Transaction Trends April 2014 by Content Communicators, LLC

EXCLUSIVE: TRANSACT 14 ON-SITE PROGRAM INSIDE!

Transaction trends The Official Publication of the Electronic Transactions Association

| April 2014

Beyond

EMV

for Security

Inherent limitations prompt serious consideration of other security solutions

ALSO INSIDE: Special! TRANSACT 14 Keynote Preview Fraud Trends & CrossBorder E-Commerce Startup Stories: PII Focus for CSR

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343 14

Transaction trends The Official Publication of the Electronic Transactions Association

Vol. 19 | No. 3

FEATURES

10 Beyond EMV for Security By Julie Ritzer Ross Adoption of the EMV standard in the United States will help secure card transactions at terminals in-store, but this approach alone is not enough to prevent breaches. A multilayered strategy that includes tokenization and encryption is essential for top security, say experts.

International Ops

A Chat With the Change-Makers

52 S PE C I A L S E RI E S

By John Manasso With cross-border e-commerce expected to hit $1.4 trillion by 2015, it’s clear that more merchants are pushing their products on a global basis. Experts from the CBEC Council share international payments trends and fraud considerations.

By Brian Ochalla VeriFone’s Paul Galant, Visa’s Elizabeth Buse, and Google Payments’ Ariel Bardin offer Transaction Trends readers an exclusive preview of the keynote speeches they will deliver at TRANSACT 14: Powered by ETA.

By John Manasso CSR’s data compliance solutions are designed to assist clients in going beyond PCI standards to secure personally identifiable information.

16 The Fraud Side of

Page 25

SPECIAL:

TRANSACT 14 On-Site Program Inside! See page 25 for everything you need to know to navigate TRANSACT 14: Powered by ETA.

departmentS 4

ETA Gateway

Industry News

Insights from ETA’s CEO, Jason Oxman Trends, strategies, and news in the payments business and ETA member community

Startup Stories: Private Practice

55 Ad Index 56 The Last Word

TRANSACT 14 programming reflects ETA’s emphasis on protecting the industry.

Transaction trends | April 2014 3

ETA Gateway

Welcome to THE Gathering Place to Make Connections With the Biggest Players in Payments

elcome to TRANSACT 14: Powered by ETA! Thank you for joining thousands of your industry peers representing 1,000 companies from 24 countries here in Las Vegas for the most important payments industry event of the year. While you are here, you’ll benefit from three full days of speakers from the world’s top payments and technology companies, a show floor full of the latest innovations, and unlimited industry networking opportunities. Together, we are making history at the inaugural TRANSACT show, ETA’s biggest and best event to date. TRANSACT connects thousands of payments and technology industry executives, venture capitalists, and media to experience the next generation of innovation in payments.TRANSACT 14 includes an expanded selection of educational opportunities with eight conference tracks, Editorial Policy: The Electronic Transactions Association, founded in 1990, is a not-for-profit organization representing entities who provide transaction services between merchants and settlement banks and others involved in the electronic transactions industry. Our purpose is to provide leadership in the industry through education, advocacy, and the exchange of information. The magazine acts as a moderator without approving, disapproving, or guaranteeing the validity or accuracy of any data, claim, or opinion appearing under a byline or obtained or quoted from an acknowledged source. The opinions expressed do not necessarily reflect the official view of the Electronic Transactions Association. Also, appearance of advertisements and new product or service information does not constitute an endorsement of products or services featured by the Association. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided and disseminated with the understanding that the publisher is not engaged in rendering legal or other professional services. If legal advice and other expert assistance are required, the services of a competent professional should be sought. Transaction Trends (ISSN 1939-1595) is the official publication, published eight times annually, of the Electronic Transactions Association, 1101 16th St. N.W., Suite 402, Washington, DC 20036; 800/695-5509 or 202/828-2635; 202/828-2639 fax. POSTMASTER: Send address changes to the address noted above. Copyright © 2014 The Electronic Transactions Association. All Rights Reserved, including World Rights and Electronic Rights. No part of this publication may be reproduced without permission from the publisher, nor may any part of this publication be reproduced, stored in a retrieval system, or copied by mechanical photocopying, recording, or other means, now or hereafter invented, without permission of the publisher.

4 April 2014 | Transaction trends

increased trade show floor hours, and networking events that connect you with current and future customers and partners. Don’t miss keynotes from industry leaders,Visa’s Elizabeth Buse,VeriFone’s Paul Galant, and Google’s Ariel Bardin, who will provide you with insight into the future of payments and the opportunities that await you (see page 22).TRANSACT 14 culminates in the biggest networking party in payments, the TRANSACT Party at the Shark Reef Aquarium at Mandalay Bay.All of these enhancements showcase technical innovations in payments, ramp-up training for those new to payments, and provide a stage for networking and partnerships. From startups to industry giants, TRANSACT 14 is by far the best outlet to showcase payments industry products and services. More than 200 marquee brands from across the payments and technology industry will unveil their latest innovations on the show floor.The expanded Mobile Pay Zone will feature exhibitors that are leaders in the mobile payments sector. The Payments Next Zone will showcase innovative startups seeking to launch

payments technology to serve global customers.A grant from the Bill & Melinda Gates Foundation is funding the $50,000 E-Pay Innovation Award for the most innovative startup in the Payments Next Zone. More than 150 new companies have become ETA members in the last year, recognizing the value of participating in ETA all year long. ETA now represents the nation’s largest and most successful ISOs, acquirers, processors, and financial institutions, as well as the nation’s largest mobile network operators, technology companies, equipment manufacturers, security providers, and apps companies. Given the rapid changes and challenges facing our industry, I encourage you to take advantage of your ETA membership by engaging in our education, policy, and industry activities to help grow your business. Thank you for being a part of ETA’s continued success. Kind Regards, Jason Oxman Chief Executive Officer Electronic Transactions Association

Electronic Transactions Association 1101 16th Street NW, Suite 402 Washington, DC 20036 202/828.2635 www.electran.org ETA CEO Jason Oxman COO Pamela Furneaux Director, Education and Professional Development Rori Ferensic Director, Membership and Marketing Del Baker Robertson Director, Communications Meghan Cieslak Publishing office: Stratton Publishing & Marketing Inc. 5285 Shawnee Road, Suite 510 Alexandria, VA 22312 703/914.9200; fax 703/914.6777 Subscriptions: 202/677.7411

Publisher Debra Stratton Associate Publisher & Editor Josephine Rossi Managing Editor Lia Dangelico Editorial/Production Associate Christine Umbrell Art Director Janelle Welch Contributing Writers Lia Dangelico, John Manasso, Bryan Ochalla, Julie Ritzer Ross, and Scott Talbott Advertising Sales Linda Baker Advertising Sales Manager Phone: 703/964.1240, ext. 13 Fax: 866/466.9187 Lbaker@conferencemanagers.com Alison Bashian Phone: 800/335.7500 Fax: 440/232.0398 alisonb@strattonpublishing.com

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INDuSTRYnews Report: U.S. Mobile Payment Landscape in Flux

Apps Will Power Mobile Payments Adoption Apps will drive widespread adoption of mobile payments services, according to a SAP survey focused on mobile commerce and mobile operator services. Respondents included mobile operators, fixed telecommunication providers, over-the-top players, and other global mobile industry executives. The majority of respondents, 52 percent, cited credit cards as the most secure payment option, followed by mobile payments (20 percent), and near-field communication (15 percent). However, they were divided on who should be creating and running mobile payment networks. More than a quarter said banks, followed closely by existing online payment providers such as PayPal and iTunes (25 percent). Nineteen percent said a consortium of operators would be best, while 17 percent believe credit card schemes/ issuers and social networks are in the best position to provide a successful mobile payments platform.

Interest in mobile wallets is high but adoption is still low, according to a report from Yankee Group, as just 16 percent of mobile device owners reported using their phone to make an in-store payment in the last quarter of 2013. With many companies vying for a position in the U.S mobile payments landscape much remains uncertain, and the report stresses the need for a long-term vision within the industry for survival. Other key findings include: n PayPal is a leader in the mobile wallet race, with 15 percent of consumers having used its application in the past month to make an in-store transaction. n P rioritizing integration with smalland medium-size businesses’ POS systems can lead to near-term adoption. Smaller merchants see greater value in third-party wallet solutions as compared to their upmarket counterparts.

info GRAPH Prepaid To Dominate U.S. Online Payments Into 2018 32% 15%

6% 41%

Prepaid/Gift Card Online alternative payments Major credit card

Store-branded credit card Debit card

Source: Javelin Strategy & Research, Online Retail Payments Forecast 2013-2018 Report

6 April 2014 | Transaction trends

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Most consumers don’t believe that organizations are committed to keeping their personal and financial data safe, according to a new“snap”poll by HyTrust Inc. Roughly 73 percent of nearly 2,000 respondents answered “no” to the question:“Do you really believe organizations care about your private data and keeping it safe and secure?”

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with Lead Dolphin that offers clients of both companies a totally integrated solution that includes member acquisition, engagement, billing, and retention. AnywhereCommerce’s mPOS appliance for chip-card and magnetic stripe card acceptance, Nomad 2.0, has been certified PCI PTS 3.x and Secure Reading and Exchange of Data compliant. Apriva announced it received a U.S. patent for wireless encryption technology. CHARGE Anywhere debuted its white-label, EMVready mPOS platform at the 2014 Mobile World Congress in Barcelona, Spain. EVO Payments and MagTek Inc announced a security agreement to leverage MagTek’s security software and hardware-based solutions for EVO’s merchant network. First Data announced it signed a long-term extension with International Bank of Commerce for merchant services and payment solutions. Gemalto developed an online banking security site for Dutch online-only retail bank Knab. Heartland Payment Systems hired Michael McMillan as chief branding officer, and broke ground on its new office in Edmond, Oklahoma. Ingenico is partnering with Samsung to offer merchants an integrated mobile payment system. Integrity Payment Systems released its new push notification service allowing clients to receive credit card processing information by text or email. Leaf named Sarah McCrary COO; Chad Kelly,VP of finance; and

Dan Smith, VP of engineering; and moved into a new office in Cambridge, Massachusetts. Merchant Warehouse received a Gold Stevie Award in the Customer Service Management Team of the Year category from the Stevie Awards for Sales & Customer Service. ROAM launched a new chipand-PIN solution through its RP750x mobile card reader. SecureBuy announced the creation of a frictionless payment-fraud solution for mobile and online card-not-present payment processing. SecureNet has introduced comprehensive new features to help merchants track and manage their inventory across all sales channels. ShopKeep POS announced it has reached 10,000 customers and is expanding both in the U.S. and internationally with two new locations on the West Coast and in Ireland. TransFirst now offers its merchant clients ControlScan’s SmartSAQ PCI compliance validation tool. TSYS announced it renewed its longstanding partnership with client Commerce Bank. USAePay released a new mobile payment application serving Infinite Peripherals mobile peripheral devices, which is available in the iTunes App Store. VeriFone Systems won the 2014 Merchant Payments Ecosystem Award in the mPOS category at MPE 2014 in Berlin. WorldPay is partnering with e-document solution provider Anachron to enable merchants to pay e-invoices in real-time.

