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BREAKING - TARGET CEO STEPS DOWN: Target CEO Gregg Steinhafel has stepped down, the retailer <a href="http://pressroom.target.com/news/statement-from-targets-board-of-directors" target="_blank">announced today</a>. Late last year, Target was the subject of a massive hack that saw 40 million customers' credit card numbers exposed to data thieves. Steinhafel has been CEO for six years but has been with the company for 35 years. Target's announcement made explicit mention of the data breach in the announcement: "[Steinhafel] held himself personally accountable and pledged that Target would emerge a better company." Steinhafel will also step down from his roles as president and chairman. Target's CFO John Mulligan will take over as interim CEO. 
Steinhafel's departure appears to be part of a well-orchestrated series of steps by Target to rehabilitate its security systems and its public image. In recent weeks it has also hired a new CTO, announced plans to migrate to payment terminals that accept the new more secure EMV credit cards containing a microchip, and announced its commitment to the more secure chip-and-PIN credit card security standard for EMV. Customers have to enter a PIN number to complete purchases rather than sign a receipt. 
WALGREENS PILOTS iBEACON IN NYC: A Walgreens executive revealed that the company is piloting Apple's iBeacon technology at 10 of its Duane Reade drugstores in New York. Tim McCauley, senior director of mobile commerce at Illinois-based Walgreens, said last week that Bluetooth-powered beacons will push offers and notifications to Duane Reade iPhone apps, <a href="http://www.mobilecommercedaily.com/walgreens-tests-ibeacon-to-bolster-mobile-coupon-personalization-awareness" target="_blank">Mobile Commerce Daily reports</a>. Walgreens, the nation's largest drug retailer, initiated the pilot after finding that store shoppers who also transact online and on mobile spend six time more than store-only shoppers. Walgreens also has an app that's compatible with Apple's Passbook, which is a mobile wallet for coupons, loyalty cards, and vouchers. Since beacons can also transmit payments data, it's thought that Passbook and beacons could complement one another in an Apple-controlled payments system. 
iBeacon drew little attention immediately following its mid-2013 launch, but the Walgreens pilot is another sign that merchants are warming up to the technology. Recently, we reported on the signs that Apple's beacon is gaining ground with merchants. By the end of 2014, over 30,000 retailers will have beacons installed, <a href="http://www.patentlyapple.com/patently-apple/2014/04/apples-ibeacon-begins-to-rock-the-market-with-more-on-the-way.html" target="_blank">one study predicts</a>. We've also <a href="https://intelligence.businessinsider.com/beacons-revolutionary-mobile-technology-2013-12" target="_blank">estimated</a> that there are over 200 million currently deployed iPhones and iPads capable of acting as or receiving signals via iBeacon. 
WELLS FARGO MARCHES CARDS TOWARD EMV: Wells Fargo has <a href="http://www.businesswire.com/news/home/20140501005538/en/Wells-Fargo-Commercial-Cards-Europe-Bound">announced</a> that it will begin integrating the EMV security standard into its WellsOne commercial card product in the U.S. (commercial cards are used by businesses as company cards). EMV, a card security standard common in Europe and Asia, embeds a microprocessor into cards to make them more secure. The San Francisco-based bank also said it would begin migrating all WellsOne cardholders to the chip technology ahead of an October 2015 deadline, although they will maintain the magnetic stripe so that they'll remain be compatible with non-EMV terminals. Retailers and card issuers have been hesitant to begin migration to EMV, but <a href="https://intelligence.businessinsider.com/payments-insider-target-dumps-visa--ebays-payment-volume--squares-new-feature-2014-4">Target has announced</a> that it will upgrade all checkout terminals and store-branded cards to EMV. The Wells Fargo move is another sign of an uptick in the speed of adoption. 
REGULATOR - BITCOIN USERS, MINING OPERATORS ARE NOT MONEY TRANSMITTERS: The U.S. Treasury Department's Financial Crimes Enforcement Network last week <a href="http://www.fincen.gov/news_room/rp/rulings/html/FIN-2014-R007.html">announced</a> that renting out computer servers for Bitcoin mining is not money transmission under Federal guidelines - and therefore is not subject to regulations for money transmitters, including reporting and registration requirements. In January, FinCEN <a href="http://www.fincen.gov/news_room/rp/rulings/html/FIN-2014-R001.html">ruled</a> that the act of Bitcoin mining, or processing the ledgers that enable Bitcoin transactions, is not itself money transmission. 
Former Treasury secretary Larry Summers also weighed in with cautious optimism on Bitcoin in an unrelated <a href="http://blogs.wsj.com/moneybeat/2014/04/30/in-bitcoin-debate-larry-summers-sides-with-the-history-of-change/">interview with the Journal</a>. "I'm not ready to stand with those who are sure they have seen the future here," he said, "but it seems to me that it's a serious mistake to write this off as either ill-conceived or illegitimate."
PAYMENTS PEOPLE ON THE MOVE
Randi Zuckerberg, CEO of Zuckerberg Media and sister of Facebook founder Mark Zuckerberg, has been appointed to the board of directors at Mozido, a white-label mobile payments provider.
First Data has tapped Christopher Foskett as head of global, strategic, and national accounts. Foskett joins the company from JP Morgan, where he was head of global sales.
Nathalie Reinelt has joined investment research firm Aite Group as an analyst focusing on the global payments ecosystem. Prior to joining Aite, she worked for Apple and Facebook.
Loyalty-app maker Belly has recruited a new VP of Engineering. Fred Lee joins the company from online financial services provider Enova, where he was CTO.
PayPal is seeking a <a href="http://www.businessinsider.com/paypal-exec-tweets-2014-5">new director of strategy</a>.
Editorial director Marcelo Ballvé contributed to this report. 
Have your own career move to share? Email <a href="mailto:kgriffith@businessinsider.com" target="_blank">kgriffith@businessinsider.com</a>

Target's CEO Steps Down Following Massive Data Breach

<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">AP</div></div></div>Samsung and its payments partner MasterCard are in talks with European banks to bring Samsung Pay to Europe, <a href="http://techcrunch.com/2015/07/30/samsung-mastercard-take-europe/">TechCrunch reports.</a> The service is scheduled to launch in the US later this summer, and is already being trialled in South Korea.Samsung Pay is already integrated into <a href="http://www.businessinsider.com/samsung-pay-announced-2015-2">both the Galaxy S6 and Galaxy S6 Edge</a>, but isn't live yet. It works a little differently to its competitor. Apple Pay requires specialized near-field communication (NFC) pads to work, while Samsung's system will work with any terminal with a standard magnetic stripe credit card reader and NFC.This is because the system is built on technology acquired from payments company LoopPay, which Samsung bought at the end of February. LoopPay uses a tiny metal coil to generate a magnetic current to the credit card reader, unlike NFC, which requires to you tap a device against a specific compatible sensor.While this could give it some advantage in the US, where traditional credit card readers are still widely used, Europe switched to EMV (chip-and-pin) technology some time ago, and many merchants now take contactless payments too. When we <a href="http://uk.businessinsider.com/apple-pay-trial-uk-launch-problems-boots-starbucks-2015-7">tried out Apple Pay in London</a>, it worked in most stores because they had also already upgraded to contactless terminals. Samsung Pay will work at these stores too.Like Apple Pay, Samsung Pay will use tokenization to secure payments, producing a one-time token to represent the user's card details each time they make a transaction. <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/clear-out-iphone-storage-space-2015-6">How to clear out a ton of space on your iPhone superfast</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="5qcmxndToofREk2JFghn1wjMFTZOXP_E" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

