Daily Tech Snippet: Tuesday, November 17

• Chip-Only, or Chip-And-Pin? Credit Cards Give Retailers Another Grievance Against Banks: The employee perched on a stepstool by the checkout at Trader Joe’s in Union Square in Manhattan is like an air traffic controller: Register 6 for one customer. Register 9 for the next. The routine helps move traffic quickly through the store, where the lines can often snake around the aisles of whole grain cereal, mixed nuts and Fair Trade coffee. Trader Joe’s, like many retailers around the country, recently upgraded its payment terminals around the Oct. 1 deadline to accept debit and credit cards with a new security chip. The timing, retailers say, could not be worse. The new terminals are often slower, meaning that the long lines during the busy year-end holiday season will grow longer. The new chip cards are also at the center of a growing dispute that has pitted two of America’s most prominent industries — banking and retailing — against each other, and pulled in attorneys general and even the Federal Bureau of Investigation in the process. But the debate involves more than whether consumers will be adequately protected during a season that has been rife with security breaches: The battle could affect the long-simmering war over the billions of dollars in interchange fees that merchants pay to process credit and debit transactions. “That is the crux of the matter,” said David Robertson, publisher of The Nilson Report, a payments industry publication. “The real savings is not about fraud, the real savings is about interchange.” Last year, merchants paid about $61 billion in interchange fees, Mr. Robertson said, compared with about $30 billion in fraud losses. The fight involves new payment cards, issued over the last year, that come with a small square security chip that can help make in-person transactions more secure. Retailers complain that they have spent billions of dollars upgrading their payment terminals to accommodate a system that cuts down only on the fraud shouldered by banks, not merchants. Chip and PIN, long the standard in Europe, would help retailers verify not just the card, but the person using it. Writing to their colleagues in October, two attorneys general sounded a warning bell: The new security chip would not go far enough to make transactions safer. Credit cards needed a PIN, too. “If we continue to settle for weaker standards here, we will continue to pay the price,” wrote Sam Olens, the Republican Georgia attorney general, and George Jepsen, his Democratic counterpart in Connecticut. They urged top prosecutors in other states to sign a separate letter to Visa, MasterCard, JPMorgan Chase, Bank of America and other institutions, pushing them to adopt the chip-and-PIN technology. Banking groups were swift to issue their own statement, saying that merchants had been “spreading an outdated narrative.” In November, a spokesman for Mr. Olens confirmed that he had taken his name off the letter.

• Pandora To Buy Music Streaming Provider Rdio Assets For $75M In Cash, Rdio Files Ch.11, Will Shutter Service: That was fast: just as soon as it was reported that Pandora was in talks to buy Rdio, the two sides have confirmed that an acquisition is indeed taking place. Pandora has acquired “key assets” from Rdio for $75 million in cash, the company has just announced. But as part of it, the Rdio service as we know it is tanking: the streaming service is filing for bankruptcy. “The transaction is contingent upon Rdio seeking protection in the United States Bankruptcy Court for the Northern District of California. Upon approval of the proposed transaction by the bankruptcy court, Rdio will be winding down the Rdio-branded service in all markets,” Pandora noted in its statement. Separately, Rdio said in a blog post that it will shut down in the coming weeks. More immediately, however, Rdio will continue uninterrupted. In digital music market with constrained economics, we are likely to see yet more consolidation or outright closures. And with Rdio, there is still a chance that someone could step in right now and buy the company instead of Pandora, Rdio noted in its own statement: “While we are filing for bankruptcy, because the planned sale to Pandora is contingent on such a filing, by law Rdio is required to entertain competitive offers during the bankruptcy process that is being managed for us by Moelis & Company,” it noted. But, if Pandora’s pland does go ahead, it sounds like Pandora’s plan will be to create its own flavor of on-demand streaming to exist alongside its radio-style service. The assets it is planning to buy include technology and intellectual property. Additionally it’s taking on several members of Rdio’s team, but that will not include Anthony Bay, who is staying on with Rdio to wind down the business, Brian McAndrews confirmed on a conference call about the news today.

• Amazon is the Tiger Global's second-largest public stake at $1.6 billion: Tiger Global Increased Amazon, Cut Back JD.Com in Third Quarter: Chase Coleman’s Tiger Global Management boosted its stake in Amazon.com Inc. and cut its holding in JD.Com Inc. in the third quarter, reflecting the disparate performance of the two online retailers.  Tiger Global increased its number of shares in Amazon by more than three times in the quarter, according to a filing with the U.S. Securities and Exchange Commission. The firm’s position, its second-largest U.S. stock holding, was valued at $1.64 billion at the end of September. The shares jumped 18 percent in the three-month period, extending this year’s gains. The asset manager trimmed its stake in JD.com’s American depositary receipts by about 18 percent. Even with a 24 percent decline in price for the Chinese company’s ADRs and the reduction in holdings, Tiger Global’s stake was worth $1.5 billion at the end of September, making it the firm’s third-largest disclosed position. The firm’s U.S. stock positions were valued at $8.1 billion as of Sept. 30, about 15 percent below its second-quarter level. Money managers who oversee more than $100 million in equities in the U.S. must file a Form 13F within 45 days of each quarter’s end to list those stocks as well as options and convertible bonds. The filings don’t show non-U.S. securities, holdings that aren’t publicly traded, or cash.