August 24th, 2012

Edition #318

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In this Issue

	LAST CHANCE: Contribute to TSG's Survey on NFC in the US - Receive a FREE Report
	High-Tech PayPal-Discover Deal Relies on Old-School Mag-Stripe Cards
	...Leads to the Beginning of the End for Traditional Payment Card Industry - RIP?
	Will Others Jump on the Bandwagon and Offer Free Interchange?
	Data Point to Slow Pace of Healing in Economy
	Stability in the Credit Card Industry Boosts Customer Satisfaction for Third Consecutive Year
	Strong Growth in Debit Transaction Volume in 2011 Amid Profound Regulatory Changes
	Time is Ticking, Can the U.S. Meet EMV Deadlines?
	Visa Announces Visa Merchant Data Secure with P2P Encryption, Adds Protection for Card Data
	Directory of U.S. Merchant Acquirers – Contribute & Stand Out with Complimentary Listing
	BitInstant Announces BitCoin Debit Card, Puts MasterCard Logo on Mock-Up; MasterCard Claims No Involvement with BitInstant
	How the Venmo Deal Helps Braintree Unlock the 'Digital Wallet''
	FTS Names Chuck Bernicker Chief Financial Officer
	Revel Systems Brings iPad Cash Register to Supermarket Industry, Starts the REVELution
	Rising Competition Casts Shadow on NetSpend
	The Small Business Authority Releases The July 2012 SB Authority Index
	First Financial FCU of Maryland Renews STAR® Network Agreement
	McRib with a Side of McPayments
	Unified Payments Ranked 1st on 2012 Inc. 500/5000 List
	Green Dot and Sallie Mae Form Partnership to Market Prepaid to Students
	Europe Gets Another Square-Like Player
	Contactless Symbol Established Within British Minds

In Other News

This Day in History 17 A.D.

Vesuvius Erupts

After centuries of dormancy, Mount Vesuvius erupts in southern Italy, devastating the prosperous Roman cities of Pompeii and Herculaneum and killing thousands. The cities, buried under a thick layer of volcanic material and mud, were never rebuilt and largely forgotten in the course of history. In the 18th century, Pompeii and Herculaneum were rediscovered and excavated, providing an unprecedented archaeological record of the everyday life of an ancient civilization, startlingly preserved in sudden death.

The ancient cities of Pompeii and Herculaneum thrived near the base of Mount Vesuvius at the Bay of Naples. In the time of the early Roman Empire, 20,000 people lived in Pompeii, including merchants, manufacturers, and farmers who exploited the rich soil of the region with numerous vineyards and orchards. None suspected that the black fertile earth was the legacy of earlier eruptions of Mount Vesuvius. Herculaneum was a city of 5,000 and a favorite summer destination for rich Romans. Named for the mythic hero Hercules, Herculaneum housed opulent villas and grand Roman baths. Gambling artifacts found in Herculaneum and a brothel unearthed in Pompeii attest to the decadent nature of the cities. There were smaller resort communities in the area as well, such as the quiet little town of Stabiae. Click here to read more.

