Tuesday, January 5, 2010

Another Day...Another Card Reader for the iPhone

Santa Barbara, Calif., - Simply Swipe It, LLC (www.simplyswipeit.com ) today announced Swipe It, a complete credit card payments solution for Apple’s iPhone and iPod touch. Swipe It, an application for the Apple’s iPhone and iPod touch that allows users to take credit card payments, works exclusively with Macally’s QuikSwipe credit card reader.

QuikSwipe attaches to the Apple iPhone and iPod touch for encrypted, card‐present transactions providing small businesses with a secure, cost‐effective and easy solution to their payment needs.

Swipe It provides for:

iPhone and iPod touch touch compatible application for credit card payments

Address Verification of Card Holder – more secure and better costs with card associations

Pull your contact information from your iPhone and iPod touch’s address book

Charge History – available on Swipe It application and via payment gateway account login

Simply EPay & Authorize.net payment gateways supported

Supports QuikSwipe, the most flexible and secure magnetic credit card swiper

Email receipts to your customers

Supports your existing merchant services account

Processor/ISO agnostic

Transmit data over WiFi or cellular network

We are thrilled to partner with both Macally and Magtek to deliver the most flexible and secure credit card processing platform on the market for the iPhone and iPod touch saidBraden Harris, VP of Sales Simply Swipe It.

QuikSwipe Provides for:

iPhone and iPod touch compatible hardware

Integrated with Magtek’s Secure Card Reader (MagneSafe) for increased card holder security with end‐to‐end encryption

Swipe all credit cards to capitalize on industry’s best rates (card‐present transactions)

Commercial grade quality hardware ensures longer lasting product even for higher volume merchants

Flexible spring loaded arm that provides one size fits all form factor for all models of iPhone & iPod touch

"The Swipe It application combined with Macally's QuikSwipe offer a very compelling solution for Macally's existing customer base and distribution Channels", said Cindy Araujo, VP Sales & Marketing, Macally"

Swipe It’s payment application will be available through Apple’s iTunes and merchant accounts will be available through any acquirer and ISO that works with Authorize.net or the Simply EPay gateway. Simply Swipe It, LLC will provide its API working closely with system integrators, valueadded resellers (VARs) and entities interested in implementing the rapidly growing market of mobile payments to their business model. Customers who sign up with Simply Swipe It without existing merchant accounts will be directed to a variety of payment processor options. Simply Swipe It, LLC has plans to support Google’s Android, and RIM’s Blackberry.

Merchants can request to participate in our current limited beta program or reserve and view service options and fees at www.simplyswipeit.com .

About QuikSwipe’s Encrypted Secure Reader

Bill Rorick, MagTek's Vice President of OEM Products stated: "By selecting MagTek's MagneSafe Module, the industry's first counterfeit resistant security module, Simply Swipe It has shown genuine concern for their customers in regards to card fraud and ID theft. By being proactive and integrating this secure card reader authenticator (SCRA) with both encryption and card authentication capabilities, they have demonstrated their commitment to utilize a layered approach to protect their customers from these growing threats.

I believe the unique combination of convenience and security will allow this new application from Simply Swipe It to become one of the leading iPhone applications in 2010."

About Simply Swipe It

Simply Swipe It delivers the full range of products and services for credit card processing on the iPhone and iPod touch. The company’s goal is to provide a turn‐key solution from payment gateway, credit card swipers, merchant services and phone applications directly or through our partners. For more information, please visit www.simplyswipeit.com or email news@simplyswipeit.com

About Macally

Since 1975 Macally has been delivering aesthetically pleasing, high quality, competitively priced consumer electronic peripheral equipment and accessories to satisfied customers. The company’s mission is to create easy‐to‐use products that add enjoyment ‐‐ not complexity ‐‐ to life. The company’s innovative and attractive product lines provide solutions for customers’ mobile lifestyle as well as the home and office. For more information go to www.macally.com

About MagTek

Since 1972, MagTek has been a leading manufacturer of electronic devices and systems for the reliable issuance, reading, transmission and security of cards, checks, PINS and other identification documents. Today, MagTek continues to innovate with the development of a new generation of security centric products secured by MagneSafe. By leveraging strong encryption, secure tokenization and real time authentication, MagneSafe products enable users to assess and validate the trustworthiness of credentials used for online identification, payment processing, and other highvalue electronic transactions. For more information please visit www.magtek.com .

Source: Company press release.

30 Million German Credit/Debit Cards Stop Working

Financial Times is reporting that 30 Million German debit and credit cards have left customers unable to use them. Looks like Y2K10 is responsible...

A “Year 2010” software problem triggered by the change of decade has affected 30 million German debit and credit cards and left bank customers unable to make purchases or make cash withdrawals.

But German banks appear to have been unprepared this month for the emergence of the fault, which has been attributed to a software glitch in the microchips embedded into many “chip and pin” cards and has meant they have not coped with the change to 2010.

In what has given the notoriously thrifty consumers of Europe’s largest economy another reason to curb their spending, Germany’s savings bank association admitted on Tuesday that a “belated year 2000 problem” had affected more than 20m of 45m debit cards issued by the public-sector.

A further 3.5m of 8m credit cards were also affected, according to the association, which represents the small institutions that hold the greatest share of the country’s retail savings.

The association of private sector banks said 2.5m of 22m cards were affected, while the association of mutual banks said the problem was restricted to 4m of the 27m debit cards issued by its members.

Customers have reported being unable to use the cards to withdraw cash from ATMs or make payments in shops. Many have also been unable to use their cards in shops or cash machines outside Germany.

Continue Reading at FT.com

Morgan Stanley Wins Discover Dispute...and $800 Million

The Wall Street Journal Reports:

BY AARON LUCCHETTI AND ROBIN SIDEL

Morgan Stanley won a ruling in its legal battle with former credit-card subsidiary Discover Financial Services Inc. over nearly $800 million that Morgan Stanley claims it is owed.

