Thursday, April 30, 2009

Canada’s First Transaction With a Chip Debit Card - Issue 19 - September 2007

Canada’s First Transaction with a Chip Debit Card

Toronto, July 9 07—TD Canada Trust has announced the completion of "Canada's first transaction with a chip debit card. The transaction was made at a Green Machine automated banking machine (ABM) located in TD's Creekside Corporate Office in Mississauga, Ontario. TD becomes the first organization in Canada to be able to conduct a transaction using a chip debit card at a chip-enabled ABM that adheres to EMV standards."

EMV is the global technology standard developed by Europay, MasterCard, and Visa for chip-based debit and credit cards to replace existing magnetic stripe cards. While many other countries including Britain and France have already migrated to chip technology, Canada has just begun, with critical mass of cards, ABMs and point-of-sale (POS) terminals in market expected to be reached by 2010. Over the next several years, TD will issue millions of chip-enabled TD Visa Cards and TD Canada Trust Access Cards to its customers. TD Merchant Services has already deployed tens of thousands of chip-enabled POS terminals to merchants in preparation of chip cards entering the market.

"We've made great progress internally to ready TD for the transition to chip, and being the first bank in Canada to be able to complete a transaction with a chip debit card is both a satisfying and proud moment," said Chris Stamper, Vice President, Core Banking and Debit Payments, TD Canada Trust. "With last year's upgrade of our network of more than 2,500 ABMs, today's announcement sets the stage for the final software implementation at Green Machines to accept chip debit and credit cards."

Chip technology simply makes a secure payment system even better. Chip cards have an embedded computer chip that stores information in a secure, encrypted format, making it virtually impossible for unauthorized users to copy or access the information on the card. Chip-enabled POS terminals will prompt chip debit and credit cardholders to enter a Personal Identification Number (PIN). The PIN provides an extra level of protection against fraudulent unauthorized use and is a key security element of the transaction.

"Because we offer both debit and credit card issuing and payment processing services, we feel we're particularly well positioned to assist customers in the transition to chip technology," said Jeff van Duynhoven, Vice President, TD Merchant Services. "Businesses that process their card payments through TD can gain an advantage by tapping into the high level of confidence consumers have with the TD brand at the point-of-sale."


NOTE FROM THE EDITOR

Chip, contactless and other innovative authentication devices are being rolled out in Canada and the US to cut down on fraud, increase convenience and capture a greater share of transactions that are still cash based. We are approaching, and have perhaps passed, the tipping point where a majority of retail transactions are electronic and not cash-based. In my view, all non-biometric authentication and identification devices have a kind of built in obsolescence with the advent of inexpensive biometric scanning devices. In Germany a material portion of grocery store payments are authorized by fingerprint.

Fingerprint authorizations are becoming popular in certain US markets as well. As a leader in biometric privacy regulation, Germany has also enacted legislation that specifically addresses biometric data bases. German and other European privacy laws make our Canadian PIPEDA and Office of the Privacy Commissioner look comical.

Canadian payments professionals and legislators should set the ground work for biometric payments which will inevitably become the standard form of authorization and payment not long after chip and contactless cards are finally rolled out.

In the mean time, the FT would like to wish all readers an awesome Canadian back to school season.

Adam N. Atlas

Editor in Chief

atlas@frontiertimes.ca


NEWS

Cardex Financial Corporation (CFC) changes their name to Cesef Financial Corporation

Montreal, July 19 07 – Cardex Financial Corporation, a Canadian company offering merchant cash advances, has changed their name to Cesef Financial Corporation.

CFC was formed in June 2006 as the sister company to Cardex Corporation, Canada’s leading payment processor, to offer their merchants cash advances. With Cardex’s recent acquisition by Pivotal Payments, CFC is now in the position to act as a standalone company and continue to offer Merchant Cash Advances to a wider array of Canadian SMEs, and business partners.

“Cesef means money, which is exactly what CFC provides to Canadian businesses,” said Peter Mazoff, President of CFC.

“The traditional reason for SME failure is due to lack of or poorly managed cashflow, Merchant Cash Advances allow millions of businesses to not only survive but also thrive in their new positions.”


Chase Paymentech Provides Tim Hortons Enhanced Speed and Convenience with Point of Sale Payment Acceptance

Toronto, July 17 07-- When customers step up to the front counter or pull up to the 24-hour drive-thru window at their local Tim Hortons, they will enjoy the convenience of paying with their MasterCard(R) card through the introduction of Chase Paymentech-powered services to be rolled out at more than 2,200 Canadian locations by September 2007.