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News from the association

ETA Praises Attorney General Holder’s Call for Data Breach Notification Standard

“ETA applauds Attorney General Holder for recognizing the importance of a uniform national data breach notification standard,” ETA CEO Jason Oxman said in a recent statement. “Currently, there is a patchwork of 46 separate state data breach laws with which retailers and the payments industry must comply, making uniform alerts virtually impossible. A uniform national standard would protect consumers by providing reasonable and effective notification requirements. Consumers and businesses would have a common and consistent expectation of breach procedure, and company time and resources could be devoted to innovative security solutions to protect against new threats.” “As the trade association of the payments industry, the Electronic Transactions Association (ETA) recognizes that protecting the personal financial information of consumers is a responsibility shared among the payments processing industry, retailers and financial services industry. We recently joined with 14 leading retail and financial services trade groups in a partnership to ensure that our shared infrastructure is secure.”

CALENDAR: 2014 ETA Strategic Leadership Forum The Breakers Palm Beach, FL October 7-9, 2014

TRANSACT 15: Powered by ETA Moscone Center San Francisco, CA March 31-April 2, 2015

New Members

ETA is pleased to welcome the following companies to its membership.To inquire about a membership with ETA, please contact Del Baker Robertson, director of membership and marketing, at dbaker@electran.org. AdvoPay Fishers, IN www.advopayment.com

Galitt US San Mateo, CA www.galitt.com

Powa Technologies Inc. London, England www.powa.com

AZT POS Pustin, CA www.aztpos.com

GET Bankcard Svcs. SenorPay LA LLC Montebello, CA

RevealSoft Atlanta, GA

Girmiti Software Pvt Ltd. Bangalore, India www.girmiti.com

SecuTrans Bankcard Svc. Markham, Ontario, Canada www.secutrans.ca

Global Collect Services USA San Francisco, CA

Springbrook Software Portland, OR www.sprbrk.com

Baker & Hostetler, LLP Cincinnati, OH www.bakerlaw.com Class Action Refund LLC Harrison, NY www.classactionrefund.com Cornerstone Credit Services Anchorage, AK www.cornerstonecredit.net Cornerstone Funding Irvine, CA www.cornerstonefunding.com Encompass Consulting Group LLC Lenexa, KS www.encompasscg.net Excentus Corp. Dallas, TX www.excentus.com

Griffin Technology Nashville, TN www.griffintechnology.com Host Merchant Services Newark, DE www.hostmerchantservices.com Merchant Club of America Irvine, CA http://merchant-club.com/ Merchant Processing Services LLC Irvine, CA

STRADA Capital Laguna Hills, CA www.stradacapital.com Tarang Software Technologies Bangalore, India www.tarangtech.com Trident Merchant Services Southern Pines, NC www.tridentmerchantservices.com

POPcodes.com Calgary, Alberta, Canada www.popcodes.com

Transaction trends | April 2014 9

[ COVER STORY ]

Beyond for Security

Industry ponders a multilayer approach, including tokenization and P2PE, to solve payments security issues

By Julie Ritzer Ross

ince news of the Target Corp. and Neiman Marcus data breaches broke late last year, migration to more secure chip technology—specifically, technology that conforms to the Europay, MasterCard, and Visa (EMV) standard—has been touted by some as the

answer to securing the U.S. payments infrastructure. But many payments industry professionals believe EMV adoption alone would not have shielded Target from data compromise.

10 April 2014 | Transaction trends

d EMV KEY NOTES 8 Experts say EMV technology would not have prevented recent breaches for a variety of reasons, including because the stolen information was not directly taken from the physical cards.

8 Tokenization has been currying favor among merchants because the formatting of tokens does not require retailers to radically alter their payment acceptance systems.

8 The selling point of P2PE is that it secures and encrypts data from hardware-to-hardware, rather than software-to-software as with traditional E2EE.

Transaction trends | April 2014 11

[ COVER STORY ] “The EMV chip is an extremely effective method of reducing counterfeit and lost/stolen card fraud in a face-to-face payments environment,”Troy Leach, lead security standards architect for the Payment Card Industry (PCI) Council, wrote in testimony presented at congressional hearings last month in the wake of the Target and Neiman Marcus incidents. However, “protection…requires more than just EMV technology.” EMV technology would have proven insufficient to prevent the breaches, according to industry experts, primarily because third-party malware, which was found to be the catalyst that opened the floodgates to Target’s database, was seeking account information in the memory inside pointof-sale devices, where data are unencrypted. “The criminals would have been able to obtain this information even if it had come from chip-and-PIN cards since the stolen information was not directly taken off the cards themselves,” says Ricardo Villadiego, CEO of fraud monitoring systems provider Easy Solutions. EMV’s inability to preclude the introduction of malware and subsequent exfiltration of cardholder data is only one of many reasons it could not have prevented the Target breach. Sources also cite several other reasons why EMV adoption cannot be considered the ultimate weapon against future occurrences:

EMV does not have a true security focus. “EMV is not the total answer to the data breach problem because it is more focused on the prevention of counterfeit card production than on securing the passage of data,” says Michael Gokturk, CEO of Payfirma, a payment processor and Cloud payment platform provider.

EMV will not necessarily see widespread adoption in the United States. October of 2015 remains the date by which liability for fraudulent transactions shifts from issuers to merchants if the latter do not process at least 75 percent of their transactions on an EMV-enabled platform. However, many merchants have been reluctant to bear the cost of replacing legacy payment processing technology with its EMV counterpart. A contin12 April 2014 | Transaction trends

NFC, Biometrics, and Data Security Not long after experiencing a major data breach that raised consumer ire and sent holiday sales plummeting, Target Corp. announced its decision to accelerate the implementation of POS equipment that conforms with the Europay, MasterCard, and Visa (EMV) standard. Other merchants also are considering doing so ahead of Oct. 1, 2015, when liability for fraudulent credit card transactions shifts from issuers to merchants if the latter do not process 75 percent of their transactions with EMV-compliant hardware. “Because EMV holds what is seen as the benefit of increased security—even if it protects only card-present data—some merchants are getting excited about it,” says a spokesperson for Isis. “And there’s the expectation that installing the necessary EMV hardware will encourage them to also bring in the contact readers they need to accept mobile payments, which some consumers think are a safer option than traditional payments. So, EMV could essentially push near-field communication adoption.” Meanwhile, technologies other than tokenization and point-to-point encryption (P2PE) are said to hold promise for card data security, as well as for devaluing data and/or making it useless to perpetrators even if it is stolen. Some vendors reportedly are investigating means of improving authentication solutions that ascertain that any individual who attempts to access card data or a card account is who he or she claims to be. The newest technology for authenticating users is biometrics that transcends the fingerprint scanners found in iPhones. “It includes voice biometrics, as well as what is called ‘location proximity’—which determines, if a card is being used in a specific location, whether the cardholder also is in that location in real time,” explains Pat Carroll, founding partner and executive chairman of security solutions provider ValidSoft. This type of technology, Carroll says, already is being deployed by end-users like FICO, which provides the transaction risk engine to most banks and issuers.

ued hesitancy among many consumers to request or pay for chip-and-PIN cards also is fueling retailers’ and some issuers’ reluctance to migrate. “The U.S. is pretty wedded to its chipand-signature and magnetic stripe-andsignature technology, and we cannot underestimate the impact of the size and cost of the task required to switch,” says Steve Durbin, global vice president, Information Security Forum.

EMV works only in card-present payment environments. EMV is not effective in card-not-present (CNP) environments; there are no provisions for consumers making purchases online to enter a PIN number to complete a transaction, or for the scanning of chips em-

bedded in their credit cards. By most estimates, two thirds of credit card breaches are linked to CNP transactions. Even nations where EMV adoption has occurred have experienced incidents involving card data compromise. Colombia represents a case in point: Local police there reported a 25 percent increase in card-cloning between 2012 and last year. “Some merchants continue to process transactions by swiping the magnetic stripe instead of using EMV-compliant technology,” says Mike Weber, managing director of the Coalfire Labs division of independent IT governance Coalfire Systems. “This makes EMV cards as vulnerable to cloning as non-EMV cards.” There are other inherent weaknesses

in EMV technology that have the potential to be exploited in fraud attacks. For example, EMV cards will continue to have magnetic stripes for backward compatibility, and numbers will be printed on cards to enable CNP transactions. Consequently, there is the continued possibility of hacking, and the use of EMV data for nefarious purposes. In addition, EMV offers a limited security scope: The technology does not encrypt primary card account numbers (PANs) at the point of sale. Rather, PANs “are stored and transmitted in the clear, where they are vulnerable to fraudsters,” says Erik Vlught, vice president, product marketing, VeriFone. Similarly, EMV offers no protection for other data associated with cards, such as personally identifiable information (PII), bank account information, and Social Security numbers. Finally, chip-and-PIN card systems incorporate failover mechanisms that, by essentially reverting to the magnetic stripe, allow a transaction to be completed if authentication does not work. “Perpetrators can effortlessly cause the chip to fail; all it takes is placing a piece

of tape over it,” explains Deena Coffman, chief executive officer of Scottsdale, Arizona-based IDT911, a data breach management and consulting firm. Coffman adds that detecting the presence of illicitly placed credit card skimmers on EMV-compliant card processing hardware is far more difficult than doing the same on traditional equipment. That chip-and-PIN systems have power supplies only makes them easier to beat: Individuals planting skimmers need not return to the devices to collect the desired data. Rather, the data can be transmitted from compromised systems to hackers in electronic mode. Some industry experts also warn it is possible for perpetrators to capture data on EMV cards. More than one proof of concept “has been demonstrated against the EMV system,” underscoring the viability of this claim, says Richard Henderson, a security strategist in the FortiGuard Labs arm of network security solutions provider Fortinet.

Multilayered Security While EMV can be extremely effective in

securing card transactions executed at terminals in-store, its limitations are leading industry experts to investigate other data security elements. One such element is tokenization, which protects card data by replacing the PAN with a “token”—either a unique, randomly generated sequence of numbers and alphanumeric characters, or a combination of a truncated PAN and a random alphanumeric sequence. Tokenized data cannot be decrypted without a special key, rendering it of no value to hackers. “Among the key benefits of tokenization is that it allows payment card numbers to be separated from systems and repositories where they aren’t applicable, such as those used for sales analysis,” says Terrence Spies, chief technology officer of Voltage Security, a provider of encryption and other data masking technologies. “Cardholder data can be reused without being stored and secured on the merchant’s system.” Tokenization also has been currying favor among merchants because the formatting of tokens occurs in much the same way as the formatting of card information. Consequently, there is no need

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[ COVER STORY ] for retailers to radically alter their payment acceptance systems.This is not the case with EMV, sources explain. Additionally, tokenization holds potential and appeal for the mobile wallet segment. Operators might leverage singleuse tokens as alternatives to actual debit and credit card numbers, issuing them to consumers to store in their virtual wallets. Consumers would then use the tokens to pay for goods and services, as with “real” payment cards, while merchants would be able to complete transactions without touching or storing true PAN data. Not surprisingly, the tokenization space has recently seen increased activity. The Clearing House Payments Company (TCH), which represents 22 of the world’s largest banks and whose owners include Bank of America, Citibank, Capital One, and JP Morgan Chase, has teamed up with member banks to determine how to apply tokenization in the online and mobile payment segments.TCH is reportedly promulgating the creation and use of a common standard that would allow tokenization to be consistently implemented throughout the payment landscape. Meanwhile, the Cryptographic Tools Group of the X9 Standards Body, whose responsibilities encompass the development of cryptographic standards for the financial services industry, is attempting to create tokenization standards for the U.S. payments industry. “We are concentrating on coming up with standard tokenization definitions and processes for generating and validating tokens,” Spies says.“So far, reaction from all sides to the idea of having these in place has been very positive.” For its part, EMVCo, an entity owned by American Express, MasterCard, Visa, and three other credit card brands, plans to configure a tokenization standard that would secure credit and debit card transactions originating from smartphones and tablet computers as well as those initiated online. In a blanket statement issued in January, EMVCo said the standard would complement existing smartcard EMV specifications and set forth “a consistent approach to identify and verify the valid use of a token during payment processing, including authorization, capture, clearing, and settlement.” 14 April 2014 | Transaction trends

