice for price verification and being asked for fingerprint biometric authentication and then, a few screens later, a signature. Neither of those steps were part of the Apple Pay process until merchants switched on EMV.

To be clear, those time-wasting moves are not part of the Apple Pay process at all, but are superimposed after the Apple Pay transaction is complete and customers think they are done. The reason this is now happening is due to very strict interpretations of EMV rules—and the fact that the nature of the payment mechanism (beyond that it's contactless) is not always communicated to the POS. Hence, it must assume the worst. When two retailers—Trader Joe's and Whole Foods--last week made the switch through upgraded Verifone POS terminals, customers used to speedy Apple Pay experiences were literally being called back to the checkout lane to complete the additional keystrokes. Before, once Apple Pay's screen said "done" and displayed an animated checkmark, they were free to leave. Not so in an EMV world.

Oh, what a tangled web we weave when EMV data we receive. As more major retail chains fully accept EMV payments, Apple Pay is being dealt some serious experience setbacks, such as being asked twice for price verification and being asked for fingerprint biometric authentication and then, a few screens later, a signature. Neither of those steps were part of the Apple Pay process until merchants switched on EMV.

In Pizza Hut Asian Restaurants, A MasterCard Robot Takes Orders And Payments—With An Attitude

An interesting MasterCard experiment is going on now at some Pizza Hut restaurants in Asia, where life-size robots take orders and process payments, with the intent of letting more store associates perform more involved customer tasks. (If you'll recall, that was the same argument made for early self-checkout systems.) But what makes this effort different is that these robots are designed to sense emotions and to react accordingly.

Beyond the obvious questions—such as "Is the world ready for empathetic creatures trying to sell you stuffed crust toasted s'mores cookie pizzas?"—there are the implications of emotion-detecting robots named Pepper. ("The name Pepper was chosen because it is a word that is easy to say and understand across many languages and cultures," MasterCard said.) In this deployment, they are named Pepper. The company making these robots, SoftBank Robotics, has created a series of videos depicting their potential. The main video (in Japanese) is worth watching, but be prepared for some serious weirding-out, if my teen daughter will permit me to use that phrase.

An interesting MasterCard experiment is going on now at some Pizza Hut restaurants in Asia, where life-size robots take orders and process payments, with the intent of letting more store associates perform more involved customer tasks. (If you'll recall, that was the same argument made for early self-checkout systems.) But what makes this effort different is that these robots are designed to sense emotions and to react accordingly.

Good Analytics Won’t Help If Your Data Sucks

At best, sophisticated analytics software can deliver good answers if the underlying data is accurate and—most critically—is the right data. For a lot of merchants, that is often not the case.

Ralph Dangelmaier, CEO of payment facilitator BlueSnap, is proposing what he sees as a better way, at least for extracting useful answers from payments data. From his perspective, there are two big mistakes that merchants tend to do. First, they give far too much weight to pageviews and site visits from a region, assuming that a lot of activity translates into a lot of sales. And secondly, when those merchants do wisely opt to isolate sales from a region, they neglect to go back and adjust those figures to account for refunds and chargebacks.

At best, sophisticated analytics software can deliver good answers if the underlying data is accurate and—most critically—is the right data. For a lot of merchants, that is often not the case.

Podcast: The Small Merchant’s Response To A Breach Is To Pretend It Didn’t Happen

Of the seven stages of grief, the most remembered is denial. It's certainly remembered by small merchants, who often bizarrely gravitate to denial when they are told that they have been breached. At least that's how Chris Geron, chairman of the MAC Government Relations Committee, sees it.

The justifications for this denial are many, Geron said in this week's PaymentFacilitator.com podcast. Some cling to the absurd belief that being granted a letter of PCI compliance means "that it's not possible to be breached," Geron said. Other small merchants react negatively to a notification from a cardbrand, bank or processor. "Small retailers often believe that if the information has not been shared with them by law enforcement, that the allegation of a breach is not true," Geron said. And some smaller store chains believe that only large chains get breached, he said, despite the fact that the opposite is true. But the most likely reality-denying aspect is financial.

Of the seven stages of grief, the most remembered is denial. It's certainly remembered by small merchants, who often bizarrely gravitate to denial when they are told that they have been breached. At least that's how Chris Geron, chairman of the MAC Government Relations Committee, sees it.

With A New Mission, Walmart Pay Goes Live In Arkansas, Texas

Now that Walmart no longer has to pretend to be support CurrentC—thanks to its effective demise, courtesy of MCX's concession to reality—the largest retail chain announced Monday (May 16) that it had rolled out Walmart Pay across 110 Walmart stores in Arkansas and 480 Walmart stores in Texas. Walmart Pay the concept was announced by the merchant back in December. Walmart Pay has been rolled out in a way very different than Walmart wanted to do a mobile payment, but it's a model that has been obviously shaped by Apple Pay.

Like Apple Pay, it supports "any major credit, debit, pre-paid or Walmart gift card." But unlike Apple Pay, it works across iOS and Android devices. And unlike Apple Pay and every other NFC payment method, it can work on a far wider range of phones—especially older phones—that do not support NFC. All the phone needs is the ability to download an app and enough of a camera to scan a QR code. But Walmart Pay suffers a major weakness that Apple Pay doesn't. As long as the shopper is willing to use the default card in Apple Pay, all that the shopper need do is hold the phone right above the card reader. It doesn't need to be connected to any network, nor does the shopper have to launch an app, key in a password or manipulate the app in any way. Contrast that with Walmart Pay, which requires the shopper to find and then open the Walmart app, select Walmart Pay and then manually activate the camera and then scan a register QR code—which as many shoppers will confirm, isn't always that easy to do on the first or second attempt.

Now that Walmart no longer has to pretend to be support CurrentC—thanks to its effective demise, courtesy of MCX's concession to reality—the largest retail chain announced Monday (May 16) that it had rolled out Walmart Pay across 110 Walmart stores in Arkansas and 480 Walmart stores in Texas. Walmart Pay the concept was announced by the merchant back in December. Walmart Pay has been rolled out in a way very different than Walmart wanted to do a mobile payment, but it's a model that has been obviously shaped by Apple Pay.

MCX Concedes The Obvious: CurrentC Is Dead. Indeed, It Was Never Really Alive

When MCX on Monday (May 16) issued a statement that "MCX will postpone a nationwide rollout of its CurrentC application," it was akin to U.S. presidential candidates who suspend their campaigns. It's a polite way of saying "it's over" without having to say those words outloud.

But for many reasons, CurrentC never had much of a chance, having been created in the most merchant-centric (OK, I'll admit it: Walmart-centric) manner possible. It's creation was to give retailers a way to sharply cut back interchange fees and it was being pushed by a merchant who was already paying among the very lowest interchange fee percentages of anyone.

When MCX on Monday (May 16) issued a statement that "MCX will postpone a nationwide rollout of its CurrentC application," it was akin to U.S. presidential candidates who suspend their campaigns. It's a polite way of saying "it's over" without having to say those words outloud.

Chase Makes The Right Security Move After SWIFT Breaches

A report Tuesday (May 17) that J.P. Morgan Chase "has limited some employees’ access to the Swift global interbank messaging service amid questions about security breaches at a pair of Asian banks that used the funds-transfer platform" raises some concerns, but it appears to be just enforcing a stricter "need to know" and "need to access" approach from Chase.

Although there have been other reports raising the possibility of an earlier Swift attack—with a major Bangladesh bank—being an insider job, it could just as easily be an attack where the bank employees were victimized. Employees might have had their credentials stolen via keystroke-capturing malware or being tricked into visiting a credential-stealing site designed to look like Swift's access area.

A report Tuesday (May 17) that J.P. Morgan Chase "has limited some employees’ access to the Swift global interbank messaging service amid questions about security breaches at a pair of Asian banks that used the funds-transfer platform" raises some concerns, but it appears to be just enforcing a stricter "need to know" and "need to access" approach from Chase.

More State Money Transmitter Headaches

As states continue to play with how they define money transmitters, the payment facilitator is caught in the middle. And one payments advocate suggests that it may force a greater role for processors.

Mike Cottrell, direct of global marketing at ProPay and our guest this week for the PaymentFacilitator.com podcast series, argues that not only could this encourage PFs to embrace a greater role for processors, but it could also discourage innovation. In the podcast, Cottrell painted a scenario where PFs—who see themselves as helping merchants do business—will start to pull back on very innovative efforts if it means that they have to spend much more time filling out forms and adhering to different regulations.

As states continue to play with how they define money transmitters, the payment facilitator is caught in the middle. And one payments advocate suggests that it may force a greater role for processors.

Wendy’s Admits Almost 350 Stores Hit In POS Attack

On Wednesday (May 11), Wendy's said that "fewer than 300 of approximately 5,500 franchised North America Wendy's restaurants" had malware in their POS systems and another "approximately 50 franchise restaurants are suspected of experiencing, or have been found to have, unrelated cybersecurity issues." This comes on the heels of a lawsuit that accused Wendy's of a wide range of IT security shortcomings.

In the new statement, Wendy's did not identify which POS was impacted, but it strongly implied that new Aloha POS systems—currently being installed throughout the company, with the stated goal of full deployment by "year-end 2016"—were not infected. Wendy's "has worked aggressively with its investigator to identify the source of the malware and quantify the extent of the malicious cyber-attacks, and has disabled and eradicated the malware in affected restaurants. The Company continues to work through a defined process with the payment card brands, its investigator and federal law enforcement authorities to complete the investigation," Wendy's said.

On Wednesday (May 11), Wendy's said that "fewer than 300 of approximately 5,500 franchised North America Wendy's restaurants" had malware in their POS systems and another "approximately 50 franchise restaurants are suspected of experiencing, or have been found to have, unrelated cybersecurity issues." This comes on the heels of a lawsuit that accused Wendy's of a wide range of IT security shortcomings.

Walmart’s Visa PIN Lawsuit Puts A “We Want Security” Face On A “We Want More Money” Argument

With their frequent lawsuits and counter-suits, Walmart and Visa is that always-quarreling couple that stays together for the sake of the kids. Only in this case, the kids are the piles of money each makes from the other. Alas, anything that forces the argument of PIN versus signature into the light is a good thing for payments and, by extension, payment facilitators.

Quick update on the latest example. On Tuesday (May 10), Walmart sued Visa, with the largest merchant saying that the largest card brand is forcing Walmart to accept signature on debit transactions when it would rather accept PIN. Walmart's argument is that PIN is more secure—which it is—and Walmart neglects to stress that Walmart can save money by processing PIN transactions elsewhere.

With their frequent lawsuits and counter-suits, Walmart and Visa is that always-quarreling couple that stays together for the sake of the kids. Only in this case, the kids are the piles of money each makes from the other. Alas, anything that forces the argument of PIN versus signature into the light is a good thing for payments and, by extension, payment facilitators.

