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« September 25, 2005 - October 1, 2005 | Main | October 9, 2005 - October 15, 2005 »

October 08, 2005

The Best Credit Card Deals

Ron Lieber reports for the Saturday Wall St. Journal on where to find the best deals in credit cards.

Down in Arkansas, far from states like Delaware and New York where credit-card giants make their homes, lives a little bank that offers big savings.

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One from American Express

American Express has announced the launch of One from American Express, a new credit card that contributes 1% of purchases to an FDIC-insured high-yield savings account.

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Are Merchants Doing Enough To Prevent ID Theft?

Andrea Coombes writes for MarketWatch.com about the wealth of personal data collected by companies nationwide and how well its protected.

How well are companies protecting data? If this were school, they'd be close to failing, said Tom Arnold, a partner at PSC, a consulting firm that secures merchants' payment systems. PSC gives each merchant an initial security score.

"The average score first time out is around 52%," he said. "The level of awareness and general concern is up and there is a sense of urgency regarding the protection of information, but the scorecard suggests the effectiveness is still about a 'D' in anybody's book."

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New California Laws Will Help Protect Against Identity Theft

According to the State of California Department of Consumer Affairs, several bills have been signed into law in California that will help prevent identity theft.  Among them are measures that will ban “phishing,” increase the penalties for "spam," and outlaw the use of equipment to make fake documents.

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Fingerprint Payments Taking Off Despite Security Concerns

Robert Lemos reports for SecurityFocus on the growth of fingerprint biometric-based payments by Pay By Touch Solutions and BioPay.

However, at least one of BioPay's practices has raised eyebrows among security and privacy experts. While Pay By Touch executives say the company does not keep the original image of the fingerprints used by the customer to enroll, BioPay does, storing two fingerprints images from each of its two million customers encrypted in an offline database.

Separately, Emma Trincal writes for TheStreet.com about the hedge funds that have recently funded Pay By Touch Solutions.

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October 07, 2005

October 06, 2005

Taking On Credit Card Fees

Ellen Rosen reports for the New York Times on the recent lawsuits filed by merchants against the credit card associations and major banks regarding interchange fees.

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Visa Chief Proposes Security Agency for Credit Card Industry

Eric Dash reports for the New York Times on a proposal by Visa USA CEO John Philip Coghlan to create a private standard-setting agency for the credit card industry for security rules.

In a brief interview, Mr. Coghlan said a standard-setting body would allow for a "more balanced approach" of "carrots rather than sticks" by allowing banks and merchants to distinguish themselves as well as obtain financial rewards for tighter data security. But enforcement would remain a challenge.

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Credit-Card Use Is Up Despite Concern About Fraud

Christopher Conkey reports for the Wall St. Journal on a consumer survey by Javelin Strategy & Research that concluded that only 13% said the problem of payments fraud would improve over the next six months, while 55% expected it would worsen. 35% had a low level of confidence in their ability to avoid becoming a victim of credit- or debit-card fraud.

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Nordstrom Launches New Debit Card

Nordstrom has announced the launch of Nordstrom MOD, an exclusive debit card for Nordstrom that deducts Nordstrom purchases directly from a customer's personal bank account and offers all the benefits of the Nordstrom Rewards program previously unique to Nordstrom retail and Visa® card holders.

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Visa CEO Calls For Data Protection Laws, Incentives

ComputerWorld reports on comments by Visa USA CEO John Coghlan at this week's Security Summity regarding pending legislation regarding the obligations on companies following data breaches as well as potential rewards to merchants for improved security practices.

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October 05, 2005

First Data, Chase Agree to Integrate Chase Merchant Services, Paymentech

JPMorgan Chase and First Data Corp. have announced an agreement to integrate the companies' jointly owned Chase Merchant Services and Paymentech merchant businesses, to be operated under the name of Chase Paymentech Solutions, LLC. The joint venture will be owned in the aggregate -- 51 percent by Chase and 49 percent by First Data.  Chase Paymentech Solutions will be directed by a combined executive team led by Michael P. Duffy, Paymentech's current president and chief executive officer.