Samsung is going to launch its Apple Pay competitor in Europe

Welcome to our new Payments Insider newsletter, a morning email with the top news and analysis on the digital payments industry, produced by <a href="https://intelligence.businessinsider.com/welcome?utm_source=House&amp;utm_medium=Edit&amp;utm_term=PINSIGHTSutm_content=link&amp;utm_campaign=BIIMobile" target="_blank">BI Intelligence</a>. 
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FELIX SALMON SAYS BITCOIN WON'T BE DISRUPTIVE TO PAYMENTS. Reuters' Felix Salmon points out that one reason Bitcoin enthusiasts like <a href="http://www.npr.org/blogs/money/2014/02/05/272077743/a-venture-capitalist-is-betting-a-pair-of-socks-and-50-million-on-bitcoins-futur" target="_blank">Ben Horowitz</a>, <a href="http://money.cnn.com/2014/02/06/investing/bitcoin-venture-capital.pr.fortune/index.html" target="_blank">Dan Primack</a>, and <a href="http://www.ft.com/intl/cms/s/0/612ed094-8aaf-11e3-9465-00144feab7de.html" target="_blank">John Gapper</a> think the digital currency will be disruptive to the current payments system is because Bitcoin provides a way to transfer digital content between two people without copying it, and without more than one person owning it at once. In effect, it allows digital property to have the same characteristics as physical property.
Salmon argues that there are already examples of technology that effectively creates digital property that is owned by only one person or group at a time and that allows for it to be exchanged in a fast and inexpensive way. In particular, the example he gives is the technology underlying the stock markets. Ownership of stock can't be copied and people can't get access to it unless they pay for it. In a nutshell, he is saying that while elegant, Bitcoin won't be disruptive to digital payments because it doesn't add much more value than other solutions that are already in the system. (<a href="http://blogs.reuters.com/felix-salmon/2014/02/06/why-bitcoin-wont-disrupt-digital-transactions/" target="_blank">Reuters</a>) 
Over three-quarters of Americans are not familiar with Bitcoin. Bitcoin is a really exciting topic in payments, but outside of the tech media ecosystem it's still a foreign concept, according to new research conducted by OMNITEL on behalf of The Street. When surveyed, 76% of American respondents said that they were unfamiliar with Bitcoin. Still, it's important to note, 75% of respondents were interviewed via landline telephone. The high percentage of respondents who answered using landline telephone likely skewed the data toward a subset of Americans who may not be digitally inclined. Consider that back in 2012 <a href="http://gigaom2.files.wordpress.com/2012/12/wireless201212.pdf" target="_blank">36% of Americans said they didn't have a landline telephone</a>, according to a survey by the Center For Disease Control. (<a href="http://www.thestreet.com/story/12306983/1/three-in-four-people-have-never-heard-of-bitcoin.html" target="_blank">The Street</a>)
XIAOMI LOOKS LIKE IT WILL GET INTO PAYMENTS. On December 26, 2013 Xiaomi founder Lei Jun registered a new company called Beijing Xiaomi Payment Technology Ltd. with the Beijing Administration for Industry and Commerce, according to Technode. Xiaomi hasn't commented on its plans for the company beyond acknowledging its existence, but if the low-end smartphone manufacturer is planning to get into payments it would face stiff competition from both Alipay, a payment method offered by Alibaba, China's answer to Amazon, and social media behemoth Tencent's Tenpay. (Technode)
A CLEAR EXPLANATION OF EMV. Confused about what EMV is and why it's newsworthy? We've covered this topic in depth, but for those who need an introduction or a refresher, Business Insider's Jim Edwards has a <a href="http://www.businessinsider.com/chip-and-pin-credit-card-changeover-in-2015-2014-2" target="_blank">great article</a> on what EMV or "Chip and PIN" technology is and what it means for consumers and merchants. (<a href="http://www.businessinsider.com/chip-and-pin-credit-card-changeover-in-2015-2014-2" target="_blank">Business Insider</a>) 
FORGET CHIP AND PIN, THE U.K. HAS CONTACTLESS CARDS. Contactless payment cards need only be moved near a card reader in order to complete a transaction, and they only require pin entry periodically. They have not been particularly fast to take off in the U.S. but in the U.K., adoption has been more widespread. Through the first nine months of 2013, Visa saw transaction volume of about $740 million in the U.K. from NFC-based contactless cards and smartphone payments - that's up four times from 2012, according to Mark Austin, director of contactless for Visa Europe.
While contactless cards require a bit less from the consumer to conduct a transaction, there is debate as to whether they're safe. The cards do have a ~$32 transaction cap in the U.K., but since the transaction does not involve a PIN number for every transaction or even a signature, there's nothing to keep a thief who's obtained the card from using it for multiple transactions. In terms of safety, contactless cards are about as safe as the swipe and sign credit card payments used in the U.S. But in the U.K., where higher-level chip and PIN security on credit cards is the standard, contactless cards seem like a step back in security in favor of faster transactions. (<a href="http://www.computing.co.uk/ctg/analysis/2327179/contactless-payments-are-we-sacrificing-security-for-convenience/page/2" target="_blank">Computing</a>)
WELCOME, INSIDERS: Don't forget to sign up and get it every morning in your inbox. Please email johnh@businessinsider.com with news and tips.
AT SHOPRITE YOU CAN SCAN YOUR GROCERIES IN THE AISLE. ShopRite is a grocery chain that operates in Connecticut and New Jersey. The company is testing out a new payment system that allows shoppers to scan items they wish to purchase from grocery aisles using their mobile phones. Then shoppers pay for groceries by scanning their phones at self-service checkouts. The hope is that the checkout process will become speedier if scanning items takes place while customers are still shopping. (<a href="http://www.mobilepaymentstoday.com/article/227537/ShopRite-grocery-chain-trials-app-to-scan-and-pay-from-aisle" target="_blank">Mobile Payments Today) </a>
NBS PAYMENTS SOLUTIONS BUYS PAYMENTS TERMINAL PROVIDER EQUINOX. Toronto-based payment terminal provider NBS Payment Solutions announced the completion of its acquisition of the assets of Arizona-based payments terminal provider Equinox. The terms of the deal were not disclosed, but NBS will operate under the name Equinox in the U.S. market. (<a href="http://www.marketwired.com/press-release/nbs-payment-solutions-acquires-the-assets-of-equinox-payments-1876770.htm" target="_blank">Market Wired via NBS</a>)
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<a href="https://intelligence.businessinsider.com/targets-data-breach-began-with-a-company-that-does-heating-and-ac-work-on-its-stores-2014-2">Target's Data Breach Began With A Company That Does Heating And A/C Work On Its Stores</a>
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Bitcoin May Be Elegant But That's Not Enough For It To Disrupt The Payments System

