Posted by Mark Brousseau
It’s estimated that the percentage of U.S. households without bank accounts may be as high as 26 percent. So what happens to the $1.1 trillion that those households take in each year? According to Turner Investments, much of that money is likely to end up on prepaid cash cards over the next five years.
Turner Investments anticipates that the market for prepaid cash cards may grow at double-digit annual rates between now and 2015. Two small prepaid-card vendors that appear to be well positioned to profit from that growth are Green Dot and NetSpend Holdings, Turner Investments says.
For the consumers averse to traditional banking, Turner Investments says prepaid cash cards may hold three benefits:
•The cards can be a cheaper alternative to checking accounts. Consumers who are prone to overspending can’t spend more than they put on the cards, so they aren’t exposed to overdraft charges. Also, the increased checking-account fees resulting from new federal financial reforms are driving some consumers to the cards.
•The cards require no background check, unlike some checking accounts.
•The cards are convenient to load and use, enabling customers to take their paycheck to a retailer where they can have the money loaded onto a card and start shopping immediately.
What do you think?
Showing posts with label debit card. Show all posts
Showing posts with label debit card. Show all posts
Tuesday, December 21, 2010
Wednesday, May 19, 2010
NACHA stats reveal electronic migration
Posted by Mark Brousseau
If you’re looking for more proof that consumers continue to move away from paper-based check payments and towards more convenient and “greener” electronic transactions, look no further than NACHA’s 2009 statistics for the Automatic Clearing House (ACH) Network, says Leilani Doyle (ldoyle@usdataworks.com), product manager at US Dataworks, Inc., a leading provider of enterprise payments solutions.
Doyle notes that while overall ACH payment volume increased by more than 475 million transactions in 2009 – a 2.6 percent increase compared to 2008 – Accounts Receivable Check (ARC) Conversion volume decreased by about 10 percent, according to NACHA’s statistics. The drop in ARC volume was offset by a spike in Internet-initiated (WEB) transactions of 9.7 percent in 2009, Doyle points out. Similarly, US Dataworks, the long-time market share leader in ARC volumes, saw its WEB volumes soar 700 percent in 2009 compared to the previous year, Doyle said.
“This trend is not surprising,” Doyle says. “It reflects the shift in consumer preferences from writing checks to making payments over the Internet.”
Doyle adds that she also wasn’t surprised by the uptick in Back Office Conversion (BOC) volumes indicated by NACHA’s annual statistics. “BOC will continue to grow as businesses that still take checks over the counter look for ways to reduce their costs to process checks,” Doyle explains.
What do you think?
If you’re looking for more proof that consumers continue to move away from paper-based check payments and towards more convenient and “greener” electronic transactions, look no further than NACHA’s 2009 statistics for the Automatic Clearing House (ACH) Network, says Leilani Doyle (ldoyle@usdataworks.com), product manager at US Dataworks, Inc., a leading provider of enterprise payments solutions.
Doyle notes that while overall ACH payment volume increased by more than 475 million transactions in 2009 – a 2.6 percent increase compared to 2008 – Accounts Receivable Check (ARC) Conversion volume decreased by about 10 percent, according to NACHA’s statistics. The drop in ARC volume was offset by a spike in Internet-initiated (WEB) transactions of 9.7 percent in 2009, Doyle points out. Similarly, US Dataworks, the long-time market share leader in ARC volumes, saw its WEB volumes soar 700 percent in 2009 compared to the previous year, Doyle said.
“This trend is not surprising,” Doyle says. “It reflects the shift in consumer preferences from writing checks to making payments over the Internet.”
Doyle adds that she also wasn’t surprised by the uptick in Back Office Conversion (BOC) volumes indicated by NACHA’s annual statistics. “BOC will continue to grow as businesses that still take checks over the counter look for ways to reduce their costs to process checks,” Doyle explains.
What do you think?
Monday, April 26, 2010
P-Card Conference Wrap-Up
Posted by Mark Brousseau
Steven Putney, a partner with PayTech International, provides his thoughts on the 11th Annual National Association of Purchasing Card Professionals’ (NAPCP) conference held in Orlando:
Over 600 purchasing card payment industry professionals gathered April 18-21, 2010 at the 11th Annual NAPCP Conference in Orlando. Representing a broad span of private and public-sector organizations, they convened to discuss topics that ranged from best practices and technology developments to legislative changes affecting the purchasing card industry.
For purchasing card professionals, staying current on industry changes is critical to playing an effective role in the management of their organizations. The conference provided excellent opportunities for attendees to gain insights on a wide variety of topics and network with peers, industry providers and purchasing program experts.
