In This Issue
Bringing "Social" to M-Payments with Zumogo
Protection through Adaptation and Evolution
Changing Winds of Commercial Data Privacy
ProPay News
Zumogo Press Release
Quick Links

Join Our Mailing List!

Mobile payment applications are becoming widely known and functionality is rapidly increasing.  With so many advantages to these app's, why is there no social aspect integrated? ProPay's Social M-Payment allows merchants and consumers to chat directly between each other, bringing a new "cool" factor to the scene. Mobile payment applications need to have several other elements in order to become a widely accepted social payment app.  


Evolution is an integral part of business. Change needs to occur in order for any business to stay in tune with new technology. Mobile payments is a new way of thinking for accepting credit/debit card transactions.  Dr. Heather Mark, PhD, discusses the views of "Mobile Payments" in this months newsletter. 


Privacy is always a concern when it comes to technology.  Businesses are always in need to stay compliant.  The Federal Trade Commission has released green papers discussing privacy in e-Commerce and proposing divergent but significant changes to how online businesses deal with privacy.


Lastly, ProPay's Zumogo has launched at the 2011 Sundance Film Festival! Below you will find the link to read the latest in the Social M-Payment Press Release.


As always, please feel free to forward this newsletter to anyone that you think might be interested. 

The ProPay Team
Bringing "Social" to M-Payments with Zumogo
by Chris Mark, EVP, Data Security and Compliance

Over the past several years, numerous advances have been made in mobile payment technology.  SMS, WAP, and NFC are all becoming common terms.  While each of these technologies has perceived advantages and disadvantages, none incorporate social features into their technologies.  This new approach, coined "Social M-Payments" by ProPay, incorporates the most attractive elements of mobile payments and social media to the advantage of both the merchant and consumer.  Social M-Payments like Zumogo possess the following characteristics:


1.       Merchant Agnostic- Many merchants are using proprietary payment applications.  The impact is that a consumer would need an application for each merchant.  A Social M-Payment solution allows a consumer application to identify, communicate with, and pay multiple merchants.


2.       Proximity Control-  While technologies such as Near Field Communication require the customer to use the payment device in close proximity to the point of sale system, a Social M-Payment solution allows payments to be made inside the merchant or many miles away.


3.       Merchant Identification/Location- Social M-Payments solutions should have the ability to allow a consumer to identify and locate participating merchants.  ProPay's Zumogo employs GeoLocation services for this purpose.


4.       Bi-Directional Communication- A solution cannot be called Social M-Payments without allowing the merchant and consumer to communicate with each other.  This means that a consumer must have the ability to communicate with the merchant and the merchant must have the ability to communicate with the consumer. 


5.       Privacy/Security- Privacy and security should be a consideration of any social media or Social M-Payment solution.  Enabling consumers to opt-in or opt-out of various features and communications fosters trust between the parties.  Finally, ensuring that appropriate fraud prevention tools and authentication mechanisms are employed becomes critical to the success of any Social M-Payment solution.


ProPay's Zumogo payment solution incorporates all of the characteristics listed above.  It should be noted that Social M-Payments should be considered complementary to technologies such as NFC.  


Protecting Your Business through Adaptation and Evolution

by Dr. Heather Mark, PhD, SVP, Market Strategy

Evolution - this word generates a great deal of trepidation.  In business, this means that organizations must be agile, flexible, willing, and able to adjust to a rapidly changing competitive landscape. Maintaining a competitive edge means being able to address new technologies or processes as they arise in order to meet customer demand.  In the world of payments, the landscape is changing as a result of the rapid movement towards mobile payment technologies.  In order to respond and adapt, though, one must be familiar with the technologies and processes that are driving the change. 


"Mobile" payments come in a variety of packages.  The most frequently discussed is Near Field Communications (NFC), in which a user taps or waves a payment device near specialized equipment in the merchant's location.  Typically, there is a limit on the purchase amount in this type of transaction, because of  the limited authentication required to complete an NFC transaction..  Physical proximity is also a consideration for NFC communication.  The consumer must be physically present in the store and be able to 'swipe or touch' the NFC device to the point of sale to make the payment.


