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HomeATM Still Waiting To Hear From ATMDirect Regarding "PIN-Off"

I couldn't resist doing ONE more post on the Pay By Touch Blog. It's in regards to the former Internet PIN Debit division of PBT known as ATMDirect, which was recently acquired by Acculink in the bankruptcy auction for $600k.

I have taken a position with HomeATM, and following Acculink's "patently absurb" press release, (in which they claim they procured 25 Global Internet PIN Debit Patents) HomeATM's CEO, Ken Mages and I came up with the idea to challenge ATMDirect to a "PIN-OFF".

For more information on the PIN-OFF that HomeATM has challenged ATMDirect to, please go to www.PINcept.com or visit HomeATM's blog at www.PINdebit.blogspot.com

By the way, we still haven't heard from ATMDirect and the word on the street is that we shouldn't be holding our collective breaths...

In the wake of the Airlines Industry having just become aware that a credit card processor can (and will) dictate that 100% of an airlines credit card based revenue can be withheld, it has become more than obvious that Internet PIN Debit will not only "fly" but will become "air apparent" to the current web transaction space. HATM is more than ready to "earn it's wings".

I am aware how both ATMDirect and HomeATM's Internet PIN Debit solutions work. As a founding member of Pay By Touch, from which Acculink procured ATMDirect, I am privy to specific details driving ATMDirect's solution. After seeing and learning more about HomeATM's Internet PIN Debit Solution, I am convinced that HomeATM's technology is the strongest of these two.

I am interested in bringing more publicity and thus awareness to PIN Based Internet Transactions.

For that reason, when HomeATM, last week, suggested challenging ATMDirect to an industry sponsored showdown which was dubbed by Ken Mages, HomeATM's CEO and Founder, as a "PIN-OFF," I thought it was a brilliant way to drum up some exposure towards furthering the cause of PIN Debit for the Internet.

Of course, it also occurred to me that this was analagous to an old-fashioned duel, ala the Old Wild West...and not unlike the Wild West, this duel may leave only one man (technology) standing.

According to Ken Mages, CEO and Founder of HomeATM, HATM is entirely more than willing to have this so-called "PIN Off" supervised by a knowledgeable, non-partisan entity(ies).

As I mentioned in last weeks blog posting, entitled "HomeATM Officially Challenges ATMDirect to a "PIN-Off," one suggestion (among many) as a "fair and balanced" technological judge/arbitrator was John Stewart" the Editor in Chief of Digital Transactions Magazine. With that said, HomeATM would welcome any and all highly respected industry veteran(s).

Strong candidates might include highly regarded Gartner Research analyst Avivah Litan, Aite Research Director and Analyst, Gwenn Bézard, Glenbrook's Payments News Editor Scott Loftesness, The GreenSheet's President and Founder, Paul Green and/or Internet Retailer Magainzes Publisher, Jack Love.

However, HomeATM is willing to invite any and all analysts to form an "Internet PIN Debit Payments Panel." and oversee the "PIN-Off"

As I see it, the panel's primary function would be to subject both HomeATM's and ATMDirect's methodologies to whatever rigorous tests they may wish to institute to verify how it works, that it works, how secure it is and how quickly the transaction is transacted.

Of course, all I'd ask is that results of these tests be shared (publicly) including each "analysts independent findings" upon the conclusion of conducting these "objectively unbiased analysis".

Say again? Okay. HomeATM is willing to showcase the HomeATM technology to a professional unbiased payments panel...and ATMDirect would be and hereby "is invited" ...to do the same. The results of the evaluation will be public domain.

Will you, ATMDirect accept PIN Debit ? As I posed last week, I think the real question is: Can ATMDirect accept,? If so, will ATMDirect be able to do so "securely" without any glitches? That is the gist of the challenge. My personal belief is the PIN-Off" might be too "Rocky" a road for them to travel. My educated guess is they may want to avoid having their technology subjected to independent analysis as it may die from exposure.

However, I've been known to be wrong before, so...ATMDirect, prove me wrong! If you don't think that HomeATM would "PIN U" into the proverbial corner, feel free to accept the invitation to an offical PIN Off by emailing me at: ATMDirect Hereby Accepts.