Elsewhere on the tokenization front, Paymetric, a provider of integrated payment processing and tokenization platforms, is promulgating a shift from processor tokenization platforms to proprietary tokenization platforms.“For merchants, going with a processor’s platform means being tied to that processor,” says Asif Ramji, chief executive officer. “This is not an ideal position to be in.” Ramji believes large merchants will embrace tokenization first, with small- and mediumsized business retailers following suit as they attempt to shore up their defenses against data breaches.

to reduce the scope of their PCI DSS assessments by implementing a validated and PCI-listed P2PE solution for accepting and processing payment card data. To qualify for validation and a listing on the website, a P2PE solution must comply with the PCI SSC P2PE Standard, encrypting cardholder data from the point where a merchant device accepts the payment card (for example, at the point of swipe or dip) to the point where the third-party payment processor or acquirer decrypts the data for processing. Solutions from European Payment Services and Ingenico currently appear on the

“Security is all about building layers and layers of security—not to mention intrusion prevention and detection... Merchants cannot take shortcuts.” -Perry Kramer, Boston Retail Partners Another alternative to EMV is point-topoint encryption (P2PE), wherein cleartext data is eliminated from the merchant network and point-of-sale system through encryption at the point of capture by the card reader prior to passing through a secure payment gateway to the bank or processor.“The distinction and selling point of P2PE is that it secures and encrypts data from the merchant network and POS system, from hardware-to-hardware as opposed to from software-tosoftware,” as with traditional end-to-end encryption, says Chris Kronenthal, chief technology officer of payment platform provider FreedomPay. Software-to-software encryption leaves room for malware installation, Kronenthal says. Last November, the PCI Security Standards Council (SSC) announced the availability of its Validated P2PE Solutions Listing on the PCI SSC website. The PCI Validated P2PE Solutions Listing is the next step in the rollout of the council’s P2PE program, developed with input and feedback from the council’s global stakeholders.The program provides a method for vendors to validate their P2PE solutions and applications, and for merchants

roster.A number of other solutions validated by P2PE assessors are under review.According to Kronenthal, FreedomPay will be the first North American company to offer a PCI-certified P2PE payment platform. Constituents throughout the electronic payments industry are calling for a layered approach to security that incorporates EMV, tokenization, and P2PE encryption alike. “Tokenization and encryption are highly complementary; both layers are essential,” says Barry McCarthy, president, financial services, First Data. “Encryption mitigates security weaknesses that exist when card data has been captured, but not yet authorized. Tokenization addresses security vulnerabilities after a transaction has been authorized.” “Security is all about building layers and layers of security—not to mention intrusion prevention and detection,” says Perry Kramer, vice president of retail industry management and strategy firm Boston Retail Partners. “Merchants cannot take shortcuts.” TT Julie Ritzer Ross is a contributing writer to Transaction Trends. Reach her at jritzerross@gmail.com.

[ FEATURE ]

The

FraudSide of International Ops Members of the Cross-Border E-Commerce Council discuss the market and risk

By John Manasso

KEY NOTES 8 Cross-border e-commerce reached $300 billion in 2012 and is expected to hit $1.4 trillion by 2015. Global online trade sales figures have increased 19 percent.

8 Fraudsters are focusing on countries where Three-Domain Secure protocol is not fully embraced by consumers; in Western Europe because of the economic downturn; and in a number of African countries.

8 Experts advise ISOs and acquirers to partner with local providers, with local knowledge and language skills, to optimize the solutions they offer their merchants.

olf Visser is among those who are trying to change attitudes on a subject that might have once caused eyes to glaze over. About two years ago,Visser, the vice president of global marketing for Payvision,

helped to start a group, the Cross-Border E-Commerce (CBEC) Council, on a subject that is near and dear to his heart. “If you think about cross-border e-commerce, especially in the U.S., in the beginning there was, ‘Oh, there’s the interchange fees. It vaporizes your margins, so you really don’t want to do (it),’” he says.

16 April 2014 | Transaction trends

[ FEATURE ] “A number of African countries remain at the top of the list for fraud, and ReD’s merchant base has seen fraud originating especially from IP addresses in Nigeria, Ghana, and Morocco.”

range of perspectives—from meAccording to the CBEC Council webdia and bloggers to opinion leadsite, in 2012 cross-border e-commerce ers—Visser realized that there was reached $300 billion and is expected to abundant interest in cross-border hit $1.4 trillion by 2015.The site also says e-commerce (more commonly rethat global online trade sales figures have ferred to as “international opportuincreased 19 percent each year and that nities” in the United States). this year 580 million online shoppers will Each quarter, the CBEC Counpay for and purchase products and sercil website posts a whitepaper on vices from their smartphones or tablets. a certain topic of interest. It also One example of a large international has country profiles with facts and market that appears poised for growth figures, preferred payment methin the payments industry is Brazil, acods, risk and fraud information, cording to Tristan Hugo-Webb, an asand laws and legislation affecting sociate director, International Advisory e-commerce. Service at Mercator Advisory Group. By pooling their knowledge, ex“Soon the world’s attention will perts in the sector are finding ways turn to Brazil as the country prepares to make it profitable. to host two of the world’s premier ath“Everything is opening up,”Vissletic events, the 2014 FIFA World Cup er says. “The obstacles that hinder and Rio 2016 Games, the XXXI Olympic —John Lees, ReD cross-border expansion are being Summer Games in August 2016 in Rio de explored. The payment methods, Janeiro,” Hugo-Webb wrote in a recent report. “While the press and public focus on these events, the logistics, regulations, risk and fraud.You name it—the barthe maturity of the Brazilian payments system will go largely riers, which can be rather challenging to overcome in a way.” unnoticed except by the payments industry.The Brazilian payments market has emerged as a leading player not only in the Fraud Trends Latin American region but around the world.” Understanding the risk and fraud aspect in particular can be chalThe CBEC Council’s vision for exploring such new mar- lenging for those getting their feet wet in CBEC. But there is a kets is collaborative. By listening to and observing a wide general pattern of how fraud apriva_city_transaction_trends_half_pg_horz_ad_2014_v1.0_printer.pdf 1 2/7/14 11:19 AM spreads around the world, according

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[ FEATURE ]

to John Lees, vice president of sales, North America, at ReD, which specializes in risk and fraud prevention. “So what we’re able to see is fraud trends developing and then moving from one side of the world to the other,” Lees explains. “And typically what you’ll find is they start off perhaps out in sort of the APAC (Asia and Pacific) regions and move in through Europe and out across to the (United States). So on more than one occasion, we’ve been able to identify fraud before it even hits. I think that’s a big plus in this fight against fraud.” ReD has offices all over the world: Beijing, Australia, South Africa, Brazil, and in North America. Lees says those offices comprise not only sales and support staff but also risk analysts who help to identify the newest fraud trends. How much of an obstacle is fraud to the expansion of CBEC? Lees explains the different dynamics between fraudsters and those trying to stay ahead of them: Think of the movie “Catch Me If You Can,” as Tom Hanks’ FBI agent character travels the United States trying to apprehend Leonardo DiCaprio, whose character possesses a genius for forging bank checks. These days, such an image is long outdated. “The fraudsters have got a little bit of an advantage over the merchants and the companies that fight fraud,” Lees says. “[They] don’t have to go to board meetings and get budgets approved [or] organize by committee. …They keep probing to see if there are any opportunities to develop fraud potential, ways for them to make money.The most important thing is for them to monetize that fraud as they see it. So they’re trying in all the different locations, and once they find an opportunity, then they maximize that as much as they can. So it won’t just sort of be one fraud and they leave, and then in six months they hit it back again. “They identify a gap and then dive in and get as much 20 April 2014 | Transaction trends

One challenge for risk and fraud is that CBEC has grown by an annual compounded rate of 23 percent a year, ...meaning that fraudsters don’t even need to grow to make a killing.

out of that weakness as they possibly can. There’s a number of websites that promote these windows of opportunity for the fraudsters. So it’s not just one person you can find. The fraudsters will group together to maximize the opportunity. So it’s very important we’ve got coverage across the globe to identify that.”

Knowing the Risk As business goes online, a spike in online fraud follows it, says Felicity O’Brien, director of global marketing at ReD. One challenge for risk and fraud is that CBEC has grown by an annual compounded rate of 23 percent a year, according to the CBEC Council website, meaning that fraudsters don’t even need to grow to make a killing. They just have to continue to prey on their victims at the same rate, or even less, each year. “And the risks of fraud and e-commerce are higher as you go across borders,” she says. “So although businesses are seeing a great deal of opportunity for cross-border e-commerce, and we have a lot of evidence of merchants increasing their

cross-border activity—the revenue opportunity is very significant—the risks of doing business across borders are higher. So, it’s very important that merchants, as they look to expand, are thinking about and getting a good understanding of the differences between the countries in which they’re hoping to do business.” ReD sees fraudsters focusing on those countries where the Three-Domain Secure, or 3-D, protocol is not fully adopted or not fully embraced by consumers. MasterCard SecureCode, according to the MasterCard website, “uses the 3-D Secure protocol as the framework to deliver cardholder authentication capabilities at the e-commerce point of interaction.” It is “deployed as a static password solution that requires each cardholder to register for the service and authenticate himself or herself for every transaction,” the website says. “When implemented properly, this approach has proved effective in combating fraud.” Lees reinforced that message. “In the last couple of years, we have also seen an increase in fraud in some Western European countries that have suffered particularly badly from the economic downturn and a rise in unemployment levels,” he says. “A number of African countries remain at the top of the list for fraud, and ReD’s merchant base has seen fraud originating especially from IP addresses in Nigeria, Ghana, and Morocco.” As e-commerce crosses borders, merchants tend to have less information or, as O’Brien puts it, “less of a good understanding of people buying from you.”A merchant is more inclined to be able to ferret out a real delivery address when working domestically than when working with a foreign transaction. The same is true of IP and email addresses. For ISOs and acquirers interested in exploring CBEC with their merchants, Lees says some markets require a local acquiring presence, for regulatory reasons or to secure interchange reductions. “It is important that ISOs and acquirers consider partnering with local providers, with local knowledge and language skills, to optimize the solutions they can offer to merchants.” Having an understanding of consumer payment preferences and buying behaviors also factors into risk and fraud strategies when it comes to CBEC. Lees calls it “crucial for effective fraud prevention.” “Fraud strategies and rules need to be tailored to different payment methods and channels,” he says.“Merchants and acquirers need to understand these consumer preferences if they are to expand successfully— offering only card payments in Germany, for example, would seriously restrict the size of the market available to the merchant.” TT John Manasso is a contributing writer to Transaction Trends. Reach him at john_manasso@ yahoo.com. Transaction trends | April 2014 21

[ FEATURE ]

A Chat With the

Change-Makers TRANSACT 14’s keynote speakers share their thoughts on the future of the payments industry By Bryan Ochalla

hen TRANSACT 14: Powered by ETA kicks off on Tuesday, April 8, in Las Vegas, it will do so accompanied by the voices, insights, and expertise of a trio of the payments industry’s top executives. Leading the charge as keynote speakers for this

innovation-focused event will be Elizabeth Buse, executive vice president of global solutions at Visa; Ariel Bardin, vice president of product management for Google Payments; and Paul Galant, chief executive officer of VeriFone. Transaction Trends recently spoke with each of these individuals, who offered a sneak peek into their keynote speeches. Below, Galant, Buse, and Bardin share their insights on the state of the payments industry, and offer advice on how to keep up with the changes surrounding the profession.

