Issue 1014 - Prepaid Press Expo

INSIDE: Fast Facts P 2-4 | vanstone pos terminal P 5 | Gemalto mobile nFc in canada P 5 | vantaGescore adds 30 million people P 12

CHARTS: Global acceptance locations P 6 | Global cards in circulation credit & debit P 9 | Global General purpose cards 2012 vs. 2011 P 9 purchase transactions on Global cards P 10 | Global credit cards P 10,11 | Global debit & prepaid cards P 11

EMV Data PrEParationU.S. credit and debit card issuers using mainframe computers to store card account data can incorporate Prime Factors’ Bank Card Security System (BCSS) module to handle data preparation

Global branDs CarD aCCEPtanCE WorlDWiDEThe MasterCard and Visa networks of merchant acceptance locations have reached nearly 36 million worldwide. Acceptance locations include merchant outlets, ATMs, and bank branches

Global CarDs — 2012Transactions at merchants on cards carrying the American Express, Diners Club, JCB, MasterCard, UnionPay, and Visa brands totaled 149.36 billion for 2012, up 13.19 billion or 9.7% over 2011. These purchase transactions include commercial and consumer credit, debit, and prepaid cards. Prepaid cards are included in debit figures. Visa figures include both Visa Inc. and Visa Europe.

Visa debit cards continued to account for the most transactions at merchants with a share of 39.29%, followed by Visa credit cards with 22.78%, MasterCard credit cards with 14.95%, MasterCard debit cards with 11.88%, American Express credit cards with 3.91%, UnionPay credit

sMartDisPlayEr EPaPEr DisPlay CarDsTechnology to provide strong transaction authentication using ISO compliant plastic cards embedded with ePaper (electronic paper) display modules that generate one-time passwords (OTP)

trustEEr E-CoMMErCE FrauD ProtECtionMalicious software (malware) called uMitB, which fools cardholders into thinking they are completing a 3-D Secure protected purchase at a valid website, is being sold for $555 at

WEstErn union MobilE bill PayMEntsThe Western Union Payments links consumers to billers through a network of 44,000 walk-in locations, by phone through an IVR system, online at a website, and by mobile phone. In all channels

DEbit nEtWorks PiCk DisCoVEr’s aPP For EMVDiscover Financial Services will provide its D-PAS payment application for use in a new shared application identifier (AID) for EMV-compliant debit card transactions initiated by network

HEartlanD aDDs lEVEluP as MobilE PartnErHeartland Payment Systems (HPS), the fifth largest U.S. acquirer, has expanded its growing number of mobile payments and loyalty programs with a partnership with LevelUp, provider of a QR code-

MARCH 2013 Issue 1,014For 42 years, the leading publication covering payment systems worldwide.

© HSN Consultants Inc. 2013 THE NILSON REPORT Reproducing or allowing reproduction or dissemination of any portion of this newsletter in any manner for any purpose is a copyright violation subject to substantial fines. Yearly Subscription for 23 print and electronic issues is $1,295. ISSN 1087-8718THE NILSON REPORT: 1110 Eugenia Place, Suite 100, Carpinteria, CA 93013 USA • PHONE (805) 684-8800 • FAX (805) 684-8825 • [email protected]

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AMERICAN EXPRESS/WALMART Bluebird accounts are now eligible for FDIC insurance through an agreement between Amex and Wells Fargo bank, which will hold cardholder's deposited funds. Backed by FDIC insurance Bluebird accounts can be funded by Social Security, tax refunds and other government funds. There were 575,000 Bluebird accounts as of January 2013. Daniel Eckert is VP Financial Services for Walmart U.S., (479) 204-2123, [email protected], www.walmart.com. Alpesh Chokski, President, Global Payment Options, at American Express, (212) 640-2000, [email protected], www.americanexpress.com.

EARLY WARNING has enhanced its Deposit Chek product to ad-dress the threat of duplicate deposit fraud. A new feature verifies the legitimacy of mobile deposits by cross-checking them against deposits made at branch locations, ATMs, teller windows, and lockboxes of other institutions across the country. Bob Lewis is VP, Financial Services, 480-426-2040, [email protected], www.earlywarning.com.

GLOBAL PAYOUT, an electronic payment consultants and prepaid card management firm, will provide reloadable prepaid Discover cards to customers of UltraPawn. New cardholders will receive im-mediate access to funds obtained from the sale of personal assets. The National Pawnbrokers' Association says that the $789 million-a-year pawnbroker market grew 15% last year. William Rochfort is VP, Sales & Marketing at Global Payout, (619) 564-7811, [email protected], www.globalpayout.com.

THE NILSON REPORTNUMBER 1014 March 2013 - 1 -

GE CAPITAL RETAIL BANK will provide private label credit cards to customers of American Signature, a home furnishings retailer with 126 locations. Paul Schell is General Manager, Retail Finance at GE Capital, (937) 534-2289, [email protected], www.gogecapital.com.

FEDERAL RESERVE BOARD has released a report called "Consumers and Mobile Financial Services 2013", which is available at www.federalreserve.gov/econresdata/consumers-and-mobile-financial-services-report-201303.pdf.

TRANZLOGIC offers a system to track transaction data at merchant locations to identify demographic, geographic, psychographic, and economic details of key customers. Merchants access the data online, where they can monitor and analyze it to develop and implement targeted marketing campaigns. Charles Hogan is Co-Founder at Tranzlogic, (818) 926-4608, [email protected], www.tranzlogic.com.

COINSTAR, which operates self-service coin-counting kiosks at 20,300 locations in the U.S., Canada, Puerto Rico, Ireland, and the U.K., now lets its device in Texas, No. California, and Ohio be used to add coins and paper currency or withdraw funds from PayPal accounts, as well as send money to another PayPal account. Caroline Hauge is Sr. Marketing Manager at Coinstar, (425) 943-8732, [email protected], www.coinstar.com.

CHIRPIFY, a social commerce-based payments company, which has been enabling in-stream payments on Twitter and Instagram, now offers its service directly in the news feed on Facebook. Chris Teso is CEO at Chirpify, (503) 208-3068, [email protected], www.chirpify.com.