New York state Supreme Court Justice Barbara Kapnick said Monday that Discover is obligated to pay the amount as a special dividend to Morgan Stanley.

The ruling means that the Wall Street firm stands to boost its bottom line if the decision isn't reversed on appeal. The special dividend is equal to about 17% of the $4.5 billion Morgan Stanley is expected by analysts ...

uMonitor Announces Four Credit Unions Expanding Online Financial Services

Financial Institutions Moving Forward with Enhanced Online Service Offerings

MEMPHIS, Tenn.--(BUSINESS WIRE)--uMonitor, the innovative financial solution services provider for operational excellence with member acquisition and retention, announced that Eli Lilly Federal Credit Union, CINCO Family Financial Center Credit Union, Communications Federal Credit Union, and CDC FCU have stepped up to expand their online offerings to delight members with services powered by uMonitor’s platform. Services include online account opening and funding service with a built-in switch kit, stand alone switch kit and account-to-account money transfer.

uOpen & uFund® streamlines the account opening and funding process online, in call center and in-branch and provides 24/7 service to members for checking, savings, money market and CD accounts, as well as credit cards and various loan accounts and gap insurance. The fully automated switch kit, uSwitch®, provides an easier way for members to close outside accounts and pay off loans, as well as switch direct deposits and automatic payments. The switch service is integrated with the account set-up process, but it is also available for later use by members and staff.

“After careful analysis we selected uMonitor’s platform to position our credit union to achieve the desired sales results, especially from younger, internet savvy generations,” Tim Greene, AVP of eCommerce at Eli Lilly FCU, explained. “uOpen & uFund and uTransfer are leading solutions for credit unions that will make us more competitive as the account opening and funding process is completely automated, enabling us to offer the convenience and timeliness that meets and exceeds our member service expectations.”

uTransfer® expands the benefits of online banking to members who prefer electronic transactions to manage their money. Credit union members will be able to visit the credit unions’ Web sites and initiate money transfers or set up recurring transfers. Many members use the automatic recurring transfer service to coordinate the transfer date with loan payment due dates. The service, with its security and monitoring provided with the uMonitor platform, makes this a risk-free option for members and most credit unions do not charge anything for in-bound transfers. Additionally, the built-in transaction level authentication makes it more secure.

“Investing in the right technology has always been a critical decision, but in today’s environment it is the key differentiator that will separate financial institutions as we emerge from the downturn,” Dinesh Sheth, CEO at uMonitor, explained. “These credit unions are showing their leadership as we enter 2010 with investments in services that delight members, and at the same time improve everything from customer service and cross-selling opportunities to regulatory compliance and operational efficiencies across all channels.”

About uMonitor (www.umonitor.com)

uMonitor offers a wide range of online solutions specifically designed to help financial institutions provide the most up-to-date services. These highly configurable and customizable solutions enable financial institutions to increase profitability, generate revenue, improve regulatory compliance, improve employee productivity while reducing costs and delighting customers. uMonitor solutions include New Account Setup and Online Funding with Switch Kit, New Loan Application Processing, Funds Transfer Service, Bill Presentment and Payment Solutions, Premium Account Management Service, Advisor-Client Relationship Management, and other services. The company’s growth and success were recognized by its inclusion on the Inc. 5000 list in 2008 and 2009.

For more information on uMonitor or its solutions, contact Gillian Smoot at gsmoot@umonitor.com, call 901-757-1212 ext. 7115, or visit the company at www.umonitor.com.

Redecard Discovers a new market

Lafferty Group reports that MasterCard's Brazilian Redecard division has agreed to process Discover cards...

Brazilian payment processor and merchant acquirer Redecard – the main acquirer of MasterCard and Diners Club International cards in Brazil – has reportedly agreed to process Discover card payments.

The agreement means that Redecard will process transactions on Discover cards that have been issued internationally, allowing visitors to Brazil to have their Discover card accepted. It comes ahead of the expected increase in foreign visitors to Brazil when the country hosts the World Cup in 2014. The ability to process Discover cards also extends Redecard’s capabilities.

The Wall Street Journal reported that following the move, Redecard will be the first Brazilian network to accept Discover cards. Redecard reportedly said that the agreement will increase the proportion of its foreign transactions from 4 percent to 5 percent of total annual transactions.

eBillme Presents: "How eCommerce Biz Can Use Social Media"

Gary Vaynerchuk to Host Online Social Media Workshop for Retailers

“How eCommerce Merchants Can Use Social Media” will be presented by eBillme for eCommerce executives

RYE BROOK, N.Y.--(BUSINESS WIRE)--On Friday, Jan. 15, Gary Vaynerchuk, social media expert, host of WineLibraryTV.com, and bestselling author of “Crush It!,” will host a free online social media workshop for eCommerce companies. “How eCommerce Businesses Can Use Social Media,” presented by eBillme, a secure payment option online that enables consumers to use online banking to pay now, pay securely, and use available funds, will teach online retailers how they can use social networking sites for brand awareness, customer service, and to reach new customers.

The interactive session, is designed for any eCommerce executive interested in learning how social media can help grow their business. During this two-hour workshop, eCommerce companies will learn:

The common myths when it comes to social media engagement.

Tips and tricks for setting up an eCommerce presence on social networking sites.

How to train and motivate your eCommerce teams to use social media.

A tour of social media sites, including Twitter and Facebook.

How to find and engage customers through social networking.

“Social media has become a powerful tool for retailers to support sales, marketing, and customer service,” says Samer Forzley, Vice President of Marketing for eBillme. “Forrester Research is predicting that in 2010, online retail marketers will move out of the testing phase and will establish formal social media budgets and plans. We worked closely with Gary Vaynerchuk to design a workshop that speaks directly to the needs of eCommerce executives. This is an opportunity for online retailers to learn new techniques and see an impact from their social media presence in the new year.”

