Friday, September 29, 2006
Best ID Security May Not Be Just Biometric
Specific identification of an individual short of a DNA make-up can be achieved through many identification processes. A large investment has been made in systems based on biometric access, radio based proximity information exchange, and video software that can recognize individuals through data mining identifiers associated with ones face ... or body type.
Maybe the best identification solution to implement can also be one of the simplest. Maybe the easiest way to insure the identification of an individual is to rely on a two step authentication process that requires the individual, after entering a password, to interact with the process via a matrix matching grid that uses the individual's brain.
Oh, and by the way, this security solution is inexpensive and simple to implement.
Excerpts from CR80News -
Grid-based two-factor authentication comes to campus cards
Sweden’s Goteborg University deploys a visual challenge and response solution from Entrust
By Andy Williams, Contributing Editor, CR80News - Monday, September 25 2006
You log in with your password, then you're met with another screen with the following: A3, F4, J5. No, you're not playing Bingo. It's part of an authentication system created by Dallas, Texas-based Entrust. To supply the correct answers to A3, F4 and J5, you need a grid supplied by the company. It's a security solution that one Swedish university has chosen to protect its student records.
Entrust IdentityGuard "X-Y" matrix grid pad. Image Credit: Entrust, Inc. via Avisian publications
"Grid authentication is about an X-Y coordinate lookup system," said Steve Neville, senior manager of ID products and solutions for Entrust, Inc. a secure digital identity provider. "It's like reading a map and it's about being able to respond to the random challenges of a coordinate on a grid."
To help prevent attacks on student data and protect the records of its 60,000 students and faculty while facilitating access for authorized parties, Goteborg University in Sweden recently implemented Entrust's IdentityGuard.
A cost-conscious option for multi-factor authentication
The two-factor authentication system requires a password, plus the grid that's often printed on the back of a student's or faculty member's identification card, said Mr. Neville. It's a standard student card that's usable not only for identification but for other things, like accessing foodservice.
Either way, the grid is useless without the password and the password useless without the grid. The grid is the 'something you have' and the password is the 'something you know' in the multi-factor authentication scenario.
"We wanted an authentication solution that would provide strong security but also would be easy to use for our students and faculty and also be economical to manage," said Sven-Elof Kristenson, IT manager at Goteborg University. "Because we can combine the Entrust IdentityGuard grid authentication capability with the identity cards we already issue to our students and faculty at the beginning of the school term, it fit seamlessly into our existing system and will give us the ability to make even more services available online for everyone."
The university also chose IdentityGuard because its grid authentication capability can be used to access records, file storage, reports, e-mail and calendar functions, said Mr. Neville. "It was a natural choice for stronger authentication. Ease of integration and usability also were factors that led to the decision to implement Entrust IdentityGuard."
Entrust IdentityGuard matrix grid pad information as it is applied to a computer log-in screen. Image Credit: Entrust, Inc. via Avisian publications
Adding 'machine fingerprinting' to the grid authentication
"ID Guard in and of itself is a platform for authentication," said Mr. Neville. It comes in six different flavors-authentication options --- ranging from the non-intrusive like machine fingerprinting and grid authentication to one-time password tokens, he added.
"One of the reasons Goteborg liked grid authentication is that it also delivers the flexibility to input other types of authentication. Inside our license model we don't force them to track which authentication they're using. They can choose which ones they want to use to protect student data," said Mr. Neville.
A risk can be assigned to student data to determine the type of authentication needed, he added. "It can be a simple process, like this type of information requires the grid and machine authentication. For students, the grid is totally fine because they're roaming around," said Mr. Neville.
ID Guard is a "software server based product that can also provide strong authentication for remote access," he added.
"When they (Goteborg University officials) were looking at security solutions, they were very sensitive to cost and how much change would be required. They looked at ID Guard as a very attractive solution versus one that could only be deployed to faculty alone because of the cost. It was also something they found very unique and something they could trust."
Wednesday, September 27, 2006
Realizing The Convergence Of Auto ID And Cellphone Technologies
Last week, Motorola agreed to purchase the automatic identification industry leading manufacturer Symbol Technologies.