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RETAILERS SCRAMBLE TO AVOID BECOMING THE NEXT TARGET: The latest fallout from Target's data breach underscores how high the stakes are in payments security for big retail. Gregg Steinhafel, a nearly 35-year-veteran of Target, <a href="http://pressroom.target.com/internal_redirect/cms.ipressroom.com.s3.amazonaws.com/18/files/20144/image2014-05-05-051917.pdf" target="_blank">resigned</a> yesterday in the wake of the late 2013 data breach that compromised the credit card and personal information of tens of millions of Target customers. CIO Beth Jacob also resigned earlier this year, but this is the first CEO resignation to follow a major data breach. "The Target CEO getting let go was kind of unprecedented," says David Kennedy, CEO of TrustedSec, a security consulting firm that works with national retailers. "It's started to jolt folks." 
Payments security, once a second-tier issue, has become a top priority in retail executive suites and boardrooms. "Since the breach there's been a huge uptick in companies trying to gather risk assessments," says TrustedSec's Kennedy. "It's a new era for boards to take a proactive role in understanding what the risks are," security expert Cynthia Larose was quoted as saying in the <a href="http://hosted.ap.org/dynamic/stories/U/US_TARGET_CEO" target="_blank">Associated Press</a>. Steinhafel had reportedly been meeting monthly with the Target board following the breach, rather than quarterly, as was customary. 
See a copy of Gregg Steinhafel's resignation letter <a href="http://pressroom.target.com/internal_redirect/cms.ipressroom.com.s3.amazonaws.com/18/files/20144/image2014-05-05-051917.pdf" target="_blank">here</a>. 
REPORT - ISSUERS TO BEAR THE BRUNT OF EMV TRANSITION COSTS: A new report from Javelin Strategy and Research, scheduled for release later today, estimates that credit card-issuing banks will bear a hefty 62% of the total hardware cost (cards and point-of-sale terminals) for the U.S. migration to EMV, the chip card security standard common in Europe and Asia. Merchants will bear 38% of the cost, which the report author Nick Holland pegs at $6.8 billion. 
Whoever ends up paying, the migration may be a windfall for point-of-sale hardware and software makers. Our own report, which also includes the cost of POS software updates, pegs the POS conversion cost at $7 billion, annualized in the chart below. In the wake of the Target breach, major retailers will almost certainly take the lead in the conversion. Target last week <a href="http://pressroom.target.com/news/target-appoints-new-chief-information-officer-outlines-updates-on-security-enhancements" target="_blank">announced</a> that it would accelerate a plan to convert all branded store cards and payment terminals in its 1,797 U.S. stores to EMV, at a cost of at least $100 million. 
<div class="KonaFilter image-container click-to-enlarge"><div class="image"><a title_source="BII" title_caption="" class="zoomin" href="http://static1.businessinsider.com/image/532361216bb3f770501ad616-960/chip%20card%20terminal%20forecast.png"></a>BII</div></div> 
MASTERCARD TOUTS MOBILE POINT-OF-SALE GROWTH, LED BY EMV: A <a href="http://www.mastercard.com/corporate/_assets/img/features/MasterCard-Mobile-POS-May-2014.pdf">new report</a> from MasterCard shows a sharp uptick in the number of mobile point-of-sale systems registered with the payment network. The number has grown from just six in September 2012 to 72 in March 2014. These systems typically either accept payments remotely through custom-built mobile terminals, or use a combination of attachable card readers and software to transform tablets and smartphones into mobile registers. 
EMV, the new credit card security standard, is already accepted on a majority of systems. Of the 72 different mobile card readers built to accept MasterCard, 46 were geared for EMV, with chip-and-PIN readers leading chip-only 2-to-1.
BITCOIN GETS VENTURE CAPITAL BUMP WITH NEW $30M FUND: Australian venture capital fund Future Capital yesterday <a href="http://www.prweb.com/releases/2014/05/prweb11823720.htm">announced</a> a new $30 million fund devoted to "companies that are leveraging services based on Bitcoin and other crypto-currencies." Dominic Carosa will lead the fund, which is <a href="http://futurecapital.com.au/bitcoinfund/">actively soliciting</a> investors and start-ups online. The new fund sits at the nexus of two trends: a rising tide of payments industry venture funding, which hit <a href="https://intelligence.businessinsider.com/payments-insider-payments-funding-high--amex-earnings--a-bitcoin-documentary-2014-4">a new high last quarter</a>, and increasing interest in the business cases for Bitcoin - which got an official blessing of sorts last week when quotes on the digital currency's price began <a href="http://blogs.marketwatch.com/thetell/2014/04/30/could-bitcoin-prices-on-bloomberg-terminals-spur-investments/">appearing on Bloomberg data terminals</a>. In the U.S., prominent venture capitalists like Union Square Ventures' Fred Wilson and a16z's Marc Andreessen have invested in Bitcoin, and have been outspoken in describing its potential. Andreessen has <a href="http://www.businessinsider.com/andreessen-horowitz-doubling-down-on-bitcoin-2014-3">told the Wall Street Journal</a> he planned to invest "hundreds of millions" more dollars in Bitcoin products. 
AMAZON ADDS CIRCUITOUS CART-ADDS ON TWITTER: Amazon is asking its customers to use the hashtag #AmazonCart on Twitter so that products mentioned in tweets will be added to that person's shopping cart, according to <a href="http://pando.com/2014/05/05/amazon-now-lets-users-add-items-to-their-shopping-cart-with-a-hashtag-but-will-anybody-use-it/" target="_blank">Pando</a>. To participate, shoppers must first connect their Twitter account to Amazon. Then they can reply with #AmazonCart to tweets containing an Amazon product link. This seems like an awful lot of steps just to add an item to a shopping cart - and shoppers will still have to go to Amazon.com to make a purchase. Past efforts at a similar Tweet-to-purchase feature, <a href="http://allthingsd.com/20130211/now-american-express-cardholders-can-tweet-to-buy/" target="_blank">like one by Amex</a>, have not seen wide adoption. The one case where it might be helpful to use #AmazonCart is when a shopper sees a product mentioned on Twitter and wants to make a spontaneous purchase. But even then, most people will probably want to see photos of the product and do some research before making a purchase.
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 Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.

Target CEO's Resignation Cranks Up Pressure On Retailers To Improve Payment Security 

Everyone is talking about a “cashless <keyword id="34412" type="ORGANIZATION" weightage="20" keywordseo="economy">economy</keyword>” these days: regulators, the government, your bank. There are many reasons why reducing cash is helpful for the economy. It builds transparency in the financial system. It reduces tax avoidance and consequently attacks the black money problem. It reduces the pernicious impact of counterfeit money in the economy. And of course, it reduces the massive cost overheads of cash transactions. 

	While these are all great reasons for the economy to go cashless, should you, as an individual consumer, go cashless? More importantly, can you? Most developed economies have transitioned a significant proportion of consumer spends to non-cash formats. In India, however, cash is still king, accounting for 90% of all transactions. How can we overcome the overwhelming dominance of cash? Let me suggest this – There is an instrument that can fight the battle for cashless boldly, and can enfeeble cash, if not actually slay it. No, it is not a new fangled e-wallet I speak of. Look into your real, physical wallet – you are probably carrying the giant fighter … the humble <keyword id="6356475" type="UNKNOWN" weightage="20" keywordseo="debit-card">debit card</keyword>. 
	 

	There are 55 crore debit cards in circulation today. That is a huge number, given that there are just over 60 crore adults in the country. These 55 crore cardholders could, if they chose, move a large part of their expenses to cashless by using their debit card. But only about 10% of them actually make any spends at all using these cards. The rest merely use them as cash withdrawal cards to be used at the ATM. 
	 

	Why this avoidance? There are three main reasons. 
	 

	The first reason is lack of awareness. Some customers are not aware that the cards they carry with them can actually be used at merchants or on e-commerce sites. Most are aware, but are not sure whether it is a good idea to use a debit card. I suggest to you that if you have a debit card in your wallet, using it is simple common sense. Here are half a dozen reasons why: 
	 

	1. It is convenient: Why carry around a wallet overflowing with soiled, torn notes and coins when all the value can be carried on one simple piece of plastic?

	2. It is safer: Lose your wallet and you lose your cash for good. But one phone call to your bank protects your debit card and all your money instantly. What’s more, because of the PIN-based authentication required on your debit card, it is useless to the thief unless he knows your PIN too.

	3. Earn interest: Why withdraw a large sum of money and hold it in cash, just so you can spend? Let it stay in your account and keep earning interest. When you need to spend, swipe your card!

	4. Get Deals and Offers: Have you noticed the many great offers that are available to customers who pay by card? Your bank is spending a lot of time (and money!) designing these offers just for you. Why let them go?

	5. Free insurance: Most banks offer free insurance on their debit cards. However, to be eligible for it, you need to use your card for spends.

	6. Protection: The merchant did not deliver the goods as promised or delivered inferior goods? If you spent on your debit card, you have an opportunity to cancel (“chargeback”) the transaction. You can similarly charge-back incorrect billings, non-authorised transactions etc.

	 
	The second reason why customers don’t spend on their debit cards, is lack of merchants. There just aren’t enough merchants who accept cards, particularly in smaller towns. This situation though, is changing rapidly. More and more terminalization is going on across the country. And of course, all of e-commerce is available for card acceptance! 
	 

	The third reason that stops customers from using their debit cards is the serious concern around security. Is my card information secure? Or am I exposing my bank account in some way by using debit cards? Security and financial protection is a very big deal for customers, just as it should be. The good news is, we in India have one of the most secure payment systems in the world now! 
	 

	Starting December 2013, based on an RBI regulatory directive, all debit card purchase transactions in India are authenticated by entering the ATM PIN of the card. This has resulted in a much higher level of protection for purchase transactions on Debit. Many cards are also now moving to EMV Chip format, the most secure form of cards in the world. 
	 

	Banks, on their part, are also coming out with several innovative debit card products to address security concerns of the customers. Take for instance the new Axis Bank Secure+ debit card. The card gives the customer the power to turn your card on or off; the ability to change your card limits; protection from all fraud transactions, including frauds occurring due to phishing, vishing attacks etc. Many such product innovations will continue to come in, to give you, the customer, a feeling of safety when using your debit card. 
	 

	But there are some simple steps you can do too, to make sure your debit card is secure. And they are truly simple, and common sense. Don’t disclose your card PIN to anyone. Don’t write it on the back of your card. Don’t share information like PIN with someone calling you claiming to be from your bank. Your bank will never ask for such information over the phone or on email! When you buy online, look for the lock sign. And if you want to feel even more secure, upgrade from your magnetic stripe card to a chip card. Simple steps – aren’t you always vigilant to protect the cash you carry around? Your debit card asks the same! 
	 

	So the next time you step out to shop, think before taking out your cash. Go cashless with debit cards. It is safer, simpler and smarter. 
 

	(About the author: This article has been written by Jairam Sridharan, President &amp; Head, Retail Lending &amp; Payments, Axis Bank.)

