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Sep. 25th, 2015

Edition #473


 
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This Day
in History: 1957
Central High School Integrated
Under escort from the U.S. Army's 101st Airborne Division, nine black students enter all-white Central High School in Little Rock, Arkansas. Three weeks earlier, Arkansas Governor Orval Faubus had surrounded the school with National Guard troops to prevent its federal court-ordered racial integration. After a tense standoff, President Dwight D. Eisenhower federalized the Arkansas National Guard and sent 1,000 army paratroopers to Little Rock to enforce the court order.

On May 17, 1954, the U.S. Supreme Court ruled unanimously in Brown v. Board of Education of Topeka that racial segregation in educational facilities was unconstitutional. Five days later, the Little Rock School Board issued a statement saying it would comply with the decision when the Supreme Court outlined the method and time frame in which desegregation should be implemented.

Arkansas was at the time among the more progressive Southern states in regard to racial issues. The University of Arkansas School of Law was integrated in 1949, and the Little Rock Public Library in 1951. Even before the Supreme Court ordered integration to proceed "with all deliberate speed," the Little Rock School Board in 1955 unanimously adopted a plan of integration to begin in 1957 at the high school level. The National Association for the Advancement of Colored People (NAACP) filed suit, arguing the plan was too gradual, but a federal judge dismissed the suit, saying that the school board was acting in "utmost good faith." Meanwhile, Little Rock's public buses were desegregated. By 1957, seven out of Arkansas' eight state universities were integrated. Click here to read more.
Trending this week...

EMV is less than a week away, and many merchants are still wrestling with upgrades. As a reminder, TSG released findings last week stating approximately 27 percent of merchants will be EMV-ready by October 1st.
 
In other news, First Data, valued at around $20-25B, is planning to raise $3B in an IPO that could kick off next week. This would mark the biggest U.S. listing so far this year.
 
Other highlights include:
A Few Days Left To Get Educated...At a Discount

TSG's EMV in the U.S. - The Whole Story (Preview)  is an 86-page guide to help understand what EMV is, who is impacted by the EMV migration and how the shift to EMV will impact the payments environment.

Receive a 50 percent savings on this eReport until October 1st. Click here to purchase.

