Welcome back, and happy 2016. At this point, the last of the champagne bottle has been drained, and it’s time to get back to work and pushing ahead on those New Year’s resolutions.
And while we can’t do much to help make sure you get to the gym every day or help you really eliminate all the sugar from your diet, we can help you live up to that resolution about being better informed about what’s happening in payments.
So, we have this week’s edition of the Data Dive, wherein EMV managed to alienate more merchants, Salesforce made a big move and Hyatt got hacked.
Need to know more?
EMV: Another Anchor For Physical Retail
As report after report surfaces about digital’s growing dominance when it comes to attracting the spend of consumers, just about the last thing any physical retailer is looking for is anything that makes the in-store experience slower, less engaging or less pleasant for the customer. It’s getting harder to motivate customers in-store instead of on-screen, and merchants would really like not to alienate, for any reason, those who have taken the trouble to get to the store.
Which has made the newest unintended consequence trailing EMV so particularly frustrating for physical retailers, because as it turns out, the increased security of the chip card is making line wait times longer.
Several anonymous employees at Trader Joe’s told New York Post that the longer process of dipping, as opposed to swiping, a card — as well as a general lack of awareness of the change on the part of both consumers and store employees — has introduced a level of annoyance into the checkout process that didn’t exist before.
“It’s so annoying; it’s not even funny,” one TJ’s cashier told the Post. “It’s more time-consuming; it’s frustrating.”
The frustrations aren’t entirely unexpected. Steve Mathison, senior vice president of payment acceptance at First Data, told The Village Voice in a recent interview that EMV wasn’t designed to fit in perfectly with modern retail shopping habits. That fact, he notes, is not necessarily a world-ender for retailers, though it does present new challenges for retailers to adapt to.
“How EMV works and how it kind of fits in with the culture of how we operate with our cards and how we behave in [stores], it’s not a perfect mesh yet,” Mathison said. “But there are technologies and implementation styles that the [retailers] can use to make it as seamless as possible.”
Some have decided to roll the dice on liability and have decided the best way to make that experience as “seamless as possible” is just to skip EMV entirely — or at least hold off until it is a more perfect mesh with consumer culture. Notably, a majority of small businesses haven’t made the transition (with many saying they intend not to, as the risk of fraud is smaller than the cost of the tech upgrade), and a fairly large number of big chains, like CVS and Barnes & Noble, are holding off the switch.
The costs of fraud are high, but the costs of losing yet more customers to Amazon because EMV made those consumer languish too long in a line are clearly higher.
Salesforce Snags SteelBrick For $360 Million
Analysts ended 2015 touting that 2016 could be a big year for merger and acquisition activity, and it looks like B2B SaaS giant Salesforce has decided to start surfing that predicted wave early.
According to reports last week, Salesforce will acquire SteelBrick — a B2B financial services firm that provides companies with a quote-to-cash platform — for $360 million. SteelBrick recently finished a $48 million funding round led by Institutional Venture Partners. The acquisition was confirmed through a filing with the Securities and Exchange Commission, reports added.
“Being a part of Salesforce will give us an amazing opportunity to accelerate our delivery of fully integrated quote-to-cash applications right within Salesforce, helping thousands more customers grow revenue faster than ever before,” said SteelBrick CEO Godard Abel, according to reports.
This is not Abel’s first experience with a big, high-profile acquisition; in 2013, he was CEO of BigMachines when Oracle bought it for $400 million.
The acquisition of SteelBrick is something of a twofer for Salesforce, since earlier this year SteelBrick acquired Invoice IT, which added a billing feature to the SteelBrick suite.
“SteelBrick now can automatically generate an invoice as soon as a quote is marked ‘closed/won,’” Abel noted in an interview with PYMNTS at the time. “SteelBrick CPQ and Billing (formerly Invoice IT) work together to immediately create and post an order, as well as generate any customer invoices that are due upon signing. In addition, SteelBrick will set up a revenue and billing schedule for all future invoices and then send those invoices to the customer upon billing criteria being met.”
Though the acquisition was announced just before the clock ran down on 2015, the deal will reportedly close in 2016.
Hyatt Gets Hacked
Just in case anyone needed a reminder that cybercriminals do not take holiday vacations, Hyatt Hotels ended the year with some bad news.
“We recently identified malware on computers that operate the payment processing systems for Hyatt-managed locations,” a statement from Hyatt Hotels Global President of Operations Chuck Floyd explained.
“As soon as we discovered the activity, we launched an investigation and engaged leading third-party cybersecurity experts,” Floyd continued.
An official release from Hyatt told essentially the same story, noting that an investigation into the payment system breach is ongoing, and customers should continue to keep a close watch on their payment card account statements for any unauthorized charges.
According to spokeswoman Stephanie Sheppard, the credit card-stealing malware attack was discovered on Nov. 30.
At this time, it is unknown how many of the hotel chain’s locations were impacted or how long its network was left vulnerable. It is also unclear as to whether payments data was actually stolen.
The goods news for Hyatt — if there can be in any in the event of a massive system breach — is that it can at least take comfort in the fact that it isn’t alone. In November, Starwood Hotels & Resorts — the world’s largest hotel company — announced some of its hotel locations were hit by a malware attack.
That breach enabled unauthorized parties to gain access to sensitive information, such as payment card number, cardholder name, security code and expiration date.
Trump Hotels, Hilton Hotels, Mandarin Oriental Hotel Group and hotel management group White Lodging Services have all reported and investigated breaches to their payment and/or point-of-sale systems this year.
So, what did we learn this week? EMV isn’t doing much to earn the loving admiration of consumers or merchants, the acquisition party looks to be starting early and cybercrime never sleeps (but sure likes to target the places where consumers pay to sleep).
Happy New Year!
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