We would love (and are anxiously waiting) to hear from you ATMDirect...just accept the challenge sometime within the next 30 days. and we'll make arrangements for the PIN-Off. As a friendly reminder look for the "PIN-Off" Countdown Widget at the top right of this blog!

And every day for the next 30 days, I will let you know if I've yet to hear from or receive an acceptance of the invite to a "PIN Off" from ATMDirect.

You said in your "Press Release" that you will "Own PIN Debit on the Internet," so let's at least see you "Own Up to This Challenge".

Feel free to e-mail at: jfrank@homeatm.net to accept this challenge! I'll be waiting...

Final Post...Pay By Touch Shuts Down

In what will be (sadly) my final post on the Pay By Touch Blog, I am covering the announcement that Pay By Touch has shut down. Unbelievable! They had an opportunity to, as they said, "Change the Way the World Pays" but instead of making history, it turns out they are history.

Good luck to all the PBT employees and loyal users.

Anyone who is interested in the Internet PIN Debit space that ATMDirect was involved in can follow my Internet PIN Debit Blog at www.PINdebit.blogspot.com- The HomeATM Blog

Here's the final Wall Street Journal Coverage of this once "can't miss" company going cold

Thanks to all the subscribers and readers of the Pay By Touch Blog.

As a proud and eternal optimist, I will close by saying that it is important to know in your heart AND believe that when one door closes...another one opens. Thanks again for following Pay By Touch in the PBT Blog.

Sincerely,

John B. Frank
Pay By Touch Blog
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Shoppers won’t be doing this anymorePay By Touch, a privately held Silicon Valley startup, was going to revolutionize the way we buy things using biometric technology. Instead of swiping a credit card or using old-fashioned cash, we would pay for groceries by scanning our fingerprints. There are some benefits to the idea: It’s more secure because no one can duplicate your fingerprint; it’s private because you don’t have to present your credit card or a check; and it liberates people from the tyranny of wallets.But it’s also futuristic, which is often frightening, and solves problems that not many people think of as problems. (If you don’t think that the general public is indifferent to data privacy and security, consider the indifference with which people greet news of data breaches and the eagerness with which they hand over personal data.) Making something like this stick always requires more than just a cool piece of tech.

Another Hot New Technology Turns Cold

For every hot new technology that takes off, many don’t. And they’ll fail for any number of reasons other than the technology itself, as Pay By Touch’s demise reminds us.

Pay By Touch, which signed up more than 3.6 million consumers for its service, had some success here – at least enough to attract round after round of funding.

The Journal once called the company “fast growing” and Pay By Touch routinely issued press releases with titles like “Pay By Touch on Course to Change the Way the World Shops.”

Nonetheless, Pay By Touch will stop processing payments at 11:59 tonight, according to the company, at which point the 3,000 or so stores that have installed its scanners will have to take the devices down.

Why did Pay By Touch fail?

In hindsight, making something like a biometric payment system mainstream was a monumental challenge, one that could withstand few missteps. And Pay By Touch has had its missteps: The gossip blog Valleywag wrote a seemingly endless string of posts about the shortcomings of the company’s CEO – everything from allegations of drug abuse, mismanagement and avarice.

Pay By Touch officials didn’t immediately respond to calls and an email seeking comment, but we’ll update this post when we hear back.Whatever the reason, it’s another lesson that a technology’s success depends on more than just the technology.

Ya think?

Announcing the HomeATM Blog

As readers of the blog can attest, I firmly believe that a Web Enabled PIN Debit Platform such as the one ATMDirect attempted to build, has powerful potential.

However, now ATMDirect has been liquidated and since no bids came from PayPal, Amazon or Google, I must assume that their platform was not very impressive.

However, there is a company that I have been in recent talks with that has made some major headway in this arena.

The name of the company is HomeATM based in Montreal, although they are planning a move to the Silicon Valley soon.

They recently signed a contract with Universal Air Travel Plan to provide their lower cost PIN Authorized Internet Debit (P.A.I.D.) platform.

Universal Air Travel Plan is the corporate travel payment network owned and issued by airlines around the world. UATP is a low-cost payment option that airlines can offer to their corporate customers so both can reduce the high cost of credit card purchases.