Cashless Economy? Start with your Debit Card

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SQUARE SHIFTS FOCUS AWAY FROM PAYMENTS: In a surprise move, Square yesterday pulled its Square Wallet app from Apple and Google's app stores. Wallet was Square's consumer-facing mobile payments service. It allowed users to make payments at Square merchants simply by checking in through the app, walking up to the register and saying their name (merchants were able to see a photo of the user and their account information on their displays). In place of Wallet, which Square says it will continue to support for existing users, comes Square Order, an app built around ordering ahead from restaurants and cafes. "This new offering is a customer experience that goes above and beyond payments and processing payments," Square spokesperson Semonti Stephens tells us.
That's a dramatic shift in Square's consumer-facing strategy. Square will take an 8% cut of transactions made through the new app, compared to its usual 2.75% rate for merchant payment processing (Square's main products remain its attachable card readers and software that turn merchant smartphones and tablets into registers). The steep fee for Square Order transactions reflects the new app's aim to become a customer referral engine: it will steer new customers to small businesses with in-app advertising, rewards programs, and discounts. "It's turning customers into regulars for businesses," says Square's Semonti. Competitor ordering app Grubhub Seamless <a href="http://venturebeat.com/2014/05/12/square-kills-wallet-launches-order-another-way-to-order-food/" target="_blank">charges 10 to 14%</a>, but PayPal, which has offered advance ordering for over a year, does not charge merchants higher fees. 
Square's shift illuminates the challenges facing all mobile wallets. The crowded mobile wallet field is plagued by slim margins and slowing adoption rates, on top of the expense of maintaining a complex service for a consumer audience. More broadly, the shift comes amid <a href="http://online.wsj.com/news/articles/SB10001424052702303825604579513882989476424" target="_blank">rumors of Square's difficulties in subsisting on the razor-thin margins provided by its core payments processing business</a>. If the new app is successful, Square Order's higher fees would create a consumer-side revenue stream with more robust margins. 
APPLE STORES TO ROLL OUT NEW MOBILE REGISTERS FROM VERIFONE: Apple is deploying new EMV-capable mobile point-of-sale terminals in its stores across the country, <a href="http://9to5mac.com/2014/05/09/apple-store-employees-switching-from-ipod-touch-to-iphone-5s-for-easypay-pos-system/">9 to 5 Mac</a> reports. The new system from VeriFone replaces a solution marketed by Infinite Peripherals. The new terminal is a hard case compatible with the iPhone 5 and 5S, and is configured to accept chip-and-PIN card payments under the EMV microchip security standard that's popular in Europe and spreading in the U.S. The new terminals can also accept near-field communications (NFC) payments. As Forbes contributor Gary Allen <a href="http://www.forbes.com/sites/garydallen/2014/05/10/apple-point-of-sale-upgrade-signals-better-security-nfc-access/">points out</a>, the move may stoke the rumors of an <a href="https://intelligence.businessinsider.com/payments-insider-apple-nfc-rumors--paypal-goes-biometric--p2p-payments-2014-4">NFC-capable iPhone 6</a>. But on the other hand, NFC comes standard on nearly all EMV VeriFone terminals. 
<div class="KonaFilter image-container float_right click-to-enlarge" style="width:400px"><div class="image"><a title_source="First Data" title_caption="" class="zoomin" href="http://static5.businessinsider.com/image/53714fc2ecad04cc3a84d4c2-960/spendtrend-data-201404.png"></a>First Data</div></div>FIRST DATA RELEASES APRIL SPENDTREND DATA: In its monthly SpendTrend report on U.S. consumer purchasing habits, First Data found strong overall growth in spending. Growth in credit and signature debit transactions, which both typically carry higher interchange rates, outpaced PIN debit. Prepaid, a category that includes gift cards, shot up sharply from declines in March, possibly due to the unusually late Easter. (See graphic, right)
MESSENGER APP KIK DEBUTS VIRTUAL CURRENCY: Kik Messenger, the mobile instant messaging app with 140 million registered users, has quietly debuted a virtual currency system called "Kik Points," <a href="http://thenextweb.com/apps/2014/05/09/kik-introduces-virtual-currency-encourage-engagement-potentially-make-money/" target="_blank">Next Web reports</a>. Kik Points is now in a <a href="http://testdrive.kik.com/?app=points" target="_blank">developer test-drive mode</a>, but it awards points to users for completing certain tasks. Currently, the points are only redeemable for a set of virtual stickers called Hipster Animals. 
SETTLEMENT IN U.S. PAYMENT-PROCESSOR DRAGNET: Late last month, a U.S. judge in North Carolina approved a $1.2 million settlement that could serve as a template for other banks and payment processors targeted in Operation Chokepoint. <a href="http://blogs.justice.gov/main/archives/3651">The U.S. Department Of Justice claims</a> that Four Oaks bank reaped $850,000 in fees by allowing an unnamed third-party payment processor in Texas to originate $2.4 billion in debit transactions, ignoring signs that the transactions were fraudulent - allegations that Four Oaks has disputed, and did not admit to as part of the settlement. The federal dragnet, first disclosed in March of 2013, has targeted over 50 banks and payment processors with subpoenas in similar cases, <a href="http://www.americanbanker.com/gallery/timeline-operation-choke-point-1066360-1.html">American Banker</a> reports. Electronic Transaction Association CEO <a href="http://thehill.com/blogs/congress-blog/economy-budget/204174-operation-choke-point-harmful-to-flow-of-commerce">Jason Oxman has written</a> that Chokepoint, which was initially targeted at <a href="https://intelligence.businessinsider.com/payments-insider-payments-funding-high--amex-earnings--a-bitcoin-documentary-2014-4">limiting payday lenders' access</a> to the financial system, is "burdensome and costly" for law-abiding businesses.
BRIEFLY NOTED
PayPal CEO David Marcus ribbed his counterpart Bill Ready of PayPal-subsidiary Braintree <a href="https://twitter.com/williamready/status/464895548156149760" target="_blank">on Twitter</a>, joking that Ready's new beard makes him look older. "Fear the beard!" replied Ready. The two will appear together at the <a href="http://southlandse.com/" target="_blank">Southland</a> conference in Memphis next month.
Software snags hinder Chrystler's ability to pay suppliers on time. (<a href="http://www.pymnts.com/news/2014/chrysler-struggling-to-pay-suppliers-on-time/" target="_blank">PYMNTS</a>)
Karen Webster, CEO of Market Platform Dynamics, writes on Alibaba's payments business. (<a href="http://www.pymnts.com/news/2014/chrysler-struggling-to-pay-suppliers-on-time/" target="_blank">PYMNTS</a>)
Online payments provider PayLane launches a mobile app. (<a href="http://www.finextra.com/news/announcement.aspx?pressreleaseid=55166" target="_blank">Finextra</a>)
Here's what else BI Intelligence members are reading...
<a href="https://intelligence.businessinsider.com/venmo-could-become-the-leading-mobile-payments-app-2014-5">Venmo Could Become The Leading Mobile Payments App</a>
<a href="https://intelligence.businessinsider.com/video-ads-everywhere--increased-ad-spending-will-put-video-ads-on-every-screen-2014-5">Digital Video Advertising: Aggressive Spending And Increased Ad Availability Are Putting Ads On Every Screen</a>

