Evan Schuman's StorefrontBacktalk

With mobile-payments rivals Google and PayPal breathing down its neck a week before Apple announces its new iPhones (and possibly its own mobile-payments plans), ISIS on Tuesday (Sept. 27) said it has lined up five Android handset makers plus BlackBerry maker RIM to support ISIS-style mobile payments. Actually, that’s a little less than it appears: NFC-equipped phones from Samsung, HTC, LG, Motorola, Sony Ericsson and RIM will support “preexisting global standards” that “essentially detail how banks and other service providers can securely provision payment credentials in the secure element,” according to an ISIS statement.

That brings six phone makers, four card brands and three mobile telcos under ISIS’ big tent, along with DeviceFidelity, which lets non-NFC phones add NFC through a microSD slot. Problem: ISIS’ card brands have also signed with Google, as have the five Android handset makers (and DeviceFidelity says its deal with ISIS isn’t exclusive, either). Bigger problem: ISIS has yet to demonstrate payments, while Google Wallet is already operating with multiple retailers. It’s hearts-and-minds time, but ISIS has nothing exclusive and nothing to show potential users. Would it kill these telcos to just demonstrate they can actually make a transaction?…

On top of everything else that went wrong, that made Target's IT problems just that much worse. Seems that Target is only now starting to understand the full costs of having outsourced to Amazon. Loss of control? That it knew. Loss of experience? That's the cost it's just starting to understand.Read more...

But in light of this bill's lengthy exemptions and data breach size limits—public disclosure, for example, is only required when a breach impacts more than 5,000 people in one state—the National Retail Federation issued a statement saying it fears that with so many retailers having to report data breaches under this legislation people might get bored and start to ignore the notices. NRF dubs this scenario "notice fatigue." What does it say to the nation when the chief lobbying organization charged with protecting retail interests publicly trumpets the fact that it believes there will be a huge number of data breach reports if full disclosure is required? Yeah, that makes me want to go and buy stock in Wal-Mart and Walgreens right away.Read more...

The Federal Trade Commission is reworking its rules on how E-Commerce sites have to deal with children (12 years old and younger) who visit. Yes, “uh-oh” is the correct response. The FTC is officially soliciting feedback on its proposed changes to the Children’s Online Privacy Protection Rule. It might be a good idea to take a peek at its changes and offer some feedback.

Do they need help? One of the FTC’s questions was whether certain emerging technologies are “Web sites located on the Internet” or “online services.” Web sites located on the Internet? As opposed to what? One begins to wonder if the FTC understands that the Worldwide Web and E-mail and FTP and newsgroups and IP services are all part of the Internet. No matter. The issues being debated include parental consent methods, along with how it’s determined who is a child and who isn’t, given that some children might simply opt to lie. From an E-tail perspective, there are huge implications about verification, handling this data and delays before legitimate information can be gathered. The rules themselves look fairly benign, but the FTC needs to hear more comments from E-tail IT folk about the implications of various methods of authentication and collection. Better to help form the rules now then to complain about them later. (Note: As an IT person, you do have an obligation to do both.) …

The Big Y chain, with 61 stores in Connecticut and Massachusetts, announced this month that it would kill all of its self-checkout lanes. "In the battle of Service vs. Self Checkouts, service won," the chain said in a short statement. In a conversation with a chain executive, though, the decision sounded a lot more complicated. To be blunt, it didn't seem as if the chain had ever been all that fond of self-checkout, which it first deployed back in 2003. "We were one of the last chains to get into the self-checkout game. We were really dragging our feet," said Claire D'Amour-Daley, the chain's VP for corporate communications.Read more...

The simplest way for a site to guess whether another site is influencing purchases is to review referral link logs, to see where customers were right before. That method, however, doesn't make much sense with many social sites. A Twitter visitor, for example, will likely click on a link to read the reviews/photos/thoughts of a Twitter connection, and only after that—and perhaps one or two more links—will the customer visit the retailer's site.Read more...

