Wednesday, September 17, 2008

Let's Get Those College Students a Wedgie!

College Students Lead the Way Online
SEPTEMBER 17, 2008

Today's college students are digital natives—they have grown up with technology and Internet access at their fingertips. But what does that mean for the future? eMarketer estimates that this year 95.7% of college students—17.4 million strong—will go online at least once a month.

Note: (eMarketer defines a college student as anyone ages 18 or older who attends college full-time or part-time, including undergraduate, graduate-school and professional-school students.)

"College students are the most digitally connected demographic group in the US," says Debra Aho Williamson, senior analyst at eMarketer and author of the new report, College Students Online: Driving Change in Internet and Mobile Usage. "They have grown up with technology and it is a seamless part of their lives.Marketers looking for the next big trend online can learn a lot from college students.

"Students have played a prominent role in some of the biggest developments in the Internet and technology in recent years," says Ms. Williamson, "from social networking to the iPod."

In fact, entering college freshmen have already lived through a series of Internet-era milestones...often themselves created by college students:

  • 1990: The World Wide Web was born.
  • 1994: Two Stanford University students launched a site called "Yet Another Hierarchical Officious Oracle". It later became known by its acronym, Yahoo!. In the same year, the Mosaic Internet browser—precursor to Netscape—was created.
  • 1996: Two other Stanford students began collaborating on BackRub, which eventually became Google.
  • 1999: Northeastern University student Shawn Fanning created music file-sharing service Napster.
  • 2001: The first entry was posted to Wikipedia.
  • 2004: Harvard University student Mark Zuckerberg and a few classmates launched Facebook.
  • 2007: Apple introduced the iPhone.
"The college market is basically the testing ground for all technologies," Matt Britton, chief of brand development for youth marketing agency Mr. Youth tells eMarketer. "If it takes off there, it’s going to take off in the mass market."

"In addition, the college market is one of the most-attractive demographic groups for marketers because of students' discretionary budgets," says Ms. Williamson.|

According to a National Retail Federation (NRF) survey, conducted by BIGresearch, the back-to-college season alone is a huge purchasing occasion. Students and parents were expected to spend an estimated $11 billion on electronics in 2008.

"In so many areas, students are key drivers of change in technology usage," says Ms. Williamson. "They brought social networks into the mainstream, and such sites remain hugely popular with them."

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Turned Down By US...Wal*Mart Files for Canadian Banking License

Wal-Mart files for Canadian banking license
Hollie Shaw , Canwest News Service

TORONTO - As worldwide markets plunge, Wal-Mart Canada is vowing to carry its low-cost credo into the financial sector.  The biggest mass merchant in Canada has applied for a banking license, joining the ranks of retailers such as Canadian Tire, Sears and Loblaw.

Two years after luring a former American Express Canada executive to head up its financial services department and expand into non-bank financial products, the retailer posted mandatory public notice on Saturday of its official bank application to the Office of the Superintendent of Financial Institutions.

'A license would allow us get into banking products and the obvious one would be a credit card, but if you look at other retailers the breadth of (potential) products is huge,' Wal-Mart spokesman Kevin Groh said.  "Services common to some other retailers (include) savings accounts, loans, mortgages, RSPs, GICs . . . but at this point it would be premature for us to speculate" the breadth of its offering, he said.

One thing seems certain - the price competition that Wal-Mart Canada has brought to the retail sector in the past decade, from Pampers to groceries, will likely be carried into the banking segment.  "Our approach in everything we have done to date is to be a price leader and eliminate costs that would pass on to customers," Groh said. 

Keith Howlett, retailing analyst at Desjardins Securities, said getting
into financial services is a valuable income stream for retailers.

"It is pretty lucrative for Loblaw and at Canadian Tire it was a big growth driver for them," he said. Credit cards are also a valuable source of information about its consumers, letting them see where and how they spend their money.

"I think Wal-Mart could have a huge opportunity there, and quite a different offering from ING or President's Choice Financial or Canadian Tire and something quite different from the banks. The traffic in their stores is enormous and is skewed to those least likely to get the value-added from banks," he said, noting that banks mostly try to court customers with high income or high savings.

"Wal-Mart could design a business model that goes against the grain." One such business, he suggested, would be to offer a lower-fee option on payday loans and services provided by companies such as Money Mart. "It's a huge, fast-growing business, it covers a huge number of people," but no banks or retailers are tapping into it.

