The Prepaid Press - October 15, 2008 - (Page 24)

RETAIL FOCUS October 15 · 2008 - 24 PREPAID IOI by Professor Retske Basics of PINs to be debited from the account as purchases are made or services are used. Let’s look at what prepaid is, so we can see how important the PIN is to the process. In a prepaid service, the basic concept is that the customer loads an account with an amount of money. This applies no matter what the service or product is, from iTunes to gift cards and calling cards. All of these have an account for each user. The account number or PIN is like a little bank account that is set up when the prepaid account is established. The account can be virtual, like iTunes for online purchases, or have a physical card associated with, like a gift or debit card. Regardless of the form that the account takes, the principle is the same. Customers load the account with money from some source, like cash, a bank account, a credit or debit card. They then use the money in the account for purchases of product or services. Each time the PIN is used, the account is debited for the amount of the purchase. In some cases, the user, or someone else, can add money to the account so more purchases can be made. There are even arrangements where money will automatically be added when a certain threshold is reached. When the PIN itself is used, like in prepaid calling cards, it needs to have enough digits to prevent it from being guessed easily. For example, if you had a 3 digit PIN, and 500 ac- Revealing PINs to anyone along the distribution channel, including the retailer, increases the probability that someone will steal them. tive PINs, 50% of the possible 3 digit number combinations would be valid at any point in time, making it relatively easy to guess a valid number. The number of digits in a PIN must be related to the number of active accounts. Every time you add another digit, you reduce the ability to guess combinations by a factor of 10. It is usually good practice to make the odds less than one in 1000 or more, so if you take the number of active users, multiply by 1000, and count the number of digits, you will get an idea of the number of digits you need to employ in your PIN codes. For example, if you anticipate one thousand users, multiply 1,000 by 1,000 and you get 1,000,000, which is seven digits. In this example, a 7 digit number would be minimally adequate. Every digit you add reduces the probability of hacking a code by a factor of 1,000, so it might be prudent to make it 8 digits. Although it should be obvious, PINs must be randomly generated and not sequential. If PINs were sequential, they would be very easy calls even after the card is exhausted. There are programs that will generate and manage the inventory of numbers to assure they are not easy to guess. Obvious number combinations like “77777777” and “1234567”are to be avoided no matter what. Since PINs are the key that unlocks the account with the money stored in it, they should be protected. An unencrypted PIN file should never be sent over the Internet, EVER. Printouts that include PINs should never be left sitting about, and if you have such printouts, they must be shredded before disposing of them. The basic common denominator in prepaid is the PIN, or Personal Identification Number. PIN is another name for account number, which is what stores the prepaid value. It is the PIN that identifies the user, and allows for money The account number or PIN is like a little bank account that is set up when the prepaid account is established. PINs should be treated with the same care as credit card numbers. Revealing PINs to anyone along the distribution channel, including the retailer, increases the probability that someone will steal them. Since most debit cards are branded with Visa, MasterCard, AMEX, Discover, etc. they will have the PIN, account number, printed or embossed on the card, along with expiration and CIV, or card identification number. This means these cards must also be protected from compromise. Virtual PINs are usually a bit more secure, as are the magnetic striped and contactless cards. While they are somewhat more immune, they can be compromised under the right circumstances. PINs are a necessary evil. Without them, it would be impossible to keep all the accounts straight, allow users to check balances, make purchases and re-load the account. But, since they are the basic commodity in a prepaid system, all the processes and procedures regarding PINs must be carefully designed and managed. See you next class! The number of digits in a PIN must be related to the number of active accounts. to guess. Just add “1” to any valid PIN number, and you have the next valid number. A random number generator can provide whatever quantity of numbers you need. You should generate as many as you will need for the foreseeable future, since re-use is not recommended, as previous users often try to see if they can still make Gasoline Cards to Benefit Armed Forces, Veterans SVM Teams Up With Soldiers’ Angels CHICAGO, IL (September 30, 2008) SVM, a company in the gasoline and retail gift card industry, is launching a new program with Soldiers’ Angels to support U.S. armed forces and veterans. This program, called Tank Support, provides gasoline gift cards to veterans who have returned to U.S. soil after serving in the armed forces. The Tank Support program was developed as it became clear that these returning veterans need to obtain general health care, as well as medical evaluation, treatment and rehabilitation, but often cannot afford to pay for the gasoline to visit these health care providers. Tank Support puts resources, in the form of gasoline gift cards, directly into the hands of these veterans. Individuals participate in the program by visiting the website, www.svmcards.net/tanksupport. Participants provide U.S. troops with “tank support” when they purchase gasoline gift cards, which are then directly sent to VA Hospitals across the country. The VA Hospitals distribute the cards to veteran patients. SVM pays for the shipping of the gift cards and also donates $1 to Soldiers’ Angels for each order placed on the program website. SVM’s contribution will be provided in the form of gasoline gift cards, again directly benefiting the veterans. Marshall Reavis, CEO of SVM, is a very strong supporter of our nation’s veterans and feels this program will directly support the needs of this special group of individuals. “We know of no better cause than to help those men and women and their families who protect our freedom and way of life,” Reavis stated. Source: SVM (www.svmcards.net) http://www.prepaidgrapevine.com http://www.svmcards.net/tanksupport http://www.svmcards.net/tanksupport http://www.svmcards.net

Table of Contents Feed for the Digital Edition of The Prepaid Press - October 15, 2008

The Prepaid Press - October 15, 2008 Oblio Wins Judgment Mobile Remittance Providers Look to Latin America Contents The Retske Report: The Game Changer Regulatory Rundown: New Rules and Requirements Likely for 2009 5 Minutes With Saul Bienenfeld, President of Pop2Call Prepaid Wireless Roundup MetroPCS Sues Virgin Mobile Wireless in Brief Leap’s Cricket Service Introduces Cricket PAYGo Virgin Mobile USA to Launch the Shuttle New Study Shows Mobile Phones Merging Roles TracFone Launches SafeLink Wireless in FL IVI and Titan Sign Agreement with YA Global Boost Mobile Launches New Phone The State of Prepaid Technology: Will the Coming Market Bring You Problems or Opportunities? Calling Cards in Brief The Legal Line Tata Awarded Cisco Powered Status IDT Fails to Meet NYSE Listing Standards BillSoft Offers New Taxation Service Dialogic to Acquire NMS Platforms Business STi Acquires Sprint’s Calling Card Business TelcoBridges Introduces ToolPack System Manager Hypercom Increases Multilane Team Mobile Banking: CGAP Spurs Market Prepaid Resources Introduces PORTABLES Bancorp and Obopay Introduce Payment Card Verities, Inc. Partners with BBB and i2c Inc. The Bancorp Bank Partners with LeagueSafe Donor Dialogue Partners with Springbok Services Mercator Offers New Merchant Report Travelex Launches Budget Calculator MPOWER Companies Join Clinton Global Initiative Payments in Brief Promotions Evolve into Must-Have Marketing Strategy for Prepaid Sector Access Launches Cash-Back Rewards VendTek Partners with United Bank Card Flash Foods, Tedeschi Partner with Pinnacle Prepaid 101: Basics of PINs Gasoline Cards to Benefit Armed Forces, Veterans i2c Inc. Signs Agreement with Diestel iPayStation Partners with Pronto Envios Sodexo Releases Prepaid Incentive Card Heartland Leverages VeriFone Managed Services Retail Focus in Brief Our Advertisers Contact Us

The Prepaid Press - October 15, 2008

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