Wednesday, March 5, 2014

The migration of EMV or chip-based payment standards has heated up in large part due to the well publicized security breaches and card fraud.  But, is the overall impact to U.S. merchants going to be the answer to dramatically reducing fraud?  Probably not.

Harry Williams the President of JetPayi5, a merchant services provider specializing in online transactions and a bank processor, is skeptical.  "A lot of people seem to think that face to face or POS in-store payment fraud will be cut by 70-90%.  That's just not the case."

Mr. Williams and others suggest, that while cloning, skimming and counterfeiting have largely not been successful in countries that have adopted smart chip cards, that might not be the case going forward.  Card usage in the U.S. is about $2.6 trillion annually.  This represents about 41% of the total card usage globally.

Experts reason that when large scale adoption occurs in the U.S., fraudsters will invest the resources to "capture" a new burgeoning market.  David Marcus the President of PayPal claimed that his smart card was skimmed when he used his card at one hotel in Europe.

Card Not Present and E-Commerce

Smart card technology will not prevent misuse and fraud in card not present transactions.  Card not present transactions will continue to grow as a result of the procurement card and virtual card growth in the B2B sector of our economy.

According to Payment Source, in 2012, e-commerce transactions represented about 13% of all card transactions in the U.S.  While the final stats on Holiday Shopping 2013 are still not in, all indications are that e-commerce and m-commerce grew significantly while brick and mortar was flat at best.   

New Solutions Changing the Landscape

Harry Williams has just received a patent pending on a program that puts the card user in control of their own security.  Mr. Williams solution is safer than chip based cards but is compatible with any branded bank issued card including debit, credit, re-loadable debit and even gift cards.

Mr. William's patented program allows the card holder to pre-approve transactions just minutes before the purchase.  Without the approval the transaction will be rejected.  This is all accomplished with a simple yet highly secure app on the cardholders phone.  It's easier than sending a SMS text.

Additionally, the growth of re-loadable cards is a significant move towards eliminating fraud.  Versatility and technology has made it possible for both companies and consumers to load their cards just moments before the funds are needed via their phones, pads and computers.

You can't steal what isn't there or hasn't been approved in advance.

Let's face it, if hackers can breach sophisticated, secure systems, they will break the false security of the chip based technology.

We would love to hear your input on this subject.

Eagle Point Network

Tuesday, February 19, 2013

The New Normal In Corporate Payment Solutions

The average consumer has an easier time of paying their bills than businesses.  Never mind publicly traded corporations or highly regulated entities such as insurance companies and financial institutions.

While it’s true that sound stewardship of corporate accounting is far more complex than managing household finances, receiving money and paying bills is extraordinarily expensive with fewer choices for corporate America.

Instant payment of bills for the consumer can be accomplished over the internet by use of credit cards, bank debit cards and electronic checks.  Fewer Americans write checks, lick envelopes and stamps and mail their payments.  Our twenty something generation never reconciles their bank accounts as part of the ritual of paying their bills.  Electronic transfer options pay the utilities, insurance, the mortgage and the car payments and in just hours, these transactions are recorded with their bank and available through the bank’s web portal.

Most businesses largely pay accounts payables with checks.  The process of writing checks, printing, mailing and reconciliation is expensive and less efficient than breakthrough alternatives.
In this forum we are dedicated to creating awareness of trends, developing technology and conventions for CFO, Treasurers and those with oversight of the bottom.

Financial professionals today, are able to create significant revenue streams in their finance department by simply paying their bills.  Just as importantly, significant hard and soft costs are reduced, and performance metrics such as daily payable outstanding are improved.

Our goal is first to inform and if we can assist that works too.