The Real Reason Square Pulled Its Wallet App

Welcome to our new Payments Insider newsletter, a morning email with the top news and analysis on the digital payments industry, produced by <a href="https://intelligence.businessinsider.com/welcome?utm_source=House&amp;utm_medium=Edit&amp;utm_term=PINSIGHTSutm_content=link&amp;utm_campaign=BIIMobile" target="_blank">BI Intelligence</a>. 
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UPGRADING TO CHIP AND PIN CARDS CARRIES A HEFTY PRICE TAG FOR TARGET. Upgrading Target's systems to the EMV or "chip card" standard would cost $100 million, according to John J. Mulligan, Target executive vice president and chief financial officer. Mulligan made his statement before a Senate Judiciary Committee on Tuesday.
 Card networks are putting a lot of pressure on retailers to adopt the EMV standard for their point-of-sale register system in the wake of the Target data breach, but it's not clear that the standard would fix the problem. While the EMV standard is generally more secure than magnetic stripe payment cards and makes it nearly impossible for data thieves to clone payment cards, sensitive information is still transferred in the transaction process, and still has the potential to be compromised. If data is compromised it can still be used for transactions where the card isn't physically present, such as those that take place on e-commerce platforms. There are solutions for this as well, but they require adding another level of technology that could be even more expensive for retailers. (<a href="http://www.judiciary.senate.gov/hearings/hearing.cfm?id=138603a26950ad873303535a6300170f&amp;2" target="_blank">Senate.gov</a>)
The Senate breach investigation is expanding. U.S. Senator Claire McCaskill (D-Mo.) and Senator Jay Rockefeller, (D-W.V.) sent letters to three retailers indicating the expansion of their investigation into corporate data security practices beyond Target. The letters (linked below) requested briefings from <a href="http://www.mccaskill.senate.gov/LetterJointJDRMcCaskilltoYahooDataBreach.pdf" target="_blank">Marissa Mayer, CEO Yahoo</a>; <a href="http://www.mccaskill.senate.gov/LetterJointJDRMcCaskilltoWhiteLodgingDataBreach.pdf" target="_blank">Bruce White, CEO White Lodging Services</a>; and <a href="http://www.mccaskill.senate.gov/LetterJointJDRMcCaskilltoMichaelsDataBreach.pdf" target="_blank">Carl Rubin, CEO Michaels Stores</a>. Each of the mentioned corporations recently suffered data breaches. (<a href="http://www.mccaskill.senate.gov/?p=press_release&amp;id=12080" target="_blank">Senate.gov</a>)
SPEAKING OF RETAILERS. Chipotle is about to spend $10 million to bring mobile payments to its customers in addition to other technology upgrades, according to the company's fourth quarter earnings call. "We at this point don't think it's going to require new POS. There is a device we will need to add that's not very expensive, it's a matter of 100s of dollars per restaurant not 1000s or 10,000s." says Steve Ells, Co-Chief Executive Officer. Ells goes on to say that while they are not sure what technology they are going to implement, their goal is to speed-up checkout lines. If we had to bet we'd put our money on Chipotle's new mobile payments system using Bluetooth LE beacons, which <a href="https://intelligence.businessinsider.com/beacons-revolutionary-mobile-technology-2013-12" target="_blank">we covered in a recent report</a>. (<a href="http://ir.chipotle.com/phoenix.zhtml?c=194775&amp;p=irol-irhome" target="_blank">Chipotle</a>) 
XOOM ACQUIRES BLUEKITE. Digital money transfer services Xoom announced yesterday that it acquired Bluekite for $15 million. Guatemala City-based Bluekite provides cross border bill payment technology. San Francisco-based Xoom offers money transfer services in 31 countries, has over 1 million active customers, and processed over $5.5 billion in money transfers over the last year. (<a href="http://ir.xoom.com/releasedetail.cfm?ReleaseID=823234" target="_blank">Xoom</a>) 
WELCOME, INSIDERS: Don't forget to sign up and get it every morning in your inbox. Please email johnh@businessinsider.com or BI Intelligence director mballve@businessinsider.com with news and tips.
HERE COMES AUTOMATED GAS PUMP PAYMENTS. Cashless payments company On Track Innovations (OTI) is simplifying the fueling process for consumers. The company uses "Moon Tags" which are installed on the fuel intake of vehicles. When a consumer inserts a fuel pump into the fuel tank of a vehicle at a participating gas station, the Moon Tag establishes a connection that automates payment once fueling is completed. The consumer doesn't need to swipe a payment card at the pump or in the the gas station. OTI already provides a automated fuel payment service for commercial fleets called EasyFuel Plus. (<a href="http://www.finextra.com/news/announcement.aspx?pressreleaseid=53669" target="_blank">Finextra via OTI</a>)
NOT TOO MANY MERCHANTS ARE ACCEPTING CONTACTLESS MOBILE PAYMENTS. Only 7% of U.S. merchants said they had the technology to accept payments which are transacted by scanning a smartphone at a point-of-sale, according to a new study by Lexis Nexis and Javelin Strategy Research. While the number is unimpressive it grew to 7% from 0% in 2013. (<a href="http://www.lexisnexis.com/risk/newsevents/press-release.aspx?id=1391203446773283" target="_blank">Lexis Nexis</a>)
NOW YOU CAN USE YOUR HEARTBEAT TO AUTHENTICATE YOUR BITCOIN WALLET. Toronto-based Bionym is developing a smart bracelet called Nymi that can be used to authenticate a user's devices by sensing the user's unique heartbeat. Yesterday the company announced that Nymi could also be used to authenticate a user's Bitcoin wallet. One potential danger in using Bitcoin is that if someone gains access to your Bitcoin wallet and spends your bitcoins, it is virtually impossible to recover them, so adding a level of biometric security isn't a bad idea. (<a href="http://sg.finance.yahoo.com/news/nymi-announces-secure-accessible-bitcoin-140000143.html" target="_blank">Yahoo Finance via Bionym</a>)
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<a href="https://intelligence.businessinsider.com/the-number-of-mobile-transactions-expected-to-increase-by-over-38-worldwide-in-2014-2014-2">The Number Of Worldwide Mobile Transactions To Increase 62% This Year</a>
<a href="https://intelligence.businessinsider.com/too-much-payments-hype-2014-2">Too Much Payments Hype - U.S. Bank's Shopping App - African Opportunities</a>
<a href="https://intelligence.businessinsider.com/these-market-share-numbers-show-why-google-is-clamping-down-on-the-android-open-source-project-2014-2">These Market Share Numbers Show Why Google Is Clamping Down On The Android Open Source Project</a>
<a href="https://intelligence.businessinsider.com/digital-advertising-surged-in-2013-as-evidence-builds-that-tv-dollars-are-going-online-2014-1">Digital Advertising Surged In 2013, As Evidence Builds That TV Dollars Are Going Online</a>

