Earlier this week in its first law enforcement action involving gift cards, the Federal Trade Commission announced that "Kmart Corporation has agreed to settle Federal Trade Commission charges that it engaged in deceptive practices in advertising and selling its Kmart gift card. As part of the settlement, Kmart will implement a refund program and publicize it on its Web site."

In a new report titled "RFID Contactless Payments", ABI Research is forecasting that spending on the contactless hardware, software, and services market will reach $800 million by 2011, up from $260 million in 2006. According to ABI, "because they speed retail payments and public transportation, contactless payment deployments are quickly expanding around the world. But these two largest contactless applications remain mostly separate, limiting the uptake of contactless cards and delaying the transition of contactless payment technologies into mobile phones."

Dove Consulting has released results of its 2006/2007 Study of Small Business Payment Preferences concluding that payments are a critical issue for small businesses. The study was sponsored by CheckFree, Discover, First Data Corporation, and NEACH.

Robin Sidel reports for the Wall St. Journal on plans by Visa to introduce a new high-end "Signature Preferred" Visa card specifically aimed at consumers with the highest card spending. The card will have a higher interchange fee paid to issuers by merchants than the current Visa Signature cards - averaging 2.27% according to Sidel's report.

While it continues to wait for regulatory and legislative action to decide the fate of its application for an Industrial Loan Corporation charter in Utah, both the New York Times and the Wall St. Journal today are reporting on changes that Wal-Mart reportedly has made recently to the leases it has with a number of banks currently operating in its stores. According to Damian Paletta writing for the WSJ, the changes to the lease language appear to give Wal-Mart an "explicit right to offer mortgages, home-equity lines of credit and consumer loans."

The Payment Cards Center of the Federal Reserve Bank of Philadelphia has published a discussion paper by James C. McGrath titled "General-Use Prepaid Cards: The Path to Gaining Mainstream Acceptance" (PDF). According to the author, "this paper argues that the increased flexibility and more complete functionality [of "open loop" prepaid cards] carry with them substantial new costs, resulting in a “cost hurdle” that must be overcome in order to create economically viable business models."

Philip J. Philliou has been named CEO of Grameen America, Inc., a for-profit microfinance company that "provides small loans, savings programs, and other services to poor people in the United States."

On the Digital Money blog, Dave Birch digs into the impact that contactless mobile payments are having on the levels of cash in circulation in Japan. "The Feds say that the Bank of Japan reported that the total amount of cash in circulation has started to fall for the first time on record."

• Taco Bell(R) Tests MasterCard(R) PayPass(TM) Contactless Payment Option