First Data Corp.’s CardConnect acquisition, disclosed May 29, 2017, is the latest in a series of payments industry mergers. Payments analysts expect CardConnect’s 67,000 merchants and technology suite to complement First Data’s processing solutions while adding $26 billion to the company’s $2.2 trillion annual processing volumes. Both companies unanimously approved First Data’s $750 million cash offer for CardConnect’s outstanding shares. Upon completion, First Data will repay CardConnect’s debt and receive $15 per share for the company’s untendered common stock. First Data will use a combination of cash on hand and credit to execute the deal, which is expected to close in the third quarter of 2017.

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Investigation of a payment card security incident first reported on April 25, 2017, revealed POS malware was used at certain Chipotle Mexican Grill Inc. and affiliated Pizzeria Locale restaurants from March 24, 2017 to April 18, 2017. The malware apparently searched for track data (cardholder name, card number, expiration date and internal verification code) from magnetic stripe cards being routed through POS devices. It is unclear how many customers may have been impacted by the breach, but of the chain's estimated 2,250 restaurant locations, a large number were found to have been affected.

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The Consumer Financial Protection Bureau has been closely scrutinized since its inception as part of the 2010 Dodd-Frank Act. Advocates say the government agency protects consumers from unfair lending and predatory credit practices. Opponents claim the agency is too powerful and autonomous. Both sides had their day in court May 24, 2017, when the U.S. Court of Appeals for the D.C. Circuit reopened PHH v. CFPB, a legal action challenging the CFPB’s constitutionality and powers. As reported March 13, 2017, in issue 17:03:01 of The Green Sheet, PHH Corp. and concerned parties sued the CFPB in April 2016. Plaintiff alleged the bureau belonged to a group of government agencies such as the Federal Communications Commission that “constitute a headless fourth branch of government." Mortgage provider PHH Corp. was also contesting a $109 million penalty imposed by the CFPB for deceptive practices; PHH called the penalty executive overreach.

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On May 22, 2017, Universal Secure Registry LLC filed a complaint in the U.S. District Court for the District of Delaware alleging that Apple Inc., Visa Inc. and its subsidiary Visa U.S.A. Inc. infringed seminal patents for electronic payments and identity authentication integral in developing their mobile payment platforms. Represented by Quinn Emmanuel Urquhart & Sullivan LLP, the same law firm that represented Samsung Electronics Co. Ltd. in a design patent dispute with Apple, USR holds 13 of the more than 30 U.S. patents authored by USR founder and Chief Executive Officer Kenneth Weiss, inventor of SecurID token and former CEO of Security Dynamics Technologies Inc., now RSA Security LLC.

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San Francisco-based DocuSign Inc., global provider of electronic signature and digital transaction management solutions, warned of a phishing campaign with malicious code that began circulating May 16, 2017. Company representatives recommend deleting and not opening suspicious emails that contain non-PDF attachments, suspicious URLs and spelling errors. The trending phishing attack from "dse@dousign.com" misspells DocuSign and contains a macro-enabled Microsoft Word document, they noted. Preliminary reports from forensic investigators indicated no names, physical addresses, passwords or sensitive data were stolen. DocuSign customer privacy and documents remain intact, and the company has asked users to forward suspicious emails to spam@docusign.com.

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During the Google I/O 2017 developer conference held May 17 to 19 in Mountain View., Calif., Google Inc. revealed that building upon a nearly three-year partnership with PayPal Inc., Android Pay users on Chrome mobile web will soon be able to pay at millions of online merchants that accept PayPal using their PayPal account and a fingerprint; no username or password required. Addressing the importance of a seamless mobile checkout experience, Google Vice President of Payments Products Pali Bhat stated, "Mobile checkout remains one of the biggest sources of friction in the commerce experience, and we're excited to collaborate with PayPal on enabling streamlined checkout experiences for all Android Pay and PayPal users."

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First Data Corp. placed first in the overall rankings on Military Times' "Best for Vets: Employers 2017" list, which this year recognized 84 companies nationwide. To make the grade, companies were evaluated based on military service member recruitment policies, company culture and reservist accommodations. Military Times provides news related to the military and defense targeted to current and former military personnel. "This is a tremendous honor for First Data and reflects the significant commitment we have made to support our nation's service members and military families," said First Data Chairman and CEO Frank Bisignano. "Our hiring efforts have placed veterans and military spouses at every level of the company, and we work tirelessly to support veteran-owned businesses through innovative tools to help these business owners thrive long after returning home from service."

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Troy, Mich.-based North American Bancard Holdings LLC disclosed on May 17, 2017, it will acquire Woodland Hills, Calif.-based Total Merchant Services Inc. Payment analysts expect the merger to improve capabilities, geographic footprint and ranking for North American Bancard, which will become North America's seventh largest acquirer, with estimated annual processing volumes of $50 billion. Marc Gardner, founder, President and Chief Executive Officer at North American Bancard, noted TMS has been an industry staple for more than 20 years, with a history of providing premier business solutions and consistent focus on ease, affordability and excellent service. "These traits made this acquisition a strategic fit for us," he stated.

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Capturing and holding data hostage in exchange for a fixed sum is hardly a new phenomenon, but security experts were uneasy about the global scale of last week’s WannaCry ransomware attack. It affected hospitals and organizations in more than 150 countries. It was not just data held hostage, but factory workers unable to work and critically ill patients unable to receive treatment, experts stated. A group known as the Shadow Brokers exploited vulnerabilities in Microsoft Windows PCs, which it claims to have stolen from U.S. intelligence agencies. The United Kingdom’s National Health Service; Spain’s telecom carrier Telefonica; and businesses in Russia, the Ukraine and Taiwan were among those affected. Victims, who received instructions for buying back encrypted data, learned that bitcoin is the only accepted payment method.

