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June 30, 2005

Glenbrook Announces Summer/Fall Executive Payments Boot Camp Series

Glenbrook has announced a new series of executive payments workshops.

Following a successful initial workshop series this spring, technology executives, venture investors, and product and business development managers from financial services companies all told us to "keep 'em coming", said Carol Coye Benson of Glenbrook.

The new series includes workshops on the U.S. payments landscape, on authentication in financial services, and on consumer payments in China.

Glenbrook's summer and fall series workshops will be held on both the East and the West Coasts and are now open for registration.

Wachovia Left Out In The Cold?

Liz Moyer writes for Forbes.com on today's annouced acquisition of MBNA by Bank of America.

It wouldn't be the first time Wachovia lost out to Bank of America. Last year, Bank of America acquired Boston-based FleetBoston Financial, once seen as a near-perfect fit for Wachovia.

Andrew Ross Sorkin writes for the New York Times filling in more details, namely that Wachovia's board had failed to approve the acquisition of MBNA after the deal had been negotiated between the two companies' management teams.

The ABCs of Credit Reports

Robert Bruss reports for the Boston Globe on his experience with getting current credit reports and FICO scores from the three major credit bureaus.

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Bank of America to Acquire MBNA

Bank of America Corporation today announced a definitive agreement to acquire MBNA for $35 billion in cash and stock. Based upon Bank of America's current price, the deal values MBNA shares at about a 30 percent premium to MBNA's closing price yesterday.

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Weakness in the Data Chain

Eric Dash reports for the New York Times on the vulnerabilities of the payment system and, in particular, the recent card data security breach at CardSystems Solutions.

And if CardSystems could have its data compromised, might it happen to another processor elsewhere? Industry experts say the likely answer is yes, given how lax Visa and MasterCard have been about enforcing rules with suspensions or fines. Visa and MasterCard maintain that their standards are rigorous, but they need to allow the processor companies time to upgrade systems.

June 29, 2005

BJ’s and DSW Cases Open a New Front in the War on Data Insecurity

Charles Kenney and Kristina Hickerson of law firm Morrison and Foerster write about two recent data security cases: BJ's Wholesale Club and shoe retailer DSW.

What is noteworthy is that for the first time, the FTC has acted against a company that gave no assurances to the public concerning its handling of customer information. After the BJ’s case, companies that say nothing about their data security practices are just as vulnerable to enforcement actions as those that do. This marks an aggressive shift in the FTC’s enforcement strategy and raises the bar for companies that store and handle customer information.

Open Prepaid Market Performance

Mercator Advisory Group has published the first of three planned reports on prepaid products, the first one by Tim Sloane focusing on open prepaid solutions.

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Latest FDIC Findings on Identity Theft Suggest Need for New Safeguards for Internet Banking

The FDIC has announced new findings regarding identity theft associated with Internet banking in an update to an earlier study issued last December.

"Identity theft, particularly account hijacking, continues to grow as a problem for the financial services industry and for consumers," said FDIC Chairman Don Powell.

"Our review illustrates that ID theft is evolving in more complicated ways and that more can and should be done to make online banking more secure."

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Financial Institutions Must Take More Holistic Approach to Combating Fraud

TowerGroup this morning reported on new research regarding enterprise fraud management in financial services firms - asserting that while many financial institutions fight fraud effectively in certain areas of their business, many do so poorly - if at all - across their full spectrum of products and services.

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Today's Headline News - Wednesday, June 29, 2005

Note: This posting is updated regularly throughout the day.

June 28, 2005

State Attorneys General Seek Answers Over Data Breach

Matt Gouras reports for the Associated Press on a terse letter sent today to CardSystems Solutions, Inc. from the attorneys general of 44 states.

"It is the responsibility of CardSystems Solutions, Inc. to make sure the public is aware of this security breach ... and to take the appropriate action to make sure it doesn't happen again," said Tennessee Attorney General Paul Summers. The letter called the company's action "unacceptable."

Americans Face Another Transaction Fee Overseas

Kelly Spors reports for the Wall St. Journal on yet another fee that Americans traveling abroad may encounter when using their credit and debit cards for purchases.

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Class Action Lawsuit Filed Over CardSystems Data Security Breach

San Rafael, CA-based Rothken Law Firm has announced the filing of a class action lawsuit in San Francisco Superior Court against Cardsystems Solutions, Merrick Bank, Visa and MasterCard.

Joris Evers reports on the story for ZDNet News.

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June 27, 2005

Chase's blink Card: A Denver Field Test Report

Update: See this blink Denver update posted Friday, August 12, 2005.


A very good friend of Glenbrook's, Linda Elliott, lives in the Denver area and just got her very own Chase blink card in the mail. She's just finished writing up part one of a report on her first day's experiences with that blink card in her hands. Great stuff - enjoy!

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Primary Payment Systems' Early Warning Fraud Assessment Now Covers an Estimated 90 Percent of All U.S. Transaction Accounts

First Data Corp. has announced that its Primary Payments Systems (PPS) affiliate now covers an estimated 90 percent of all open and active US transaction accounts.

The near total coverage is expected to help save U.S. financial institutions an additional $100 million or more in fraud losses this year. Powered by the databases, the Early Warning deposit and payment risk assessment services help prevent fraud-related losses by notifying users of high-risk deposits and payments via transaction accounts, such as checking, demand deposit, negotiable order of withdrawal, automatic transfer service and credit union share draft accounts. The databases, which are used exclusively for fraud prevention, receive daily updates with non-public secure information regarding accounts, transactions and identities.