It was only a matter of time where a major manufacturer and player in the mobility communications world sought to control, influence, and participate in the communication technologies that aid in retail transactions, warehousing, work-in-progress manufacturing, CRM (customer relations management), asset inventory management, supply chain efficiencies, and etc.
The PIDION BM-200 Series Image Credit: Daewoo
Throughout this last year, manufacturers from "Pacific Rim" manufacturing countries have begun to introduce handheld mobility solutions that incorporate functions that combine CDMA communications (cellphone), MicroSoft CE OS (best for PDA style touchscreen data collectors), PoS applications hardware (on-board printer, card swipe, and etc.), RFID sensors, 2D scanners (to read LCD screens for cellphone transaction verification), and more.
One company effort is marketed here in North America by Daewoo (more commonly known for automobile manufacturing). A major conglomerate business located in South Korea, Daewoo is introducing mobility solutions manufactured under the name of Pidion that combine many of the configurations and functionalities mentioned above.
The PIDION BM-1200 Series Image Credit: Daewoo
With the manufacturing innovation push seen from the Pacific Rim, this announcement now puts the introduction of these platforms into more of a catch up/partner up mode.
This from RIS News -
Motorola to Acquire Symbol Technologies
RIS News and Edgell Communications
Motorola and Symbol Technologies have signed a definitive merger agreement, under which Motorola has agreed to acquire all of the outstanding shares of Symbol for $15 per share in cash. The transaction has a total equity value of approximately $3.9 billion on a fully-diluted basis. As of June 30, 2006, Symbol had approximately $200 million of net cash. Upon completion of the transaction, Symbol will become a wholly owned subsidiary of Motorola. The acquisition is subject to customary regulatory approval and the approval of Symbol's stockholders, and is expected to be completed in late 2006 or early 2007.
In acquiring Symbol, which has the tag line "The Enterprise Mobility Company", Motorola is buying a business that includes wireless technologies, mobile computing, Radio Frequency Identification (RFID), and scanner technology commonly found in retail checkout counters. Symbol brings to Motorola more than 900 patents and thousands of enterprise customers.
Industry analysts weigh in on the acquisition:
Rob Garf, AMR Research: This one will shake up the market a bit. Having Symbol team up with Motorola gives the combined company the ability to tap into the cell phone market, and almost every U.S. consumer has a cell phone. Until now, the role of personal shopping assistant has been somewhat slow to take hold. On day one, this new company will have at its disposal a critical mass of users of this type of technology. Look at some of the retailers who have invested in handhelds - they have had to take on the capital costs, but now can rely on the consumer for the capital costs.
Greg Buzek, IHL Consulting: This acquisition finally brings credibility to the discussion of mobile commerce. Symbol has owned many patents in the area of scan engines and particularly small ones. They have had a history of vigorously defending and litigating those patents in the past to the point that many vendors have been unwilling to work with them. When it comes to mobile commerce, no single vendor has had all the pieces and Symbol had the missing scanner piece. With Motorola purchasing Symbol, mobile commerce and just mobility in all facets will take a strong step forward.
Bud Wagner, CSC Consulting Group: All in all, this acquisition promises to push RFID to the next level as retail and consumer product companies find creative ways to leverage the technology. This could become a powerful tool in optimizing an item's sell-through by having the right product in the right place at the right time.
Eric Austvold, AMR Research: This acquisition will inevitably trigger further consolidation as the likes of Nokia, Ericsson, and others look to snap up someone like Intermec, a Symbol competitor. Standing alone in this market just became unattractive. Motorola benefits from the timing. By acquiring an early RFID pioneer like Symbol, Motorola gets the benefit of Symbol's experience without the pain of initial investment. It also creates an opportunity to grow business from new enterprise customers by aligning with carrier partners like Cingular, AT&T, Verizon, or Sprint to provide new possibilities for mobile computing.
To match up with the access this aquisition provides, all the Daewoo PIDION is going to need is to develop a relationship with a cellphone service carrier partner ... or two ... or.