MOBILE MONEY AMERICAS 2013Four-Day ConferenceApril 15-18, 2013The Westin Santa Fe, Mexico City

Topics include: successful mobile financial services in a changing ecosystem, driving adoption through interoperability and building scale and sustainability, NFC, mobile financial service delivery, growing existing mobile money services, securing subscribers effectively, incentivising the uptake of retail mobile payments across Latin America and the Caribbean, and demystifying regulatory environments in the Americas. Speakers represent: Grameen Foundation, Scotiabank, Citibank, Banamex, Bank of Mexico, Uniteller Banorte, Bank of Jamaica, BBVA Bancomer, Central Bank of Brazil, and more. Cost is $2,499 for a gold pass. Contact Charlotte Walkling at Clarion Events, 44 (20) 7384-7919, [email protected]. Register at www.mobile-money-gateway.com/event/mobile-money-americas-2013.

FEATURED CONFERENCE 20%

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Subscribers to The Nilson Report will receive a 20% discount. (Use code MMANILSON.)

ADVANCED COMMERCE & MOBILE RETAIL SERVICES SUMMIT 2013Three-Day ConferenceApril 15-17, 2013The Pheasant Run ResortSaint Charles, Illinois

Topics include: mobile payments, POS upgrades, EMV migration, e-commerce platforms, mobile retail services, location-based marketing, omnichannel platforms, driving traffic, enhancing the customer experience, increasing basket size, increasing loyalty, and more. Speakers represent: Walmart, Supervalu, Ralph Lauren, Sears, Subway, Forest City, OfficeMax, US Foods, The Miami Dolphins, Chicos, The GAP, 7-Eleven, Express, jetBlue, Pandora, Batteries Plus, Levi’s, Domino’s, GM, A&P, Isis, MCX, Seamless and more! Cost is $1,895 for industry executives. Complimentary passes available for qualified retailers. Contact Melissa Morrissey at (646) 593-1439, [email protected]. Register at www.retailramp.com.

FEATURED CONFERENCE 40%

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Subscribers to The Nilson Report will receive a 40% discount, bringing the cost down to $1,195. (Use code RAMP-NILS.)

Fast Facts > > > > > > > > >

2 march 2013 issue 1,014 the nilson reportIf you are being forwarded a copy of this report, you are not an authorized user and must delete the report

immediately. Your obtaining an unauthorized copy may violate the intellectual property rights of HSN Consultants, Inc. d/b/a The Nilson Report. The right to possess digital versions of this report is granted solely to the individual subscriber.

Official Payments now offers electronic bill (eBill) present-ment featuring an exact bill replica or a full-color, interactive PDF file. Official Payments' customers include the IRS, 23 states, the District of Columbia, and more than 3,000 other clients including counties, universities and utility companies. Mark Lavin is SVP of Sales, (404) 844-7039, [email protected], www.opay.officialpayments.com.

Safeway has filed an initial public offering of common stock for its Blackhawk Network prepaid card unit. It hopes to raise about $200 million. All stock will be sold to existing shareholders. Cur-rently, Safeway owns 96% of Blackhawk, which had revenues of $949 million last year. Talbott Roche is President at BlackHawk Network, (925) 226-9030, [email protected], www.blackhawknetwork.com.

HaRBORtOUcH, the 36th largest merchant acquirer in the U.S., has 131,624 active merchant outlets, not 18,220 as shown in the table on page 10 of issue #1,013. Jared Isaacman is CEO at Harbortouch, (610) 596-4234, [email protected], www.harbortouch.com.

Plastic JUngle's web-based gift card exchange now allows Best Buy customers to exchange unused prepaid cards from more than 100 other retailers for Best Buy Reward Zone points. Margaret Mackenzie is CEO at Plastic Jungle, (408) 345-9553 x112, [email protected], www.plasticjungle.com. Bob Soukup is Sr. Director of Loyalty at Best Buy, (612) 291-3451, [email protected], www.bestbuy.com.

etHOR's point-of-sale integration platform, which provides a marketing dashboard and 360o analytics used to connect brick and mortar stores to the digital world, will be integrated into Andromeda's point-of-sale software for the restaurant industry. Gary Ziegler is CEO at eThor, (650) 933-3332, [email protected], www.ethor.com. Dave Hick is VP at Andromeda, (604) 997-3645, [email protected], www.andromedapos.com.

elavOn has opened a mobile innovation center at its Atlanta headquarters to focus on merchant-based mobile payments and commerce. The center, which is called The Grove, will operate as a separate business unit. Elavon is wholly owned by U.S. Bancorp. Marianne Johnson is EVP of Global Product and Innovation, (678) 731-5414, [email protected], www.elavon.com.

flint mOBile's iPhone-based payment card processing service, which works without a card reader, will be distributed by Fidano, a subsidiary of NXGEN International. Flint's technology scans a pay-ment card's account number to initiate the transaction. Greg Goldfarb is CEO at Flint Mobile, (650) 456-1880, greg@ flint.com, www.flint.com. Thomas Nitopi is CEO at Fidano, (775) 636-2461, [email protected], www.fidano.com.

PaysimPle, operator of a cloud-based platform small businesses use to automate billing and accept card payments, has now added the ability to handle electronic checks through an integration with CheckAlt. Eric Remer is CEO at PaySimple, (303) 242-8360, [email protected], www.paysimple.com. Shai Stern is CEO at Check-Alt, (310) 417-1050, [email protected], www.checkalt.com.

elite meRcHant sOlUtiOns had $3.95 billion in U.S. merchant acquiring volume in 2012 before it sold a large portion if its portfolio in mid-December 2012. It is currently signing new merchants under Woodforest Bank, its new sponsoring bank. Justin Milmeister is CEO, (818) 503-4545 x214, justinm@ elitedatacorp.com, www.elitedatacorp.com.

itaUcaRd mexicO is using FICO Capstone Decision Accelerator software to make instant online decisions on credit card applica-tions. Ricardo Toledo is Marketing Director at Itaucard Mexico, 52 (55) 5262-0650, [email protected], www.itaucard.com.mx. Robert Duque-Ribeiro is VP and Managing Director, Latin America at FICO, 55 (11) 98111-2019, [email protected], www.fico.com.

inteligensa centROameRica now offers LCD display cards that generate a dynamic password for each transaction. Cards also carry EMV chips. Inteligensa Centroamerica is a subsidiary of Inteli-gensa Group. Ricardo Palermo is Corporate Manager of Authentication Solutions, 598-2902-1499, [email protected], www.inteligensa.com.

cOntROlscan has formed a partnership with Foregenix to offer PCI and security-related assessments as a service to acquiring banks and merchant service providers working with small and mid-sized businesses in Europe, the Middle East and Africa. The partner-ship will also include security scanning, training and post-breach investigations. Joan Herbig is CEO at ControlScan, (678) 279-2644, [email protected], www.controlscan.com. Benj Hosack is a Managing Director at Forgenix, 44 (845) 845 309 6232, [email protected], www.foregenix.com.