Close to two years ago, Wal-Mart Canada signaled its interest in the banking business when it hired Trudy Fahie, former vice-president of financial services for American Express Canada, to take on the same role - a newly created position - at Wal-Mart Canada. Wal-Mart currently has ATMs and offers extended warranties, wire transfers and emergency bill payments through Western Union.

It's a different story in the United States, where the retailer has met with resistance to efforts to get into banking. Its applications for bank charters in Oklahoma and California were turned down and it ended up withdrawing an application in Utah.

Contactless and Clueless

Despite the fact that over 90% of Americans that own contactless payments cards like using them, three quarters of the population are not even aware of the technology's existence, according to a survey commissioned by the Smart Card Alliance.

Javelin Strategy and Research surveyed 500 contactless card users, finding that 92% think the technology is fast and easy to use. Respondents also use their cards regularly - with over 22% making payments with their contactless cards more than six times per month.

Contactless card users are also keen on mobile payments. The research found 43% are likely to use a handset as a mobile wallet, compared to just 19% of people who don't use contactless cards.

Nearly half - 47% - of contactless card owners would even switch carriers in order to make mobile payments.

The technology is rapidly gaining in popularity, with nine percent of the US population now possessing a contactless card. Last year the number of open network contactless cards in circulation reached 35 million, nearly double the 19 million in 2006.

Merchants are also adopting the technology, with an estimated 75,000, including taxi firms and transport operators as well as retailers, now accepting the cards.

"Contactless payment acceptance at merchants is taking off much faster than PIN debit did," says John Suchanec, SVP, payment research and innovations, Bank of America. "Contactless acceptance is already growing at a rate that it took seven years to achieve with PIN debit. Mobile will accelerate the curve."

But Javelin also questioned 1500 people representative of the US online population (not necessarily contactless card users) and found awareness of the technology is still poor.

Only a quarter of those surveyed are familiar with contactless, although this is up from 15% in 2006.
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More on More Card Skimming...

Tampa police show a skimming device — the false card slot goes over the original; underneath is a card reader that captures information. A camera is typically hidden on the ATM, often in a pamphlet holder, angled to view the monitor and keypad.

By KEITH MORELLI | The Tampa Tribune

A troubling trend in automated teller machinations has found its way into the Bay area and Tampa police say anyone who uses the convenient roadside bankers can be a potential victim.

Three times over the past two weeks, "skimmers" have been attached to automatic teller machines in the Bay area, devices that steal the numbers off debit and credit cards and record personal identification numbers as they are tapped into the keyboard.

Among the most recent victims: Tampa police Cpl. Mark Altimari, who put his debit card into the Bank of America ATM on the corner of Nebraska and Fowler avenues around lunchtime Sept. 5. He wanted to make a $20 withdrawal.

"I noticed my card wouldn't slide in smoothly," he said at a Monday news conference called to warn banking customers of the latest method of identity theft. "It kind of seemed odd to me." His card went in but only partially came out, he said. He pulled on it, and the whole card reader pulled off the face of the ATM. That's when he knew his card had been scanned by a device that was not an original part of the machine.

He immediately notified the Bank of America and bank security officials told him to check for a camera. He felt behind the trim over the keyboard and found a tiny camera the size of two sticks of gum hidden there. The entire piece of trim itself had been taped into place and looked like it was a part of the ATM. The camera, positioned over a tiny hole in the trim, was aimed at the keyboard to record PIN numbers as they are punched in.

Tampa police Sgt. Becky Bodamer said a similar card scanning device, this one less bulky and barely noticeable, was recovered at Pilot Bank, 4005 S. Dale Mabry Highway, around 4 p.m. Friday.

As of Monday morning, no one had reported missing any money from accounts in either of the banks, Bodamer said, but it was uncertain how many people had used the machines.

Some sophisticated devices are designed to transmit the card number the moment it is being used to criminals nearby, she said. But these devices were not that technologically advanced. They had to be gathered from the ATM and plugged into a computer to retrieve the data, she said. Because they were seized by police, it is assumed the thieves did not have a chance to obtain the information.

The two devices were different enough to lead detectives to think they likely were not put there by the same people, she said. Detectives are in contact with Clearwater investigators, who discovered a similar scanner at a bank there last week.

Clearwater police said that more than 20 people who used that Wachovia ATM over a two-day period last week have complained about money being pilfered from their accounts.

Officers found evidence of an adhesive on the ATM at the bank branch office at 2699 Gulf-to-Bay Blvd. They said the scanning device probably was attached to the machine and recorded information about customers' accounts, including personal identification numbers, as the customers used the machines.

