NEWSOn May 12, 2008, federal prosecutors charged three men with hacking into 11 Dave & Buster's Inc. restaurants and stealing consumer data from credit and debit cards. The company's restaurant in Islandia, N.Y., had information stolen from 5,000 credit and debit cards, causing at least $600,000 in losses.
Extent of the losses from other locations was not immediately known. Prosecutors say the trio allegedly hacked into the cash register terminals to acquire "track 2" credit and debit card information that contains cardholder account numbers and expiration dates. The men then sold the data to others who made fraudulent purchases.
Albert Gonzalez of Miami was indicted on one count of wire fraud conspiracy. Maksym Yastremskiy of the Ukraine and Aleksandr Suvorov of Estonia received a 27-count indictment that includes wire fraud conspiracy, wire fraud, conspiracy to possess unauthorized access devices, access device fraud, aggravated identity theft, conspiracy to commit computer fraud, computer fraud and interception of electronic communications.
Discover Financial Services received United States antitrust approval to acquire the Diner's Club International Card business from Citigroup Inc. Antitrust authorities reviewed the $165 million deal and will take no action to block it, the U.S. Federal Trade Commission stated in a daily notice listing deals cleared by antitrust officials.
The Federal Reserve System and The Clearing House Payments Co. will implement enhanced message formats on its U.S. dollar wire transfer system, the Fedwire Funds Service and CHIPS - The Clearing House Interbank Payments System. This will accommodate cover payments and payments containing business remittance information.
"These enhancements respond to the needs of both banks and corporations to improve efficiency in wire transfer payments," said Lauren Hargraves, Senior Vice President of the Federal Reserve Bank of New York's Wholesale Product Office.
JPMorgan Chase & Co. will eliminate 420 call service jobs at its Chase Sky Harbor operations center in Phoenix over the remainder of 2008 and move some employees overseas to its Manila, Philippines, hub. Officials attempted to notify employees before they learned their fate from news reports.
All of the cuts involve retail customer service positions. Chase spokeswoman Mary Jane Rogers said the move was a cost-cutting measure. Affected workers will receive career counseling and priority posting for other Chase positions in the Phoenix market and around the globe.
ANNOUNCEMENTSMicrosoft Corp. reported a 300 percent increase in the number of Trojan attacks against its operating system launched in the past year. To help those whose computers are infected, Comodo Group, a provider of extended validation (EV) secure sockets layer (SSL) certificates for Web site security, offers free malware cleaning services by security experts to remove Trojans, spyware, viruses, rootkits and other malicious code.
CO-OP Financial Services, the nation's largest credit union-owned automated teller machine (ATM) network and processor, incorporated deposit-taking capability through its Vcom kiosks in more than 2,700 7-Eleven Inc. stores.
The 26 million credit union members whose cards bear the CO-OP logo can now make deposits through the kiosks, which are located in 12 states.
The ATMs use check imaging technology for deposits. Users insert checks directly into the machine without an envelope and receive an image of the check on their receipts.
CSH Consulting, a recruitment firm devoted exclusively to the payments industry, recently made its 1,200th placement. Established in 2000, the CSH works with ISOs, payment gateways, financial institutions (FIs), POS manufacturers and more.
Initially focused on recruiting executives, CSH has expanded its reach to include merchant level salespeople (MLSs), operations staff and technical consultants. It also recently established a project-recruiting group. The firm recruits across the United States and has made placements across international borders as well.
Fair Isaac Corp., a provider of analytics and decision management technology, unveiled an antifraud solution for the UK Faster Payments Initiative to thwart criminals who may try to exploit the real-time speed of Faster Payments for their own profit.
The solution allows financial institutions (FIs) to roll out Faster Payments services in real-time without increased fraud risks.
IDology Inc., an identity and age verification solutions company, introduced Expect ID, a suite of solutions to help businesses comply with the Red Flag Regulations under Sections 114 and 315 of the Fair and Accurate Transaction Act of 2003.
Red Flag requires FIs and creditors to develop and deploy an identity theft prevention program to combat identity theft on new and existing accounts.
IDology's ExpectID suite provides different levels of authentication so clients can better manage their risk when suspicious activity is present.
It is based on public records data versus credit data, which increases the number of people IDology can verify. Banks and creditors have until Nov. 1, 2008, to meet Red Flag compliance regulations.
The Payment Card Industry (PCI) Security Standards Council, which manages the PCI Data Security Standard (DSS), PCI PIN Entry Device security requirements and the Payment Application DSS, scheduled the release of the PCI DSS version 1.2 for October 2008.
The enhanced clarity provided by version 1.2 is expected to ease implementation and increase overall adoption of the PCI DSS.
The updated standard reflects broad industry feedback and is designed to anticipate, identify and mitigate future security threats. It will not include any new core requirements.
Tribul Merchant Services LLC, a provider of POS credit card processing and e-commerce solutions for regional and middle market merchants throughout the United States, re-engineered its merchant services group and formed four new business units:
This step is part of the company's ongoing efforts to anticipate and adapt to marketplace changes while also maintaining premier customer service.
Trustwave, a security and compliance management solutions provider, deployed its unified threat management (UTM) information security application to 71 restaurants throughout the United States owned by Bravo! Development Inc. The deployment is part of Bravo's initiative to secure critical data processed or transmitted from its restaurants.
UTM products include multiple security features integrated into one device. To be included in this category, the appliance must enable network firewalling, network intrusion detection and prevention, and gateway antivirus protection.
VeriSign Inc., a provider of EV SSL certificates for Web site security, deployed its one millionth active SSL certificate. VeriSign provides Internet infrastructure security for more than 93 percent of the Fortune 500 companies and 40 of the world's largest banks.
