Wednesday, October 21, 2009

New Functionality to Chip and PIN Terminal - Funding

Press Release: October 21, 2009 -PIN Payments News Blog - Chip and Pin terminals are no longer just machines to accept credit and debit card payments. A new functionality has been built into these terminals, allowing retailers to borrow their future credit and debit card sales upfront which they can then payback through a percentage of each credit and debit card sale from their customers.

This is a refreshing alternative for retailers who have been struggling to get access to working capital from the banks. Retailers across the country are taking advantage of an asset they already have; their future credit and debit card sales.

This is a perfect time for retailers to learn about this facility that is available to them as Christmas is approaching. Retailers can take advantage by receiving their Christmas takings now which will allow them to invest it into their business by either purchasing Christmas stock, refurbishing their premises or simply whatever they may need.

One merchant who has taken advantage of this new technology is Jake Schamrel of the Courtyard Restaurant. Jake needed working capital to convert unused space in this restaurant into a casual dining room. Once converted, Jake has seen 28% growth in his business revenue.

“This is a genius idea, a unique system that suites my business. The payments are flexible so whether I process £5,000 or £2000 it works alongside my business activity with no risk to me or my business.”

These terminals are giving merchants an alternative route to funding, helping them to grow and improve their businesses. Jake is one of many business owners who will not be beaten and continue to grow his business through the recession.

United Kapital (http://www.unitedkapital.co.uk) is pleased to be one of the first companies to introduce this terminal functionality. Tony Pegg, Managing Director of United Kapital indicated, “These terminals are the most advanced in the market, not only are they effective at their primary function of accepting credit and credit card payments but they give merchants the assurance of working capital as and when they need it. The terminals are PCI DSS compliant and are available to all types of business whether their business currently has a fixed, portable or mobile terminal.”

Financial Services Industry Hit Hardest by Fraud According to Global Report

Out of 10 industries surveyed, half experienced a spike in fraud activity and the remaining saw a decline; the global fraud rate remained steady

BOSTON, October 21, 2009 (PIN Payments News Blog) – The global financial services industry saw a dramatic spike in fraud activity with companies losing an average of $15.2 million over the past three years, according to the latest edition of the Kroll Annual Global Fraud Report, released today at the Association of Corporate Counsel’s 2009 Annual Meeting in Boston. Despite sector-specific spikes and declines in fraud activity, the worldwide fraud rate remained steady in 2009. Companies lost an average $8.8 million to fraud over the past three years, an increase of seven percent over last year’s figure which stood at $8.2 million. The findings are the result of a survey Kroll commissioned from the Economist Intelligence Unit of more than 700 senior executives worldwide.

Fraud levels varied markedly by sector with five industries experiencing a rise in fraud losses (financial services; professional services; healthcare, pharmaceuticals & biotechnology; retail, wholesale & distribution; and travel, leisure & transportation) and five sectors reporting declines (manufacturing; technology; media & telecoms; natural resources; and consumer goods & construction).

Blake Coppotelli, senior managing director in Kroll’s Business Intelligence and Investigations unit said:

“Traditionally every downturn brings about a rise in fraud, but what we are seeing in 2009 is something far more complex. Companies are seeing greater vulnerability due to reduction in internal controls, pay cuts and reduced revenue across the board, but counteracting this increased risk are the realities of today’s constrained business environment, where factors such as high staff turnover, entry into new markets and inter-firm collaboration are far less common than in years past. In short, the current economic crisis has increased the motive for fraud, but decreased the opportunity.

Of course, this shift in business behavior is only as lasting as the economic crisis itself, which is why companies must work to bolster their existing anti-fraud strategies in preparation for the economic changes to come.”

Overall, 30 percent of companies reported the current economic climate had directly increased their exposure to fraud over the past 12 months, with only five percent reporting a decline. Of all the regions surveyed North America experienced the highest incidence of fraud as a result of the global financial crisis (32 percent).

Other key findings include:

The Middle East and Africa experienced the worst fraud levels of all the regions with companies losing an average $11.5 million and seeing the highest incidence rate in seven out of the 10 frauds surveyed

North America was no longer the low fraud leader with seven out of 10 fraud incidences showing an increase over 2008 figures. Companies experiencing internal financial fraud and financial mismanagement rose substantially, however theft of physical assets, corruption and vendor fraud were lower than any other region

Larger companies with annual sales of over $5 billion reported greater average losses (rising to $25.8 million from $23.3 million in 2008), while the situation improved for smaller businesses with yearly revenue under $5 billion (dropping to $4.6 million from $5.5 million last year).

The third Kroll Annual Global Fraud Report includes a full detailed industry analysis across a range of fraud categories and regions. To obtain a copy please visit www.kroll.com/fraud.

Methodology

Kroll commissioned The Economist Intelligence Unit to conduct a worldwide survey on fraud and its effect on business during 2009. A total of 729 senior executives took part in this survey. A little more than a third of the respondents were based in North and South America, 25 percent in Asia-Pacific, just over a quarter in Europe and 11 percent in the Middle East and Africa.

Ten industries were covered, with no fewer than 50 respondents drawn from each industry. The highest number of respondents came from the financial services industry (12 percent). A total of 46 percent of the companies polled had global annual revenues in excess of $1 billion.

