VeriFone finds ally in fight against data breaches

VeriFone and First Data are teaming up to help U.S. merchants reduce their exposure to data breaches and expedite merchant acceptance of EMV-enabled credit and debit cards.

Large-scale theft of consumer payment data from merchants’ integrated point-of-sale (POS) systems is among the biggest challenges facing the payments industry.

As we have seen over the past few years, data breaches have become widespread and undermine consumer confidence and privacy. While EMV (Europay, MasterCard and Visa) acceptance in the marketplace will strengthen data protection, it creates a burden on merchants and those that serve them,” said Guy Chiarello, president of First Data. “This partnership with VeriFone furthers our objective of working with the leading payment technology providers to benefit merchants and their customers.”

First Data said it will now offer VeriFone’s Secure Commerce Architecture (SCA) to its U.S. clients who use VeriFone equipment within an integrated point-of-sale (IPOS) system. According to First Data, SCA helps solve the difficulties of EMV compliance by eliminating the flow of consumer payment data into the IPOS. Payment data will also now flow through First Data’s TransArmor data protection system, enabling encrypted delivery directly to First Data from the VeriFone payment terminal.

"First Data’s support of SCA is a significant step in easing the burden on merchants of data breaches, and the related complexity from EMV acceptance in the U.S.,” said Paul Galant, CEO of VeriFone. “This partnership will enable First Data merchants in the U.S. that use VeriFone terminals to experience the benefit of an integrated POS, while enhancing the safety and soundness of the payments industry.”

Founded in Hawaii in 1981, VeriFone — whose credit- and debit-card payment machines are found in many U.S. retailers — has been realigning its business, with a focus on mobile and digital technology.

For the three months ended Oct. 31, VeriFone reported a profit of $31.1 million, or 27 cents a share, compared with a year-earlier loss of $247.7 million, or $2.26 a share. Excluding stock-based compensation and other items, profit rose to 44 cents a share from 27 cents a share a year earlier. Revenue rose 14% to $490.5 million.