PARTNERSHIPSDynamic Card Solutions LLC, an instant issue and PIN selection software applications developer for financial institutions, joined Advanced Card Technologies Canada. Furthering its commitment to the Canadian financial services market with Europay, MasterCard Worldwide and Visa Inc. payments' standards (EMV) instant issuance solutions, DCS became a member of the organization in March 2008.
ACT Canada is a nonprofit member association incorporated in 1989 to promote awareness, understanding and use of a wide range of applications across all advanced card technologies, including smart (contact, contactless and radio frequency), optical and emerging card technologies, and other form factors.
Merchant e-Solutions Inc., a payment processing services provider, teamed up with the Community Bankers Association of Kansas to offer merchant services to 125 Kansas banks. Merchant e-Solutions will provide CBA members with technically advanced payment services, such as Web-based portfolio management, sophisticated reporting and analysis tools, and online merchant sign-up capabilities.
NCipher PLC, a manufacturer of high-speed storage encryption applications, signed an agreement with Symitar, a division of Jack Henry and Associates Inc., a transactions processing services provider, in which Symitar will resell nCipher's CryptoStor product as part of its solution offering.
"Symitar knows that its customers need an encryption and key management solution that meets compliance regulations by securing data at rest and protecting against the loss or theft of encryption keys," said Richard Moulds, Executive Vice President of Product Strategy at nCipher. "Customers' storage security requirements can be satisfied in a quickly deployed manner with CryptoStor."
Paybox solution AG, a Frankfurt, Germany-based mobile payments solutions provider, and G-Xchange Inc., a wholly-owned subsidiary of Globe Telecom, the second largest telecommunications company in the Philippines, teamed up to offer Filipinos living overseas a less expensive and more convenient way to send money home.
The partnership enables mobile operators and financial institutions worldwide to leverage paybox's technology to access Globe Telecom subscribers as recipients for mobile money transfers.
Randolph-Brooks Federal Credit Union, a Live Oak, Texas-based nonprofit financial cooperative, extended its 16-year participation in the Pulse ATM/debit network through an exclusive agreement. Under its terms, Randolph-Brooks will utilize Pulse for PIN-debit transactions at the POS, signature debit processing, ATM transactions and gateway connections to other networks.
Online banking applications provider Yodlee Inc. and Postilion, a division of S1 Corp., a self-service banking and payments processing provider, partnered to integrate Yodlee's PersonalFinance and DirectPay into Postilion's retail and business Internet banking solutions.
PersonalFinance helps consumers manage spending, set budgets, monitor transactions, review cash flow trends and predictions, and guard against fraud. DirectPay is Yodlee's proprietary card-based payment network. For FIs that issue credit cards, DirectPay opens up new sources of interchange revenue driven by bill pay.
ACQUISITIONSHeartland Payment Systems Inc., a credit, debit and prepaid card processor, signed an agreement to acquire the Network Services business of payments processor Alliance Data Systems Corp. Heartland is paying $77.5 million in cash for NS and expects to close the acquisition by June 2008.
NS reportedly handled over $17 billion of total annual bankcard volume and 604 million transactions in 2007.
In addition to Visa and MasterCard acquiring, NS handles a wide range of payment transactions for its customer base, which is predominantly petroleum retailers, and provides approximately 2.6 billion transaction authorizations each year.
APPOINTMENTSThe National Cash Register Corp. appointed Richard L. Clemmer and Robert P. DeRodes to its board of directors. Clemmer is a Senior Adviser to Kohlberg Kravis Roberts & Co. and a member of the i2 Technologies Inc. board of directors. Since 2002, DeRodes has served as EVP and Chief Information Officer for The Home Depot U.S.A. Inc.
NACHA - The Electronic Payments Association's board of directors selected Janet O. Estep, most recently an EVP with U.S. Bank, to succeed Elliott McEntee as President and CEO at the end of 2008. During the transition period, Estep will serve as President and Chief Operating Officer. McEntee will continue as CEO.
"Jan's solid industry background and sensitivity to the needs of community banks and credit unions in the payments system ensure that NACHA and the ACH Network will continue to benefit all stakeholders," said Mike Bilski, EVP, North American Banking Company and NACHA board member. He served on the CEO search committee.
Charge Card Systems Inc., promoted Adam Moss, former Manager of the CCS New York Metropolitan regional sales office, to Vice President, National Sales Manager of CCS' Boca Raton, Fla., corporate headquarters. Moss will be in charge of the company's agent program.
CCS also promoted Bill Paul to VP and COO of the newly formed CCS Total Payment Solutions division. Paul will be in charge of identifying and marketing new products and technology to merchants nationally through the company's agent network.
Innovative Card Technologies Inc., developers of security devices for e-banking, e-commerce and data access, have added two industry veterans to its team. Mark Poidomani, former Chief Technology Officer for PrivaSys Inc. and inventor of financial and antifraud solutions, joined the company as its CTO. Jim Turley, former CEO of Patriot Scientific Corp., specialist in merger and acquisition management, and author of several books on computer science and technology, joins the company as its Technical Adviser.
TSYS Acquiring Solutions, a leading supplier of acquiring solutions, related systems and integrated support services to the payments sphere, appointed David E. Wood as COO. Wood will spearhead TSYS' business operations and will report to TSYS President Robert J. Philbin. For the past 15 years, Wood served as a senior executive with Bank of America Corp. Most recently he was responsible for its BA Merchant Services operations in Louisville, Ky. Prior to working with BofA, Woods held management positions in operations at Bank One Corp.
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