“How eCommerce Merchants Can Use Social Media,” hosted by Gary Vaynerchuk, will take place on Friday, Jan. 15 at 2:30 p.m. EST. To register, please visit https://www2.gotomeeting.com/register/274143947. Participants will receive a free copy of “Crush It!” following the webinar, while supplies last.

About eBillme

eBillme™ is the most secure way to pay online and the only online payment solution that extends the convenience of online banking to the merchant’s checkout process. The service enhances security for online shoppers, and enables merchants to increase sales while reducing transaction costs. No financial data is exposed and the payment transaction is securely transferred from the customer’s bank to the retailer’s bank. Consumers can shop online, by catalog or through call centers, and pay for their purchases at their bank, credit union, or bill pay portal using the security and convenience of online banking or by paying the bill at over 75,000 walk-in locations. For more information, please visit www.eBillme.com or eBillme’s Online Debt-Free Shopping Mall at http://Shop.eBillme.com.

PowerPay Selects Transaction Wireless wCharge Credit Card Terminal for Merchant Mobile Processing

PowerPay to ‘White Label’ wCharge to its Customers

SAN DIEGO & PORTLAND, Maine--(BUSINESS WIRE)--Transaction Wireless™ (TW), a mobile commerce payment and marketing company, and PowerPay, a leading electronic payments company, today announced a partnership enabling PowerPay to offer TW’s wCharge Credit Card Terminal to its customers. Under the agreement, PowerPay’s customers will gain access to TW’s web-based solution, turning any mobile phone into a credit card terminal without extra equipment, allowing merchants of all sizes to accept payments virtually anywhere.

Through this partnership, PowerPay customers gain value by combining TW’s Point of Sale (POS) credit card terminal with a PowerPay account, offering savings on processing fees which directly affect the bottom line of any small business. Transaction Wireless’ safe and convenient mobile POS solution will extend the functionality of a PowerPay merchant account to any mobile phone making it easy for merchants to process payments in real time at a trade show, at home, or anywhere business can be conducted, creating a 360˚ payment solution.

“We know how important capturing revenue and creating savings at every level can be for merchants during these ongoing economic difficulties,” said Bruce Springer, CEO, Transaction Wireless. “We’re proud to partner with a leader like PowerPay to extend the value of the wCharge offering to PowerPay customers.”

PowerPay supports all major credit and debit cards, electronic benefits transfer (EBT), government purchase cards, petroleum cards, loyalty cards, gift cards and recurring bill payment with applications suiting a variety of needs. Since its inception, PowerPay has offered an attractive combination of competitive pricing and individualized service. This formula has made the Company one of the fastest growing service providers in the nation.

“At PowerPay, we’re constantly investing in technology and looking for additional savings for our merchants,” said Michelle Boudette, chief sales and marketing officer, PowerPay. “By adding the wCharge terminal to our offerings, our customers can easily take advantage of the power of mobile technology to provide a new real-time payment option to their customers, creating additional convenience and security.”

About PowerPay

PowerPay is one of the nation’s premier providers of integrated e-commerce and point-of-sale (POS) payment processing solutions. Founded in 2003, the Portland, Maine-based company offers a unique, consultative approach designed to maximize customers’ payment processing efficiency, security and investment. PowerPay’s unique methods of underwriting and risk management coupled with a robust IT department, gives them the flexibility and agility to excel as a payments processor. Working with its wholly owned subsidiary and internet-based merchant account provider, e-onlinedata, PowerPay delivers comprehensive, innovative solutions that help customers grow their businesses and improve their bottom lines. www.powerpay.biz

About Transaction Wireless

Transaction Wireless is a mobile commerce, payment and one-to-one relationship marketing company enabling a unique link between consumers, retailers and brands via any mobile device leveraging existing technologies. With unparalleled solutions, Transaction Wireless’ initial product portfolio includes a small merchant mobile POS credit card terminal (wCharge) and mobile gift cards (wGiftCard). The Company is headquartered in San Diego, California. More information can be found at www.transactionwireless.com.

mPayy Launches Free iPhone Mobile Payment App

iPhone App Extends Android Functionality to Millions of iPhones and iPod Touches

CHICAGO--(BUSINESS WIRE)--mPayy, Inc., an emerging leader in mobile and online alternative payments, today announced the availability of its “mPayy Mobile Payments” application from the iTunes store for free download to all iPhones and iPod Touches. The application extends functionality mPayy recently released on the Android platform to the millions of iPhones and iPods in circulation.

“The largest concentration of mobile commerce purchases conducted thus far is the more than 1 billion downloads from Apple’s App Store,” stated Conrad Sheehan, CEO of mPayy, Inc. “It’s only natural that mPayy extend its mobile debit payment platform to the iPhone, the distribution of which will only continue to grow. mPayy looks forward to enhancing the experience of iPhone applications with its secure payment services, and tapping into the incredible talent pool of thousands of iPhone developers seeking to expand mobile commerce opportunities on the platform.”

All mPayy Personal and Business accounts may use the iPhone application to make and receive person-to-person payments, track activity, and withdraw funds from their mPayy accounts to linked bank accounts. Business account holders are also able to issue refunds for any sale through the application, even if it occurred on their website.

Once members open Business accounts, they will be able to generate their own API key to unlock mPayy's payment services, and add secure debit payments to their online or mobile websites and applications. API keys may be used to authorize one-time or recurring billing subscription payments for digital content and other services. Merchants can receive mPayy members' shipping information via additional service calls to fulfill orders conducted through its online and mobile payments service.

About mPayy, Inc.

mPayy is a secure online and mobile payment provider that enables merchant processing for any sized online retail business, plus quick and simple purchasing for buyers. The company’s highly scalable payment platform for Internet retailers improves margins by reducing fraud and transaction costs. mPayy has created an efficient and ubiquitous payment service that enables profitable micro-payments; easy, yet secure purchases of digital content and physical goods; and free person-to-person payments. mPayy is fundamentally changing the economics of both e-commerce and m-commerce. For more information, please visit www.mpayy.com or follow mPayy on Twitter @mpayy.