This report will provide newcomers, and industry veterans in the merchant landscape and payments landscape, with useful information into the various facets of the U.S. migration to EMV.
9/23/15
TSG in The New York Times
A handful of national retailers - most prominently, Walmart and Target - have invested in E.M.V.-ready terminals and spoken publicly about the switch, but many others have stayed silent. Around 27 percent of American merchants will be ready to process E.M.V. cards next month, according to a survey conducted this month by The Strawhecker Group, a consulting firm for the payments industry. For small sellers, the readiness rate is even lower. Banks and industry groups estimate that one in five will have their new systems running by Oct. 1. Both systems will continue to be available during a lengthy transition period.
9/21/15 The Wall Street Journal
May require a subscription to read. Payment processing giant First Data Corp. is planning to raise $3 billion in an initial public offering slated to kick off this week, according to people familiar with the matter, the biggest U.S. listing so far this year. First Data, taken private by KKR & Co. in 2007 for about $26 billion, could file its proposed IPO price range as soon as Monday, the people said. Money raised in the deal would be used to pay down a chunk of the company's $21 billion in debt.The IPO is expected to give First Data a stock market value of roughly $20 billion to $25 billion, depending on the demand it drums up after about two weeks on a "roadshow" pitching the stock to investors, the people said. If all goes to plan, First Data could begin trading the second week of October.
9/23/15 American Banker
In his Sept. 18 op-ed, American Bankers Association chief executive Frank Keating claims that the Federal Reserve's debit card interchange fee regulations have not done enough to help merchants or consumers. I agree. The Fed's Regulation II allows interchange rates to be charged at an unreasonably high level that far exceeds the real costs of transactions. The Fed's final rule failed to adequately follow the law I wrote and did too little to rein in the lucrative swipe fee price-fixing scheme created by Visa, MasterCard and debit card-issuing banks. Under the Fed's rule, Visa and MasterCard have gleefully raised swipe fee rates on many types of debit transactions, boosting the profits of their big-bank allies but hurting Main Street businesses and their customers.
9/22/15 New York Post
The Blackstone Group has withdrawn from the auction of ATM maker NCR, marking the second time this year the company has failed to come to terms with a potential buyer, The Post has learned. "Nothing is going to happen," a source said. "The process is over." The Post reported earlier this month that NCR had re-opened sale talks with Blackstone after an earlier auction collapsed. Buyout shop Thoma Bravo made a roughly $31 a share offer for NCR in July that the company rejected, sources said. 
9/22/15 Recode
Cover, a young payments app, is accepted in 350 restaurants in four cities. It has processed more than $10 million in transactions since the beginning of the year. But it will record, at most, just $150,000 in revenue in 2015 after passing on a big cut of its fees to other financial institutions, its founder says. So go the economics of a young payments business. And so ends Cover's life as a stand-alone company. Founder Mark Egerman said today that his startup has sold to European competitor Velocity in a small deal, after passing on taking on more venture capital under less-than-great terms.
9/22/15 Digital Transactions
Deadline: A date or time when something must be finished: the last day, hour, or minute that something will be accepted. The word "deadline" carries with it the implication of pressure-pressure to act or face the consequences. That's the very word being tossed around when people talk with merchants about the Oct. 1 liability shift. Some people are even using it as a tactic to try to sell merchants on a problem that may not exist in their business. Plain and simple, there's no deadline to upgrade terminals to accept chip transactions. The fact is, the sun will come up on Oct. 1 and a merchant will find the world much as it did on Sept. 30. 
MobilePaymentsMobile Payments & Bitcoin
9/24/15 CNET
Samsung Pay has proven both popular and profitable during its first month of use in South Korea, according to the company. On Wednesday, Samsung announced that its mobile payments system took in more than $30 million in transactions in South Korea between August 20, when it launched, and September 20. The service has been successful with merchants and users, Samsung touted, generating more than 1.5 million transactions and recording around 36 percent of its users as active during the first month, with 10 percent of them using it every day.
9/23/15 ZDNet
As EMV -- or chip and pin -- payment methods finally start to infiltrate American stores this fall, Samsung and Visa are among some of the tech and financial industry titans brainstorming beyond the plastic card (and even smartphones) altogether. "I think we're operating under the philosophy that anything that is transactional will be transactional," said Sam Shrauger, senior vice president of Visa's digital solutions unit, during a kickoff event for the 2016 Olympic Games at Visa's Global Headquarters on Wednesday.
9/25/15 Finextra
Former Ukash CEO, David Hunter has joined wearable payments startup Kerv as chairman, as the firm kicks off a crowdfunding campaign for the launch of its first product, a contactless payments ring. Kerv made its debut on Kickstarter this morning in an effort to raise 77,000 in mass production capital. The ring, which will retail at 49.99 has an outershell made of zirconia ceramic and is scratch resistant and water proof.
9/23/15 ISO & Agent
Square has opened an office in St. Louis, which will serve the mobile point of sale company's clients in the Midwest. The company plans to immediately hire 40 employees, expanding to more than 200 over the next five years, covering compliance, customer support, IT, recruiting and office experience. The St. Louis office will be the San Francisco-based Square's fourth office in the U.S. The company also has offices in Canada, Japan and Australia.
9/21/15 TechCrunch
The new Google Wallet for iOS app has been completely rebuilt with this peer-to-peer focus. With PayPal's new PayPal.me service, Square Cash, Facebook, and even Snapchat, competition is hot and there are plenty of companies in the peer-to-peer payment space already. One of the notable facets of Google Wallet is that it allows to send money to anyone in the U.S. using only an email address, the person doesn't even need to have/use the Wallet service themself.
9/22/15 Finextra
Bitcoin startup Circle has become the first firm to be granted a BitLicense from New York state's financial watchdog. The new BitLicenses are the New York State Department of Financial Services' controversial answer to the unique regulatory challenges posed by the nascent crypt-currency industry.
9/24/15 TNW
We've all been there - sometimes you simply need to borrow money. Whether it's for a big investment, moving to a new place or life just getting a little rough, Ledge aims to make it dead simple to borrow money from friends, family and others - and actually pay them back. It essentially works like a crowdfunding platform, but with a few twists. After borrowers create a campaign explaining how much cash they need, they give the loan interest rate (which adds a lending incentive), and specify the number of installments payments will be made over.
RegulationSecurityRegulation & Security
9/25/15 Bank Info Security
Security experts warn about a trio of malware threats that are designed to steal cash, online banking credentials as well as payment-card data from point-of-sale devices. The new warnings center on three types of unrelated malicious code. For starters, malware has been spotted in the wild that is being used to drain cash from ATMs in Mexico, although security researchers warn that it could go global. The Shifu banking Trojan, meanwhile, has moved beyond Japan and is now being used to target customers of four U.K. banks. 
9/21/15 Krebs on Security
In December 2013, just days after a data breach exposed 40 million customer debit and credit card accounts, Target Corp. hired security experts at Verizon to probe its networks for weaknesses. The results of that confidential investigation - until now never publicly revealed - confirm what pundits have long suspected: Once inside Target's network, there was nothing to stop attackers from gaining direct and complete access to every single cash register in every Target store. According to an internal corporate report, Target commissioned the study "in anticipation of litigation" from banks that might join together to sue the retailer in a bid to recoup the costs of reissuing cards to their customers. Last week, a federal judge cleared those claims to go forward in a class action suit.
9/23/15 Credit Union Times
The Federal Reserve Board on Wednesday announced the approval of enhancements to the Federal Reserve Banks' same-day ACH service. The enhancements will align the Fed's same-day ACH service with recent amendments to NACHA's Same-Day ACH operating rules. The move will also facilitate the use of the ACH network for certain time critical payments, accelerate final settlement and improve funds availability to payment recipients, the Fed said in a release.
9/23/15 BTN
It sounds like a movie plot, but it's all too real: a group with the handle DD4BC tries to hold corporations hostage, threatening distributed denial-of-service attacks unless it is paid a ransom in bitcoins. Comprehensive data is hard to come by, but security vendor Akamai Technologies reported a spike in such attacks from April through June before they eased a bit in July. Its rivals Arbor Networks and Verisign have detected similar patterns, and the Financial Industry Regulatory Authority recently sent warnings to companies to be on guard.
9/23/15 Wired
When hackers steal your password, you change it. When hackers steal your fingerprints, they've got an unchangeable credential that lets them spoof your identity for life. When they steal 5.6 million of those irrevocable biometric identifiers from U.S. federal employees-many with secret clearances-well, that's very bad. On Wednesday, the Office of Personnel Management admitted that the number of federal employees' fingerprints compromised in the massive breach of its servers revealed over the summer has grown from 1.1 million to 5.6 million.

