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« March 6, 2005 - March 12, 2005 | Main | March 20, 2005 - March 26, 2005 »

March 19, 2005

Bankruptcy's Next Chapter

Kathleen Day and Caroline Mayer report for Sunday's Washington Post about the proposed changes in US bankruptcy law that are close to being approved by Congress.

The stated goal of the new legislation, which was pushed by the credit card, auto and retail industries, is to end abuse of the bankruptcy system. But many bankruptcy experts worry it will only add cost and red tape to the process of filing for bankruptcy and not necessarily curb abuse.

Vesta Announces ChinaDotMan Investment

Vesta Corporation has announced an alliance with ChinaDotMan Co. Ltd. (see: www.9588.com) that includes an equity investment by Vesta.

ChinaDotMan has introduced a unique e-ticketing service that gives mobile users the ability to browse and book air tickets in real time using their cell phones. E-tickets are purchased through a user's credit card. 9588 provides an easy-to-use, complete service offering in the field of mobile payments.

China: Online Shopping and Payments

The China Stock Blog takes a look at the issues surrounding ecommerce and payments in China.

What is impeding growth of Chinese online shopping? According to both Piper Jaffray and Taobao.com, it's not primitive online payment systems - as many have suggested. While payment systems may be inefficient, the greater challenge to growth in online shopping may lie elsewhere - especially in the near-term.

Earlier, Bill Bishop posted some of his thoughts on these questions - including links to recent presentations by TaoBao (PDF) and Alibaba (PPT).

We feel that the single biggest hurdle to the development of China's eCommerce market is the lack of trust when an agreed-upon transaction comes to the settlement stage - i.e. a buyer will refuse to send money before receiving the goods, and a seller will refuse to ship the goods before receiving money.  Because the Alibaba franchise represents trust in the minds of internet users, Alibaba is uniquely-positioned to offer its escrow-based payment solution AliPay. 

March 18, 2005

VoIP Phone Spoofing

Andy Sullivan reports for Reuters on the use of Voice over IP services for spoofing caller ID phone numbers.

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Digital Insight, PayCycle Partner

Digital Insight has announced that it is partnering with PayCycle to offer PayCycle's web-based small business self-service payroll to its financial institution customers.

"Digital Insight's partnership with PayCycle is entirely consistent with our strategy of providing best-of-breed solutions to our regional and community clients so they can compete on a level playing field with anyone, including the largest and most sophisticated financial institutions," said Jeff Stiefler, chairman, president and CEO for Digital Insight.

US Bancorp Aligns Retail Payments Organization

US Bancorp has announced it is aligning its retail payments business under Pamela Joseph.
Patricia A. Wesner, executive vice president of retail payment solutions will become part of Joseph's payment team. Wesner will continue to manage U.S. Bank's consumer and small business credit card services, affinity cards, co-brand cards, debit and prepaid products.

President and COO Richard David commented: "The combination of the company's retail credit and debit card issuing business with its merchant acquiring business, creates opportunities for synergies, while providing additional focus on our goal of being a recognized leader in relationship-based payment services."

March 17, 2005

UK Police Foil Massive Bank Theft

The BBC reported today that police in London have foiled one of the biggest attempted bank thefts in Britain.

The investigation was started last October after it was discovered that computer hackers had gained access to Sumitomo Mitsui bank's computer system in London. They managed to infiltrate the system with keylogging software that would have enabled them to track every button pressed on computer keyboards.

The Guardian also reports the story:

"The rise of keyloggers poses a real threat to companies and this may be the first time we have evidence of organised criminals using the equipment to attack a bank," Alan MacDonagh, managing director of the fraud consultancy Hibis Europe told the Financial Times.

TSYS Signs ABN Amro

TSYS has announced that it has signed a seven year processing agreement with ABN Amro for its Dutch consumer and commercial credit-card portfolios.

"ABN AMRO's decision to partner with TSYS is a tremendous opportunity for us and represents the achievement of a strategic goal," says Kelley Knutson, managing director for TSYS Europe. "We are committed to the European market, and have built our platform and services to provide clients like ABN AMRO with the most technologically advanced pan-European solution."