22 April 2014 | Transaction trends

Paul Galant was recently named VeriFone’s chief executive officer. Prior to joining VeriFone, he served as the chief executive officer of Citigroup Inc.’s Enterprise Payments Galant business, where he developed innovative digital payments services for that company’s institutional and government clients. Before that, Galant was chief executive officer of Citi Cards, heading Citigroup’s North American and International Consumer Credit Cards business.

Elizabeth Buse, Visa’s executive vice president of global solutions, is responsible for i m p l e m e n t i n g, managing, and growing V isa’s wide range of solutions, including Buse those for digital channels, processing services, and information products. She also is responsible for its merchant sales and solutions, such as CyberSource.

As Google Inc.’s vice president of product management, Ariel Bardin is responsible for produc t strategy and business development related to the company ’s Google Bardin Payments division. Among the products he oversees: those that allow Google properties to accept payments, third-party merchants to accept Google Wallet, and consumers to use Google Wallet online and in the real world.

Transaction Trends: What message will you be sharing during your keynote address at TRANSACT 14? Paul Galant: There is an exciting evolution underway. I think the coming decade will be the most dynamic and important in the history of payments. Business models, technology, and consumer behaviors are changing. Electronic payments, digital commerce, predictive analytics, and mobility are converging, along with contextual marketing, digital advertising, couponing, loyalty, and social media. The opportunities to enable magical new commerce experiences for consumers and more meaningful interactions between brands, merchants, and their customers are endless. Yet, the pace of scale evolution from payments to commerce remains slow. Merchant adoption of mobility remains low in comparison to analyst predictions. Great ideas and promising new technologies have so far failed to reach scale. Also, growing concerns over the security of consumer data threaten to undermine the pace of evolution. As the physical point of consumer and merchant interaction, VeriFone delivers a core industrial secure infrastructure that enables consumer-to-merchant payments in more than 150 countries. Our goal is to extend our secure payments infrastructure to power the entire value chain of great omnichannel consumer shopping experiences. My keynote session will address these observations as well as the obstacles and the opportunities for all industry participants to work together, create value, and succeed by enabling the next generation of commerce.

Elizabeth Buse:

I’m going to spend a fair amount of time talking about marketplace trends driving innovation across our industry, and the learnings we’re applying to our work with merchants, acquirers, and technology partners. Commerce is transforming and increasingly being conducted in digital channels as mobile, the Web, and social networks converge. There is new competition at every turn. Issuers, acquirers, and merchants are pursuing a variety of strategies to enable “frictionless commerce,” differentiate, build strong customer relations, and create an optimal user experience. We, Visa, have spoken a great deal lately about our focus on working more closely and collaboratively with merchants, acquirers, and partners to enable commerce in all channels—digital channels, in particular. This isn’t just about expanding acceptance. We’re finding new ways to add value to merchants and acquirers through digital solutions that enable frictionless commerce, and ultimately enhance the consumer purchase experience. For Visa, this means enabling merchants, acquirers, and financial institutions with client-focused solutions that help them differentiate and drive growth. I’ll talk specifically about the changes we’ve made to enable more flexible relationships with our partners, investments in innovation we’re making globally, and specific products and services we’re offering.

Ariel Bardin: It’s a really exciting time to be in payments. In this new world of constant connectivity, mobile is blurring the lines between the online and offline worlds. People are growing to expect the ability to transact instantly using their smartphones—whether they’re in cyberspace or standing in your retail space. We’ve seen this firsthand with the partners who have integrated Google Wallet Instant Buy. Many merchants are seeing significant increases in mobile traffic, sales, and repeat purchases just by making it easier to pay on their mobile properties. As an industry, we’ve been chasing the consumer. But I think we’re seeing some major strides across the industry to improve the user experience and value proposition of mobile payments. We’re approaching a point when more industry players and merchants will understand the value and possibilities with mobile payments. When that happens, we’ll be able to build a thriving ecosystem and an experience for users that is compelling and useful. We’ll also continue to see small players popping up and disrupting the status quo. Disruptive technologies force us all to stretch our understanding and will ultimately push us all toward innovation. A good example of that is the introduction of host-based card emulation into the latest version of Android, which will help bring near-field communication to more people. I also think we’ll see a lot of innovation around location technologies. Transaction trends | April 2014 23

[ FEATURE ] Transaction Trends: What do you consider to be some of the keys to the payments industry embracing the change that’s bringing about evolution? Buse: Current industry trends represent a significant opportunity for our clients and for Visa globally. In India and Africa, for example, we are focused on solutions that are increasing access to formal financial services for unbanked consumers, while mobile technology and smartphone adoption in developed countries empower merchants and consumers to transact more freely. Mobile technology also is increasing the footprint of card acceptance globally; here in the United States we are most familiar with Square, but worldwide there are more than 100 providers offering mobile acceptance solutions. Mobile technology will continue to shape the future of our industry for years to come. Making click-, tab-, or wave-to-pay with a mobile device as simple and secure as a traditional transaction requires evolving the payment industry standards, developing new capabilities, and enabling a new set of stakeholders to participate. We already are deeply involved in the development of a new payment industry standard that governs transactions in digital channels, including replacement of the traditional account number with a digital token in online and mobile payments. And we also are creating new capabilities and services to enable a world that increasingly relies on mobile devices to shop, pay, and get paid.

Bardin: For me, the key to the payments industry embracing the changes that are taking place is to always be focused on the user.At Google we’ve always believed that if you focus on the user, all else will follow, and I think that’s true for the broader payments industry as well. If we work together and stay focused on building great user experiences, we’re all in for an exciting ride.

Galant: First, security is top of mind— not only in response to the recent breaches, but also in ensuring that, as we enable new methods of commerce, consumers, merchants, and financial institutions can be confident in the integrity of the transaction. We all need to be educating our clients on understanding their risk exposure and on how to develop a more comprehensive approach to reducing their risk and their total cost of ownership. Second, the power and versatility of a consumer smartphone ecosystem needs to be matched by the power and versatility of the future merchant point-of-sale environment. The point of sale, wherever it is located, must become more open and connected so merchants and consumers can have more freedom to conduct commerce in the way they want. More open and connected must not come at the expense of security and the safety and soundness of consumer information. Finally, we need to do more to leverage the collective talents of the industry to create scale. It’s going to take collaborative effort among issuers, acquirers, networks, merchants, the top digital players (such as Google, Amazon, and Apple), and companies such as VeriFone to drive this evolution toward commerce.

Plan to attend the Opening Keynote Session on Wednesday, April 9, from 8:30 to 10:30 a.m. in South Pacific A-F.

Transaction Trends: How do you personally stay on top of all of the developments and changes affecting the industry? Galant: Everything begins with our clients. I spend much of my day talking with and visiting clients across the globe to better understand what is driving their business decisions, what is keeping them up at night, and how VeriFone can help solve it. Additionally, we have assembled a strong management committee of accomplished professionals who are deeply rooted in the payments and technology industry. Of course, I also follow industry news and analyst reports and stay connected with our stakeholders through social media. 24 April 2014 | Transaction trends

Buse: First, I have a fantastic, very knowledgeable team that engages our clients and industry partners every day. They are an incredible resource to me. Second, as much as possible, I engage directly with our clients, partners, and government representatives to understand their challenges and opportunities.And third, I read a tremendous amount.

Bardin: The payments industry is moving so fast these days, sometimes it’s hard to keep up. But that’s what makes it so exciting, and I love to hear about the new innovations just like everyone else. Luckily, we have a great team and great relationships with many partners across the industry who are really pushing that innovation. I also really enjoy coming to industry events like ETA’s conference, where I can hear about the latest and greatest, and talk with other leaders in the field. TT Bryan Ochalla is a contributing writer to Transaction Trends. Reach him at bochalla@yahoo.com.

ON-SITE PROGRAM 04.08.14 - 04.10.14 M A N DA L AY BAY LAS VEGAS WWW.TRANSACT14.COM

MOBILE APP For the latest attendee, sponsor and exhibitor information, download our mobile app. Scan the code with your smartphone or tablet or search “TRANSACT 14” in the Apple App and Google Play Stores. Generously sponsored by Heartland Payment Systems.

CTRANSACT O N N 14E |CPOWERED T I NBYGETA T H E P A Y M E[ 25N] T S T E C H N O L O www.transact14.com GY WORLD

A Message from ETA’s CEO Welcome to the World’s Largest Stage for Payments Innovation Welcome to TRANSACT 14: Powered by ETA! Thank you for joining 4,000 industry peers representing 1,000 companies from 24 countries here in Las Vegas for 3 full days of speakers from the world’s top payments and technology companies, a show floor full of the latest innovations, and unlimited industry networking opportunities. Together, we are making history at the inaugural TRANSACT show, ETA’s biggest and best event to date. TRANSACT connects thousands of payments and technology industry executives, venture capitalists and media to experience the next generation of innovation in payments. The largest number of government officials ever in attendance will bring you up to speed on events in Washington, D.C. that impact your business. This event is the hub of activity at the intersection of payments and technology, so our attendees include not only payments companies and financial institutions, but also mobile commerce, telecommunications and apps companies from across the payments ecosystem. This year, we’ve quadrupled our educational offerings with more than 70 Sessions on 8 tracks. We have some of the biggest names in the industry as keynote speakers: Visa’s Elizabeth Buse, VeriFone’s Paul Galant and Google’s Ariel Bardin. And, we’ve expanded hours on our colossal show floor where more than 200 brands from across the payments and technology spectrum - from startups to industry giants - will unveil their latest innovations. This has been a year of incredible growth for ETA. More than 150 new companies have joined us over the past year - meaning that ETA now represents nearly every major company in the payments industry. Given the rapid changes and challenges facing our industry, I encourage you to take advantage of your ETA membership all year long by engaging in our education, policy and industry activities to help grow your business. Thank you for being a part of ETA’s continued success. I look forward to working with you throughout the year to help you grow your payments business. Sincerely,

Jason Oxman, CEO

TRANSACT Program Planning Committee Michelle Daughtry, Chair Cynergy Data

Tony Abruzzio Isis

Steve Callis EVO

Karen Moritzy MocaPay

Deana Rich Rich Consulting

E. Drew Soinski, Vice Chair Planet Payment Inc

Justin Block Discover

Donna Embry Payment Alliance International

Peggy Olson Strategic Marketing and Services

Robin Rotz Apriva

Todd Ablowitz Double Diamond Group

Lanny Byers CHyp USA Inc., a Consult Hyperion company

Carrie Hometh Rocket Pay

Angela Rhodes Integrated Merchant Alliance

TRANSACT 14 | POWERED BY ETA

[ 26 ]

Barrie Van Brackle Manatt, Phelps & Phillips, LLP

www.transact14.com

Welcome to global buying power. Welcome to Different.

Welcome to Different.