Thursday, September 21, 2006
Exciting USB Power Innovation For Mobility Applications
In the world of portable data collection and business mobility applications, one of the most vexing problems comes down to Ni-Cad or NiMH battery management schemes (will one have the power to do and complete the job at "hand").
An innovation that is simple but brilliant has just been introduced in England and, hopefully soon, to be available here in North America.
This NiMH AA cell can be used like a normal battery and can be recharged simply by plugging into a USB port. Image Credit: Moixa Energy
Batteries that recharge directly from the powered USB port of any properly port equipped computer.
Excerpts from Trusted Reviews -
USBCELL: Batteries That Recharge Through USB
Author: Gordon Kelly, Trusted Reviews - Published 20th September 2006
I love innovation - who doesn't? That said, my tastes lie specifically in the kind which make my life simpler and easier. We're talking email over post, wireless over wired, LCD over CRT and potentially now 'USBCELL' batteries over your traditional AAs.
Produced by Moixa Energy, USBCELL batteries are simply batteries that recharge from any USB port. They require no separate recharging devices, cradles or cables and can be used exactly like a normal battery. The design itself is rather like a typical memory stick with its flip top lid and they could be set to deliver the same killer blow to the battery market that memory sticks did to floppy discs.
At this stage the one unknown is how well they perform when compared to their established counterparts and how long they take to charge. The new wave is coming, however, and though they launch in the familiar AA they will soon comprise a full range of standard formats including phone and camera batteries and come with C & D size converters.
Available now and costing just 12.99 British Pounds [ed. approximately $24.50] for two AA USBCELL batteries (including VAT and delivery from the company's website) I'm forced to say something I never thought would pass my lips: I'm quite excited about batteries.
After careful review of the manufacturer's website, here are a few Frequently Asked Questions that should help to fill in some of the understanding of this new and exciting portable equipment power innovation.
User Instructions FAQs
How long do USBCELLs take to charge through a USB port?
USBCELL will charge in about 5 hours to 90% charged, or less if the battery was not fully drained, and then enter a trickle charge mode (LED flashing). The LED will go off after this.
Can USBCELL's be charged in NiMH battery chargers?
Yes. USBCELLs can be charged in any good quality overnight or quick (5-7 hour) battery chargers designed for Nickel Metal Hydride (NiMH) batteries. The recommended charge is 250mA for 7 hours. Consult your NiMH charger manual to confirm suitability. With the cap on, they work just like a normal rechargeable NiMH battery as the circuitry is bypassed. Do not use fast chargers which claim to take less than 1 to 2 hours.
Will USBCELLs suffer from the 'memory' effect?
Rechargeable cells can be recharged hundreds of times but the lifetime will reduce slightly if cells are always partially charged or topped up. The User Guide gives instructions for how to prolong USBCELLs life and maintain best performance. However, since USBCELL is capable of several hundred charges, occasional top-ups when you need urgent power will not have a significant effect.
Can the USBCELL be used in devices that normally take 1.5V (alkaline) throw-away batteries?
Yes, USBCELLs, like other rechargeable cells, should work with almost all AA-powered devices.
Example of consumer electronic devices using AA cells. Any portable data collector or hand held computer that can use AA cells can benefit from USBCELL solutions. Image Credit: Moixa Energy
Do USBCELLs require drivers to work with my computer?
No, USBCELLs draw power from the USB socket and do not need any special drivers to charge.
Can I use fast chargers to charge USBCELLs?
USBCELLs should not be used with any charger rated at a current above 600mA. In general USBCELLs should not be charged by any charger that has a charge time of less than 2 hours.
Is USBCELL faster to charge than normal rechargable batteries?
USBCELL takes about 5 hours to charge, this is normally classed as fast charging. They will charge in the same time as other rechargeable batteries of the same capacity in a normal NiMH charger.
Top-Up - Charging for just a few minutes provides extra hours of instant use for most input devices. Adaptors soon for C and D cells. Image Credit: Moixa Energy
Does the USBCELL last as long as other rechargeable batteries?