This year, the program offered five different tracks that focused on important aspects of purchasing card programs:
• Building the foundations of a successful program: What factors and considerations are paramount to ensuring that purchasing card programs achieve their objectives?
• Effective program management: How do you monitor your program, manage strategies and insure compliance?
• Optimization strategies: How can you increase program effectiveness and use new technologies to simplify transaction management?
• Industry overviews: What are the important trends in the technology, economics and legal arenas that are shaping purchasing card programs?
• Professional development: How can you increase your knowledge and effectiveness?
The rapid convergence of purchasing cards with the overall AP strategy at large corporations and public- sector organizations was a theme heard across many sessions. Case studies were shared in breakout sessions on how to increase control over purchases, identify opportunities for savings and ensure corporate compliance--all essential to a successful purchasing and AP strategy.
New enhanced technology platforms (originally developed to support only purchasing card transactions) were demonstrated that have added functionality to integrate deeper into the organization’s workflow processes and accounting systems and support a full range of electronic payment types. These platforms can facilitate a convergence across AP, and potentially help organizations consolidate multiple vendors down to one.
Another topic that received a great deal of attention at the conference was how to successfully expand payment programs internationally. Multi-national corporations and public-sector organizations must identify and address significant variation in key areas across different regions of the world. Areas of consideration for multi-national programs include cultural differences, commercial credit availability, legal & regulatory issues, availability of data and tax compliance challenges.
The conference provided a unique opportunity to mingle with peers and industry experts and gain a perspective on opportunities to improve existing programs and plan for the future.
Steven Putney, a partner with PayTech International, provides his thoughts on the 11th Annual National Association of Purchasing Card Professionals’ (NAPCP) conference held in Orlando:
Over 600 purchasing card payment industry professionals gathered April 18-21, 2010 at the 11th Annual NAPCP Conference in Orlando. Representing a broad span of private and public-sector organizations, they convened to discuss topics that ranged from best practices and technology developments to legislative changes affecting the purchasing card industry.
For purchasing card professionals, staying current on industry changes is critical to playing an effective role in the management of their organizations. The conference provided excellent opportunities for attendees to gain insights on a wide variety of topics and network with peers, industry providers and purchasing program experts.
This year, the program offered five different tracks that focused on important aspects of purchasing card programs:
• Building the foundations of a successful program: What factors and considerations are paramount to ensuring that purchasing card programs achieve their objectives?
• Effective program management: How do you monitor your program, manage strategies and insure compliance?
• Optimization strategies: How can you increase program effectiveness and use new technologies to simplify transaction management?
• Industry overviews: What are the important trends in the technology, economics and legal arenas that are shaping purchasing card programs?
• Professional development: How can you increase your knowledge and effectiveness?
The rapid convergence of purchasing cards with the overall AP strategy at large corporations and public- sector organizations was a theme heard across many sessions. Case studies were shared in breakout sessions on how to increase control over purchases, identify opportunities for savings and ensure corporate compliance--all essential to a successful purchasing and AP strategy.
New enhanced technology platforms (originally developed to support only purchasing card transactions) were demonstrated that have added functionality to integrate deeper into the organization’s workflow processes and accounting systems and support a full range of electronic payment types. These platforms can facilitate a convergence across AP, and potentially help organizations consolidate multiple vendors down to one.
Another topic that received a great deal of attention at the conference was how to successfully expand payment programs internationally. Multi-national corporations and public-sector organizations must identify and address significant variation in key areas across different regions of the world. Areas of consideration for multi-national programs include cultural differences, commercial credit availability, legal & regulatory issues, availability of data and tax compliance challenges.
The conference provided a unique opportunity to mingle with peers and industry experts and gain a perspective on opportunities to improve existing programs and plan for the future.
Thursday, April 15, 2010
The Changing ISO Space
Posted by Mark Brousseau
Based on what he's heard at the Electronic Transactions Association (ETA) Annual Meeting and Expo this week in Las Vegas, independent sales organizations or ISOs are beginning to struggle in a very saturated credit card market, says Mario Villarreal, president and COO of US Dataworks, Inc. (mvillarreal@usdataworks.com, 281-504-8150). US Dataworks is exhibiting at the ETA event.
"The various ISOs that we talked to [Wednesday] are interested in other payment platforms separate and apart from credit card services," Villarreal explains. "The ISOs understand the RDC [remote deposit capture] market, but are not attracted to it due to the narrow payment focus for a complicated implementation. One ISO representative told me he was looking for more 'bang for the buck.'"
"What ISOs are really looking for is a platform that brings multiple payment types and channels together under a single solution," he says. "The payments industry and the ISO space is changing. The question is which vendor will break away from the traditional way of doing business to win."
What do you think?
