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May 03, 2008

Payments News - Weekly Wrap - May 3, 2008

Here's a review of this week's top stories on Payments News. If you missed it, last week's Weekly Wrap is here.

You can find all of our Weekly Wrap summaries in the Payments News Weekly Wrap Archive. They're published every Saturday and look back at the highlights of the week's news. Please send us on how we can improve the Weekly Wrap!

Debit Card Scams Hit Shoppers in Silicon Valley

Jessie Mangaliman and Mark Gomez write for the San Jose Mercury News about recent incidents of debit card skimming in Silicon Valley resulting in counterfeit cards being used to attack ATMs and get cash. "It's unclear how, but police said the thieves may have swapped a debit-card-reading machine at one or more of the store's checkout stands, or installed small, easily hidden skimming devices that collect a shopper's card number and personal identification codes"

May 02, 2008

How to Comment on the Fed's Proposed Credit Card Rule Changes

Earlier today, the Federal Reserve proposed new rules to prohibit unfair practices regarding credit cards and overdraft services. that would, among other provisions, protect consumers from unexpected increases in the rate charged on pre-existing credit card balances.

In addition, the proposed rules addresses practices in connection with a bank’s payment of overdrafts on a deposit account, whether the overdraft is created by check, a withdrawal at an ATM, a debit card purchase, or other transactions. The proposed rules require institutions to provide consumers with notice and an opportunity to opt out of the payment of overdrafts, before any overdraft fees or charges may be imposed on consumers' accounts.

The Fed has been joined in putting forth these proposed changes by the Office of Thrift Supervision and the National Credit Union Administration.

The Fed has provided a seventy-five day comment period - to approximately mid-July. Providing your comments to the Fed is easy:

  • On the Fed's web site (scroll down to the bottom of the page to Regulation AA - click on submit comment)
  • By email to: regs.comments@federalreserve.gov
  • By fax to (202) 452-3819 or (202) 452-3102
  • By regular mail to:

    Jennifer J. Johnson
    Secretary, Board of Governors of the Federal Reserve System
    20th Street and Constitution Avenue, NW
    Washington, DC 20551

Be sure to reference Docket No. R-1314 in your written comments.

All comments will be public and can be viewed online on the Fed's web site. Pro or con - this is an important payment card industry issue worth your comments.

The Tangled Web of PCI Compliance

In an article titled 'The Tangled Web of PCI Compliance', Richard Adhikari writes for InternetNews.com - 'The best protection is to have an end-to-end solution combining source code reviews, vulnerability scans and Web application firewalls.'

Cloning Credit and Debit Cards

In an article titled 'Crooks Have Your Card and You Don't Even Know It', Elisabeth Leamy reports for ABC News on credit and debit card cloning. She writes: "It's a bonanza for crooks. They used to have to risk going into stores to buy pricey merchandise, which they then sold for cash. Now they can just drain ATMs. Authorities say specialized crews do nothing but hit ATMs, cashing out on behalf of other identity thieves and taking a commission."

Mobile Banking with Sprint and PayPal

Menekse Gencer of PayPal blogs on the PayPal Blog about PayPal's mobile money transfer application now available on Sprint phones.

A Look at the Proposed Fed/OTS/NCUA Credit Card Regulations

Adam Levitin writes on the Credit Slips blog about his take on the proposed Fed/OTS/NCUA Credit Card Regulations. "Some of the proposed rules are quite favorable for consumer interests. Others do not go far enough, however, and perhaps most importantly, there are several major issues that the proposed rules simply do not address."

New Technologies in the Remittance Space

Celent has published a new report titled 'The Would-Be Disruptors: New Technologies in the Remittance Space' that 'examines the application of technology that holds the promise of making cross-border remittances less expensive, quicker, more convenient, and more secure than traditional low-tech remittance models.' READ MORE »

ABA Issues Statement on Credit Card Reform Rules

Edward L. Yingling, president and CEO of the American Bankers Association, issued a press release today discussing the Federal Reserve's proposed rules regarding credit card practices and overdraft fees saying: “The Federal Reserve’s proposal is an unprecedented regulatory intrusion into marketplace pricing and product offerings. We are deeply concerned that these rules will result in less competition, higher consumer prices, fewer consumer choices and reduced consumer access to credit cards. In short, everyday consumers will bear the real cost of these proposals. READ MORE »

Fed Proposes Rules to Prohibit Unfair Practices on Cards, Overdrafts

The Federal Reserve Board has announced proposed new rules to 'prohibit unfair practices regarding credit cards and overdraft services that would, among other provisions, protect consumers from unexpected increases in the rate charged on pre-existing credit card balances.' The Fed is acting in concert with the Office of Thrift Supervision and the National Credit Union Administration in pursuing these new rules.