In Australia, Apple Pay Boosts Credit Card, Deposit Account Applications

In Australia, the ANZ Banking Group found something strange happen after it started accepting Apple Pay. It experienced "a surge in applications for credit cards and deposit accounts" to such a degree that it "has forced the other major banks to re-enter negotiations" with Apple, according to a report in The Sydney Morning Herald. In other words, Australian shoppers found the idea of the NFC payment method so significant that they wanted to engage in non-Apple Pay-related banking functions.

"ANZ chief executive Shayne Elliott said at the bank's interim results last week that online credit card applications were up 20 per cent since the deal with Apple was announced on April 28," the story noted, adding that the figures "were the highest on record" and "more than double the average." Elliott was quoted as saying "that the higher level is continuing." This is consistent with much of what we've said about Apple Pay, that this huge a behavioral change needs to be a psychological shift. This will need to be a right-brain move—focused on emotions, intuition and imagination—rather than a left-brain (logic, analysis, linear) move. Bankers and payment professionals are notoriously left-brain people, while Apple is the quintessential right-brain company.

In Australia, the ANZ Banking Group found something strange happen after it started accepting Apple Pay. It experienced "a surge in applications for credit cards and deposit accounts" to such a degree that it "has forced the other major banks to re-enter negotiations" with Apple, according to a report in The Sydney Morning Herald. In other words, Australian shoppers found the idea of the NFC payment method so significant that they wanted to engage in non-Apple Pay-related banking functions.

FTC Investigating Venmo, Potentially Raising Compliance Interpretation Issues

Venmo has gotten into trouble—of the embarrassment sort—before with aggressive compliance efforts. That was specifically when it created a list of words that could delay transaction processing, such as the word Persian. And PayPal-owned Venmo was hardly alone, with Chase was caught doing similar word scans, as a man who had a dog named Dash discovered.

But the U.S. Federal Trade Commission has now launched a formal investigation into Venmo. With the FTC, phrasing is critical. An investigation is very different than an FTC study, such as the one the FTC launched to look into practices of the PCI Council. PayPal disclosed the investigation in an SEC filing last week. What exactly is being investigated?

Venmo has gotten into trouble—of the embarrassment sort—before with aggressive compliance efforts. That was specifically when it created a list of words that could delay transaction processing, such as the word Persian. And PayPal-owned Venmo was hardly alone, with Chase was caught doing similar word scans, as a man who had a dog named Dash discovered.

PCI Just Gave A Huge Gift To PFs

Merchants of all sizes love to hate PCI. In a perverse sense then, PCI can be a payment facilitator's best friend. The more complicated, difficult and agonizing PCI guidelines become, the more merchants—especially smaller ones—will find tremendous value in pawning off the PCI duties to someone else, especially someone else—such as a PF—that knows PCI and other compliance rules intimately.

It's for that reason that what the PCI Security Standards Council did last week is so important. Not only are they making the rules more demanding and complicated—a necessary move to boost the rules' security—but they are now applying the rules far more broadly, implicating executives who had never before had to directly deal with PCI. Put into corporate terms, it's one thing to infuriate a bunch of CIOs and CISOs, but it's quite a different thing to infuriate their CFO, COO and CEO bosses as well as their bosses, namely board members. And yet that's exactly what the council is doing.

Merchants of all sizes love to hate PCI. In a perverse sense then, PCI can be a payment facilitator's best friend. The more complicated, difficult and agonizing PCI guidelines become, the more merchants—especially smaller ones—will find tremendous value in pawning off the PCI duties to someone else, especially someone else—such as a PF—that knows PCI and other compliance rules intimately.

PayPal’s New Fraud Rules Are Key For PFs

PayPal announced Wednesday (May 4) a series of payments policy changes, including late-to-the-game restrictions on gift cards, a longtime favorite cyberthief tool. Given PayPal's massive marketshare, payment facilitators need to watch closely any policy changes the no-longer-Ebay-unit makes. In short, any fraud-related changes that PayPal makes gives political cover for any PF to mimic the move.

The biggest change is that PayPal is now excluding "items equivalent to cash, including gift cards" from its PayPal Seller Protection program. It made a similar change to its Purchase Protection program by "clarifying the exclusion for items equivalent to cash to now include stored value items such as gift cards and pre-paid cards." A few other items that will no longer be supported by purchase protection—at least as of June 25, when the new rules are scheduled to kick in—are payments on crowdfunding platforms, "gambling, gaming and/or any other activity with an entry fee and a prize" and "anything purchased from or an amount paid to a government agency."

PayPal announced Wednesday (May 4) a series of payments policy changes, including late-to-the-game restrictions on gift cards, a longtime favorite cyberthief tool. Given PayPal's massive marketshare, payment facilitators need to watch closely any policy changes the no-longer-Ebay-unit makes. In short, any fraud-related changes that PayPal makes gives political cover for any PF to mimic the move.

MasterCard Follows Visa To A More Comfortable EMV Experience

On Wednesday April 27, MasterCard unveiled its M/Chip Fast, which is an almost identical version of Visa's Quick Chip For EMV. Both approaches cut down on some authentication so that the EMV card can be removed a couple of seconds after the shopper dips it. And both Visa and MasterCard are only pushing it for retailers that have the greatest need for speed, which has the unfortunate result of guaranteeing vastly different EMV experiences as shoppers go from merchant to merchant.

In a GuestView this week, Mercator Advisory Group's Tim Sloane argued that by encouraging different kinds of EMV experiences, the card brands might be impeding the rapid adoption of EMV. In MasterCard's statement, the brand said it was important that it join Visa's effort and that EMV can only succeed through industry standardization. "MasterCard called for the industry to activate current action-oriented forums like the Payments Security Taskforce and the EMV Migration Forum to align behind a common approach to address perceptions of speed of a chip card transaction," the statement said, before quoting Ajay Bhalla, president of enterprise risk and security for MasterCard saying "Ultimately, we all want to deliver great experiences for consumers and merchants. That’s why we believe that M/Chip Fast or any similar product should be implemented in consultation with the industry. With that holistic view, interested merchants can easily integrate this with their current systems to provide both speed and security for all chip cards.”

On Wednesday April 27, MasterCard unveiled its M/Chip Fast, which is an almost identical version of Visa's Quick Chip For EMV. Both approaches cut down on some authentication so that the EMV card can be removed a couple of seconds after the shopper dips it. And both Visa and MasterCard are only pushing it for retailers that have the greatest need for speed, which has the unfortunate result of guaranteeing vastly different EMV experiences as shoppers go from merchant to merchant.

PFs Should Take Liability Far More Often Than Anyone Expected

Based on analysis of the payment facilitator model, payments consultant Todd Ablowitz is arguing that payment facilitators need to take on liability a lot more often than they might think.

"Taking the risk as a PF is a choice. Do I take the liability or let the acquirer take the liability?" Ablowitz said. "It doesn't have a dial. You can have a dial on fraud and you can have a dial on credit, but you can't have a dial on how much risk tolerance you have for regulatory. You always have to be on point there. (If you don't), your acquirer will beat you up, the regulators will drag you through the mud and take you to court. You don't want it."

Based on analysis of the payment facilitator model, payments consultant Todd Ablowitz is arguing that payment facilitators need to take on liability a lot more often than they might think.

Stripe’s Hiring Experiment

It's well known that payment facilitators are toying with and improving payments mechanisms all over the world, but one PF—Stripe—is also getting rather creating about hiring the talent to make those new age payments happen.

In an experiment called Bring Your Own Team (and like any PF, it feels the need to generate an acronym. Hence: BYOT), the company has set up its HR job applications to allow one application to be linked with as many as five others. If the group passes initial inspection, they are given the same interview day/time. If the group crosses the HR hiring finish line, they will be asked to all start on the same day. In a blog post by Stripe engineering manager Avi Bryant, the rationale for the trial is made explicit. A key part of the magic of workgroups is getting groups that get along with each other and already work well together.

It's well known that payment facilitators are toying with and improving payments mechanisms all over the world, but one PF—Stripe—is also getting rather creating about hiring the talent to make those new age payments happen.

SWIFT Confirms Major Data Breach As Details Leak Out

On Monday (April 25), SWIFT announced that it is aware of "a number of recent cyber incidents where attackers had sent fraudulent messages over its system," Reuters said. "SWIFT is aware of a number of recent cyber incidents in which malicious insiders or external attackers have managed to submit SWIFT messages from financial institutions' back-offices, PCs or workstations connected to their local interface to the SWIFT network," the group warned customers on Monday in a notice seen by Reuters." This follows publication of quite a few details about the breach that surfaced earlier in the day by the BAE Threat Research Blog, which noted that the attackers attempted to steal $951 million, of which $81 million still unaccounted for.

"This malware appears to be just part of a wider attack toolkit, and would have been used to cover the attackers’ tracks as they sent forged payment instructions to make the transfers. This would have hampered the detection and response to the attack, giving more time for the subsequent money laundering to take place," the blog noted. The report went into many of the particulars of the attack method. "The malware registers itself as a service and operates within an environment running SWIFT’s Alliance software suite, powered by an Oracle Database. The main purpose is to inspect SWIFT messages for strings defined in the configuration file. From these messages, the malware can extract fields such as transfer references and SWIFT addresses to interact with the system database. These details are then used to delete specific transactions, or update transaction amounts appearing in balance reporting messages based on the amount of Convertible Currency available in specific accounts. This functionality runs in a loop until 6am on 6th February 2016. This is significant given the transfers are believed to have occurred in the two days prior to this date. The tool was custom made for this job, and shows a significant level of knowledge of SWIFT Alliance Access software as well as good malware coding skills."

On Monday (April 25), SWIFT announced that it is aware of "a number of recent cyber incidents where attackers had sent fraudulent messages over its system," Reuters said. "SWIFT is aware of a number of recent cyber incidents in which malicious insiders or external attackers have managed to submit SWIFT messages from financial institutions' back-offices, PCs or workstations connected to their local interface to the SWIFT network," the group warned customers on Monday in a notice seen by Reuters." This follows publication of quite a few details about the breach that surfaced earlier in the day by the BAE Threat Research Blog, which noted that the attackers attempted to steal $951 million, of which $81 million still unaccounted for.

New EMV Methods: Confusion To Reign Supreme

Visa introduced Quick Chip for EMV on April 19th and MasterCard quickly followed with the announcement of M/Chip Fast on April 21st. By speeding up how quickly the consumer can remove the card from the POS, these two networks have also increased complexity for the already complicated payment process as implemented by consumers, merchants, and issuers. Where once it was possible to have some confidence a card would work as long as the brand was displayed, life is now more complicated. Besides Swipe, Dip, and Tap, we now have Swipe, Hover (MST), Show (Chase Pay), Dip, Quick Dip, and Tap – to name a few.

