Transaction processor First Data Corp. expects to sign up more than 100,000 merchants by the end of this year for its new TransArmor payment card security product. TransArmor uses a combination of tokenization and encryption to secure transaction data as it passes through merchants’ systems.
“The response from merchants interested in the TransArmor [service] has been enormous and a testament to the sought-after service the product delivers,” says Tim Horton, vice president of merchant product management. “Many of our customers have been waiting for the TransArmor [service] to become commercially available.”
First Data, which processes transactions for some 6 million merchant locations worldwide, would not disclose specific pricing, which may vary by sales channel and merchant, the company says. First Data announced a pilot of TransArmor in March (see story).
The Atlanta-based processor will make TransArmor available to merchants of all sizes throughout its network of resale partners, Horton says. “We have been educating the [independent sales organization] and agent channel on the benefits of the TransArmor [service] over the past several months, and they will be ready to sell the product to merchants by early November.”
First Data completed its test of TransArmor in June that involved more than 150 merchants using a variety of point-of-sale products. The processor used the pilot to test such factors as authorization time, which averaged less than one-tenth of a second per transaction, and ease of implementation.
Breakers Motel signed up for the TransArmor pilot in March, and the product easily integrated with its POS systems. “Strong security can be a significant challenge to implement,” says Anna Janise, manager of the Grand Isle, La.-based merchant. “Adding the TransArmor service to our existing point-of-sale [system] required almost no effort on our part and didn’t impact our business operations.”
Market observers agree that protecting data as it flows to and from retailers’ systems is important, but the services that support it only recently have begun to emerge.
“The category of ‘end-to-end’ encryption is a relatively new category that everybody sees a need for–the retailers, processors and terminal manufacturers,” says Gil Luria, vice president of equity research at Los Angeles-based Wedbush Securities, noting VeriFone Systems Inc. was first out with such a product when it launched VeriShield Protect in 2008. “First Data is the first company to come out with a viable product to compete with VeriFone.”
VeriFone declined to comment on First Data’s product introduction.
Securing 100,000 clients for the TransArmor product is a lofty goal, Luria says, citing the difficulty First Data faces convincing some retailers they should invest in such security measures when they have not yet had a breach. “Some retailers think it’s somebody else’s problem,” he says. “It depends on merchant adoption and the sense of urgency merchants have” to protect their transactions data, Luria says.
Still, with such high-profile breaches as Heartland Payment Systems’ in 2008 and the TJX Cos. breach in 2007, data security is becoming a priority for more retailers, Luria suggests.
“Some merchants still don’t want to spend money on something that does not affect the bottom line in the short term,” he says. “But as the market develops and we see more public cases of breaches, then there will be more of a sense of urgency.”
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