Based on what he's heard at the Electronic Transactions Association (ETA) Annual Meeting and Expo this week in Las Vegas, independent sales organizations or ISOs are beginning to struggle in a very saturated credit card market, says Mario Villarreal, president and COO of US Dataworks, Inc. (mvillarreal@usdataworks.com, 281-504-8150). US Dataworks is exhibiting at the ETA event.
"The various ISOs that we talked to [Wednesday] are interested in other payment platforms separate and apart from credit card services," Villarreal explains. "The ISOs understand the RDC [remote deposit capture] market, but are not attracted to it due to the narrow payment focus for a complicated implementation. One ISO representative told me he was looking for more 'bang for the buck.'"
"What ISOs are really looking for is a platform that brings multiple payment types and channels together under a single solution," he says. "The payments industry and the ISO space is changing. The question is which vendor will break away from the traditional way of doing business to win."
What do you think?
Monday, July 7, 2008
ATM Hack Reveals Security Woes
Posted by Mark Brousseau
An interesting article from the Associated Press about ATM security challenges:
Citibank ATM breach reveals PIN security problems
By JORDAN ROBERTSON
The Associated PressTuesday, July 1, 2008; 4:39 PM
SAN JOSE, Calif. -- Hackers broke into Citibank's network of ATMs inside 7-Eleven stores and stole customers' PIN codes, according to recent court filings that revealed a disturbing security hole in the most sensitive part of a banking record.
The scam netted the alleged identity thieves millions of dollars. But more importantly for consumers, it indicates criminals were able to access PINs -- the numeric passwords that theoretically are among the most closely guarded elements of banking transactions -- by attacking the back-end computers responsible for approving the cash withdrawals.
The case against three people in U.S. District Court for the Southern District of New York highlights a significant problem.
Hackers are targeting the ATM system's infrastructure, which is increasingly built on Microsoft Corp.'s Windows operating system and allows machines to be remotely diagnosed and repaired over the Internet. And despite industry standards that call for protecting PINs with strong encryption -- which means encoding them to cloak them to outsiders -- some ATM operators apparently aren't properly doing that. The PINs seem to be leaking while in transit between the automated teller machines and the computers that process the transactions.
"PINs were supposed be sacrosanct _ what this shows is that PINs aren't always encrypted like they're supposed to be," said Avivah Litan, a security analyst with the Gartner research firm. "The banks need much better fraud detection systems and much better authentication."
It's unclear how many Citibank customers were affected by the breach, which extended at least from October 2007 to March of this year and was first reported by technology news Web site Wired.com. The bank has nearly 5,700 Citibank-branded ATMs inside 7-Eleven Inc. stores throughout the U.S., but it doesn't own or operate any of them.
That responsibility falls on two companies: Houston-based Cardtronics Inc., which owns all the machines but only operates some, and Brookfield, Wis.-based Fiserv Inc., which operates the others.
A critical issue in the investigation is how the hackers infiltrated the system, a question that still hasn't been answered publicly.
All that's known is they broke into the ATM network through a server at a third-party processor, which means they probably didn't have to touch the ATMs at all to pull off the heist.
They could have gained administrative access to the machines -- which means they had carte blanche to grab information -- through a flaw in the network or by figuring out those computers' passwords. Or it's possible they installed a piece of malicious software on a banking server to capture unencrypted PINs as they passed through.
What that means for consumers is that their PINs were stolen from machines that showed no signs of tampering they could detect. In previous PIN thefts, thieves generally took steps that might draw notice -- sending "phishing" e-mails, for example, or installing false-front keypads or even tiny cameras on ATMs.
Getting the PINs is a key step for identity thieves. It lets criminals encode stolen account information onto blank ATM cards and withdraw piles of cash from compromised accounts.
Don Jackson, director of threat intelligence for SecureWorks Inc., said he has seen an "alarming" spike in the number of attacks on back-end computers for ATM networks over the past year.
"This was fairly large, but I don't think it's anything out of the ordinary -- these kinds of scams go on every day," Jackson said. "What makes this case unique is the sheer luck of happening upon these guys and catching them red-handed. But there are a whole lot of other ATM and PIN compromises going on that aren't reported."
The alleged plot is outlined in court papers supporting the prosecution of three people _ Yuriy Rakushchynets, Ivan Biltse and Angelina Kitaeva. They were indicted in March on two counts each of conspiracy and fraud. Prosecutors say their activities generated at least $2 million in illegal profits.
Defense lawyers for all three people did not return calls for comment, and it was not clear where they had been living. The main defendant, Rakushchynets, was described as having Michigan and Florida's driver licenses in a February FBI affidavit for an arrest warrant.