EconomyEconomy
9/24/15 The New York Times
The Federal Reserve still intends to raise its benchmark interest rate this year, barring unpleasant surprises, the Fed chairwoman, Janet L. Yellen, said on Thursday. Ms. Yellen, speaking a week after the Fed announced it was not ready to raise interest rates just yet, reiterated that the central bank was not planning to wait much longer. She said that labor market conditions were improving and that the Fed expected inflation to follow.
9/24/15 American Express
When it comes to finances, more than half (53% vs. 45% in 2014) of Americans expect a greener outlook in the next six months, and this optimism is strongest among Millennials (70% vs. 64% in 2014) according to the American Express Spending & Saving Tracker. With job and financial confidence high, Americans are comfortably spending and adequately saving. For the second year in a row, employed Americans are reporting that they feel more stable in their jobs than they did a year ago (34% vs. 25% in 2014).
PaymentsPressPayments Press
Business Question TSG is assisting buyers and sellers connect as well as by providing transaction support services to assist both buyers and sellers achieve their objectives.
 
In addition, TSG has been engaged to identify ISO and merchant acquiring business acquisitions and capital partnerships. 
 
Key investment criteria includes:
  • First Data back-end portfolios (with and without the sales component)
  • Producing monthly Net Revenue of $20,000 to $35,000
If you are interested in discussing a potential transaction, please provide high level details of your business and email us at Acquisitions@TheStrawGroup.com. Learn more about TSG's Transaction Advisory services.
 
All responses will be treated confidentially.