Accor Services Announces the Availability of Its New Commuter Check Card Prepaid Mastercard®

Commuter Benefits Program Leader Delivers New Commuter Benefit Cards for Transit and Parking

WATERTOWN, Mass.--(BUSINESS WIRE)--Accor Services USA, leader in innovative employee benefits solutions and premier provider of national commuter benefit programs with its Commuter Check® and WiredCommute® programs, today announced the availability of its new Commuter Check Card Prepaid MasterCard®, a new prepaid card commuters can use in accordance with the Qualified Transportation Fringe Benefit (IRS Tax Code Section 132(f)) to pay for commuting and commute-related parking expenses. Commuter Check Cards make paying for commuting and commute-related parking easier and more convenient than ever before.

Compliance

A fully compliant commuter benefit product, the Commuter Check Card is ahead of the curve in terms of adhering to the guidelines set forth by the IRS Ruling 2006 – 57 and subsequent notices issued by the IRS that delayed the implementation of the ruling to January 2011. Commuter Check Card prepaid products for transit and parking employ terminal restriction technology that limits usage of the cards to specific Merchant ID codes for transit and parking. The Commuter Check Card is already in compliance with the IRS Ruling ahead of the implementation deadline.

Commuter Benefit Cards for all commuting needs

Accor Services’ commuter benefit cards come in two varieties; Transit and Parking, to enable both transit riders and parkers to easily take advantage of the qualified transportation fringe benefit at automated vending machines across the country. Automated vending machines are fast becoming the fare collection choice of transit agencies and parking providers equally. With Accor Services new commuter benefit prepaid cards, it will be a breeze to purchase transit and parking with pre-tax dollars for commuters and parkers alike. The cards are also accepted at transit agency and parking provider operated staffed sales locations.

Commuter Benefit Cards for all Employer needs

Accor Services caters to employers nationwide with both anonymous and personalized versions of the Commuter Check Card for Transit and Parking.

With Accor Services offers employers two program options to provide commuter benefits to their employees. With he Commuter Check Office solution, employers that administer commuter benefits in-house can benefit from anonymous prepaid cards that are not specific to an employee, and are intended to be distributed, used and disposed of every month or quarter. The anonymous version of the Commuter Check card is not reloadable, rather will be loaded with funds once and used until the funds run out.

On the other hand, with the Commuter Check Direct and WiredCommute solutions, clients that outsource the administration of their commuter benefit program can benefit from personalized, reloadable version of the Commuter Check Card Prepaid MasterCard for transit and parking. These prepaid cards are assigned to employees, with their names associated with and imprinted on the cards for continuous use. These Commuter Check Card Prepaid MasterCards are reloaded with value based on the employees’ need for the following month, and can also be linked to commuters’ transit smart cards in markets where smart card administration is available via such as San Francisco’s TransLink Card.

Both anonymous and personalized Commuter Check Cards are enabled for pre and post tax funding and are fully compliant with Section 132 f and IRS Ruling 2006 – 57.

Taking advantage of the full benefit, commuters can save over $2,000 per year while employers save over $400 per employee in payroll taxes.

“We are excited to offer Commuter Check and WiredCommute program participants this option,” said Gerard Bridi, President of Accor Services USA. “These two Commuter Check Cards options are just our latest offering to make it ever-easier and convenient to take advantage of commuter benefits that help encourage public transit use and help protect our environment.”

Where Commuter Check Card Prepaid MasterCards Are Accepted

The Commuter Check Card for Transit, whether anonymous or personalized, is accepted at transit agencies or designated transit retail centers that accept Debit MasterCard where only transit passes, tickets, fare cards, and vanpool passes are sold. The Commuter Check Card for Parking is accepted at any parking provider that accepts Debit MasterCard for payment.

For more information, please visit www.commutercheck.com.

About Accor Services USA

Accor Services USA is a leader in innovative employee benefits solutions and premier provider of national commuter benefit programs: Commuter Check Benefit Solutions, a nationwide transit and parking voucher program; and WiredCommute, a program for private labeled commuter benefits. Its mission is to make tax-free commuter benefits a staple in employee benefits packages throughout the American workplace – while helping protect the environment.

About MasterCard Worldwide

MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes approximately 21 billion transactions each year, and provides industry-leading analysis and consulting services to financial-institution customers and merchants. Powered by the MasterCard Worldwide Network and through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to www.mastercard.com.

Commuter Check is a registered trademark of Accor Services USA. All other names may be trademarks or registered trademarks of their respective owners.

The Commuter Check Card Prepaid MasterCard is issued by MetaBank™ pursuant to license by MasterCard International Incorporated. MasterCard is a registered trademark of MasterCard International Incorporated.

Fitch: U.S. Credit Card Delinquencies Reach Record Levels; Chargeoffs Surge

Image representing Business Wire as depicted i...

Image via CrunchBase

NEW YORK--(BUSINESS WIRE)--Delinquent balances on U.S. credit cards reached record levels and defaults surged higher in December 2009, according to the latest Credit Card Index results from Fitch Ratings.

Chargeoffs are poised to trend even higher in the coming months as consumers struggle with debt burdens in the still challenging employment environment, according to Managing Director Michael Dean.

'U.S. consumer credit quality remains under considerable stress due to persistently weak labor market conditions,' said Dean. 'As a result, chargeoffs will retest their recent highs throughout the first half of 2010.'

The 60+ day delinquency rate reached an all time high of 4.54% for the December 2009 index, which is based on performance data through November month end. This surpassed the previous high of 4.45% set in June 2009. Chargeoffs crept up to 10.68% from 10.09% in the prior month but remained inside of the record high of 11.52% set in September 2009.

