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The Green Sheet Online Edition

May 24, 2010 • Issue 10:05:02

Research Rundown

Payments industry faring well

#dch_The Electronic Transactions Association's Q1 2010 US Economic Indicators report, released in April by The Strawhecker Group, indicates the payments industry is coming through the recession better than the S&P 500 index by 46 percent year over year. Technology providers were especially strong performers. To download the report, visit www.electran.org.

Online, MO/TO fraud on the rise

#dch_According to Retail Decisions (ReD) research, card fraud losses in the United States totaled approximately $2.6 billion in 2009, and London is a hotspot for criminals targeting U.S.-based online retailers. Carl Clump, ReD's Chief Executive Officer, said data for 2009 show a 7 percent increase in the value of online and MO/TO fraud, compared with 2008's fraud loss total of $2.4 billion.

ReD estimates total 2010 Internet and MO/TO fraud will be valued at $2.8 billion. Clump suggested retailers employ nonintrusive, instantaneous fraud prevention technologies to ensure the best possible protection.

Traits of successful payment solutions

#dch_Fiserv Inc. revealed nine characteristics it believes new payment solutions must have to succeed. They must be all electronic, ubiquitous, intuitive, secure, easy, informative, interactive, always on and customizable. According to the company, these were formulated by Fiserv's Consulting Director for Global Payment Solutions, George Warfel, based on "time-tested learning and observations across a range of payments products."

Canadian payment trends

#dch_A new Deloitte & Touche LLP report, Charting a new course for the credit card industry, highlights eight emerging payment trends in Canada: credit cards and bank accounts will start to merge; social networking sites and personal digital assistants will be used as payment platforms; mobile phones will be used as payment devices; loyalty programs will increase significantly between card issuers and retailers; use of prepaid cards for recurring payments will increase; cardholders will see an increase in security features that prevent fraud; consumers will be educated on responsible debt management; and some credit cards will be cancelled, but new ones will emerge.

The future of E2EE

#dch_In End-to-End Encryption in Card Payments: An Introduction, Aite Group LLC concludes that the most appropriate technological route to address current card fraud threats in the United States is end-to-end encryption (E2EE), especially given the country's entrenched magnetic card infrastructure.

According to Aite Senior Analyst Nick Holland, the report's author, merchant choices will be "highly subjective based on transaction fees, hardware requirements, and, not insignificantly, the degree to which an offering removes the merchant from PCI scope" and "while a focus on PCI scope reduction may be a fine way for E2EE vendors to gain merchant attention, it loses sight of the fundamental aspect of solutions: protecting consumer cardholder data."

Retail, restaurant sales declines slowing

#dch_Capital Access Network Inc.'s recently released Q1 2010 Small Business Credit Sales Report indicates that year-over-year same store sales for brick-and-mortar retailers and restaurants declined in the first quarter of 2010: 6.31 percent and 11.67 percent, respectively.

However, the extent of decline slowed compared with 2009. The strongest performing segment was restaurants with average tickets of less than $25, which showed only a 0.52 percent decline. end of article

The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.

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