Schedule at a Glance Education Session Tracks

n Compliance/Risk/Fraud/Security (Islander G) n Mobile & Technology (Tradewinds D-F) Sponsored by PayPal n Investment (Tradewinds A-C) Sponsored by Cynergy Data n International (Islander D-E) Sponsored by Discover Financial Services

n Merchant (Islander B) n Policy (Islander C) Sponsored by Venable LLP n Sales (Islander H) Sponsored by Discover Financial Services

n ETAU

❖ Data Breach Summit Session

Tuesday, April 8 8:00 am – 2:00 pm

ETA Golf Tournament - The Revere Concord Golf Course Sponsored by SecurityMetrics

8:00 am – 7:30 pm

Registration Open

Bayside Lobby

8:00 am – 9:00 am

Continental Power Breakfast

Bayside A-B

9:00 am – 10:00 am

n Regulatory Update/FTC n Mobile, Point-of-Sale, and Main Street Realities n M&A Opportunities in the Payments Space: A New

n Regional - Americas n Helping Merchants Monetize Customer Data n The Future of Aggregation

Paradigm in Seeking and Creating Value

9:00 am – 12:00 pm 10:15 am – 11:15 am

11:30 am – 12:30 pm

Shell Seekers n ETAU: Introduction to Electronic Processing n ETAU: PCI Fundamentals for the Small (Level 4) Merchant Coral B/C n The FTC and How to Avoid Liability n The Future of the Point of Sale: How Consumers are Changing the Retail Experience

n Mobile Acceptance by Vertical Market n Payments in BRIC: Brazil, India, Russia, China n Current Fraud Trends: Detection, Prevention and

n App Maker, App Maker, Make Me an App n Big Data and Payments: What it Means to You n Are Card-Linked Offers the Next Big Thing?

n Mobile Payment in a Remote Environment

n Big Changes Loom for Mobile Payments

n True Global Acquirers

n Marketing to Build Brand Awareness and

Mitigation

Regulation: Are you Ready? Generate Leads

12:30 pm – 1:30 pm Networking Lunch / All Attendees

South Pacific G-J

1:30 pm – 4:30 pm

ETAU: Introduction to Operations

Shell Seekers

ETAU: Acquiring Payments Risk/Fraud Management Tactics and Trends

Coral B/C

1:45 pm – 2:45 pm

3:00 pm – 4:00 pm

5:00 pm – 6:30 pm

n n

n To Risk or Not to Risk…That is the Question

n Blurred Lines: Retail Channel Convergence Makes

n Face to Face Models in Mobile Payments

n Emerging Mobile Payments: A View from the

n Canada, Post-EMV

n The Impact of Disruptive Technologies from a

Now the Time for Omni-Channel Payments Federal Reserve

Payments and Marketing Perspective

n Compliance as a Competitive Advantage: The Hidden Links n ❖ Cyber Attacks and Gems in the Payment Chain

n Convergence n International Growth Potential in Acquiring

n Policy Overview n Leveraging Data to Increase Efficiency and

Welcome Opening Reception / Meet & Mingle

South Pacific G-J

Create Alternative Revenue Streams

For the latest attendee, sponsor and exhibitor information, download our mobile app. Scan the code with your smartphone or tablet or search “TRANSACT 14” in the Apple App and Google Play Stores. Generously sponsored by Heartland Payment Systems. TRANSACT 14 | POWERED BY ETA

[ 28 ]

www.transact14.com

Change the way the world does business. We are recruiting the industry’s top talent to sell the first and only free tablet placement solution. Speak with a North American Bancard representative to learn how you can be a part of the payments revolution that will change the industry forever.

Find us at Booth 822 Call 1-877-266-1108 or visit gonab.com/revolution © 2014 North American Bancard, LLC. All rights reserved. North American Bancard (“NAB”) is a registered ISO of Wells Fargo Bank, N.A., Walnut Creek, CA. American Express may require separate approval. PayAnywhere (“PA”) is currently available only in the United States.

Schedule at a Glance Education Session Tracks

n Compliance/Risk/Fraud/Security (Islander G) n Mobile & Technology (Exhibit Hall Session Room 1) Sponsored by PayPal n Investment (Exhibit Hall Session Room 2) Sponsored by Cynergy Data n International (Islander D-E) Sponsored by Discover Financial Services

n Merchant (Islander B) n Policy (Islander C) Sponsored by Venable LLP n Sales (Islander H) Sponsored by Discover Financial Services

n ETAU

❖ Data Breach Summit Session

Wednesday, April 9 8:00 am – 6:30 pm

Registration Open

Bayside Lobby

8:00 am – 9:00 am

Continental Power Breakfast

Bayside A-B

8:30 am – 10:30 am Opening Keynote Session: Elizabeth Buse, Executive Vice President, Global Solutions, Visa Ariel Bardin, VP of Product Management, Payments, Google Inc. Paul Galant, Chief Executive Officer, VeriFone

South Pacific A-F

10:45 am – 10:50 am Ribbon Cutting Ceremony

Exhibit Hall / Bayside A-B

10:45 am – 11:45 am

n ❖ Beyond PCI: What You Should know about

n ❖ Target Aftermath: Can Merchants, Payment

n Winning Through Mobile n Start Up Roundtable

n International Expansion Strategy n Goldman Sachs Survey Results

Data Security & PII

Companies, and Consumers Work Together to Prevent the Next Breach?

10:45 am – 6:00 pm Exhibit Hall Open

Exhibit Hall / Bayside A-B

12:00 pm – 1:00 pm Lunch / Exhibit Hall

Exhibit Hall / Bayside A-B

n ❖ EMV Exposed n Future of Money

n International Expansion in Emerging Markets n Merchants and Payments: The Top 5 Issues and

n Payments Next Zone Pitch Session One

n Commerce in 2024: How the Consumer

1:30 pm – 4:30 pm

Shell Seekers

2:30 pm – 3:00 pm

Networking Beverage Break / Exhibit Hall

Exhibit Hall / Bayside A-B

2:45 pm – 3:45 pm

n FCACP Workshop: Keeping Child Pornography Merchants

n Navigating International Strategies

n ISVs and Merchant Services Providers: Partnerships that

n State of the Payments Market: A Roundtable

1:30 pm – 2:30 pm

Opportunities?

Shopping Experience will Influence Acquirers

ETAU: Introduction to Sales and Marketing

Out of the Payments System

Lead to New Growth Opportunities

Discussion

n Payments Next Zone Pitch Session Two 5:00 pm – 6:00 pm

Networking Happy Hour / Exhibit Hall Sponsored by Intuit

Exhibit Hall / Bayside A-B

7:30 pm – 10:00 pm ETA President’s Dinner & Star Awards Gala Sponsored by VISA

South Pacific A-F

[ 30 ]

www.transact14.com

Schedule at a Glance Education Session Tracks

n Merchant (Islander B) n Policy (Islander C) Sponsored by Venable LLP n Sales (Islander H) Sponsored by Discover Financial Services

n ETAU

❖ Data Breach Summit Session

Thursday, April 10 8:00 am – 6:00 pm

Registration Open

Bayside Foyer

8:30 am – 9:00 am

Continental Power Breakfast Sponsored by Apriva

Bayview Court South/South Pacific Ballroom Foyer

9:00 am – 10:15 am CEO Roundtable – The Acquirers Donald Boeding, President, Vantiv Brian Mooney, CEO, Bank of America Merchant Services Debra Rossi, EVP, Wells Fargo Sponsored by CAN Capital

South Pacific A-F

9:00 am – 12:00 pm

Shell Seekers

ETAU: Introduction to Technology

10:30 am – 11:00 am Networking Beverage Break / Exhibit Hall

Exhibit Hall / Bayside A-B

10:30 am – 6:00 pm Exhibit Hall Open

Exhibit Hall / Bayside A-B

10:45 am – 11:45 am

n ❖ The Anatomy of a POS Breach – Could Your

n Retailer Perspectives on Payments Security and

n Start Up Investor Roundtable

n Bitcoin: Threat or Opportunity for the Payments

n Don’t Get Left Out in the Cold: Navigating the World of

n Sales and Marketing from the Merchant

Compliance Program Use a Reset?

Innovation

Industry?

Alternative Payments

Perspective

12:00 pm – 1:00 pm Lunch / Exhibit Hall

Exhibit Hall / Bayside A-B

12:00 pm – 1:30 pm Annual Member Meeting / ISO Lunch (By Invitation Only)

South Pacific H-J

n PCI Updates: Securing the Future of Payments

n How Institutional Investors View Payments

n Next Generation Mobile POS n Engaging POS Threats to Marketplace and Embrace

n How ISOs Commit Fraud n Engaging POS Threats to Marketplace and

1:30 pm – 4:30 pm

Shell Seekers

2:30 pm – 3:00 pm

Networking Beverage Break / Exhibit Hall

2:45 pm – 3:45 pm

n ❖ Security Beyond Compliance

4:00 pm – 5:00 pm

CEO Roundtable – The Processors Robert Carr, Chairman and CEO, Heartland Payment Systems Mark Pyke, President, TSYS Jeffrey Sloan, President and CEO, Global Payments

South Pacific A-F

6:00 pm – 9:00 pm

TRANSACT Closing Party

Shark Reef Aquarium at Mandalay Bay

1:30 pm – 2:30 pm

Partnerships

ETAU: Sales Channel Development

Companies

Embrace Partnerships

Exhibit Hall / Bayside A-B

[ 32 ]

www.transact14.com

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Opening General Session — Keynote Speakers Wednesday, April 9 8:30 am - 10:30 am

Elizabeth Buse Executive Vice President, Global Solutions, Visa

Ariel Bardin VP of Product Management, Payments, Google

Elizabeth Buse is Executive Vice President, Global Solutions where she is responsible for implementing, managing and growing Visa’s wide range of solutions, including those for digital channels, processing services, information products and merchant sales and solutions, including CyberSource.

Ariel Bardin is responsible for product strategy and business development for Google Payments. This includes products that allow Google properties to accept payments, third-party merchants to accept Google Wallet, and consumers to use Google Wallet online and in the real world. Previously, Ariel spent eight years as a leader in Google AdWords where he helped define, build, and launch many advertiser-facing features.

Previously, she was Visa’s Group President for Asia Pacific, Central Europe, Middle East and Africa (APCEMEA), with responsibility for Visa’s business in those fast-growing geographies.

TRANSACT 14 | POWERED BY ETA

Prior to joining Google in 2004, Ariel was a Software Developer at AltaVista and SAP labs, and a Technical Director at BigVine/AllBusiness. He also has entrepreneurial roots: Ariel founded a small software company that developed CAD collaboration tools, and before he found his calling in the tech industry, he started a dance studio in Jerusalem, Israel.

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Paul Galant, CEO, VeriFone Payments Industry: Lead the Evolution to Commerce There is an exciting evolution underway in payments – the coming decade will be the most dynamic and important in the history of payments. Business models, technology, and consumer behaviors are changing. Electronic payments, digital commerce, predicative analytics and mobility are converging along with contextual marketing, digital advertising, couponing, loyalty, and social media. The opportunities to enable magical new commerce experiences for consumers and more meaningful interactions between brands, merchants and their customers are endless. Paul will address these observations, the obstacles, and the opportunities for processors, acquirers and all industry participates to work together, create value, and succeed by enabling the next generation of commerce.

www.transact14.com

CEO Roundtables â&#x20AC;&#x201D; Acquirers Thursday, April 10 9:00 am - 10:15 am

Sponsored by:

Donald Boeding, President, Vantiv

Brian Mooney, CEO, Bank of America Merchant Services

The former COO at Wells Fargo, Donald joined Vantiv in 2004 and is responsible for the day-to-day Merchant Services operations of the merchant business, from relationship management to new product and technology development.

In his role as Chief Executive Officer, Brian Mooney oversees all aspects of Bank of America Merchant Services service delivery including client engagement, sales, operations, risk, and compliance.

With more than 20 years of experience in the merchant services industry, Donald has served as Director of Merchant Services at Norwest Card Services and Merchant Services Manager at Commerce Bank of Kansas City.

Prior to this position, Mr. Mooney served as a founding member of the Bank of America Merchant Services Management Committee until his appointment to the CEO role in February 2013. In 1998, Mr. Mooney joined First Data and held various leadership positions, including President of First Data Merchant Services and Chief Financial Officer of First Data Merchant Services . He also served as President of TeleCheck International Inc. and led various financial M & A efforts for First Data during his tenure.