"The proposed rules are intended to establish a new baseline for fairness in how credit card plans operate," said Federal Reserve Chairman Ben S. Bernanke. "Consumers relying on credit cards should be better able to predict how their decisions and actions will affect their costs." READ MORE »

The Legal Implications of the PCI Data Security Standard

David Navetta, a lawyer with InfoSecCompliance, writes for SC Magazine about the legal implications of the PCI Data Security Standard (PCI-DSS), saying it 'now presents serious legal challenges and risk for retailers.'

Big Winners and Big Losers in Payments

Unisys has published an insights paper titled Big Winners and Big Losers in Payments - – Where Is Your Bank Headed? icon_PDF_small.gif. "In 2008 banks need to face the new challenges head on to become payments winners in 2010. It is time for banks to modernize their internal infrastructure to work FOR them instead of AGAINST them, enabling them to quickly develop new, competitive services. They should prepare themselves for a complex exercise that will likely take them several years to complete. Banks need to act now in order to survive and prosper to become big winners in tomorrow’s payments business."

Visa Announces Corporate Responsibility Program

Visa Inc. has announced its first corporate responsibility program at the Clinton Global Initiative (CGI) mid-year meeting, where Visa was recognized as the first CGI "commitment to action" of 2008. READ MORE »

MasterCard Bumps PayPass No Signature Threshold to $50 in Canada

MasterCard has announced that in Canada it has increased its purchase threshold limit for PayPass Tap & Go purchases to $50 across all retail categories, including quick serve restaurants, grocery stores, gas stations, movie theatres and convenience stores. READ MORE »

Amazon Sues New York Over State Law on Collection of Sales Tax

Saul Hansell reports for the New York Times that Amazon.com has 'filed a lawsuit challenging New York State’s new law forcing online retailers to collect sales tax on shipments to state residents.' Apparently the law is known anecdotally in the state as the "Amazon tax".

NCUA Joins In New Rules For Card Issuers, Overdraft Fees

The National Credit Union Administration (NCUA) Board has announced it has approved a joint proposed rule prohibiting credit card and overdraft service practices as unfair or deceptive under Section 5 of the Federal Trade Commission Act.

Developments in Interchange Fees in the United States and Abroad

In a Payment Systems Research Briefing titled Developments in Interchange Fees in the United States and Abroad icon_PDF_small.gif, Terri Bradford and Fumiko Hayashi of the Federal Reserve Bank of Kansas City provide an update on developments in interchange fees in the United States and recent public authority involvement in interchange fees abroad. They write: "While regulation of interchange fees is still just a point of discussion in the United States, regulation abroad is a reality. In about 20 countries, public authorities have taken actions that limit the level of interchange fees or merchant discount fees."

May 01, 2008

Bank of America's Asiana Airlines American Express Credit Card

Asiana Airlines, Bank of America, and American Express have announced the launch of the new Asiana American Express Card from Bank of America. The card provides two miles per dollar on everyday purchases and access to members-only golf courses in Korea and throughout the Asia Pacific region. READ MORE »

OTS Proposes New Rules on Credit Cards, Overdraft Services

The Office of Thrift Supervision (OTS) has announced it has approved a proposal to prohibit savings associations from engaging in unfair or deceptive acts or practices regarding credit cards and overdraft services that violate the Federal Trade Commission Act. The Federal Reserve Board and the National Credit Union Administration are expected to also approve the proposal shortly.

