NFC For ATM Transactions Catching On

Several of the nation’s biggest banks in the U.S. now support the use of a smartphone to withdraw cash from an ATM — many by way of Near Field Communication (NFC) technology — instead of requiring customers to use a bank card.

Will MasterCard Sell Big Data?

MasterCard Inc, the world’s second-largest credit card association, sees business booming from selling data to retailers, banks and governments on spending patterns found in the payments it processes, a top executive told Reuters.

MasterCard, which handles payments for 2 billion cardholders and tens of millions of merchants, uses that information to generate real-time data on consumer trends, available more quickly that regular government statistics.

“It is an incredibly fast growing area for us,” Ann Cairns, who heads MasterCard’s business outside North America, said in an interview, stressing that the company respects cardholder privacy, using anonymous data rather than personal information.

MasterCard does not give figures for its information services products but “other revenues”, which include the sale of data, grew 22 percent in the first quarter of 2014 to $341 million, outpacing the growth of total revenue dominated by payments processing, which rose 14 percent to $2.177 billion.

Cairns said clients for the data include retailers, banks and governments, with MasterCard tailoring it to their needs.

“Retailers are fantastic at using the data they have available about how people shop in their store, how their inventory turns over, but what they don’t know is what happens outside their store,” she said. “The data we’ve got is ubiquitous across the whole market. We can help retailers see what they need to do to capture more sales.”

Cairns, 57, a statistician by training who joined MasterCard in 2011 after helping manage the disposal of Lehman Brothers assets in Europe, revels in the insights real-time card data can provide, such as London’s popularity as the world’s top travel destination and a rise in spending on experiences such as eating out or going on holiday rather than shopping in stores.

MasterCard has recorded a spike in spending in Brazil on groceries and a drop in spending on luxury goods as the price of food has risen ahead of the World Cup, she said, the kind of insight valued by companies such as Nike and Adidas that are hoping to sell $300 soccer boots during the competition.

While MasterCard expands in “big data”, Cairns sees no slowdown in its traditional business of processing payments, with plenty of potential for growth as 85 percent of consumer transactions are still made by cash or check.

“Moving money and doing it safely and securely is so deeply cared about by so many people around the world that it will be a business that has fantastic value now and for years to come,” said Cairns, who previously worked at Citigroup and ABN Amro.

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Google Buys A.I. Firm

Google has purchased DeepMind Technologies, an artificial intelligence company in London, reportedly for $400 million.

A Google representative confirmed the via email, but said the company’s isn’t providing any additional information at this time.

News website Re/code said in a report this past Sunday that Google was paying $400 million for the company, founded by games prodigy and neuroscientist Demis Hassabis, Shane Legg and Mustafa Suleyman.

The company claims on its website that it combines “the best techniques from machine learning and systems neuroscience to build powerful general-purpose learning algorithms.” It said its first commercial applications are in simulations, e-commerce and games.

Google announced this month it was paying $3.2 billion in cash to acquire Nest, a maker of smart smoke alarms and thermostats, in what is seen as a bid to expand into the connected home market. It also acquired in January a security firm called Impermium, to boost its expertise in countering spam and abuse.

The Internet giant said on a research site that much of its work on language, speech, translation, and visual processing relies on machine learning and artificial intelligence. “In all of those tasks and many others, we gather large volumes of direct or indirect evidence of relationships of interest, and we apply learning algorithms to generalize from that evidence to new cases of interest,” it said.

In May, Google launched a Quantum Artificial Intelligence Lab, hosted by NASA’s Ames Research Center. The Universities Space Research Association was to invite researchers around the world to share time on the quantum computer from D-Wave Systems, to study how quantum computing can advance machine learning.

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Some ATMs Still On XP

Cyber-criminals have been cutting holes into European cash machines in order to infect them with malware.

The holes were cut so that the hackers could plug in USB drives that installed their code onto the ATMs. Details of the attacks on an unnamed European bank’s cash dispensers were presented at the hacker-themed Chaos Computing Congress in Hamburg, Germany.

The thefts came to light in July after the lender involved noticed several its ATMs were being emptied. The bank discovered the criminals were vandalising the machines to use the infected USB sticks. Once the malware had been transferred, they patched the holes up. This allowed the same machines to be targeted several times without the hack being discovered.

The attackers could take the highest value banknotes in order to minimise the amount of time they were exposed. Interestingly the software required the thief to enter a second code in response to numbers shown on the ATM’s screen before they could release the money and the thief could only obtain the right code by phoning another gang member and telling them the numbers displayed. This stopped the criminals going alone.

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ATM Malware Found In Mexico

A malicious software program identified in ATMs in Mexico has been improved and translated into English, which suggests it may be used elsewhere, according to security vendor Symantec.

Two versions of the malware, called Ploutus, have been discovered, both of which are engineered to empty a certain type of ATM, which Symantec has not identified.