TRANSACT 14 | POWERED BY ETA

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Debra Rossi, EVP, Wells Fargo Debra Rossi is an Executive Vice President of Wells Fargo and Chief Executive Officer for the Wells Fargo Merchant Services, LLC that provides payment services for retail and corporate customers. She is responsible for the business strategy and management of one of the largest payment processing businesses in the United States. Debra has spent more than 20 years in the payments industry and has been instrumental in defining its landscape. She was one of the early leaders in banking to launch the first point-of-sale debit and credit solution for grocery and quickservice restaurants in the U.S. She was also responsible for building Wells Fargoâ&#x20AC;&#x2122;s Business Internet Services group in the early 1990s and through her leadership Wells Fargo became the first bank to process a secure credit card transaction on the Internet. Debra was pivotal in partnering with leading technology companies including eBay, PayPal, Intuit and CyberSource.

www.transact14.com

CEO Roundtables — Processors Thursday, April 10 4:00 pm - 5:00 pm

Robert Carr, Chairman and CEO, Heartland Payment Systems Bob started his career at Parkland College in Champaign, IL, at the age of 21. After serving as a professor, president of the college’s faculty and director of its computer center, he moved to the Bank of Illinois and then started a software and consulting business for small and mid-sized businesses. In 1997, Bob co-founded Heartland Payment Systems with Heartland Bank. Under his guidance, Heartland has been named a FORTUNE 1000 company, climbed from #61 to #5 in the nation and #9 in the world, and is the creator of the The Merchant Bill of Rights.

TRANSACT 14 | POWERED BY ETA

Mark Pyke, President, TSYS As president of TSYS Merchant Services, Mark Pyke uses his extensive banking and financial expertise to generate strong business results for TSYS. Serving on the TSYS management committee, he brings more than 25 years of payments and financial services experience to the company. Prior to joining TSYS, Pyke served as president of Bank of America Merchant Services. He also previously held the title of chief operating officer and executive vice president for National Processing Company, and served as vice president and chief credit officer of NaBANCO Merchant Services - a division of First Data Corporation - along with a variety of other positions in the payments and financial services industries.

[ 36 ]

Jeffrey Sloan, President and CEO, Global Payments Jeffrey S. Sloan is the President and Chief Executive Officer of Global Payments Inc., one of the world’s leading payment processing companies. He is a decisive leader with deep industry knowledge and nearly 20 years of experience in financial services. Mr. Sloan joined Global Payments as President in 2010 and became Chief Executive Officer in October 2013. Prior to joining Global Payments, Mr. Sloan was a partner and the worldwide head of the Financial Technology Group in New York for Goldman, Sachs & Co. At Goldman Sachs, he pioneered the development of the firm’s payments practice in investment banking, where he led many of the landmark transactions in payments.

www.transact14.com

Tracks Compliance/Risk/Fraud/Security

Investment

Merchant

Compliance has never been more important than it is today. Proper risk management and fraud reduction will help you manage your compliance, they go hand in hand. This track will help you understand how risk management and fraud reduction will help you manage your compliance to the levels that are expected by the regulatory bodies.

Sponsored by:

The merchant landscape has always been dynamic and is now changing at a record-setting pace. The emergence and preference of customers for different, safe and specific payment forms is driving what merchants do and how they obtain their customers. Technology has changed the way customers look at merchants and the way ISOs obtain new merchants. This track will help you understand what merchants are thinking, the challenges they face, and how you can benefit by understanding the issues they’re facing.

Mobile & Technology Sponsored by: Mobile phones are a growing focus in modern consumer’s lives, moving well beyond phone calls to include everything from texting, photography, and web browsing, to gaming, and increasingly, payments. Yesterday’s new and exciting technology is set to become a key driver of tomorrow’s method of payment following a path that NFC has travelled, with Bluetooth Low Energy (BLE) being the hottest new trend. This track will help you understand what a mobile payment is, the wide variety of options in the types of mobile payments that exist, and explore the different players in the value chain for accepting a mobile payment.

TRANSACT 14 | POWERED BY ETA

The rate of change in the payments space is reaching warp speeds. Old paradigms are being shattered as startup companies challenge the status quo. Investment in payments is more interesting and exciting than ever before. It is no longer so much about “what is the multiple” but is now about market size, rate of growth and taking risk on new technologies. This track will help you understand how investors are thinking about the new payments paradigm and how you should prepare yourself for the exciting times ahead.

Policy International

Sponsored by:

The rate of change in the payments space is faster and more innovative than it has ever been. Old paradigms are being challenged as startup companies push boundaries. Policy makers are watching us with renewed interest. This track will help you understand what the policy makers are thinking and what you can do to help mold the future of policy and regulation.

The International Payments landscape is dynamic and growing faster than the US market. The emergence and preference of customers for regional and country specific payment forms deepens. The introduction of new and exciting technologies that allow for cross border payments, as well as the globalization of the merchant community, is more important than ever. We all understand the benefits and ramification to our businesses, but how we can stay ahead of any new compliance mandates that are introduced? This track will touch on all aspects of the international marketplace and will help you understand if this effects your organizations in a positive or negative way.

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Tracks Sales Sponsored by: In the past, the sales landscape was linear. Now it has become an ever-changing landscape responding to the demands of the consumer and the drive for more information. The introduction of new and exciting mobile technologies that allow for faster payments is changing the way sales are made. We all understand the benefits and ramifications to our businesses, but

how we can stay ahead of any new sales strategies or market influences that are introduced? This track will address the changing landscape of sales and will help you understand how these changes affect your organization.

ETAU ETA University (ETAU) is designed for your professional growth and success! Each course will address key facets of the industry necessary to expand your

knowledge and expertise. Courses are designed to meet your needs whether you work for an ISO, financial institution, processor, vendor or service provider. ETAU will cover the latest developments, issues and regulations relating to the electronic processing industry. Best of all, we’re capitalizing on the skills and expertise of those who know the industry the best — ETA members who deal with the issues on a day-to-day basis — to serve as faculty for ETAU.

Data Breach Summit NEW

Exclusive Event

Don’t be a mark – leverage the wealth of industry expertise delivered in the Data Breach Summit at TRANSACTSM: Powered by ETA. Industry innovators, security specialists and top federal regulators bring you up-to-speed on how to avert risk, address incursions, and meet the evolving regulatory landscape through five top-propriety conference sessions: • Tuesday | 3:00 pm – 4:00 pm Cyber Attacks, Data Breaches

• Wednesday | 10:45 am – 11:45 am Beyond PCI: What You Should Know About Data Security and PII

Target Aftermath: Can Merchants, Payment Companies, and Consumers Work Together to Prevent the Next Breach?

• Wednesday | 1:30 pm – 2:30 pm EMV, Encryption, Tokenization, Mobile Security

• Thursday | 10:45 am – 11:45 am The Anatomy of a POS Breach – Could Your Compliance Program Use a Reset?

• Thursday | 2:45 pm – 3:45 pm Security Beyond Compliance

Whether an electronic payments titan or an industry aspirant, the Data Breach Summit is an unmatched opportunity to underscore your commitment to intercepting threats before your clients become the next casualty.

TRANSACT 14 | POWERED BY ETA

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www.transact14.com

THE DIFFERENCE IS EXPERIENCE

Save the Date

03.31.15 - 04.02.15 Moscone Center | San Francisco, CA

TRANSACT 14 | POWERED BY ETA

[ 39 ]

www.transact14.com

Networking Events Golf Tournament

Ribbon Cutting Ceremony

Tuesday, April 8

Wednesday, April 9

ISO Disruption Luncheon – By Invitation Only

8:00 am Shotgun Start | $180 / player The Revere Concord Golf Course Sponsored by:

10:45 am | Exhibit Hall / Bayside A-B

Thursday, April 10 12:00 pm - 1:30 pm | South Pacific H-J

Networking Happy Hour Wednesday, April 9 5:00 pm - 6:00 pm | Exhibit Hall / Bayside A-B

Buses depart Mandalay Bay at 6:30am. Continental breakfast and lunch will be provided at the course. Club rentals are $50. If you need to reserve clubs, please specify mens/ ladies, left or right handed in an e-mail to Van Voss: vanv@vegasgolfservices.com.

Welcome Opening Reception / Meet and Mingle

Thursday, April 10 6:00 pm - 9:00 pm | Shark Reef Aquarium at Mandalay Bay

Sponsored by:

The Revere Golf Club presents a blend of beauty and challenge unlike any other in southern Nevada. Draped through the rugged desert canyons and valleys of the Las Vegas foothills, The Revere offers unending, awe-inspiring views of the Las Vegas Skyline and mountains beyond, and the Lexington’s stunning 7,143 -yard, par-72 layout will test your shot making capabilities with classic risk / reward scenarios. The Concord Course, the latest creation, offers a 7,034 yard par-72 layout that offers bermuda fairways and large greens.

TRANSACT Closing Party

Enjoy dinner and drinks with the sharks in the Mandalay Bay’s Shark Reef Aquarium. Conference participants will have exclusive use of the aquarium. Come enjoy a rare opportunity to see the aquarium after hours.

ETA President’s Dinner & Star Awards Gala Wednesday, April 9 7:30 pm Cocktail Reception | 8:00 pm Dinner & Awards Presentation | $95 / person South Pacific A-F Sponsored by: Join us as we recognize the outstanding individuals and organizations that have contributed to the success of ETA and the payments industry. We hope to see you there!

Tuesday, April 8 5:00 pm - 6:30 pm | South Pacific G-J Join your colleagues for drinks, hors d’oeuvres and networking.

TRANSACT 14 | POWERED BY ETA

[ 40 ]

www.transact14.com

Strategic Leadership Forum 2014

Engage with the Innovators Capitalize on the knowledge of hundreds of frontline leaders, business visionaries and senior level professionals who are advancing the payments industry — Top Executives at the nexus of technology, mobile, and e-commerce will share smart techniques and explore the next generation of innovative ideas.

ETA is pleased to announce the formation of ETAPAC, which will advance the interests of the electronic payments industry in Washington, D.C.

For more information, please contact

For more info about

Scott Talbott, Sr. Vice President

The Voice of Payments™, please go to

Government Affairs

www.voiceofpayments.org.

scott.talbott@electran.org Follow the Conversation,

TRANSACT 14 | POWERED BY ETA

@electranassoc #voiceofpayments

[ 41 ]

www.transact14.com

TRANSACT Exhibit Hall

Browse TRANSACT 14 to find new partnerships, renew connections, and discover the industry’s latest products and services. There will be more than 200 vendors offering solutions to help you improve your effectiveness and provide you with the tools you need to prepare yourself for the future.

Tech Tours ETA is pleased to offer TRANSACT attendees with guided technology tours of the expo floor. Lead by an ETA Technology Committee Member, these tours will provide attendees with opportunities to see industry progress first hand while networking with other tour attendees. Check the conference app for updated meeting locations and times.

Wednesday, April 9 in the exhibit hall 10:45 am – 10:50 am Ribbon Cutting Ceremony 10:45 am – 6:00 pm Exhibit Hall Open

For the latest Attendee, Sponsor, and Exhibitor information, be sure to download the Transact 14 Annual Meeting App.

