May 2014

LaCie Admits Year-Long Credit Card Data Breach

The payment industry was shaken to the core with the Target-Neiman Marcus credit card processing systems hack in late 2013; millions of users saw their personal information compromised and their credit card numbers sold online for cloning. The scandal unleashed a wave of cries for reform in the credit card processing systems industry, and the end of the outdated and decades-long magnetic strip cards.

 

Now, however, popular hard drive manufacturer Seagate-LaCie has unveiled that for most of the past year, they have been victim to a hacker at their online store, which has exposed credit card numbers and contact information for many customers. Perhaps more troubling is that it took the vendor almost a month to admit to the breach after it was first reported online.

 

ColdFusion Vulnerability

The hack appears to exploit vulnerabilities in Adobe’s ColdFusion software, which was also responsible for a break-in at Adobe itself in which tens of millions of customer records including credit card data and source code for Adobe’s leading software was stolen. In fact, many experts believe that it was the same group of hackers that performed the LaCie break in, as well as attacks at Smuckers and at credit card processing systems vendor SecurePay.

 

Protecting Your Data

It is uncertain as yet just how many card numbers and how much information was compromised; the company has not revealed this information yet, but given that the breach has been going on for the past year, it is possible that millions of customers have been affected by the attacks. The company claims that they were only made aware of the breach by the FBI on March 19. The company is advising that all customers who have purchased hard drives in the past year should take precautions to protect their data. So far there have been no reports of stolen credit cards, but the malware has been confirmed, so the company is advising that it might be wise to replace cards and reset passwords.

 

 

 

 

iPhone 6 May Feature NFC Technology

iPhone merchant services users can rejoice: there are rumors that Apple could finally adopt Near Field Communication (NFC) technology for mobile payment plans. The company has been far behind the curve on this technology for too many years, while its largest competitor, Samsung, has been touting the technology as a major feature for its last several phones.

 

NFC technology is a set of standards for mobile devices which allow the devices to connect via radio signals when the devices are touched or brought within a few inches of each other. So far in most mobile devices the technology has been used as little more than a gimmick for sharing files or making it easier to pair Bluetooth devices. However, if Apple integrates the technology the way some are predicting, it could be a game changer.

 

So far, few devices have leveraged NFC to its fullest potential as a vehicle for mobile payments. Apple could integrate the technology across the board as a means by which iPhone merchant service providers can perform “handshake” payment transfers. This could go hand-in-hand with the reported development of the iPhone mobile wallet, which would integrate with existing iTunes accounts. What this means is the moment the technology is implemented, there is a ready-made network of well over 600 million users instantly set up to perform handshake mobile payments, using Touch ID to both authenticate payments and track data for customer loyalty and marketing purposes.

 

In fact, Apple has already patented technology that applies to NFC for mobile payments, and CEO Tim Cook has admitted that accepting payments for the iPhone merchant is partially responsible for the development of the Touch ID authentication system currently in use on the iPhone 5.

 

If Apple adopts this technology for broad implementation of payment processing services, the innovation could be a complete game-changer for the entire mobile payment market.

 

 

 

 

 

Internet Credit Card Processing: What You Need to Know

Accepting credit card payments online is almost a must for any small business these days. Internet credit card processing is an ideal way to grow business and simplify sales. The problem is that you need to protect your customers’ credit card information as well as defending your own business against security risks. In order to avoid becoming one of the 42 percent of online merchants who are responsible for fraudulent transactions, there are some things you need to keep in mind.

 

  • Verify the billing address of the purchaser’s account. This is a good way to ensure that you are taking a transaction from an authorized account. People who attempt fraudulent Internet credit card processing transactions generally cannot verify this billing address.

 

  • Match up the shipping and billing addresses. In addition to verifying the address, make sure that the billing and shipping address match. This can be a red-flag for fraudulent transactions.

 

  • Remember that you are liable for transactions. Just because you understand PCI Compliance Standards for your brick-and-mortar business does not mean you understand fully how it works online. For online transactions, the retailer is 100% liable for fraudulent transactions.

 

  • Make sure your service is PCI compliant. Many digital service providers offer Internet credit card processing services but that does not mean they are up to date on PCI requirements. You cannot use the fact that you didn’t know as a defense if you find that data is being compromised.

 

This is not a small issue. If you don’t follow all of the current PCI Compliance Standards, and you end up getting hit with a data compromise situation, you could lose a lot more than revenue and shipping costs. Your privileges to accept Internet credit card processing could be revoked, for all intents and purposes shutting you down online.

Facebook Money to Challenge PayPal?

For many years, PayPal has stood unchallenged at the top of the Internet money transfer heap. When it comes to paying for items online or transferring money for just about any reason, PayPal credit card processing and money transfer is the default, go-to service to use. Now, however, a new challenger has arisen that could turn out to be the first legitimate challenger to the Paypal credit card processing empire.

 

Facebook is preparing to unveil a money transfer business of its own, in Europe at first, and due to Facebook’s expansive, hundreds-of-millions-strong user base, could set itself up as an heir to the throne.

 

Experts are still split as to whether a Facebook money transfer service would constitute a legitimate challenge, or how long it would take for the social network to build trust and establish a successful operation. Facebook has yet to comment on the launch, so there is no clear timeframe for the service, but the company already has a license to perform money services in most of the United States and is close to gaining the same in Ireland, which serves as its European base. The Financial Times has reported that Facebook is scant weeks away from gaining this approval, in fact, and when they get it, there could be a legitimate threat to Paypal credit card processing and money transfer services.

