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A group of payments industry consultants and executives has formed a trade association devoted to the "growth, development, and market adoption of Internet-based debit transactions and mobile-payment methods that meet or exceed the security standards for PIN-debit card-present payments," ATM&Debit News has learned.
The Secure Remote Payment Council insists it will not back one product over another, but instead will have a "laser focus" on the security of payments conducted online with PIN-debit cards and with mobile-based products, says Paul Tomasofsky, president of Montvale, N.J.-based Two Sparrows Consulting. Tomasofsky also is a member of the council's steering committee.
As Internet PIN-debit products such as Acculynk Inc.'s PaySecure continue to gain traction in the marketplace, the council's steering committee members believe a standard security-authentication process is needed regardless of the technology used to enable such card-not-present payments.
The organization will not be a standards-making body such as the Payment Card Industry Security Standards Council but instead will promote a set of best practices for companies that enable remote payments.
The details for various technologies used for Internet debit and mobile-based products may be getting in the way of concentrating on the security aspect of such transactions, says Mike Keresman, CEO, president and chairman of Mentor, Ohio-based Commercial Commerce Corp., which specializes in enabling authenticated payments, secure transactions and alternative payment brands for both e-commerce and mobile payments.
"You have significant debit traction in the United States, and abroad and no one seems to be addressing remote payments and making them safe [regardless] of the technology," says Keresman, who is also a member of the council's steering committee.
Alternative payments such as PayPal Inc. and Google Checkout that enable consumers to use debit cards to complete online transactions also need to be taken into account, Keresman says.
"You do have these payment methods out there that are using some form or credit or debit, and we're looking at the bigger picture of how to make payments safe," Keresman adds.
Reducing fraud tops the council's objectives. Fraudulent transactions accounted for 1.4%, or $4 billion, of the $145 billion consumers spent online in 2008, according to a MasterCard Advisors study cited by the council. Signature-debit cards are used in 30% of online transactions, the report says.
"[Those numbers] set up the metrics that support our strong feeling that we have a need for a council such as the one we are advocating," says Mike Strada, group manager of debit product at Chase Paymentech and also a member of the council's steering committee.
Financial institutions should be particularly interested in the council's efforts, says Julie Seville, vice president of product development for the Star electronic funds network.
"With new technology and the evolution of new technology, we have a great opportunity to stop fraud before the transaction starts," Seville says.
Though the rise of debit-based Internet products largely spurred the organization's formation, mobile payments also are steadily gaining ground in the marketplace.
"You throw mobile into the equation, and you have the challenge of protecting payment credentials on the phone," Keresman says.
Merchants that conduct a significant amount of business by remote means are "looking for answers [with security] that aren't being addressed by the traditional associations," Keresman adds.
The council's formation is still in preliminary stages, but it has a live Web site at www.secureremotepaymentcouncil.org.
Paul Turgeon, president of Payments & Processing Consultants Inc., identified the need for a council this year. As Turgeon reached out to various industry players that might benefit from such a council, he discovered interest was high after some initial doubts by some executives.
Annmarie Hart, CEO, president and chairman at MagTek Inc., initially believed finding support and moving the organization forward would be an "uphill battle."
But as the weeks went on, "we did the outreach and discovered more and more people really did understand the message and said they felt there was a need," Hart says. The council plans to have a board of directors in place by 2010.
"We want to hold regional meetings throughout the first quarter, probably three, to discuss the issues and our organization with interested parties," says Ronald Congemi, former senior vice president of strategic industry relations of First Data Corp.
The committee believes the organization will garner interest from merchants, financial institutions, merchant processors, issuer processors, payment-brand companies, payments-authentication hardware and software providers and payments consultants. ATM