Then there are is the question of compatibility. NFC won’t work at non-NFC terminals while a Samsung device with MST will. Swiping an EMV card forces a dip, but only at terminals that support EMV. I’m in payments and I have no idea what happens if I present an EMV enabled card within my Samsung Pay device and use MST to communicate it to a POS that only supports swipe and EMV – does it ask me to dip my phone?

Visa introduced Quick Chip for EMV on April 19th and MasterCard quickly followed with the announcement of M/Chip Fast on April 21st. By speeding up how quickly the consumer can remove the card from the POS, these two networks have also increased complexity for the already complicated payment process as implemented by consumers, merchants, and issuers. Where once it was possible to have some confidence a card would work as long as the brand was displayed, life is now more complicated. Besides Swipe, Dip, and Tap, we now have Swipe, Hover (MST), Show (Chase Pay), Dip, Quick Dip, and Tap – to name a few.

Visa’s Quick Chip EMV Move, Banking On Perception To Trump Reality

Using the Electronic Transaction Association’s TRANSACT 16 event as a backdrop, Visa on Tuesday (April 19) rolled out Quick Chip for EMV, which the leading card brand described in a news release as being "a technology enhancement that optimizes EMC chip processing and speeds up checkout times." Unfortunately, Quick Chip isn't a technology enhancement nor does it optimize chip processing and it certainly doesn't speed up checkout times. Other than that, the lead of Visa's news release got it right.

What Quick Chip, however, does do is potentially just as powerful an aid to EMV—or quite destructive to EMV adoption, depending on who is talking—as what Visa claims. All that it does is allow the shopper to remove the card from the card reader much more quickly than current deployments permit. Given that the reader's retention of the card until the full transaction is complete is behind a very high percentage of both merchant and consumer EMV complaints, this could be seen as a very good thing. Let's break this down. For almost all transactions, the Quick Chip change won't accelerate the total transaction time at all. The customer still needs to stand there until all products have scanned and the cashier has been given the final transaction approval. Therefore, from the merchant perspective of "how many shoppers can I push through the line in an hour?" this change is unlikely to help at all. But like so much of what happens in retail, reality never stands a chance against perception.

Using the Electronic Transaction Association’s TRANSACT 16 event as a backdrop, Visa on Tuesday (April 19) rolled out Quick Chip for EMV, which the leading card brand described in a news release as being "a technology enhancement that optimizes EMC chip processing and speeds up checkout times." Unfortunately, Quick Chip isn't a technology enhancement nor does it optimize chip processing and it certainly doesn't speed up checkout times. Other than that, the lead of Visa's news release got it right.

Purchases Made Via Tablets Plunging

Tablets still play a large role in retail purchases, as they are the most popular device for sales associates to use to do product demonstrations and often to perform in-aisle checkout. But on the other end of the transaction—the end where shoppers use their own tablets to make e-commerce purchases—the tablet is surrendering many of the purchases it briefly stole from smartphones. That's according to research recently published from Bizrate Insights.

The iPad specifically has seen a sharp and continual drop in how many purchases it processes, Bizrate said, dropping from control of about 70 percent of such purchases in 2013's Q3 down to 36 percent in Q116. "The decrease in the percentage of online sales taking place on a tablet is the result of the increasing utility of smartphones (screen size, website optimization, and improved cell phone coverage), which are nearly always at hand," said Hayley Silver, a Bizrate VP.

Tablets still play a large role in retail purchases, as they are the most popular device for sales associates to use to do product demonstrations and often to perform in-aisle checkout. But on the other end of the transaction—the end where shoppers use their own tablets to make e-commerce purchases—the tablet is surrendering many of the purchases it briefly stole from smartphones. That's according to research recently published from Bizrate Insights.

PCI To Publish New Version April 28 With More Strict Authentication, Service Provider Rules

The PCI Security Council, which said in early March that its' new version (3.2) would be out sometime in April, is now saying that April 28 is the likely day and that the new rules would get stricter about authentication as well as service providers.

In a blog post Tuesday (April 19), PCI Chief Technology Officer Troy Leach said the new rules will add "multi-factor authentication as a requirement for any personnel with administrative access into the cardholder data environment, so that a password alone is not enough to verify the user’s identity and grant access to sensitive information, even if they are within a trusted network." Leach said this will require this additional authentication to employees who had before had to deal with it. "The most important point is that the change to the requirement is intended for all administrative access into the cardholder data environment, even from within a company’s own network. This applies to any administrator, whether it be a third party or internal, that has the ability to change systems and other credentials within that network to potentially compromise the security of the environment," Leach said.

The PCI Security Council, which said in early March that its' new version (3.2) would be out sometime in April, is now saying that April 28 is the likely day and that the new rules would get stricter about authentication as well as service providers.

Look For ETA To Publish PF Guidelines By June

The Electronic Transactions Association (ETA) on Tuesday (April 19) announced "the roll-out of new Payment Facilitator guidelines offering guidance and best practices to new entrants regarding settlement, registration, funding delays, fraud, security and related issues." Those guidelines are still being finalized and are not expected to be published until "May or June," according to Todd Ablowitz, the payments consultant overseeing the guideline's creation.

The document will only be available to ETA members. The document—which now stands at 85 pages, but could easily grow—is the most extensive compilation of protocols, procedures and best practices for payment facilitators yet assembled. Amy Zirkle, the ETA's director of industry affairs, said that a lot of the software companies that are salivating over becoming PFs know their software and their merchants' environments and needs but they may not be nearly as familiar with the intricacies of modern payments systems. "These people will get into payments and they don't always know a lot about payments," she said. "This the nitty gritty of what needs to be considered to ultimately protect the payment facilitator. This is the quintessential toolkit for payment facilitators, showing new PFs all of the necessary steps."

The Electronic Transactions Association (ETA) on Tuesday (April 19) announced "the roll-out of new Payment Facilitator guidelines offering guidance and best practices to new entrants regarding settlement, registration, funding delays, fraud, security and related issues." Those guidelines are still being finalized and are not expected to be published until "May or June," according to Todd Ablowitz, the payments consultant overseeing the guideline's creation.

Study Projects PF Explosion Next Year, To $58.4 Billion Transaction Volume

The number of payment facilitators—and the dollars they are expected to process—will both soar by the end of next year, from 450 PFs and $27 billion in transaction processing last year to 973 PFs and $58.4 billion in transaction processing next year, according to a PF market study finalized this week from Double Diamond Group. That transaction processing number is actually even more powerful as those figures excluded any transactions processed by industry powerhouses PayPal, Stripe and Square.

The study started by examining the SaaS B2B space—a roughly $33 billion market with 22,000 companies—and found that about 13,000 of those companies are positioned to benefit from the PF model. The study's results were announced at the PF Day at ETA TRANSACT 2016.

The number of payment facilitators—and the dollars they are expected to process—will both soar by the end of next year, from 450 PFs and $27 billion in transaction processing last year to 973 PFs and $58.4 billion in transaction processing next year, according to a PF market study finalized this week from Double Diamond Group. That transaction processing number is actually even more powerful as those figures excluded any transactions processed by industry powerhouses PayPal, Stripe and Square.

NYC Subways To Go Mobile Payment—In 2022 (Or Maybe A Bit Later)

You can't fight City Hall, nor can you apparently accelerate it. But mobile payments progress is still mobile payments progress and the county's largest mass transit system on Wednesday (April 13) committed to moving to mobile payments for all mass transit activity. But New York City's Metropolitan Transportation Authority (MTA) being the bureaucracy that it is, the RFP that it published Wednesday gives contractors "69 months" (five years and nine months) from the "Notice of Award date to substantial completion."

It's clearly not known how long it will be until that award date—which will follow a lengthy bid submission and evaluation process—but even if it happens this year, that still pushes the deployment to about 2022. Unless, of course, there are implementation delays. In New York City? What are the odds?

You can't fight City Hall, nor can you apparently accelerate it. But mobile payments progress is still mobile payments progress and the county's largest mass transit system on Wednesday (April 13) committed to moving to mobile payments for all mass transit activity. But New York City's Metropolitan Transportation Authority (MTA) being the bureaucracy that it is, the RFP that it published Wednesday gives contractors "69 months" (five years and nine months) from the "Notice of Award date to substantial completion."

Uber Really Doesn’t Like Regulators

When Uber published on Tuesday (April 12) what it calls its "transparency report"—a compilation of information delivered to law enforcement and regulators last year—it took the opportunity to express its displeasure that it had to deliver all of those data-dumps.

"Regulators will always need some amount of data to be effective, just like law enforcement. But in many cases they send blanket requests without explaining why the information is needed, or how it will be used," said an Uber blog post. "And while this kind of trip data doesn’t include personal information, it can reveal patterns of behavior—and is more than regulators need to do their jobs. It’s why Uber frequently tries to narrow the scope of these demands, though our efforts are typically rebuffed."

When Uber published on Tuesday (April 12) what it calls its "transparency report"—a compilation of information delivered to law enforcement and regulators last year—it took the opportunity to express its displeasure that it had to deliver all of those data-dumps.

Yapstone’s Way Of Unlocking Payments For Renters Everywhere

Paying rent is one of the last—and largest—vestiges of paper-check-writing in the U.S. and it's also remarkably inefficient. Combine that with the fact that rent is often one of the largest monthly costs for the country's roughly 100 million tenants and it's easy to see why Yapstone has focused on rent payments as one of its most critical verticals.

"We want to focus on multi-billion-dollar opportunities," said Yapstone President David Weiss.It's also important to remember that paying that monthly rent bill is only one part of the tenant—and landlord—financial reality. By selling the service to both apartment dwellers and apartment managers, Yapstone has the perfect audience for a group of services that make the rental process easier and therefore more profitable. "We're offering a whole range of value-added services such as credit reporting, renters' insurance that follows that resident from unit to unit," Weiss said. "This is a powerful series of products that enable us to tap into a $400 billion to $500 billion market."

Paying rent is one of the last—and largest--vestiges of paper-check-writing in the U.S. and it's also remarkably inefficient. Combine that with the fact that rent is often one of the largest monthly costs for the country's roughly 100 million tenants and it's easy to see why Yapstone has focused on rent payments as one of its most critical verticals.

Podcast: A Preview of Next Week’s Payment Facilitator Day ‘16

The 2nd Annual Payment Facilitator Day at the ETA TRANSACT 2016 will kick off Tuesday (April 19) in Las Vegas. This year’s theme is In Depth and On Target as the full-day event goal is to explore all of the relevant topics and ideas that are shaping the payment facilitator industry.