UATP streamlines billing and provides travel managers with detailed activity reports that track a traveler’s: carrier, destination and travel itinerary. With UATP, airlines can completely avoid credit card fees if their corporate clients purchase tickets on the airline that issued their UATP card.

Additionally, airlines that issue UATP accounts earn revenue when their card is used to purchase travel on another carrier. No other credit card program offers this benefit. And, UATP’s robust data is the industry leader. No other card brand can offer Level III data for every ticket regardless of which airline the ticket is purchased and what method of purchase (e.g. via a travel agency, online booking site or direct purchase at the airline).

Over 220 airlines and travel agencies accept UATP as a low-cost form of payment for air travel, service fees, management fees and net fares. Not only does this make UATP an impressive network for corporate clients who use UATP as their preferred form of payment but those entities that accept UATP save money because of UATP’s low merchant service charges.

As I have mentioned in the past, they have also been in talks with Costco about providing their 23rd ranked, 1.2 billion dollar Internet Retail Site with PIN Authorized Internet Debit.

They also recently signed a deal with Smart Card Marketing and their Velocity Money division. Here's the story from Digital Transaction News.

Smart Card Marketing, HomeATM Enable PIN Debit Online, at Stores

In a move that could further the penetration of Internet-based PIN debit, a San Antonio-based processor of prepaid card transactions has adopted a device that will allow users of its electronic-wallet service to load their accounts online with credit cards and PIN debit cards. Smart Card Marketing Systems Inc., which introduced its VelocityMoney.com e-wallet product just six months ago and so far has 1,000 users, will use a device from Montreal-based HomeATM that connects to PCs via a USB cable to allow users to load accounts online with card swipes. The device includes a numeric pad for entry of PINs linked to debit cards.

Also, as part of the agreement with Smart Card Marketing Systems, HomeATM will begin reaching the physical point of sale for the first time. Working with an unnamed merchant acquirer, Smart Card Marketing Systems is signing up merchants to accept credit and debit cards through the HomeATM device. The acquirer will process credit card transactions, while HomeATM will handle debit card payments. Smart Card Marketing has booked orders from merchants for 9,000 of the devices so far, says Bruce Baillio, president of the company. Targeting niche merchants that in many cases don’t have existing merchant accounts, Smart Card Marketing is offering the HomeATM device as a substitute for conventional point-of-sale terminals and pricing it at around $50.

Although the devices will accept credit or debit cards, Baillio says many merchants have a strong interest in PIN debit. “Our merchants are interested in the debit-loading aspects of this,” he notes. A travel agency, for example, finds the service useful to allow customers to load prepaid cards for use on trips, he says. Another client is a processor for small online merchants that wants to enable PIN debit payment, Baillio says.

The agreement with Smart Card Marketing represents the second major deal HomeATM, a small engineering company with a handful of Web merchants as clients, has struck in the past two months. In December, the company agreed to use its technology to enable online PIN debit and credit card transactions for airlines linked to the Universal Air Travel Plan transaction switch. At the same time, it applied for a patent on a PIN-authentication system called PinMyCard, which, when paired with its device, could allow merchants to process credit card transactions online at card-present interchange rates. Company officials say this is possible by virtually eliminating the risk of fraud (Digital Transactions News, Dec. 18, 2007).

For users of Smart Card Marketing’s VelocityMoney.com service, the HomeATM device will enable cardholders to replenish the company’s prepaid MasterCard online with the swipe of a credit or PIN debit card. VelocityMoney.com, an e-wallet platform, also allows loading through the automated clearing house, wire transfers, and checks and money orders. The advantage of PIN debit card swipes, Baillio says, is that the company will get good funds the same day. “Unless you’re getting physical cash from someone, the time frame of moving money is extended, it could turn into multiple days or a week,” he says.

The agreement with Smart Card Marketing does not yet involve HomeATM’s PinMyCard system, so online credit card transactions on the devices are being assessed card-not-present interchange, according to Mitchell Cobrin, chief operating officer at HomeATM. But he says talks are under way with Smart Card Marketing to integrate the system and allow card-present rates, which do not carry the premium the card networks levy on card-not-present payments.