This means, writes Legal Columnist Mark Rasch, that Texas law would apply to the relationship between a retailer in Tuscaloosa and a consumer in Birmingham, AL, a retailer in Louisville and a consumer on Lexington, KY, a retailer in Albuquerque and a consumer in Santa Fe, NM, or a retailer in Sioux Falls and a consumer in Rapid City, SD.Read more...

In the real world, many retailers and franchisors (and franchisees) try to qualify to use SAQ C. PCI Columnist Walter Conway calls this the "anything but SAQ D" approach. In his experience, the biggest challenge of SAQ C is isolating the application server(s) from the rest of the merchant environment. Conway knows merchants who have devoted a lot of effort and changed their network so they can qualify for SAQ C. A recent clarification by the PCI Council, however, limits the ability of many retailers and franchisors to use this SAQ.Read more...

That's increasingly likely—at least if Apple is ready. This particular fight may be moving to the hearts and phones of consumers, where two players—ISIS and PayPal—have serious handicaps. But consumers see Google as a search engine that does a lot of stuff for them for free. And if any company generates even more warm-and-fuzzy feelings than Google, it's Apple. And Apple also has a host of rarely-discussed huge mobile payment advantages, starting with the fact that it's a retailer and a darn innovative one at that.Read more...

The good news: The security hole can be closed by upgrading E-Commerce sites to a version of the security protocol that has been available since 2006. The bad news: Most E-Commerce Web sites and most Web browsers are still using the version with the security hole. The security-guru consensus: The sky isn't falling yet, and browser makers may be able to implement a tweak that blocks the threat without a new security protocol.Read more...

The "now it's out-of-stock, now it's back in stock" problem isn't new to either in-store or E-Commerce, and it's one that retailers usually try to handle as quietly as possible with ever-smarter inventory systems. But that will probably never work, because real-time inventory stops working very well when an item is about to go out of stock. Unfortunately, giving online customers more information about a looming out-of-stock situation could actually encourage them to buy less—and may not keep them any happier.Read more...

The problem isn't just that PayPal has apparently done nothing to pull together its pile of recently acquired technologies into a suite of payment services. It's that each of these services has real problems that have dogged retailers' efforts at mobile payments for years. And astonishingly, PayPal doesn't seem to have solved any of them.Read more...

The SAQ is an excellent starting point, pens PCI Columnist Walter Conway. But it is not (and does not promise to be) an all-inclusive approach to achieving—not just validating—PCI compliance. In a previous column, Walt noted the PCI Council's point that slavishly (his terminology) completing a SAQ may not be enough to be PCI compliant.Read more...

The big news is where the Council says in the report that "it is expected that PCI DSS controls that will be applicable to a merchant's validation will include (but will not be limited to): Protection of media and devices; Maintaining information security policies and training for personnel; Processes for management of third-party providers (including P2PE provider); Incident response and escalation procedures." That means a retailer implementing approved P2PE might reduce its PCI compliance to just requirements 9 and 12 (and maybe 11.1). The Council's words "will include (but not be limited to)" are important. We have, effectively, a new PCI standard with the accompanying infrastructure: detailed hardware and software specifications, an independent P2PE validation process and two new flavors of specialized QSAs.Read more...

Historically, those 100 Best Buy IT folk have managed "several thousand" IT contractors, Davids said, which puts Best Buy—albeit in a rather extreme way—in the same position as many other chains. Outsourced IT certainly has the advantages of scale and instant experts, in that it's a lot easier to bring in a team to create a specialized app for one business group and to then not rehire them when the project is over. That's much easier than having to hire and train employees and to then have to try and lay them all off.Read more...

The idea is straight-forward enough. If a ToysRUs customer can't easily get to the local store, he/she asks a friend/relative to pick up the item as a favor. The initial customer simply is asked to give the picker-upper's first/last name, E-mail, phone number, address and the relation to purchaser. The picker-upper gets a direct E-mail message indicating the item is ready for pickup. Before going any further, ToysRUs is now picking up a bunch of verified E-mail addresses of people who are near its stores, along with other bits of wonderful data. Not only is the E-mail address verified (they had to receive the confirmation notice), but so is the name and address, courtesy of the driver's license or other ID they had to show when picking up the merchandise.Read more...