Citibank, part of Citigroup Inc., has declined to comment on the technique or how many customers' accounts were compromised. It said it notified affected customers and issued them new debit cards.
"We want our customers to know that, consistent with legal requirements, we do not hold them responsible for fraudulent activity in their accounts," the bank said in a statement.
Cardtronics said it is cooperating with authorities but otherwise declined to comment. Fiserv spokeswoman Melanie Tolley said the intrusion didn't happen on Fiserv's servers.
"Fiserv," she said, "is confident in the integrity and security of our system."
An interesting article from the Associated Press about ATM security challenges:
Citibank ATM breach reveals PIN security problems
By JORDAN ROBERTSON
The Associated PressTuesday, July 1, 2008; 4:39 PM
SAN JOSE, Calif. -- Hackers broke into Citibank's network of ATMs inside 7-Eleven stores and stole customers' PIN codes, according to recent court filings that revealed a disturbing security hole in the most sensitive part of a banking record.
The scam netted the alleged identity thieves millions of dollars. But more importantly for consumers, it indicates criminals were able to access PINs -- the numeric passwords that theoretically are among the most closely guarded elements of banking transactions -- by attacking the back-end computers responsible for approving the cash withdrawals.
The case against three people in U.S. District Court for the Southern District of New York highlights a significant problem.
Hackers are targeting the ATM system's infrastructure, which is increasingly built on Microsoft Corp.'s Windows operating system and allows machines to be remotely diagnosed and repaired over the Internet. And despite industry standards that call for protecting PINs with strong encryption -- which means encoding them to cloak them to outsiders -- some ATM operators apparently aren't properly doing that. The PINs seem to be leaking while in transit between the automated teller machines and the computers that process the transactions.
"PINs were supposed be sacrosanct _ what this shows is that PINs aren't always encrypted like they're supposed to be," said Avivah Litan, a security analyst with the Gartner research firm. "The banks need much better fraud detection systems and much better authentication."
It's unclear how many Citibank customers were affected by the breach, which extended at least from October 2007 to March of this year and was first reported by technology news Web site Wired.com. The bank has nearly 5,700 Citibank-branded ATMs inside 7-Eleven Inc. stores throughout the U.S., but it doesn't own or operate any of them.
That responsibility falls on two companies: Houston-based Cardtronics Inc., which owns all the machines but only operates some, and Brookfield, Wis.-based Fiserv Inc., which operates the others.
A critical issue in the investigation is how the hackers infiltrated the system, a question that still hasn't been answered publicly.
All that's known is they broke into the ATM network through a server at a third-party processor, which means they probably didn't have to touch the ATMs at all to pull off the heist.
They could have gained administrative access to the machines -- which means they had carte blanche to grab information -- through a flaw in the network or by figuring out those computers' passwords. Or it's possible they installed a piece of malicious software on a banking server to capture unencrypted PINs as they passed through.
What that means for consumers is that their PINs were stolen from machines that showed no signs of tampering they could detect. In previous PIN thefts, thieves generally took steps that might draw notice -- sending "phishing" e-mails, for example, or installing false-front keypads or even tiny cameras on ATMs.
Getting the PINs is a key step for identity thieves. It lets criminals encode stolen account information onto blank ATM cards and withdraw piles of cash from compromised accounts.
Don Jackson, director of threat intelligence for SecureWorks Inc., said he has seen an "alarming" spike in the number of attacks on back-end computers for ATM networks over the past year.
"This was fairly large, but I don't think it's anything out of the ordinary -- these kinds of scams go on every day," Jackson said. "What makes this case unique is the sheer luck of happening upon these guys and catching them red-handed. But there are a whole lot of other ATM and PIN compromises going on that aren't reported."
The alleged plot is outlined in court papers supporting the prosecution of three people _ Yuriy Rakushchynets, Ivan Biltse and Angelina Kitaeva. They were indicted in March on two counts each of conspiracy and fraud. Prosecutors say their activities generated at least $2 million in illegal profits.
Defense lawyers for all three people did not return calls for comment, and it was not clear where they had been living. The main defendant, Rakushchynets, was described as having Michigan and Florida's driver licenses in a February FBI affidavit for an arrest warrant.
Citibank, part of Citigroup Inc., has declined to comment on the technique or how many customers' accounts were compromised. It said it notified affected customers and issued them new debit cards.
"We want our customers to know that, consistent with legal requirements, we do not hold them responsible for fraudulent activity in their accounts," the bank said in a statement.
Cardtronics said it is cooperating with authorities but otherwise declined to comment. Fiserv spokeswoman Melanie Tolley said the intrusion didn't happen on Fiserv's servers.
"Fiserv," she said, "is confident in the integrity and security of our system."
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