Jennifer Miles has been appointed President, Americas at VeriFone, (678) 773-5882, [email protected]. Bulent Ozayaz has been appointed President, Southern Europe, Russia, Middle East and Africa at VeriFone, (516) 647-6829, [email protected]. George Peabody has joined Glenbrook Partners as Senior Director, (978) 393-1737, [email protected]. Bill Pittman has been appointed Senior Vice President of Product Management at ROAM, (425) 246-9123, [email protected]. Scott Holt has been appointed Vice President of Marketing at ROAM, (857) 254-2360, [email protected]. Eric Spear has been appointed Vice President of Professional Services at ROAM (857) 254-2400, [email protected]. Jim Maloney formerly at Intuit, has been appointed Chief Information Security Officer at Mercury Payment Systems, (970) 247-5557, [email protected]. Greg Cohen formerly with VeriFone, has been appointed Chief Revenue and Strategy Officer at Merchant Warehouse, (617) 896-5590, [email protected]. Ofer Tziperman has been appointed CEO at On Track Innovations, (972) 4686-8000, [email protected].

management > CHANGES

> > > > > > > > > Fast Facts



> > > > > > > > Fast FactsG-ABLE-THAILAND, a top systems integration and professional

services firm, will distribute ElectraCard Services' electraTX suite of payment products for issuers and acquirers in Thailand. Mayuree Chatmethakul is Managing Director at G-ABLE Group, 66 (2) 685 9000, [email protected], www.g-able.com. Jose Thattil is Sales Head at ElectraCard Services, 91 (20) 6789-6800, [email protected], www.electracard.com.

CITI MOBILE COLLECT is a cash payment/collection alternative available in the Dominican Republic to small merchants who have to pay their bills to Citibank corporate clients. When a merchant receives a delivery the invoice and payments are settled via mobile and are confirmed via text message. GCS Systems is providing the mobile network platform. Maximo Vidal is the General Manager at Citi Dominican Republic, (809) 473-2404, [email protected], www.citi.com. Brian Paniagua is COO at GCS Systems, (809) 732-5775, [email protected], www.gcs-systems.com.

EASYCASH LOYALTY SOLUTIONS, an Ingenico company, is operating a private label prepaid card program for JET Tanksellen Austria. Cards can be used to make purchases at more than 140 JET gas stations. Jochen Freese is Managing Director at easycash, 49 (2102) 973-314, [email protected], www.easycash.de.

ALARIC, a global supplier of fraud prevention and payments pro-cessing products to financial institutions, processors and retailers, has opened a data analytics research center in Rome. Peter Parke is General Manager Fraud Solutions, 44 (207) 593 2200, [email protected], www.alaric.com.

TORONTO-DOMINION BANK has purchased the Canadian store card business of HSBC. The portfolio includes $484 million in outstandings. Michael Rhodes is Head of North American Credit Card and Merchant Services at TD Bank, (416) 307-5832, [email protected], www.td.com.

VISA AND PLANET PAYMENT processing platforms are being used in Myanmar by Co-Operative Bank, Kanbawza Bank, and Myanmar Overseas Oriental Bank to facilitate transactions on ATM and POS terminals. Somboon Krobteeranon is Country Manager, Myanmar and Thailand at Visa, 66 (2) 263-9200, [email protected], www.visa.com. Philip Beck is CEO at Planet Payment, (516) 670-3200, [email protected], www.planetpayment.com.

B+S CARD SERVICE, Europe's 28th largest merchant acquirer, has opened for business in the U.K. The company, which is a member of the German Savings Bank Finance Group, supports 227,000 custom-ers in 14 European countries. Andreas Stendera is Director of Sales, 49 (69) 6630-5200, [email protected], https://www.bs-card-service.com.

MONEX'S dynamic currency conversion technology will be integrat-ed with Ingenico's Axis payment processing platform for merchants in Ireland and the U.K. Cillian Wright is Sales and Marketing Director, Northern Europe at Ingenico, 44 (131) 459-8800, [email protected], www.ingenico.com. Jo Noonan is Director of Business Development at Monex, 353 (64) 66306-80, [email protected], www.monexfs.com.

THE NILSON REPORTNUMBER 1013 March 2013 - 3 -

MOBILE PAYMENTS CONFERENCE 2013: April 10-11, 2013. The Helen Mills Event Space & Theater, New York. Estimated attendance: 175. Cost for the two-day conference is $499.99. Subscribers to The Nilson Report will receive a 20% discount. (Use code NR13MPC.) Contact Marla Ellerman at MM&T, (602) 315-8808, [email protected]. Register at www.mobilepaymentconference.com.

NFC SOLUTIONS SUMMIT 2013: May 15-16, 2013. The Hyatt Regency San Francisco Airport, Burlingame, California. Estimated attendance: 450. Cost for the two-day conference is $950. Subscribers to The Nilson Report will receive a 20% discount. (Use code MSDISC.) (Use code MSEXOP for free exhibit-only access.) Contact Jaci Sauvé at SCA, (203) 512-0531, [email protected]. Register at www.nfcsolutionssummit.com.

MOBILE BANKING & COMMERCE SUMMIT 2013: June 3-5, 2013. The InterContinental Miami, Miami, Florida. Estimated attendance: 600. Cost for the three-day conference ranges from $1,395 to $1,895 until 4/26/13 and $1,595 to $2,395 through to 6/2/13, after which, onsite rates apply. Subscribers to The Nilson Report will receive a $395 discount. (Use code NILSAVE.) Contact Sonja Campbell at SourceMedia, (212) 803-6086, [email protected]. Register at www.americanbanker.com/conferences/mobile/.