The capacity of USBCELL is 1300mAH - this is greater than some ordinary NiCd and NiMH batteries. Some new high-capacity NiMH batteries can go up to 2500mAH. However, with USBCELL you can simply recharge or top-up by plugging into a USB port rather than going off to find a wall charger and adaptor. Also, make sure that the battery is fully charged - the charge should take about 5 hours by USB and the light should go off when USBCELL is fully charged.
Does the type of USB port matter?
Most USB ports are 'powered' and capable of providing up to 500mA current at 5 volts (USBCELL should draw about half of this maximum current). Because of the AA size of USBCELL, it may be difficult to insert into some inaccessible or recessed USB ports. If it's difficult to insert, don't force it!
Can I charge from a USB hub?
USBCELLs can be charged in most powered USB hubs. These should be connected to an external power supply during use. In some powered hubs, USBCELLS can be charged even without the connection to a PC, provided that the power is connected. Some USB hubs are not separately powered, and so these may not provide enough power to each socket. If you do need to use an unpowered hub, we recommend that only one USBCELL is charged at one time, with no other high-power peripherals connected.
Recharge in Powered Hubs - Multicell charging in Hub. Image Credit: Moixa Energy
How do I know my USBCELL is charged, when charging in a USB port?
A small LED light at the USB plug end of each USBCELL indicates that it is charging. If the cell is already charged the LED should start flashing within 15-25 minutes and stop after a further 10 minutes of top-up charge. If the cell is less charged, the LED will stay on and the battery will continue charging until full charge is detected at which point the LED will flash for 10 minutes. If the USBCELL was fully discharged it will charge for 5 hours and then trickle charge for 90 minutes. When the LED switches off then the USBCELL is fully charged. Batteries get warm during charging, to a peak temperature when fully charged. It is therefore not recommended that you recharge batteries immediately after charging. Batteries should always be charged at room temperature.
Tuesday, September 19, 2006
The Cannon That Will Sink The Ships Of DVD Piracy - Embedded RFID
"Avast ye, you soil-licking varmints." ("Hello"), today - September 19, 2006 - is "Talk Like a Pirate Day" throughout North America so says talklikeapirateday.com.
TLAPD was founded by John Baur and Mark Summers during a raquetball game and Talk Like a Pirate Day has taken the world by storm. The thing just sort of grew, and then took off in 2002 when Pulitzer Prize-winning columnist Dave Barry got wind of it and wrote about it in his Miami Herald Column. (HT: talklikeapirateday.com)
Yar, but I digress! Aye, piratin'o' music and mo'ie D'd's has been a real problem throughout the world. Gar, Where can I find a bottle o'rum?
Just yesterday, it was reported that Chinese police and copyright officials have raided 537,000 illegal publication markets and distributors in major cities such as Beijing, Shanghai, Tianjin and Liaoning Province.
Arrr, these operations seized 13 million pirated D'd's. Aye, me parrot concurs (these operations seized 13 million in pirated DVD's).
About 500,000 pirated CDs and DVDs are destroyed during a recent crackdown on pirated audio and video products in Shenyang, capital of Northeast China's Liaoning Province. Image Credit: China Daily
Arrr, technology rides t' the rescue with embedded RFID. A pence for an old man o'de sea?
Excerpts from VNU Net -
DVD chips 'to kill illegal copying'
Embedded radio transmitter chips to track movie, music and software discs
Simon Burns in Taipei, vnunet.com 15 Sep 2006
DVDs will soon be tracked with embedded radio transmitter chips to prevent copying and piracy, according to the company which makes movie discs for Warner, Disney, Fox and other major studios.
The technology, which can also be used for Blu-Ray and HD-DVD discs, will allow movie studios to remotely track individual discs as they travel from factories to retail shelves to consumers' homes.
Home DVD players will eventually be able to check on the chip embedded in a disc, and refuse to play discs which are copied or played in the 'wrong' geographical region, the companies behind the technology expect.
"This technology holds the potential to protect the intellectual property of music companies, film studios, gaming and software developers worldwide," said Gordon Yeh, chief executive of Ritek Corporation.