Despite the unfavorable trends, Fitch continues to expect current ratings of senior credit card ABS tranches to remain stable given available credit enhancement, loss coverage multiples, and structural protections afforded investors. The outlook for subordinate tranches remains negative. Fitch expects U.S. unemployment will peak at 10.4% in second quarter-2010 (2Q'10) and remain above the 10% threshold throughout 2010.

From 4Q'08 through 2Q'09, Fitch's delinquency index rose 42% as the economic environment and employment situation worsened. Chargeoffs subsequently peaked in 3Q'09 with Fitch's index reaching 11.52% in September 2009 before receding in recent months. While recent trends point to higher chargeoffs, future deterioration is not anticipated to be as severe given that unemployment is expected to plateau near current levels.

'The recent acceleration in delinquencies has not yet approached levels experienced last year,' said Senior Director Cynthia Ullrich. 'With that said, seasonal patterns dictate further delinquency increases and higher chargeoffs in the coming months.'

Gross yield, the measure of interest, fees and interchange revenue collected on outstanding balances, continued to increase reaching 20.21%. Since recent legislative changes will restrict dynamic risk based pricing policies, issuers are mitigating against potential future risk by increasing APRs across their portfolios. This is the first time since April 2001 that Fitch's Prime Gross Yield index has surpassed 20%. However, credit is relatively more expensive now, as the prime rate averaged 8.32% back in March 2001, whereas it is currently 3.25%.

Although gross yield rose more slowly than chargeoffs over the past year, yield has reached a point where it is able to cover the elevated chargeoff and generate more robust excess spread. The one month excess spread reached 6.90% while the three month average increased to 6.78%. The decompression in significant considering that three month average excess spread averaged only 5.50% for all of 2009. Fitch expects that excess spread may compress again in the coming months as elevated chargeoffs persist and yield increases slow, however our view is that early amortization risk remains remote.

Monthly payment rates (MPR), a measure of how quickly consumers are paying off their card balances, fell to 17.64% from 18.57% last month. These MPRs are low compared to 2006 and 2007 when the MPR index routinely topped 20%, but are still strong compared to the average MPR of 16.00% since the inception of the index in 1991.

Additional information is available at 'www.fitchratings.com'.

Global ATM Association Honors Interswitch

ATM Industry Association (ATMIA), the global non-profit trade association with over 1,300 members in 50 countries, has rewarded Interswitch as one of its loyal members in the African region.

ATMIA promotes ATM convenience, growth and usage worldwide in order to protect the ATM industry’s assets, interests, good name and public trust. It also provides education, best practices, political voice, and networking opportunities for member organizations.

Interswitch, Nigeria’s premier transactions switching and e-payment company, was the only electronic payment company listed in Nigeria and the entire West Africa as “ATMIA Loyal Member”.

“Interswitch has been a loyal member since 2004,” the letter from ATMIA reads.

ATMIA members have free access to the body’s international security best practice manuals for the global ATM business, corporate governance, resources and mobile banking security, policies and procedures.

ATMIA International member database also includes the global centre for ATM security best practices, fraud alerts, fraud reference library and ATM crime information.

In a communiqué from the international organization, ATMIA listed 23 companies as loyal members in seven different categories based on the number of years these companies have been supporting it. Interswitch was listed in the fifth category along with corporate institutions such as Absa Bank, Banking Machine Services (PTY), Bankserv, Barrier Angelucci PTY, Fiserv, TMD Security Gmbh, ATMmarketplace.com, NCR, First National Bank, and Triton Systems of Delaware Inc, amongst others.

Speaking on the reward, Interswitch’s Managing Director and Chief Executive Officer, Mr. Mitchell Elegbe, stated that the management and staff of Interswitch are very proud to be selected as worthy of such recognition by the global body.

“As the only company listed in Nigeria and the whole of the West African region as an ATMIA Loyal Member, the management of Interswitch is humbled by the global recognition. We hope to continue to support the global body and as ATM services become pervasive in Nigeria and other West African countries. We also believe more Nigerian companies will make the list in the future and benefit from global associations such as this,” he said.

All the installed ATM capacity managed by 24 banks in the country and ATM Consortium (ATMC), the country’s only Independent ATM Deployer, are linked to InterSwitch electronic switching and processing networks.

The company provides switching and account reconciliation services for all the ATM networks, also pioneered the use of the Verve Chip and PIN card.

VeriFone Acquires Taxi Media Sales Business from Clear Channel Outdoor

SAN JOSE, Calif.--(BUSINESS WIRE)--Accelerating its strategic expansion into payment-enabled media, VeriFone Holdings, Inc. (NYSE: PAY), today announced that it has acquired the Clear Channel Taxi Media business from Clear Channel Outdoor. The acquisition is not expected to be material to 2010 results. Financial terms were not disclosed.

VeriFone intends to leverage this well-developed channel into VeriFone’s Media Solutions payment-enabled business, where in-taxi digital content is positioned to become one of the most innovative advertising venues as spending moves from traditional to online and digital place-based media.

“VeriFone is delivering Internet-enabled, multi-media technologies at the point-of-sale,” said Douglas G. Bergeron, CEO of VeriFone. “As consumers shift to electronic transactions in taxicabs and other media-enabled locations, we have a unique ability to deliver dynamic and interactive campaigns with desirable and measurable advertising efficiencies. This is a very high value services opportunity.”

The acquisition includes relationships with a nationwide network of taxi media buyers and more than 20 experienced media sales representatives. With the acquisition, VeriFone has added an additional 5,000 taxicab advertising endpoints to its existing New York City network of 6,500 cabs.

VeriFone's expanded media sales force can now sell advertising to local and national buyers with a reach of 90 percent of all New York taxi cabs. Presently, there are approximately 300,000 taxi fares a day in New York City.

VeriFone Media Solutions now has sales representatives in Boston, Chicago, Las Vegas, Miami, New Orleans, New York City and San Francisco.

Clear Channel Outdoor entered the taxi advertising business in 2000, with a significant percentage of the business centered on sales of taxi top advertising. In 2007, Clear Channel Outdoor entered the market for in-taxi digital place-based media.