"It’s about payment facilitators, for payment facilitators and entities that want to become payment facilitators,” Todd Ablowitz said in this week’s PaymentFacilitator.com podcast. Event hosts, Todd Ablowitz and Deana Rich, dive into what to expect at PF Day ’16 and who will be there.

The 2nd Annual Payment Facilitator Day at the ETA TRANSACT 2016 will kick off Tuesday (April 19) in Las Vegas. This year’s theme is In Depth and On Target as the full-day event goal is to explore all of the relevant topics and ideas that are shaping the payment facilitator industry.

Chase’s Removal Of ATM Limits Is The Right Idea But For The Wrong Device

Moving more and increasingly complex payments capabilities to ATMs and away from bank branches is a good thing, as we've argued before with ATM ApplePay and with MasterCard's patent application to turn ATMs into full-fledged POS units. But there is a line where it doesn't make sense and JPMorgan Chase's current debate about removing per-day cash limits crosses that line.

First of all, unlike mobile devices, ATMs have a very physical limitation: Once the cash that some human loaded into the ATM runs out, the ATM loses much of its most-desired functionality. Sure, it can still accept deposits and reveal balances, but not that much more. To be candid, those particular services are much better handled by a mobile app. (Note: That is true up to the limit of mobile deposits which, I assure you, I'll get back to shortly.) The ATM's most powerful function is to dispense cash, as that is something mobile apps can't do. When the money is gone, the ATM becomes rather pointless.

Moving more and increasingly complex payments capabilities to ATMs and away from bank branches is a good thing, as we've argued before with ATM ApplePay and with MasterCard's patent application to turn ATMs into full-fledged POS units. But there is a line where it doesn't make sense and JPMorgan Chase's current debate about removing per-day cash limits crosses that line.

Finally, An Event Where PF Is The Focus, Not A Footnote

Given how important payment facilitators are to the rapidly emerging and morphing payments landscape in 2016, it's stunning how few places there are to explore the implications of being a PF today. Plenty of meetings and symposium exist for chatting about payments in general or virtual currencies or mobile payments, but the opportunities to really delve deeply into PF issues are practically non-existent. Until now.

If you can swing by Las Vegas on April 19, PaymentFacilatator.com—in conjunction with Double Diamond Group, Rich Consulting and the Electronic Transactions Association—will present our version of Everything You Ever Wanted To Know About PFs, But Were Too Geeky To Ask. Officially, though, it's dubbed simply TRANSACT 16’s Payment Facilitator Day – In Depth and On Target.

Given how important payment facilitators are to the rapidly emerging and morphing payments landscape in 2016, it's stunning how few places there are to explore the implications of being a PF today. Plenty of meetings and symposium exist for chatting about payments in general or virtual currencies or mobile payments, but the opportunities to really delve deeply into PF issues are practically non-existent. Until now.

Risk Teams Are All Over The Map When It Comes To PFs

Compliance and risk leaders in the Americas, Europe, and Asia exhibit a polarity in their attitudes about payment facilitators. First, there are those who either endorse or oppose. Second, there are PFs that are either fit or unfit for partnership. This yields three observations: Risk teams see PFs in general as either "friends" or "foes"; Risk teams categorize PFs into "safe bets" or "wild cards"; Risk teams demand oversight rights when working with PFs.

G2 recently conducted a survey with acquirers globally. The results showed a greater willingness among banks and processors to work with PFs in EMEA and APAC. In the Americas, one-half of respondents actively work with PFs. In EMEA and APAC, the numbers were closer to two-thirds. When asked if they knew if there were PFs in their portfolios, there was some doubt. A significant number of acquirers in all regions had either discovered a merchant unknowingly acting as a PF in the past year or did not know if that activity was occurring.

Compliance and risk leaders in the Americas, Europe, and Asia exhibit a polarity in their attitudes about payment facilitators. First, there are those who either endorse or oppose. Second, there are PFs that are either fit or unfit for partnership. This yields three observations: Risk teams see PFs in general as either "friends" or "foes"; Risk teams categorize PFs into "safe bets" or "wild cards"; Risk teams demand oversight rights when working with PFs.

Visa’s New SMB Rules Add PF Complexities

When Visa recently added more rules on its smallest merchants—PCI Level 4s—it created a sales opportunity for payment facilitators by giving SMBs an even stronger reason to outsource its payments activities. At the same time, it added more complexity to PCI management for those PFs.

Mike Cottrell, head of global sales and marketing at ProPay, tried to put the new rules into perspective for payment facilitators in this week's PaymentFacilitator.com podcast.

When Visa recently added more rules on its smallest merchants—PCI Level 4s—it created a sales opportunity for payment facilitators by giving SMBs an even stronger reason to outsource its payments activities. At the same time, it added more complexity to PCI management for those PFs.

Banks Simply Can’t Handle Technology As Well As PFs

We have made the argument before that when it comes to mastering the technology required for next-generation payments, the structure of banks doesn't permit it and the attitude of bankers won't allow it. Seems that we're not alone. McKinsey & Company has now come to the identical conclusion.

In a fascinating report, McKinsey's argues that bank's technological intransigence—which creates the economic hole that payment facilitators are uniquely qualified to fill—dates back hundreds of years before credit cards. "Banking has historically been one of the business sectors most resistant to disruption by technology. Since the first mortgage was issued in England in the 11th century, banks have built robust businesses with multiple moats: ubiquitous distribution through branches; unique expertise such as credit underwriting underpinned by both data and judgment; even the special status of being regulated institutions that supply credit, the lifeblood of economic growth, and have sovereign insurance for their liabilities (deposits)," the McKinsey report said.

We have made the argument before that when it comes to mastering the technology required for next-generation payments, the structure of banks doesn't permit it and the attitude of bankers won't allow it. Seems that we're not alone. McKinsey & Company has now come to the identical conclusion.

Payment Regulatory Insanity Two: A Dog Named Dash

Two weeks ago, we told you the tale of PayPal's Venmo going overboard with compliance efforts, when it delayed any transaction that mentioned the word "Persian." Not wanting to be outdone by any PayPal division, Chase has decided to top Venmo in the craziness department. Chase's entry? It blocked the money transfer of a 55-year-old sufferer of muscular dystrophy, who was paying someone to walk his service dog and the dog's name is Dash. Seems that the bank saw Dash as code for Daesh, the Arabic term for the Islamic State aka ISIS.

A few initial takes. First, Daesh may sometimes be pronounced "dash" but it's never spelled that way. Secondly, really? If I pay someone to walk a dog named SPOT, it's probably not an acronym for Special People Overthrowing Turkey. And third, let's go again with "really?" But wait: this story gets even better with the details.

Two weeks ago, we told you the tale of PayPal's Venmo going overboard with compliance efforts, when it delayed any transaction that mentioned the word "Persian." Not wanting to be outdone by any PayPal division, Chase has decided to top Venmo in the craziness department. Chase's entry? It blocked the money transfer of a 55-year-old sufferer of muscular dystrophy, who was paying someone to walk his service dog and the dog's name is Dash. Seems that the bank saw Dash as code for Daesh, the Arabic term for the Islamic State aka ISIS.

When Payments Disruptions Hit Nashville, Things Are Looking Good

In the world of payments and transportation, the initial phrase of a disruptive technology is to eat away at the user base of traditional payment and transportation methods. But you know things are being really disrupted when those traditional forces embrace the disruption as a way to improve their offerings. In Nashville, Tennessee, that has now happened with Uber and Lyft. As those services disrupt and transform the very notion of urban transportation, mobile payments are going along for the ride—and it's a beautiful one-way trip.

These are the exact kinds of changes that payment facilitators will deliver. And as cities and their commuters rapidly move into next-generation payments, the demands will expand to all kinds of businesses—especially small merchants—who will now have a ready-made customer base itching for new payment methods, but with no way to deliver. Enter their regional PF. Transportation is arguably the most important sector to modernize because the repetition involved (a regular commuter can use such a service 10 times a week, with five roundtrips) is the best way to quickly get a population comfortable with new payment procedures.

In the world of payments and transportation, the initial phrase of a disruptive technology is to eat away at the user base of traditional payment and transportation methods. But you know things are being really disrupted when those traditional forces embrace the disruption as a way to improve their offerings. In Nashville, Tennessee, that has now happened with Uber and Lyft. As those services disrupt and transform the very notion of urban transportation, mobile payments are going along for the ride—and it's a beautiful one-way trip. These are the exact kinds of changes that payment facilitators will deliver.

Square’s Design Miracle: EMV, NFC And An Amazing $49 Pricetag

FastCompany recently took a fascinating deep-dive into the strategy and tactics behind Square's design. It's a terrific read, if only to explain the design genius behind a thoroughly under-appreciated feat of engineering. It's certainly no surprise that the Square team would have taken so much time perfecting it's design, which delivers a beautiful—yes, I think it's beautiful—fast and truly effortless interface. The biggest surprise here is how difficult it was to deliver the price they needed to hit.

It's a longheld project reality that you can have your timeline, your price or your scope, but never all three. Such realities don't cut it at Square. What is going on here is Square making a strategic longterm bet on mobile payments. Their top brass felt that someone has to suck it up price-wise to get the market moving. It's a loss-leader mentality, but not in the quintessential razor-and-razor-blade mode. It's more in the "we'll pay a lot more now for a big slice of this worthless pie, betting that we can make this pie worth a bundle if we make the first move." And Square's engineering team has succeeded in a big way, not merely in capturing marketshare but in moving the entire market.

FastCompany recently took a fascinating deep-dive into the strategy and tactics behind Square's design. It's a terrific read, if only to explain the design genius behind a thoroughly under-appreciated feat of engineering. It's certainly no surprise that the Square team would have taken so much time perfecting it's design, which delivers a beautiful—yes, I think it's beautiful—fast and truly effortless interface. The biggest surprise here is how difficult it was to deliver the price they needed to hit.

Transaction Laundering: How Not To Get Taken To The Cleaners

One of the cyberthief's favorite tactics these days is transaction laundering, where the bad guy takes their bad transactions—usually for drugs, gambling, counterfeit goods or human trafficking—and runs them through seemingly good web sites, ones ostensibly trying to sell innocuous products. There are things that a payment facilitator can do to thwart such efforts and that is the focus of this week's PaymentFacilitator.com podcast, featuring Deana Rich, president of Rich Consulting.

One of the less-commonly-used but quite effective tactics, Rich said, is do some secret shopping, both on the PF's own customer sites as well as suspected fraudulent sites. That is literally making purchases from both kinds of sites and seeing what then happens. Rich said she was recently talking "with a banker who told me that she had done that on a site she suspected to be bad and then she made the purchase and it never came through her own system. She never saw it because the purchase didn't really occur. They weren't really selling anything on that site. They were really selling stuff on the bad site. It was that secret shopping, using your own payment card to purchase things, that let her know what went wrong."

