First Data Corp, a worldwide leader in electronic commerce and payments services, and PrivaSys Inc., a provider of patented software and card technology, announced a long-term licensing agreement that sets the stage for First Data to become a clear leader in the processing of contactless and other emerging payments for its clients – both financial institutions and merchants – around the world.
Through rights to PrivaSys’ portfolio of patents, First Data will be able to expand and develop its contactless product offerings and migrate quickly to other emerging payment offerings such as mobile payments for debit, credit and stored value accounts.
“First Data is committed to helping our partners and clients quickly and easily adopt important emerging payment technologies,” said Barry McCarthy, First Data’s president of product innovation for its Commercial Services business unit. “This agreement furthers First Data’s leadership in delivering secure contactless point-of-sale, mobile payment solutions, card and account personalization services and transaction processing services for our clients.”
Global research and consulting firm, Celent, LLC, estimates that global mobile commerce revenue will more than double from $24.1 billion in 2006 to $54.6 billion in 2008. Within that figure, contactless mobile commerce revenue is estimated to account for $1.4 billion in 2006 and increase to $6.0 billion in 2008.(a)
“This agreement enhances First Data’s ability to leverage our global payment infrastructure to support contactless, mobile and other emerging payment forms,” McCarthy said.
The PrivaSys solution leverages patented software and card technology to generate a transaction-specific Dynamic Authentication Code (DAC). The DAC generates a unique set of trailing data in the discretionary data fields of the legacy magnetic stripe data packet for each transaction. The trailing data is decrypted to authenticate the cardholder. Protected by a portfolio of issued and pending U.S. and international patents, PrivaSys’ business solution for card security enables issuers to preclude card skimming/cloning because each DAC is used for only one transaction. The PrivaSys solution is available in various form factors: conventional plastic cards as well as other devices such as cell phones, PDAs or electronic key fobs.
“We are pleased to begin a long-term relationship with First Data. First Data serves both the merchant side and the issuer side of the electronic payments market, which gives us far greater reach and enables our technologies to become more prevalent in the payments marketplace,” said Joan Ziegler, chief executive officer of PrivaSys.
Specific terms of the licensing agreement are not being disclosed.
(a)Source: Celent, LLC – “Mobile Commerce: Dealing with the Devil in the Details”, February 2006
About First Data
First Data Corp. (NYSE:FDC) is a leading provider of electronic commerce and payment solutions for businesses worldwide. Serving 4.9 million merchant locations, 1,900 card issuers and their customers, First Data powers the global economy by making it easy, fast and secure for people and businesses around the world to buy goods and services using virtually any form of payment. The company’s portfolio of services and solutions includes merchant transaction processing services; credit, debit, private-label, gift, payroll and other prepaid card offerings; fraud protection and authentication solutions; electronic check acceptance services through TeleCheck ; as well as Internet commerce and mobile payment solutions. The company’s STAR Network offers PIN-secured debit acceptance at 2 million ATM and retail locations. For more information, visit www.firstdata.com.
About PrivaSys
PrivaSys licenses its innovative payment solutions to credit and debit card issuers to provide issuers with a solid bottom line return by reducing fraud and increasing top line revenue through differentiation in card services. Requiring no changes of merchants’ terminals, PrivaSys’ patented technology enables a transaction-specific code to authenticate the card at the point of sale and to ensure there is no latent or persistent value in cardholder data if exposed in a security compromise. The SecurSys product line deploys the transaction-specific code, with an optional ATM-style PIN pad on the card. Additional product lines include VariSys, providing a variety of card instruments from one plastic, and PromoSys, which electronically merchandises rewards on the card at the point of sale. Licensees can deploy PrivaSys solutions for contactless/RF, dynamic magnetic stripe, EMV, NFC and other emerging payment platforms. PrivaSys solutions protect the issuer’s market position via a portfolio of issued and pending patents.
