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Cardtronics have made a statement, reiterating the compliance of their ATMs in 7-11s with all the relevant security standards. They also claim that their processing centre and networks comply with PIN security standards, and have been independently reviewed.

So either the 7-11 stores were targeted in a widespread installation of fake ATM fronts, possibly combined with video surveillance of customers entering PINs, or - as seems to be suggested by some of the court procedings - there was compromise of back-end processing servers.

If it's the former, then perhaps 7-11 can be held responsible for lax in-store security. If it is the latter, then it's probably either Cardtronics or Fiserv at fault. And if they were indeed both up to standard in terms of security, it begs the question - do standards need to be improved?

Jonathan, I know EMV doesn't have anything directly to do with PIN encryption - that's the job of the TripleDES standard I mentioned. But It does make it harder for criminals - even if they have obtained a PIN from should surfing or whatever other means - to make a cloned copy of the card and use it to withdraw cash.

Yes, you're right. Thanks for catching my typo - I've now edited it to read 2009

The press room was as dire as ever - a few fixed ethernet internet connections, and one internet-connected PC that couldn't even take a USB memory stick. The backwardness is quite ironic for a "technology management conference".

I think they might do this on purpose. A lot of publications buy exhibition space, rent some furniture and internet connections and work from there.

We did that this year, and it was worthwhile, particularly as we wanted a space to do some video interviews. As for the general buzz of the show, it wasn't as pessimistic as I expected it might be. But I think of the thousands of people to traipse through the exhibition halls over the 3 days, there was a pretty high ratio of promo grabbers, headhunters, exhibiting company salespeople and summer interns.  

Do you think DTCC taking over LCH Clearnet would cause further divide in the industry? Would other clearing and settlement operations implement more defensive strategies to protect their business in the face of a new transatlantic dominant competitor?

How about the world's highest ATM?

There's probably room for a whole bunch of superlatives here: most dangerously located, most remote, most ancient  ...

I hope DIFX has more luck than LCH.Clearnet in replacing its clearing and settlement system. (see this Computer Weekly article for a post-mortem of that disaster).

As a relatively new exchange (since 2005) DIFX doesn't have much in the way of legacy systems to deal with, which should make things easier. It was originally going to outsource clearing and settlement to LCH.Clearnet, but in the end it went with eClearSettle, a solution from Indian vendor firm Tata Consultancy Services, which I believe is still running it on an outsource contract.

While SmartStream's Trade Process Management solution has been deployed for clearing and settlement in sell-side, buy-side and custodian environments, I don't think it has ever been deployed by an exchange, particularly one that also acts as a CSD. I'm not sure how much change would be required to the solution over and above the normal customisation required on any SmartStream implementation. But given SmartStream's recent hosted recs partnership with TCS, I wouldn't be surprised to see the two companies working together on the new infrastructure for DIFX.

At the Fintech M&A event last week, Fred Sum, the CEO of Chinese payments firm PayEase, mentioned the 3% credit card penetration. To illustrate how far the payments business in China has yet to mature, he also mentioned that for many online purchases people still have to pay cash to the bicycle courier who delivers the goods. So obviously there is huge untapped potential in the Chinese market for greater automation and electronification of payments, but as you say, there are many cultural considerations that need to be taken into account.

KKR and First Data might argue your point about the Advent and Sophis deal being the most significant private equity deal of recent months, though if you limit the statement to the software sector, you’re probably right.

As for whether it will spark a consolidation wave, I guess it depends on Advent’s reasons for investment and Sophis’ subsequent strategy. Is it an international expansion play? Possibly. Sophis already had a wide network of global offices, but has since pushed to grow its derivatives business presence across its geographies, most recently with the hire of a chief operating officer for North America.

It’s probably not a strategic restructuring play, as Sophis was already quite focused. Is it a high-growth play? Possibly, if you look in the public markets at the performance of Advent Software (no relation), which also sells into this space you can see that there is growth in this market. But then if you look at the performance of Sophis’ fellow French company Linedata, where they hired their new North American COO from, you can see that just riding the wave of increased IT spend from the buy side isn’t enough – execution and product differentiation are key, and building strength in the derivatives side of the business will definitely help Sophis hit whatever targets the private equity team has in mind.

UPDATE:

I've just been alerted by a friendly PR agency to the blog of the analyst in question - Ian Spence.

It seems that the FT misquoted him, and "competitor" should have been "comparator", which makes much more sense.

Ian's take on this is: "First of all we need to correct a misquote in the FT article this morning - we said that fidessa was the nearest comparator to Smartstream, not competitor as got printed. fidessa is clearly not a competitor of SmartStream but it does operate in broadly the same market space. That said, we do believe that with a price at around £175m, which is where we think it is being pitched, SmartStream is looking pretty good value. Given the figures that we believe are in the market for the year to June 2008, this would put SmartStream on a current year EV/EBITDA of under 10x which would seem to leave room for a re-rating as the company gains momentum as a listed company."