One of the cyberthief's favorite tactics these days is transaction laundering, where the bad guy takes their bad transactions—usually for drugs, gambling, counterfeit goods or human trafficking—and runs them through seemingly good web sites, ones ostensibly trying to sell innocuous products. There are things that a payment facilitator can do to thwart such efforts and that is the focus of this week's PaymentFacilitator.com podcast, featuring Deana Rich, president of Rich Consulting.

Facebook Wants A Piece Of In-Store Payments

Finding experimental features hidden in code is like reviewing patents for clues as to a company's future plans. Given that most trialed ideas—let alone patented ones that never get to trials—are never productized. That said, code in a product suggests a somewhat more serious interest. And it was inside code of the latest version of Facebook's Messenger that Facebook planted some hints of plans to enable in-store payments.

To be fair, there's as yet no concrete details about how this may materialize nor how Facebook would fulfill in-store product purchases. Still, it's intriguing. "Tucked inside the code for Facebook’s Messenger are clues for how the chat app plans to become a marketplace, including an unreleased feature that lets people use the app to buy things in stores," said a story in The Information. "But the unreleased features suggest Messenger’s push to shape itself as a social commerce platform is accelerating more quickly than previously known. And the interest in store purchases is notable. The software includes commands allowing a user to 'pay in person' or 'pay directly in Messenger when you pick up the item' with 'no cash needed.' One developer who has worked with Facebook said Messenger has a large team working on integrating online and offline services, like using the app for purchasing items in retail stores."

Finding experimental features hidden in code is like reviewing patents for clues as to a company's future plans. Given that most trialed ideas—let alone patented ones that never get to trials—are never productized. That said, code in a product suggests a somewhat more serious interest. And it was inside code of the latest version of Facebook's Messenger that Facebook planted some hints of plans to enable in-store payments.

Cyberthieves Use Far Better Security Than Do Banks. Aren’t You Embarrassed?

This shouldn't be the least bit surprising, but it's downright humiliating how bad our security habits are with our top financial institutions when you take a look at large criminal enterprises. If fraudsters and entry-level terrorists can be bothered to use robust authentication security, why can't the good guys?

"If you are a seller on Alphabay -- a darkweb site that sells 'drugs, stolen data and hacking tools,' you'll have to use two-factor authentication (based on PGP/GPG) for all your logins," said the depressing story in BoingBoing. "Alphabay requires you to use a unique seven-word phrase to recover passwords (as opposed to easily researched questions like high-school football team, mother's maiden name, etc), and says there is no way to recover a lost password without this phrase. Finally, Alphabay requires a four-digit PIN to transfer bitcoin to your personal wallet."

This shouldn't be the least bit surprising, but it's downright humiliating how bad our security habits are with our top financial institutions when you take a look at large criminal enterprises. If fraudsters and entry-level terrorists can be bothered to use robust authentication security, why can't the good guys?

Questions Every New Payment Facilitator Should Ask Its Payments Attorney

Under the latest card brand rules, payment facilitators are being held to exacting requirements. Note that the acquirer is now able to terminate a PF contract immediately with "good cause." So while state and federal regulation may get the bulk of the attention, those are hardly the only areas of potential rules-enforced disasters.

Visa’s Core Rules, for example, have the PF being "liable for all acts, omissions, cardholder disputes, and other cardholder customer service related issues caused by the Payment Facilitator's Sponsored Merchants" and "is responsible and financially liable for each transaction processed on behalf of the sponsored merchant, or for any disputed transaction or credit." MasterCard similarly requires that "the payment facilitator must ensure that each of its submerchants complies with the standards applicable to merchants." Understanding the limitations and obligations that the card brands impose upon PFs is crucial to ensure the ongoing operations of business.

Under the latest card brand rules, payment facilitators are being held to exacting requirements. Note that the acquirer is now able to terminate a PF contract immediately with "good cause." So while state and federal regulation may get the bulk of the attention, those are hardly the only areas of potential rules-enforced disasters.

NRF Pushes Back Against Debit Swipe Fee Cap

The National Retail Federation (NRF) last week pushed back against debit card swipe fees, saying the fees are still far too much.

"In most cases, 24 cents per transaction represents a significant savings over the prior non-competitive pricing," NRF Senior Vice President and General Counsel Mallory Duncan said in a statement. “However, it is still substantially higher than issuers’ incremental costs."

The National Retail Federation (NRF) last week pushed back against debit card swipe fees, saying the fees are still far too much.

MasterCard Uses Golf To Demo Virtual Reality

MasterCard, which has sometimes struggled with Internet-of-Things (IoT) efforts, used a golf tournament to (dear readers, please forgive me for what I am about to perpetrate) gulf the digital divide from putting green on a golf course's putting green. (Whatever you just said, I probably deserved it.)

In all fairness, MasterCard put on an impressive virtual reality demo at its sponsored Arnold Palmer Invitational. "While out on the course, golfers might simply tap their golf glove at the point-of-sale to buy refreshments from the beverage cart," said a MasterCard statement. "MasterCard is taking it a step further with a concept designed in collaboration with Wearality, an Orlando-based start-up that designs virtual reality glasses and wearables, to allow consumers to identify an item within the experience - such as a golf shirt - and buy it without leaving the virtual world." Let's put this into context.

MasterCard, which has sometimes struggled with Internet-of-Things (IoT) efforts, used a golf tournament to (dear readers, please forgive me for what I am about to perpetrate) gulf the digital divide from putting green on a golf course's putting green. (Whatever you just said, I probably deserved it.)

Alibaba-Backed Paytm Gets Into Movie Theater Tickets—But They Have Bigger Things In Mind

India payments powerhouse—and Alibaba-financed—Paytm has cut a deal with India's largest multiplex movie theater chain (PVR) to sell movie tickets in mobile and online. Why make the move now, with physical movie theaters a quickly dying industry? Those tickets will unleash a lot more one night at the cinema.

Why make a movie theater play now, when even the most aggressive movie industry defenders concede that the shared physical viewing of films will surrender to the better pricing and much stronger convenience of watching films at home or via mobile devices? It's a smart move. Once shoppers have completed the digital movie transition, mobile payment options will surround them, assuming they haven't already paid Amazon or Netflix directly. But by tying in physical movie payments with Paytm, they are making the mobile connection in a physical context. When those consumers make the inevitable move to a more digital experience, the account and the mindset will already be established. Better yet, Paytm will know the entertainment habits/choices made by those consumers, allowing for very effective marketing moves later.

India payments powerhouse—and Alibaba-financed—Paytm has cut a deal with India's largest multiplex movie theater chain (PVR) to sell movie tickets in mobile and online. Why make the move now, with physical movie theaters a quickly dying industry? Those tickets will unleash a lot more one night at the cinema.

Uber’s Deal With Green Dot Illustrates Payments Potential

When Uber and Green Dot last week rolled out Uber Checking By Go Bank, it offered little more than a slightly more convenient way for workers to get paid and to be paid more timely. In payments, though, it can be those little conveniences and small elements of automation that can build into a massive change. And who understands that digital disruption concept better than Uber—and payment facilitators.

The idea is straight-forward: When Uber drivers want to get paid for hours logged, use what Uber is calling Instant Pay. They can log in 24x7 and "cash out your earnings instantly and easily at any time, with no minimum deposit or transaction fees." The cash is loaded onto their Uber Debit Card. The near-term advantages are that workers control when they get paid—no more waiting until the company dictated date of, let's say, the 15th of each month—and the account can be isolated. That isolation means that they don't need to share sensitive bank account details with their employer if they don’t want to.

When Uber and Green Dot last week rolled out Uber Checking By Go Bank, it offered little more than a slightly more convenient way for workers to get paid and to be paid more timely. In payments, though, it can be those little conveniences and small elements of automation that can build into a massive change. And who understands that digital disruption concept better than Uber—and payment facilitators.

A Surreal Peek Into The Payment Data Underworld

If you're in the mood for a truly surreal peek into the stolen payment card data market, check out this profile of a data-seller called Joker's Stash, over at KrebsOnSecurity. This vendor's employees, solely selling illegal stolen data mind you, "set themselves apart by focusing on loyalty programs, frequent-buyer discounts, money-back guarantees and just plain old good customer service." Heck, it's hard enough to get legitimate retailers to do that.

Indeed, the Bitcoin-accepting company markets itself as proudly only selling data that it's own people stole, as opposed to selling what any lowlife on the street steals. And it offers limited guarantees: "All sales are final, although some batches of stolen cards for sale at Joker’s Stash come with a replacement policy — a short window of time from minutes to a few hours, generally — in which buyers can request replacement cards for any that come back as declined during that replacement timeframe." Even their loyalty program is better than that offered by some large retailers.

If you're in the mood for a truly surreal peek into the stolen payment card data market, check out this profile of a data-seller called Joker's Stash, over at KrebsOnSecurity. This vendor's employees, solely selling illegal stolen data mind you, "set themselves apart by focusing on loyalty programs, frequent-buyer discounts, money-back guarantees and just plain old good customer service." Heck, it's hard enough to get legitimate retailers to do that.

Class Action Merchant EMV Lawsuit Could Make The EMV Transition A Lot Messier

EMV has always delivered more than its fair share of headaches and surprises—and this week even has the MasterCard CEO doing some EMV griping of his own—but a class action lawsuit filed last week is raising yet another troubling EMV question. Is the liability shift appropriate if merchants have done everything in their power to embrace EMV? If backlogs from the card brands are why a merchant doesn't have an EMV greenlight, is it fair to punish them with the liability shift?

Like every payments issue, there are details to be dealt with. Did the merchant submit all paperwork in a reasonable timeframe? One can't file 10 minutes before the deadline and then blame the backlog for a lack of approval. Still, it's an interesting question. And the lawsuit from B&R Supermarkets and Grove Liquors goes further than saying that the backlog was unexpected or larger than expected. The filing accuses the card brands—and other payments players—of deliberately being slow, in an attempt to push off liability costs on as many merchants as possible, regardless of their EMV efforts.

EMV has always delivered more than its fair share of headaches and surprises—and this week even has the MasterCard CEO doing some EMV griping of his own—but a class action lawsuit filed last week is raising yet another troubling EMV question. Is the liability shift appropriate if merchants have done everything in their power to embrace EMV? If backlogs from the card brands are why a merchant doesn't have an EMV greenlight, is it fair to punish them with the liability shift?

Accenture Study: Most Boards Of Large Banks Have Little Tech Background

Under the least surprising things ever category comes a new report—from Accenture—that barely six percent of the board members at large banks have any meaning technology background. The findings certainly explain the tech-hesitations coming from banks, especially when it comes to reducing payments friction.