Tim Hortons is introducing the latest payment solutions from Chase Paymentech as a means to provide payment convenience to consumers. Research indicates that nearly half of adult consumers carry $20 or less in their wallet and that 86 percent want to make cashless transactions more frequently.

Tim Hortons will also feature Chase Paymentech's payment solutions equipped with MasterCard PayPass card readers at the drive-thru and inside the store. These point-of-sale terminals will accept the newest contactless payment cards, along with conventional swipe cards from MasterCard. Contactless credit cards contain radio frequency technology to transmit payment details to themerchant's terminal, replacing the magnetic stripe and the need for consumers to swipe the card. Merchants accepting contactless technology are able to accept and process payments quicker, making contactless ideal for the quick service restaurant industry.

"Our customers expect fast, convenient service," said Paul House, president and chief executive officer, Tim Hortons.

"Providing them with the ability to just 'tap-n-go' when buying their coffee and food delivers on our commitment to provide customers with the best quality and convenience in the market."


Smart Processing Solutions partners with Electronic Transaction Services Limited

Toronto, July 19 07-- Smart Processing Solutions one of the TNS Group of Companies has announced that it has entered into a partnership with Electronic Transaction Services Limited, to pilot the Smart Processing Suite™ solution in the New Zealand market.

Independent SalesOrganizations acrossNorthAmerica – and now New Zealand - have been empowered by the Smart Processing Suite™ to successfully process in-house transactions. The Smart Processing Suite securely delivers terminal management, connection to EFT and ATM networks, extensive monitoring, reporting capabilities, and numerous management tools designed specifically to help the ISOs grow and advance.

With the Smart Processing Suite's™highly flexible configuration, exhaustive security measures and extensive feature set, large and small Banking Institutions, Credit Unions, Retail Organizations, and Independent Sales Organizations can provide the same level of service as a major national processing institution.


Anti-Money Laundering Spending Up 71 Percent at North American Banks

North America, July 15 07—A new survey by KPMG International reports that bank executives say spending to combat money-laundering activities rose by 71 percent in North America over the past three years,mainly to pay for IT systems and training staff.

With an expectation that the appropriate IT systems are now in place to support monitoring and regulatory reforms, those same North American executives expect to hold spending increases to just 28 percent over the next three years, the KPMG study found. But IT systems are only part of the monitoring process.

In addition, 95 percent of North American banking executives reported a rise in the number of suspicious activity reports (SARs) over the past three years, with 63 percent of those surveyed saying the number of SARs were up "substantially."

Globally, 72 percent of those surveyed reported an increase, while just 42 percent saying the number were "substantially" higher. The white paper did not ask for the number of SARs that each institution filed.

With more SARs being filed, banks have new investigative challenges, particularly when an issue requires cross-border deployment of staff and when emerging markets are involved.

"To successfully combat global AML issues you need a truly global team," said Pesce. "That means having well-trained, locally-based investigators in foreign countries who know the domestic banking laws and business culture, as well as how to speak the language."

Pesce also pointed out that although globalization of banking and other market forces have increased the focus on moneylaundering by senior management and boards, more attention is needed. According to the survey, only 63 percent of North American respondents believed AML issues were among senior management's highest priorities.


PUREPAY ACQUIRES REMITTANCE SOLUTIONS PROVIDER CREDITRON

Toronto, August 10 07 –Purepay, a $100 million buyout fund focused on payments, banking and the financial supply chain, announced that it has acquired Creditron, a Toronto-based remittance software provider focused primarily on middle market commercial customers in the U.S. and Canada. Creditron’s existing management team will continue to direct the company on a day-to-day basis.

With strong capabilities in Check 21 and Remote Deposit Capture, Creditron has been providing automated lockbox and remittance solutions to small and medium sized companies for 12 years. Regulations like Check 21 and BOC have created new and greater demand for these services. Creditron intends to capitalize on this increased demand by leveraging its operational experience in the sector and tapping Purepay’s capital resources to extend the company’s capabilities into new and broader markets.

Carol Coye Benson, a partner at Glenbrook Partners commented “Not only does Creditron have a very solid core remittance application, but its ROI product’s cash application functionality and integration withMicrosoft Great Plains hits the sweet spot for the small to medium enterprise.”

“We entertained several potential investors and in the end we chose Purepay based on their understanding of remittance and a shared vision of Creditron’s future,” saidWally Vogel, President of Creditron. “Purepay is not only a financial sponsor. We’re looking to leverage their network and resources to enhance the future growth of Creditron.”

Purepay anticipates a consolidation among companies serving this market and expects future opportunities in the remittance and lockbox services over the coming quarters. The deal closed on August 1, 2007.


