Thursday, October 22, 2009

BofA To Sell First Republic Bank

October 22, 2009 (FinancialWire) — Bank of America Corp. (NYSE: BAC) said it has signed a definitive agreement to sell First Republic Bank to a number of investors, led by First Republic’s existing management, and including investment funds managed by Colony Capital, LLC and General Atlantic LLC.

First Republic was acquired by B of A on January 1, 2009 as part of its acquisition of Merrill Lynch & Co. As of Sept. 30, 2009, First Republic posted $19 billion in total assets, $16 billion in deposits, and $15 billion in wealth management assets under management.

The transaction is scheduled to close in the second quarter of 2010. Terms were not disclosed.

Charlotte, North Carolina-based Bank of America serves around 53 million consumer and small business relationships with 6,000 retail banking offices, more than 18,000 ATMs and online banking with more than 29 million active users.

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Microsoft Talks Browser Security at RSA Conference Europe 2009

Microsoft puts a spotlight on browser security

by Mirko Zorz - Wednesday, 21 October 2009.

The Internet is growing. With the steady rise of the number of users from emerging markets getting computers and joining the online world, opportunities abound for the bad guys to launch worldwide attacks. Some of these attacks target specifically these new markets and use password stealers and social engineering techniques. However, there is still a vast range of attacks that targets users through the Web browser.

In general, people tend to be confused when it comes to online security. They read security horror stories in the newspaper and they look to the operating system vendors and browser makers to make sure they are secure.

At the RSA Conference 2009 Europe in London today, Amy Barzdukas, General Manager, Internet Explorer and Consumer Security at Microsoft, discussed what Microsoft is doing to improve the security in Internet Explorer 8.

Continue Reading

"Card Trapping" the Latest Rage with the Bad Guys

Fraudsters trying to capture bank cards at machines

Jeremy Kirk

22.10.2009 kl 10:51 | IDG News Service

If your cash card gets eaten by the automated-teller machine, it may not end up in the hands of a bank employee.

European financial institutions are seeing a sharp rise in card "trapping," where criminals use various tricks in order to capture and retrieve a person's ATM card for fraudulent use.
For the first half of this year, financial institutions reported 1,045 trapping incidents, according to a new report from the European ATM Security Team (EAST), a nonprofit group composed of financial institutions and law enforcement. The figure, which covers 20 countries within the Single Euro Payments Area (SEPA), represents a 640 percent increase over the first half of 2008.

"For the first time, we've seen a significant spike in the number of card-trapping incidents," said Lachlan Gunn, EAST's coordinator. "It's a new trend."

Continue Reading at ComputerWorld

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PNC Earns $559 Million in Third Quarter and $1.3 Billion Year-To-Date
Strong quarterly earnings and capital growth
Credit quality deterioration eases

PITTSBURGH, Oct. 22 /PRNewswire-FirstCall/ -- The PNC Financial Services Group, Inc. (NYSE: PNC) today reported net income of $559 million, or $1.00 per diluted common share, for the third quarter of 2009 compared with net income of $207 million, or $.14 per diluted common share, for the second quarter of 2009. For the first nine months of 2009, the company earned net income of $1.30 billion, or $2.17 per diluted common share. Net income was $1.16 billion, or $3.23 per diluted common share, for the first nine months of 2008.

"PNC continued to demonstrate its resiliency in the economic downturn with strong third quarter earnings growth," said James E. Rohr, chairman and chief executive officer. "Once again we delivered pretax pre-provision earnings significantly in excess of our credit costs resulting in growth in capital. We strengthened our balance sheet which we believe is well positioned as the economy begins to recover and the pace of credit quality deterioration eases. Sales across the franchise were strong and we see growing momentum as we added clients and deepened customer relationships in the quarter. We are building on the value of our combined company and are well prepared for the first wave of National City client conversions in early November. As our results demonstrate, we continue to execute against our plans to deliver significant shareholder value now and in the future."


  • Pretax pre-provision earnings of $1.7 billion exceeded the provision for credit losses by more than $750 million in the third quarter of 2009.