Another common mobile payment technology is common text messaging known more formally as Simple Message Service or SMS.  In a common implementation of this model, a consumer texts authorization to the merchant and the charge appears on the consumer's wireless bill.  This method is most commonly associated with digital goods, such as games or applications, in which the average ticket price is rather small.  This method also requires a partnership with a wireless carrier, or a third party provider that has such a relationship.


Mobile payments can also be accomplished through applications that can be downloaded to the user's Smartphone. This method is arguably the most versatile application for mobile payments.  If implemented correctly, it can address security issues associated with the storage of cardholder data and can allow merchants to enhance the customer experience.  These can be used in either face-to-face transactions or when the merchant and consumer are geographically distant.


The important thing to remember is that the term "mobile payments" can mean a variety of things to different people.  Clearly, the industry is moving towards mobile payments, but it has yet to decide on a specific path.  While some large companies are focusing on NFC, we are also seeing a movement towards applications.  It can be said, actually, that these two technologies are complementary.  As with any new technology, companies should carefully evaluate its value to the organization and to its customers.


Preparation and knowledge are powerful aids to evolution.  We know that mobile payments will be incorporated into future payment strategies and platforms.  Being able to do so in a way that makes sense for your business and your customers, will be the critical factor in a successful payments evolution for your organization.  If you have questions about your mobile payment strategy, please feel free to contact us

The Changing Winds of Commercial Data Privacy on the Internet

by Tony Allen, Corporate Counsel


Concerns relating to current business privacy policies have recently lead both the U.S. Department of Commerce and the Federal Trade Commission to release green papers, the precursor to white papers, dealing with the state of privacy in e-Commerce and proposing divergent but significant changes to how online businesses deal with privacy.  This emphasis on change is being driven by the rapid transformation of information and communications technology in the marketplace.


Today commerce depends on rapid online communications and transmission of significant amounts of data.  That a significant amount of global commerce takes place on the Internet is evidenced by the fact that global online transactions are currently estimated to be 10 trillion dollars annually.  In the U.S. alone online transactions are currently estimated at 3.7 trillion dollars annually.  Furthermore, the importance of the Internet in the lives of Americans is demonstrated by the fact that 96% of working Americans use the Internet as part of their daily life, while 62% use the Internet as an integral part of their jobs.


Arguably, consumer trust is of central importance to the continued growth in use of the Internet.  Simply stated trust is the belief that someone or something will behave as expected, and not the other way.  The Department of Commerce has collected a large body of evidence during the rapid growth of the Internet, pertaining to business' current typical "notice-and-choice" model of commercial data privacy policy-posting privacy policies on websites to inform consumers' choices about whether to use a website, is leading to a significant decrease in consumer confidence and trust.  To revitalize trust both the Department of Commerce and the Federal Trade Commission are proposing new approaches to consumer privacy for commercial data.


To protect consumer privacy in an era of rapid change a new framework is proposed for business.  A framework that applies to all commercial entities that collect or 9 data that can reasonably be linked to a specific consumer, computer or other device.  In this regard the Department of Commerce proposes three overriding principles. 


The first is privacy by design, rather than notice-and-choice.  Privacy by design means that companies should promote consumer privacy throughout their organizations and at every stage of the development of their products and services.  To implement this principle companies should incorporate substantive privacy protections into their practices such as data security, reasonable collection limits, sound retention policies, and data accuracy and maintain comprehensive data management procedures throughout the life cycle of their products and services.  This includes auditing the use of commercial data by the company to assure that it is only being used for the purposes stated in the company's privacy policy and no other.


The second principle is simplified consumer choice.  This means companies should not provide choice before collecting and using consumer's data for commonly accepted practices, such as product fulfillment, but for practices requiring choice, companies should offer the choice at a time in a context in which the consumer is making a decision about his or her data.