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LAST CHANCE: Contribute to TSG's Survey on NFC in the US - Receive a FREE Report The Strawhecker Group, in collaboration with the University of Nebraska at Omaha, is conducting a survey to analyze the acceptance of contactless mobile payments, using NFC technology, by U.S. merchants. Upon completion of this study you will be emailed a summary of the final results as an incentive for your participation (if you add your email at the conclusion of the survey). Follow this link, you will be redirected to take the survey. High-Tech PayPal-Discover Deal Relies on Old-School Mag-Stripe Cards 8/22/12 PayPal Press Release     Today, PayPal announced an extension of its offline strategy by teaming up with Discover to bring PayPal to more than 7 million merchant locations across the U.S., and potentially to millions of international merchant locations in the future. Starting in 2013, Discover will work with PayPal to enable participating merchants to accept PayPal easily through their existing relationship with Discover. Consumers will be able to take advantage of the benefits of PayPal at these merchant locations, providing them with the simplicity, speed and security they've come to expect from PayPal across any channel, any time.   ...Leads to the Beginning of the End for Traditional Payment Card Industry - RIP? 8/23/12 StorefrontBacktalk    August 2012 will go down in history as the beginning of the end for the traditional payment card industry. Discover and PayPal just teamed up to offer what could prove to be the ultimate demise of the biggest payment system monopoly: in-store payments. Without involving the POS providers. PayPal’s Discover credit-card network deal will see PayPal integrated with Discover, which it will then push out to all merchants that accept Discover—assuming the acquirers don’t stop them. This is big news. Will Others Jump on the Bandwagon and Offer Free Interchange? 8/23/12 The Washington Post    We eventually think the cost of moving money will go to zero,” said Seth Priebatsch, LevelUp’s “chief ninja,” — the company’s title for chief executive. The most successful mobile payment method will be the one to add the most value to small businesses, he predicts. LevelUp was the first mobile payment method to offer free interchange, and has since created a new revenue model in which it only makes money when its users, small businesses, team up with it to launch marketing campaigns. Data Point to Slow Pace of Healing in Economy 8/23/12 Reuters    Growth in the manufacturing sector picked up in August, a sign the economy is resisting the global economic chill although a rise in new jobless claims last week pointed to a still-sluggish labor market. Financial information firm Markit said on Thursday its "flash" index for U.S. manufacturing edged up a half point to 51.9 in August. A reading above 50 indicates expansion. Stability in the Credit Card Industry Boosts Customer Satisfaction for Third Consecutive Year 8/23/12 The Sacramento Bee    After several years of dramatic changes due to legislation, increased fees and limited credit availability, there finally is stabilization in the credit card industry reflected in a third consecutive year of increased credit card customer satisfaction, according to the J.D. Power and Associates 2012 U.S. Credit Card Satisfaction Study(SM). Overall credit card satisfaction averages 753 on a 1,000-point scale in 2012, up from 731 in 2011.  The 39-point improvement over the three-year period raises customer satisfaction to its highest level since the study's inception. Strong Growth in Debit Transaction Volume in 2011 Amid Profound Regulatory Changes 8/20/12 BusinessWire    “The latest Debit Issuer Study provides more evidence that growth in debit remains robust even in the face of significant regulatory headwinds,” said Steve Sievert, Executive Vice President of Marketing and Communications for PULSE. The Federal Reserve’s Regulation II capped the maximum interchange fees that financial institutions with at least $10 billion in worldwide assets could receive on debit card transactions. These issuers report fundamental shifts in their debit business. Time is Ticking, Can the U.S. Meet EMV Deadlines? 8/22/12 ISO & Agent    Experts are wondering if the United States can meet the deadlines the card brands have set for converting to EMV chip cards from magnetic stripe cards. “The magnitude of the EMV transition here in this country -- it’s just mind-boggling,” says Gregg Smith, co-founder of the EMV Academy Inc. in Toluca Lake, Calif. “You have to ask yourself: Can this really be pulled off by everyone that fast?” Visa Announces Visa Merchant Data Secure with P2P Encryption, Adds Protection for Card Data 8/21/12 Dark Reading    Visa Inc. announced a new service, Visa Merchant Data Secure with Point-to-Point Encryption, to help acquirers and their merchants protect payment card data. Visa will make the service available to acquirers and their merchants by early 2013. Visa is currently working with acquirers, processors and payment technology vendors to provide specifications for integrating Visa's solution into payment terminals as well as into all critical systems across the payment processing industry. Directory of U.S. Merchant Acquirers – Contribute & Stand Out with Complimentary Listing TSG Metrics is in the process of updating and expanding one of our most prevalent reports among payments industry professionals – the Directory of U.S. Merchant Acquirers. Learn More. Click here for survey. This publication provided by TSG will serve to: Recognize high growth potential ISOs/MSPs Supply third-party validation/industry credibility Enhance valuations and exit strategy potential Understand the competitive positions of ISOs/MSPs within the marketplace Incentives to Participate:                                                      Participants will receive a one-page synopsis comparing their data against all other participants, along with an overall ranking High-growth ISOs will receive recognition in the form of a ‘TSG Emerging ISO of 2012’ emblem for placement on the participants’ website and other marketing materials. A significant discount, gaining access to the report for $950 (normally $2,900) One participant, selected randomly, will receive a complimentary copy of TSG’s Directory. BitInstant Announces BitCoin Debit