Intrix Blog: CEO Perspective: Apple Pay—an Excellent Step Forward

By Jeffrey Connors
Chairman and CEO
September 15, 2014

Jeff ConnorsAs I’m sure you’ve heard, Apple in its Tuesday product launch came out with a new product called Apple Pay. From my perspective, this is an excellent step forward in furthering the development of mobile payments. And, I believe, the major beneficiaries of this development will ultimately be the consumer and the retailers frequented by them.

Today, there are approximately 300 million mobile devices being used by American consumers who carry more than one billion debit and credit cards. Many consumers would like to use their smartphone to complete the buying experience. And Apple’s adoption of the NFC standard will further that specific objective.

Apple’s use of a tokenized approach (Intrix was one of the early adopters of tokenization) in their latest line of smartphones and adoption of the Visa standards for tokenization and EMV is a major step in the right direction and a further catalyst for continued growth of the mobile marketplace. What’s more, in developing partnerships with the major payment industry players, Apple clearly understands the complexity of the industry and is addressing one unique aspect of the ecosystem—replacing the swipe with a touch and go smartphone approach.  Although immediate restrictions exist as to how fast this approach will be adopted, my view is that, over time, adoption will be significant.

Given the Industry’s current move to a chip and pin EMV POS or terminal environment as utilized in the rest of the world, Apple’s timing is very strong. With NFC being included on future systems being purchased, Merchants will avoid the need for a second costly replacement terminal. I’m proud that Intrix has, and will continue, to support the adoption of NFC and EMV technology and a variety of consumer friendly devices that reduce the amount of marketplace fraud.

What’s most exciting about Apple’s announcement is that for Intrix’ key customer—the Merchant—Apple Pay will help mitigate unnecessary fraud while enhancing the overall customer experience. Apple is a highly innovative company whose actions today will further enhance credit card growth and the continued move away from paper checks. It is the natural next step in the evolution of the payments industry.

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Intrix Blog: The Atlantic: “The Spectacular Decline of Checks”…and what it means to Merchants

By Jeffrey Connors
Chairman and CEO
August 5, 2014

Checks once accounted for 86 percent of all non-cash payments, but in recent years they’ve fallen out of favor, says a recent article by Matt Phillips in The Atlantic in which he cited statistics from the Federal Reserve’s Cash Products Office. In 2000, checks were used in more than 40 billion transactions; that number is down to less than 20 billion, according to the Fed’s most recent numbers, which are based on a survey conducted in October 2012.

blog8.5.2014What has replaced checks? According to the article titled, “The Spectacular Decline of Checks,” debit cards and credit cards are by far consumers’ favorite way to make payments. Some 43 percent of the consumers surveyed by the Fed said debit was their preferred method of payment. Another 22 percent preferred using credit cards.

 
 
 
 Image courtesy of phanlop88 / FreeDigitalPhotos.net 

And this reminded me: “Has your business made the switch to accepting credit cards? Businesses that refuse to accept debit and credit card payments may be missing out on a significant number of sales every month. The costs of upgrading may seem daunting, but the long term benefits should most definitely be examined before a final decision is made.

Research has found that businesses accepting non-cash purchase payments have seen increased revenue by more than 30% since 2009. Merchants attract and retain more customers when they have payment technologies that accept credit and debit. As a consumer, isn’t it disappointing to want to spend at a store, only to find they only accept cash? Don’t risk losing out on your share of sales.

It is imperative for business owners to consider which payment options they are going to offer and what company they are going to partner with to complete each transaction. But, you should, at the very least, be set up to process credit and debit cards.

Intrix Blog: Wired Magazine: “Why American Express Wants to Kill Credit Cards”

By Jeff Connors
President & CEO
July 8, 2014

ccardsforblog
Image courtesy of ddpavumba / FreeDigitalPhotos.net

“Why American Express Wants to kill Credit Cards”—a recent article by Marcus Wohlsen in the June 5, 2014 issue of Wired Magazine caught our attention. The article goes on to say that a black card or a gold card won’t mean any more than a purple card, because you won’t have a card at all. Even American Express believes the plastic in our wallets eventually will go away.