About Kroll

Kroll, the world's leading risk consulting company, provides a broad range of investigative, intelligence, financial, security and technology services to help clients reduce risks, solve problems and capitalize on opportunities. Headquartered in New York with offices in more than 60 cities in over 29 countries, Kroll has a multidisciplinary team of more than 3,000 employees and serves a global clientele of law firms, financial institutions, corporations, non-profit institutions, government agencies, and individuals. Kroll is a subsidiary of Marsh & McLennan Companies, Inc. (NYSE: MMC), the global professional services firm.

About The Economist Intelligence Unit

The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist. Through our global network of about 700 analysts, we continuously assess and forecast political, economic and business conditions in 200 countries. As the world's leading provider of country intelligence, we help executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies.

Shop.org/Forrester Report Shows Online Retailers Optimistic for ’09

Online Retailers See Opportunity Ahead

- Despite Economy, Online Retailers Report Profitable 2008 -

Washington, October 2009 – Despite a progressively deteriorating economic environment, including the worst holiday season in decades, 57 percent of online retailers surveyed for Shop.org’s State of Retailing Online reported they were more profitable in 2008 than 2007. The survey polled 117 retailers and was conducted by Forrester Research, Inc.

“Many Americans are heading to the internet first to look for sales and promotions, especially when shopping for gifts and big purchases,” said Scott Silverman, Executive Director of Shop.org. “Though online retailers have had their challenges within the past year and watched consumers pull back on spending, e-commerce continues to be a bright spot in business.”

According to the survey, online retailers adjusted to the economy in a variety of different ways. Nine in ten retailers (91%) focused on preserving margins, while 88 percent of retailers amplified promotions or increased “value” messaging. Slightly more than half of retailers (53%) lowered prices as a result of the economy.

As the U.S. economy suffered in 2008, the environment provided an opportunity for some online retailers to focus on gaining market share while other retailers struggled. For many, that concentration proved successful: according to the survey, one-third of online retailers (33%) said they increased market share during the downturn.

“While online retailers have been able to navigate better than most through the economic downturn, companies should continue to focus on keeping costs low and integrating the online and offline channels in order to be best positioned when the economy bounces back,” said Sucharita Mulpuru, Forrester Research principal analyst.

As the economy begins to stabilize and consumer confidence grows, online retailers are hopeful for the future with guarded optimism. Four out of five online retailers (60%) believe the U.S economy will improve within the next year, and half (50%) think their web business will actually fare better than expected in the next 12 months. That said, retailers are being cautious internally: even though the overall sentiment about online retail is strong, thirty-eight percent said that they have actually lowered expectations around the Web business, even though the overall sentiment about the channel is strong.

"The State Of Retailing Online 2009: Profitability Report" is currently available to Shop.org members and can also be purchased directly at www.shop.org/soro. Select Forrester clients will be able to access the report directly on www.forrester.com as part of their subscription service starting on October 23, 2009.

Forrester Research, Inc. (Nasdaq: FORR) is an independent research company that provides pragmatic and forward-thinking advice to global leaders in business and technology. Forrester works with professionals in 20 key roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs. For more than 26 years, Forrester has been making IT, marketing, and technology industry leaders successful every day. For more information, visit www.forrester.com.

Shop.org, a division of the National Retail Federation, is the world's leading membership community for digital retail. Founded in 1996, Shop.org's 700 members include the 10 largest retailers in the U.S. and more than 60 percent of the Internet Retailer Top 100 E-Retailers. It's where the best retail minds come together to gain the insight, knowledge and intelligence to make smarter, more informed decisions in the evolving world of the Internet and multichannel retailing. Shop.org programs and activities include benchmarking research, events and networking communities.

###

Source: Press Release

43 Million People Give Bank Details to Cybercriminals in Last 12 Months?

Question: Do you still really believe it is safe to bank online by typing in your username and password instead of authenticating yourself the same way you would do at an ATM?

According to the latest study by Symantec, up to 43 MILLION people may have voluntarily (can you say..."duped") given their bank details to the bad guys.

Don't people know that "sharing" their username and password to "anybody" (let alone the bad guys) means that the bank won't reimburse them? Seriously...here's an example from Wells Fargo.

Our Guarantee

We guarantee that you will be covered for 100% of funds removed from your Wells Fargo accounts in the unlikely event that someone you haven’t authorized removes those funds through our Online Services. To qualify for this guarantee, you must follow Your Responsibilities below.

Online Services means any Wells Fargo Online^® or Wells Fargo Business Online^®services you use to initiate consumer, business, or brokerage monetary transactions.

Your Responsibilities

You are responsible for protecting your password and account information by: Not disclosing your personal account information to others (including your ATM PIN, online username, and password)

Think about it. 43 Million in 12 months. Voluntarily.

Let's put that in perspective. How long did it take McDonald's to serve 43 Million Hamburgers at 15 cents each? It took them years and years.

43 Million in 12 months means that (as predicted)...it's getting a lot worse before it's getting better...in fact...it's getting downright crazy!

Up to 43 million people could have given their bank details to cyber criminals after being duped by fake anti-virus software online, a web security firm has found.

Figures published by Symantec suggest: 93 percent of the people scammed downloaded the rogue programs "by choice" after being tricked into believing it was legitimate.