First Credit Line Available to Owners of Health Savings Accounts

MedDirect Health Benefits, a provider of financing to patients seeking affordable ways to pay for healthcare procedures, has announced a strategic partnership with 1Point Solutions, a third party administrator in Dickson, Tennessee.

"MedDirect HSA Plus" offers a full range of other services necessary to administer HSAs.

Central to "MedDirect HSA Plus" is a savings account established with Bancorp Bank that offers superior interest rates, mutual funds and FDIC/SIPC protection, as well as overdraft protection offered through the MedDirect Bridge Line. This overdraft protection is an employer-sponsored benefit, and is available to all employees regardless of their creditworthiness.

The partnership with 1Point Solutions helps to enhance a key element of "MedDirect HSA Plus" - the Bridge Card, a smart debit MasterCard that can be used at the point-of-sale by subscribers for all HSA-eligible expenses.

A presentation on MedDirect HSA Plus (PPT) is available for downloading from the company's website.

What Chinese Consumers Want From Banks

Matthias Bekier and Kenny Lam write for the McKinsey Quarterly on what Chinese consumers want from their banks.

While Chinese consumers indicate some willingness to use foreign banks, their preference for local ones is stronger than ever: 78 percent of respondents say that doing business with local institutions is important to them, up from 66 percent in 1999.

Los Angeles Firemen's Credit Union Launches CashEdge's Instant Account Opening and New Account Funding Solutions

CashEdge announced this morning that the Los Angeles Firemen's Credit Union, a credit union serving firefighters and their families in the state of California, is using CashEdge's OpenNow and FundNow services. OpenNow/FundNow enables prospective credit union members to securely open and fund a new account in real-time through the credit union's website.

Approximately 95 percent of new online account applicants drop out between enrollment and funding. By offering a single-session solution, CashEdge enables financial institutions to increase dramatically account completion rates among this valuable member-base. Online members are particularly attractive because they are less costly to acquire and more profitable, maintaining higher account balances, utilizing more services and exhibiting higher overall account activity.

Today's Headline News - Monday, June 27, 2005

Note: This posting is updated regularly throughout the day.

June 26, 2005

Under the Hammer -- Another Look at eBay and PayPal in China

Simon Song writes for The Standard from Hong Kong about eBay's (and PayPal's) efforts in China.

ChinaThe online auction giant would seem to have every incentive to introduce PayPal to China, which is already its third biggest market outside North America in registered-user terms.

So why is it taking so long?

FDIC Holds Identity Theft Symposium and Marches Forward on Multifactor Authentication

This week's eAlert from the American Bankers Association reports on the FDIC's recent ID Theft Symposium held in Los Angeles that included the release of a supplement to the agency's recent study, "Putting an End to Account-Hijacking Theft."

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Central Bancard Links Merchants with Credit Cards

Sara Reicks profiles Central Bancard, an emerging merchant card servicer, for the Quad City Times.

"We sign the merchant based on saving money and charging less than the bank or company they're with. We keep them based on a higher level of service."

Abroad, See How The Fees Translate

Albert Crenshaw writes for the Washington Post on the increased fees now associated international use of credit cards.

Consumer Reports, the magazine of Consumers Union, recently compared a credit card, even with a 3 percent fee, with getting cash from a foreign ATM or an exchange shop or foreign bank, using traveler's checks or changing money at a hotel or airport, and found the credit card remained the least expensive way to go.

Merchants Retaliate Over Credit Card Fees

Lauren Mayk writes for the Lakeland, Florida Ledger on merchant frustrations with the costs of credit card acceptance.

Credit card companies say merchants are blowing the whole fee issue way out of proportion. The fees, known in the industry as "interchange" rates or fees, are set by the credit-card companies and paid to the bank that issues the cards.

June 25, 2005

Taobao Plots eBay Offensive

Red Herring reports on the battle between eBay and Taobao in China.

“It’s a bit like the early days of the Internet,” says Paul Waide, an editor at Shanghai-based analyst firm Pacific Epoch. “They’re using metrics that don’t really mean anything. What everyone wants to know is how they’re going to turn those into revenues.”
By that he means Taobao doesn't yet have a business model -- it doesn't yet charge for the transactions it handles prompting the folks at eBay to point out that "free is not a business model." The parallel here is Japan where eBay ultimately lost the market to Yahoo! Japan who pursued a similar free listing strategy. Both Yahoo! Japan and Taobao are backed by Softbank.

Simpay: Pan-European Mobile Payment Initiative Falls Apart

Forrester's Michelle de Lussanet writes about yesterday's announcement that Simpay is shutting down.

The wait for a pan-European mobile payment scheme just got longer, with Simpay's announcement that it will not go ahead with its pan-European development. Forrester isn't surprised: The mobile channel isn't suited for large-scale payment collection because it's too unreliable and too expensive.

Forged Credit Cards In Japan Account For 80% Of Leak Losses

The Japan Times reports on losses resulting from the recent security breach at CardSystems Solutions.

The Tokyo office of Visa International Inc. said it has so far found the illicit use of 838 Japanese credit cards issued jointly with Visa, including 658 cases considered to have involved counterfeit cards at retailers. Losses caused through the use of forged cards totaled 79 million, yen or 86 percent, of all losses from unauthorized use following the theft of card information, the office said.

E-Commerce's Growing Pains

Leslie Walker reports for the Washington Post on eBay's 10th anniversary celebration.

Gary Neubert, a Tampa resident who has sold shipping supplies on eBay since 1999, said he has been steadily building traffic to his own Web site to bypass eBay's commissions whenever possible. Half his sales today come through his own site, he said. Neubert said he and others are increasingly exploring options outside eBay.
Verne Kopytoff takes a look behind the scenes for the San Francisco Chronicle.

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