 

It is unclear at this point whether Facebook would go it alone or pair with one of at least three London-based financial firms who already have apps for these kinds of transfer. The biggest hurdle that the company will have to overcome would appear to be a trust issue; they seem to continually face issues from their user base over new features and changes to appearance on the site. Still, this sort of endeavor stands to be more profitable by far than their recent acquisitions of WhatsApp and Oculus VR; experts feel that the company could’ve created its own services that mimic the functionality of these for cheaper than they spent to buy the apps. A financial money transfer service, however, builds on the existing strengths of the company.

 

 

 

 

Decline of Credit Cards Hurting Online Gambling in New Jersey

In November, New Jersey voters passed a referendum allowing online gambling, and most of the state’s residents agree that this is a good thing. The original estimates put forth by Governer Chris Christie estimated that online gambling would contribute $1 billion to the state’s economy in its first year alone. Certainly, that amount of money would be a boon not only to New Jersey, but to credit card merchant service providers.

Gross Underestimation

Unfortunately, the estimates fell far short of the reality. As it turns out, a lot of transactions are being declined by credit card merchant services, and only roughly 44% are actually getting approved for online gambling. As a result, Wall Street analysts are predicting that the online gambling industry will only bring in about $200 million, far short of Christie’s billion-dollar estimate. Currently, less than $40 million has been earned through the services.

Varying Approval Rates

Interestingly, the rate of declined transactions varies wildly by provider. Currently, Visa and MasterCard are accepted for online gambling services, while American Express and Discover are not. Visa approves only 44% of requested transactions, but Mastercard approves 73% of requests.

Mary Jo Flaherty of the State Division of Gaming Enforcement has issued a statement that her department is working hard to get banks, credit card merchant providers, and other institutions in the state on board with the legality of online gaming in New Jersey. The feeling is that these declined transactions are not the result of bad credit, but of credit card companies not allowing gambling revenues to be charged to the card for legal reasons. There is a question of appropriateness which has stopped many transactions cold.

Since credit card merchant service providers are the largest means of online payments, it’s certain that this is the single largest reason that the online gambling industry has not yet caught on in New Jersey. It remains to be seen what will happen if and when this issue gets straightened out.

 

 

In November, New Jersey voters passed a referendum allowing online gambling, and most of the state’s residents agree that this is a good thing. The original estimates put forth by Governer Chris Christie estimated that online gambling would contribute $1 billion to the state’s economy in its first year alone. Certainly, that amount of money would be a boon not only to New Jersey, but to credit card merchant service providers.

Gross Underestimation

Unfortunately, the estimates fell far short of the reality. As it turns out, a lot of transactions are being declined by credit card merchant services, and only roughly 44% are actually getting approved for online gambling. As a result, Wall Street analysts are predicting that the online gambling industry will only bring in about $200 million, far short of Christie’s billion-dollar estimate. Currently, less than $40 million has been earned through the services.

Varying Approval Rates

Interestingly, the rate of declined transactions varies wildly by provider. Currently, Visa and MasterCard are accepted for online gambling services, while American Express and Discover are not. Visa approves only 44% of requested transactions, but Mastercard approves 73% of requests.

Mary Jo Flaherty of the State Division of Gaming Enforcement has issued a statement that her department is working hard to get banks, credit card merchant providers, and other institutions in the state on board with the legality of online gaming in New Jersey. The feeling is that these declined transactions are not the result of bad credit, but of credit card companies not allowing gambling revenues to be charged to the card for legal reasons. There is a question of appropriateness which has stopped many transactions cold.

Since credit card merchant service providers are the largest means of online payments, it’s certain that this is the single largest reason that the online gambling industry has not yet caught on in New Jersey. It remains to be seen what will happen if and when this issue gets straightened out.

eBay Keeping PayPal Makes Sense

The potential for Apple’s iPhone processing services to undermine or harm PayPal is a hot topic right now. At this time it is unclear whether the new Apple mobile payment service will cover e-commerce or be restricted to physical stores, but if the potential for iPhone processing of payments does extend to mobile and Internet services, this could form a big threat to PayPal and by extension, its parent company, eBay.

 

There have been analysts out there who are urging eBay to drop its integrated association with PayPal, arguing that an independent PayPal would be more valuable than an integrated one. But eBay, who purchased PayPal in 2002 to bolster its own Billpoint system, is sticking with PayPal, and this makes sense in the long term. Even if iPhone processing goes mobile, it really will not be a threat to eBay or PayPal. Both companies are so firmly entrenched in the e-commerce industry that unseating them would be an Herculean task, even for a monster like Apple, and it is also unlikely that Apple at this time views eBay as a competitor in the field. It has its own 600-million-strong customer base.

 

Besides this, PayPal offers easy-to-understand, low-cost, and user friendly services and options and has the benefit of legacy behind it: people trust PayPal due to their history of providing secure and high quality customer service. Finally, PayPal accounted for a full 41% of the overall eBay revenue in 2013, and eBay showed a 20% growth in FY 2013.

 

There is, quite simply, no reason for eBay to divorce itself from PayPal integration, especially in favor of a company whose foray into the world of brick-and-mortar and mobile processing services have yet to be proven beyond its own iTunes users. Sure, there are many iPhone processing services out there, but Apple creating an integrated one has yet to stand the test of time and user-ship.