Target May Have To Spend $100 Million To Prevent Future Data Breaches

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VISA AND MASTERCARD INTENSIFY COMPETITION IN JAPAN: Surprisingly, Japan, the world's third-largest economy, is still largely cash-based. Overall payment card penetration is a measly 14% for consumer expenditures, according to Visa. That means plenty of opportunities for the main global card networks to make inroads. MasterCard hopes to carve out payments volume with a new pre-paid card it <a href="http://www.finextra.com/news/announcement.aspx?pressreleaseid=55144&amp;topic=payments" target="_blank">announced yesterday</a>. Offered in partnership with Japanese mobile operator KDDI, allows users to pre-load value online, or at the mobile carrier's retail locations. Card users also win points that can be redeemed as credits against their phone bill. MasterCard says its prepaid card business grew 40% last year across Asia, the Middle East, and Africa.
Meanwhile, Visa is aiming for the Japanese debit market. The company launched Visa Debit in Japan last quarter. "While debit is still considered in its infancy stage, there is a meaningful opportunity for growth given the large deposit base which exists in the banks from which to grow a debit business," Visa CEO <a href="http://seekingalpha.com/article/2164283-visas-ceo-discusses-f2q-2014-results-earnings-call-transcript" target="_blank">Charlie Scharf said</a> during an investor call last week.
SQUARE COMPETITOR iZETTLE RAISES $55 MILLION: The new funding round for the Swedish mobile payments company brings the total it has raised to $102 million, according to TechCrunch. Like Square, iZettle offers merchants apps and add-on hardware that transforms their smartphones and tablets into registers that can accept credit cards. iZettle is currently active in nine countries: Mexico, Brazil, the UK, Spain, Germany, Sweden, Denmark, Norway and Finland.
One difference between iZettle and Square is that the former is completely compatible with the chip-and-PIN credit card security technology used in Europe. Also known as EMV, the the standard means credit cards carry a microchip and merchant terminals require customers to punch in a PIN to complete credit card transactions. Many U.S. merchants are migrating to EMV ahead of 2015 deadline imposed by the card networks, but iZettle insists <a href="http://dealbook.nytimes.com/2014/05/09/swedish-payments-processor-raises-55-million/?_php=true&amp;_type=blogs&amp;_r=0" target="_blank">it does not have plans</a> to compete with Square in the U.S. (<a href="http://techcrunch.com/2014/05/08/as-square-struggles-european-payments-rival-izettle-takes-another-55-5m-in-funding/?utm_source=dlvr.it&amp;utm_medium=twitter" target="_blank">TechCrunch</a>)
ANTITRUST SUIT AGAINST AMEX TO PROCEED: A U.S. federal judge ruled yesterday that there's enough substance in a government antitrust suit against American Express for the lawsuit to proceed. The suit targets AmEx policies preventing merchants from offering incentives to consumers to use less expensive forms of payment - a claim also included among broader allegations in <a href="https://intelligence.businessinsider.com/visa-and-wal-mart--retail-banking-apps--the-fastest-payment-gateways-2014-3" target="_blank">Wal-Mart's March suit against Visa</a>. The antitrust suit, first filed by the U.S. Department Of Justice in 2010, originally named Visa and MasterCard as co-defendants, but the two largest card networks settled immediately, according to court records. AmEx said in a statement to <a href="http://www.reuters.com/article/2014/05/07/us-usa-antitrust-amex-idUSBREA460QI20140507" target="_blank">Reuters</a> that it believes it has a strong case, and will continue to defend against the suit.
M-PESA LAUNCHES REAL-TIME SETTLEMENT: M-Pesa, the mobile money solution started in Kenya that has recently launched in <a href="https://intelligence.businessinsider.com/payments-insider-m-pesa-in-europe--xoom-in-india--a-bitcoin-sales-tax-2014-3">Eastern Europe</a> and <a href="https://intelligence.businessinsider.com/payments-insider-apples-credit-cards--visas-russia-problem--bitcoin-satillite-2014-4">India</a>, unveiled <a href="http://www.standardmedia.co.ke/business/article/2000111286/safaricom-upgrades-system-to-fast-track-m-pesa-transactions">an update</a> yesterday that allows nearly instantaneous mobile banking transactions. The transaction time has been shaved down to thirty seconds from two hours, which means that businesses that pay staff through M-Pesa or receive payments through M-Pesa will see amounts settle in their bank accounts nearly in real-time. Thirty-eight banking institutions in Kenya migrated to a new upgraded M-Pesa API in order to allow for these fast settlements, and thirty others are completing the transition. Since Safaricom launched M-Pesa in 2007, it has made mobile payments the norm in Kenya (see chart below). Safaricom part-owner Vodafone and its competitors are hoping to replicate the app's success in other emerging markets.
<div class="KonaFilter image-container click-to-enlarge"><div class="image"><a title_source="BII" title_caption="" class="zoomin" href="http://static5.businessinsider.com/image/5304b5dc6bb3f70a2cd60b41-960/mobile%20phone%20owners.png"></a>BII</div></div>
1.3M AFFECTED IN EUROPEAN TELECOM BREACH: French telecom group Orange revealed yesterday that personal data for 1.3 million customers had been stolen by hackers in a data breach - the second attack on the company this year, according to <a href="http://online.wsj.com/news/articles/SB10001424052702304655304579547762183336026" target="_blank">The Wall Street Journal</a>. Though Orange, like the other major European telecoms, is pushing hard into mobile payments, no payment account data was lost. The breach did reveal customer contact information and names. In the U.S., pressure over data security is rising in the retail and payment sectors, in the wake of the massive Target breach that led to its CEO's resignation. 
Clarification: In Wednesday's Payment Insider, we reported growth statistics on Venmo's payment volume which were sourced from <a href="https://www.braintreepayments.com/blog/delivering-commitments-to-customers" target="_blank">the official blog</a> of parent company Braintree. A conversation with a Braintree spokesperson reveals that Venmo's annual payment volume is on pace to hit $1 billion annually if growth continues at present rate. We repeated Braintree's claim that Venmo "is now handling" that volume.
Here's what else BI Intelligence members are reading...
<a href="https://intelligence.businessinsider.com/apple-continues-to-break-away-from-competitors-with-a-staggering-number-of-payment-cards-on-file-2014-5">Apple Has A Staggering Number Of Payment Cards On File, Way More Than Its Competitors</a>
<a href="https://intelligence.businessinsider.com/mobile-messaging-business-2014-4">Messaging Apps: Growth And Monetization Trends For Mobile's Fastest-Growing Platforms</a>

Visa And MasterCard Are Battling For Japan

Welcome to our new Payments Insights newsletter, a morning email with the top news and analysis on the digital payments industry, produced by <a href="https://intelligence.businessinsider.com/welcome?utm_source=House&amp;utm_medium=Edit&amp;utm_term=PINSIGHTSutm_content=link&amp;utm_campaign=BIIMobile" target="_blank">BI Intelligence</a>. 
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O2 DROPS ITS MOBILE WALLET IN THE UK. The Telefonica-owned mobile operator is dropping its mobile wallet service just 18 months after launch. Starting in early March, the service will no longer be available.
The mobile wallet suffered from low adoption rates which likely led to its discontinuation. In addition, O2 has forged partnerships with competitors Vodafone and EE to build a new mobile commerce platform called <a href="http://weve.com/products/wallet" target="_blank">Weve</a>, which includes a mobile wallet along with location-based marketing services. So, O2 isn't totally out of the mobile wallet game. 
One of the biggest hurdles to the success of any mobile wallet is convincing merchants to purchase the technology that reads and accepts mobile wallet payments. And when there are so many different mobile wallets vying for merchant and consumer adoption, it's especially difficult to get any single mobile wallet off the ground. One way to solve that problem is for telecoms to team up in an effort to provide a more ubiquitous solution. We expect that other large payments networks and mobile operators will continue to partner in an effort to reach a wider swath of merchants and consumers. (<a href="http://www.computerworlduk.com/news/mobile-wireless/3496600/o2-ditches-mobile-wallet/" target="_blank">Computer World UK</a>) 
BITCOIN'S POTENTIALLY FATAL FLAW. Transaction confirmation in the Bitcoin network requires that users across the network solve mathematical puzzles using their computers. This distributes the power to confirm Bitcoin transactions throughout the network. One weakness in the system is that users or groups of users can increase the probability of solving the puzzles by increasing computing power. So, a group with enough computing power could decide which transactions should and shouldn't be confirmed. In order to do this effectively a person or a group would have to have computing power greater than half of the computing power in the entire network. Last week, a Bitcoin mining group, GHash.io, reached 43% of the mining power in the network. GHash.io doesn't want to destroy Bitcoin, so the mining group voluntarily reduced the computing power in its mining pool, but that doesn't mean that everyone who mines Bitcoin is equally as right-minded. The event highlights a systemic weakness in Bitcoin, one that doesn't seem to have an easy fix. (<a href="http://www.businessinsider.com/bitcoin-miners-approach-dangers-threshold-2014-1" target="_blank">Business Insider</a>)
OVERSTOCK.COM HAD A HUGE FIRST DAY ACCEPTING BITCOIN. According to a tweet from Overstock.com CEO Patrick Byrne, customers paid for 840 orders in Bitcoin on Friday. The value of the orders in aggregate was $130,000. Friday was the first day that the company allowed customers to pay for goods using the digital currency. Overstock.com's success accepting Bitcoin provides evidence that Bitcoin, or a similar digital currency, could become a popular method of payment. (<a href="https://twitter.com/OverstockCEO/status/421754592427139072" target="_blank">Patrick Byrne's tweet</a>)
TARGET DATA BREACH UPDATE. After an internal audit, Target believes that as many as 70 million payment cards used at its stores may have been compromised in the U.S. between Nov. 27 and Dec.15. That's up from the first estimate of 40 million. The breach highlights how weaknesses in the legacy payments system can affect the largest retailers. It also highlights potential opportunities for new payment technology companies to meet the market's security needs. (<a href="http://www.businessinsider.com/target-update-on-personal-info-being-stolen-2014-1" target="_blank">Business Insider</a>) 
WELCOME TO PAYMENTS INSIGHTS. We hope you are enjoying this newsletter. Don't forget to <a href="http://e.businessinsider.com/join/biipaymentsform" target="_blank">sign up</a> and get it every morning in your inbox. Please email <a href="mailto:johnh@businessinsider.com">johnh@businessinsider.com</a> or BI Intelligence director <a href="mailto:mballve@businessinsider.com" target="_blank">mballve@businessinsider.com</a> with news and tips.
NYC WANTS TO GET TO KNOW BITCOIN. The New York City Economic Development Corporation is hosting an invite-only event for representatives from Bitcoin startups, policy officials, and venture capitalists to meet and discuss the implications of the emerging digital currency. (<a href="http://recode.net/2014/01/09/bitcoins-big-new-york-city-moment-is-coming-later-this-month/" target="_blank">Re/code</a>) 
<div class="KonaFilter image-container float_right" style="width:400px"><div class="image">www.chipandpin.co.uk</div></div>INDEPENDENT ATM OPERATORS FACE A MASSIVE HURDLE. Payment cards in the U.S. are scheduled to be upgraded to the EMV standard by 2015. The EMV standard, also known as "chip and pin," is more secure than legacy magnetic stripe cards. When the new standard is implemented, merchant acquirers will assume liability for magnetic strip-based fraud. This will likely put pressure on ATM operators to upgrade their hardware to the EMV standard as well because companies that process ATM transactions may either deny service or increase the cost of processing transactions for merchants who don't make the upgrade. These upgrades will be expensive and won't increase the profitability of owning an ATM, which may lead some independent ATM operators to move out of the business altogether. (<a href="http://www.paymentssource.com/news/atm-deployers-face-perfect-storm-of-obsolescence-3016556-1.html" target="_blank">Payments Source</a>)
REGULATORY CLARIFICATION FOR BITCOIN STARTUPS. One of the big questions that Bitcoin startups have is whether or not they will be regulated as money transmitters, which are subject to a host of onerous and perhaps prohibitive regulations. For a company like Bitpay, which acts as a Bitcoin payments processor, the answer is likely "no," according to Broox Peterson, formerly Senior Vice President and Assistant General Counsel at Visa International. The definition of a money transmitter expressly excludes businesses that process transactions from a consumer on behalf of a merchant. (<a href="http://paymentsviews.com/2014/01/10/payments-regulation-in-the-united-states-is-hampering-innovation-really/#more-5526" target="_blank">Payments Views</a>)
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<a href="https://intelligence.businessinsider.com/app-store-revenues-reach-10-billion-2014-1">Apple's App Store Had A Massive Year In 2013 - Revenue Grew 136%</a>