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More than 200 exhibitors and 4,000 attendees from across the globe gathered May 10 to 12, 2017, for Transact 17 at Mandalay Bay Resort and Casino’s conference center in Las Vegas. The annual convention and expo, hosted by the Electronic Transactions Association, included keynote speakers and panelists from leading technology and retail companies. A curated menu of events facilitated networking, company and product launches, deal making, education and infotainment. In opening remarks, ETA Chief Executive Officer Jason Oxman said the conference is about meeting people and connecting with community to shape the future. “You’re here to transact,” he said. “ISVs, payment facilitators, financial institutions, deal-makers and innovators are committed to making what’s next in payments secure, convenient and rewarding.”

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Robert O. Carr is back in the saddle. Carr, who built Heartland Payment Systems Inc. from a $2 million startup to a $4.3 billion enterprise that he sold last year to leading acquirer Global Payments Inc., launched a new startup, Beyond. Beyond is an employee-owned company with a service lineup that includes payment processing, POS systems, lending, payroll and integrated human resources services, as well as services tailored to specific verticals, such as restaurants and dealership management. Carr, in an interview with The Green Sheet, explained he wasn’t keen on leaving the industry last year, but as Chief Executive Officer of Heartland, he had an obligation to do right by shareholders, and the offer Global made was a good deal for shareholders.

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With calls for its restructuring or demise on the part of some members of Congress, the Consumer Financial Protection Bureau nevertheless continues to take actions in accordance with its stated mission to “make markets for consumer financial products and services work for Americans – whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.”

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On May 8, 2017, First Data Corp. expanded its relationship with Alipay, becoming the first payments technology company to implement Alipay at the POS for U.S. businesses on a scalable basis. Following a successful pilot in California and New York, First Data will now embark on initial rollout of Alipay at U.S.-based First Data Clover-direct merchant locations. This is expected to take four to five months to complete. "As Alipay's popularity continues to spread beyond China, we are thrilled that Alipay chose First Data to support its acceptance for American businesses of all sizes," said Frank Bisignano, Chairman and Chief Executive Officer at First Data. Alipay, owned by Ant Financial Services Group, with an estimated 450 million registered users ranks second behind PayPal in number of mobile wallet users.

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The Federal Trade Commission reported today that it launched ftc.gov/SmallBusiness, a new website containing articles, videos and other information compiled to help small business owners avoid scams and protect their computers and networks from cyberattacks and other threats. This looks like good news for ISOs, merchant level salespeople (MLSs) and the merchants they serve. "Small businesses are critical to our economic strength, building America's future, and helping the United States compete in today's global marketplace," said FTC Acting Chairman Maureen Ohlhausen, who spearheaded development of the new resource. "This innovative new website is a one-stop shop where small businesses can find information to protect themselves from scammers and hackers, as well as resources they can use if they are hit with a cyberattack."

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U.K.-based Sage Group PLC confirmed during a May 3, 2017, earnings call that it will divest its U.S.-based Sage Payment Solutions division. The news follows word in December that a potential sale was under review, all part of a global strategy executed by Sage Chief Executive Officer Stephen Kelly, who took the helm in 2014. According to Sage, over 3 million clients use its integrated accounting, payroll and payment systems. In a written statement about the sale, Sage said that after a strategic review of payments, its North American payments business is "now classified as an asset held for sale and a discontinued operation."

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PayPal’s Business in a Box launched May 1, 2017, during National Small Business Week. It is a comprehensive set of resources and services for small and midsize business (SMB) owners. The solution includes social media support by WooCommerce and online accounting services by Xero. PayPal said the service is part of a broad objective to serve the small business community through financial services and tools to help them start and grow their businesses.

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Verizon Communications Inc. disclosed May 2, 2017, that it will sell its cloud and managed hosting services to IBM Corp. for an undisclosed sum. The agreement is part of an ongoing effort to help Verizon customers securely connect to their cloud-based resources and solutions, said George Fischer, Senior Vice President at Verizon Enterprise Solutions. "We are notifying affected customers directly although we do not expect any immediate impact to their services as a result of this agreement," Fischer said. "We will formally notify and update customers as appropriate with additional information nearer to the close of the deal. We expect the transaction to close later this year."

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The Consumer Financial Protection Bureau officially rolled back the effective date on new regulations targeting prepaid debit cards so it can review and tweak the rules. That hasn’t mollified detractors in Congress, who continue to push for repeal of the comprehensive rules. Nor does it set well with consumer groups, some of which are crying foul and mounting an aggressive campaign against congressional efforts to repeal the prepaid card rule.

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In advance of the Electronic Transactions Association’s Transact17 show, the organization released the names of this year’s Star Awards finalists. The awards recognize innovative leaders who help fulfill the ETA’s mission to grow the payments technology industry, ETA Chief Executive Officer Jason Oxman stated. Finalists were named in the Business Partner of the Year, ISO of the Year and Committee Volunteer of the Year categories. These winners, as well as Distinguished Payments Professional and Pay It Forward Award honorees will be revealed during the President’s Dinner at Transact17, which will take place from May 10 through 12 at the Mandalay Bay Hotel and Casino in Las Vegas.

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On April 27, 2017, Sen. Michael Enzi, R-Wyo., reintroduced the Marketplace Fairness Act, legislation originally approved by the Senate in 2013, but not voted upon by the House. Rep. Kristi Noem, R.-S.D., reintroduced the House version, also delayed, entitled the Remote Transactions Parity Act. The two measures seek to end sales and use tax exemptions for large, ecommerce merchants selling to customers in states where the merchants have no physical presence. Said sales and use taxes currently apply to all brick-and-mortar merchant locations.

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