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EMVSpellsHolidayTroubleForRetailers
By pymnts ! "
Posted onNovember 17, 2015
This week, EMV remained
center stage in retail
security news, as the battle
between banks and
retailers over fees and
adoption of new security
measures continued to play
out on a very public stage.
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Meanwhile, a number of
other security issues, some
surrounding EMV, also
come into sharper focus as
the busy holiday retail
season gets ready to kick
into high gear.
Here are some of the
security stories that are
important for retailers right
now.
Walmart CEO Says EMV
Will “Wreak Havoc” On
Holiday Shopping
In a recent Retail
Dive article, Walmart
Senior Director of Payment
Services John Drechny,
who was involved in
transitioning the company
to new EMV protocols,
stated that EMV could slow
down checkout lines and
lead to a loss of sales during
the important holiday
season.
However, some experts
believe there may be a
silver lining should EMV
readers prove to be a
clunky experience for
shoppers: More may be
driven to adopt mobile
payments.
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“As long as new mobile
systems meet or exceed the
security of the cards that
they might replace,” Nicko
van Someren, CTO of Good
Technology, told Retail
Dive, “the barrier to
adoption is always going to
be whether using your
mobile device can be made
easier than grabbing your
‘top of wallet’ card.”
New Reason For Retailers
To Dislike EMV: Long Lines
A recent New York Times
article articulated some of
the ongoing controversy
around the shift in EMV-
enabled payments for
retailers. The shift in
security measures and
liability has pitted the retail
industry against the
banking industry in a battle
that only continues to
intensify and remain front
and center in payments
news.
The dispute focuses around
interchange fees, which
merchants pay to banks in
order to process credit and
debit transactions. Last
year the banking industry
collected $61 billion in
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interchange fees from
merchants, while fraud only
accounted for $30 billion in
losses.
“The real savings is not
about fraud; the real
savings is about
interchange,” David
Robertson of The Nilson
Report told
an NYT reporter. While the
banking industry maintains
that the shift to EMV was
driven by the weak security
infrastructures of retailers,
merchants are upset that
they’ve had to foot the bill
for updating their systems
to read chip-enabled cards,
which they say does not go
far enough in protecting
them and their customers
against fraud.
In recent months, the fight
has been taken to Capitol
Hill and in front of several
states’ attorneys general. In
October the Georgia
attorney general, along
with the attorney general
for Connecticut, sent a
letter to their colleagues
warning that chip
technology was not
enough; credit cards
needed a PIN, too. Earlier
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this week, eight more
attorneys general added
their voices to the rallying
cry in a letter to Visa,
MasterCard, JPMorgan
Chase, Bank of America
and other institutions
urging them to adopt the
PIN technology. However,
they stopped short of
suggesting that they were
petitioning for a change to
the law that would make
such safeguards
mandatory.
The finger-pointing just
continues with each side
accusing the other of
dragging their heels in
adopting security measures
fast enough; by some
estimates, nearly half of
retailers have yet to turn on
their chip-reading devices
in store, while others claim
only 19 percent of cards
issued by banks were chip-
enabled as of the EMV
deadline.
“We think the focus should
be for retailers to turn on
their chip readers and use
the technology that’s
available to them,” said
James Chessen, executive
vice president and chief
economist at the American
Bankers Association.
As the battle rages on,
stakeholders on both sides
will be keen to see how it
unfolds, although they may
have to wait awhile as both
sides seem to have dug in
their heels with no signs of
relenting.
POS Malware Could
Create A Holiday
Hangover
This past week, Tech Times
reported on two separate
pieces of malware detected
by analysts. The programs,
which have been operating
in stealth mode for as long
as several years on the
networks of some retailers,
go by the names
AbaddonPOS and Cherry
Picker and represent some
of the savviest malware
detected in POS networks
to date.
Cherry Picker, which may
have started running
malicious actions as early
as 2011, originally targeted
retail stores, but digital
security analysts say it has
evolved. The malware now
features updated card-
ripping capability,
persistence mechanisms
and anti-analysis decoys,
which allow it to operate
undetected on security
networks. The most recent
victims of cybertheft at the
hands of this malware are
food industry clients who
use POSs for their
purchases.
Eric Merritt, a security
researcher at Trustwave,
points out that the malware
deceitfully erases evidence
of its own existence after
completing its work. By
overwriting the files again
and again, the malware
goes undetected and
removes evidence of itself
in the system’s data logs.