That compounded the problems of "Missoni Tuesday," which a Target spokesman said saw "greater item demand than we do on a typical Black Friday." But the crush of customers, and the fact that so many items sold out, masked a serious issue: Even though Target.com made buckets of money that day, the result left a bad taste in the mouths of many Target customers—and the site's nonconformist challenges are still there.Read more...

Why such delays? First, the Council wants retailers to contract only for P2PE applications that appear on a Council list of applications validated to be PCI compliant. The problem? That list doesn't yet exist, and the list's creation is "targeted for Spring 2012," according to a draft copy of the Council's document. A second reason for the delay is PCI training of assessors. The Council isn't promising to identify the testing procedures until "the end of 2011" and "training opportunities" (which we assume means classes) won't be detailed until "Spring 2012." The report will say that the guidelines—even if perfectly followed—won't offer a path for a retailer to be considered out-of-scope. The best that a chain can hope for, according to the document, will be "reduced scope." But nowhere does the document say what exactly that would and wouldn't include.Read more...

To be specific, Wall Street doesn't think that all IT investments are cool. It's when IT investments come from companies where it's not expected. When eBay or, heaven forbid, Amazon invest in IT, Wall Street lets them have it with both spreadsheets, in a way that it would have never criticized Wal-Mart for opening new stores. But when the Sears and Macy's of the world start talking about these space-age computer thingies, stock analysts get all starry-eyed.Read more...

For readers focused on any of those areas, the Monthlies provide an easy way to keep up-to-date and to make sure you don't miss any story important to your operation. The Monthlies also have two other helpful features.Read more...

As if QR codes weren’t having enough trouble getting traction among young consumers who should be their biggest fans, now it turns out that the codes are not only widely unused, they’re also unsafe. On September 9, mobile security blog Kaotico Neutral pointed out that because many mobile apps, when fed a QR code containing a URL, will immediately send the browser to that Web site—no questions asked—QR codes can easily be used to inject malware from an infected site into any phone or tablet that scans it.

Worse still, because the checkerboard codes are often on stickers or posters in public places, a QR on a retailer’s legitimate advertising can be turned evil by someone using a replacement QR that covers the original—even in-store. That means QR codes represent a triple threat (literally) for retailers: Many customers don’t know what they are. The ones who do are at risk if they read them. And cybercrooks can use your own advertising and signage to damage your reputation. Yeah, that certainly sounds like the mobile retail gimmick you need.…

Of course, that's only a problem if that high-bandwidth content comes from the Internet. If it's served from within the store, customers could receive a constant stream of commercials, product pitches and other videos on their smartphones and tablets. There's just one difficulty: If customers are accustomed to having a huge pipe to the Internet on their personal devices, they won't react well to retailers that have cut back their bandwidth ration to just enough for the Web, E-mail and Twitter—unless there's someone else available to blame.Read more...

There are two different legal precedents for these situations, writes Legal Columnist Mark Rasch—and in fact, they go in exactly opposite directions. That creates an inherent problem, for both consumer relations and the law. Customers could feel cheated if price changes don't work the way the customer expects. And as ESLs make in-store pricing work more like online pricing, that could change the way courts see it.Read more...

That sounds just a wee bit hypocritical, especially because Wal-Mart is unquestionably required to collect sales taxes online given that it has both brick-and-mortar stores and an E-Commerce distribution center in California. But the problem—and Wal-Mart's excuse—points out a legitimate issue when it comes to collecting those taxes online. A traditional store's boundaries are pretty straightforward. But online, it can get a lot harder to tell where one retailer ends and another begins, and exactly who is supposed to be collecting which taxes.Read more...

The deal also effectively signals an end to a string of political and court battles in New York, Illinois, Connecticut, Rhode Island, North Carolina, Arkansas and Colorado. Amazon—which California calculated would be responsible for delivering half the online sales taxes the state expects to collect—is now in a race to get Congress to authorize online sales taxes. And unless the rest of the pure-play E-tailers decide to fight it, Amazon will drag them all along in its slipstream.Read more...