Ritek is the world's largest DVD maker, and its U-Tech subsidiary will make the discs.
U-Tech and IPICO, the company behind the RFID chips used in the discs, announced today that production of the 'chipped' DVDs will begin at U-Tech's main plant in Taiwan.
DVD-R is a high capacity optical disc, which is ideal for high volume data recording, archiving and playback. RIDATA DVD-R ensures high durability and reliability for a variety of recording situations, making it a versatile storage solution. Image Credit: RITEK USA/Advanced Media Inc.
U-Tech's global network of factories stamps out some 500 million pre-recorded DVDs and CDs a month for major movie studios, recording studios and video games companies.
After ironing out bugs in the manufacturing process, U-Tech will work with major movie studios on a large-scale test of an RFID-based supply chain management process at its manufacturing plant and distribution centre in Australia.
RFID readers will then be built-in to home DVD players to extend the anti-copying technology into homes as part of a digital rights management system.
U-Tech described this as the "real end game" for the chip-on-disc technology, which would "eliminate optical disc piracy in the entertainment and IT sectors".
IPICO claims that its RFID tags can be read from at least six metres away, and at a rate of thousands of tags per minute. The passive chips require no battery, as they are powered by the energy in radio waves from the RFID reader.
Ahoy, this would effecti'ely put an end t' pirate production o D'd's as we know them. Aye, me parrot concurs - (this would effectively put an end to pirate DVD's as we know them).
Wednesday, September 06, 2006
"Gross-Inflation" is hitting the shoplifting industry by as much as 37% in average dollar loss per theft over this last measurable year. With rings of professional shoplifters, some with ties to funding Islamo-Fascist terror networks, the retail establishment (and, thereby, the consumer) is under assualt.
Security system designers, value-added resellers and Information Technology integrators respond to retailers requests for heightened security with an array of high-technology tools to thwart this major threat to their (and our) shopping environment.
Excerpts from BusinessWeek -
With $30 billion in theft, there's a revolution in surveillance systems
By Elizabeth Woyke - BusinessWeek - Issued for 9-11-2006
There are 6 million video cameras mounted in stores across the U.S., according to market researcher J.P. Freeman Co. Their unblinking eyes are everywhere, watching exits and peering down aisles. You already knew that. But you probably had no idea how smart some of these cameras are getting.
Some Macy's (FD ), CVS (CVS ), and Babies 'R' Us stores have installed a system called the Video Investigator, whose advanced surveillance software can compare a shopper's movements between video images and recognize unusual activity. Remove 10 items from a shelf at once, for instance, or open a case that's normally kept closed and locked, and the system alerts guards sitting in a back room -- or pacing the sales floor -- with a chime or flashing screen. The system can predict where a shoplifter is likely to hide (at the ends of aisles, behind floor displays). A search function spots sudden movement that might indicate a large spill, prompting workers to clean up before it leads to a slip-and-fall accident and a costly lawsuit. And if someone opens a back door at 2 a.m., the system will record who sneaked in and link it with snapshots of the previous and next persons to use the door. Alerts, complete with images, can be sent to handheld devices, keeping retailers informed 24/7, says Jumbi Edulbehram, vice-president for strategic marketing at IntelliVid Corp., a Cambridge (Mass.) firm that makes the Video Investigator system.
Store managers these days need all the high-tech help they can get. Increasingly, they're under assault from organized gangs of professional shoplifters. These skilled thieves walk off with huge amounts of selected items and resell them at discounts. The pros are driving up losses dramatically, to $855 per shoplifting incident last year, from $265 in 2003, according to a survey by the University of Florida's Center for Studies in Criminology and Law. All told, stores lost $30 billion to shoplifting and employee theft in 2005.
To fight back, store chains are embedding smarter devices everywhere, from checkout stands to shelves to places you wouldn't even think of (and can't see). At the same time, more of these systems are talking to each other, sharing data about shoppers and employees alike.