Pivotal Payments Acquires Cardex Corporation’s 8000 Merchants Expanding Annual Processing to over $3.8 Billion

Montreal, August 8 07 — Pivotal Payments, announced it has purchased the assets of Cardex Corporation, one of Canada’s leading ISO/MSPs. With the acquisition of the Cardex portfolio, Pivotal continues its long-termgrowth strategy that began in 2005 to develop into one of North America largest, most complete, merchant friendly payment processors.

The purchase of Cardex Corporation’s assets adds over 8000 merchants to the Pivotal Payments portfolio, solidifying Pivotal as one of the top ISO/MSPs in North America, processing over $3.8 billion annually. All of Cardex’s 51 employees have joined the Pivotal team and will work out of Pivotal’s downtown Montreal offices. “We are very excited with the direction Pivotal is going in and feel confident that this new partnership will lead to tremendous growth,” says Cardex’s founder Greg Mitelman.

With debt financing provided by Goldman Sachs, Pivotal’s growth and acquisition plans continue to produce tremendous value and opportunity for its employees, partners and stakeholders. Plans for 2007-2008 include continued organic growth and additional strategic acquisitions that will extend Pivotal’s influence throughout North America.


NXGEN Payment Services Promotes Michael Jaffe Vice President of Global Marketing and New Programs

Calgary, August 1 07 – NXGEN Payment Services, a leading MSP for bothNOVAInformation Systems andCynergyData, has promoted Michael Jaffe as its Vice President of Global Marketing and New Programs. Jaffe will be responsible for designing, coordinating and driving to execution products and program to feed the company’s growth both in USA and in Canada while jump starting business in the other countries targeted by the International division of the company. In this position, Jaffe will report directly to the COO Giuseppe Caltabiano.

“Michael is one of the founders of NXGEN and has been a driving force in building up the indirect sales organization as well as taking to the market our core products,” said Giuseppe Caltabiano “the exciting part for all of us is that we are now expanding our International Division with senior management while growing profitably”

“After having brought NXGEN USA to the current level of sales, I cannot wait to start exchanging programs, products, and ideas across borders.” States Jaffe “With a solid presence established in USA and in Canada, more than 800 referral partnership in USA alone, we have plans to deepen our presence by growing in different vertical markets, while expanding our reach to different continents”

Michael Jaffe has been with NXGEN since its inception and bringsmore than 10 years experience in the payment and banking industry.


New From NCR, Teller Assist Cash Recyclers

Calgary, August 13 07– NCR Corporation has announced the availability in Canada of new Teller Assist Cash Recycler (TACR) technology. The cash recycling units, a component of NCR’s broader branch optimization portfolio, are integral to further extending NCR’s commitment to providing innovative branch technology to banks and credit unions across Canada.

The worldwide leader in financial self-service solutions,NCR recently signed a multiyear technology license agreement with CIMA S.p.A, a leading cash-handling technology company. With this agreement, NCR will leverage its global manufacturing expertise, customer service infrastructure, and sales and marketing breadth to bring CIMA’s Teller Assist Cash Recycler to the global marketplace.

TACR technology is designed to help improve branch efficiency and customer service levels, cornerstones of all retail bank branch strategies today. The TACR offers the optimum mix of a high-cash capacity, coupled with a small, branch-friendly footprint. The cash recyclers can be positioned at the teller counter for individual or shared use, or be used as a mini-vault to further enhance security for both cash and the employee.

“Since the 1980s, many bank branches have been using Teller Assist Cash Dispensers to improve teller productivity and increase security. We see TACR as an emerging technology that will replace the 20-year-old cash dispense system,” said Nicholas Hames, vice president of NCR’s Financial Solutions division in Canada. “TACRs offer financial institutions many incremental benefits. For example, over the course of the day, cash received by the teller begins to accumulate in teller drawers. TACRs eliminate this as cash can be stored safely within the cash recycling unit itself and made ready for immediate dispense. TACRs can also replace currency counters, day vaults and other commonly used incremental security equipment generally associated with Teller Assist Cash Dispensers.”

The TACR automatically authenticates, counts, stores and makes available deposited currency notes, which are then recycled back to customers over the teller counter. With today’s labour intensive cash counting process, it is not uncommon for a banknote to be counted by hand at least six times on its journey from the vault through the branch. As much as two-thirds of a teller’s daily processing time can be reduced using the TACR technology.

For commercial customers in particular, TACRs can reduce the transaction time for bulk cash counting and sorting deposits and cash purchase orders by as much as 50 per cent.


