Doing Business in the Mobile Channel
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News July 12, 2010 • Issue 10:07:01 Industry Update .......................................14 Security standards lifecycle extended .........42 Congress approves interchange Doing business in regulation amendment ..........................44 New ACH rules in step with Check 21 .......47 the mobile channel Trade Association News: ETA unveils new logo ............................76 By Patti Murphy MWAA to present strategies The Takoma Group for changing times ................................76 verything is mobile these days, and the business of payments is no Features exception: Juniper Research Ltd., a high-tech research firm based in the U.K., forecasts that nearly half of all mobile telephone users worldwide GS Advisory Board: E will be using mobile devices to initiate payments by 2014. Meanwhile, the online auction site eBay Inc. claims it handled $500 million in mobile pay- Merchant retention, taking ments in 2009; this year that number is expected to triple. the initiative – Part 1 .............................24 SellingPrepaid: At present, the bulk of mobile payments occur outside the United States. In Prepaid in brief ....................................33 Kenya, for example, M-Pesa, a mobile banking and payments product provided FinCEN seeks comprehensive by mobile operator Safaricom Ltd., managed to sign up 20 percent of Kenyans who just a few years ago were unbanked. AML framework....................................34 Prepaid largely spared in fi nal In Haiti, where 90 percent of adults had no bank accounts just last year, a Durbin Amendment ..............................38 project is underway to build a mobile money system for the entire nation. Views The U.S. Agency for International Development and the Bill & Melinda Gates Foundation kicked in money and expertise to create the system. Strong relationship skills obliterate obstacles Among developed countries, Japan has been heralded for its inroads into the By Jeffrey Shavitz mobile payment sphere (see "The Japanese experience" sidebar on page 51). Charge Card Systems Inc. .....................32 Education According to Mobile Payments for Digital and Physical Goods, a new white paper from Juniper, more than 500 million mobile phone subscribers in the Indian subcontinent will be using their devices for payments by 2014. "[A] recent Street SmartsSM: trend we're seeing is the launch of mobile storefronts and malls, as well as new Should an industry attorney smart-phone apps and mobile payments services from companies such as eBay, review your contracts? Amazon and Digby," said Howard Wilcox, author of the white paper. By Ken Musante Eureka Payments LLC ............................56 Richard Crone, Chief Executive Officer of Crone Consulting LLC, estimates mobile payments have the potential to become a $6.2 trillion a year market. Managing your most important asset By Jeff Fortney Payments, not banking Clearent LLC ........................................60 The mobile payments arena is not the same as mobile banking, although experts De-commoditize continuously to agree mobile banking gives banks a leg up on getting account holders on board conquer a crowded market with mobile payments. The Federal Reserve Bank of Boston reported in its 2008 By Daniel Burrus Survey of Consumer Payment Choice that 8.2 percent of bank account holders pres- Burrus Research Associates Inc. ..............62 ently access the bank using mobile technologies. Building a PCI program that works Bank of America Corp., a leader in Internet banking, seems situated at the head By Tim Cranny of the mobile pack with its millions of mobile banking customers. BofA also Panoptic Security Inc. ............................65 boasts the largest checking account base in the nation, the largest check process- Digital reputation management ing workload, and it's a top card acquirer, too. By Peggy Bekavac Olson Strategic Marketing ..............................68 According to Crone, mobile payment services require two sets of "credentials" to work: those that provide access to payment networks and those that support Continued on page 3 See Mobile channel on page 51 3 AdvisoryBoard NotableQuote » Tony Abruzzio–Global Payments Inc. » John Arato–MagTek Inc. Google, Yahoo, Bing, Facebook, » Adam Atlas–Attorney at Law LinkedIn, MySpace, Twitter, » Clinton Baller–PayNet Merchant Services Inc. Wikipedia and more – it can be overwhelming. How do you go about » Audrey Blackmon–TASQ Technology digital reputation management? » Robert Christiansen–ARM Loyalty » Steve Christianson–AAmonte Bankcard See story on page 68 » Steve Eazell–Secure Payment Systems Inc. » W. Ross Federgreen–CSRSI » Ed Freedman–Total Merchant Services » Robert Ficarra–Sterling Payment Technologies » Marc Gardner–North American Bancard » Chad T. Gay - PNC Merchant Services Inside this issue: » Russ Goebel–Quantus Health Solutions LLC CONTINUED » Matt Golis–YapStone Inc. » Curt Hensley–CSH Consulting Company Profi les » Scott Henry–VeriFone Inc. » Jared Isaacman–United Bank Card Inc. Roam Data Inc. » Kevin Jones–First American Payment Systems Device-agnostic mobile commerce .....................................................39 » Jerry Julien–Equity Commerce LP » Lazaros Kalemis–Alpha Card Services Inc. New Products » Dee Karawadra–Impact PaySystem » Rod R. Katzfey–Consultant Loyalty program, in spades ..................................................................73 » Allen Kopelman–Nationwide Payment Systems Inc. Cordless retrofi t for dial-up ...................................................................74 » Mitch Levy–Merchant Cash and Capital » Dan Lewis–AmeriBanc National Ltd. Inspiration » Douglas Mack–Payex » Paul Martaus–Martaus & Assoc. Turn negative thoughts into positive action .............................................77 » Biff Matthews–CardWare International Departments » Sonny McKinney–TransWORKS LLC » Tim McWeeney–WAY Systems Inc. » Justin Milmeister–Elite Merchant Solutions Forum ..................................................................................................5 » Patti Murphy–The Takoma Group Resource Guide ..................................................................................80 » Michael Nardy–Electronic Payments Inc. (EPI) » Steve Norell–US Merchant Services Advertiser Index .................................................................................94 » Michael Petitti–Trustwave Miscellaneous » Bill Pittman–SoundPOS LLC. » David H. Press–Integrity Payment Systems » Steve Rizzuto–TransFirst QSGS: Quick Summary Green Sheet......................................................8 » Charles W. Salyer–Ladco Leasing Inc. Bottom Lines .......................................................................................14 » Jeffrey I. Shavitz–Charge Card Systems Inc. » Lisa Shipley–Ingenico North America Water Cooler Wisdom ........................................................................77 » Dave Siembieda–CrossCheck Inc. » Rick Slifka–Exec-Links LLC » Anna Soloman–Fast Transact Inc. » Nick Starai–Network Merchants Inc. » Ted Svoronos–Group ISO » Stuart Taylor–Hypercom Corp. » Scott Wagner–GO DIRECT Merchant Services Inc. » Dan D. Wolfe–Teledraft Inc. 4 President and CEO: Paul H. 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Print Production: Hudson Printing Company Contributing Writers: Daniel Burrus ......................................................................office@burrus.com Tim Cranny ....................................................tim.cranny@panopticsecurity.com Jeff Fortney .......................................................................... jeff@clearent.com