This is much of the reason why payment facilitators have such a critical role to play with banks—a role that banks neither want to nor are able to execute themselves.

Under the least surprising things ever category comes a new report—from Accenture—that barely six percent of the board members at large banks have any meaning technology background. The findings certainly explain the tech-hesitations coming from banks, especially when it comes to reducing payments friction.

MasterCard Draws Its Line In Silicon: MobileWallet Vendors, Go This Far And No Farther

Speaking at the Barclays Emerging Payments Forum on Tuesday (March 15), MasterCard CEO Ajay Banga told attendees that MasterCard has no problem with the many mobile wallets today, as long as they don't cross the line and try to change key parts of payments infrastructure.

Banga said that current mobile wallets are supporting MC's goal of converting cash and checks into digital transactions. As long as they keep doing that, Banga will be happy to play along. "I will support everything so long as it protects the ecosystem and does not damage the relationship between merchants, banks, these (mobile wallet) players and us. The moment it changes that and it starts playing with the data, then I’ve got a problem. If it's basically a passthrough and it's not affecting the ecosystem and it's actually attacking cash, I'm all for it. If you do things that make it complicated for the ecosystem to work cleanly, I'm not going to be supportive."

Speaking at the Barclays Emerging Payments Forum on Tuesday (March 15), MasterCard CEO Ajay Banga told attendees that MasterCard has no problem with the many mobile wallets today, as long as they don't cross the line and try to change key parts of payments infrastructure.

Venmo/PayPal Go Overboard On Compliance

If you’re trying to use Venmo to pay someone for sitting your Persian cat or for buying a used Persian rug, don’t actually use the word “Persian” or be prepared to wait longer. And you can thank a compliance program that is perhaps going a few steps too far.

Although opting—understandably—to be vague on specifics, the PayPal-owned Venmo responded to media reports that is has coded its systems to be on the lookout for certain words, including Persian. "There has been recent discussion around specific keywords associated with payments within Venmo that have caused us to pause the transaction and review. We understand the frustration this may cause," Venmo said on its blog.

If you’re trying to use Venmo to pay someone for sitting your Persian cat or for buying a used Persian rug, don’t actually use the word “Persian” or be prepared to wait longer. And you can thank a compliance program that is perhaps going a few steps too far.

With Better-Than-Expected Earnings From Square, Comes A Sharp Spike In Its Non-Payment Business

Square late on Wednesday (March 9) posted earnings that topped analyst estimates and briefly sent its stock soaring 3.7 percent in after-market trading. But of potentially greater interest to the payment facilitator community is that Square's non-payment revenue hit 15 percent, which is about triple what it was when Square launched its IPO.

In Q415, Square reported gross payment volume (GPV) soaring 47 percent—year over year—to $10.2 billion. The most surprising stat, though, was from Square's Software and Data Products group. In that same quarter, that software/data products revenue shot up 52 percent (compared with the prior quarter), to $22 million. "From payment processing to point of sale, hardware to software, business financing to payroll and more, we have built a cohesive commerce ecosystem that helps sellers start, run, and grow their businesses," Square said in an unattributed portion of its news release. "This makes us unique and stands in marked contrast to the rest of the industry, which forces sellers to laboriously piece together hardware, software, and payments services from many different vendors."

Square late on Wednesday (March 9) posted earnings that topped analyst estimates and briefly sent its stock soaring 3.7 percent in after-market trading. But of potentially greater interest to the payment facilitator community is that Square's non-payment revenue hit 15 percent, which is about triple what it was when Square launched its IPO.

FTC Launches PCI Probe. Ruh-Roh

On Monday (March 7), the U.S. Federal Trade Commission (FTC) launched a government investigation of PCI, zeroing in on potentially excessive charges, inconsistency in enforcement and rampant conflicts of interest. As famed QSA Scooby Doo would have said, "Ruh-roh."

None of this is news to the FTC and it's part of the reason for the investigation, which FTC is officially calling a study. "We have heard these issues," said David Lincicum, an FTC attorney in the division of privacy and identity protection, who is the lead attorney on the study and is also managing the study. "We go into this looking to get information, to get some details about what the interactions look like."

On Monday (March 7), the U.S. Federal Trade Commission (FTC) launched a government investigation of PCI, zeroing in on potentially excessive charges, inconsistency in enforcement and rampant conflicts of interest. As famed QSA Scooby Doo would have said, "Ruh-roh."

ExxonMobil Now Accepts ApplePay, But Rejects NFC. Bad Move

Wanting to avoid having to purchase and install NFC-friendly card readers at its stations, ExxonMobil has opted to use ApplePay but only as an in-app method, from within the petro company's own app. Although it might make short-term economic sense from ExxonMobil's perspective, it may be a big hit with over the long-term and it could damage some consumer perceptions of NFC payment convenience.

ApplePay has several solid user-experience advantages and cashiers at retailers that accept a lot of ApplePay transactions (think Whole Foods, TraderJoe's or McDonald's) typically find it the fastest payment experience. The service will be offered initially at 6,000 Exxon and Mobil gas stations in 46 states, with an additional 2,000 stores slated to join by this summer.

Wanting to avoid having to purchase and install NFC-friendly card readers at its stations, ExxonMobil has opted to use ApplePay but only as an in-app method, from within the petro company's own app. Although it might make short-term economic sense from ExxonMobil's perspective, it may be a big hit with over the long-term and it could damage some consumer perceptions of NFC payment convenience.

Australia’s Crackdown On “Excessive” Interchange

A bill passed by both houses of the Australian Parliament bans companies "from charging an excessive payment surcharge." But what does Parliament consider excessive? That is partially dictated by rules from the Reserve Bank of Australia (RBA).

The bill requires that interchange must "reflect the cost of using the payment methods for which they are charged." Does it allow for any margin? And if so, how much would Parliament consider reasonable? In a report from PwC (aka PricewaterhouseCoopers) Australia, "whether a surcharge will be deemed excessive is dependent upon whether there is a Reserve Bank of Australia (RBA) standard or regulation in place. The RBA is currently consulting on a standard and is due to make a decision in May 2016. The Bill will not become operative until the standard is in place." It added: "If an infringement notice is issued it will impose a penalty of 600 penalty units ($108,000) for a listed corporation and 60 penalty units ($10,800) for a body corporate that is not a listed corporation."

A bill passed by both houses of the Australian Parliament bans companies "from charging an excessive payment surcharge." But what does Parliament consider excessive? That is partially dictated by rules from the Reserve Bank of Australia (RBA).

States Seek Reasonable-Sounding—But Logistically All-But-Impossible—Payment Rules

Some state legislatures are pushing some potential laws aimed at giving consumers—and their heirs—more control over their digital lives. But in doing so, some are preparing to impose rules on merchants that neither the merchant—nor the merchant's payment facilitator—are likely to be able to obey.

The thrust of the rules—under consideration in states such as Oregon and Connecticut—are honorable. They are intended to avoid the heart-wrenching stories of a parent or other next-of-kin unable to access a deceased loved one's e-mails or social media interactions. But the legislation goes beyond that in some cases, granting consumers much more control over their digital footprints. In Connecticut, for example, the bill "would allow consumers to ask stores you no longer do business with to delete your personal information so that your personal information would not be compromised in the event that the company is hacked," according to a report from NBC Connecticut. That's where things get dicey.

Some state legislatures are pushing some potential laws aimed at giving consumers—and their heirs—more control over their digital lives. But in doing so, some are preparing to impose rules on merchants that neither the merchant—nor the merchant's payment facilitator—are likely to be able to obey.

Payments Crime Of The Week: A New Twist On Quarterly Earnings

In a new twist on the concept of quarterly earnings, a Brink’s Company armored transport service money processing manager used his access to the Federal Reserve Coin Inventory to pocket some loose change. Specifically, he grabbed 784,000 quarters, worth $196,000. But how exactly did he take home 9,800 pounds of coinage? That's where this tale took a turn positively borrowed from Raiders Of The Lost Ark.

If you recall one of that film's most famous scenes, Indiana Jones opts to try steal the prized statue by fillings enough bags with sand to proximate the statue's weight. In this federal case, according to a statement from the U.S. Attorney's office in the Northern District of Alabama, the accused filled bags of quarters with beads. To thwart such a ploy, the bags all had plastic windows. To thwart the attempt at thwarting, the accused, Stephen Lancaster Dennis, removed most of the quarters, but carefully left enough inside each bag to cover the small plastic window.

In a new twist on the concept of quarterly earnings, a Brink’s Company armored transport service money processing manager used his access to the Federal Reserve Coin Inventory to pocket some loose change. Specifically, he grabbed 784,000 quarters, worth $196,000. But how exactly did he take home 9,800 pounds of coinage? That's where this tale took a turn positively borrowed from Raiders Of The Lost Ark.

How A PF Can Clear The Confusing Regulatory Thicket Of Money Transmitters

As states, U.S. federal regulators along with country regulators across the globe try and set rules for money transmitters, payment facilitators are temporarily caught in the middle.

That is how Heather Mark—director of compliance at ProPay and our guest for this week's PaymentFacilitator.com podcast—sees the environment. When all of the conflicting particulars are set aside, there are only two situations where a PF gets into the money transmitter definition mess. First, there is the issue of "who has the ultimate control of the funds being transmitted," Mark said. Secondly, she points to circumstances "where payment facilitators are injecting themselves into the payments process." If a PF's activities take it into either of those scenarios, "then chances are pretty good that they will fall under the money transmitter provision," Mark said.

As states, U.S. federal regulators along with country regulators across the globe try and set rules for money transmitters, payment facilitators are temporarily caught in the middle.

Dwolla’s $100K CFPB Security Fine Wasn’t For What It Did As Much As What It Said

Dwolla got slapped down hard on Wednesday (March 2) by the Consumer Financial Protection Bureau for a series of security violations. But due to a dearth of meaningful federal security laws, CFPB's $100K fine of Dwolla had to follow in the footsteps of fellow federal regulator Federal Trade Commission. They can't punish a company for what it did nearly as easily as they can punish it for not doing what it says.

That said, once Dwolla opened the door to federal investigators by boasting about its security on its Web site, every security violation discovered was fair game. Takeaway: In the same way that marketers of publicly-held companies were beaten down by senior staffers from investor relations to never say anything publicly without IR's blessing, payment facilitators today must reign in anything involving security that even smells a little of hype. See? Our mothers were right. Boasting can deliver real problems. Once those doors were opened, according to a federal consent order published on Wednesday, security violations aplenty were found.

Dwolla got slapped down hard on Wednesday (March 2) by the Consumer Financial Protection Bureau for a series of security violations. But due to a dearth of meaningful federal security laws, CFPB's $100K fine of Dwolla had to follow in the footsteps of fellow federal regulator Federal Trade Commission. They can't punish a company for what it did nearly as easily as they can punish it for not doing what it says.