In contrast to most malware, Ploutus is installed the old-fashioned way — by inserting a CD boot disk into the innards of an ATM machine running Microsoft Windows. The installation method suggests that cybercriminals are targeting standalone ATMs where access is easier.

The first version of Ploutus displays a graphical user interface after the thief enters a numerical sequence on an ATM’s keypad, although the malware can be controlled by a keyboard, wrote Daniel Regalado, a Symantec malware analyst, on Oct. 11.

Ploutus is programmed for a specific ATM model since it assumes there is a maximum of four cassettes per dispenser in the ATM. It then calculates the amount of money that should be dispensed based on the number of bills. If any of the cassettes have less than the maximum number of 40 bills, it releases whatever is left, repeating that process until the ATM is empty.

Kevin Haley, director of Symantec Security Response, said in an interview earlier this month that the attackers have deep knowledge of the software and hardware of the particular ATM model.

“They clearly know how this machine worked,” he said.

The source code of Ploutus “contains Spanish function names and poor English grammar that suggests the malware may have been coded by Spanish-speaking developers,” Regalado wrote.

In a new blog post, Regalado wrote that the attackers made Ploutus more robust and translated it into English, indicating the same ATM software can be exploited in countries other than Mexico.

The “B” variant of Ploutus has some differences. It only accepts commands through the keypad but will display a window showing the money available in the machine along with a transaction log as it dispenses cash. An attacker cannot enter a specific number of bills, so Ploutus withdraws money from the cassette with the most available bills, Regalado wrote.

Symantec advised those with ATMs to change the BIOS boot order to only boot from the hard disk and not CDs, DVDs or USB sticks. The BIOS should also be password protected so the boot options can’t be changed, Regalado wrote.

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Apple Hacked

A group of German hackers claimed to have successfully breached the iPhone fingerprint scanner on Sunday, just two days after Apple Inc debuted the technology that it promises will better protect devices from criminals and snoopers seeking access.

If the claim is verified, it will be embarrassing for Apple which is betting on the scanner to set its smartphone apart from new models of Samsung Electronics Co Ltd and others running the Android operating system of Google Inc.

Two prominent iPhone security experts told Reuters that they believed the German group, known as the Chaos Computing Club, or CCC, had succeeded in defeating Apple’s Touch ID, though they had not personally replicated the work.

One of them, Charlie Miller, co-author of the iOS Hacker’s Handbook, described the work as “a complete break” of Touch ID security. “It certainly opens up a new possibility for attackers.”

Apple representatives did not respond to requests for comment.

CCC, one the world’s largest and most respected hacking groups, posted a video on its website that appeared to show somebody accessing an iPhone 5S with a fabricated print. The site described how members of its biometrics team had cracked the new fingerprint reader, one of the few major high-tech features added to the latest version of the iPhone.

The group said they targeted Touch ID to knock down reports about its “marvels,” which suggested it would be difficult to crack.

“Fingerprints should not be used to secure anything. You leave them everywhere, and it is far too easy to make fake fingers out of lifted prints,” a hacker named Starbug was quoted as saying on the CCC’s site.

The group said it defeated Touch ID by photographing the fingerprint of an iPhone’s user, then printing it on to a transparent sheet, which it used to create a mold for a “fake finger.”

CCC said similar processes have been used to crack “the vast majority” of fingerprint sensors on the market.

“I think it’s legit,” said Dino Dai Zovi,” another co-author of the iOS Hacker’s Handbook. “The CCC doesn’t fool around or over-hype, especially when they are trying to make a political point.”

Touch ID, which was only introduced on the top-of-the-line iPhone 5S, lets users unlock their devices or make purchases on iTunes by simply pressing their finger on the home button. It uses a sapphire crystal sensor embedded in the button.

Data used for verification is encrypted and stored in a secure enclave of the phone’s A7 processor chip.

Two security experts who sponsored an impromptu competition offering cash and other prizes to the first hackers who cracked the iPhone said they had reviewed the information posted on the CCC website, but wanted more documentation.

“We are simply awaiting a full video documentation and walk through of the process that they have claimed,” said mobile security researcher Nick DePetrillo, who started the contest with another security expert, Robert Graham. “When they deliver that video we will review it.”

The two of them each put up $100 toward a prize for the contest winner, then set up a website inviting others to contribute. While the booty now includes more than $13,000 in cash, it was not clear that the CCC would receive the full payout, even if DePetrillo and Graham declared them winners.

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Can Blackberry Be Sold?

Struggling smartphone maker BlackBerry is reviewing several options that could include joint ventures, partnerships or an outright sale, as the company’s leading shareholder steps down from its board in a possible prelude to taking a different role.

BlackBerry, which pioneered on-your-hip email with its first smartphones and email pagers, said on Monday it had set up a committee to review its options, sparking debate over whether Canada’s one-time crown jewel is more valuable as a whole or snapped up piece by piece by competitors or private investors.