Editor's Note: So much for the idea of "educating" customers about the dangers of phishing. I never really thought that was a good "master plan" anyway.

The better "master plan" would be the elimination of typing username/passwords into a box at an online banking website. Then phishers have nothing to phish phor. Otherwise...online banking fraud will double...I suppose instead of giving away a HomeATM SLIM they could ask their online banking customers if they "Would Like Phries" with their Philet-O-Phish...

Click Here for the PDF Version of the Symantec Report

From Symantec: Web users fall prey to the scam when they click on links, pop-ups or flashing adverts warning them their computer is infected. The fake program then appears to run a virus check which tells the user their PC is infected and asks them to pay for it to be cleaned up.

But downloading the software can give criminals access to bank details and computer files. Symantec found 250 rogue programs were downloaded 43 million times in the 12 months to July 2009.

The company's analysts believe a small number of people run networks of more than 1,000 distributors — whose earnings are linked to the number of machines they infect.

The distributors, most of whom are in the United States, may not even realize they are acting illegally. "It is a challenge to (ph)fight this," Orla Cox, Symantec's security operations manager told Sky News Online.

Continue Reading at Fox News

Tuesday, October 20, 2009

Fake Anti-Virus Scams Big Business

Evidence of mass-market small-loss scamming

The Anti-Phishing Working Group recently estimated that 485,000 samples were detected in the first six months of the year, which is more than five times the total detected for the whole of 2008.

Symantec has found as many as 250 different cases of fake anti-virus and scareware scams that are being distributed through 200,000 web sites across the globe.

Cyber criminals could be pocketing up to £850,000 from the scams, the security vendor speculates in a new report on the phenomenon, suggesting that its findings indicate 43 million people were duped into paying for false security software in the year ending June 2009.

David Wall, a criminal psychologist and an expert in cybercrime working at the University of Leeds said of the findings, “Not only have we seen an explosion of activity in the last six months or so but these operation have become almost silky smooth. It has become a form of cybercrime that is almost wholly automated. Once a computer has become infected, the scammers don’t need to be involved in seeing the crime through.”

Continue Reading at CBR

2009 Privacy Trust Study for Retail Banking - Ponemon Institute

SOURCE: Ponemon Institute

Oct 20, 2009

Global Financial Crisis Weighs on Results of Ponemon Institute 2009 Most Trusted Companies for Retail Banking Study

Study Finds Recession, Breaches, Rumors Erode Trust; Stability, Service, Customer Respect Buoy Trust

TRAVERSE CITY, MI--(Marketwire - October 20, 2009) - Privacy and information management research firm the Ponemon Institute has announced the results of its annual study of consumer trust in banks. Now in its seventh year, the 2009 Privacy Trust Study for Retail Banking measures consumer perceptions of trustworthiness for retail banking institutes and identifies the issues that influence consumer opinion.

The specter of the global financial crisis had clear and negative consequences on this year's results, reflected by a second straight overall decline in trust scores. Other factors, such as data breaches, rumors related to poor security practice, annoying advertising campaigns, poor web site design, and aggressive use of data coupled with offshore data management were also found to have a detrimental effect on perception.

In contrast to the downward trend, however, five of the six banks earning a top-five ranking improved their scores over 2008. The factors seen to have a positive effect on a bank's brand included perceived financial stability, quality customer service, clear privacy and security practice disclosures, strong online banking identity and authentication processes, stated or implied commitment to stand behind the customer in case of a breach or identity theft, and respectful advertising and marketing campaigns.

For the fourth year in a row, U.S. Bank earned the highest overall trust ranking. According to the Ponemon Institute, the five most trusted banks for privacy in 2009 are:

           2009                                    2008

1.  U.S. Bank (Minneapolis)           1.  U.S. Bank (Minneapolis)
2.  PNC Bank (Pittsburgh)               2.  National City (Cleveland)
3.  SunTrust (Atlanta)                3.  SunTrust (Atlanta)
4.  Citizens Bank (Providence)        4.  PNC Bank (Pittsburgh)
5.  Bank of America (Charlotte)       4.  Citizens Bank (Providence)
5.  Fifth Third Bank (Cincinnati)     5.  Wachovia (Charlotte)

"We were not surprised to see an overall decline in trust scores owing to the global financial crisis, but the increased trust scores earned by the top banks show that there are many aspects of trust that are absolutely within a bank's ability to control," said Dr. Larry Ponemon, chairman and founder, Ponemon Institute. "Those banks that consistently appear at the top of this study, including U.S. Bank's fourth straight number one ranking, are not there accidentally, but have earned their place through a determined effort to apply sound security and privacy practices to their overall business strategy."

"Earning our customers' trust is fundamental to sustaining a meaningful relationship with them, and trust is particularly important in challenging economic times," said Dan Burks, chief privacy officer at U.S. Bank. "The work of the Ponemon Institute to recognize leading institutions provides a great service to consumers as they seek trusted financial partners."

The 2009 Privacy Trust Study for Retail Banking was derived from a final sample of 6,950 surveys returned from adult consumers residing in all geographic regions of the United States. To request a copy of the study, contact the Ponemon Institute.

About the Ponemon Institute:

The Ponemon Institute© is dedicated to advancing responsible information and privacy management practices in business and government. To achieve this objective, the Institute conducts independent research, educates leaders from the private and public sectors, and verifies the privacy and data protection practices of organizations in a variety of industries.