CONFERENCES & SEMINARS

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2013 ETA ANNUAL MEETING & EXPO: April 30 – May 2, 2013. The New Orleans Convention Center, New Orleans, Louisiana. Estimated attendance: 3,000. Cost for the three-day conference is $745 (member) or $1,245 (nonmember). Subscribers to The Nilson Report will receive a $250 discount off the nonmember price. Contact Del Baker Robertson at ETA, (202) 828-2635 x204, [email protected], www.electran.org/am13/. To receive the savings, you must register using this form http://www2.electran.org/am13/nilson/ETAAM13NilsonSubscriberReg.pdf.

CNP EXPO 2013: May 20-23, 2013. The Omni Orlando Resort, ChampionsGate, Florida. Estimated attendance: 500+. Cost for the four-day conference is $400 (merchants) or $1,000 (nonmerchant). Subscribers to The Nilson Report will receive a 20% discount. (Use code nilson20off.) Contact Steve Casco at CardNotPresent.com, (978) 761-9198, [email protected]. Register at www.cardnotpresent.com/cnpexpo.

INTERNATIONAL & CROSS BORDER PAYMENTS 2013: June 13-14, 2013. The Omni San Francisco Hotel, San Francisco, California. Estimated attendance: 90. Cost for the two-day conference is $2,095. Subscribers to The Nilson Report will receive a $300 discount. (Use code TNR 300.) Contact Evan Ring at ACI, (212) 352-3220 x5511, [email protected]. Register at www.americanconference.com/internationalpayments.



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http://www2.electran.org/am13/nilson/ETAAM13NilsonSubscriberReg.pdf

Among the suite of POS terminal products available from China-based

Vanstone is Model

V32G, a

device that integrates

a card acceptance terminal with a

telephone — and features a 7-inch multimedia touch screen. The V32G uses the Android operating system and comes with a 32-bit 1GHZ CPU, 512MB DDR, and 4GB Flash to promote speed of operation. The device is equipped with a magnetic stripe reader as well as contact and contactless chip card readers. Communication modes include DTMF, MODEM, Ethernet, WiFi, Bluetooth, GPRS, CDMA, EVDO, WCDMA, and TD-SCDMA.

V32G provides external ports for mini USB OTG adaptor,

Ethernet, PIN pad, and two RJ11 telephone lines. It is EMV2000 Level 1 and Level 2 compliant.

Vanstone is the 13th largest POS terminal manufacturer in the world. It ships all of

its POS terminals to customers in China. Fiona Guo is Overseas Product Manager at Vanstone Electronic Co. Ltd. in Beijing, China, 86 (10) 8840-0641, [email protected], www.vanstone.com.cn. Prior issues: 1,003, 992

Rogers and Telus, Canada’s first and third largest mobile network operators (MNOs), are committed to using Gemalto’s UpTeq NFC SIM card in mobile devices they sell. Upteq NFC SIM cards can handle EMV-compliant payments as well as other applications including transit and access control.

Rogers began offering NFC-enabled handsets embedded with Gemalto technology in January, and CIBC, Canada’s second largest credit card issuer, is working with the MNO. Telus is expected to begin selling NFC-enabled handsets by the third quarter Gemalto manufactures UpTeq cards for the North American market in Pennsylvania. In addition to the Canadian MNOs Gemalto is the exclusive supplier in the U.S. of

NFC-UICC cards to AT&T, Verizon, and T-Mobile, partners in the ISIS

mobile commerce service.

Gemalto is also providing Rogers and Telus its Trusted Services Manager technology to handle over-the-air provisioning of card account data to their handsets, giving the MNOs an end-to-end platform. Yeshwant Chauhan is VP Strategic Accounts-Telecommunications at Gemalto in Austin, Texas, (512) 257-3992,

[email protected], www.gemalto.com.

and other locations where cardholders can obtain cash.

JCB, the Japan-based credit card issuer, now gives cardholders access to 23.5 million acceptance locations worldwide.

Discover Financial Services operates the third largest global card acceptance network with 21.5 million locations. Since purchasing the global Diners Club switch in 2008 it has

created worldwide acceptance for what had been its U.S.-only Discover card.

BC Card, the Korea-based credit card company, which is a direct

13tH larGEst Pos tErMinal ManuFaC-turEr WorlD-WiDE.

roGErs anD tElus Will also usE GEMalto’s tsM sErViCE.

Vanstone multimedia Pos terminal

Gemalto mobile nFC in Canada

Global brands Card aCCePtanCe WorldWide (from page 1)...

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http://www.vanstone.com.cn

http://www.gemalto.com

http://www.gemalto.com

for EMV-compliant cards. Approximately 80% of credit and

debit card account processing in the U.S. occurs on mainframes.

Keeping data preparation in-house versus outsourcing to a third party lets issuers determine what security levels they want to use and reduces exposure from transit. It also gives issuers

complete control of the master keys. Master keys are used to

derive the unique keys that are loaded onto every chip so that the card and the transaction can be verified at a POS terminal.

Smart cards require many more keys than mag-stripe cards.

Prime Factors charges a one-time license fee for the BCCS module as well as an annual

maintenance fee. When issuers use a third-party to manage EMV-card personalization, they pay recurring per-card fees.

Prime Factors will begin testing its EMV module with two issuers in the second quarter. David Tushie is Product Manager at Prime Factors in Minneapolis, Minnesota, (612) 747-6553, [email protected],

www.primefactors.com. Prior issues: 1,008, 982, 957

was first brought to market by Taiwan-based SmartDisplayer in 2006. When card manufacturer Nagra ID, now known as the top provider of MasterCard and Visa payment cards with built-in displays, first came to market with OTP

products, it used ePaper display modules manufactured by SmartDisplayer.

Today NagraID uses LCS (liquid crystal) displays in its products, and SmartDisplayer is a fully certified manufacturer of Visa and MasterCard cards.

