Posts tagged ‘FIS’

Will The FIS Worldpay Merger Impact Your Credit Union?

It will take time to figure out precisely how much this impacts credit unions but there is little doubt that at some point it will. On Monday, FIS announced it was acquiring payment processor Worldpay in the latest move to alter the landscape in the rapidly consolidating  payment processing industry.

In a refreshingly honest press release announcing the deal, Gary Norcoross, the President and CEO of FIS explained that “scale matters in our rapidly changing industry.” The press release explained that the combination of Worldpay with FIS will help facilitate an omni-channel technology platform which can combine both payment processing and traditional core operating capabilities.

Let’s face it, increasingly who is executing a payment is as important as the institution holding the individual’s money to begin with. For example, Apple Pay is nothing more than a payment platform but it’s a lot more important to younger people than the account they choose. In addition, prepaid debit cards are becoming such an important part of the banking landscape that regulations are finally set to take effect on April 1st, imposing consumer protection obligations on these payment devices. More on that in an upcoming blog post.

What does this mean for credit unions? Fiserv recognizes that financial institutions are going to need to have the capability to rapidly process payments and to do so over a broad range of platforms. Your credit union has to have the technology and foresight to integrate itself into the payment process not only as the account holder but as the marketer of services which promise and provide quick and easy payment solutions.

One more thought. Credit unions love to beat themselves up about how the industry is shrinking. In fact, it’s not shrinking, it’s consolidating. At the end of the day the larger you are the more cheaply you can provide services and this is as true for credit unions and banks as it is for payment processors.

 

March 19, 2019 at 8:59 am 1 comment

White House Spotlights Patent Trolls

imagesWhen it comes to patent trolls, the White House is mad as hell and not going to take it anymore.

Patent trolls are companies that specialize not in developing technology but in buying it and then trolling around for patent violations.  Yesterday, the White House unveiled Executive orders and legislative proposals designed to crack down on these potentially parasitic interlopers.  As any credit union that has received those increasingly ubiquitous demand letters informing them that they are violating registered patents with their ATM technology and graciously offering to forego litigation in return for a licensing fee knows, there has been an explosion in patent litigation that is impacting virtually every business in this country.

The problem is while the President’s Executive Orders and legislative recommendations announced yesterday put a spotlight on an extremely serious problem, there is very little he can do without the help of Congress.  For example, he would like to give federal courts more power to make the losing party in a patent lawsuit pay the legal costs.  Right now there is very little disincentive for patent trolls to cast their net of potential violators as widely as possible, which is why credit unions have been confronted with allegations that they are violating technology over which they often have absolutely no control.  Under the President’s Executive Orders patent examiners will be given training to enable them to more closely scrutinize technology patent applications, particularly related to claims of exclusivity for the functional use of software technology.

I admit this may sound like dry stuff but as technology gets more complicated unless the law evolves to keep up with it, credit unions of all shapes and sizes will have to choose between retaining a patent attorney or settling lawsuits they know to be frivolous.  It’s the type of cost that legitimately gets people angry about our legal system.

FIS Security Breach Larger Than First Reported

Speaking of the impact that technology has on credit unions, you may want to take a look at this blog posting outlining the extent of last November’s break-in of FIS.  As the CU Times reported yesterday, the breach was “far more extensive and serious” than previously disclosed by the corporation.  Considering that FIS is one of the largest information processors for financial institutions in the world, this is the type of report that can send chills down  the spine of your IT team.  As a result of last November’s break-in, FIS first reported that approximately 7,170 accounts may have been put at risk.  The hackers  used an increasingly common scheme in which they were able to break into FIS networks and eliminate withdrawal limits on debit and prepaid cards.

NCUA Releases Quarterly Review Of Industry Trends

NCUA released its latest snapshot of credit union growth trends.  The report, which includes a state by state comparison of key credit unions data, indicates that New York credit unions continue to perform above the national average in many key categories.

June 5, 2013 at 7:50 am 1 comment

Are We Facing a Data Breach Pearl Harbor?

You may not know Preet Bharara yet, buy my guess is that you will.  He is the U.S. Attorney for the Southern District in New York and in a recent piece in the New York Times, he compared the epidemic of cyber crime to a modern-day Pearl Harbor.  Evidence demonstrates that he’s not overstating the case, at least by much.

Listen, I love Five Guys as much as the next guy.  In fact, for my money, it’s the best fast food burger in the Country.  But, a recently disclosed security breach demonstrates yet again why merchants have to be made more responsible for protecting debit, credit, and, increasingly, prepaid cards.  My local paper, the Albany Times Union, reported the other day that Trustco is suing Five Guys because of its negligent handling of customer payment information that resulted in the theft of $90,000 worth of merchandize.  If what the bank alleges is true, it’s the same old story:  the merchant knew about the data breach for months but was slow to alert authorities.  Five Guys, of course, insists that it was complying with the law.

Then, today, the Wall Street Journal has an article detailing the security shortcomings at Fidelity National Information Services (FIS), which led both the OCC and the NCUA to be extra vigilant in dealing with the third party processor.  Of course, what these two cases have in common is that credit unions are victimized by third party processors and merchants that have too little responsibility for protecting debit and credit card information.  When the breach gets exposed, it is often the credit union or bank that is left holding the bag.  I wish Trustco all the best with their lawsuit, but unless there is a sea change in legal analysis, the courts will continue to be reluctant to hold merchants responsible to card issuers.  The problem is one that needs a legislative fix and quickly.

As explained recently by Bharara, “companies must start thinking ahead of the hack and locking their doors. It is simply no longer enough for company leaders to take a hands-off approach, leaving these matters to a few “techies.” Such an attitude practically invites a hack. Even simple measures — like employee training and regular threat assessments — can help companies avoid becoming the easy target.” 

The fact is that these are the type of steps that financial institutions have been taking for years; but without federal legislation, it simply won’t be in the financial interest of third party processors and merchants to adequately protect consumer records.  

America is the great information economy that refuses to recognize that high tech bank robbers are ripping off companies more easily than bandits could rip off stage coaches in the 19th Century.

June 6, 2012 at 7:17 am 3 comments


Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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