The company said Prem Watsa, whose Fairfax Financial Holdings Ltd is BlackBerry’s biggest shareholder, was leaving the board to avoid a possible conflict of interest as BlackBerry determines its next steps.

The resignation of Watsa, often described as Canada’s version of Warren Buffett, suggests Fairfax may be part of a solution.

BlackBerry, once a stock market darling, has bled market share to the likes of Apple Inc and phones using Google Inc’s Android operating system, and its new BlackBerry 10 smartphones have failed to gain traction with consumers.

Blackberry shares rose 7.5 percent to $10.80 in New York and C$10.84 in Toronto in afternoon trading. But the shares remain well below the levels seen in June, before the company reported dismal results that included poor sales of the BlackBerry 10 phones it viewed as key to a successful turnaround.

The share price peaked at about C$150 in June 2008.

A clean balance sheet makes the smartphone seller an enticing takeover candidate. Like Dell Inc, it is a tech icon in need of a turnaround. But BlackBerry’s cash flow is worse, meaning leverage would be extra risky.

The company’s assets include a well-regarded services business that powers BlackBerry’s security-focused messaging system, worth $3 billion to $4.5 billion; a collection of patents that could be worth $2 billion to $3 billion; and $3.1 billion in cash and investments, according to analysts.

But the smartphones that bear its name have little or no value, and it may cost $2 billion to shutter that unit, the analysts said.

Analysts expressed skepticism about the new committee, noting that BlackBerry announced similar steps more than a year ago when it hired JPMorgan and RBC as financial advisers. A source said both are still involved in the strategic review.

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Is NFC Catching On?

Near Field Communication (NFC) is steadily gaining adoption in the U.S. for sharing data and music among smartphones, but the technology faces years of slow growth as a replacement for physical wallets.

NFC will take a minimum of three more years to grab hold as a technology that enables so-called mobile wallets as a replacement for credit cards and cash in the U.S., according to a consensus of five analysts. And by “grab hold,” these analysts mean being used by only 10% of mobile phone users to make digital purchases.

Gartner analyst Avivah Litan predicts that NFC payments will hit the 10% threshold in 2015, compared to the process of SMS (texting) payments that is expected to represent 50% of mobile payment volume globally in that same year. “We’re still on the edge when it comes to NFC innovation,” Litan says. “It will take a decade before it’s mainstream across the globe.”

Dozens of new smartphones that run Android, BlackBerry and Windows, and that include an NFC chip, launched last year. But Apple notably did not put NFC in its new iPhone 5 when the phone launched in September. That move “surely had a significant detrimental impact on industry adoption of NFC,” Litan says, given Apple’s influence in the mobile market.

Apple justified the move by saying that consumers already could use its Passbook app, which shows barcodes on the display, instead of NFC. The barcodes contain information that can be scanned by optical readers to let users board planes and redeem movie tickets — tasks that Apple notes are “the kinds of things consumers need today.”

Some have criticized Apple for omitting NFC from the iPhone 5, which has led to a widespread reassessment of NFC’s immediate future, especially in the U.S.

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Rambus Makes Cuts

Technology licensing firm Rambus Inc said it has reorganized its businesses into three divisions and will slash its workforce by 15 percent as part of its efforts to cut costs.

The company, which has posted a loss for the last three consecutive quarters, appointed a new Chief Executive in June.

Rambus expects to save between $30 million and $35 million in cash annually, most of it from cuts in its general and administrative expenses.

The Sunnyvale, California-based company said the reductions in expense and related workforce will begin in the coming weeks and are expected to be completed during the fourth quarter.

It will take a related charge of $6 million over the next two quarters.

As of December 2011, the company had 456 employees.

Rambus said it now operates three business units — Memory and Interfaces, Cryptography Research Inc and Lighting and Display Technologies. It also named Martin Scott as the new role of chief technology officer.

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Seagate To Acquire Samsung’s HD Unit

Seagate Technology is to acquire Samsung Electronics  loss-plagued hard disk drive (HDD) business for $1.4 billion as it looks to battle rival Western Digital Corp and curb price wars that continue to damage the industry.

The deal comes a month after Western Digital sought to buy Hitachi Ltd’s hard disk drive division for $4.3 billion, to create a global leader with deep resources.

It is yet to be seen whether Western Digital trump Seagate as the world’s largest hard drive maker after the deals conclude. In 2010, Seagate’s sales was $11.4 billion while Western Digital posted revenue of $9.85 billion.

Toshiba Corp and Fujitsu are the other smaller players in the hard-drive space.

The sale of the HDD business will see Samsung leave the cut-rate industry and focus on its bread-and-butter memory-chip business.

The sector is already battling persistent sales-growth declines and now faces a longer-term threat from wireless tablet devices using more power-efficient flash drives, or solid-state drives (SSD).

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