It can ship cards to an issuer’s personalization center or deliver a fully personalized card, including all needed printing, directly to any issuer in the world. It is working with banks in Europe, Asia/Pacific, Middle East, and the U.S.

issuer as well as a licensor of the BC Card brand to other issuers, gives its direct cardholders access to the Discover, and Pulse ATM networks as well as access to all Discover and Diners Club merchants. Those cards are being reissued with the Discover and Diners Club service marks to help cardholders identify acceptance locations.

American Express continues to grow its acceptance network in the U.S. and through financial institutions worldwide that join its Global Network partners program. Merchant, ATM, and over-the-counter acceptance locations are estimated at 16 million worldwide.

UnionPay, (formerly China UnionPay) has 17.5 million locations in 135 countries and territories.

Included in these locations are Pulse merchant outlets in the U.S. (including protectorates and territories) for PIN-based UnionPay debit transactions and Discover merchant outlets for UnionPay credit card transactions. UnionPay credit and debit cards have access to Pulse ATMs in the U.S.

Maestro, the global debit brand owned by MasterCard, reached 15.5 million merchant and ATM locations at the end of last year.

80% oF CarD aCCount ProCEssinG oCCurs on MainFraMEs.

Global AcceptanceLocations

* Estimate. © 2013 The Nilson Report

Brand (mil.)Visa & MasterCard 35.9JCB 23.5Discover/Diners 21.5BC Card 21.0UnionPay 17.5American Express 16.0*Maestro 15.5

emV data PreParation (from page 1)...

smartdisPlayer ePaPer disPlay Cards (from page 1)...

Global brands Card aCCePtanCe WorldWide (from page 5)...



http://www.primefactors.com

SmartDisplayer touts its ePaper display technology as superior to the LCD (liquid crystal) technology. EPaper provides a five-year battery life to displays and the image in the display

could remain visible for months if not turned off. One reason for the long-lasting image is because ePaper displays do not consume any power once the image is visible. By comparison, LCD technology is limited to a three-year battery life and images are typically visible in the display for 14 seconds. Unlike LCDs, ePaper displays are clear in sunlight, can be viewed at an

angle, and don’t get blurry when they are touched.

SmartDisplayer products include DCVV, which delivers a 3-digit dynamic CVV number for every transaction, Challenge Response, Chip Guard Display Card, and Compass Card. George Ou is

CEO at SmartDisplayer in Taipei, Taiwan, 886 (2) 2452-5100 x300, [email protected], www.smartdisplayer.com.

members of the Secure Remote Payment Council (SRPc). Merchants, processors, POS terminal manufacturers, as well as card issuers use an AID to select the correct card application in a chip. The SRPc, whose largest members are STAR (owned by First Data), Pulse (owned by Discover), and Nyce (owned by FIS), will establish a new consortium, which will license the D-PAS application for use as is or to make a derivative specification. There will be no royalty payments.

Discover’s D-PAS is being used in Western Europe and Asia where its Diners Club businesses are deploying EMV cards. BC Card in Korea is also using D-PAS for new co-brand cards that carry the Discover and Diners Club service marks. The companies have a reciprocal sharing arrangement for merchant and ATM networks.

Discover offered the SRPc members everything they needed and wanted. Visa and MasterCard were interested in having SRPc members use their EMV apps as shared AIDs but both of their offers left out elements Discover was willing to provide.

The SRPc decision ends uncertainty about how the payment card industry will balance Visa

and MasterCard EMV migration plans with accommodation of a federal mandate in the Durbin Amendment of the Dodd-Frank Act requiring issuers to give merchants debit network options for routing payments. Currently, the debit industry in the U.S. is majority signature-based, led by cards issued on the Visa, MasterCard, and to a far lesser

extent, Discover networks.

Visa or MasterCard EMV apps will be on chips in their branded debit cards. D-PAS will likely be the second payment app on most of those cards giving merchants the option to route transactions to PIN-based network members of SRPc.

Discover’s D-PAS app has already been certified by processors, which will help shorten the time to market for deployers. Troy Bernard is Global Head of Chip Payment Products at Discover in Riverwoods, Illinois, (224) 405-2127, [email protected], www.discovernetwork.com. Prior issue: 1,011

based point-of-sale payment and loyalty platform. Both companies focus on merchants with high levels of repeat customers

— quick-service restaurants, C-stores, grocery stores, etc. where mobile apps are highly desirable. These merchants view

Starbucks and Dunkin’ Donuts, the two most successful mobile programs in the U.S., as models.

EPaPEr Pro-ViDEs a 5-yEar battEry liFE to DisPlays.

a nEW Con-sortiuM Will liCEnsE tHE D-Pas PayMEnt aPP.

debit netWorks PiCk disCoVer’s aPP For emV (from page 1)...

Heartland adds leVeluP as mobile Partner (from page 1)...

... turn to page 8



http://www.smartdisplayer.com

http://www.discovernetwork.com

the value to consumers is same-day or next-day posting with the biller.

In recent years billers have been interested in improving their mobile links to bill recipients and Western Union has been investing there. Beginning in 2009 it offered payments by SMS text messages. In 2011 it began building mobile websites (.mobi) for its biller clients so smartphone users could have a friendlier experience versus the more difficult navigation at a conventional website.

Now Western Union has released two downloadable apps that consumers

can use to receive a faster and easier payment experience when using iPad, iPhone, and Android mobile devices. The biller-branded apps optimize navigation for bill presentment, payment, and when needed, information presentment (e.g., from

a utility company).

WU believes that the success in mobile bill payment apps depends on adding enough value to justify the download. It partnered with iFactor, a provider of mobile applications focused on the utilities industry, to help with mobile apps needing specialized information

in that industry. David Shapiro is Senior VP at Western Union Payments in Englewood, Colorado, (720) 332-3577, [email protected], www.westernunion.com. Prior issues: 973, 957, 892, 888, 876, 852, 821, 802, 574, 532

Heartland has processing contracts with merchants who

operate more than 250,000 locations. The 34,500 that use its branded EMV- and NFC-enabled E3 POS terminal will be the first to be offered LevelUp, whose mobile app has been downloaded by one million consumers. Once they add the QR code reader, Heartland merchants can accept LevelUp transactions. LevelUp supports consumer payments tied to Visa, MasterCard, American Express, and Discover cards initiated by iPhone, Android, or Windows-based devices.