UK Telecom O2 Drops Its Mobile Wallet After Just 18 Months

Welcome to our new E-Commerce Insider newsletter, a morning email with the top news and analysis on the e-commerce industry, produced by <a href="https://intelligence.businessinsider.com/">BI Intelligence</a>. 
Click <a href="http://e.businessinsider.com/join/ci/biiecommerceform">here</a> to sign up for E-Commerce Insider today, and <a href="http://e.businessinsider.com/join/ci/biiecommerceform">receive it every morning in your inbox</a>. 

GOOGLE EXPANDS SAME-DAY DELIVERY: Google announced that its same-day delivery service, called Google Shopping Express, <a href="http://googlecommerce.blogspot.com/2014/05/google-shopping-express-expands-same.html">will soon be available in Los Angeles and Manhattan</a>. Shoppers can go to google.com/express and order items from Google's participating partners, which includes major retail brands such as Costco, Target, and Walgreens. "It's a big team and a major multi-year commitment for Google," Tom Fallows, head of Google Shopping Express, was quoted as saying in <a href="http://nypost.com/2014/05/05/google-expands-same-day-delivery-service-to-manhattan-la/">The New York Post</a>. Fallows' comment implies that Google will be rolling out the service to more cities. 
The same-day delivery space is suddenly growing crowded. Google's announcement comes just days after Amazon said that its same-day delivery service would be available in Los Angeles. Along with Amazon and Google, eBay, and Uber are all operating same-day delivery in several large cities in the U.S., and we don't foresee a world where we need all those delivery services - not to mention those offered by pre-existing shipping giants such as FedEx. The economics of same-day delivery aren't very forgiving. It's expensive to cobble together courier services in metro areas, and difficult to eke out gains through fees and added volume. We expect a couple of these entrants to bow out if they fail to gain market share. 
TARGET CEO STEPS DOWN: Target CEO Gregg Steinhafel has stepped down, the retailer <a href="http://pressroom.target.com/news/statement-from-targets-board-of-directors">announced today</a>. Late last year, Target was the subject of a massive hack that saw 40 million customers' credit card numbers exposed to data thieves. Steinhafel has been CEO for six years but has been with the company for 35 years. Target's announcement made explicit mention of the data breach in the announcement: "[Steinhafel] held himself personally accountable and pledged that Target would emerge a better company." Steinhafel will also step down from his roles as president and chairman. Target's CFO John Mulligan will take over as interim CEO. 
Steinhafel's departure appears to be part of a well-orchestrated series of steps by Target to rehabilitate its security systems and its public image. In recent weeks it has also hired a new CTO, announced plans to migrate to payment terminals that accept the new more secure EMV credit cards containing a microchip, and announced its commitment to the more secure chip-and-PIN credit card security standard for EMV. Customers have to enter a PIN number to complete purchases rather than sign a receipt. 
ONE KINGS LANE APPOINTS CEO: Online boutique One Kings Lane <a href="http://www.prnewswire.com/news-releases/one-kings-lane-names-dinesh-lathi-chief-executive-officer-257322051.html">has named</a> Dinesh Lathi as its new chief executive officer. Previously, Lathi was the company's chief operating and financial officer. He has worked for One Kings Lane since 2011, and prior to that he spent seven years at eBay where he served at vice president of the company's North America operations. 
Former One Kings Lane CEO Doug Mack <a href="http://techcrunch.com/2014/04/09/one-kings-lane-loses-ceo-doug-mack-to-fanatics/">left after four years to head a sports website</a>, which led some to speculate that the e-commerce retailer was facing some headwinds. 
E-COMMERCE EXECUTIVES ON THE MOVE 
Clothing retailer Lands' End has hired Steven Rado as its new chief marketing officer. Previously, Rado was senior vice president of customer strategy for Office Depot. (<a href="http://www.internetretailer.com/2014/05/02/lands-end-hires-former-office-depot-exec-head-marketing">Internet Retailer</a>)
Appliance and electronics retailer HHGregg has hired Troy Risch as its new chief operating officer. Previously, Risch worked at RadioShack where he was executive vice president of store operations. (<a href="http://www.marketwatch.com/story/hhgregg-announces-hiring-of-coo-2014-04-30?reflink=MW_news_stmp">MarketWatch</a>)
WELCOME, E-COMMERCE INSIDERS: This is our new newsletter covering all things e-commerce. Please email <a href="mailto:csmith@businessinsider.com">csmith@businessinsider.com</a> with news and tips. Click <a href="http://e.businessinsider.com/join/ci/biiecommerceform">here</a> to sign up for E-Commerce Insider today, and <a href="http://e.businessinsider.com/join/ci/biiecommerceform">receive it every morning in your inbox</a>. 
AMAZON PROMOTES SHOPPING HASHTAG ON TWITTER: Amazon is asking its customers to use the hashtag #AmazonCart on Twitter so that products mentioned in tweets will be added to that person's shopping cart, according to <a href="http://pando.com/2014/05/05/amazon-now-lets-users-add-items-to-their-shopping-cart-with-a-hashtag-but-will-anybody-use-it/" target="_blank">Pando</a>. To participate, shoppers must first connect their Twitter account to Amazon. Then they can reply with #AmazonCart to tweets containing an Amazon product link. This seems like an awful lot of steps just to add an item to a shopping cart - and shoppers will still have to go to <a href="http://amazon.com/">Amazon.com</a> to make a purchase. Past efforts at a similar Tweet-to-purchase feature, <a href="http://allthingsd.com/20130211/now-american-express-cardholders-can-tweet-to-buy/" target="_blank">like one by Amex</a>, have not seen wide adoption. The one case where it might be helpful to use #AmazonCart is when a shopper sees a product mentioned on Twitter and wants to make a spontaneous purchase. But even then, most people will probably want to see photos of the product and do some research before making a purchase. 
GOOGLE ACQUIRES RANGESPAN: Google has acquired retail analytics startup Rangespan, <a href="http://venturebeat.com/2014/05/02/google-rangespan/">according to VentureBeat</a>. Rangespan helps retailers predict which products and services shoppers might want in the future. Analytics that generate personalized future purchase recommendations to shoppers would be valuable both for Google search and for mobile payments schemes. For example, the Google Wallet app could generate recommendations after every completed purchase, or on an ongoing basis. 
Canadian online marketplace Shop.ca has raised more than $28 million in a new round of financing. The company says it will use some of the funds to recruit more merchants to sell on its platform. Currently, more than 2,000 merchants sell merchandise on Shop.ca, ranging across 28 different product categories. (<a href="http://www.internetretailer.com/2014/05/02/canadian-online-marketplace-shopca-hauls-28-million">Internet Retailer</a>)
J. Crew is reportedly launching a budget-conscious chain called J.Crew Mercantile, according to <a href="http://online.wsj.com/news/articles/SB10001424052702303948104579536090650567318">The Wall Street Journal</a>. Prices are expected to be similar to those found at an outlet store, but the line of clothing will be unique to the Mercantile brand. While Mercantile could help J. Crew reach different consumers, it could also backfire on the company and end up cannibalizing the brand - pulling J. Crew's own customers away to shop at a lower-cost store with a similar product line.
Here's what else BI Intelligence subscribers are reading …
<a href="https://intelligence.businessinsider.com/online-shopping-in-china-is-now-more-popular-than-social-networking-2014-5">In China, Online Shopping Is Now More Popular Than Social Networking</a>
<a href="https://intelligence.businessinsider.com/most-mobile-video-ad-impressions-occur-on-phones-lead-by-ios-2014-5">Most Mobile Video Ads Are Viewed On Phones, Especially iOS Devices</a>

The Same-Day Delivery Space Is Suddenly Growing Crowded

Welcome to our new Payments Insider newsletter, a morning email with the top news and analysis on the digital payments industry, produced by <a href="https://intelligence.businessinsider.com/welcome?utm_source=House&amp;utm_medium=Edit&amp;utm_term=PINSIGHTSutm_content=link&amp;utm_campaign=BIIMobile" target="_blank">BI Intelligence</a>. 
<a href="http://e.businessinsider.com/join/biipaymentsform" target="_blank">Click here to sign up for Payments Insider today, and receive it every morning in your inbox</a>.