Media Contact:

Mike Spinney

Ponemon Institute

978-597-0342

Email Contact Click here to see all recent news f

U.S. Bank Ranks First for Consumer Trust in Ponemon Institute Study

MINNEAPOLIS--(Business Wire)--The Ponemon Institute, a privacy and information management research firm, has released the 2009 Privacy Trust Study for Retail Banking and for the fourth year, U.S. Bank has ranked first. U.S. Bank has also ranked in the top five each year since the study`s inception in 2003.

The Ponemon Institute study measures consumer perceptions of trustworthiness for retail banking institutes and identifies the issues that influence consumer opinion. This year, Ponemon found that while the global financial crisis has had a negative impact on banks` scores overall, five of the top six banks saw an increase in their scores, including U.S. Bank.

Financial stability, quality customer service, clear privacy and security practice disclosures, strong online banking identity and authentication processes, stated or implied commitment to stand behind the customer in case of a breach or identity theft, and respectful advertising and marketing campaigns were all cited as positive factors impacting consumer trust in banks. Factors such as data breaches, rumors related to poor security practice, annoying advertising campaigns, poor web site design, and aggressive use of data coupled with offshore data management were found to have a detrimental effect on

perception.

"We were not surprised to see an overall decline in trust scores owing to the global financial crisis, but the increased trust scores earned by the top banks show that there are many aspects of trust that are absolutely within a bank`s ability to control," said Dr. Larry Ponemon, chairman and founder of the Ponemon Institute. "Those banks that consistently appear at the top of this study, including U.S. Bank`s fourth straight number one ranking, are not there accidentally, but have earned their place through a determined effort to apply sound security and privacy practices to their overall business strategy."

"Earning our customers` trust is fundamental to sustaining a meaningful relationship with them, and trust is particularly important in challenging economic times," said Dan Burks, chief privacy officer at U.S. Bank. "The work of the Ponemon Institute to recognize leading institutions provides a great service to consumers as they seek trusted financial partners."

The 2009 Privacy Trust Study for Retail Banking was derived from a final sample of 6,950 surveys returned from adult consumers residing in all geographic regions of the United States. To request a copy of the study, contact the Ponemon Institute.

The Ponemon Institute is dedicated to advancing responsible information and privacy management practices in business and government. To achieve this objective, the Institute conducts independent research, educates leaders from the private and public sectors, and verifies the privacy and data protection practices of organizations in a variety of industries.

U.S. Bancorp (NYSE: USB), with $266 billion in assets, is the parent company of U.S. Bank, the 6th largest commercial bank in the United States. The company operates 2,850 banking offices and 5,173 ATMs in 24 states, and provides a

comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Visit U.S. Bancorp on the web at www.usbank.com.

U.S. Bank

Teri Charest, 612-303-0732

or

Ponemon Institute

Mike Spinney, 978-597-0342

Duane Reade to Offer MoneyGram

Drugstore chain adds Utility Bill Payment to its MoneyGram services

MINNEAPOLIS--(PIN Payments News Blog)--Oct. 20, 2009-- MoneyGram International (NYSE: MGI), a leading provider of global payment services, yesterday announced that it has renewed its agent agreement with Duane Reade, the New York City-based drugstore chain. As part of the multi-year agreement, MoneyGram introduced Utility Bill Payment services at Duane Reade locations that already offer MoneyGram money transfers, money orders and ExpressPayment® services for urgent bill payment and reload options for prepaid debit cards.

“Duane Reade continues to be a great partner and essential link to the New York City market and the diverse consumers that make their home there,” said Dan O’Malley, senior vice president and president of the Americas for MoneyGram International. “We’re very pleased to have extended our contract with Duane Reade and look forward to many more years of providing affordable, reliable and convenient money transfer, bill payment and prepaid debit card reload services at one of our premier agents in the region.”

MoneyGram services are available in approximately 200 Duane Reade stores, located in commercial and residential neighborhoods throughout New York City and in parts of New Jersey. They have been a MoneyGram agent since 2001.

MoneyGram Agrees to $18 Million Fine by FTC

MoneyGram International Reaches Agreement with FTC

MINNEAPOLIS--(PIN Payments Blog)--Oct. 20, 2009-- MoneyGram International (NYSE:MGI), a global leader in the payment services industry, today entered into an agreement with the Federal Trade Commission (FTC) to make certain enhancements to its consumer anti-fraud program to further combat consumer fraud perpetrated by criminals who use MoneyGram’s services illegally.

“At MoneyGram, we take the issue of consumer fraud very seriously. Our ability to provide safe and reliable money transfer services for our consumers is critically important,” said Pamela H. Patsley, MoneyGram chairman and CEO. “MoneyGram has committed extraordinary resources to building a state-of-the-art consumer anti-fraud program.”

The company has begun implementing new systems and processes to further bolster consumer protection, which have been effective at stopping millions of dollars in fraudulent transactions every year.

“While we don’t agree with the FTC’s allegations regarding our fraud prevention in the past, we can agree on fraud prevention today and in the future,” said Patsley. “We don’t want our customers being victimized by third-party fraud. What we are announcing today with the FTC is our commitment to enhance our already comprehensive efforts to combat fraud and ensure our customers can continue to rely on MoneyGram for safe, reliable money transfer services.”