Card, Puts MasterCard Logo on Mock-Up; MasterCard Claims No Involvement with BitInstant 8/22/12 Engadget    Well, BitInstant is insistent that it will launch a BitCoin debit card, but MasterCard is claiming it will not be part of the plans. After a mock up of the plastic made the rounds featuring the company's logo, the financial powerhouse felt it necessary to reach out to us, clarifying its non-involvement. "MasterCard has no relationship with BitInstant. There are issuers who allow the conversion of Bitcoins to US dollars and other currencies, delivered on prepaid cards. However, we're not aware of this particular programme from BitInstant." How the Venmo Deal Helps Braintree Unlock the 'Digital Wallet'' 8/21/12 Crain's Chicago Business    The Venmo acquisition signals a shift in that strategy: Braintree is aiming to build a more comprehensive mobile-payments infrastructure, including a digital wallet — a concept that has thus far failed to take root with consumers despite efforts from Google Inc. and others. Bryan Johnson, Braintree's founder and chairman, outlines the Venmo deal for Silicon City and describes Braintree's vision for the future of mobile commerce. FTS Names Chuck Bernicker Chief Financial Officer 8/24/12 Yahoo! News    Financial Transaction Services (FTS), has named Chuck Bernicker Chief Financial Officer (CFO) effective August, 2012. He will be responsible for leading all of FTS Finance & Accounting initiatives including Merger & Acquisitions analysis. “Bringing Chuck on board adds strong executive leadership to FTS,” said Brian Shanahan, CEO for FTS. “His proven track record and leadership will be invaluable as we embark on our next phase of growth." Revel Systems Brings iPad Cash Register to Supermarket Industry, Starts the REVELution 8/21/12 EE Times    Revel Systems, the leader in iPad point-of-sale (POS) solutions, released a new version of its POS system designed specifically for supermarkets and grocery stores. The launch of Revel Systems' Grocery POS software solution at Marty's Market—a specialty market with five checkout lanes in Pittsburg, Pennsylvania that focuses on bringing fresh, all-natural food to its customers—marks the expansion of Revel's successful customer base of restaurants, food trucks and retail establishments into an industry segment that has long been in need of point-of-sale updates. Rising Competition Casts Shadow on NetSpend 8/23/12 Chicago Tribune    Green Dot Corp's dim outlook is casting a shadow on NetSpend Holdings Inc as rising competition turns the two companies' high-margin prepaid cards into just another piece of plastic. Green Dot Corp's dim outlook is casting a shadow on NetSpend Holdings Inc as rising competition turns the two companies' high-margin prepaid cards into just another piece of plastic. NetSpend and Green Dot pioneered, and for 10 years dominated, the sale of prepaid cards that people without bank accounts can load up with value and use like a debit card. The Small Business Authority Releases The July 2012 SB Authority Index 8/23/12 Newtek    Newtek Business Services, Inc.announced the release of the SB Authority Index of small business indicators for July 2012 reached 112.89 points.  The SB Authority index is up .41% from June 2012. The increase was led by new business formations, Newtek proprietary's merchant processing volume and approved SBA gross lending volume. First Financial FCU of Maryland Renews STAR® Network Agreement 8/23/12 First Data    First Financial Federal Credit Union of Maryland, Lutherville, Md., has renewed its relationship with the STAR® Network, signing a multi-year agreement under which STAR will provide PIN-secured debit point-of-sale (POS) and ATM access to its cardholders. The credit union also has added ATM driving and related services from First Data. McRib with a Side of McPayments 8/21/12 BTN    As consumers warm to plastic card alternatives, such as contactless debit and mobile wallets the roster of merchants that are brandishing self-branded payment options is growing again with McDonald's. McDonald's plans to accept Interac Flash at a handful of stores in Canada ahead of a broader rollout in that country. InteracFlash will allow customers to make contactless debit transactions, with plans to offer mobile payments in the future. Unified Payments Ranked 1st on 2012 Inc. 500/5000 List 8/21/12 The GreenSheet    Inc. magazine today ranked Unified Payments as the top company of 2012 having achieved three years sales growth of 23,646%. The Inc. 500 list presents a comprehensive insight into the most important segment of the economy—America’s independent entrepreneurs. Companies such as Microsoft, Zappos, Intuit, Jamba Juice, Zipcar, Clif Bar, Vizio, Oracle, and many other well-known names gained early exposure as members of the Inc. 500|5000. Green Dot and Sallie Mae Form Partnership to Market Prepaid to Students 8/22/12 American Banker    In an effort to make up for some of the shelf space it could soon be losing at big-box retailers, Green Dot (GDOT) is partnering with student lender Sallie Mae to market a prepaid card to students who do not have a traditional bank account. Under the arrangement, any funds left over from a Sallie Mae-issued student loan will be loaded onto Green Dot's My Flex prepaid card that students can then use to cover the cost of books and other expenses. Europe Gets Another Square-Like Player 8/23/12 Tech Crunch    Add one more to the list of companies going head-to-head in the area of card payments by way of smartphone attachments: Berlin-based SumUp is opening up for business in the UK, Germany, Ireland and Austria, backed by an eight-figure Series A round, understood by TechCrunch to be over $20 million. SumUp’s $20 million Series A investment comes from b-to-v Partners, Shortcut Ventures, Tengelmann Ventures and Klaus Hommels, the early Skype, Facebook and Xing investor. Contactless Symbol Established Within British Minds 8/23/12 Finextra    The percentage is nearly double the figure from a year ago, according to Barclaycard, which carried out the research. Between them, Barclaycard and parent Barclays have issued nearly 20 million contactless cards and say that these are now being used for more than a million transactions a month. The main hurdle to adoption continues to be security fears, with 75% of people not knowing that contactless, like all card payments, are insured against fraud.