The road for EMV in the US...

Guest blog post by Guy Weber, risk manager, SIX Card Solutions

The debate over whether the United States will move to chip and PIN security continues to rage on, even in 2012. Ever since Europe adopted EMV technology back in the early noughties, pressure has been applied on the US to join its European counterparts and take up chip and PIN to help eradicate the ongoing problem of counterfeit fraud and enhance international card acceptance. While many organisations have made attempts to sway the US in favour of chip and PIN, it was Visa’s announcement last summer of its three-step plan to encourage the US to invest in EMV technology that sent a flurry of excitement through the payments industry. This is because it was the first time a major player in the cards industry had provided a clear route to EMV migration.

Although promising, a lot of confusion remains around Visa’s roadmap and exactly how the card scheme is proposing to implement EMV in the US. In an effort to clarify some questions, Stephanie Ericksen, head of authentication products at Visa, recently provided some guidance around the issue and highlighted that a transition to EMV in the US would not necessarily mean a move to chip and PIN. She has suggested that online authorisation could be a more practical and cost-effective solution while there has been speculation that should the US implement a card fraud strategy, it would opt for the next generation of payment security technology in a mobile solution. This is perhaps why Visa has set out a programme to drive the adoption of dual-interface chip technology and compel merchants to invest in terminals that support both contact and contactless chip acceptance, including mobile NFC.

These alternative implementations for EMV technology are still better than the age-old ‘magstripe’, and would certainly help reduce skimming incidents. However, if the US were to skip chip and PIN altogether, the fragmented nature of card protection would remain and do little to encourage interoperability and wider card acceptance around the world. chip and PIN has been tried and tested in Europe and as a result, the European Central Bank (ECB) in October recommended that from 2012 onwards, all newly issued cards in the Single Euro Payments Area (SEPA) should be issued, by default, as 'chip-only' cards. As such, it looks set to stay in Europe for a good while longer.

With these disparities, it is clear there needs to be broader and more far reaching regulation, as well as an industry agreement, on how to move forward with this issue. The reality is that until a common standard is introduced around cardholder verification, criminals will continue to exploit gaps and regional differences in card acceptance, and the cards and payments industry will ultimately lose out.

What a load of rubbish!

The first batch of a network of recycle bins has been delivered within the Square Mile. Renew, the company behind the 25 bins, which have screens attached to them, says the daily audience will grow from 750,000 at launch to over three million by the Olympics.

It has been awarded a 21 year tender by the City of London to tackle the problem of free papers littering the streets. The ‘pods’ also broadcast news on two screens, pulled from the likes of The Economist, Time Out, London Stock Exchange and ESPN. A further 75 are due to be introduced in time for the Olympics.

It’s certainly an interesting idea, although I foresee a few issues. Apparently it’s £30K a pod. Yikes! That’s a lot for what is essentially a bin. Plus, content on the sides of bins is nothing new and hasn’t exactly been a roaring success in the past. I’ve seen one of the pods and they do look snazzy but it was freezing and I didn’t stick around to look at the news on display. And as someone who can’t abide all these freebie rags we get in London, why not just stamp them out? It would be a cheaper alternative to bins which cost 30 grand a pop. Just a thought…

Sir Fred the Shred no more

The business community can be its own worse enemy at times, can't it? Whilst politicians, the media and the vast majority of people in this country have welcomed the move, figures from the business world have condemned the decision to strip Fred Goodwin of his knighthood.

The Institute of Directors (IoD) has warned of politicians creating "anti-business hysteria." Whilst former Labour Trade Minister and ex-Confederation of British Industry head Lord Digby Jones said there was "the faint whiff of the lynch mob on the village green" about the move.

The argument is that Fred the Shred has not been convicted of crime and traditionally only convicted criminals or people struck off professional bodies have had knighthoods taken away. Ultimately, however, he was given the title for services to banking. Considering his role in creating the biggest financial recession in modern times, it's the right thing to strip him of the knighthood. Of course, others should shoulder the blame as well but the man is the epitome of everything that went wrong with banking. To quote a Cabinet Office spokesman: "The scale and severity of the impact of his actions as CEO of RBS made this an exceptional case."

The public is shifting to the left (admittedly, you wouldn't guess it from the polls but put that down to the lame duck leader of the opposition that is Ed Miliband). All across the country people are feeling the squeeze and, in many cases, facing genuine hardship. Which makes it all the more ridiculous that the business community should see fit to talk of lynch mobs and scapegoats.

Apple surges, Yahoo slumps

Apple are one of the few sure things in these uncertain economic times but even they surpassed themselves this week.

Shares soared after strong demand for iPhones and iPads lead them to report a 73 per cent rise in quarterly revenue to $46.33 billion, comfortably beating Wall Street analyst estimates. Net profit rose 118 per cent to $13.06 billion.

In stark contrast, Yahoo reported a drop in net revenue and profit for the fourth quarter, just days after co-founder Jerry Yang resigned from the company. New chief executive Scott Thompson said Yahoo needs to "do better" and "get innovative products that matter into the market." He joined from PayPal (where he was president) earlier this year, an appointment which raised many eyebrows, not least at the online payments outfit with John Donahoe, interim president, describing his resignation as a shock.

There's a scene in the Willy Russell play, Educating Rita, where university lecturer Frank asks his student Rita to leave England behind and move to Australia with him, remarking: "It would be good to leave a country that's finishing for one that's beginning." That quote came to mind when I first heard of Thompson's departure from PayPal, although the reverse is true in this case. That is, leave a company where business is booming and the future holds all kind of possibilities and join one that has all the signs of a sinking ship.

BTW, our friends at Retail Systems have provided a glimpse into PayPal's future - the move by the company into the bricks and mortar world.

2012 FStech Awards: the shortlist arriveth

Phew! After much huffing and puffing, scratching of head and nashing of teeth (have I milked it enough?), I've finally completed the shortlist for the 2012 FStech Awards.

You can find it here.

Congratulations to all those who made the final cut. I've been really impressed by the standard of entries and now look forward to meeting with the judges to decide the winners. Also look forward to seeing many of you on the big night - Wednesday, 28 March at the London Lancaster Hotel.

2012 FStech Awards: the shortlist cometh

Well, the entry deadline has come and gone and now I'm busy putting together the shortlist for the 2012 FStech Awards.

It's proving to be something of an epic undertaking as we've had a record number of submissions. This is my first FStech Awards and I have to say that I've been really impressed by the standard of entries - some great examples of how financial institutions (such as Deutsche Bank, RBS, Lloyds Banking Group and BNP Paribas) are making innovative and effective use of technology in such areas as social media, mobile banking, payments, datacentres and customer service.

The shortlist will be available early next week. Judging will take place in mid-February and the big night will be on 28 March at the Lancaster London Hotel. Whilst this is my first awards proper, I have been to the last few events, to hand out an award on behalf of sister title, Retail Systems, so I can confidently say we're in for a great night. Look forward to seeing many of you there.

Top of the flops

Happy New Year! Hope you had a great break and are looking forward to what will be an immensely challenging but no doubt fascinating year.

I'll start 2012 on a bit of a downer (no booing at the back please). Forbes has unveiled its latest top 100 most innovative companies. Not a bank in sight. Depressing stuff.