12:00 pm – 1:00 pm Lunch in Exhibit Hall 5:00 pm – 6:00 pm Happy Hour Sponsored by Intuit 5:00 pm – 6:00 pm E-Pay Innovation Award winner announcement

Search “TRANSACT 14” in the Apple App and Google Play Stores. New features include:

Thursday, April 10 in the exhibit hall 10:30 am – 6:00 pm Exhibit Hall Open 12:00 pm – 1:30 pm Lunch in Exhibit Hall

See the next page for the up to date list of companies

TRANSACT 14 | POWERED BY ETA

Or scan the code with your smart phone

Stay connected with other attendees and social media postings

Receive up to date schedule with automatic program updates and notifications

View the latest exhibitor listing and exhibit hall maps

Sponsored by:

[ 42 ]

www.transact14.com

TRANSACT Exhibitors Exhibitors as of 2/28/14

Platinum Sponsor

Gold Sponsor

Silver Sponsor

Bronze Sponsor

Booth #

Exhibitor

Booth #

Exhibitor

Booth #

Exhibitor

761

@Pay

427

CardWare International

866

ETS Corporation

662B

1st PayPOS

1134

654

ExaDigm, Inc.

1057

Accel

CarePoint Managed Services, LLC

329

ExecuTech Lease Group

Casio America, Inc.

1154

ACI Worldwide

1128

1476

Eye4Fraud

327

Actum Processing

1270

CHARGE Anywhere

558

FeedZai

Affirmative Technologies, Inc.

638

Chase Paymentech

838

1136

Alaric Systems

744

Checkgateway, LLC

First American Payment Systems

542

American Express

934

Chetu Inc.

716

First Data

339

American Finance Solutions

1368

Class Action Refund LLC

1015

419

Aperia Solutions

315

Clear2Pay

First National Technology Solutions

1166

APG Cash Drawer, LLC

1028

Clearent

656

FlyPOS

612

Apriva

365

Coalfire Systems, Inc.

1132

Fora Financial

1454

Arroweye Solutions

516

COCARD

333

Forte Payment Systems

453

Ascert, LLC

844

ControlScan

319

Futurex

406

Authorize.Net

860

CreditCall Corporation

1004

G2 Web Services

1105

AuthoTrans Digital Marketing

738

Credorax

1033

1353

Avalon Solutions Group

663

CRI

GB Frank International/ ROMO Durable Graphics

566

AZT Corp/Zonerich

632

CrossCheck, Inc.

954

General Credit Forms, Inc.

753

Azura Leasing

568

Current Components Inc.

1364

GHL Systems

767

BillPRO Pty Ltd.

1054

CurvePay

556

Givex

1265

Bitel Co., Ltd.

353

CUSTOS MOBILE S.L.

904

Global Payments, Inc.

726

BIXOLON America Inc.

363

Cutter LLC

335

GO3 Solution

361

Biz2Credit Inc.

644

Dejavoo Systems

316

GRP Funding, LLC

1367

Blackstone Merchant Services

1038

Digicom International, Inc./ POS Bank

1044

Harbortouch

1120

ICG Software - Hio POS

1053

Bluebird Inc.

562

Digital Donations

337

ID Analytics

1362

BPC Banking Technologies

958

Dinerware

305

ID TECH

1254

BridgePay Network Solutions

600

Discover Financial Services

554

Impact Payments Recruiting

1357

Brighterion

358

DMI Digital Management Inc.

653

Infinite Peripherals, Inc.

1458

Business Credit and Capital

304

Elavon

559

Infinity Capital Funding

825

CAN Capital, Inc.

1032

Electronic Merchant Systems

754

Ingenico North America

1153

Card Resource Group

1160

eGivings

1456

IOU Central

1258

CardConnect

617

eProcessing Network, LLC

1144

iPayment, Inc.

661B

CardFlight

620

Epson America, Inc.

454

ISIS

356

Cardinal Commerce

412

Equinox Payments LLC

367

IT4Merchant Solution Ltd.

1155

Ethoca

1027

[ 44 ]

www.transact14.com

TRANSACT Exhibitors Exhibitors as of 2/28/14

Platinum Sponsor

Gold Sponsor

Silver Sponsor

Bronze Sponsor

Booth #

Exhibitor

Booth #

Exhibitor

Booth #

Exhibitor

615

JCB International Credit Card Co., Inc.

437

Payment Alliance International

1138

Simply Charged Inc.

664

Socure

344

JetPay LLC

1116

Payment World LLC

944

1130

KirkpatrickPrice

730

PayPal

SPECTRA Technologies Holdings Co. Ltd.

667

Kount Inc.

938

Payvision

338

Star Micronics

303

Ladco Global Leasing Solutions

1103

PCI Compliance

429

Strategic Funding Source, Inc.

1355

Super G Funding, LLC

Layered Technologies

PCI Security Standards Council

1125

928

328

Swift Capital

330

Leaf (Leaf Holdings, Inc.)

765

Pivotal Payments

466

Switch Commerce

1168

Lenox Recovery Group

309

Planet Group, Inc.

1256

662A

LoopPay, Inc.

916

Planet Payment

Sword & Shield Enterprise Security

428

MagTek, Inc.

1021

Plug ‘n Pay Technologies

1006

Sysnet Global Solutions

816

MasterCard

520

POS Portal

666

Tarang Software Technologies

1354

Merchant Cash & Capital

606

Powa Technologies Limited

1107

The Funding Tree, LLC

331

Merchant Cash Group

301

Principis Capital

415

The Phoenix Group

320

Merchant Warehouse

854

Priority Payment Systems

318

topcreditcardprocessors.com

362

Merchants’ Choice Payment Solutions

621

ProfitStars

874

Total Merchant Services

1562A

PulseWallet

1126

Transax

1019

Mocapay

1017

Quick Bridge Funding

502

TransFirst

1464

MotherFund

922

Quiktrak, Inc.

455

TranzLogic

661A

MySingleLink

1109

Recombo Inc.

810

Trustwave

343

National Merchants Association

657

Red Oak Payment Solutions

150

TSYS

932

Repeat Returns

1268

Uniform Industrial Corp.

1114

Retail Capital LLC

626

UnionPay International

1029

Retailcloud

444

United Merchant Services

1117

RingCentral

1020

USA Technologies

354

Riskified

1008

USAePay

674

ROAM

964

V12 Group

1066

RS2 Software

299

Valutec Card Solutions, Inc.

1127

Salesgenie

800

Vantiv

530

SecurityMetrics

1121

Venable LLP

763

Settlement Recovery Group

1018

Vericheck Inc.

1262

Shift4 Corporation

1170

Verifi, Inc.

1157

ShopKeep POS

605

VeriFone, Inc.

400

VISA, Inc.

1026

vPromos, Inc.

433

World Gift Card

355

New POS Technology Ltd.

1062

Nextwave Enterprises

332

Norse Corporation

822

North American Bancard

422

Northern Leasing Systems

956

NVMS, Inc.

1161

OfferPipe

1016

On Deck Capital

755

ONPEX GmbH

658

Paay

1115

Paragon Application Systems

436

PAX Technology, Inc.

TRANSACT 14 | POWERED BY ETA

[ 45 ]

www.transact14.com

Entrance

TRANSACT Exhibit Hall Floor Plan

To On Floor Session Rooms TRANSACT 14 | POWERED BY ETA

[ 46 ]

www.transact14.com

For the latest Attendee, Sponsor, and Exhibitor information, be sure to download the Transact 14 Annual Meeting App. Search â&#x20AC;&#x153;TRANSACT 14â&#x20AC;? in the Apple App and Google Play Stores.

New features include: n

Stay connected with other attendees and social media postings

Receive up to date schedule with automatic program updates and notifications

View the latest exhibitor listing and exhibit hall maps

Or scan the code with your smart phone Sponsored by:

TRANSACT 14 | POWERED BY ETA

[ 47 ]

www.transact14.com

Mobile Pay Zone The one-stop shop for all things mobile! The mobile economy is undergoing expansive growth, creating exciting opportunities to increase revenue for all involved. ETA is proud to offer the Mobile Pay Zone this year at TRANSACT 14. The Mobile Pay Zone within the exhibit floor will bring together a comprehensive offering of mobile-based businesses and partners, offering a targeted exhibiting opportunity to showcase your companyâ&#x20AC;&#x2122;s unique mobile innovations. List of companie as of 2/28/14. @Pay

ExaDigm, Inc.

Paay

1st PayPOS

FlyPOS

BIXOLON America In

Infinite Peripherals, Inc.

Red Oak Payment Solutions

CardFlight CRI

Kount Inc. MySingleLink

Socure Tarang Software Technologies

Payments Next Zone

Opportunities for Startups! This pavilion at the TRANSACT 14 is designed for startup companies looking Sponsored by: to bring their innovative new electronic payments technology product or service to market. The Payments Next Zone will be the premier destination at the show where media, venture investors and potential industry partners can meet with startups to explore new ideas and innovations to bring innovative financial services to market. Join these innovative start ups in a shark tank competition on Wednesday, and hear the winner of the E-Pay Innovation Award announced at the Wednesday evening networking reception. TRANSACT 14 | POWERED BY ETA

[ 48 ]

www.transact14.com

President’s Dinner Kim Fitzsimmons Board President, Electronic Transactions Association and Jason Oxman CEO, Electronic Transactions Association cordially invite you to attend the

2014 ETA President’s Dinner & Star Awards Gala Tuesday, April 9, 7:30 pm Mandalay Bay, Las Vegas South Pacific A-F Purchase ETA President’s Dinner tickets when you register online, or onsite at the registration desk at TRANSACT 14.

ETA President’s Dinner and Star Awards are Sponsored by:

Sponsors Platinum

Gold

Silver

Bronze

Media Partners

TRANSACT 14 | POWERED BY ETA

[ 51 ]

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Startup Stories: Compliance Solutions and Resources

Private Practice CSR’s data compliance solutions assist merchants in maintenance and safety of PII By John Manasso

arrel Anderson, ETA CPP, somewhat chuckles at the idea of promoting an annual software product update. Anderson is executive vice president of sales and client solutions at Compliance Solutions and Resources (CSR), which provides data compliance solutions, mostly for large companies. In the field of data security, a year might as well as be a century. “We maintain the products all the time,” says Anderson.“Mostly every week there is an update to our product in small form or not. It may be visible or not so they’re constantly being updated. We’ve shied away from this whole giant release thing.‘In October there’ll be a new one!’ It’s every Friday there’s a new one.” CSR founder Ross Federgreen characterized the constantly changing nature of his field as,“every hour on the hour.” Founded in 1998, CSR produces toolkits, most of which are patented, for merchants and also provides what Federgreen refers to as a “consultative services” to businesses. Its Payment Card Industry (PCI) ToolKit simplifies PCI Data Security Standard merchant compliance, and its CSR Data Breach ToolKit is designed to facilitate “timely and accurate” personally identifiable information (PII) data breach reporting.

CSR Founder Ross Federgreen

An Evolving Business CSR targets companies with annual revenues of at least $100 million or $200 million, according to Federgreen. For the consulting side of its business, companies tend to have annual revenues of $500 million or more.