LevelUp operates by offering a branded payment and loyalty app as well as by offering the same functions on a white label basis. Heartland and LevelUp will

absorb 25% of the development cost of a white-labeled iPhone and Android app for any merchant with 10 or more locations willing to switch their processing to Heartland, or extend their existing processing relationship

with Heartland. Chris Mahl is Chief Revenue and Strategy Officer at LevelUp in Boston, Massachusetts, (617) 444-9658, [email protected], www.thelevelup.com.

Heartland has more that 14,000 retail and restaurant customers using its Mobuyle mobile app for iOS and Android devices. Over 60,000 students use its OneCard MyPay mobile wallet and OneCard MyAccount mobile banking app through contracts

Heartland maintains with colleges.

WaveRider Mobile is the name Heartland has given to an

app that lets users initiate transactions

at washing machines. Heartland supports 250 locations in the ISIS mobile commerce

test. It also supports

terminals participating in

the Google wallet test. Ian Drysdale,

is President at Heartland

Payments Systems in Milton, Georgia, (954) 857-7493, [email protected], www.heartlandpaymentsystems.com.

billEr-branDED aPPs oPtiMizE naViGation.

Western union mobile bill Payments (from page 1)...

Heartland adds leVeluP as mobile Partner (from page 7)...



http://www.westernunion.com

https://www.thelevelup.com

https://www.thelevelup.com

http://www.heartlandpaymentsystems.com

http://www.heartlandpaymentsystems.com

cards with 3.17%, UnionPay debit cards with 2.86%, JCB credit cards with 1.05%, and Diners Club credit cards with 0.11%.

While UnionPay had the highest percentage increase in purchase transactions (up 40.5%), it only added 2.60 billion transactions compared to an increase of 5.04 billion for Visa and 4.92 billion for MasterCard.

Debit and prepaid cards accounted for 54.03% of purchase transactions, down from 54.93% in 2011. Visa purchase transactions were 63.30% debit, down from 64.68% in 2011.

MasterCard purchase transactions were 44.29% debit, up from 42.62%. UnionPay purchase transactions were 47.40% debit, down from

48.40%.

The number of credit, debit, and prepaid cards in circulation reached 7.37 billion at the end of 2012, up 13.2% or 857.2

million. UnionPay added the

most cards (585.0 million) for a 19.8% increase. Visa followed with an increase of 152.6 million cards, up 6.5%. MasterCard added 111.6 million cards, up 10.7%, American Express added 5.0 million cards, up 5.1%, JCB added 3.3 million cards, up 4.3%, and Diners Club declined by 0.2

Global Cards — 2012 (from page 1)...

CarDs in CirCulation rEaCHED 7.37 billion at yEar EnD.

Brand Share

Global Cards in CirculationCredit & Debit 2012

©2013 The Nilson Report

UnionPay 47.95%Visa 33.80% MasterCard 15.71%Amex 1.39%JCB 1.07%Diners 0.08%

7.37 bil.

Global General Purpose Cards — 2012 vs. 2011 Dollar Volume (bil.) Transactions (bil.) Cards Brand Total Chg. Purchases Chg. Cash Chg. Total Chg. Purchases Chg. (mil.) Chg.

Visa Credit $3,209.44 9.7% $2,892.67 11.0% $316.76 –0.9% 35.24 9.5% 34.03 9.9% 883.5 1.6%

MasterCard Credit $2,119.89 11.9% $1,902.39 12.6% $217.50 6.1% 23.14 10.6% 22.32 10.7% 721.4 5.2%

UnionPay Credit $1,021.88 51.8% $991.52 52.7% $30.36 28.0% 4.89 42.7% 4.74 43.2% 331.0 16.1%

American Express Credit $888.40 9.1% $884.24 9.1% $4.16 0.6% 5.92 8.5% 5.84 8.7% 102.4 5.1%

JCB Credit $185.77 14.4% $179.27 14.5% $6.50 11.2% 1.60 12.8% 1.57 12.8% 79.1 4.3%

Diners Club Credit $28.49 –2.5% $27.07 –2.5% $1.42 –3.6% 0.17 –3.8% 0.16 –3.9% 5.8 –2.9%

CREDIT CARD TOTALS $7,453.88 14.7% $6,877.16 15.8% $576.72 3.0% 70.96 11.6% 68.66 11.9% 2,123.2 5.1%

Visa Debit & Prepaid $5,576.92 7.4% $2,781.59 5.6% $2,795.33 9.2% 77.02 3.4% 58.69 3.5% 1,607.6 9.4%

UnionPay Debit $2,755.70 29.7% $2,302.48 31.1% $453.22 23.0% 6.82 29.6% 4.27 37.6% 3,203.0 20.2%

MasterCard Debit & Prepaid $1,526.66 20.5% $791.25 16.1% $735.41 25.7% 23.16 19.3% 17.74 18.5% 436.4 21.1%

DEBIT CARD TOTALS $9,859.28 14.8% $5,875.32 15.9% $3,983.96 13.4% 107.01 7.9% 80.70 7.9% 5,247.0 16.8%

Visa Total $8,786.36 8.2% $5,674.26 8.3% $3,112.10 8.1% 112.26 5.2% 92.71 5.8% 2,491.1 6.5%

MasterCard Total $3,646.55 15.4% $2,693.64 13.6% $952.91 20.6% 46.30 14.8% 40.07 14.0% 1,157.8 10.7%

VISA & MC TOTALS $12,432.91 10.2% $8,367.90 10.0% $4,065.01 10.8% 158.56 7.8% 132.78 8.1% 3,648.9 7.8%

UnionPay Total $3,777.59 35.0% $3,294.00 36.9% $483.58 23.3% 11.72 34.7% 9.01 40.5% 3,534.0 19.8%

CREDIT & DEBIT TOTALS $17,313.16 14.8% $12,752.48 15.8% $4,560.68 12.0% 177.97 9.3% 149.36 9.7% 7,370.2 13.2%

Includes all consumer and commercial credit, debit, and prepaid cards. Some prior year figures have been restated. Currency figures are in U.S. dollars. Change figures for dollar volume reflect a year-over-year comparison in local currency. Visa includes the sum of Visa Europe and Visa Inc. and includes Visa, Visa Electron, and Interlink brands. The Visa card figure excludes Plus-only cards (with no Visa logo). MasterCard excludes Maestro and Cirrus figures. American Express includes figures for third-party issuers. JCB figures include third-party issuers and other payment-related products. Some figures are estimates. © 2013 The Nilson Report

... turn to page 10



million cards, down 2.9%.