MoneyGram provides consumer warnings about the latest scams on its website and money transfer send-forms, and through its 24-hour customer service center. The company also works closely with local, state, federal and international law enforcement to combat this global criminal activity.

“We are committed to be vigilant in our efforts in protecting our customers from fraudulent activity,” said Patsley. “Ensuring safe and reliable money transfers for our customers all over the world is at the forefront of all we do.”

As part of its agreement with the FTC, the company has also agreed to pay $18 million into an FTC-administered fund to refund consumers who have been victimized through third-party fraud.

About MoneyGram International

MoneyGram International offers more control and more choices for people separated by distance or with limited bank relationships to meet their financial needs. A leading global payment services company, MoneyGram International helps consumers to pay bills quickly and safely send money around the world in as little as 10 minutes. Its global network is comprised of 180,000 agent locations in nearly 190 countries and territories. MoneyGram’s convenient and reliable network includes retailers, international post offices and financial institutions. To learn more about money transfer or bill payment at an agent location or online, please visit www.moneygram.com.

Source: MoneyGram International

MoneyGram International

Media:

Lynda Michielutti, 952-591-3846

lmichielutti@moneygram.com

or

Investors:

Alex Holmes, 720-568-8703

aholmes@moneygram.com

Ukash Expands into Canada

Image representing Ukash as depicted in CrunchBase

Image via CrunchBase

London, Oct. 20, 2009 -- Ukash, the fast growing global e-commerce payment solution, has today announced that Canada will be the first country in North America to make Ukash e-cash available to consumers. Through a deal with VendTek Systems Inc under its brand Now Prepay, Ukash will be available from 4,000 point of sale terminals in Ontario, before expanding to a total of 15,000 outlets across Canada by the end of the year.

Having extended its global footprint to Australia in August 2009 and South America earlier this month in a continued effort to bring easy, controlled and anonymous online cash payments to everyone including those without credit or debit cards from anywhere in the world; Ukash is now making its entry into the North American market where there are over 70 million unbanked consumers[1].

With the continued growth of online shopping in Canada and industry reports revealing that Canadians placed almost $12.8 billion worth of orders in 2007[2], the need for a range of alternative payment solutions to support consumers presents an opportunity for Ukash to tap into digitally excluded consumers as well as those with concerns about online fraud.

Mark Chirnside, chief executive officer, Ukash said: "North America is a territory with huge potential for the Ukash proposition. High rates of unbanked consumers at this time, largely due to poor credit history and immigrants unable to get bank accounts, means that there is a growing number of cash consumers who want to spend online. Canada is a key territory for the Ukash proposition and working with Now Prepay will give us the prominence needed to expand our availability across Canada before launching in other countries across the Americas."

Doug Buchanan, President of VendTek said,"Ukash offers an electronic cash payment source and an important solution for people who are looking for an alternative to credit cards. We have been interested in an on-line payment product for our network and Ukash has an e-commerce payment solution that is an excellent fit with our network. We are very excited to partner with them to enable money transfer services over the Now Prepay network in Canada."

Ukash vouchers, which allow consumers to shop, pay and play online using cash, will be available from 15,000 point of sale terminals across Canada including independent convenience stores and gas stations. Vouchers will be available in 25, 50, 75, 100, 150 denominations of Canadian dollars. Ukash is particularly popular with consumers who do not have access to credit and debit cards or those that are fearful of online fraud. Users receive a voucher containing a 19-digit code which can be used to pay at thousands of online merchants.

Ukash is also available in the UK, mainland Europe, South Africa, Australia and South America and has an existing global network of 300,000 physical points of purchase. Purchases of Ukash vouchers in Canada will be subject to a fee.

1] 2008 First Data White Paper

[2] 2007 Canadian Internet Use Survey, conducted as a supplement to the Labour Force Survey.

Source: Company press release.

In an article written by Daniel Indiviglio for The Atlantic, he talks about yesterday's piece in the Wall Street Journal on Interchange Fees. He comes to the conclusion that if Congress steps in and starts messing around with Interchange, the end result will be that consumers will be the ones that are forced to pick up the slack.

With consumer credit card reform having taken place last spring, businesses want their share of Congress' concern. Their cries are getting louder for action to be taken to limit interchange fees -- the cost imposed on businesses for credit card transactions. The Wall Street Journal has an article on interchange fees today. I can understand why businesses don't want to pay as much, as it's a huge expense. But the only alternative is for the cost to fall on consumers.

From WSJ:

U.S. banks raked in $45.3 billion last year from credit- and debit-card fees charged to merchants. About 75% of that comes from interchange fees set by Visa Inc. and MasterCard Inc.

Overall merchant fees, including other revenue collected by banks and processing middlemen, are up 78% from $25.5 billion in 2003, according to the Nilson Report, a Carpinteria, Calif., newsletter that tracks the payments industry.

Here's what that looks like, in chart form, via WSJ:

As you can see, while the quantity of fees is increasing, that's due in large part to people just using credit cards more. Obviously, this trend will only continue, as more and more people are discovering the delightful convenience of credit cards. Meanwhile, the actual percentage of transaction required to be paid as interchange has decreased to the lowest levels we've seen all decade. To me, that makes it seem like the problem of higher costs isn't the fees as much as the popularity of credit cards. After all, the fee percentages are decreasing.