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Visa Hosts Industry Leaders at First Security Summit

In a press release this morning, Visa USA has provided some of the commentary of President and CEO John Philip Coghlan at this week's Security Summit in Washington, DC.

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Bank of America Introduces "Keep the Change"

Bank of America has launched "Keep the Change", a new savings feature tied to debit cards.

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Pay By Touch Solutions Closes $130 Million in Financing

Pay By Touch Solutions has announced that it has secured $130 million in new financing: $75 million was raised in senior secured notes and an additional $55 million was raised in a convertible promissory notes.

"We are thrilled to have major investments from two of the world's most respected hedge funds in this innovative financing. They will be substantial value added partners as we continue our rapid growth," said Gus Spanos, Executive Vice President of Pay By Touch Solutions.

"We are changing the way the world pays," said John Rogers, founder, chairman and CEO of Pay By Touch Solutions. "The additional funding allows us to continue development of secure biometric products and services as well as to pursue strategic acquisitions in vertical markets such as healthcare, loyalty products, online shopping, gaming, banking, finance, and implementations in businesses such as lodging, airlines, quick service restaurants, gas stations, car rentals, health clubs, theme parks, sports stadiums...the opportunities are boundless."

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October 04, 2005

Publix Announces Suit Against VISA and MasterCard

Publix has announced it has filed a federal lawsuit against Visa and MasterCard "alleging that they are individually, along with their respective member banks, engaging in deceptive practices and restricting competition in violation of antitrust laws.

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Pay By Touch Financing

Matt Marshall reports for the San Jose Mercury News this morning on an expected announcement today by Pay By Touch Solutions regarding new financing.  Marshall reports in his article that the company will announce $130 million in new financing -- $55 million from convertible notes and $75 million in loans.

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October 03, 2005

In Memoriam: Gary Craft 1958-2005

Gary Craft, founder and CEO of Financial DNA and an analyst who uniquely covered payments and financial services companies for many years, passed away September 26, 2005 due to complications arising from acute myeloid leukemia, with which he had been diagnosed one week prior. He was 47.

UK: Credit Card Issuers Feel Squeeze

Paul Davis reports for the Financial Times on the financial pressures being faced by credit card issuers in the UK.

A slowdown in consumer spending, and a simultaneous rise in defaults as over-indebted consumers try to absorb higher fuel prices, are combining to reduce the outlook for interest-payment revenues for the credit card industry.

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Forces Shaping the Payments Environment

The Federal Reserve Bank of Chicago has posted a summary of its 2005 Payments Conference titled "Forces Shaping the Payments Environment" (pdf).

The case of PayPal demonstrates that if existing payment products are unable to satisfy the requirements of the marketplace, new providers may emerge to provide superior payment solutions. Interestingly, such products may be provided by nontraditional payment providers. However, it appears that build upon the existing payment infrastructure. Thus, partnerships with existing payment providers and networks may be critical for greater market adoption.

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Picking Up the Tab for Payments

The October issue of the National Retail Federation's Stores magazine has a cover story by Patricia Murphy on increasing retailer opposition to bank card interchange fees.

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Wooing China's Credit-Card Users

Andrew Browne reports from Shanghai for the Wall St. Journal on China's "credit card war".

David Von Emloh, a McKinsey partner in Shanghai, estimates that issuers are paying so much to lure customers that half of the cards now in circulation will never be profitable. There's a risk issuers "will destroy the economics of the industry," he says.

CardSystems and CyberSource

Erica Sagon reports for the Arizona Republic on the pending acquisition of CardSystems by CyberSource.

Metavante to Acquire LINK2GOV

Metavante has announced the signing of a definitive merger agreement to acquire LINK2GOV Corp. of Nashville, Tenn. The company will continue to operate under the name of LINK2GOV, and will become a subsidiary of Metavante Corporation, with existing management continuing in their positions.

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