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« October 17, 2004 - October 23, 2004 | Main | October 31, 2004 - November 6, 2004 »

October 29, 2004

Credit Card Receivables Growth Slowing

CardWeb reports on the increasing inclination of US consumers to pay down their credit card debt and the impact its having on the growth in receivables.

There are approximately 185 million bank credit cardholders in the USA. Of these about 70 million pay-off in full each month, 71 million make more than the minimum required payment, and 44 million make minimum required payments.

Banks Can Taste Savings from Check 21

The Chicago Tribune carries a Bloomberg story on the potential financial benefits banks will receive as a result of Check 21.

"We'll be able to save a lot of money," said Kennedy Thompson, chief executive of Wachovia Corp., the nation's fourth-biggest bank. "It will eliminate a lot of paper, reduce the huge infrastructure of check processing and all of the transportation of checks."

US Department of Justice Announces Internet "Carding" Arrests

The US Department of Justice has announced the the arrests of nineteen individuals "who are alleged to have founded, moderated and operated one of the largest illegal online centers for trafficking in stolen identity information and documents, as well as stolen credit and debit card numbers."

Some PayPal Users Still Upset

Red Herring reports on yesterday's PayPal thank you day -- including the reactions of some PayPal users who remain disgruntled by PayPal's outages earlier this month.

October 28, 2004

FFIEC Releases Guidance re: Risk Management of Free and Open Source Software

The Federal Financial Institutions Examination Council (FFIEC) has released guidance to US financial institutions regarding their use of free and open source software.

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Check 21 Goes Live

Today marks an important milestone in the payments industry as the Check 21 Act becomes effective. A great way to learn more about Act is to visit the Check 21 InfoBase for Flash-based tutorials:
The InfoBase contains a training presentation that provides a concise overview of the Act and its implementing regulation, an example of check processing under Check 21, information on consumer compliance and other requirements, and an explanation of the examination concepts for consumer compliance issues.
The InfoBase was put together by the Federal Financial Institutions Examination Council (FFIEC).

Adapting to Paperless Check Processing

Robin Sidel reports in this morning's Wall St. Journal (sub. reqd.) on the changes in how checks are being processed.

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Citi Launches Citi Dividend Merchant Network

Citi has announced the Citi Dividend Merchant Network. Citi Dividend Platinum Select cardholders can earn incremental cash-back rewards averaging 5 to 7% by shopping at merchants in the new merchant network.

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October 27, 2004

Foiling Phishing

CSO Magazine takes a look at what companies are doing to deal with the onslaught of phishing attacks.

PayPal Says Sorry by Waiving Fees for a Day

eWeek reports that PayPal will credit its premier and business account members for all transaction fees they pay this Thursday for transactions posted between midnight and 11:59 PM PDT as an apology for the recent outages they've experienced.

Details on the "thank you day" are available on the PayPal site.

Deluxe Launches DeluxeCard Visa Gift Card

Deluxe Financial Services announced today the DeluxeCard Visa Gift Card, "an open-system prepaid card that allows financial institutions to meet growing consumer demand for a versatile payment tool and universal gift solution."

DeluxeCard prepaid cards can be purchased in dollar amounts from $25 to $500. In addition, there is a processing fee of $5.95 for dollar amounts from $25 to $250, and $7.95 for dollar amounts from $251 to $500.

For more information, go to the DeluxeCard web site.

AFP Releases B2B Electronic Payment Survey

The Association for Financial Professionals (AFP) has released the results of its 2004 Electronic Payments Survey (pdf) covering business to business payments.

Financial professionals identified barriers that obstruct progress toward wider adoption of electronic payments in B2B transactions.

In the survey respondents gave nearly equal weight to four major barriers: accounting systems that are not integrated with electronic payment systems; shortage of IT resources; lack of a single standard format for remittance information; and trading partners who cannot send or receive electronic payments with sufficient remittance information.

October 26, 2004

American Express Posts Results of ID Theft Quiz

American Express has shared the results of an identity theft quiz recently used to survey consumers.

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UK Card Chiefs Get Grilled

This is London reports on a hearing by the UK's Treasury Select Committee that questioned credit card issuers about their practices of mailing unsolicited cheques to customers.