The malware mostly
impacts those systems
using Windows 7 and
Windows XP by running
remote admin services.
Experts from Proofpoint, a
payments security
company, also blew the
whistle on the
AbaddonPOS malware and
released several
statements describing in
detail exactly how it works.
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“Point-of-sale malware has
been implicated in some of
the biggest recent data
breaches, striking retailers,
restaurants, hospitality and
organizations from a
variety of industries and
often targeting consumers
in the United States,”
Proofpoint said in
a statement.
The malware uses
Microsoft Office
documents, which can then
download a program called
TinyLoader, which in turn
results in the POS device
being infected by
AbaddonPOS.
Proofpoint warns that the
holiday shopping season
may lead to an increase in
the number of
vulnerabilities in the retail
sector. What’s more, with
the adoption and
deployment of EMV credit
card technologies, POS
malware danger is likely to
increase in the United
States as attackers look for
new ways to breach
retailers’ payments
infrastructures.
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NEWS
StoreFrontBusinessIndex:It’s AllGood InTheHood
By pymnts ! "
Posted on
November 17, 2015
capital andbusiness risk. And,it looks like theSouthwest andMountain Regionshave reason tosmile.
Store front businesses are
the heartbeat of the local
economy – but do they all
behave the same way? Are
the business risks for the
hair salon and local
watering hole in the same
city similar? Do they all hire
for growth? And, do store
front proprietors face the
same ups and downs as
their larger business
counterparts? This
quarter’s PYMNTS Store
Front Business IndexTM,
powered by CAN Capital,
measures where these
businesses are strong and
where they need help. We
also went to one of these
store front communities to
get their perspectives, from
the front lines, so to speak.
OVERVIEW
The store front business is
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the heartbeat of the local
community. And, the more
vibrant these businesses
are, the more vibrant the
communities in which they
operate are. Store front
businesses represent
approximately 37 percent
of all small business
establishments in the U.S.,
roughly 3.4 million. The
Index measures their well-
being. And, so far, in 2015,
this subset of the small
business community
continues to do well,
outperforming the GDP,
which grew by 0.6 percent
in the first quarter of 2015.
We found that after a slight
slowdown in the first
quarter of 2015, the
growth of store front
businesses is moving along
at a pretty decent pace. We
track growth as measured
by the number of
establishments, wages and
employment. This quarter,
our Index reflects a modest
growth in the number of
establishments compared
to wages and employment.
For example, the number of
employees saw steady
growth throughout the
country at an average rate
of 3.2 percent for the first
quarter of 2015 compared
to the growth in
establishments, which
stands at 2.4 percent. That
tells us that store front
businesses are adding to
their rosters – and growing
their businesses. That’s
good for the local
economies in which they
operate, in addition to
signaling the health of their
own businesses.
METHODOLOGY
The Store Front Business
Index measures the
performance of local
businesses, both retail and
services. We track these
businesses across all
regions of the country and
8 business segments:
eating establishments,
professional and personal
services, construction,
remodeling and repair
services, fitness clubs, and a
wide variety of retailers.
The Index is a quarterly
assessment of how well
these businesses are
performing based on three
criteria: growth in new
establishments, wages and
employment.
FINDINGS FROM THEFRONT LINES
“Businessenvironmentis thriving. Ihaveseen tremendousgrowth inmy ownindustry.”
There’s no better way to
understand how relevant
our Index findings are than
to talk to store front
businesses themselves. So,
the PYMNTS team
interviewed seven small
merchants in a local
community in the
Northeast to get their
firsthand perspectives on a
range of topics spanning
financing, expansion plans,
growth, employment and
general business sentiment
in their area.
We picked Warwick, Rhode
Island, for our first series of
interviews, a community
that is sort of middle of the
road — not experiencing
extreme growth nor
RELATED ITEMS: CAN CAPITAL,CAN CAPITAL STORE FRONTBUSINESS INDEX, MAINFEATURE, SMALL BUSINESSADMINISTRATOIN, SMALLBUSINESS BANKING, WHAT'SHAPPENING NOW
significant struggles.
Excerpts from the
interviews and the owners’
perspectives are
highlighted and contrasted
to the findings in the
different sections of this
Index.
“Business environment is
thriving. I have
seen tremendous growth in
my own industry. After 24
years of renting, it made
sense to start my own
business four years ago and
within a week, I had three
employees and within a
year, I had eight and within
two, I had twelve,” said a
salon owner.
The full Index and
explanation of its findings
can be found here.
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