Compliance Solutions and Resources | Jensen Beach, Florida

Founder: Ross Federgreen Employees: 15 52 April 2014 | Transaction trends

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Startup Stories: Compliance Solutions and Resources

He shares how CSR’s business has evolved over the years: “Now we really do focus principally on privacy and PII and all those inter-related areas much more so than the traditional payment space,” he says. “In fact, the payment space represents just a small basket of our work and services. In fact, it’s rapidly dwindling as a single-focus relationship. Most of the relationships we have now are driven by privacy issues, Internet response issues, data in general, and the… data life cycle management.” CSR has only 15 employees but a large network of contractors on which it can depend in emergency situations (when a client has a large data breach, for example). Its corporate offices are in Jensen Beach, Florida, but its employees are scattered throughout the United States. One of its larger offices is in Reno, Nevada, and is home to its information technology department and support staff. That is where Paul Nowling, CSR’s director of technical operations and support, is based. Among his 20 years of experience in IT, Nowling spent some time working in the credit card security industry. Because of the nature and quality of CSR’s software, a larger support staff isn’t needed, according to Anderson. In October 2012, CSR’s Breach Reporting ToolKit, which is designed to expedite reporting to authorities in the event of data breach, won the International Association of Privacy Professionals Privacy Innovation Award. “We have a unique way we engage with the merchant,” says Anderson, who has a long history in the payments industry, including a tenure at processor and acquirer TSYS as senior vice president of strategic partnerships. “That’s why we don’t have the support calls, and that’s why we can get away with having only 15 people. Because the system is very automated… 85 percent of the merchants get through on the same day they enter the program.” Having been in the business for so long, Federgreen, whose background is in the consulting industry, says CSR has subject matter experts in their respective security areas. He describes it as a “very deep and extensive network” of people with expertise in a variety of niches.

The Merchant Experience CSR’s concept is to control the experience of how the merchant interacts with its software. It generally outsources

54 April 2014 | Transaction trends

the coding to programmers. “The recipe’s always been that anything that was really the thought process and the strategic thinking of how it interfaces with the customers—that was always us,” says Anderson.“The grunt work of the coding and all of that back office stuff—we let somebody who has a giant coding office do that. But we’re more worried about what our customers see, feel, and think, and we take desperate control of that. “Others in the industry, what their PCI toolkit does is it goes,‘What SAQ are you?’” Anderson says, referring to a PCI Data Security Standard Self-Assessment Questionnaire. “The merchant goes,‘I don’t know,’ and then he’s on the phone, right? Ours doesn’t really do that. It engages in a conversation. In fact, we ignore the whole SAQ structure, and we ask the merchant about what his business is, what equipment he has on hand, how he trains his staff, and what sort of data he holds. We start asking those questions that he knows the answers to. “And then, instead of 1,300 questions in the background, it’s 500 and then it’s 200 and then it’s 30, just by the way he’s engaging. But, surreptitiously, we’re filling the SAQ up on background.”

Security Trends Being in touch with merchants on the ground level, CSR has to know what they think but also what they need to know. Both Anderson and Federgreen say an important trend of which merchants must be made aware is that PII has moved to the forefront over PCI. “The PCI Data Security Standard, which in and of itself is very sectoral in nature and very specific for data related to debit, credit cards, etc., really does not encompass 99 percent of the world,” says Federgreen, who is a member of the ETA’s Data Security Task Force and previously served on its Program Planning Committee.“All types of other forms of data—health records, criminal records, facial recognition—all this other stuff is really where all the action is. There are many companies that don’t deal in the world of credit and debit cards, believe it or not, but there’s no company that does not deal with PII… . “So you can see the aspects of it are much broader, and, frankly, there are 90-plus sovereign countries that have legal requirements for handling PII where PCI is not a

legal standard except for a couple of free states.” PCI is the least of a merchant’s worries, according to Anderson, who notes that 46 states have requirements for merchants on maintenance and safety of PII. “[Merchants] say, ‘Well, credit card data is protected, I’m OK,’”Anderson says.“Yeah, but your health records are laying around, your employees’ records are, financial records, records of customers. That’s where our privacy toolkit comes in. It helps a business come in and assess the breadth of all the information and data they have there. “In the last couple of years people finally have wrapped their heads around what PCI is, and now they’ve got to wrap their heads around the idea that PCI data represents only 5 percent of the data you hold as a merchant—you’re responsible for it. If you mess up on PCI, Visa may send you a fine.You mess up on PII? See you in federal prison. They put people in federal jail for compromising data, so it’s a big deal and I don’t think merchants kind of get it yet.” TT John Manasso is a contributing writer to Transaction Trends. Reach him at john_ manasso@yahoo.com.

WORDSTOTHEWISE � ISOs and acquirers should think more about providing ancillary services to merchants. “One of the ubiquitous issues continues to be that of the management of data of all shapes, sizes,” says CSR founder Ross Federgreen. “I think there is, at least our experience has been, most people get it and most people want a solution or assistance with it so that would be my nickel advice. But I really think we’re seeing it with people inquiring about our products and services.” � Personally identifiable information (PII) will continue to move to the forefront of the industry in years to come. “If I was to read my crystal ball, which is usually very flawed, I would say in the next three to five years the conversation is going to be entirely about PII and its derivatives,” Federgreen says, “and PCI will be a historical thing like the Model T.” � Never forget that you are a trusted advisor to your merchant. “Of the two people in the room, who knows more about the payments industry than you?” asks Darrel Anderson, CSR’s executive vice president, sales and client solutions. “You are the trusted advisor so never forget that you are the more knowledgeable person about payments and you shouldn’t be afraid to help the merchant understand that because a lot of people say, ‘Well, whatever he wants is fine with me.’ “Imagine if you went to the doctor and said, ‘I’m having some palpitations. Give me some nitroglycerin.’ A bad doctor would probably say, ‘Yeah, you’re right. Here you go.’ A good doctor would say, ‘Wait a minute. Let me think about this.’”

Advertisers index Company

Page

Apriva

Phone

18 877-277-0728

C&H Financial Services, Inc.

Web www.apriva.com

855-600-2437

www.chfs.us

Cardinal Commerce

877-352-8444

www.CardinalCommerce.com

Discover Network

800-347-2000

www.discovernetwork.com

800-296-4810

www.eprocessingnetwork.com

Epson America, Inc.

bellyband

562-981-3840

pos.epson.com

Epson America, Inc.

562-981-3840

pos.epson.com/financial

800-227-3794

www.evopayments.com

Magtek, Inc.

562-546-6603

www.magtek.com

Merchant Warehouse

888-291-7571

www.merchantwarehouse.com

eProcessing Network, LLC

EVO Payments International

Merchants’ Choice Payment Solutions

800-478-9367 x5

www.mcpscorp.com

National Merchant Association

866-509-7199

www.nationalmerchants.org, www.iso4nma.org

Network Merchant, Inc.

800-617-4850

www.nmi.com

North American Bancard

855-211-1610

www.gonab.com/tt

Northern Leasing Systems

877-325-6469

www.northernleasing.com

PAX Technology, Inc.

877-859-0099

www.pax.us

Planet Group Inc.

800-979-9166

www.planetgroupinc.com

SecurityMetrics

15 801-995-6860

www.securitymetrics.com

Shift 4 Corporation

800-265-5795

www.shift4.com

The Strawhecker Group

402-964-2617

http://www.thestrawgroup.com

Total Merchant Services, Inc.

877-498-2807

www.totalpartnership.com

TSYS Acquiring Solutions

480-333-7799

www.tsys.com

USAePay

21 866-490-0042

www.usaepay.com

Transaction trends | April 2014 55

It’s Time To Be a Payments Advocate The Last Word

Take advantage of these critical education and engagement opportunities at TRANSACT 14 By Scott Talbott

e’ve told you before, and we’ll say it again:Advocacy in the payments industry will be front and center at TRANSACT 14.And in the current legislative and regulatory environment, the timing couldn’t be better for this programmatic emphasis. When industry leaders gather in Las Vegas,April 8-10, to network, learn, and enhance their businesses, they also will encounter a more comprehensive educational program on public policy issues than they have seen in previous years at the ETA Annual Meeting. Recent press headlines and significant policy attention around data security and breaches have emphasized the need for ETA members to be adequately versed in the current and potential regulatory regime for privacy, security, risk, and fraud compliance. ETA recognizes the critical impact that legislative and regulatory changes have on the bottom line of its members’ businesses and on the industry as a whole.TRANSACT 14 programming reflects the expanding and diligent emphasis ETA places on advocacy and protecting the payments industry’s license to innovate with efficiency at the highest standards. Highlights include: a regulatory update from the Federal Trade Commission on compliance, risk, fraud, and security; anticipated changes for mobile payments regulation by Minnesota State Representative Joe Atkins;The Federal Reserve’s perspective on emerging mobile payments; an industry outlook from Washington, D.C. insiders; and the role that Bitcoin plays in payments.

Data Breach Summit In response to intense national focus on the issue, ETA has added a Data Breach Summit to the TRANSACT 14 agenda. Six timely sessions will offer everything you need to know to protect against breaches and respond to them. Of special interest is, “Target Aftermath: Can Merchants, Payment Companies, and Consumers Work Together to Prevent the Next Breach?”This is shaping up to be a lively conversation by merchants, payments professionals, and consumer groups about how various industry and consumer segments have reacted to recent breaches as well as marketplace solutions that will prevent future breaches and protect consumer data. Expect the panel to touch on preferred public policy scenarios moving forward.

Operation Choke Point Boot Camp The best defense is a good offense, and with today’s heavy government oversight, one can never be too prepared.This is why we have created an Operation Choke Point Boot Camp. Recent federal enforcement actions, known as Operation Choke Point, have targeted the pay56 April 2014 | Transaction trends

ments industry as a means to attack certain segments of merchants. In effect, government regulators are forgoing established rule making procedures and are instead using financial institutions as the “cop on the beat” to address fraudulent activities by merchants. We’ve teamed up with law enforcement officials to create an educational program that will help ISOs, agents, processors, and financial institutions protect against unwarranted targeting.While all TRANSACT 14 registrants will receive the new ETA Guidelines on Merchant and ISO Underwriting and Risk Monitoring, the Boot Camp series will provide an overview of this 100-plus page guide, information and best practices from relevant agency personnel, and a session on compliance in the current environment.

March Hill Briefing ETA continues to educate policymakers and their staff on Capitol Hill about issues that are important to the payments industry. On March 14, 2014, congressional staffers and regulatory agency staff attended a briefing hosted by ETA on data security and breach notification. Panelists from VISA, MasterCard, First Data Corporation, and Trustwave shared vital information on the electronic payments system, the mechanics of how to respond to a breach, how the payments industry is protecting consumer data, and an explanation of current and future technology. This well-attended discussion prompted numerous questions from congressional staff, and provided an invaluable opportunity for ETA to educate policymakers. ETA’s advocacy team will continue to educate policymakers through one-on-one meetings to ensure that all concerns are addressed. Kudos to our panelists for their participation and candor. We appreciate them sharing their knowledge and amplifying their voices on key industry issues.

The Voice of Payments Keep an eye out for ETA’s advocacy team at TRANSACT. We are looking forward to connecting with as many attendees as possible, and we are always available to report on the evolving congressional and regulatory developments on data breach notification and any other issues important to our members. We are especially looking forward to talking with you about how you can amplify your voice on advocacy issues via participation in The Voice of Payments political engagement program. TT Scott Talbott is senior vice president of government affairs for ETA. Reach him at stalbott@electran.org.

When we say People-Centered Payments ®

We’re talking about you. At TRANSACTSM 14 let’s talk about taking your payments to the next level. Our invitation-only VIP product lounge will have product experts to preview the exciting ISO and Acquiring solutions TSYS has on the horizon. While you’re at the show, don’t miss Mark Pyke, president of TSYS Merchant Services share his insights at the processors CEO Roundtable, Thursday, April 10 4:00pm – 5:00pm. For your invitation to the VIP lounge, please contact us at acq-sales@tsys.com or 480-333-7799.

Get to know us

+1.480.333.7799 acq-sales@tsys.com www.tsysacquiring.com

Get Ready to Sell. Get Ready to Grow. Get Ready to ! Groovv will help you open more doors and close more deals. Learn more now at www.groovv.com or by calling 877.498.2809