Additional Resources: www.verifone.com/media

25 Million New Malware Strains in 2009 vs.15 Million Over Last 20 Years

Help Net Security announced the release of PandaLabs 2009 Annual Report which let us know about the prolific proliferation of new malware strains in 2009. The bad guys wow'd us with 25 million new malware strains in one year

The outstanding trend of the last 12 months has been the prolific production of new malware: 25 million new strains were created in just one year, compared to a combined total of 15 million throughout the last 20 years.

This is one of the findings of the latest malware report by PandaLabs which reviews the major incidents and events concerning IT security in 2009. This latest surge of activity included countless new examples of banker Trojans (some 66%) as well as a host of fake anti-virus programs (rogueware).

The report also draws attention to the resurgence of traditional viruses, previously on the verge of extinction, such as Conficker, Sality or the veteran Virutas.

As regards malware distribution channels, social networks (mainly Facebook, Twitter, YouTube or Digg), and SEO attacks (directing users to malware-laden websites) have been favored by cyber-criminals, who have been consolidating underground business models to increase revenues.

The report also examines how individual countries and regions have been affected throughout the year. Taiwan tops the rankings, followed by Russia, Poland, Turkey, Colombia, Argentina and Spain. Countries suffering fewest infections include Portugal and Sweden.

Last year also saw a rise in the number of news stories related to cyber-attacks with political motives or targets, suggesting that this is no longer the preserve of sci-fi movies and conspiracy theorists and is now becoming a reality.

PandaLabs has predicted that the amount of malware in circulation will continue to grow during 2010. Windows 7 will surely attract the interest of hackers when it comes to designing new malware, and attacks on Mac will increase. While we are likely to witness more politically motivated attacks the report concludes that, once again, this will not be the year of the cell phone virus.

The complete report is available here.

Visa Reigns with Silent Tax - Video from NY Times

Click the link below to watch the video accompaniment to the NY Times article on Visa and why they push the less secure signature debit over the more secure PIN debit.

By the way...Signature Debit is also known as "offline" debit whereas PIN Debit has been forever called "online debit."

That being the case, why do YOU think "online shopping" doesn't offer "online debit?" Watch the video...it's chock full of "Fees Frames"

Visa Reigns with Silent Tax

The growing use of debit cards has meant big profits for Visa, and there are concerns that the company's market power has led to unnecessarily high fees to merchants.

Fees Frame... http://video.nytimes.com/video/2010/01/04/your-money/credit-and-debit-cards/1247466238575/visa-reigns-with-silent-tax.html

The "Perverse" Nature of the Bank Card Industry

In the last post of the year on the PIN Payments News Blog, I talked about the "Cardtels" and how they don't like the fact that HomeATM can enhance the security of online transactions...the reason being that a more secure transaction has a price tag. Therefore, prior to posting the New York Times article, I thought I'd refresh your memory on what I had to say, because it correlates with what NYT has to say. Here's a snippet:

..."If you are in the payments industry, you've probably already figured out why the "cardtels" might want to keep both "Card Present" AND conventional "PIN Debit" transactions "offline." (Hint: their reasoning lies within the picture on the left)

Cutting processing costs in half might sound like a wonderful solution to the average person, but not in this industry. Instead, it's the problem. Why you say? Simple...

The money (savings) would come out of the pockets of banks, the EFT Networks and V/MC, which I call the Cardtels. So, they feel it is in their best interest to prevent that from happening. It doesn't matter that PIN Debit is the most popular AND SECURE payment option available. They (the Cardtels) tried (and did) to keep PIN debit out of retail locations for years, until Constantine and Cannon represented Wal*Mart and other retailers in an anti-trust lawsuit that wound up costing the V/MC $3 plus billion dollars. That "loss" really didn't matter. They probably earned $4 plus billion during the seven years it took to get to the Supreme Court house steps, the location of which compelled them to settle "out of court." (to prevent the TRIPLE damages associated with an antitrust loss in court)

You see, it doesn't matter that fraud continues to rise at record levels.

It doesn't matter that "Card Not Present transactions" are responsible for more than 50% of all fraud even though it only constitutes about 10% of all transactions.

It doesn't matter that people card numbers are being stolen left and right

It doesn't matter that retailers lost $191 BILLION dollars to fraud in 2008.

It doesn't matter that HomeATM can increase online payments security and significantly reduce fraud

What DOES matter, is that the Cardtels continue turning a huge profit. Even though our device would mean the end of the threats posed by phishing, keystroke logging etc. (both of which are responsible for a huge percentage of identity theft cases) and even though it would significantly reduce the costs of fraud for business cardholders and Internet Retailers, the problem is that a more secure transaction, comes with a price tag. A lower one.

In one of the better written articles explaining how these "cardtels" and the payments industry in general has worked for years, Andrew Martin writes for the New York Times on the "perverse" nature of the bank card industry...

The Card Game: How Visa, Using Card Fees, Dominates a Market

By Andrew Martin

Every day, millions of Americans stand at store checkout counters and make a seemingly random decision: after swiping their debit card, they choose whether to punch in a code, or to sign their name.

It is a pointless distinction to most consumers, since the price is the same either way. But behind the scenes, billions of dollars are at stake.

When you sign a debit card receipt at a large retailer, the store pays your bank an average of 75 cents for every $100 spent, more than twice as much as when you punch in a four-digit code.

The difference is so large that Costco will not allow you to sign for your debit purchase in its checkout lines. Wal*Mart and Home Depot steer customers to use a PIN, the debit card norm outside the United States.

Despite all this, signature debit cards dominate debit use in this country, accounting for 61 percent of all such transactions, even though PIN debit cards are less expensive and less vulnerable to fraud.

How this came to be is largely a result of a successful if controversial strategy hatched decades ago by Visa, the dominant payment network for credit and debit cards. It is an approach that has benefited Visa and the nation’s banks at the expense of merchants and, some argue, consumers.

