Retailers

Merchants processing from 1 million to 6 million MasterCard transactions no longer have to meet a Dec. 31, 2010, deadline to have a third-party security assessor perform an onsite assessment of their payment networks for compliance with Payment Card Industry data security standards unless they want to do so voluntarily, according to a MasterCard spokesperson. This is a reversal from a policy MasterCard contained in an Aug. 17 Site Data Protection program document that would have required such so-called Level 2 merchants to pay for a qualified security assessor to audit their compliance by Dec. 31, 2010. Now MasterCard has moved the compliance deadline to June 30, 2011, and made the onsite assessment optional. Level 2 merchants will be required annually to complete a self-assessment questionnaire and perform quarterly network-security scans of their systems. Merchant employees completing the self-assessments must have completed Payment Card Industry Security Standards Council training and pass the council’s accreditation program, according to a MasterCard Dec. 15 Global Security Bulletin. The Aug. 17 summary of changes to MasterCard’s Site Data Protection program said the earlier change was designed to aid the “consistent application and implementation of [data security-standard] requirements.”

Element Payment Services Inc., a Phoenix-based independent sales organization, will use services from Trustwave, a Chicago-based payment-security company, as part of the ISO’s effort to improve payment security among its smaller merchants, Trustwave says today.

Ingenico S.A. will end 2009 with a better-balanced revenue model of products and services because of several moves the France-based point-of-sale terminal maker made this year, says Gil Luria, an analyst with Wedbush Securities in Los Angeles. In a research report, Luria says the completion of Ingenico's $426 million (292.2 million euros) acquisition of easycash Beteiligungen GmbH, a Germany-based payment processor, alters the balance in revenue between products, such as payment terminals, and services. "The integration of easycash will immediately create a 70/30 balance between products and services," Luria says, while Ingenico will continue to look for more recurring services and software revenue "both organically and through [mergers and acquisitions]." Ingenico will see growth in the United States, Brazil, China and India, Luria forecasts.

Concerns that payment networks will increase their fees to merchant acquirers in 2010 tops a recent survey published by Boston-based Aite Group LLC. In the survey of 45 merchant acquirers conducted between July and October, Aite found that 84% of respondents believe an increase in fees assessed by payment networks likely will happen in 2010. Concerns about increases in PIN-debit processing fees also were significant, with 78% saying that was likely. Overall interchange increases appeared likely in 2010 to 76% of the respondents. Seventy-one percent of respondents expected card networks to issue cards assessing higher interchange rates next year. A majority–64%–also maintained that rate increases for signature-debit transactions are likely. Sixty-nine percent of respondents said it is unlikely interchange will fall under government regulation in 2010. Most–82%–also doubted that card networks would begin to work directly with independent sales organizations instead of through acquirers in 2010.

Consumers are initiating more transactions online this holiday season, but the average ticket size is down, according to payment processor Chase Paymentech Solutions LLC. The Chase Paymentech Pulse Index, which samples a portion of the daily settlement activity of 50 of Internet Retailer’s Top 500 online merchants, reports that total online transactions from Nov. 5 through Dec. 13 were up 25.3% compared with the same period last year, while total purchase volume was up 14.7%. But the average ticket size was down 8.3%, to $53.74 this year from $58.62 last year. “We’re encouraged to see that overall e-commerce continues to grow,” Aaron Press, director of market analysis at Dallas-based Chase Paymentech, tells CardLine, adding that “a variety of forces” helped to drive down the average ticket size. “Promotional activity was very heavy in November, with discounts, free shipping and other deals. That, combined with economic conditions and the fact that consumer confidence is still tracking fairly low, is contributing to somewhat smaller transaction amounts,” Press says. Chase Paymentech, which estimates it processes some 50% of all online transactions, bases its findings on a fraction of the total number of transactions it processes.

CUNA MutualGroup officials expressed regret yesterday at this week's Massachusetts Supreme Court ruling that the major card brands' compliance processes provided an adequate remedy for credit unions that suffered huge losses in the BJ's Wholesale Club breach, reports Credit Union Journal, a PaymentsSource sister publication. "This is an unfortunate ruling and one which we, and likely our credit-union partners in this litigation, do not agree with," says Chuck Cashman, CUNA Mutual plastic card product executive. In its decision, the state's high court affirmed a lower-court ruling dismissing the multi-million dollar lawsuit by CUNA Mutual's CUMIS Insurance Society affiliate on behalf of 130 credit unions whose credit cards were breached in the 2005 hacking of BJ's Wholesale Club. The credit-union insurer had sued BJ’s for breach of a third-party contract, based on BJ's agreement with merchant acquirer Fifth Third Bancorp not to store customers's card magnetic stripe data. The lower court sided with BJ's, and the state's high court affirmed, saying the contract was exclusively between BJ's and Fifth Third. The credit union wanted BJ's to pay compensation for the millions it cost to replace credit cards that were breached by the hackers. Meantime, Pennsylvania State Employees Credit Union, which spent almost $100,000 to replace cards breached in the BJ's case, says it has ended its legal pursuit of claims against Fifth Third. Greg Smith, president of the $3.5 billion credit union, says the institution agreed to settle the case out of court but could not discuss the terms under the settlement. A group of hackers has confessed to the 2005 BJ&'s breach and others involving TJX Cos., Barnes & Nobles, Sports Authority , Hannaford Bros. supermarkets and Heartland Payment Systems", among others.

VeriFone Holdings Inc.’s efforts to drive payment card acceptance in taxis and at the gas pump appear to be paying off, VeriFone CEO Douglas G. Bergeron told analysts during a conference call this week discussing the point-of-sale terminal makers fourth quarter earnings.

As more consumers go online to make holiday purchases in November and December, so-called cybercriminals also increase their efforts to obtain consumer information fraudulently, observers say. The potential for data theft and increased attacks by fraudsters, however, does not deter many consumers from completing online transactions, according to recent survey data.

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A much-anticipated government report on interchange finally appeared Thursday - and hardly seemed worth the wait.

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Despite a revenue boost it attributed largely to its joint venture with Bank of America Corp., First Data Corp. reported a $288.9 million loss for the third quarter, 76% wider than the year-earlier loss.