UnionPay accounted for 47.95% of cards in circulation, up from

45.28%, followed by Visa with 33.80%, down from 35.91%, MasterCard with 15.71%, down from 16.06%, American Express with 1.39%, down from 1.50%, JCB with 1.07%, down from 1.16%, and Diners Club with 0.08%, down from 0.09%.

Of the payment cards in circulation carrying these global brands, 71.19% were debit, up from 68.99%. UnionPay’s share of debit cards was 61.04%, Visa’s was 30.64%, and MasterCard’s was 8.32%. Debit cards increased by 753.8 million compared to a 103.4 million increase for credit cards. The largest contributor to the increase in debit cards was UnionPay (up 539.0 million), followed by Visa (up 138.7 million), and MasterCard (up 76.1 million).

Debit cards accounted for 64.53%

of Visa’s card base, up from 62.81%. For MasterCard, 37.69% were debit, up from 34.44%. For UnionPay, 90.63% were debit, up from 90.34%.

Total volume of consumer and commercial purchases and cash on credit and debit cards combined, increased by $2.231 trillion in 2012. Visa and MasterCard generated 71.81% of total volume, down from 74.78% in 2011.

In 2012 purchase volume for goods and services, which excludes cash advances on credit cards and cash withdrawals on debit cards, increased by $1.743 trillion or 15.8%. Visa and MasterCard purchases accounted for $66 of every $100 in purchase volume, compared to $69 the prior year. Visa cards generated $44 of every $100, down from $48.

Of Visa’s purchase volume, 49.02% came from debit cards, down from 50.27% in 2011. For MasterCard, debit cards accounted for 29.37% of its purchase volume, up from 28.75%. For UnionPay, debit cards accounted for 69.90% of its purchase volume, down from 73.00%.

When comparing purchase volume on credit cards only, Visa’s share dropped 181 basis points to 42.06%. MasterCard’s share fell 78 basis points to 27.66%. UnionPay’s share increased by 348 basis points to 14.42%. It overtook American Express to become the third largest credit card brand based on purchase volume worldwide.

American Express’s share dropped 79 basis points to 12.86%. JCB’s share declined by 3 basis points to 2.61%, and Diners Club’s share fell 7 basis points 0.39%.

When comparing purchase volume on debit cards only, Visa’s market share was down 460 basis points to 47.34%, UnionPay’s share increased by 457 basis points to 39.19%, and MasterCard’s share rose 3 basis points to 13.47%.

Cash volume on all credit, debit, and prepaid cards — the combined advances against lines of credit and withdrawals from funds on deposit — increased by $487.54 billion. For Visa, cash accounted for

35.42% of total volume, down from 35.47%. For MasterCard, cash accounted for 26.13%, up from 25.00%. For UnionPay, cash accounted for 12.80%,

down from 14.02%. For Diners Club, cash accounted for 5.00%, down from 5.05%. For JCB, cash accounted for 3.50%, down from 3.60%. For American Express, cash accounted for 0.47%, down from 0.51%.

Credit cards issued to U.S. cardholders with the Visa, MasterCard, and American Express brands generated 37.04% of credit card purchase volume worldwide, down from 37.95% in 2011.

For American Express, the percent change in credit card purchase volume was greater on cards issued outside the U.S. (up 9.6%) than on those issued inside the U.S. (up 8.9%).

The number of American Express cards in circulation outside the U.S. increased by 3.6 million, while the number circulating in the U.S. increased by 1.4 million. However, the purchase volume per card issued outside the U.S. was $5,874, up 1.8%, while the purchase volume per U.S.

card was $11,311, up 6.0%.

For MasterCard, the percent change in credit card purchase volume was significantly greater on cards issued outside the U.S. (up 15.9%) than those issued inside the U.S. (up 5.1%).

The number of MasterCard credit cards in circulation increased by 32.6 million outside the U.S. compared to a 3.0 million increase inside the U.S.

For Visa, the percent change in credit card purchase volume was also greater on cards issued outside the U.S. (up 11.4%) than those issued inside the U.S. (up 10.4%). But the number of Visa credit cards in circulation increased by only 2.8 million outside the U.S. compared to a 11.0 million card increase inside the U.S.

Chg. in Brand Share Basis Pts.

Purchase Transactions on Global Cards 2012

©2013 The Nilson Report

Credit Cards

Chg. in Brand Share Basis Pts.

Debit Cards

Visa 49.6% –89

MasterCard 32.5% –35

Amex 8.5% –25

UnionPay 6.9% 151

JCB 2.3% 2

Diners 0.2% –4

68.66 bil.

Visa 72.7% –310

MasterCard 22.0% 196

UnionPay 5.3% 114

80.70 bil.

© 2013 The Nilson Report

Transactions per Card 39.9 7.7% 32.1 5.2% 57.8 3.2% 14.8 22.9% 20.3 8.1% 29.3 –1.0%

Purchase Transactions per Card 38.5 8.2% 30.9 5.2% 57.0 3.4% 14.3 23.3% 19.8 8.1% 27.9 –1.0%

as Percent of Total 96.6% 0.4 pt. 96.5% 0.0 pt. 98.6% 0.2 pt. 96.9% 0.4 pt. 97.8% 0.0 pt. 95.1% –0.1 pt.

Cash Transactions per Card 1.4 –3.0% 1.1 4.4% 0.8 –8.8% 0.5 10.1% 0.5 6.1% 1.4 0.5%

as Percent of Total 3.4% –0.4 pt. 3.5% 0.0 pt. 1.4% –0.2 pt. 3.1% –0.4 pt. 2.2% 0.0 pt. 4.9% 0.1 pt.

