April 6th, 2012
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This Day in History 1896
First Modern Olympic Games
On April 6, 1896, the Olympic Games, a long-lost tradition of ancient Greece, are reborn in Athens 1,500 years after being banned by Roman Emperor Theodosius I. At the opening of the Athens Games, King Georgios I of Greece and a crowd of 60,000 spectators welcomed athletes from 13 nations to the international competition.
The first recorded Olympic Games were held at Olympia in the Greek city-state of Elis in 776 B.C., but it is generally accepted that the Olympics were at least 500 years old at that time. The ancient Olympics, held every four years, occurred during a religious festival honoring the Greek god Zeus. In the eighth century B.C., contestants came from a dozen or more Greek cities, and by the fifth century B.C. from as many as 100 cities from throughout the Greek empire. Initially, Olympic competition was limited to foot races, but later a number of other events were added, including wrestling, boxing, horse and chariot racing, and military competitions. The pentathlon, introduced in 708 B.C., consisted of a foot race, the long jump, discus and javelin throws, and wrestling. With the rise of Rome, the Olympics declined, and in 393 A.D. the Roman Emperor Theodosius I, a Christian, abolished
the Games as part of his efforts to suppress paganism in the Roman Empire. Click here to read more.
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A Tale of Two Breaches - What Heartland's Story Says About Global Payments' Future
4/06/12 Bank Info Security
Heartland, like Global, is a U.S.-based payments processor. Its breach, revealed in January 2009, impacted an estimated 130 million payment cards and remains the benchmark case for financial cybercrime. And, more than anyone, Heartland's executives know how long and winding the road to breach recovery can be. "It's going to be a fairly long process," says Steve Elefant, the former chief information officer at Heartland who now serves on the counsel team at The Strawhecker Group. "The most important thing right now is plugging the hole and getting compliant again with PCI."
Visa Yanks Global Payments’ PCI Compliance. Catch-22 In Full Force
Visa has now yanked the PCI compliance away from processor Global Payments, following word of a potentially huge data breach. Visa’s move, based on its initial comments, both supports the seriousness of PCI and simultaneously makes it seem pointless. The problem is not Visa removing a company that is not compliant from its compliance list (note that MasterCard hasn’t. More on that in a moment). The problem is the perception that Visa is doing this as a kneejerk reaction to a breach—this de-list first, ask questions later approach—not because it established anything concrete.
Global Still Signing Merchants After Breach
4/04/12 ISO & Agent
Global Payments’ response to the data breach disclosed last week, as well as the card networks’ response, followed a familiar script. As did other processors before it, Global Payments Inc. considered itself compliant with the Payment Card Industry Data Security Standard until it discovered the breach last month. Now it’s not. The immediate consequence for Global Payments is its removal from Visa Inc.’s list of compliant merchants. Global Payments said it expects eventually to pay a fine and cover the cost of reissued cards.
Vantiv - Initial Public Offering Analysis
Market Multiple Notes:
Compared to other public payment company market value multiples, Vantiv’s IPO received a relatively cheaper valuation based on the P/E, P/S, and EV/EBITDA price multiples
Given the strong financial performance on the following pages it is likely that Vantiv’s relatively large amount of long term debt in it’s capital structure is a driving force behind the relatively lower valuation multiples
Vantiv’s interest coverage ratio, at 5 times, is also relatively lower than that of its peers which may be causing investors to price an additional risk premium related to potential financial distress into Vantiv’s market price
Click here to read TSG's full analysis.
Then and Now – The Payments Evolution
Commentary by Bob Philbin, Of Counsel TSG
In the payments industry, change is the only constant, forcing those in the industry to try and evaluate where the payments industry is heading. Often, the best way to predict the future is to understand the past.
The history lesson goes back to our ancestors who came to America on credit. Not the way it is thought of now but as indentured slaves. Work off debt for the transportation and the ability to buy a homestead. Work off debt, what a concept! True sacrifice and a way to make life better, the American dream! This was reality for at least the first 150 years in the United States.
Click here to read more.