The Magic of RFID

Ever wonder how your Speedpass actually worked? Heard the hype about RFID and curious to learn more? Check out the article in ACM Queue by Intel's Roy Want titled The Magic of RFID".

Finding Top Business Leaders

Ted Pincus reports in the Chicago Sun-Times on a new book titled Business Evolves, Leadership Endures by Andrea Redmond and Charles Tribbett III, both executive recruiters at Russell Reynolds Associates.

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Visa International Forms Alliance with Application Security

Visa International has announced that it has formed a two year strategic alliance partnership with database security vendor Application Security, Inc. that includes making a minority investment in the firm.

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Next Estate Expands Green Dot Financial Network

Next Estate Communications has announced the addition of loading capability for ACS Ultima Cards at over 35,000 Green Dot Financial Network retail locations.

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Stored Value Cards Offer New Way to Pay

Thomas Pack writes in Business First about stored value cards.

Like credit or debit cards, they can be used to get money from an ATM or buy something at a store. Like prepaid phone cards or store gift cards, they aren't tied to a person's bank account, and they're preloaded with a specific amount of money. Some can be reloaded when the initial amount runs out.

Businesses like them, bankers say, because they help reduce payroll-processing costs. Consumers like them because they're easy to use. Banks like them because they provide another product to sell and help bring in new customers.

October 25, 2004

Credit Card Companies Lobbying for Airline Liability Protection

Scott McCartney reports in the Wall St. Journal (subs. reqd.) about lobbying by credit card companies for new legislation that would protect them from potential liability if an airline shuts down.

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Richard Clarke Addresses Smart Card Industry Forum

Former US national security advisor Richard Clarke spoke to the Smart Card Alliance's fall conference in San Francisco last week.

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American Express Reports 16% Growth in Cardmember Spending

In its third quarter financial results reported this afternoon, American Express reported a 16% increase in Amex cardmember spending over the same quarter last year and a 14% increase in discount revenue paid by card accepting merchants. Amex's average discount rate declined 3 basis points from 2.60% to 2.57% as compared to the same quarter last year.

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Micro to the Max

Denver's Rocky Mountain News takes a look at micropayments.

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October 24, 2004

Credit Card Companies Monkeying with Credit Ratings

Kenneth Harney reports in today's San Francisco Chronicle on a recent Federal Reserve staff research report that discussed how some credit card issuers may be withholding certain information from the national credit bureaus and, as a result, affecting consumers credit scores.

The Fed researchers did not identify the credit card issuers that intentionally withhold customers' limits. But for 46 percent of the consumers in a random sample of 301,000 credit files to be affected by this score-depressing policy, the creditors involved must be numerous, big or both.

The full study is available for downloading online (PDF).

Be Careful Using Those Credit Cards!

This Sunday several writers chose to write a cluster of stories about how you should be careful using credit cards.

Humberto Cruz writes about how credit card rewards can have a downside. He talks about how he uses several different rewards cards to optimize his rebates -- the Chase Freedom card for gas because it's offering the biggest rebate on gasoline purchases, his MBNA World Points card at the local supermarket because of its 5% rebate on purchases of groceries between now and the end of the year, etc.

Writing from Rochester, NY, Frank Bilovsky says that the convenience of using credit cards can "bite". He quotes a local book author:

"The ultimate bottom line is if you use a credit card, you are going to buy more than if you don't have a credit card," said Robert Manning, the Rochester Institute of Technology professor and author of the book Credit Card Nation: The Consequences of America's Addiction to Credit. "That ultimately was the selling point to get it into grocery stores."

Finally, Michelle Singletary says to be sure to be careful when paying routine household bills with credit cards.

A 401(k) Card

David Vise reports in the Washington Post on Francis Vitagliano and his 401(k) card. Vitagliano worked with an MIT professor, the late Franco Modigliani to patent the idea over ten years ago.

Vitagliano's and Modigliani's patent (5,206,803 - System for enhanced management of pension-backed credit
) has been licensed by ING and is scheduled to be introduced at a conference tomorrow.

The credit card industry is not opposing the card's introduction, in part because the first 401(k) card will be a Visa card. In addition, ING is willing to sub-license the rights to the product to other financial services firms, which means that eventually there may be 401(k) American Express and MasterCards too.

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