So what if Washington heeds the call of business and orders banks to charge them less? I think you'd have a similar kind of situation to what I noted regarding overdraft fees a few weeks back. Clearly, banks won't simply be content with making less profit. Instead, someone else will pay.

Consumers will be forced to pick up the slack...

Continue Reading

National Bank of Kuwait and Visa Partner for New NFC Mobile Payment Trial

Image via Wikipedia

KUNA (Kuwait News Agency)

20 October 2009

KUWAIT -- The National Bank of Kuwait and Visa Inc. have partnered with Zain Co. to launch the first Near Field Communication mobile payment trial in the GCC.

According to a statement released by the NBK on Tuesday, the payment trial will be using NFC enabled Nokia 6212 devices. The trial marks the first live EMV-Chip compliant Visa payWave NFC transaction in the GCC.

The six month pilot will take place from October 2009 to April 2010 using NFC software technology provided by VIVOtech. Registration will be open from October 2009 for interested NBK customers to participate in the trial. To register for the trial, customers will visit NBK website and follow the registration instructions. Shaikha Khalid Al Bahar, NBK Deputy Chief Executive Officer said, "NBK is proud to launch the first EMV Chip compliant NFC Visa payWave mobile payment trial in the Middle East. We strive to offer the best and most comprehensive financial services to all our customers, as well as being at the forefront adopting cutting edge technology to enhance services and develop innovative products.

"Partnering with Visa and Zain has given us a strong platform from which to launch this innovative mobile payWave payment trial for our customers. We are pleased that our customers can benefit from the ease and convenience of paying for their everyday items with their everyday device and also enjoy dynamic retail offers through smart posters while still enjoying the same level of security that a NBK Visa card transaction provides".

The trial will allow 500 selected NBK cardholders to download their Zain Visa credit card account details directly to their Nokia 6212 classic handset over the Zain network. Once the account has been personalized on the phone, customers can then begin to make purchases at any one of the 100 merchant partner outlets at Kuwait's largest mall, The Avenues, by simply passing a Nokia mobile phone over the Visa payWave reader at the point of sale. The trial uses the same EMV technology which protects all NBK credit and debit cards. There are three milestone innovations occurring within this trial.

The concept of 'smart posters' will be introduced to consumers, allowing them to collect retail offers that can be immediately redeemed for purchases at partner outlets simply by tapping their mobile phone against the poster. Secondly, customers and trial participants will be able to download a free Visa prepaid card by tapping the phone on a smart poster. Thirdly, participants with a credit card and a pre paid card, will also have the option to choose to pay from either cards from their phone at the point of sale, allowing greater on the go flexibility and convenience. Purchases will be charged directly to the customer's NBK Zain Visa credit card or Visa prepaid card account just as they would be with a traditional card payment.

Payments initiated with a mobile phone benefit from the same security as all NBK Visa card transactions, making mobile payWave a fast, reliable and secure method of purchasing goods. VIVOtech, the market leader in contactless/NFC payment software, is providing the underlying technology, including the NFC wallet, over-the-air (OTA) card provisioning software, smart posters and the mobile coupon application.

© KUNA (Kuwait News Agency) 2009

Article originally published by KUNA (Kuwait News Agency) 20-Oct-09

Western Union Q3 Profits Down 25 Percent

ENGLEWOOD, Colo. -- Cash transfer company Western Union Co. said Tuesday that its third-quarter profit sank 25 percent as it set aside cash in preparation for a legal settlement.

For the three months ending Sept. 30, the company earned $181 million, or 26 cents per share, down from $240.8 million, or 33 cents per share, during the same period last year.

Continue Reading at Forbes

Fifth Third to Issue Revolution Money RevolutionCard

ST. PETERSBURG, Fla.--(Business Wire)--

Revolution Money today announced that Fifth Third Bank has joined the Revolution Money network as an issuing bank. The combination of Fifth Third Bank`s card-issuing capabilities with Revolution Money`s marketing and customer servicing and communication capabilities will provide a robust platform for

expanded adoption of RevolutionCard.

"With Fifth Third as an issuing bank we have our largest opportunity yet to significantly grow the RevolutionCard business," said Jason Hogg, founder and CEO of Revolution Money. "Our partnership coincides with a time when consumers are looking for the type of embedded value in every purchase that Revolution Card provides."

With no interchange fees, RevolutionCard creates substantial cost savings for merchants - savings they today are passing back to consumers in the form of loyalty programs and incentives. As the first PIN-based credit card, RevolutionCard provides cardholders peace-of-mind knowing that if they lose their card an unauthorized person cannot use it without their PIN. Additionally, RevolutionCard reduces the chance of identity theft as the card does not display a cardholder`s name or signature. These consumer-oriented security features benefit merchants by helping to reduce chargeback and fraud risk.

"We are excited to join the Revolution Money network and about the opportunity it creates by providing Fifth Third with a new card distribution channel to supplement our existing distribution channels," said Jon Groch, Fifth Third Bank director of Bankcard Services. "We are confident that the value proposition the Revolution Card provides will attract loyal customers seeking everyday value, and enhanced security from their credit card."