Average Amount per Transaction $91 0.3% $92 1.2% $150 0.6% $209 6.4% $116 1.4% $168 1.3%

Average Purchase Amount $85 1.0% $85 1.8% $151 0.4% $209 6.6% $114 1.5% $168 1.4%

Average Cash Amount $260 0.6% $267 –3.4% $50 4.9% $200 0.1% $181 0.4% $173 –1.2%

Total Volume per Card $3,633 8.0% $2,939 6.4% $8,676 3.8% $3,087 30.7% $2,348 9.6% $4,934 0.3%

Purchase Volume per Card $3,274 9.3% $2,637 7.1% $8,635 3.8% $2,996 31.5% $2,266 9.8% $4,687 0.4%

as Percent of Total 90.1% 1.1 pts. 89.7% 0.6 pt. 99.5% 0.0 pt. 97.0% 0.6 pt. 96.5% 0.1 pt. 95.0% 0.1 pt.

Cash Volume per Card $359 –2.4% $302 0.9% $41 –4.3% $92 10.2% $82 6.6% $247 –0.7%

as Percent of Total 9.9% –1.1 pts. 10.3% –0.6 pt. 0.5% 0.0 pt. 3.0% –0.6 pt. 3.5% –0.1 pt. 5.0% –0.1 pt.

Visa MasterCard American Express UnionPay JCB Diners Club Category 2012 Chg. 2012 Chg. 2012 Chg. 2012 Chg. 2012 Chg. 2012 Chg.

Global Credit Cards

Visa MasterCard UnionPay Category 2012 Chg. 2012 Chg. 2012 Chg.

Transactions per Card 47.9 –5.5% 53.1 –1.5% 2.1 7.8%

Purchase Trans. 36.5 –5.4% 40.7 –2.2% 1.3 14.4%

as Percent of Total 76.2% 0.1 pt. 76.6% –0.5 pt. 62.6% 3.6 pts.

Cash Transactions 11.4 –5.8% 12.4 0.7% 0.8 –1.8%

as Percent of Total 23.8% –0.1 pt. 23.4% 0.5 pt. 37.4% –3.6 pts.

Avg. Amt. per Trans. $72 3.8% $66 1.1% $404 0.1%

Average Purch. Amt. $47 2.0% $45 –2.0% $539 –4.7%

Average Cash Amt. $152 5.9% $136 3.1% $177 4.2%

Total Volume per Card $3,469 –1.9% $3,498 –0.5% $860 7.9%

Purchase Volume $1,730 –3.5% $1,813 –4.1% $719 9.1%

as Percent of Total 49.9% –0.8 pt. 51.8% –2.0 pts. 83.6% 0.9 pt.

Cash Volume $1,739 –0.2% $1,685 3.8% $141 2.3%

as Percent of Total 50.1% 0.8 pt. 48.2% 2.0 pts. 16.4% –0.9 pt.© 2013 The Nilson Report

Global Debit & Prepaid Cards

unionPay is noW tHE 3rD larGEst CrEDit CarD branD.

Global Cards — 2012 (from page 9)...

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an online chat room. Once secretly installed on the cardholder’s computer, uMitB captures the

3-D Secure credentials inputted over a secure SSL connection. It

instantly triggers a replica of a valid 3-D Secure session page for viewing on the cardholder’s screen as the cardholder begins inputting their account numbers.

Simultaneously in the background, uMitB applies the Luhn algorithm to determine if the consumer’s account number is valid. If it is, the cardholder’s 3-D Secure credentials can be matched to their Visa or MasterCard account number, then sold at a premium through chat rooms catering to criminals who want to commit card fraud. Card accounts sell for as little as $1 and as much as $20. Those with confirmed account numbers and 3-D Secure credentials earn premium prices.

UMitB attacks began in 2012 but have been increasing this year after sellers improved the quality of the replicated 3-D Secure screen image. Those sellers now also provide uMitB customer service support.

One product that can negate uMitB is Rapport from Trusteer. Once installed, Rapport detects if uMitB or any other type of malware has already infected a computer. It then waits until the malware activates

to thwart its efforts.

Rapport is one of several online security products sold by Trusteer and distributed by banks to their customers. Collectively Trusteer products are deployed at 100 million computers worldwide. The company is headquartered in Boston, Massachusetts. Research and

development occurs in Israel. Etay Maor is Senior Product Manager at Trusteer in Tel Aviv, Israel, 972 (73) 225-4523, [email protected], www.trusteer.com.

VantageScore Solutions has improved the credit risk scoring model currently used by six of

the ten largest U.S. credit card issuers by incorporating new data now available from its owners — the top

three credit bureaus. Version 3.0 of VantageScore is the company’s first model built in the post-recession period, and reflects the lack of volatility in the current market. It was created using 45 million credit files, across two timeframes, and 13 different segments.

VantageScore 3.0 is said

to be 25% more predictive because TransUnion, Experian, and Equifax are supplying information on real estate, installment, personal, and revolving credit loans not available when version 2.0 was launched in 2010. As a result, VantageScore says it can now offer a credit score on 200 million people, 30 million more than other scoring models.

Another change in 3.0 is the scale (300 to 850) used to rank a consumer’s creditworthiness. This new scale gives credit card issuers and other lenders a direct comparison to the credit score scale available from FICO.

VantageScore claims that the predictive strength of version 3.0 exceeds benchmark scoring models across industries and

applications, particularly with prime and near-prime consumer files. The 30 million new people covered by the score include new entrants, “no open trade” files, those with minimal activity over two years, and those with no activity in the past two years. Sarah Davies is Senior VP of Analytics, Research and Product Management at VantageScore Solutions in Stamford, Connecticut, (203) 363-2199, [email protected], www.vantagescore.com. Prior issues: 990, 964, 951, 949, 941, 938, 931, 905, 892, 874, 868, 867

raPPort DEtECts MalWarE tHat Has inFECtED a CoMPutEr.

David Robertson, Publisher march 31, 2013

trusteer e-CommerCe Fraud ProteCtion (from page 1)...

VantaGesCore adds 30 million PeoPle



http://www.trusteer.com

http://www.trusteer.com

http://www.vantagescore.com

Issue 1014 - Prepaid Press Expo

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