MOBILE CARRIERS LOSE CONTROL OF THE MOBILE WALLET ECOSYSTEM. One hurdle for NFC-based mobile wallets from a developer's perspective is that in order to store a payment card on a mobile phone the app needs access to the phone's "secure element," a partitioned and highly secure piece of the phone that's inaccessible to most applications. Access to the secure element is usually controlled by mobile operators. 
Mobile operators have many reasons for limiting access to the secure element besides needing to secure customer payment information. One reason is that some mobile operators are launching their own mobile wallets and want to limit competition. For example, Verizon, which is invested in the ISIS mobile wallet, doesn't allow Google Wallet on its phones. 
Google's latest version of Android supports a feature called "host card emulation" (HCE) that bypasses the need for an app to access a phone's secure element in order to make an NFC-based payment. HCE accomplishes this by storing payment information in the cloud rather than on the secure element. 
Yesterday, Visa and MasterCard both announced their support for HCE. What this means is that any app that supports HCE could potentially support card payments transacted using mobile devices. In this case, mobile carriers will not be able to so easily box out competitors. On the other hand, NFC-based transactions haven't taken off in the U.S. and unless they improve the consumer's point-of-sale payment experience, there is no reason to think consumers will jump on board. (<a href="http://pressreleases.visa.com/phoenix.zhtml?c=215693&amp;p=irol-newsarticlePR&amp;ID=1901153&amp;highlight=" target="_blank">Visa</a> and <a href="http://newsroom.mastercard.com/press-releases/mastercard-to-use-host-card-emulation-hce-for-nfc-based-mobile-payments/" target="_blank">MasterCard</a>) 
AMAZON EXPANDS ROLLOUT OF AMAZON COINS. Amazon Coins can be used to purchase apps and other digital content from Amazon's app store. It's part loyalty program, part gamification strategy - you can win coins for downloading content, for example - and part a means of bypassing having to make frequent low value purchases with a credit card. Now, Amazon is expanding the program. The company announced yesterday that Amazon coins can be used on Android devices in the U.S., U.K., and Germany. Previously, Amazon Coins could only be used on Kindle Fire tablets. (<a href="http://phx.corporate-ir.net/phoenix.zhtml?c=176060&amp;p=irol-newsArticle&amp;ID=1901229&amp;highlight=" target="_blank">Amazon</a>)
VENMO ADDS LOCATION-BASED PAYMENTS. PayPal-owned Venmo added a new feature to its iOS 7 peer-to-peer payments app, which allows users to see and make payments to people who are near to them. The feature uses the Bluetooth LE communication frequency, which we covered in a <a href="https://intelligence.businessinsider.com/beacons-revolutionary-mobile-technology-2013-12" target="_blank">recent report</a> on beacon technology. This is a big step for Venmo because previously payments required users to search for the recipient's name - now Venmo users simply have to be within a small distance of payment prospects. Meaning, the app could potentially be used for consumer-to-business transactions. (<a href="http://www.businessinsider.com/new-venmo-nearby-feature-2014-2" target="_blank">Business Insider</a>) 
WELCOME, INSIDERS: Don't forget to sign up and get Payments Insider every morning in your inbox. Please email johnh@businessinsider.com with news and tips.
THE BITCOIN WINKDEX IS HERE: Yesterday, the Winklevoss twins - famous for their lawsuit against Mark Zuckerberg - made a regulatory filing with the SEC for their Bitcoin Index, called Winkdex. The brothers are currently moving forward with launching a Bitcoin exchange-traded fund as well. (<a href="http://dealbook.nytimes.com/2014/02/19/before-a-bitcoin-fund-comes-a-price-index/?_php=true&amp;_type=blogs&amp;_r=0" target="_blank">New York Times</a>)
FORTUMO SIGNS CARRIER BILLING CONTRACT IN THE PHILIPPINES. Carrier billing platform provider Fortumo announced a new partnership with Smart Communications. With 57 million subscribers, Smart Communications is the largest mobile carrier in the Philippines. Carrier billing allows mobile users to purchase digital goods like games by adding the cost of the purchase directly to their mobile bill. The Philippines is a prime market for direct carrier billing because of a lack of alternative payment methods and high smartphone penetration. (<a href="http://blog.fortumo.com/fortumo-goes-to-the-philippines-direct-carrier-billing-for-57-million-subscribers-of-smart/" target="_blank">Fortumo</a>)
INGENICO REPORTS EARNINGS. The French payments technology and hardware provider Ingenico reported "very strong" 14% revenue growth in 2013, rising to €1.371 billion ($1.88 billion). One highlight was a 42% increase in revenue in the company's North America business segment. Ingenico attributed the growth to increased technology and hardware sales driven by the upcoming 2015 EMV or "chip-and-PIN" deadline set by the major credit card networks. The chip-and-PIN deadline requires merchants to update their points-of-sale to a higher standard of security meant to reduce fraud. If merchants do not do this, they will have an increased fraud liability burden. (<a href="http://www.ingenico.com/en/media-centre/press-releases/20140219-ingenico-annual-results-2013/" target="_blank">Ingenico</a>) 
STARTUP RELEASES MOBILE PAYMENT SOLUTION THAT IS ACCEPTED EVERYWHERE. Boston-based Loop has a new way to pay with your smartphone. The company's hardware solutions - a smartphone case and something called a "Fob", which looks similar to Square's card reader - effectively trick card readers into thinking a payment card has been swiped. Both technologies accomplish this by transmitting a magnetic signal to credit card readers in close proximity. The result is a mobile payment solution that can be accepted at any point-of-sale that can swipe payment cards. It gets around the problem many mobile wallets face - needing merchants to adopt hardware that can accept smartphone point-of-sale payments. The problem with Loop's solution is that merchants probably aren't going to want people using a strange device near their card readers in the wake of the Target data breach. Also, the Fob costs $39, a price consumers may not want to pay simply to be able to use their smartphone as a universal payment mechanism. (<a href="http://www.looppay.com/wp-content/uploads/2014/02/Loop_Feb_19_Press_Release.pdf" target="_blank">Loop</a>)
Here's what else BI Intelligence subscribers are reading...
<a href="https://intelligence.businessinsider.com/how-bitcoin-works-and-could-change-payments-2014-1">BITCOIN: How It Works, And Why It Could Fundamentally Change How Companies And Individuals Handle Payments</a>
<a href="https://intelligence.businessinsider.com/social-brand-timeline-2014-1">The Early Adopter Effect In Social Networks - Success Goes To Brands That Get There First</a>
<a href="https://intelligence.businessinsider.com/reverse-showrooming-bricks-and-mortar-retailers-fight-back-2014-2">'Reverse Showrooming': Bricks-And-Mortar Retailers Fight Back</a>
<a href="https://intelligence.businessinsider.com/m-pesas-astounding-success-in-africa-spotlights-the-global-payments-opportunity-2014-2">M-Pesa's Astounding Success In Africa Spotlights The Global Payments Opportunity</a>
<a href="https://intelligence.businessinsider.com/consumers-use-smartphones-and-tablets-differently-for-shopping-2014-2">Consumers Use Smartphones And Tablets Differently For Shopping</a>
<a href="https://intelligence.businessinsider.com/android-and-ios-combine-for-over-80-of-global-mobile-ad-revenue-and-traffic-2014-2">Android Phones Drive More Mobile Ads Than iPhones For The First Time, But Revenue Gap Persists</a> Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.

You Searched For "EMV chip and PIN" and got 11 results

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