At a recent event, hosted by Andreessen-Horowitz, on the future of retail, Leslie Berlind at American Express pointed out that there are two things you always have with you: a credit card and a smartphone. The day is coming when we combine them. “What we are hyper-focused on is how we merge those two things,” she says. “Especially as one day the physical card will disappear.”

Well, we don’t fully agree but rather believe that over time it will occur with gradual adoption more likely. It’s hard to give up your wallet right now, but Amex is directionally correct. Women have pocketbooks to carry many things and might do both. Not so with men.

Mobile “wallets” will have to incentivize consumers with added features and benefits in order to gain traction. Consumers want broader functionality than a single purpose “wallet” like the Square model for Starbucks.

Net-net we believe there will be a holistic approach to engaging consumers and their loyalty.

What do you think? Take a look at the piece and give us your thoughts.

Read More:

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Intrix Blog: Observations from the 2014 IFE Show

By Jason Milbrandt
June 30, 2014

It’s been a week since we got back from the International Franchise Expo in NYC. What an exciting show. It’s the franchise industry’s premier event—and this year 450+ franchises were on the floor. Everything from food service to education, travel, beauty, financial services, senior care and more.
We were surpIFEShowrised by the number of “new” franchises. There were familiar brands like Cinnabon and 7-Eleven to newcomers like Original Soupman and Kono Pizza, pioneer of the pizza in a cone.
All of these franchises are looking to grow. We had an opportunity to talk to dozens of them about the importance of having the right payment processing solution to meet their needs today while allowing them to scale in the future.
We’ve worked with franchises since 2000 and have low-cost solutions to meet specific needs. Let us know if we can help you too.
You can read more (and see a video) about the IFE show in this piece by Geoff Weiss, staff writer at Entrepreneur Magazine: http://www.entrepreneur.com/video/234747

 

About Jason
Jason is Business Development Manager for Intrix Technology. He is based in the company’s Westminster, CO office.

Intrix Blog – ETA

TRANSACT℠ 14:   Security and EMV Top the Buzz List

By Jeff Connors

May 8, 2014

At the ETA’s TRAtransact 14 LogoNSACT℠ 14 show in Las Vegas last month the buzz was all about security, EMV, convergence, Integrated POS, collaboration and frictionless commerce. As you can imagine, though, security and EMV topped the list.

Here are some interesting takeaways from the world’s largest payments industry event.

  • U.S. consumer card spend remains sluggish year-to-date.
  • New payment technology remains network friendly (leveraging existing rails) and may play a bigger role in distribution—(i.e. integrated POS and security).
  • Point-of-sale is changing—we are going from unsophisticated to sophisticated and the terminal is going the way of the dinosaur.
  • EMV roll-out in the U.S. will be complicated, and needs to be supplemented by encryption and tokenization.

In the wake of recent breaches, security was a key theme of the entire show. Visa’s CEO noted that they are emphasizing security, including EMV. He noted that card-not-present transactions will require some kind of tokenization.   As for encryption, Visa believes it is still a hurdle for both the industry and the small merchant.

Views on EMV (chip) were mixed, as most assume deadlines will hold, but skepticism remains high on timely commercial roll-outs of chip cards and terminals. Good news is that specs on EMV are moving forward, as most EFT networks have agreed to common standards with Visa/MasterCard, and EMV terminals and peripherals appear abundant. Many, including Visa and VeriFone in their keynote speeches, stressed the importance of supplementing EMV with encryption and tokenization.

Let me know your thoughts.

Jeff

Intrix Blog: OpenSSL Heartbleed bug does not affect Intrix

By Suzanne Coleman, CTO

April 9, 2014

It was announced this week that a major vulnerability has been identified in some versions of OpenSSL, and this vulnerability can result in leaking data over what were thought to be secure connections.  A Security Advisory issued by the OpenSSL Project can be found at: https://www.openssl.org/news/secadv_20140407.txt

I ntrix Technology does not use any of the affected versions of OpenSSL in the Intrix Payment Gateway, or in its entry point software (for example, the Intrix Virtual Terminal, the Intrix Hosted Payment Solution, the Intrix SOAP API).  Intrix TranScend software does not use any of the affected versions of OpenSSL.  Since Intrix does not use the affected versions of OpenSSL, this vulnerability does not affect Intrix customers when using Intrix systems.