  • Total revenue of $4.0 billion for the quarter reflected strong net interest income and noninterest income as PNC's diverse sources of revenue continued to deliver high quality results. The net interest margin increased 16 basis points linked quarter to 3.76 percent for the third quarter of 2009 primarily due to a substantial reduction in the overall cost of funds.

  • Expenses remained well controlled and declined $279 million, or 10 percent, compared with the linked quarter.

  • Capital ratios strengthened as PNC increased the estimated Tier 1 risk-based capital ratio by 30 basis points to 10.8 percent at September 30, 2009 and added 20 basis points to the estimated Tier 1 common equity ratio which was 5.5 percent at September 30, 2009. PNC plans to redeem the preferred shares issued under the TARP Capital Purchase Program when appropriate and in a shareholder-friendly manner, subject to approval by its banking regulators.

  • PNC continued to maintain a strong liquidity position with an 87 percent loan to deposit ratio at September 30, 2009 combined with significant liquid assets and borrowing capacity. Transaction deposits increased $1 billion during the third quarter, reflecting growth of approximately $3 billion before the impact of the required branch divestitures that included $2 billion of transaction deposits. During the quarter the company continued to manage deposit pricing, reducing nonrelationship certificates of deposit.

  • Loans declined 3 percent during the quarter to $161 billion reflecting paydowns and reduced demand as customers decreased debt, as well as net charge-offs. PNC remains committed to responsible lending, and loans and commitments of approximately $28 billion were originated and renewed during the third quarter as the company continued to make credit available.

  • Credit quality deterioration occurred at a slower pace during the third quarter. PNC strengthened loan loss reserves. The provision for credit losses exceeded net charge-offs by $264 million and the ratio of allowance for loan and lease losses to total loans increased to 2.99 percent at September 30, 2009 from 2.77 percent at June 30, 2009. Net charge-offs to average loans were 1.59 percent on an annualized basis for the third quarter down from 1.89 percent for the second quarter of 2009. The allowance for loan and lease losses of $4.8 billion combined with the fair value marks of $6.6 billion on acquired impaired loans represented approximately 7 percent of loans outstanding at September 30, 2009.

  • Overall the acquisition of National City Corporation continued to exceed expectations.
    • The transaction was accretive to year-to-date earnings and is expected to be accretive for the full year.

    • Cost savings of approximately $200 million were realized in the third quarter, an increase of $60 million from the second quarter. This brings cumulative savings to more than $460 million, ahead of plan and on track to exceed the $1.2 billion two-year goal.

    • The required divestiture of 61 branches including $4.1 billion of deposits and $.8 billion of loans was completed by September 4, 2009.

    • The first major conversion of National City customers to the PNC platform is scheduled for completion by November 9, 2009, with the remaining conversions to be completed by June 2010.

    • Consolidation of bank charters is planned for early November 2009.

    • The combined company is committed to delivering the PNC brand for client and business growth.

    Read the Entire Press Release at

Online Banking Provide Opportunity to Rebuild Trust Between Banks and Consumers, Says MasterCard CFO

According to BankTracker...Lawrence Flanagan, the Chief Financial Officer of MasterCard, recently had a little heart-to-heart with Forbes about the need to rebuild trust between financial institutions and consumers.

Mr. Flanagan expressed his views on  recent turmoil in the industry which has caused customers to feel the need for more security and personal control over their banking.

Internet banking and have given consumers the power to, not only have a strong medium with which to voice wither opinions, but also provided them with the means to literally take their banking into their own hands.  (Iagree!  consumers can use their own hands to swipe their own card and enter their own PIN!)

With the ability to have the details of their banking information at their fingertips at all times, customers have much more power in the relationship with banks, and with this new dynamic and the technology that makes it possible comes a unique opportunity for banking institutions to rethink the way that they interact with their clients, and rebuild a relationship with them based on mutual understanding and trust.

...Consumers are still wary of the financial sector as a whole, and so will not be fooled by the usual smoke and mirrors act of traditional bank marketing schemes. As Mr. Flanagan put it, “…consumers can sniff out a commercial pitch.  Editor's Note:  Oh does he mean to say that useless banking promotions are...useless?  How about a useful one that allows consumers to take their banking into their own that offers two two-factor that reduces fear, induces trust and eliminates phishing? 