Online Bank Sites Hit by Cross-Frame Phishing Attacks

Netcraft is reporting several incidents of online banking sites being hit recently by clever cross-site phishing attacks.

One surprising facet of hosting frauds on banking sites is that banks to date have tended to be significantly slower than hosting companies to react to fraudsters using their sites. Fraudsters have benefited from the longevity of frauds hosted on banking sites as well as their plausibility.

Jeremy Wagstaff also writes about the issue on his weblog.

DOJ Closes Investigation of FDC's Western Union

The US Department of Justice announced yesterday that it had closed its investigation into Western Union's exclusive contracting practices with its retail agents.

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March 16, 2005

Chip and Spin

The card market in the UK is nearing completion of its "chip and PIN" initiative -- replacing mag stripe only cards with cards containing chips and moving the customer from written signatures to PIN's.

Ross Anderson, Mike Bond, and Steven Murdoch have written a white paper titled "Chip and Spin" that addresses their point of view on this migration of the UK card market to "Chip and PIN". See their Chip and Spin website for more background on this thinking.

Philadelphia Fed Payment Card Center Announces New Publications

The Payment Card Center of the Federal Reserve Bank of Philadelphia has announced two new publications.

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Authorize.net Virtual Point of Sale

Authorize.net has announced the completion of its beta release of its new Virtual Point of Sale product. VPOS is designed to enable retail merchants using a PC equipped with a mag stripe reader to utilize the Authorize.net payment gateway.

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B2B Electronic Payments: Coming Soon?

Celent analyst Alenka Grealish writes for Bank Systems and Technology about business-to-business electronic payments and why higher volumes can be expected over the next five years.

Despite the formidable incumbent status of the check in business-to-business transactions, its dominance will wane. Various industry, technological and regulatory trends will propel the adoption of e-payments. The drivers of adoption include both collaborative and competitive forces and players outside the banking realm. The era of banks' molding of payment systems in their favor is over. Next-generation payment systems will be structured with corporations' needs in mind and will be influenced by technology providers.

Roanoke Accepts eChecks

Andrew Kantor reports for the Roanoke Times on that city's recent launch of eCheck acceptance.

The program lets people pay bills without using a credit card, benefiting both users and the city. That's because American Express, Discover, MasterCard and Visa charge Official Payments (the company that handles the city's credit-card processing) for each transaction. This cost is passed on to customers in the form of a "convenience fee" of 2.75 percent of their bill.

Accepting payments by check means the city doesn't have to charge those fees, but retains the speed of an all-electronic payment. "I don't have a person back here opening up the envelopes and sorting them out," Powers said. "It's already there. We submit it, we hit it, we get the money."

March 15, 2005

ChoicePoint, Bank of America Execs Testify At Senate Hearing

The US Senate Committee on Banking, Housing and Urban Affairs held a continuation hearing today at which senior executives of ChoicePoint (PDF) and Bank of America (PDF) provided additional information about the recent incidents at their companies involving the potential compromise of personal consumer information.

Survey Says Many Misunderstand Credit Scores

Fair Isaac and the Consumer Federation of America have announced the results of a new survey that shows that almost half of American consumers do not understand key facts about credit scores.

To provide consumers with basic information about credit scores, CFA and Fair Isaac have prepared a new free brochure that is being distributed by the Federal Citizen Information Center (FCIC).

"This credit score brochure contains the most important information about the score most businesses use -- the FICO credit score -- including what factors influence its rise and fall, and how consumers can get their own scores," said Cheri St. John, vice president of Global Scoring and Consumer Solutions for Fair Isaac.

The brochure is available for downloading at both FICO's and CFA's websites.

Sam's Club and GE Consumer Finance Launch New Cash Back Discover Credit Cards

Wal-Mart and GE Consumer Finance have announced they are launching two new Discover credit cards -- one for business members of Sam's Club and one for consumers.