Other vendors’ software may contain this vulnerability, and there are unconfirmed reports that some Yahoo passwords have been obtained by exploiting this vulnerability.  So, what should you do?

If you use any system that connects to another system using SSL (secure socket layer), and is used to process or transmit any data that is considered sensitive, you should contact the vendor and ask if they are vulnerable to this bug.  If they are, they should already have a remediation plan that they can provide to you.

Additional information:

OpenSSL is an opensource toolkit commonly used by application makers when needing to provide Secure Socket Layer (SSL) connections. SSL connections are used when 2 computers or systems need to communicate via the internet in a secure manner.  URLs that start with HTTPS (notice the “s”) are secure “SSL encrypted” connections between your browser and the site to which you are connected.  The connections are made secure by encryption, and it is the encryption library that has the bug.  For more information on what OpenSSL is and how SSL works, there are many references available, including this site at DigiCert: https://www.digicert.com/ssl.htm.

A variety of sources are providing information about the HeartBleed.  As always, one should verify the source of the information before taking action based on that information.   One such source of information is http://heartbleed.com/.

Intrix Technology considers security our top priority.  Upon learning of this issue, Intrix immediately verified all products to ensure that Intrix environments and products are secure.

Intrix Blog: Digital Transactions Opinion Piece: “The Time is Now for EMV”

By Jeffrey Connors
February 21, 2014

There’s been a lot of buzz regarding the onset of EMV in the U.S. payments infrastructure.  As a matter of fact, we at Intrix blogged about it a couple of months ago in an effort to keep our merchants informed about the technology and what they will need to do to prepare.  And so I was delighted to see a very insightful opinion piece entitled “The Time is Now for EMV” in the January issue of Digital Transactions. The piece, by Erik Vlugt of VeriFone Systems, Inc., advises that merchants should start getting ready now.

He says, “The 2015 EMV liability shift may appear to be a concern for the future; but in reality merchants needs to have EMV on their agenda right now.”

He goes on to say, “As with other emerging standards, technology, and trends, EMV will be met with some skepticism.  But sooner rather than later, merchants must come to the realization that EMV is unavoidable and will ultimately lead to a much more secure payments ecosystem.

“And merchants that choose to procrastinate may find themselves unable to absorb the liability they will be exposed to after 2015”

To that, we’re in total agreement.   Intrix embraces the move to EMV as an added measure of security and protection for all of us in payments.

You can read the entire article here.

Intrix Blog: Let Private Sector Deal with Fraud: Another View

By Jeffrey Connors, CEO
January 20, 2014

The industry is best positioned to address criminal tactics, says Jason Oxman, CEO of the Electronic Transactions Association, in a recent opinion piece in USA Today.   We agree with Jason.  At Intrix, we’re already taking steps to address the constantly shifting tactics of criminals.

Let us know what you think about the article.

Intrix Blog: QSR SmartChain: “Perplexed by Payments”

By Jeffrey Connors, CEO
November 26, 2013

lock.and.cardPaul Gereffi from QSR magazine recently interviewed me for the November SmartChain section about PCI Compliance and Merchant Solutions. The article focuses on the latest in payment processing and PCI Compliance technology and solutions for the quick service and casual dining business.  Paul and I focused on EMV and how they will affect merchants.

 

Here is an excerpt of the interview:

There are many issues regarding the onset of EMV into the U.S. payments infrastructure that have yet to be fully understood, says Jeffrey Connors, chairman and CEO of Intrix Technology. While proponents tout that EMV technology could potentially result in the reduction in counterfeit cards, increased security of online payment transactions with real-time transaction approval, lower charge-back costs, and the possibility of reduced PCI compliance costs, there is an initial cost for those implementing the system.

“Some of these changes give me pause for concern,” Connors says. “Operators are intensely concerned about costs, especially if consumers aren’t demanding it, but two different card systems can’t stay.”