Even the lowly shopping cart has been recruited in the war on retail crime. A surprisingly common -- and simple -- scam is the "push out," in which thieves load up carts and just dash out of the store. The solution: Gatekeeper Systems Inc. (GKR ), in Irvine, Calif., invented an electric-fence technology for carts. The system, called GS2, uses radio frequency identification (RFID) chips, which are embedded in cart wheels, and antennas around the periphery of the store that broadcast signals to the chips. When a cart approaches the store boundary, its wheels lock up. They can be unlocked only by an employee who activates a remote-control device. "[Thieves] can't push the cart," says Brett Osterfeld, Gatekeeper's vice-president for sales and marketing. "They'd have to pick it up and walk with it." Target Corp. (TGT ) and several smaller chains have signed on.
To thieves, infant formula is "gold in a can;" relatively expensive and easy to resell on the street. Other "hot" items at supermarkets include batteries, film, and disposable cameras. Image Credit: Nestlé USA
Those handy rungs underneath the cart are great for hauling bulky items like diapers, pet food, and beer. The problem for retailers is that shoppers often "forget" to pay for the goods. The answer? Seven grocery chains, including Pathmark Stores (PTMK ) and Giant Eagle, recently began testing LaneHawk, a system by Evolution Robotics Retail Inc. that uses visual pattern recognition to spot hidden packages. Cameras mounted in cashier stands about six inches off the ground scrutinize the bottom racks of passing carts. If an item matches an image in a database, the system computes the price of the product and adds it to the customer's bill. "It's like biometrics for packages," says Alec Hudnut, CEO of Evolution Robotics Retail.
Still, a few chains, including Best Buy Co. and (BBY ) Tesco Corp. (TESOF ), are testing RFID's ability to monitor oft-stolen items like DVDs, jewelry, and apparel. Those chains have experimented with TrueVUE, a system by VUE Technology Inc. that uses antennas placed under a shelf's laminated surface to communicate with RFID tags on merchandise. Store employees could also wave RFID-reading wands over racks of clothes to see which items have moved. "The program wakes up the tags, which send back their serial numbers, in effect saying, 'I'm here,"' explains VUE CEO Robert Locke. EAS tags only activate when they approach a store exit, but RFID-equipped smart shelves can notify security the minute a large number of items move.
No part of a store churns out more data than cash registers. This is also where employee theft is most likely to pop up. New types of transaction-monitoring software pull information from registers into a central database and look for unusual patterns. An excess of manually entered credit-card numbers could be a sign that employees are stealing customers' information. Returns of the same type of sweater 10 times in a row at one register, for instance, could indicate that an employee is processing fake returns for a friend or being conned into making fraudulent returns. Retailers decide what to track and how often, and set parameters for alerts. Often the feedback points to problems other than dishonesty. "It might be a hardware issue or a sign that an employee needs more training," says Cheryl Blake, a vice-president at Aspect Loss Prevention, which works with Children's Place Retail Stores Inc. (PLCE ) and Ross Stores Inc. (ROST ) "Whatever it is, the transactions will stick out and tip off management to investigate."
"Retailers can pull data from all these systems, look at them together and connect the dots," says Rob Garf, a research director at AMR Research.
The newest retail data-mining programs also sync up with video to permit a more comprehensive look at activity at cash registers. With the press of a button, managers can highlight irregular register transactions on their computers and pull up corresponding video. This could enable them to catch cashiers who cut deals for their friends or pocket cash refunds themselves. It could also curtail fraudulent returns by tracking the route customers take to the customer service desk -- do they head straight there or meander through the store, picking up their "return" merchandise along the way?
MUM'S THE WORD
Despite this revolution in retail tech, you won't find many stores bragging about their new security tools. No one wants to tip off shoplifters or advertise that they suspect their customers. That's why so much of the technology is hidden in the first place. But another reason stores don't talk much about surveillance is that they know it sparks concerns about privacy. Consumer groups and legislators have opposed the spread of RFID and video surveillance for just that reason. "Item-level RFID creates privacy and security problems that are unacceptable, even for antitheft purposes," says Dr. Katherine Albrecht, founder and director of Consumers Against Supermarket Privacy Invasion and Numbering.