Job Growth Slows Sharply in March
4/06/12 LA Times
Employers added a modest 120,000 new jobs in March, ending a streak of solid job gains in the prior three months and raising fresh questions about the strength of the economy and hiring momentum in coming months. The nation's jobless rate inched down to 8.2% from 8.3% in February, the Labor Department said Friday, but that came amid a shrinking labor force in which more people dropped out of the job market and thus weren't counted as unemployed. Analysts were expecting growth of about 210,000 jobs in March, after gains of more than 220,000 in the prior three months.
Retailers Saw Higher Sales in March
4/05/12 The New York Times
Retailers’ sales continued to hum along in March, particularly in the trendy apparel sector, suggesting that shoppers are snapping up spring fashions. Sales at stores open at least a year, which retailers use to gauge ongoing demand, rose an average of 4.3 percent last month compared with March 2011 at the 20 stores tracked by Thomson Reuters. That was better than the 3.5 percent increase that analysts had expected.
Facebook Tags the Nasdaq
4/06/12 The Wall Street Journal
Facebook Inc. is going to be ringing the Nasdaq Stock Market's bell. Nasdaq OMX Group Inc. NDAQ +1.19%scored the planned stock-market listing of the social-media company, according to people familiar with the matter. The win gives Nasdaq one of the most-coveted deals among the new crop of Internet companies and a leg up in the race for technology IPOs. Securing Facebook's listing burnishes Nasdaq's reputation in the high-tech arena.
US Payments System Failing to Meet the Needs of the Digital Economy
In a paper delivered late last week to a payments summit hosted by the Kansas City Fed, Bruce Summers - a career official with the Federal Reserve until his retirement in 2007 - lamented the lack of public interest governance in the US payments industry. Taking the failure of the US to develop a mechanism for immediate funds transfer (IFT), such as the UK's Faster Payments scheme, as a key theme, Summers pointed out that neither the Federal Reserve Board nor prominent private sector orgs have either "the interest or the ability" to lead payment system development into the digital age.
The Internet Retailer Survey: Lower Debit Card Rates Elude Most Online Retailers, but It's Still Early
4/02/12 Internet Retailer
E-retailers had reason to hope their fees for accepting debit cards would fall after the Federal Reserve Board last fall ordered a reduction in debit card interchange, a significant component in the discount rate that retailers pay when accepting credit and debit cards. But most e-retailers are still waiting to see any benefit from the interchange reduction, according to a new survey by Internet Retailer. Only 14.6% of online retailers that responded to the survey say they're paying lower fees on debit card transactions, while 17.7% say they're paying more.
ETA Star Award Finalists Announced
4/03/12 The GreenSheet
The Electronic Transactions Association has announced the finalists for the prestigious annual Star Awards. The ETA Star Awards are designed to recognize and showcase individuals and companies that have made a significant difference in the payments industry, whether through innovation, business practices, or contributions to the association. All ETA members and non-members were invited to nominate leading contributions to the association and the payments industry from a wide variety of individuals and organizations.
Bump Pay Nudges Mobile P-to-P Market
The apps provided by Bump Technologies, which let people share data and photos by touching their phones together, have proven popular — the app has attracted 80 million users in three years. While the technology's use as a payments enabler has been slowly developing for the past couple of years, Bump believes there's enough of a current opportunity to spin off a Bump app dedicated entirely to payments. Bump Pay, enables two smartphones using Bump apps to transfer card or account payments data by tapping against each other.
Any Place, Any Time: Mobile Devices Help Consumers Find Better Value
On March 29th, Devaraj Southworth, VP of Online and Mobile Partnerships, joined the Brand Innovators E-Commerce panel, “Mobile, Mobile, Mobile,” at the Crosby Street Hotel in NYC. Jason John, Sr. Director of Online, Mobile & Social Marketing at Gilt Groupe moderated the discussion, covering best practice, case studies, and how major brands are leveraging the mobile platform for their users.