According to the OTS, the joint proposal addresses practices that have raised concern about fairness and transparency. For credit cards, the proposed rule would address: (1) unfair time periods for making payments; (2) unfair payment allocations; (3) unfair interest rate increases on outstanding balances; (4) unfair fees from credit holds; (5) unfair methods of computing balances; (6) unfair security deposits and fees charged to an account for the issuance of credit; and (7) deceptive offers of credit. For overdraft protection services on deposit accounts, the proposed rule would address: (1) a consumer’s ability to opt out of overdraft services; and (2) unfair fees for debit holds. A summary of the proposed rules icon_PDF_small.gif is available online. READ MORE »

A New Day for TSYS

Tony Adams reports for the Columbus (GA) Ledger-Enquirer about yesterday's first ever annual meeting for TSYS as an independent company. 'Tomlinson [TSYS CEO] said his company will soon introduce a single card that lets consumers choose between a debit or credit transaction at the point of sale.' A webcast of the annual meeting is available at the TSYS web site.

Global Payments Supports PayPass Contactless Acceptance in Canada

Global Payments has announced that Pioneer Petroleums, one of Ontario's largest independent gasoline retailers, is now accepting MasterCard PayPass contactless card acceptance. The service, which allows consumers to pay for goods and services with the simple tap of their payment card, is available at more than 140 Pioneer locations across Ontario. READ MORE »

Remote Deposit Capture Saves Steps and Gas

Christina Rexrode writes for the Charlotte Observer about the benefits of remote deposit capture to both businesses and consumers. But she notes that some large banks have no plans for introducing the service for consumers.

Consumer Groups Applaud Dodd's Credit Card Reform Bill

A coalition of consumer, labor and civil rights groups yesterday lauded what they called tough new legislation to prohibit abusive and unfair credit card practices, introduced by Senate Banking Committee Chairman Chris Dodd. In a letter of support for the legislation icon_PDF_small.gif, the groups noted that “as the U.S. economy tightens, financially vulnerable families need the protections of the Credit CARD Act more than ever.” READ MORE »

Sen. Chris Dodd Introduces Major Reform of Credit Card Practices

Senator Chris Dodd (D-CT), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, yesterday introduced legislation to 'improve credit card billing, marketing, and disclosure practices.' According to Dodd, 'the Credit Card Accountability, Responsibility and Disclosure Act (the C.A.R.D. Act) is aimed at stopping credit card practices that drag consumers into staggering amounts of debt, and too often harm, rather than help, the ability of American families to move up the economic ladder.'

Dodd introduced similar legislation in 2005 that died in Committee. This year, Politico.com reports that 'Democrats believe the issue is an election-year winner, offering their candidates a way to get out in front of the current economic turmoil and target an industry reviled by consumers. Both Democratic presidential rivals — Illinois Sen. Barack Obama and New York Sen. Hillary Rodham Clinton — have plans addressing credit card abuses.' READ MORE »

Chase, Canadian Cancer Society Launch Charitable Card in Canada

Chase Card Services and the Canadian Cancer Society have announced the launch of the PayPass-enabled Canadian Cancer Society MasterCard from Chase. By using the card for daily purchases, one per cent of customers’ eligible net purchases will be donated directly to the Canadian Cancer Society. READ MORE »

Barclaycard, InterContinental Hotel Group Launch Rewards Visa Card

In the UK, Barclaycard and InterContinental Hotel Group (IHG) have announced the launch of the Priority Club Rewards Visa credit card. READ MORE »

WaMu Launches Paperless Checking Account Openings on the Web

Washington Mutual has announced a new account opening experience that it says couples 100% online approval and opening, and eliminates the need to mail a traditional signature card. Rather than the signature card, the new customer 'uses the first check in their checkbook, which has been specially designed so that once written and processed, it is scanned and used to serve as the sample signature for the account.' READ MORE »

April 30, 2008

More About Other Payments and Banking Blogs

The list of other payments and banking-related blogs we started last week has just about doubled in size over the last couple of days! We've now got over 25 blogs listed - along with widgets displaying the latest RSS feeds from each blog. You can quickly scan the page for stories that might be of interest and then click through to read the full text of each story. Clicking on the blog's name takes you to that blog's home page. Hope you find this useful and that it's helpful introducing you to some new sources of payments insights!

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