If every retail chain is not yet sold on the benefits of relying so much on chips and software to patrol store aisles, experts still believe the industry will keep moving toward ever-smarter, ever-more-networked tracking systems. The number of video cameras installed in stores is expected to grow by 20% over the next year, according to J.P. Freeman. "It won't be long before retailers link their store data to crime reports and statistical analysis to predict losses... and deploy the right technology and people to stop them," says LaRocca of the National Retail Federation. Already, tech startups are working on even more promising -- or intimidating -- systems to track customers through the entire shopping process. There's even talk of stores installing facial recognition programs and license plate readers to catch repeat offenders.
You're not likely to notice much of a difference at your favorite shopping haunts. But make no mistake -- they're noticing you.Read All>>
... And thank GOD they are.
Friday, September 01, 2006
The Consumer & Retail Economics Of EFT
At WESCO, a regional convenience store chain in Michigan, Electronic Funds Transfer (EFT) service charges greatly effect consumer fuel purchases at the pump.
The 51 store operation processes approximately 2.5 million transactions per month, with more than 70 percent charged to Visa and Mastercard EFT (debit and credit) cards, which both carry costly transaction fees.
In an effort to keep and gain customers as well as make the fuel operation a little more profitable, WESCO puts smiles at the pump by combining its own branded debit card with a consumer loyalty program that automatically discounts gas prices at the time of the fuel purchase.
Excerpts from the American Banker via Cardinal VC -
Debitman Issuer Offers Gas Discount Incentive
By American Banker - 08/22/2006
WASHINGTON -- Debitman Card Inc. said Monday that it has signed a new merchant issuer for its payment cards, the fuel and convenience store operator Wesco Inc.
Wesco began offering the Debitman cards under its own brand this month at its 51 Michigan locations. The Muskegon, Mich., company is promoting the PIN debit cards with a program that knocks 2 cents a gallon from the price of gas.
R. Scott Hatfield, Debitman's founder and vice president of business development, said in an interview Monday that Wesco is the first company to implement a gasoline rewards program, though Debitman has discussed the idea with other companies and another merchant is testing a similar gasoline rewards program.
"The bottom-line is retailers want to incent their consumers to make purchases with cards that are more retailer-friendly," Mr. Hatfield said.
Debitman, of San Mateo, Calif., operates the Retailer's Network, which allows merchants to cut their card processing costs by routing transactions across the automated clearing house system instead of the networks operated by credit card companies.
Wesco plans to expand the rewards program in September, so in-store purchases will generate points, which can be redeemed for additional discounts on gas.
Merchants accepting Debitman cards pay a flat fee of 15 cents per transaction, which is generally lower than the fees for using bank-issued debit and credit cards. Debitman card-issuing merchants also get a 6- to 9-cent rebate per transaction when their cards are used at their stores or at other merchants that accept Debitman.
Wesco tested the cards in June and July at two of its stores. Mr. Hatfield said it has "programmed the pump to recognize" his company's six-digit bank identification number, "and every time you activate the pump with a Debitman card, you automatically get a rollback on the price per gallon."
Customers enter a PIN to authorize an ACH debit to their bank account, "and they're not penalized for using their PIN debit card," he said.
He noted that some banks charge a fee for using their debit cards for PIN debit transactions to discourage that use of the cards; banks earn higher interchange fees from signature debit payments.
Debitman has both card issuers and card acceptors in its network. Wal-Mart Stores Inc. agreed in November to accept Debitman cards, but the retailing giant does not issue them. In January two regional supermarket chains -- Binghamton Giant Markets Inc. in New York and HAC Inc., which operates 67 supermarkets in Oklahoma and Kansas -- agreed to issue Debitman cards. Giant Markets now issues the Giant Extra Plus Debitman cards to shoppers.
Efficiencies in retailing by combining EFT and loyalty card programs make sense when the benefit becomes a two-way street.
Now, if banks can resist charging fees for "proprietary" debit transactions, this new chance at a partnership between the banking community and retail would result in a boon to consumerism.