Retailers Still Have Long Way to Go on PCI, VeriFone Chief Says

San Jose, Calif.-based point-of-sale terminal developer VeriFone Holdings Inc.'s outspoken chief executive, Douglas G. Bergeron, sought in an analysts' conference call Tuesday to make hay out of the current concern about cardholder data security stemming from recent breaches at retailers such as TJX Cos. (Digital Transactions News, March 29). Older POS software frequently stores cardholder account and PIN numbers, creating a security risk that often remains unknown to merchants and violates the Payment Card Industry data security standard, the wide-ranging set of rules for securing payment-related hardware, software, and operating systems. While many larger merchants now have PCI-compliant payment systems, retailers still have a long way to go, according to Bergeron. “It is becoming apparent that a major portion of the credit card infrastructure in today's retail space will need to be upgraded to state-of-the art systems in order to maintain consumer confidence in this increasingly cashless society,” he said. “VeriFone has the largest portfolio of PCI-compliant products,” Bergeron claimed. He also said VeriFone is the only POS systems provider on the newly appointed advisory board of the PCI Security Standards Council, the group that oversees PCI. Separately, VeriFone said on Wednesday that the New York City Taxi & Limousine Commission had given it the go-ahead to start equipping the city's 13,000 taxicabs with systems that will process wireless card swipes and contactless transactions and deliver news and other content. The city has required that all cabs install such systems by Oct. 1. VeriFone says it is the first vendor given a formal “notice to proceed” by the agency. Second-quarter profits fell 68% at VeriFone due to one-time costs associated with its November acquisition of rival Lipman Electronic Engineering Ltd., but revenues grew 53% while wireless payment systems gained market share. VeriFone reported net revenues of $217.2 million for its second fiscal 2007 quarter ended April 30 compared with $142.2 million a year earlier. Net income, however, dropped to $4.86 million from $15.04 million in the year-earlier period. International revenues?Lipman was especially strong in such markets as Western Europe?grew 97% and North American revenues grew 19%. Lipman also was a leader in wireless payment systems. VeriFone chief financial officer Barry Zwarenstein reported that wireless's share of total system sales rose to 27% compared with 25% in the first fiscal quarter. VeriFone also says orders are rolling in for its new, full-motion color video display terminal dubbed the MX780. Users include the grocery chains Stop & Shop and Giant-Landover, which plan to install the devices in all their new and remodeled stores, Wegman's Food Market, which is replacing a competitor's product with a radio-frequency MX780, and Brookshires Grocery in Texas. What Bergeron called a “glitch” in the sales and administrative process caused $4 million in booked orders originating mostly from VeriFone's new Israeli and Turkish facilities to not be recognized until the third quarter. VeriFone arch-competitor Hypercom Corp., meanwhile, on Wednesday unveiled six new PCI-compliant versions of its Optimum terminal line.