Editor's Note: I find this payment space intriguing and have started a blog on HomeATM and the PIN Debit Space.

You can find it at www.PINDebit.blogspot.com if you're interested in taking a look.

Web Based PIN Transactions Followup

As I've stated in previous posts, I believe that enabling PIN based transactions for the Internet holds powerful potential. The numbers shown on the pie-chart on the left are 18 months old and have shifted even further in PIN Debit's favor.

PIN Debit boasts the lowest interchange of all transactions, because it is the most secure. Internet Retailers pay the highest interchange because PIN Debit has been shut out of the Internet Retailer's marketplace. But no longer. the PIN-heads at Visa and MasterCard have now "accepted" that it's not a "concept" anymore. I call the process PINcept.

The PIN-heads at V/MC have conspired to keep PIN enabled debit off the web. This behavior is similar to Pay By Touch, whereby Visa and MasterCard either conspired, collaborated, or via downright collusion (you pick the word) unarguably prevented a level playing field by designating a biometric transaction (which, by it's very nature is infinitely more secure than a card not present transaction) at a "card not present" interchange rates.

Make no mistake about it, that collaboration vastly affected retailer participation on an exponential level. In turn, it vastly affected Pay By Touch.

But this post is about web enabled PIN transactions. And there's one company in the marketplace that has the wherewithal to enter that space. From what I now understand, it was never ATMDirect, which is why it went bankrupt until PBT rescued it for $30.5 million, and why it is bankrupt today.

Think about it. If ATMDirect could do what it claimed, then Google, Ebay(PayPal) BillMeLater, etc. would have bid on it. Instead it sold for a measly $600k, most of that value instilled by inventory, namely IBM Blade Servers.

No, the one company that owns the "global patent" for the browser space was never ATMDirect, but instead a small engineering firm out of Canada.

HomeATM, the "other " company at the EFT Summit with Costco has recently gained tremendous momentum in its quest to bring PIN Debit to the Web.

You can read more about this momentum at my site: www.PINcept.com Take a look, I have begun a blog on the merits of accepting PIN based debit transactions on the web. It's the one last payments space that has yet to be explored and HomeATM aims to go where no one has gone before.

Pay By Touch Update on Cardline

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PAY BY TOUCH ANNOUNCES NEW BOARD, VOLUNTARY BANKRUPTCY

Solidus Networks Inc., the San Francisco-based biometric-payments company that does business as Pay By Touch, today announced a new board of directors. The announcement comes in the wake of management trouble allegedly caused by its founder and former CEO John Rogers and a case of involuntary bankruptcy filed by disgruntled employees (CardLine, 1/6/2007).

The company also says in a statement today that it filed for voluntary Chapter 11 bankruptcy protection in mid-December. John Morris, a director, tells CardLine the company is doing well in terms of client and customer interest but that the company was “running short of funds” and needs to bring in more financing.

Morris will serve as an advisor while the company works through its bankruptcy. Members of the new board are Morris, Art Petrie, chairman; Eula Adams, chief operating officer; Robert Sigler, chief financial officer; and founder John Rogers, who, according to a company statement, “now functions in a nonemployee director role only.” Rogers had dismissed Morris and Adams, according to a complaint filed Oct. 19 by company investors in the Chancery Court of Delaware, where Solidus is incorporated. The firm was concerned that removal of Solidus board members left the company “headless,” or without leadership, the complaint stated.

The company’s investors, which acquired the right to vote Roger’s share on the board because it was in default, elected the new board and kept Rogers on because they wanted to have him as a resource, Petrie tells CardLine. “He is a large shareholder and has a strong background in the company, and we need that resource,” he says.

The company says “all core and non-core businesses, including consumer biometric and loyalty transactions, continue business as usual.”

Pay By Touch is a biometric-payment method where retail customers use an algorithm derived from a fingerprint and key in a PIN to pay for goods at the point of sale. Funds are drawn from the participant’s bank account using the automated clearinghouse network or from a credit or debit card. Chicago Shell stations (CardLine, 11/1/2007) and Jewel-Osco grocery stores are among the merchants that support Pay By Touch transactions.