As Square Nabs Google Wallet Co-Founder, Google Acquires Payments Firm TxVia
How is Square taking on the threat of PayPal, Google, and an increasing roster of mobile payments competitors? Judging from the news today, it’s hiring a bunch of smart folks. The credit card reader company has brought on board the co-founding engineer of Google Wallet, Rob von Behren, as well as former Tesla and YouTube communications head Ricardo Reyes, the NFC Times and Businessweek report. The moves follow Square’s recent hiring of former PayPal VP Alyssa Cutright.
Google Seeks to Bolster Prepaid Capabilities for Its Wallet with Deal for TxVia
4/03/12 Digital Transactions
Google Inc. on Monday thrust itself into the prepaid processing business with its acquisition of TxVia Inc., a 5-year-old processor based in New York City. The deal, which apparently closed immediately on undisclosed terms, allows Google to take over technology and network connections that could prove useful as it struggles to establish its Google Wallet mobile-payments product, though the precise rationale for the deal remains unknown as Google refuses to comment beyond an announcement posted on its corporate blog.
RapidAdvance Announces New Financing Facility Through Wells Fargo Capital Finance
Rapid Financial Services, LLC, one of the nation's leading providers of short term financing to small businesses, today announced that it has closed a new financing facility, supporting its ability to serve the increased demand for working capital from small to mid-size businesses. Rapid Financial Services, LLC, secured the facility from Wells Fargo Capital Finance, part of Wells Fargo & Company.
American Express Hires Sample from eBay X.Commerce Unit in Digital Commerce Drive
Sample, who is joining American Express as a senior vice president, has extensive experience in the e-commerce arena. A former VP of architecture and platforms at eBay, he most recently served as the CTO of X.commerce, eBay's open development and commerce platform. Prior to eBay, Sample was a senior executive at Yahoo! where his team was responsible for partnerships with Zynga, Facebook and Twitter.
American Express Pulls Gift Cards from NJ
American Express Co. has become the first company to pull its gift cards from New Jersey pharmacies, groceries and convenience stores rather than attempt to comply with a new wrinkle in the state's unclaimed property law. AmEx spokeswoman Vanessa McCutchen told The Associated Press that the company began pulling gift cards sold through third-party retailers last week. As of Monday, the only way for New Jersey residents to buy AmEx gift cards, is directly from the company.
Ingenico and First Data Enable Powerful TransArmor® Data Security Across Telium Products
4/04/12 First Data
Ingenico, leading worldwide provider of payment solutions, and First Data Corporation, a global leader in electronic commerce and payment processing, announced that the companies are working together to enable retail customers in the U.S. with the First Data® TransArmor® solution. This development will allow customers of both First Data and Ingenico to significantly increase payment security by incorporating TransArmor data encryption and tokenization tech across the Ingenico Telium range of products.
ARM, Gemalto and G&D Form Mobile Security JV
4/03/12 ReThink Wireless
ARM may have massive market share in mobile devices, but controlling an architecture is no longer just about the processor design. As the devices become more functional, and more critical to their users, more capabilities need to be supported at chip level, most notably security. ARM has formed a joint venture with embedded security majors Gemalto of The Netherlands and Germany's Giesecke & Devrient (G&D) to try to establish its TrustZone technology as an industry standard.
How A Mobile Payment Startup’s Backend Biz Got Valued At $40M
When a two-year-old tech startup announces that it has raised nearly $30 million in a deal without selling out the company, it sounds as if it has found the next big thing. So we have talked to the management team at My Mobile Payments Ltd (MMPL), which owns a payment processing service called Money-on-Mobile, and looked a bit deeper into the deal that the company has struck with the US-based payment processing services firm Calpian Inc.
Groupon Needs To Be VERY Careful, Because The Sharks Are Circling
4/03/12 Business Insider
Groupon is bleeding in the water, and the sharks are circling. On Friday, we learned that Groupon under reported the number of returns it had in Q4, and that the company had to revise its earnings. Then Groupon's auditor filed a "statement of material weakness," basically telling the SEC it would not vouch for the company's numbers. Yesterday, the WSJ reported that the SEC is investigating the company. That's not all the company has to worry about.