The key to engagement and building trust is authenticity (nee: authentication) and giving them the tools they need to make their lives easier.”
For example, a HomeATM Authentication Device which 100% replicates the process trusted to dispense cash from an ATM.  Swipe Card,  Enter PIN, using existing bank rails, existing bank cards and existing PINs.  So if MasterCard's CFO sees the opportunity for banks, does he see the opportunity for MasterCard to provide the banks with the "tool" that would "carpe diem" it?   

Read the entire article here 

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RSA 2009: Fake Chip and PIN readers hit UK

Fraudsters are being given a fake chip and PIN reader cheaply in return for giving the criminal supplier a share of the data.

By Asavin Wattanajantra, 22 Oct 2009 at 10:35

A security researcher has warned people to beware of fake Chip and PIN readers swapped for real devices in the UK and around the world.  Uri Rivner, head of new technologies at RSA, said that criminals were stealing credit card data using fake Point of Sale (POS) devices.

RSA had also seen a new business model for the crime, where the suppliers of the readers and those using them against customers would both get a cut of the profits.

The fraudster at the POS would get one of the card readers subsidised from a criminal supplier, and swap it for a real device at the targeted store or restaurant in question. When a real customer swiped the card, the reader would work exactly as you would expect a real chip and PIN device to behave.

Speaking at RSA Conference Rivner said: “When a real customer swipes a card it will be like everything is okay. All of the cards will actually work, but all of that information will go to a web server. The mothership – where all of this data is collected.”

The operators would also have the chance to earn money from the fraud, as they would keep about 30 per cent of the credit card data.

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Visa Names John Partridge as President

Visa Debit logoImage via Wikipedia

San Francisco, Oct. 21, 2009 -- Visa Inc. (NYSE:V) announced today that John Partridge has been named President of the company. Partridge's transition from his former position as Chief Operating Officer is effective immediately. He will continue to report to Joseph W. Saunders, Chairman and CEO of Visa Inc., and will oversee all client, marketing and product functions globally, enabling Visa to more effectively and efficiently allocate resources among markets to enhance its service to clients and speed Visa's growth.

About Visa

Visa Inc. operates the world's largest retail electronic payments network providing processing services and payment product platforms. This includes consumer credit, debit, prepaid and commercial payments, which are offered under the Visa, Visa Electron, Interlink and PLUS brands. Visa enjoys unsurpassed acceptance around the world, and Visa/PLUS is one of the world's largest global ATM networks, offering cash access in local currency in more than 200 countries and territories. For more information, visit .

Source: Company press release.
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Does Prepaid Debit, ID Card for "Medical Marijuana" have POTential?

At first I thought this press release regarding a PrePaid POT Card was a joke.  I can see it now..."Dude, I can't find my POTcard man...what a bummer...whvvvvvvvvvvvt...'eere it!

Commerce Online launches pre-paid debit, ID card for medical marijuana

Palm Beach, Fla., Oct. 21, 2009 -- Commerce Online Inc. (Pinksheets: CMIB - News) ( ), a leading company specializing in both bricks and mortar and online merchant payment solutions, today announced the initial launch of a branded, pre-paid debit and ID card for licensed medical marijuana dispensaries and collectives operating within the states of California and Colorado.

In an effort to keep these collectives within the guidelines of CA Proposition 215 and SB 420, the Commerce pre-paid debit/stored value ID card will offer a unique cash alternative to these regulated dispensaries for both suppliers and members of collectives. Under new legal guidelines to be issued by the Obama administration no longer seeking prosecution of medical marijuana users or suppliers as long as they conform to state laws, Commerce Online will seek to capitalize on this presently untapped and much needed solution.

"Fourteen states presently allow some use of marijuana for medical purposes: Alaska, California, Colorado, Hawaii, Maine, Maryland, Michigan, Montana, Nevada, New Mexico, Oregon, Rhode Island, Vermont and Washington. California is unique among those for the widespread presence of dispensaries - businesses that sell marijuana and even advertise their services. Colorado also has several dispensaries, and Rhode Island and New Mexico are in the process of licensing providers", according to the Marijuana Policy Project, a group that promotes the decriminalization of marijuana use.