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New Visa International Branding, Card Design

Visa LogoVisa International has announced plans to refresh and evolve its brand identity. The changes include a new look for the blue, white and gold Visa logo and changes to card design features.

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Bill Me Later To Use Princeton eCom for Presentment and Payments

Princeton eCom has announced that I4 Commerce, the developer of the Bill Me Later payment solution, will be using Princeton eCom for online bill presentment and payment.

Antitrust Activity in Card-Based Payment Systems

The Federal Reserve Bank of New York and the Review of Network Economics are sponsoring a conference in September 2005 to explore recent antitrust activity related to card payment systems.

READ MORE »

March 14, 2005

UK Banks Explore Authentication Device for Online Commerce

Elizabeth Judge reports in the Times Online (UK) on plans by UK card issuers to supply authentication devices to cardholders for use in shopping online.

Barclaycard, the world’s biggest card issuer, revealed to The Times that it had completed trials of the security device. It is in talks with leading retailers to roll out the scheme nationally. Other debit and credit card providers are expected to follow suit.

Debt on the Hill

The Hill is reporting that more than 40 members of the US House of Representatives carried at least $10,000 in credit card debt in 2003 and parts of 2004.

The lawmaker reporting the highest credit-card debt was Rep. Bobby Scott (D-Va.), who noted that in 2003 he had between $80,000 and $175,000 spread across seven credit cards. Rep. Duncan Hunter (R-Calif.), chairman of the House Armed Services Committee, listed five accounts with a total of $75,000 to $250,000 in debt.

Smart Transaction Systems Adds Contactless Support

Smart Transaction Systems has announced that its gift and loyalty card programs are now compatible with various contactless cards, tags, etc.

"STS is the first of the major gift and loyalty providers to offer contactless card technology. The new offering is compatible with the STS system that is already being used by thousands of merchants. This is an exciting innovation for the market place, and we have been looking forward to the release of this product with a great deal of anticipation," said Kevin Colaco of Paynet Transaction Services, an STS value added partner. "We believe this product will be very successful in providing a solution for companies that need to serve a lot of customers at one time."

POSDATA Certified by Hypercom

POSDATA has announced that it has been certified by Hypercom as an authorized repair service facility.

"We have awarded this designation to POSDATA because of their technical proficiencies, processes and systems. Adding POSDATA to our network of repair facilities will give merchants faster and more streamlined servicing and repair of Hypercom's highly popular and in-demand terminals,” said O.B. Rawls IV, president, Hypercom North America.

Phishing Attacks Cost Australian Bankers A$25 Million Per Year

Amanda Hodge reports in the Weekend Australian on keystroke logging attacks against online banking customers.

There's little chance the true cost of internet fraud to banks – in stolen funds and the many millions spent staying ahead of increasingly sophisticated hacking scams – will be made public. To reveal the full cost and extent would shatter fragile consumer confidence in a system that is proving increasingly vulnerable to crime.

Nova Introduces Dynamic Currency Conversion

Nova Information Systems has announced the availability of its dynamic currency conversion solution.

Dynamic Currency Conversion allows international cardholders in the U.S. the option to have their purchases instantly converted at checkout into their local currency. Currency conversion is calculated at a competitive exchange rate, and the U.S. dollar amount, conversion rate, and home currency amount are all printed on the receipt. Merchants, MSP's and other NOVA partners have the opportunity to share in the revenue generated from conversion fees.

MasterCard and Visa Agree to Common Contactless Protocol

MasterCard and Visa have announced that they have reached an agreement to share a common communications protocol and associated testing requirements for radio frequency-based contactless payments at the point of sale.

READ MORE »

PNC Bank Goes Green

As part of an initiative to integrate its business practices with environmental responsibility, PNC Bank has announced plans to ensure new bank branches meet U.S. Green Building Council Standards.

"As a bank we recognize the importance of wise investments and that the integration of green principles into our business practices enhances the value we deliver to customers, shareholders, communities and employees," says Neil Hall, CEO of regional community banking at PNC. "Good environmental sense makes good economic sense."

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