Desjardins and Couche-Tard Inc. Sign a Canada-Wide Partnership Agreement

Montreal, August 8 07 – Desjardins Group, the largest integrated cooperative financial group in Canada, announced the renewal of its partnership with Alimentation Couche-Tard inc. as a supplier of Desjardins payment solutions (debit and credit services).

Building on the strength of their running, ten-year partnership, Desjardins Card Services and Alimentation Couche-Tard inc. have not only renewed their agreement for services in Quebec, but also expanded it across Canada into the areas served by Alimentation Couche-Tard inc. under the Mac’s banner, as exclusive supplier for the processing of POS transactions.

“Now able to process both VISA™ and MasterCard® transactions, Desjardins Card Services is a premium supplier of payment and financing solutions and is strengthening its position as a leader in this area. Thanks to our extensive range of services, we can meet the evolving needs of merchants all over Canada.

We are very proud to be associated with Alimentation Couche-Tard inc. and to offer Desjardins payment solutions for all of its stores in Canada”, stated Jean Yelle, Vice-President of Desjardins Card Services.


TNS Smart Network Inc.’s Portfolio of 3rd Party ATMs is More Than Double the Size of the Largest Canadian Banks ATM Portfolio

Toronto, August 15 07 - TNS Smart Network Inc., Canada's largest ATM processor, announced that it has exceeded 10,000 3rd Party ATMs installed on its network and expects to reach a new plateau of 11,000 ATMs by the end of 2007. The strength of the Canadian ATM industry coupled with the confidence of Independent Sales Organizations and Merchants in TNS Smart Network's superior service and support is driving more ATMs to TNS Smart Network, surpassing all expectations.

TNS Smart Network's installed ATM base represents a volume of ATMs equivalent to 64% of all the ATMs deployed by the Big Five Banks in Canada. "At the current rate of growth, we expect that within one year, TNS SmartNetwork Inc. will surpass the number of ATMs currently deployed by all Canadian Financial Institutions combined.

Compared to the Banks our installed base of ATM's is more than twice the size of the largest banks installedATMbase." stated Mischa Weisz, President and CEO of TNS Smart Network Inc. (See table below)

Mr.Weisz added that, "The momentum that has driven us to where we are today is what we strive to maintain by offering the best customer service, the most innovative products and services, and giving the card holder what they want, access to their money, anytime, anywhere."

Number of installed ATM's by entity (*)

TNS Smart Network Inc. . .10,291

Royal Bank of Canada . . . . . .4,232

CIBC . . . . . . . . . . . . . . . . . . . 3,818

TD Canada Trust . . . . . . . . . .3,256

Scotiabank . . . . . . . . . . . . . . .2,742

Bank of Montreal . . . . . . . . . . 1,936

(*) Bank information as at October 31, 2006


Global Payments Certifies POSLynx220™ for Payments

Ottawa, August 1 07 – Precidia Technologies Inc., a global leader in the design and manufacture of Internet Protocol (IP) payment and networking devices, announced today the Class B certification of its POSLynx220™ payment router by leading payment processor Global Payments Inc. Today’s certification allows merchants to integrate Precidia’s secure payment application with existing POS devices including PCs and cash registers for fast, PCI compliant transaction processing to Global Payments’ GlobalNet @dvantage SSL Gateway.

While the popular POSLynx220 provides broadband connectivity to a wide range of POS equipment, from ATMs to payment terminals, today’s announcement introduces Precidia’s secure payment engine, TransNet™, to Global Payments customers. This payment engine integrates with existing PC and cash register applications, separating the payment function from other applications by housing it on the secure POSLynx220. This solution is ideal for hospitality and other retailers who depend on PC-based systems and want to ensure ongoing PCI compliance and cardholder security. With the POSLynx220 already certified by Global Payments to provide connectivity to a wide range of POS equipment, this new certification extends the IP payment options available to merchants processing to Global Payments.

Precidia’s Payment System includes the POSLynx220, TransNet™ secure payment engine, and MerchantVu™, which provides store-level statistics on transactions, network status and settlement. The Payment System boasts the industry’s most comprehensive approach to PCI and data security, with automatic alerts and updates, and a secure server for payments.


Capellas Set to Flip First Data?

August 1 07—MichaelCapellas, who sold bothMCI Inc. and Compaq Computer Corp., will become chief executive officer of First Data Corp. when its $26 billion leveraged buyout is completed. But how long will he and First Data be around?

Capellas, who has made his career by cutting costs and sprucing up companies for sale, may be a perfect fit for First Data under the control of private equity firm Kohlberg Kravis Roberts & Co. Private equity firms typically acquire companies, refinance their debt, cut costs and sell them for a profit after three to five years.