Competition, of course, usually forces prices lower. But for payment networks like Visa and MasterCard, competition in the card business is more about winning over banks that actually issue the cards than consumers who use them. Visa and MasterCard set the fees that merchants must pay the cardholder’s bank. And higher fees mean higher profits for banks, even if it means that merchants shift the cost to consumers.

Seizing on this odd twist, Visa enticed banks to embrace signature debit — the higher-priced method of handling debit cards — and turned over the fees to banks as an incentive to issue more Visa cards. At least initially, MasterCard and other rivals promoted PIN debit instead.

As debit cards became the preferred plastic in American wallets, Visa has turned its attention to PIN debit too and increased its market share even more. And it has succeeded — not by lowering the fees that merchants pay, but often by pushing them up, making its bank customers happier.

In an effort to catch up, MasterCard and other rivals eventually raised fees on debit cards too, sometimes higher than Visa, to try to woo bank customers back.

“What we witnessed was truly a perverse form of competition,” said Ronald Congemi, the former chief executive of Star Systems, one of the regional PIN-based networks that has struggled to compete with Visa. “They competed on the basis of raising prices. What other industry do you know that gets away with that?”

Visa has managed to dominate the debit landscape despite more than a decade of litigation and antitrust investigations into high fees and anticompetitive behavior, including a settlement in 2003 in which Visa paid $2 billion that some predicted would inject more competition into the debit industry.

Yet today, Visa has a commanding lead in signature debit in the United States, with a 73 percent share. Its share of the domestic PIN debit market is smaller but growing, at 42 percent, making Visa the biggest PIN network, according to The Nilson Report, an industry newsletter.

The Risk of Refusing

Critics complain that Visa does not fight fair, and that it used its market power to force merchants to accept higher costs for debit cards. Merchants say they cannot refuse Visa cards because it would result in lower sales.

“A dollar is no longer a dollar in this country,” said Mallory Duncan, senior vice president of the National Retail Federation, a trade association. “It’s a Visa dollar. It’s only worth 99 cents because they take a piece of every one”.

Visa officials say its critics are griping about debit products that have transformed the nation’s payment system, adding convenience for consumers and higher sales for merchants, while cutting the hassle and expense of dealing with cash and checks. In recent years, New York cabbies and McDonald’s restaurants are among those reporting higher sales as a result of accepting plastic.

“At times we have a perspective problem,” said William M. Sheedy, Visa’s president for the Americas. “Debit has become so mainstream, some of the people who have benefited have lost sight of what their business model was, what their cost structure was”.

Visa officials said the costs of debit for merchants had not gone down because the cards now provided greater value than they did five or 10 years ago. The costs must not be too onerous, they say, because merchant acceptance has doubled in the last decade.

The fees are “not a cost-based calculation, but a value-based calculation,” said Elizabeth Buse, Visa’s global head of product.

As for Visa’s market share, company officials maintain that it is rather small when considered within the larger context of all payments, where, for now at least, cash remains king.

While Visa may be among the best-known brands in the world, how it operates is a mystery to many consumers.

Visa does not distribute credit or debit cards, nor does it provide credit so consumers can buy flat-screen televisions or a Starbucks latte. Those tasks are left to the banks, which owned Visa until it went public in 2008.

Instead, Visa provides an electronic network that acts like a tollbooth, processing the transaction between merchants and banks and collecting a fee that averages 5 or 6 cents every time. For the financial year ended in June, Visa handled 40 billion transactions. Banks that issue Visa cards also pay a separate licensing fee, based on payment volume. MasterCard, which is roughly half the size of Visa, uses a similar model. “It’s a penny here or there,” said Moshe Katri, an analyst who tracks the payments industry for Cowen and Company. “But when you have a billion transactions or more, it adds up”.

With debit transactions forecast to overtake cash purchases by 2012, the model has investors swooning: Visa’s stock traded at $88.14 on Monday, near a 52-week high, while shares of MasterCard, at $256.84 each, have soared by more than 450 percent since the company went public in 2006.

While there is little controversy about the fees that Visa collects, some merchants are infuriated by a separate, larger fee, called interchange, that Visa makes them pay each time a debit or credit card is swiped. The fees, roughly 1 to 3 percent of each purchase, are forwarded to the cardholder’s bank to cover costs and promote the issuance of more Visa cards.

The banks have used interchange fees as a growing profit center and to pay for cardholder perks like rewards programs. Interchange revenue has increased to $45 billion today, from $20 billion in 2002, driven in part by the surge in debit card use.

Some merchants say there should be no interchange fees on debit purchases, because the money comes directly out of a checking account and does not include the risks and losses associated with credit cards. Regardless, merchants say they inevitably pass on that cost to consumers; the National Retail Federation says the interchange fees cost households an average of $427 in 2008.

While the cost per transaction may seem small, at Best Buy, the biggest stand-alone electronics chain, “these skyrocketing fees add up to hundreds of millions of dollars every year,” said Dee O’Malley, director of financial services. “Every additional dollar we are forced to pay credit card companies is another dollar we can’t use to hire employees, or pass along to our customers in the form of savings”.

Weighing Rules on Merchants

The Justice Department is investigating if rules imposed by payment networks, including Visa, on merchants regarding “various payment forms” are anticompetitive, a spokeswoman said. Several bills have been introduced in Congress seeking to give merchants more ability to negotiate interchange, which is largely unregulated.

While interchange remains legal despite repeated challenges, a group of merchants is pursuing yet another class-action suit, this time in federal court in Brooklyn, against Visa and MasterCard that seeks to upend the system for setting fees.

“Visa and MasterCard have morphed into a giant cookie jar for banks at the expense of consumers,” said Mitch Goldstone, a plaintiff in the case.

Fees were not an issue when debit cards first gained traction in the 1980s. The small networks that operated automated teller machines, like STAR, Pulse, MAC and NYCE, issued debit cards that required a PIN. MasterCard had its own PIN debit network, called Maestro.