"Being an established player within the merchant services sector and aligning ourselves with the strongest banking and technology partners within the space, we believe Commerce Online is uniquely positioned to offer the most reliable pre-paid debit and identification card to the medical marijuana industry, and roll out our pilot program immediately. Presently, most of these operations only accept cash, as well as pay cash to suppliers to the collectives, subjecting operators and collective members to theft, unregulated and potential criminal activity. There is no doubt that with new legislation for the operation of these facilities and potential legalization in select states, there will be tighter safeguards put into place by federal, state and local governments." Stated Kyle Gotshalk CEO of Commerce Online.

"The Commerce branded, pre-paid debit and ID card will be marketed through our new Collective Card Services division, and may be loaded to any denomination of funds through a PCI compliant gateway, via the Internet, POS system or PayPal Account by the member of the collective or medical dispensary . Members of each collective will be provided a card as a registered member. The card will have a photo id, and act as a pre-paid debit card branded and recognized by the collective. Funds may be transferred by the registered user via internet, POS, or mobile phone. In case of theft or loss, the card may be cancelled immediately through an 800 number provided or online. The card will also act as the Collective member's identification having Picture ID, medical id number identifying him/her as a collective member, the collective name, and expiration date of membership. With recent economic issues and more stringent requirements within the banking industry, many Americans may no longer have or qualify for a credit card or checking account to pay for essential needs or medical services and do not want to exchange or carry large amounts of cash to these locations. The Commerce Online "GreenCard" will essentially be the logical choice as a low cost, effective cash alternative to regulated medical marijuana industry", further stated Mr. Gotshalk.

About Commerce Online Inc.

Commerce Online Inc. ( ) is positioned to become a market leader in both online and wireless merchant payment solutions. The Company offers a full spectrum of secure and reliable transaction processing solutions using traditional, Internet Point-of-Sale (POS), e-commerce and mobile (wireless) terminals in conjunction with Industry Alliance Partners. The Company's Alliances provide electronic payment processing suite of services enabling merchants to accept all major credit and debit cards, as well as ATM cards and ACH check drafts for payment whether a retail, service, mail-order or Internet merchant. As an industry leader, Commerce Online is dedicated to delivering comprehensive services, such as merchant account activation, gateway connections, Web development and social network engines to a worldwide client base.

Source: Company press release.

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Unisys Security Index - October 2009

The Unisys Security IndexTM presents a social indicator regarding how safe consumers feel on key areas of security. Conducted twice a year, the Unisys Security Index provides a regular, statistically robust measure of concerns about four areas of security:

  • National security - security and epidemics

  • Financial security - bankcard fraud and ability to meet personal financial obligations

  • Internet security - spam, virus and online financial transactions

  • Personal security - physical risk and identity theft

The survey's results around computer security issues reveal that the percentage of people who don't care about computer viruses or the security of e-commerce and online banking is about the same as the percentage of folks who don't use the Internet, i.e., about 25 to 30 percent of Americans. Ignorance is bliss, it seems.

But one fear that both users and non-users of the Internet share is the fear of identity theft—about 65 percent are either "very concerned" or "extremely concerned"—and that's because ID theft is largely a low-tech threat.

US Security Index, October 2009   Source: Unisys

What's new in the report

  • Concerns around credit / debit card fraud and identity theft continue to grow around the world

  • Respondents in all countries are highly concerned about the ability of governments and financial service providers to safeguard their personal data

  • Despite the recession, consumer concern around the ability to meet financial obligations has decreased in most countries

  • Consumers are more willing to use biometric technology as a means to verify their identity, with some countries now ranking as highly as 95% in favor (fingerprint and iris scan

  • In the wake of the recent H1N1 (swine flu) pandemic, concern around the threat of a health pandemic has increased


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National Payment Card Can Now Be Processed by RBS WorldPay

I've posted about this company a (de)couple times in the past, (See: KPG Ventures Funds NPCA and,  Why $4.00 a Gallon is More Appealing to NPCA) so when this press release came across the wire, it caught my attention. 

