Evan Schuman's StorefrontBacktalk

EBay's PayPal unit has gone to public beta with its SecurityKey two-factor authentication unit, a product of its acquisition of Verisign Payment Services.

EBay is taking a loss by selling the devices for $5 to anyone who wants to participate in the public beta program, said Dan Levy, PayPal's senior director of consumer protection. In the contract Ebay signed with Verisign, it targeted purchasing a million of the tokens over three years. To put that number into context, PayPal alone has about 133 million customers and EBay has about 222 million registered users. Clearly, PayPal does not intend for a significant percentage of its users to purchase the device. To read the full story,

For retail RFID observers, the comment late last week from Homeland Security Secretary Michael Chertoff that his department was abandoning RFID for one aspect of border protection should have been big news. Upon closer examination, it's really not.

The saga started last Friday when a major wire service reported that Homeland Security was abandoning RFID across the entire mega-department. On Monday, Homeland Security clarified that the comments were limited to the exit portion of its VISIT border control effort. Even so, if Homeland Security was abandoning RFID for that important program because of "unsuccessful" tests, those results should give pause to others. To read the full story,

The Discover Card people have launched a 1,000-person trial with Motorola to try mobile phone payments via the Discover Network in Chicago and Salt Lake City.

The near-field communications (NFC) trial will initially allow participants to check card balances and payment history in addition to making purchases—all solely using their cellphone. The pilot uses Motorola phones and its “M-Wallet” software and is designed to test the entire infrastructure associated with accessing real time account information over the air.…

The Department of Homeland Security is backing off its plans to use RFID to beef up border identification checks because the tests were “unsuccessful.” At least that’s what U.S. Homeland Security Secretary Michael Chertoff testified to the House’s Homeland Security Committee on Friday.

“I think, yeah, we’re abandoning it. I think it’s not — that’s not going to be a solution” for keeping would-be terrorists out of the United States, Chertoff said, according to this brief report from United Press International (UPI).

Homeland Security Press Secretary Russ Knocke said Chertoff’s comments were limited to the United States Visitor and Immigrant Status Indicator Technology (US-VISIT).…

Verifone is taking the next logical (or perhaps illogical?) step with its wireless payment systems: sell commercials and other content on it that is timely informational.

As part of a wireless payment rollout with New York City yellow taxicabs, the vendor opined that as long as they were putting in the network in cabs, they might as well get their money’s worth. The mobile POS will have GPS map features, deliver electronic messages to drivers and feature a local ABC News weather and news report “updated several times a day. ABC, in turn, gets to sell TV commercials to a captive audience of taxi riders. Seems they’re trying to turn a really smart cash drawer into a cashcow.…

As a few supermarkets trial customer held scanners to check out items as they shop–sort of a wand approach to a smartcart–the Baltimore Sun caught up with some consumers to get their reactions.

“I wish every store had this,” said White, 39, who recently moved to Sykesville from Baltimore. “This has made my shopping more efficient. As I see my bags getting full, it makes me think about what I’m buying, rather than just piling stuff into the cart.” Not a lot of new information, but an interesting look at how consumers are reacting to the technology.…

Quite a few state attorney generals are investigating how TJX handled its data, but are they trying to prevent another disaster or take the easy way out?

Negotiating a settlement to help consumers check their credit reports and fix any problems is one thing. Getting at the security procedures and what should have been done and punishing a company for reckless acts, that's very different. To read the full column,

An interesting mobile phone payment trial is going on in Taiwan, with consumers being allowed to download MasterCard PayPass cards–plus promotions and coupons–over the cellular networks into a near-field communication (NFC) phone.

The trial, being run by MasterCard, Taipei Fubon Bank, Taiwan Mobile and VivoTech, zaps coupons to consumers “by simply touching mobile phones on smart posters located throughout the region and at retailer’s storefronts,” according to a joint statement from the group. Participants, however, need to use ViVOwallet software to view and select cards for payment and coupons for redemption and then only at ViVOpay-enabled POS stations.…

Tesco, the huge UK supermarket chain, has signed a deal with Coinstar to allow consumers to pour in loose change and then use that amount–minus “a nominal fee”–for store products.