Wendy’s Breach Fallout Painfully Illustrating The Need For EMV

A report out on Wednesday (March 2) put the level of fraud being felt by credit unions as far worse than the fraud suffered after the Home Depot and Target breaches, with some CU estimating that the fraud could be ten times those other retail breaches. And much of the pain is being felt at merchants who have yet made the EMV switch.

KrebsOnSecurity reported Wednesday that three different CUs in Ohio reporting higher levels of fraud. One CU president was quoted as saying "We have been getting killed lately with debit card fraud. We have already hit half of our normal yearly fraud so far this year, and it is not even the end of January yet. After reading this, we reviewed activity on some of our accounts which had fraud on them. The first six we checked had all been to Wendy’s in the last quarter of 2015." The story also noted an interesting twist, with some consumer victims repeatedly re-compromising themselves by going to different Wendy's restaurants—some of which had apparently not yet contained the breach.

A report out on Wednesday (March 2) put the level of fraud being felt by credit unions as far worse than the fraud suffered after the Home Depot and Target breaches, with some CU estimating that the fraud could be ten times those other retail breaches. And much of the pain is being felt at merchants who have yet made the EMV switch.

The Balance Move By Square Cash Could Push Square To Full Financial Services Status

When P2P app Square Cash announced a move to support cash balances a few days ago, it seemed a minor enough new capability. But as is true for so many things about Square, the fear is not what payment facilitator extraordinaire Square is today, but what Square will morph into tomorrow.

"There's not a major impact over the short term, but a very significant potential impact over the long term," said Rick Oglesby, senior analyst for Double Diamond Group. First, let's briefly look at what Square Cash added.

When P2P app Square Cash announced a move to support cash balances a few days ago, it seemed a minor enough new capability. But as is true for so many things about Square, the fear is not what payment facilitator extraordinaire Square is today, but what Square will morph into tomorrow.

EMV Liability Shift Delivering Surprises To Restaurants

One of the unintended consequences of merchant protections prior to the EMV liability shift in October is that they shielded retailers from seeing a lot of the fraud going through their stores. The problem? That caused quite a few smaller merchants to reach the erroneous conclusion that the frauds that they didn't see didn't exist.

"We're now just seeing the fraud that always existed," said Georgia Stavrakis, the senior director of loss prevention at Heartland Payment Systems and the secretary of MAC. Stavrakis, the guest for this week's PaymentFacilitator.com podcast, as seen a lot of retailers who looked at their level of known fraud and chose to not bother implementing EMV. In short, the fact that they were shielded from seeing their true fraud rate caused them to not fear having to pay for their fraud. The liability shift, therefore, didn't frighten them. "People were misinterpreting the data that we had from before the shift. People were looking at their records, saying 'OK, I've never had a chargeback in 16 years so I don't really care when the liability shift comes because I won't have a dispute,'" Stavrakis said during the podcast. "The reality is that you could have had hundreds of thousands of fraudulent transactions at your location before October. You just didn't know about it because the bank wasn't going to waste its time or money to send that to you."

One of the unintended consequences of merchant protections prior to the EMV liability shift in October is that they shielded retailers from seeing a lot of the fraud going through their stores. The problem? That caused quite a few smaller merchants to reach the erroneous conclusion that the frauds that they didn't see didn't exist.

New PCI Rules Won’t Be Out Until April

When the PCI Council last gave some hints as to what the upcoming PCI DSS 3.2 rules will (about two weeks ago, back on Feb. 17), it said the spec would be released "in the March/April timeframe." A council official on Wednesday (March 2) tweaked that guidance, ruling out March and saying that the council "anticipates an April release of the standard."

The timing of the new PCI rules (aka guidelines that really and truly do not like being ignored) is important as they are lengthy, complicated and merchants—especially smaller merchants—are going to expect PFs to know them intimately. Also, as PCI requirements get increasingly stringent and complex, the need for PFs to take over those duties will grow.

When the PCI Council last gave some hints as to what the upcoming PCI DSS 3.2 rules will (about two weeks ago, back on Feb. 17), it said the spec would be released "in the March/April timeframe." A council official on Wednesday (March 2) tweaked that guidance, ruling out March and saying that the council "anticipates an April release of the standard."

Is The Cash Disappearance A PF Goldrush?

The friend of my monetary enemy is my monetary enemy. In short, as long as fraudsters take a liking to $100 bills in the U.S., 1,000-franc notes in Switzerland and 10,000-yen pieces of paper in Japan, they should quickly head to the economic graveyard. Turns out, they are indeed going there—and sooner than many expect. But this news is critically important to the payment facilitator world. It provides PFs an opportunity where banks are literally unable to deliver.

How does this impact PFs? Surprisingly directly, actually. As far as cash is concerned, someone has to terminalize the world, especially in emerging markets. Is it going to be the banks? Not a chance. PFs are positioned to create acceptance worldwide of digital payments. In many developing countries, this is a powerful opportunity for fintech companies in the PF world to fill the vacuum that is increasingly going to be left thanks to the rapid demise of cash. Small merchants dramatically outnumber their larger siblings and it's those legions of small merchants that are driving these economies. Why won't the banks do this? They can't because bank business plans won't permit it. Banks have a minimum bar for profitability per merchant and that number is simply far too high for many very small merchants. The banks have to spend the equivalent of hundreds of U.S. dollars for each merchant to onboard those small merchants, with endless paper and process.

The friend of my monetary enemy is my monetary enemy. In short, as long as fraudsters take a liking to $100 bills in the U.S., 1,000-franc notes in Switzerland and 10,000-yen pieces of paper in Japan, they should quickly head to the economic graveyard. Turns out, they are indeed going there—and sooner than many expect. But this news is critically important to the payment facilitator world. It provides PFs an opportunity where banks are literally unable to deliver.

What Do Risk and Compliance Teams Really Think About PFs?

With the number of payment facilitators set to grow meaningfully over the next few years, each acquirer will make a decision—embrace or abstain. Choosing which side of the fence depends on whether an acquirer primarily sees PFs as sources of growth or risk. When G2's Dan Frechtling hears from compliance and risk leaders, this is not a spontaneous choice. It’s a conditional, pragmatic, step-by-step journey. Even the believers have adopted a trust-but-verify stance.

The compliance and risk teams who embrace PFs envision a new scalable sales channel that fuels growth. They focus on a few PFs with which to succeed. Said one compliance head, "We choose a small number opportunistically because they take so long to get over the board." Those teams that avoid PFs take a shorter term view of ROI, deeming PFs too hard to onboard in relation to potential fee revenue. Some even have a visceral fear over what could go wrong. "We see them as a risk we don’t want to touch, so we avoid them like the plague," said one manager.

With the number of payment facilitators set to grow meaningfully over the next few years, each acquirer will make a decision—embrace or abstain. Choosing which side of the fence depends on whether an acquirer primarily sees PFs as sources of growth or risk. When G2's Dan Frechtling hears from compliance and risk leaders, this is not a spontaneous choice. It’s a conditional, pragmatic, step-by-step journey. Even the believers have adopted a trust-but-verify stance.

Atlanta Fed Folk Not Wildly Optimistic About Mobile Payments

Although people who work for various Fed chapters don't usually engage in blunt talks publicly, a bunch working for the Federal Reserve Bank of Atlanta released some intriguing 2016 predictions this week. Among them are dire expectations for mobile payments and ACH Same-Day plus a belief that EMV will drive down the number of U.S. ATMs.

To be clear, the Fed folk stressed that delaying the predictions until the year was almost one-sixth over was a deliberate choice: "By waiting a couple of months to release ours, we're hoping they will end up being more accurate than usual." They also stressed that these are not technically Fed predictions, as they come from one just group of Fed employees: members of the Retail Payments Risk Forum of the Federal Reserve Bank of Atlanta.

Although people who work for various Fed chapters don't usually engage in blunt talks publicly, a bunch working for the Federal Reserve Bank of Atlanta released some intriguing 2016 predictions this week. Among them are dire expectations for mobile payments and ACH Same-Day plus a belief that EMV will drive down the number of U.S. ATMs.

Think You’re So Tough, Apple? Meet Bankers In China

Payments professionals who have lost battle after battle fighting with Apple Pay's people on getting reasonable fees know that Apple sees its lock on iPhones and iPads as a reason to not bother having to negotiate on rates. You want in? Pay up. Well, you can take some solace in Apple getting a taste of its own apple-flavored medicine.

Feeling a strong strategic need to get into the government-managed Chinese market, Apple found itself on the weaker end of negotiations with bankers. With government backing, there was little fear of being undercut by a rival bank. The result? This report from Caixin Online: "Apple will earn fees from Chinese banks when customers use its mobile payment service for purchases, but they will be about half of what the U.S. tech giant charges in the United States."

Payments professionals who have lost battle after battle fighting with Apple Pay's people on getting reasonable fees know that Apple sees its lock on iPhones and iPads as a reason to not bother having to negotiate on rates. You want in? Pay up. Well, you can take some solace in Apple getting a taste of its own apple-flavored medicine.

Skip Walmart Checkout Lines By Getting Vested

One Virginia Walmart shopper came up with a creative way to avoid the long, slow-moving lines at his local Walmart. Taking advantage of the store's apparent lack of employee authentication, he simply went to the store's stockroom and donned a Walmart employee vest.

After that, he casually and professionally grabbed a cart, loaded four flat-screen televisions onto said cart and simply pushed through out the back of the store, through an emergency exit. "They were (then) loaded into a waiting, full-size SUV,” said a local enforcement statement about the Jan. 14 incident at the Colonial Heights Walmart.

One Virginia Walmart shopper came up with a creative way to avoid the long, slow-moving lines at his local Walmart. Taking advantage of the store's apparent lack of employee authentication, he simply went to the store's stockroom and donned a Walmart employee vest.

A Shopper’s Checkout Friction Resistance Level Changes Hourly

The idea that shoppers abandon shopping carts when they run into checkout friction has been said so often that it is approaching cliché status. The truth is much more nuanced and complicated. The level of checkout-friction-resistance changes—for the identical consumer—repeatedly during the merchant interaction.

Let's consider that abandoned shopping cart consumer. They ran into some site stumbling block, got frustrated and bolted. Let's further assume that the shopper is somehow reeled back in, most likely with a friendly-phrased text message. Whatever level of resistance/tolerance that shopper had before they abandoned, it's now ten times more sensitive. A hassle that they would have tolerated before is now cause to run away—and they won't be coming back. But let's tweak that scenario slightly. This time, that same consumer runs into some friction, which is that a price seems too high or the choice of color/style is too limited. That shopper then does some Google searching, visits a bunch of other sites and ultimately comes to the conclusion that your offering's price/color/style is the best available. That consumer sheepishly comes back to complete the purchase. The situation is now flipped. That consumer's resistance to checkout friction is now dramatically lower, perhaps ten times lower. Having discovered that your deal is the best they'll get, they will put up with far more hurdles than they would have before they did that research.