The third principle is greater transparency of company's data practices.  It is proposed that privacy notices should be clearer, shorter, and more standardized, to enable better comprehension and comparison of privacy practices.  Companies should also provide reasonable access to the consumer data they maintain.  Finally, companies must provide prominent disclosures and obtain affirmative express consent before using consumer data in a materially different manner than claimed when the data was disclosed.


Under this new approach you may see the Federal Trade Commission adopting a safe harbor from prosecution for companies that adopt the privacy by design model and do not vary from their policy.  However, varying from this model will likely be viewed by the Federal Trade Commission as a deceptive and unfair practice and subject to prosecution.


Understanding Effective Rates

Scott Nelson, Vice President, Marketing

When comparing merchant accounts, make sure to read the fine print and understand all of the fees and variable rates of the plan. Some merchant service providers advertise, "rates as low as...", but what are you really paying? What is your real Effective Rate?


The best way to compare the costs for different merchant accounts is on an Effective Rate basis.  To find the Effective Rate add the fees generated from each transaction as well as all fees associated with the merchant account and divide it by the total processing volume expected. In one instance a merchant claimed rates as low as 1.48% but when all the fees were added up (statement fees, gateway fees, required equipment, monthly minimums, etc.), the effective rate ended up at 6.22% a far cry from 1.48%.  Understand that very few transactions qualify for the "as low as" rate.  Many transactions are downgraded to more expensive tiers. Most merchants will charge different transaction fees based on the type of transaction (Retail/Restaurant, Mail/Telephone Order-MOTO, Internet, etc.), and the type of card used (Qualified Consumer Card, Qualified Rewards Card, Keyed or Typed in Commercial Card, etc.). Below is an example of the variable rates dependent on the type of card a merchant provider charges for retail and restaurant transactions:


Type of Card

Transaction Rates & Fees

Qualified Regular Consumer Cards

1.48% + $0.20

Qualified Rewards Cards

2.20% + $0.20

Typed or Keyed in Commercial Cards

2.91% + $0.33

Non-Qualified (US Govt. / Outside of US

3.75% + $0.33


Effective Rate formula:


Transaction Rates + Merchant Account Fees

                  Processing Volume


At ProPay, what you see is what you get-a simple, straightforward, non-variable rate with no hidden fees. That makes calculating your Effective Rates easy. And with ProPay, you get the most flexible, most secure options for processing cards anytime, anywhere. Click to learn more about ProPay Merchant Accounts.










 Zumogo Logo




ProPay, an industry leader in Merchant Services, End-to-End Payment Security, credit card processing, and electronic payment services, is pleased to announce the debut of its new social mobile payment (m-payment) platform, provisionally named Zumogo™ in its initial release during the  2011 Sundance Film Festival. It is a mobile payment application that facilitates payments and bi-directional communication between merchants and their consumers, allowing customers and businesses to connect in a powerful new way.  With Zumogo (pronounced  "Zoo-MOE-Go"), businesses can efficiently market to new and existing  customers  and improve operating efficiencies, while customers can communicate with and make payments to businesses -- all through their Smartphone.  Both groups can benefit from the efficiency and security of the application.  Importantly, no sensitive payment data is stored on the customer's Smartphone or in the merchants' systems as Zumogo is designed to deliver state-of-the-art security.

Click here to read more on the Zumogo Press Release and the application's functionality.


DISCLAIMER:  ProPay, Inc. provides this newsletter only for general information or educational purposes.  Nothing herein should be relied upon without seeking the advice of an attorney or other professional appropriate to the subject matter.  While ProPay, Inc. strives to ensure information in this newsletter is accurate and current, ProPay, Inc. does not guarantee or represent that the information is correct, complete, or up-to-date; nor shall ProPay, Inc. be liable for any indirect, incidental or consequential damages (including lost data, information or profits) sustained or incurred in connection with the use of, operation of, or reliance upon any information contained in this newsletter.