About Fifth Third Bank

Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio. The Company has $116 billion in assets, operates 16 affiliates with 1,306 full-service Banking Centers, including 100 Bank Mart locations open seven days a week inside select grocery stores and 2,362 ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Pennsylvania, Missouri, Georgia and North Carolina. Fifth Third operates four main businesses: Commercial Banking, Branch Banking, Consumer Lending, and Investment Advisors. Fifth Third also has a 49% interest in Fifth Third Processing Solutions, LLC. Fifth Third is among the largest money managers in the Midwest and, as of June 30, 2009, has $180 billion in assets under care, of which it managed $24 billion for individuals, corporations and not-for-profit organizations. Investor

information and press releases can be viewed at www.53.com. Fifth Third's common stock is traded on the NASDAQ National Global Select Market under the symbol "FITB." Member FDIC.

About Revolution Money

Revolution Money, a secure, interchange-free payment platform, was created to deliver significant value to both consumers and merchants through two products, RevolutionCard and Revolution MoneyExchange. The RevolutionCard eliminates

costly interchange fees for merchants while simultaneously providing consumers with enhanced PIN-based security, identity protection and numerous merchant discounts and incentives. MoneyExchange is an online payment service that offers

its accountholders an easy, secure and free way to instantly send and receive money online to other accountholders. These products are leading the transformation of the payment industry by providing secure, easy, and instant payment solutions for everyone. St. Petersburg, Florida-based Revolution Money is part of the family of companies within Revolution LLC, which was founded by AOL co-founder Steve Case to drive transformative change by shifting power to

consumers. www.revolutionmoney.com.

Fifth Third Bank

Stephanie Honan, 513-534-6957

stephanie.honan@53.com

OR

Revolution Money

Brad Burns, 202-776-1400

brad.burns@revolution.com

First Data to Offer Brick-and-Click Solutions to Small and Medium Businesses

ATLANTA - (Business Wire) The convenience of online shopping continues to attract consumers to the Web, and small-and-medium businesses are increasingly turning to eCommerce to find new customers, build customer loyalty and drive repeat business. First Data, a global technology and payments processing leader, announces today a relationship with Yahoo! Inc. to provide merchants with fast and flexible payment options, whether their customers are down the street or around the globe.

Together, First Data and Yahoo! Small Business will provide easy-to-implement eCommerce solutions for small and mid-size merchants eager to extend their businesses to the Internet. First Data will provide merchants with point-of-sale terminals and payment processing services to complement Yahoo! Merchant Solutions and Web Hosting subscription-based products, which allow small businesses to set up their online stores and catalog web sites with simple design tools and tracking features.

First Data distributes its merchant products and services through a variety of channels, including global and national sales forces that serve as its feet-on-the-street, agents and independent sales organizations, and through its alliances with numerous bank partners. The company enables more than 5.3 million merchant locations to accept electronic payments in stores, over the phone or on the Internet.

Together, First Data and Yahoo! Small Business will provide easy-to-implement eCommerce solutions for small and mid-size merchants eager to extend their businesses to the Internet.

“Joining forces with one of the leading eCommerce companies in the world will drive additional growth for eCommerce,” said

Souheil Badran, senior vice president and division manager for eCommerce at First Data. “The Yahoo! solution eliminates the complexities and makes it easy for smaller merchants to create professional online stores with easy-to-use tools and step-by-step guidance, while First Data brings unique and proven experience offering a ‘brick and click’ solution in the market.

Together, we can offer our joint customers a completely integrated cross-channel payment system and a portfolio of eCommerce products certified on a broad range of gateways and POS systems.”

A well integrated cross-channel payment system helps merchants by improving the flow of funds, reducing fraud and chargeback expenses, decreasing transaction costs and providing insights crucial for customer loyalty programs. Customers enjoy a wide selection of payment options as well as tested safeguards against fraud and identity theft.

About First Data

First Data powers the global economy by making it easy, fast and secure for people and businesses to buy goods and services using virtually any form of electronic payment. Whether the choice of payment is a gift card, a credit or debit card or a check, First Data securely processes the transaction and harnesses the power of the data to deliver intelligence and insight for millions of merchant locations and thousands of card issuers in 36 countries. For more information, visit www.firstdata.com.

Fiserv Launches New Remote Lockbox Capture Solution

Today, Fiserv introduced its new RemitStream Remote Lockbox Capture solution to help organizations manage payments that consumers or businesses have mailed directly to or walked into the bank customer's office.

Fiserv Launches New Remote Lockbox Capture Solution

- Solution helps organizations manage walk-in payments and remittances -

Brookfield, Wis., October 20, 2009 - Fiserv, Inc. (NASDAQ: FISV), the leading global provider of financial services technology solutions, today introduced its new RemitStream Remote Lockbox Capture solution to help organizations manage payments that consumers or businesses have mailed directly to or walked into the bank customer's office.

Using RemitStream Remote Lockbox Capture from Fiserv, organizations receiving check payments and documents in their offices can remotely capture the items using a PC, a qualified scanner and an Internet connection. After using a scanner to capture images and data of checks and envelopes and full-page invoices, stubs, coupons or any type of remittance document, the organization can then transmit these to a Fiserv lockbox site. The scanned data and images are then merged with lockbox transactions for posting, clearing and information reporting and archiving. For bank customers, the ability to capture remote payments and supporting documents from their offices saves transportation and courier costs, minimizes paper handling and provides a local mailing address and faster deposit of funds. In addition, the lockbox customer can potentially reduce Days Sales Outstanding (DSO) by one day.