Merchants were not charged a fee for accepting PIN debit cards, and sometimes they even got a small payment because it saved banks the cost of processing a paper check.

That changed after Visa entered the debit market. In the 1990s, Visa promoted a debit card that let consumers access their checking account on the same network that processed its credit cards, which required a signature.

To persuade the banks to issue more of its debit cards, Visa charged merchants for these transactions and passed the money to the issuing banks. By 1999, Visa was setting fees of $1.35 on a $100 purchase, while Maestro and other regional PIN networks charged less than a dime, Federal Reserve data shows. Visa says the fee was justified because signature debit was so much more useful than PIN debit; at the time, roughly 15 percent of merchants had keypads for entering a PIN.

Merchants said they had no choice but to continue taking the debit cards, despite the higher fees, because Visa’s rules required them to honor its debit cards if they chose to accept Visa’s credit cards.

A Seven-Year Battle

Wal-Mart, Circuit City, Sears and a number of major merchants eventually sued. After seven years of litigation, Visa and MasterCard agreed to end the “honor all cards” rule between credit and debit and to pay the retailers a settlement of around $3 billion, one of the largest in American corporate history. Visa paid $2 billion, and MasterCard the remainder.

Since then, only a handful of retailers have stopped accepting Visa debit cards, an indication that the crux of the lawsuit was “much ado about nothing,” Mr. Sheedy says.

And while some merchants said they thought the lawsuit would pave the way to a new era of competition, a curious thing happened instead: while Visa temporarily lowered its fees for signature debit, it raised the price on PIN debit transactions and passed the funds on to card-issuing banks, and its competitors soon followed.

The current class-action lawsuit joined by Mr. Goldstone contends that Visa’s PIN debit network, called Interlink, is offering banks higher fees as an incentive to issue debit cards that are exclusively routed over this network. Interlink, which has raised its PIN debit fees for small merchants to 90 cents for each $100 transaction, from 20 cents in 2002, is often the most expensive, especially for small merchants, Fed data shows.

One large retailer, who requested anonymity to preserve its relationship with Visa, provided data that showed Interlink’s share of PIN purchases rose to 47 percent in 2009, from 20 percent in 2002, even as its fees steadily increased ahead of most other networks — to 49 cents per $100 transaction in 2009, from 38 cents in 2006.

Visa officials say its PIN debit network is taking off despite rising costs because it offers merchants, banks and consumers a level of efficiency and security that regional networks cannot match. “We are motivated as a company to try to drive value to each one of those participants so that they accept the card, issue more cards, use the card,” Mr. Sheedy said.

At checkout counters, meanwhile, consumers are quietly tugged in one direction or the other.

Safeway, 7-Eleven and CVS drugstores automatically prompt consumers to do a less costly PIN debit transaction. The banks, however, still steer consumers toward the more expensive form of signature debit. Wells Fargo and Chase are among those that offer bonus points only on debit purchases completed with a signature.

Visa says it does not care how consumers use their debit card, as long as it is a Visa. But for now at least, the company says the only way to ensure that a purchase is routed over the Visa network is to sign.

“When you use your Visa card, you have a chance to win a trip to the Olympic Winter Games,” a new Visa commercial promises.

The commercial does not explain the rules, but the fine print on Visa’s Web site does: nearly all Visa purchases are eligible — as long as the cardholder does not enter a PIN.

The New York Times

Every Man/Woman for Themselves - Melissa Hathaway

Yesterday, I posted an entry entitled: Melissa Hathaway on 'Five Myths About Cybersecurity' I let you know about a new report written by Ms. Hathaway concerning the lack of security on the web. Simply put, she is warning online shoppers and online banking customers that there are tens of thousands of newly introduced viruses/malware on any given day, designed to steal your credit card data or online banking credentials and that the cost of fraud is being passed on to consumers. For those of you unfamiliar with Melissa Hathaway, I've included a bio at the end of this post...

Here's more about what she had to say about Myth 1:

Myth 1: Consumer protection exists in cyberspace

False. On-line holiday shoppers beware, you are your own protection. On November 30th – or Cyber Monday as on-line retailers have dubbed the Monday after Thanksgiving – the FBI warned consumers of some of the threats presented in cyberspace, including scams intended to trick us into downloading malware or divulging sensitive information. Web browsers and anti-virus software are not going to protect us.

Why? Because in any given day there can be tens of thousands newly introduced viruses or malware that have a shelf life of 24 hours. Today’s software simply cannot keep up. And that is not all. Some botnets, such as the Storm botnet, are used to hide phishing and malicious web sites behind an ever-changing network of compromised hosts acting as proxies.

And what happens? Well, the average person holds approximately 20 online accounts for banking, internet-based mail, and social networking like MySpace or LinkedIn. The perpetrators obtain credit card data, bank-accounts, passwords and identities with which they then steal and spend your hard earned cash to support their business activities.

Are consumers protected? Many companies claim that they are, but have you noticed that your credit card interest rate recently increased by five percent or more? Is this a way to pass the cost of fraud onto consumers?

Further, some banks are considering making their customers responsible for protecting their smart phones and computers from becoming infected so that they cannot be used to hijack their accounts.

The bottom line is that the on-line industry will find ways to pass the costs of cybercrime through to consumers, which means that it really is every man (or woman) for themselves.

Melissa Hathaway is President of Hathaway Global Strategies, LLC and Senior Advisor at Harvard Kennedy School’s Belfer Center.

Previously she served as Senior Advisor to the Director of National Intelligence and Cyber Coordination Executive during the administration of President George W. Bush, and as Acting Senior Director for Cyberspace for the National Security Council during the administration of President Barack Obama.

Tuesday, January 5, 2010

Visa Reigns with Silent Tax

In one of the better written articles explaining how these "cardtels" and the payments industry in general has worked for years, Andrew Martin writes for the New York Times on the "perverse" nature of the bank card industry...

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