The affected parties each have differing concerns. Consumers are mostly concerned about convenience and only feel the impact of EMV technology when they travel overseas and, sometimes, can’t use their cards unless they have the chip. Merchants chafe at the expense of having to buy new terminals. Technology providers have to build new protocols to support chip technology. Processors want to limit their risk and benefit the most from it, so it’s natural for them to drive the switch aggressively.
Merchants, however, might very well be content with the current system, and there seems an innate resistance to change, especially by American consumers and retailers. Processors need to do a better job of selling the benefits of the new technology, Connors says.

“They want to be sure it’s a better system, and so far there’s been a communications gap,” he says. “Some question the timing and sense of urgency. Providers need to do more to communicate the benefits to merchants to increase their trust that this will help them.”

Probably the greatest advantage is that it’s virtually impossible to create a successful counterfeit EMV card. An EMV card’s security credentials are encoded by the card issuer at personalization, stored securely in the EMV card’s chip, and cannot be accessed by unauthorized parties. As a result, the cards help prevent card skimming and card cloning, one of the common ways magnetic stripe cards are compromised and used for fraudulent activity, Connors says.

Further, the liability shift from the processor to the merchant might be what ultimately drives the change. This could result in substantial penalties for fraudulent transactions on non-EMV compliant terminals.

For Intrix, the adoption of EMV chip cards means their processing payment platforms were mandated to have the capability to accept EMV payment transactions earlier in 2013. Their EMV roadmap includes adding support in the Intrix Payment Gateway in order to process the additional data that is included in chip transactions, including the cryptographic message that makes each transaction unique. On the Merchant Services side, Intrix offers EMV-enabled POS terminals, and Intrix is working to make EMV a smooth transition for their acquirers and their merchants. Moving full speed ahead, Intrix embraces the move to EMV as an added measure of security and protection for all in the payments industry.

“Our industry has to win the trust and communications battle with merchants and increase their credibility with customers,” Connors says. “EMV technology is going to be the standard and will be better for everyone in the long run.”

* This excerpt was posted with permission from QSR® magazine.

Intrix Blog: CNP Report says U.S. CNP Fraud Growth Accelerating, Promises to Get Worse with EMV

By Jeffrey Connors

While one of the greatest advantages of EMV is that it is virtually impossible to create a successful counterfeit EMV card, it does little for card-not-present (CNP) fraud.

As EMV moves into the U.S. payments infrastructure, CNP fraud is one of the issues that have yet to be fully understood.  CardNotPresent.com’s CNP Report has an interesting article on what’s going on in this area.  The stats show the growth rate of card-not-present fraud in the U.S. was nearly double that of counterfeit fraud in the last 20 months, and that’s before the coming EMV migration threatens to siphon even more fraud to CNP channels.  Interesting.

Here’s the article: 

credit-cardsThe growth rate of card-not-present fraud in the U.S. was nearly double that of counterfeit fraud in the last 20 months, and that’s before the coming EMV migration threatens to siphon even more fraud to CNP channels, according to data and analytics firm FICO. The San Jose, Calif.-based company that pioneered consumer credit risk scores said the companies in its Falcon Fraud Manager Consortium showed a 25 percent bump in card-not-present fraud between January 2011 and September 2012, while fraudulent transactions using counterfeit cards at physical locations grew by 14 percent.

“CNP transactions are very convenient for consumers, but CNP fraud can be especially complicated to combat,” said T.J. Horan, vice president of global fraud solutions at FICO. And, he continued, “as EMV standards get implemented in the U.S., we know that fraud will migrate as it has done in other regions of the world.”

The FICO numbers confirm a trend seen in other research: that card-not-present fraud is on the rise. Experts also agree that attention to this area of fraud needs to ramp up considerably given the experience of other countries that have migrated to the EMV card standard. In just about every geography where EMV has been introduced, fraudsters have turned to the card-not-present channel, where detection becomes more difficult.

As Jim Van Dyke, CEO of Javelin Strategy & Research put it in a recent interview with CardNotPresent.com: “So, the space that’s been hit the hardest is going to actually get hit harder yet in the next year or two.”