First Data and KKR could not be immediately reached for comment.

Capellas flips companies and pockets a lot of money on the way out. He sold Compaq to Hewlett-Packard and served as the combined company’s president for sevenmonths.He walked away with a severance package of more than $14 million, while 17,000 employees lost their jobs in the merger. At MCI, he got a $39 million package for helping turn around the bankrupt company and selling it to Verizon Communication.

First Data’s Chairman Ric Duques described Capellas as: “Michael is by any measure an accomplished, energetic and visionary CEO.”


PresentPay Inc. to Offer Secure eMail Bill Presentment and Payment

Winnipeg, September 9 07 – TelPay Incorporated is pleased to announce the formation of a subsidiary company, PresentPay Inc. to promote the presentment By secure email of corporate bills, statements and other documents normally distributed by regular mail.

PresentPay has entered into a reseller agreement for Canada with Striata Inc., of New York an international provider of bill presentment services.

Striata Secure eDocument Delivery and Email Bill Presentment & Payment are solution sets that deliver rapid reduction in operational costs and quicker payment, by revolutionizing the way bills, statements, pay stubs and other high volume system-generated documents are delivered and paid.

Unlike today's online billing solutions, which insist on consumers visiting and registering at a website, Striata delivers feature rich, secure email documents directly to customers’ inbox allowing two click electronic bill presentment and payment. This innovative and strategic change from ‘pull’ to ‘push’ dramatically increases consumer adoption of electronic billing, allowing the biller to achieve rapid ROI from their self-service and high volume e-correspondence investments.

Striata provides its billing services to many major utilities, Telco’s and financial institutions worldwide, including 3 of the top 12 banks in the world.

TelPay is Canada’s largest independent electronic bill payment processor. The combination of the Striata solutions and TelPay’s electronic payment capabilities, accomplishes the ideal solution to the long sought Electronic Bill Presentment and Payment (EBPP) eStatement capability that meets the needs of both the biller and the bill payer.


Credential Direct and TD Waterhouse Named Top Online Brokerage Firms in Canada

Ontario September 11 07—For the third time, Credential Direct and TD Waterhouse held top honors as the premier online brokerages for Canadians, according to the newly released Summer 2007 Surviscor analysis. Credential Direct retained both the "overall" and the "investor" top spots. TD Waterhouse retained the top spot in the trader profile. The analysis identified major shifts in price point, with little change in features and functionality across the firms.

In the investor profile, Credential Direct earned four category awards, BMOInvestorLine earned two and ScotiaMcLeod Direct Investing earned one. In the trader profile, TD Waterhouse earned four category awards, and BMO InvestorLine earned one.

According to the 2007 results, the main improvements to features and functionality during the past nine months have been pricing changes and an emphasis on increasing self-directed learning and research tools. "The price war continues to be the main topic of conversation as prices continue to decrease, mainly for active traders," said Surviscor President Glenn LaCoste.

Surviscor predicts that the online brokerage environment will see more features and functionality enhancements this year and into 2008 with security and messaging being at the top of the list of priorities. LaCoste observes that customers are demanding the best possible online security and secure messaging from their online brokerage firms. As a result, many firms have begun investing in delivering the most secure environment possible.


NCR Appoints Former Xerox Executive as NCR Canada President

Mississauga, September 11 07– NCR Corporation has announced the appointment of Ranji Persad as president of NCR Canada.

A proven sales and marketing executive, Persad has overall sales, marketing and management responsibility for all facets of NCR’s retail, financial and support services business in Canada.

“Ranji Persad brings to this executive role solid expertise in leading large-scale business transformation initiatives and delivering significant business results. He is joining NCR’s Canadian organization at a very exciting time as we embark on our journey as the new NCR,” said NCR Senior Vice President Dan Bogan. “By leveraging his successful sales, marketing and management track record, Ranji will help drive cross-functional marketing strategies that enhance the customer experience and also ensure that NCR capitalizes on the tremendous growth opportunities that exist in the Canadian self-service marketplace.”

Prior to joining NCR, Persad spent 24 years at Xerox Canada Ltd., most recently serving as vice president, business transformation and chief information officer. Before that, he held a number of other senior executive positions including vice president, strategy and sales operations, and vice president and general manager, major accounts Canada. His career also included management assignments in Xerox Canada’s business division marketing and indirect channel organizations as well as in the company’s U.S. operations.

Persad has a degree in commerce and economics from the University of Toronto and is Lean Six Sigma certified.

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