In all cases, the devices looked like ordinary card slots, but were not. The false slot holds an additional card reader to capture information. Hidden cameras are one method of capturing a PIN, but another method is a false keyboard, glued onto the face of the ATM directly above the real keyboard. The fake records the PIN number as it is punched in.

If working properly, the machine will give the card back, along with any cash withdrawals, and the user would walk away not knowing their personal banking information had been compromised, Bodamer said.

In many instances, she said, the devices, "can't be detected unless you're a bank official."

Tampa police issued these tips for ATM safety:

  • Use secure ATM machines, inside a bank lobby or inside a store. Offenders can install the scanners quickly, but likely won't go inside a place of business to do it.
  • Cover the keyboard with your free hand when you punch in your PIN. This obstructs the view of any hidden cameras that may be present.
  • Skimming devices may protrude from the face of the ATM. If something looks suspicious or if the keyboard jiggles or the card slot is not quite level, leave and use another ATM and contact the bank to report it.
  • If the machine keeps your card, call the bank immediately.
  • Don't accept help from anyone hanging around the ATM. They may be there to try to observe your PIN number.

Bodamer said the ATM data-thieving trend began in South Florida and is making its way north. Those behind the high-tech identity thievery are likely part of an organized group with knowledge of how such instruments work, she said, and enough cash to invest in the equipment.

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Pre-Authorized Debits in Canada Have New Requirements

New requirements for pre-authorized debits (PADs) mean changes for businesses using this payment option
OTTAWA, Sept. 16 /CNW Telbec/ - The Canadian Payments Association (CPA) has published new requirements for pre-authorized debits (PADs) to ensure appropriate information is disclosed to consumers and other parties using this option to pay for goods or services. As a result, all businesses using PADs to collect payments from their customers will need to make some changes to the forms or processes through which they obtain customers' authorization.

A PAD is a payment based on an agreement between a business and its customer through which the business obtains the customer's authorization to debit his or her bank account in accordance with specified terms. Requirements for these items to be processed through the clearing system are set out in the CPA's Rule H1 - Pre-authorized Debits. Recurring charges to credit cards are outside the scope of this framework.

On average, more than 2.3 million PADs were processed through the Canadian clearing system each business day during 2007.Mandatory Information Elements for Pre-authorized Debit Agreements

A key change in the new version of Rule H1 is the definition of mandatory elements to be included in the Payor's PAD Agreement - that is, the form or process through which the business or "payee" obtains the customer's authorization to debit his or her bank account. Among the mandatory elements are:

- information on how to cancel a PAD,
- the payee's contact information, and
- a standard statement with regard to the consumer's rights of recourse in the event of a debit that does not follow the terms of the agreement or is not authorized.

All payees using PADs must update their forms or electronic processes to reflect these new requirements by February 28, 2010. Each payee must submit a copy of its proposed forms and/or electronic processes to its financial institution to confirm that they meet the new requirements. Payor's PAD Agreements in effect before that date are grandfathered to avoid potential disruption to both consumers and payees. As part of the transition, CPA's member financial institutions will be updating their contractual arrangements with corporate clients on whose behalf they enter PADs into the clearing system to incorporate their clients' new obligations as PAD payees.

More Flexible Framework for Electronic PAD Agreements

The new framework also provides more flexibility to establish Payor's PAD Agreements through electronic means such as over the telephone or the internet. Payees who wish to initiate PAD Agreements electronically must submit their proposed electronic forms or processes to their financial
institution for review, including the proposed process to confirm the identity of the payor in the electronic environment. In addition, for all electronic Payor's PAD Agreements, the payee must send a written confirmation of all details to the payor in advance of the first PAD; the standard period is 15 days before the first PAD, which may be reduced by mutual agreement, but may not be waived

More information on the new requirements, including a copy of Rule H1, is available on the CPA's web site at

The Canadian Payments Association (CPA), created by an Act of Parliament in 1980, operates Canada's national clearing and settlement systems; facilitates their interaction with other systems involved in the clearing and settlement of payments; and facilitates the development of new payment methods and technologies. It promotes the efficiency, safety and soundness of the clearing and settlement systems, taking into account the interests of users.Its current membership comprises virtually all of Canada's bank and non-bank deposit-taking financial institutions. In 2007, the CPA's systems cleared and settled transactions averaging $203 billion each business day.

For further information: Roger Dowdall, Vice-President, Communications and Education, Canadian Payments Association, (613) 238-4173, ext 3240
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