First Data Licenses PrivaSys Patents

Through rights to PrivaSys' portfolio of patents, First Data will be able to expand and develop its contactless product offerings and migrate quickly to other emerging payment offerings such as mobile payments for debit, credit and stored value accounts.

"First Data is committed to helping our partners and clients quickly and easily adopt important emerging payment technologies," said Barry McCarthy, First Data's president of product innovation for its Commercial Services business unit. "This agreement furthers First Data's leadership in delivering secure contactless point-of-sale, mobile payment solutions, card and account personalization services and transaction processing services for our clients."

Global research and consulting firm, Celent, LLC, estimates that global mobile commerce revenue will more than double from $24.1 billion in 2006 to $54.6 billion in 2008. Within that figure, contactless mobile commerce revenue is estimated to account for $1.4 billion in 2006 and increase to $6.0 billion in 2008.(a)

"This agreement enhances First Data's ability to leverage our global payment infrastructure to support contactless, mobile and other emerging payment forms," McCarthy said.

The PrivaSys solution leverages patented software and card technology to generate a transaction-specific Dynamic Authentication Code (DAC). The DAC generates a unique set of trailing data in the discretionary data fields of the legacy magnetic stripe data packet for each transaction. The trailing data is decrypted to authenticate the cardholder. Protected by a portfolio of issued and pending U.S. and international patents, PrivaSys' business solution for card security enables issuers to preclude card skimming/cloning because each DAC is used for only one transaction. The PrivaSys solution is available in various form factors: conventional plastic cards as well as other devices such as cell phones, PDAs or electronic key fobs.

"We are pleased to begin a long-term relationship with First Data. First Data serves both the merchant side and the issuer side of the electronic payments market, which gives us far greater reach and enables our technologies to become more prevalent in the payments marketplace," said Joan Ziegler, chief executive officer of PrivaSys.