The initial payment move will be in about 300 Tesco stores. The move gives Coinstar a metal-counting lock on the four largest supermarket chains in the UK: Tesco, Sainsburys, Asda and Morrisons. …

The Rhode Island Attorney General’s office is launching a formal investigation of TJX’s data breach, including what caused it, why it wasn’t detected more quickly and why the announcement of it was delayed, the AG’s office announced on Monday.

The investigation—technically, a Civil Investigative Demand (CID) on the authority of both Rhode Island’s Deceptive Trade Practices Act and its Identity Theft Protection Act of 2005—is expected to officially begin with its first meeting with TJX officials on Feb. 12 at the Attorney General’s office in Providence, said Edmund Murray Jr., a special assistant attorney general who is in charge of the probe. To read the full story, please click here.…

When Overstock.com reported a weak earnings fourth-quarter earnings report on Monday (revenue down 6 percent, gross profits down 16 percent, a $97 million loss for the year), top management pointed the finger squarely at IT. It's unusual for a company to blame a loss on technology management, but Overstock has done it before.

"We lost $41 million for the quarter and $97 million for the year," Patrick Byrne, Overstock's Chairman/CEO, said in a statement. "We paid the price for hastily implemented system upgrades of 2005 and the subsequent troubles caused by them." Byrne said the system upgrades—involving the integration of an Oracle database and a Vcommerce database—were partly cursed by bad forecasting. To read the full story,

Financial analyst firm CL King & Associates has downgraded TJX (to neutral from strong buy) as fallout from the security data breach and the company’s vague answers continues. “Based on our diminished EPS outlook for FY07, we believe an investment in TJX Cos. is likely to be dead money at this point,” said the firm’s research advisory.

Much of the firm’s concerns are about when the next shoes may drop, especially anything involving the cost of paying for all of these unknowns. “Regarding FY07 expenses related to the data breach, the company stated it is not yet able to reasonably estimate the losses it may incur. Management stated it is unlikely to be able to reasonably estimate such losses at the time earnings are released in FY07,” the advisory said. “The ongoing expense issue includes legal costs, exposure to credit and debit card companies and banks, related fees and expenses, and other possible liabilities.”…

The attribution in this Chosun Ilbo (a major Korean newspaper) story is a bit thin--as in "The credit card industry announced Sunday," which suggests the image of a stunningly crowded podium--but the essence of the story is still an interesting way to start the week. It reports that the "private data of around 10,000 Koreans who use credit cards associated with Visa, MasterCard and American Express was stolen" in the TJX incident.

"The credit card industry announced Sunday that an intruder had gained access to the databases of TJX Companies and stole sensitive information of about 40 million card users including 10,000 Koreans," said the newspaper's online story. To read the rest of the story, .

With a $450 million three-year plan. Nordstrom is pushing to truly achieve a single view of all inventory across all of their channels, said Jamie Nordstrom, the company’s executive vice president.

The high-end retailer is in the middle of the second year of its three-year project, with the goal of full integration of customer and product data across Web, store and catalog channels, according to an Internet Retailer story. “It’s useful internally to manage inventory, but it also gives inventory visibility to our customers as well as our salespeople on the floor,” Nordstrom said, according to the story.

The system now enables store associates at the point-of-sale counter to special order products from online inventory. As the project continues, Nordstrom will extend access to integrated inventory records to front-line employees and customers so that a store associate can view on a computer screen real-time updates of available inventory across all channels and online customers can view real-time updates of inventory available in stores. The latter will support Nordstrom’s plan to offer in-store pick-up of online orders. Nordstrom’s goal for the web channel is sales of $1 billion a year within the next four to six years.…

Some of the nation's top retailers—including Rite Aid, Harry & David, Ikea, KB Toys, Disney, Regal Cinemas and AMC Theaters—are named as defendants in a lawsuit stemming from inconsistent Point-of-Sale (POS) deployment.