Between PayPal accepting STAR debit cards, Fifth Third Issuing RevolutionMoney Cards (see previous post) and RBS WorldPay accepting National Payment Card's, I would  think that MasterCard might not want to give us such a hard time with an Internet "Card Present" classification, let alone an "unattended PIN Debit" one.  There is a trend developing and MasterCard is in a position to secure their market with an innovative marketing move.  My great grandfather told me,  It's a lot more expensive to fix the leak AFTER the roof caves in.

Las Vegas, Oct. 22, 2009 -PIN Payments News Blog- RBS WorldPay, the fastest growing top ten payment processor in the US, today announced that National Payment Card Association (NPCA) debit cards can be processed by RBS WorldPay. As the leading provider of merchant branded ACH cards, NPCA offers merchants a card acceptance solution with significantly lower transaction fees than traditional credit or debit cards.

"RBS WorldPay is committed to offering our clients a wide range of card acceptance solutions," said Ian Drysdale, senior vice president of Market Development for RBS WorldPay. "Leading merchants are requesting alternative forms of payment that can reduce costs and increase sales. By processing cards from National Payment Card Association, we are further delivering on that promise."

National Payment Card Association first introduced its alternative payment solution in June 2006, earning much attention from industry insiders and consumers. Often referred to as "decoupled debit," NPCA's leading ACH card solution has proven to be a beneficial alternative to traditional card acceptance in both the petroleum industry and other business sectors.

"RBS WorldPay is a premier provider in petroleum card processing. Working with RBS WorldPay highlights the increased national acceptance of our payment solutions for all petroleum merchants, from tier one through mid-tier to single store operators," said National Payment Card Association CEO Joe Randazza.

The NPCA PIN based payment system processes transactions through the Federal Reserve Automated Clearing House (ACH), resulting in lower merchant fees and a self-funded loyalty program that provides immediate savings to consumers. Specifically, the program benefits retailers by helping them save on the interchange fees credit card companies normally charge on each transaction. The merchant can then use some of the savings to incent customer behavior by passing some of that savings along to them right at the pump.

About National Payment Card Association

National Payment Card Association ( ), based in Coconut Creek, FL, is an innovative marketer of ACH decoupled card-based payment systems. The company's primary product is a retailer branded debit card that does not utilize the Visa/Mastercard rails that provides consumers access to funds in their checking accounts so they can pay for goods or services. The ACH Decoupled Debit Card is not a credit or debit card that is linked through the national banking networks, but rather utilizes a user ID for consumer authentication and is processed through the National Payment Card Association network. A Decoupled Debit Card can be a loyalty card, a membership card or Driver's License. National Payment Card Association has filed a series of patent applications for methods of payment processing with a driver's license.

National Payment Card Association is a member of the EFT Network, which is a part of the Electronic Check Council of NACHA. NACHA is the rule-making body for all electronic funds transfers made through the ACH.

About RBS WorldPay US

RBS WorldPay is a leading, single-source provider of electronic payment processing services - including credit, debit, EBT, checks, gift cards, e-commerce, customer loyalty cards, fleet cards, ATM processing and cash management services.

RBS WorldPay is the US-based payment processing division of the Royal Bank of Scotland Group plc. For more information, please visit .

About The Royal Bank of Scotland Group (RBS)

The RBS Group is a financial services company providing a range of retail and corporate banking, financial markets, consumer finance, insurance, and wealth management services. The RBS Group operates in the Americas, Asia and the Middle East serving more than 40 million customers. For more information, please visit .

Source: Company press release.

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Revolution Raises Additional $20 Million, Targets Fifth Third

DiDigital Transactions News wrote a piece regarding the announcement by Revolution that Fifth Third would issue RevolutionCard's. 

‘A Major Pivot’ for Revolution Money As It Shifts Its Focus to Issuers

(October 20, 2009 - Digital Transactions News)  Revolution announced on Tuesday that Fifth Third Bancorp would be a RevolutionCard issuer, Revolution Money revealed a new focus on building its cardholder base and disclosed another $20 million venture-capital investment on top of the $42 million it received last spring.