9/21/15 ACI Worldwide
As retailers and banks prepare for the October 1 EMV liability shift-which moves fraud liability from issuing banks to merchants -many consumers have not yet received their new chip-enabled cards, or are simply in the dark about what EMV means, according to a new survey from ACI Worldwide. The new EMV Readiness Survey of 1,000 adults in the U.S. provides insight into consumers' views on EMV, and spotlights issues and implications for banks and retailers, ahead of the busy holiday shopping season.
9/23/15 First Data
First Data and Pivotal announced that they will bring First Data eCommerce services to Spring developers. This new collaboration is designed to make it simple and safe for developers seeking to add payment services to their applications. Together, the companies will provide Spring developers with easy access to payment services, an abstraction layer for portability as part of Pivotal's Cloud Native platform, Pivotal Cloud Foundry, and a development toolbox.
9/23/15 TechCrunch
Originally, I was trying to come up with a really whip-smart headline for this...like: "Weed Is The Gateway Drug For Gateway Point Of Sale Services," but there was no need. The news is simple: A super-smart group of folks that sold a company (Outright.com) to GoDaddy has launched its point of sale service specifically aimed at shops selling cannabis. They're called Green Bits.
9/23/15 TSYS
TSYS announced that it has extended its payments agreement with ING Bank N.V. for their commercial card portfolio. TSYS has been supporting ING Bank N.V. since 2009 with the TS2 processing platform, as well as providing additional services. ING is a global financial institution with a strong European base, offering banking services through its operating company ING Bank. Through the TSYS platform ING delivers commercial cards into 14 European countries.
9/22/15 BusinessWire
Creditcall, the EMV-ready payment gateway and EMV migration specialist, has partnered with trusted credit card processing and financial services company Gravity Payments to simplify and speed up the EMV migration process for ISVs, VARs, and developers. With the October 1st Liability Shift looming, the integration of Creditcall's ChipDNA EMV SDKs for iOS, Android, Windows, and Linux, paired with Gravity Payments' payment platform, GravityPay, allows integrators to benefit from the fastest and easiest path to EMV.     
9/23/15 American Express
American Express and the Seattle Seahawks announced a multi-year partnership to bring excitement and value to passionate Seahawks fans - also known as the "12s." With strong relationships with both Card Members and merchants and a legacy of working with sports partners, American Express will work with the Seahawks and select merchants to amplify the fandom around one of the best-supported teams in professional sports. Card Members and fans will be given a range of unique offers, experiences and benefits that are designed to magnify the excitement around the season.
9/21/15 BusinessWire
ShopKeep, the cloud-based technology and business management solution for independent merchants, today announced its acquisition of Ambur, an iPad and iPhone point of sale system for more than 1,500 restaurants. Founded by former restaurateurs Ansar Khan and James O'Leary, Ambur provides a feature-rich set of options specifically designed for full-service, quick-service and fast casual restaurants, as well as bars and food trucks. 
9/25/15 Yahoo! Finance
Shopify Inc., a leading cloud-based multichannel commerce platform, today announced the launch of its new credit card reader that will allow Shopify merchants in the U.S. to securely accept chip and pin, tap, and swipe credit and debit cards as well as contactless payment technologies like Apple Pay™.    
9/23/15 Mobile News 
The Pingit app allows customers to pay for goods and services quickly without having to enter long bank card numbers. Barclays and Verifone have signed an agreement allowing business in the UK to offer Pingit as a mobile payment solution. This new agreement will give any of Verifone's 20,000 business clients in the UK the opportunity to integrate the Pingit app into their online retail channels.
9/24/15 PRWeb
Priority Payment Systems and PayRight Health Solutions announced today a partnership to help improve patient payment education and financial management. Under this agreement, Priority will license PayRight's healthcare payment technology to power Priority's MX Medical and MX Home Care solutions, providing comprehensive tools for identifying patient eligibility and responsibility combined with a wide variety of payment options.
9/22/15 MasterCard
Silicon Valley Bank and MasterCard are inviting startups from across the United States to apply for Commerce.Innovated., a program designed to help companies that are working in payments, fintech and commerce grow their businesses. Commerce.Innovated. is a four month virtual program that provides startups with the resources to help refine and scale their solutions through access to operational and industry expertise from Silicon Valley Bank, MasterCard and their respective networks.
9/24/15 EON
Powa Technologies today unveils its partnership with Canada's leading independent Canadian payment processor, CT-Payment. At CT Payment's 2015-2016 ISO Event this week, the PowaPOS T25 is being introduced to the CT-Payment's ISO and software developer partners as a preferred tablet-based POS platform for meeting the growing demand from their retail clients.
9/24/15 LTP 
7-Eleven introduced the PayNearMe Bill Pay app, on September 22, 2015. The mobile app, which is available to download for free in the Google Play store or iTunes App Store, is particularly helpful for the financially underserved and those who prefer to use cash. Better yet, the new app will allow cash users to keep track of payment history, set reminders, and securely pay their bills in less than a minute with just a trip to their local 7-Eleven store.

Copyright 2015 The Strawhecker Group. All Rights Reserved. Unless noted, TSG does not take responsibility for content or opinions. Articles are sourced as appropriate throughout.

   

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