The class-action lawsuits accuse about 50 retail chains of violating a provision of the Fair and Accurate Credit Transactions Act (FACTA) that makes it illegal for a retailer to print more than the last five digits or a credit/debit card number and it also forbids printing the card's expiration data on that receipt. The rule took effect in phases, but by December 2006, the latest of its phases kicked in. There is little dispute that the overwhelming majority of retailers are in full compliance and there's little incentive for a retailer to resist complying. And yet, attorneys say they have found many examples of receipts that still contain the forbidden data.Read more...

When it comes to the places that e-retailers fear as the most fraud-friendly, Nigeria, Russia, the UK, Indonesia and Mexico are the top countries, while the North American cities that are seen as the most felony-favoring are New York, Miami, Los Angeles and Montreal.

Those datapoints come courtesy of the annual online fraud survey from security vendor CyberSource. The survey of 351 company executives “of companies involved in E-Commerce” was conducted Sept. 14 through Oct. 6, the company said.

The results are entirely perceptions—as opposed to an examination of where frauds have actually happened—but those are the perceptions that drive where retailers choose to focus extra scrutiny. The survey showed more retailers focusing on where transactions are coming from.…

An innovative RFID trial in Tokyo is using RFID-tagged lipstick to record when various samples are tried as well as to give store clerks full customer history of products purchased as well as tried.

The trial—involving retail chain Mitsukoshi, cosmetics company Shiseido and RFID vendor Fujitsu—also offers consumers a "virtual real-time makeup" session featuring a camera-equipped kiosk, display and RFID tag reader "that will enable customers to view on the display how particular products would look on their face by waving tagged cosmetic products such as lipsticks or eyeshadows over the tag reader," the companies said in a statement.Read more...

Singapore’s Institute for Microelectronics on Monday announced a new silicon chip that it boasted will slash RFID prices. For example, IME officials claimed that an RFID reader built with the new chip will cost less than $100, weigh less than 100 grams and consume less than a watt of power, according to a story in ZDNet.

That compares quite favorably with a typical RFID reader that “costs a few thousand dollars, measures about 6 by 6 inches, weighs approximately 1 to 2 kilograms and consumers about 10 watts of power, the story said.

IME execs told reporters that the biggest hurdle for RFID deployments today is integration, so IME’s approach was a “highly-integrated” 0.18um RF CMOS (radio frequency complementary metal oxide semiconductor) reader IC (integrated circuit), which is usable for multiple RFID tag scanners and compatible with the requirements of different countries, the story said.…

Irish supermarket chain Superquinn, which for years has had a global reputation of pushing the eggplant envelope on grocery customer service, has finally decided to give self-checkout a try.

By March, the chain will be putting NCR FastLane self-checkout units into its core 19 stores in and near Dublin. NCR agreed to deliver the units “with a custom jet-black finish to match the supermarket’s interior walls,” according to an NCR statement.

Thus far, the initial deployments have fared well, said Superquinn Chief Information Officer John Farrelly, who claimed that roughly one out of every three customers tried self-checkout during its first trial week.…

The Massachusetts Bankers Association has now confirmed TJX-related fraudulent credit/debit card purchases in Florida, Georgia and Lousisiana plus in Hong Kong and Sweden. “Thus far, nearly 60 banks have reported into the MBA that they have been contacted by the card companies about compromised cards, and these banks are notifying customers and in many cases reissuing new cards,” the association said.

The ABA has been lobbying for rules that would require the disclosure of a retailer’s name when they “caused a data breach,” as a way of both discouraging retailers from being cavalier about security as well as protecting their member banks from being blamed for something they didn’t do. They also are trying to force retailers to pay for the damage if its’ caused by that retailer’s reckless security procedures.…

The online ad business is heating up and is putting Google in a decidedly defensive posture. Yahoo’s moves this week to add significant functionality to its search is just one issue. Ebay’s much anticipated AdContext program appears to be having difficulties launching.

AdContext was initially supposed to launch by the end of last year. In early November, Ebay started to step back from that date, saying that a January launch was likely and at least a first quarter launch.

On Wednesday (Jan. 24), the same spokesperson who had indicated the January target stepped back from any targets. “I don’t have an update at this time,” said eBay spokesperson Ali Croft. “AdContext is still in beta and when we are confident that it is ready to roll out to the Community, we will roll it out.” …