Cincinnati-based Fifth Third is now Revolution Money’s main issuer for so-called prime consumers, those with the highest credit scores, chief executive Jason Hogg tells Digital Transactions News. The bank’s merchant-acquiring arm, Fifth Third Processing Solutions, already had been offering Revolution Card acceptance to merchants.

The addition of Fifth Third marks a shift by St. Petersburg, Fla.-based Revolution Money from building its merchant base to a focus on card issuance. “From our standpoint this is a major pivot,” Hogg says.

Revolution Money’s PIN-based credit card charges merchants a flat 0.5% per transaction. That saves merchants money but produces far less fee income for issuers than Visa and MasterCard credit transactions, which average a bit below 2% in interchange, the fee paid by the acquirer to the issuer. Acquirers typically pass on the cost to merchants.

So what’s in it for Fifth Third?

 It brings new relationships to us, we will get new customers, card customers, out of this partnership,” Jon Groch, Fifth Third Bank director of Bankcard Services, tells Digital Transactions News.

Continue Reading at Digital Transactions 

Gemalto Announces Third Quarter 2009 Revenue

AMSTERDAM--(Business Wire)--

Regulatory News:

* Revenue at € 401 million

* Robust activity in Middle East and Africa, lagging demand in the Americas

* Further wins in mobile service contracts and governmental projects

* Strong € 59m net cash increase before acquisitions. Net cash position

increases to € 347 million

Third quarter 2009

Total revenue for Q3 2009 was € 401 million, lower than Q3 2008 by 5% at constant exchange rates and by 4% at historical exchange rates. Revenue for the first nine months of the year was € 1 201 million, essentially unchanged when

compared with the previous year. Demand this quarter was softer in the Americas when compared to last year, and Identity and Access Management activity in Europe contracted as enterprises postponed projects. Gemalto confirmed its

leadership in Government Programs, winning two large-scale national projects, and continued to record additional wins in mobile communication service contracts.

Gemalto further strengthened its net cash position, with € 59 million of net cash generated during this quarter.

€ 35 million were used for acquisitions, € 19 million used for the share buy-back program and € 20 million received from the exercise of options by employees. As a result, the Company`s net cash position was € 347 million at the end of the third quarter 2009

Read the Entire Press Release at Reuters

VASCO To Release Q3 2009 Results On October 27, 2009

OAKBROOK TERRACE, Illinois and ZURICH, Switzerland – October 21, 2009 – VASCO Data Security International Inc. (Nasdaq: VDSI;, a leading software security company specializing in strong authentication products, announced today that it will release its Q3 2009 results on October 27, 2009.

On October 27, at 10.00 am EDT/15.00 CET*, VASCO will hold a conference call, which will be streamed on the VASCO website (  * Daylight Saving Time ends in Europe on October 25.

Thedial-in telephone numbers for the conference call are:

Dial-in U.S.: 1-800-734-8507

Dial-in International: 1-212-231-2903

Mr. T. Kendall Hunt, Chairman and CEO, Mr. Jan Valcke, President and COO and Mr. Cliff Bown, Executive Vice President and CFO of VASCO, will be available on October 27 to answer analyst, investor and media questions.


VASCO is a leading supplier of strong authentication and e-signature solutions and services specializing in Internet Security applications and transactions. VASCO has positioned itself as global software company for Internet Security serving a customer base of approximately 9,000 companies in more than 100 countries, including almost 1,300 international financial institutions. VASCO’s prime markets are the financial sector, enterprise security, e-commerce and e-government.

Forward Looking Statements

Statements made in this news release that relate to future plans, events or performances are forward-looking statements. Any statement containing words such as “believes,” “anticipates,” “plans,” “expects,” “intend,” “mean,” and similar words, is forward-looking, and these statements involve risks and uncertainties and are based on current expectations. Consequently, actual results could differ materially from the expectations expressed in these forward-looking statements.

Reference is made to VASCO's public filings with the U.S. Securities and Exchange Commission for further information regarding the Company and its operations.

This document may contain trademarks of VASCO Data Security International, Inc. and its subsidiaries, which include VASCO, the VASCO “V” design, DIGIPASS, VACMAN, aXs GUARD and IDENTIKEY.

For more information contact:

Jochem Binst, +32 2 609 97 00,

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