The idea that shoppers abandon shopping carts when they run into checkout friction has been said so often that it is approaching cliché status. The truth is much more nuanced and complicated. The level of checkout-friction-resistance changes—for the identical consumer—repeatedly during the merchant interaction.

Why The ChasePay/Starbucks Deal Makes A Difference

When Chase revealed on Tuesday (Feb. 23) that it had cut a deal with Starbucks to incorporate ChasePay into the SBUX mobile app this year, it signaled that ChasePay needs to be taken seriously. More precisely, it means that the mocha-merchant mobile-powerbroker takes ChasePay seriously, which is perhaps the best endorsement it could get.

ChasePay's previous big deal was with MCX, which, to be fair, isn't exactly the endorsement you want in mobile payments to be taken seriously. But for those care about mobile money—and who in this space doesn't?—nobody disses Starbucks.

When Chase revealed on Tuesday (Feb. 23) that it had cut a deal with Starbucks to incorporate ChasePay into the SBUX mobile app this year, it signaled that ChasePay needs to be taken seriously. More precisely, it means that the mocha-merchant mobile-powerbroker takes ChasePay seriously, which is perhaps the best endorsement it could get.

Patent Wrap: MasterCard’s Plan To Turn An ATM Into A POS

In this week’s look at interesting payments patents issued and/or applied for, PayPal and MasterCard inventors are our payments patent people with a trio of invention applications all filed on Feb. 18. MasterCard's filing envisions using all of those strategically ATMs for a lot more than cash-dispensing. This makes even more sense given that cash-dispensing will become increasingly unnecessary as in-person purchases go digital.

Meanwhile, PayPal wants to aggregate purchases from multiple merchants in one quasi-session. And MasterCard also has an idea for a way to use payment data to identify physically-proximate consumers with similar buying patterns.

In this week’s look at interesting payments patents issued and/or applied for, PayPal and MasterCard inventors are our payments patent people with a trio of invention applications all filed on Feb. 18. MasterCard's filing envisions using all of those strategically ATMs for a lot more than cash-dispensing. This makes even more sense given that cash-dispensing will become increasingly unnecessary as in-person purchases go digital.

Regulators Sharpening Their Ordinance Knives For New Payments

Although regulators have never been mainstays of payment facilitators' holiday card lists, as payments grow increasingly complex, those regulators will become even more ever-present and, candidly, resented. As state regulators—along with their federal counterparts from the Federal Trade Commission and the Consumer Financial Protection Bureau, plus some global regulators—zero in on newer payment methods, their chief focuses will be organizational structure.

Specifically, initial questions will focus on "whether compliance functions are adequately staffed, whether we have enough risk managers looking at all of the pieces of the puzzle and whether the board is involved. We're starting to see these regulators ask these questions," said Ellen Berge, law partner at Venable LLP as well as panel leader for the compliance panel at the Merchant Acquirers Committee (MAC). Berge discussed these issues during this issue's edition of the PaymentFacilitator.com's weekly payments podcast.

Although regulators have never been mainstays of payment facilitators' holiday card lists, as payments grow increasingly complex, those regulators will become even more ever-present and, candidly, resented. As state regulators—along with their federal counterparts from the Federal Trade Commission and the Consumer Financial Protection Bureau, plus some global regulators—zero in on newer payment methods, their chief focuses will be organizational structure.

Google Compare Shutting Down

Google is shutting down Google Compare (which at one point had been called Google Advisor), the search engine's service to deliver price quotes on payment cards, insurance and mortgages—and to sometimes sell those products directly to shoppers.

This likely says less about Google's commitment to the financial services space and more about the difficulties selling those kinds of highly regulated products. Sometimes, it's best to leave these matters to payment facilitator professionals, Google. Stick to your searches.

Google is shutting down Google Compare (which at one point had been called Google Advisor), the search engine's service to deliver price quotes on payment cards, insurance and mortgages—and to sometimes sell those products directly to shoppers.

Global Payments Wrap: MasterCard’s Selfie—And Other Biometric—Authentication—Trials Do Well With The Dutch

This week’s global payments news takes us to the Netherlands, France, India and Brazil. As MasterCard promises to continue and extend its selfie biometric authentications trials in various countries, it found impressively positive results in one region. Dutch participants, given the option of either a fingerprint or a selfie in lieu of a password during a six-month trial, decidedly went bio.

Visa is rolling out Visa Checkout to France, India, Ireland, Poland, Spain and the United Kingdom later this year, the card brand announced. And Paytm is close to finalising technology outsourcing contracts worth Rs 125 crore to manage the back-end for its payments bank which the company expects to roll out in August

This week’s global payments news takes us to the Netherlands, France, India and Brazil. As MasterCard promises to continue and extend its selfie biometric authentications trials in various countries, it found impressively positive results in one region. Dutch participants, given the option of either a fingerprint or a selfie in lieu of a password during a six-month trial, decidedly went bio.

To A PF, The World Of Parking Is Doing Anything But Standing Still

Pity the poor standalone parking meter, nestled between communities' sidewalks and streets. A dozen years ago, five million were scattered across the U.S.. Today, according to the International Parking Institute, no one even bothers to count them any more. New York City is preparing to abandon its 85,000 meters to a PF-fueled mobile system, joining Los Angeles, Boston, Washington, D.C., Atlanta, Indianapolis and Pittsburgh with similar plans.

The movement is hardly surprising. Many of those metal poles could only handle coins and retrofitting them for magstripe—let alone EMV or NFC—is expensive and short-sighted. To get much of the money from those poles requires a municipal employee/contractor to physically move from pole to pole. The system for fining those who disobey the parking rules is equally inefficient. Enter Jon Ziglar, the CEO of PF Parkmobile, whose company is behind many of those municipal parking meter obliteration efforts. His vision is far cleaner. A mobile app pays for the space and can even text a driver when the time is about to run out. But this gets better. Parkmobile is in pilots today with Ford and BMW to integrate the app directly into cars. Marry the efficiency of a mobile app with a smartcar that can park itself and parking takes on a delightfully 21st Century shine.

Pity the poor standalone parking meter, nestled between communities' sidewalks and streets. A dozen years ago, five million were scattered across the U.S.. Today, according to the International Parking Institute, no one even bothers to count them any more. New York City is preparing to abandon its 85,000 meters to a PF-fueled mobile system, joining Los Angeles, Boston, Washington, D.C., Atlanta, Indianapolis and Pittsburgh with similar plans.

PF Flint Mobile Shuts Down, Turns Business Over To Stripe

Payment facilitator Flint Mobile's payments business was effectively shuttered on Monday (Feb. 15), seemingly a victim of a payments player coming into an already-developed market too late and with insufficiently deep pockets. The beginning of the end happened on Feb. 5, when "Flint abruptly suspended all new signups and closed all card processing for current accounts. Users who tried to process cards were met with a message saying, 'You have exceeded your processing limits.'"

A visit to the site late on Wednesday (Feb. 17) by PaymentFacilitator.com found a seemingly active homepage, but clicking on the Sign Up Now button delivered the note "New signups suspended. We are currently transitioning to a new platform. We appreciate your patience." Alas, it seems that patience will serve no purpose. Although it appeared that company executives, between Feb. 5 and Feb. 17, were indeed trying to find a way to keep the business going, it didn't work out.

Payment facilitator Flint Mobile's payments business was effectively shuttered on Monday (Feb. 15), seemingly a victim of a payments player coming into an already-developed market too late and with insufficiently deep pockets. The beginning of the end happened on Feb. 5, when "Flint abruptly suspended all new signups and closed all card processing for current accounts. Users who tried to process cards were met with a message saying, 'You have exceeded your processing limits.'"

Javelin Report Finds What PFs Already Know: Faster Onboarding Is Critical

Onboarding speed isn't merely a consumer nice-to-have, according to a new Javelin study, but it has a concrete impact on whether customers engage at all and how many dollars they entrust.

"Banks and credit unions can boost the profitability of a new customer an estimated $212 a year with effective onboarding that emphasizes engagement," the report said. "Fully engaged customers are four times more likely than inactive customers to identify the new bank or credit union as their primary FI. Fully engaged customers not only 2.7 times more financial accounts than inactive customers at the new FI, but they also intend to open more accounts in the next 12 months." How much more? Three accounts versus an average of one-half of one account.

Onboarding speed isn't merely a consumer nice-to-have, according to a new Javelin study, but it has a concrete impact on whether customers engage at all and how many dollars they entrust.

We’re Not Playing Games. Actually, We Are. In-Game Payments Beget More In-Game Payments

An Israeli mobile game analytics firm has dived deeply into in-game payments and has issued a report on what makes pinball wizards pay.

The report from Soomla notes that average revenue per daily active user (ARPDAU) "is as low as 9¢, but it varies drastically across genres, with board and racing games averaging to 28-32¢. However, adventure, arcade, role playing and educational games generate less than 3¢ in ARPDAU."What is much more interesting is how rapidly users are willing to pay in a second game once they have paid in the first. Logically, that makes sense, in that someone who has already shown a willingness to buy will probably buy again. But what is unexpected is how rapidly those figures are climbing.

An Israeli mobile game analytics firm has dived deeply into in-game payments and has issued a report on what makes pinball wizards pay.

PCI Council’s New EMV Payment Token Rules Are Worth Reading Closely

The PCI Council in late December rolled out its security rules for token service providers for EMV payment tokens, which overwhelmingly deals with mobile transactions. Today, the card brands handle the vast majority of tokens issued, but the council expects that to sharply change now that EMVCo has released the specification. Given the importance of tokens to payment facilitators, it's worth a read.

One of the fun things that this document does, in pure PCI Council fashion, is deliver more acronyms. Yes, these are brand acronyms. (No, no need to thank them.) One is TDE, for Token Data Environment. An important term—not an acronym yet, sadly—is Payment Token Data, which has a very specific definition: "Covers a number of discrete data elements, including the Payment Token and related data as defined in the EMV Payment Tokenisation Specification Technical Framework, which include the Payment Token Expiry Date, Payment Token Requestor ID, Payment Token Assurance Level and Payment Token Assurance Data."

The PCI Council in late December rolled out its security rules for token service providers for EMV payment tokens, which overwhelmingly deals with mobile transactions. Today, the card brands handle the vast majority of tokens issued, but the council expects that to sharply change now that EMVCo has released the specification. Given the importance of tokens to payment facilitators, it's worth a read.
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