An example of the Fiserv core competency in payments, RemitStream Remote Lockbox Capture enables financial institutions to meet customers' local or regional mailing address requirements and grow deposit and fee-based revenues without capital expenditures

"Before Remote Lockbox Capture, the financial institution's customer was sending payments via overnight courier to our lockbox site or driving to make the deposit at a local branch or lockbox location," said Anna Quinlan, president, Remittance and Check Solutions, Fiserv. "With RemitStream Remote Lockbox Capture from Fiserv the lockbox customer can scan images and data and Fiserv will finish the processing, creating an image cash letter for clearing and settlement purposes. Subscribers to our Web-based image viewing and lockbox reporting application may view their remotely-captured images that same day. Lockbox customers who previously received a transmission for the work received at their offices now receive one consolidated lockbox transmission incorporating remotely captured transactions with those processed via their regular lockbox."

About Fiserv

Fiserv, Inc. (NASDAQ: FISV) is the leading global provider of information management and electronic commerce systems for the financial services industry, driving innovation that transforms experiences for financial institutions and their customers. Ranked No. 1 on the FinTech 100 survey of top technology partners to the financial services industry, Fiserv celebrates its 25th year in 2009. For more information, visit www.fiserv.com.

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Smart Card Alliance: Use of Chip Cards Can Reduce U.S. Payments Fraud

Here is a new white paper from the Smart Card Alliance that looks at fraud from the issuer’s perspective. Contributions came from the payment brands, issuers and industry --- speaking in one voice. It goes into depth about the types of payment fraud and approaches to combat it and where chip technology fits into risk mitigation approaches. There’s also detail about the cost of fraud. This follows our recent position paper advocating contactless with dynamic cryptograms in online authentication as a good direction for the U.S. payments industry to stop payment fraud. Among the paper’s conclusions: magnetic stripe cards are the culprit for U.S. fraud problems. By incorporating dynamic data into payment transactions, stolen account or transaction information is rendered useless.

Smart Card Alliance: Use of Chip Cards

Can Reduce U.S. Payments Fraud

PRINCETON JUNCTION, NJ, October 20, 2009 –PIN PAYMENTS NEWS BLOG - U.S. payments fraud is expected to rise unless the industry looks towards new technologies like contactless chip cards, the Smart Card Alliance said in a new white paper released today. “Fraud in the U.S. Payments Industry: Fraud Mitigation and Prevention Measures in Use and Chip Card Technology Impact on Fraud,” developed by the Contactless and Mobile Payments Council, is available on the Smart Card Alliance Web site.

“Criminals are known to exploit the weakest link in a payments infrastructure. With issuers in the rest of the world moving to EMV, it is likely that criminals are going to move counterfeit card activities to the U.S., attacking both U.S. and international issuers,” said Randy Vanderhoof, executive director of the Smart Card Alliance. “If the United States wants to avoid an incoming tide of higher loss, the industry must be willing and able to make investments in emerging technologies.”

Much of the fraud on debit and credit cards in the United States results from activities like counterfeiting and card skimming. Credit and debit card fraud is possible because magnetic stripe cards use static data that can be copied and reproduced on fraudulent cards or used in an Internet purchase transaction. The Alliance does not see protection of data or better fraud detection techniques as the solution to the fraud problem. Rather, the solution is to replace this static data with dynamic data, because it renders stolen account or transaction information useless.

To achieve this goal, the Smart Card Alliance recommends contactless chip cards, already implemented throughout the United States. Current contactless payment devices generate dynamic cryptograms (encrypted codes), similar to those generated by EMV payment cards, so certain data on the card and the terminal change with every transaction. The authentication of the cryptogram assures the issuer that the card presented is authentic. If data is copied or intercepted at the reader, the data is already obsolete for future transaction attempts, and cannot be used successfully to counterfeit cards or replay transactions. Importantly, the current U.S. payments infrastructure can already handle the contactless payment dynamic cryptograms.

“Use of the contactless chip card technology already in place will set the stage for eventually moving to globally-interoperable EMV cards and terminals,” added Vanderhoof. “Once the payments infrastructure moves to EMV, U.S.-issued payment cards will benefit from the same highly secure and globally interoperable payments infrastructure as in the rest of the world.”

The new white paper provides an overview of current fraud levels in the U.S. and of projected trends based on the move to EMV outside of the U.S. The different approaches used by the U.S. payments industry to combat fraud are described, with a discussion of how new technologies and processes, particularly chip card-based technologies and processes, help to mitigate card-based fraud losses.

Participants involved in the development of the white paper include: Dynamic Card Solutions, First Data Corporation, Gemalto, Giesecke & Devrient, IBM, INSIDE Contactless, KeyPoint Consulting, MasterCard Worldwide, Visa Inc., ViVOtech.

About Contactless Card Issuance and Acceptance

Contactless cards have been issued in the United States since 2004. As of June 2009, more than 90 million contactless cards, fobs, and tags have been issued by multiple card issuers under the brand names American Express, MasterCard, and Visa. More than 130,000 merchant locations accept contactless payments today, including a broad cross-section of merchants in a wide variety of merchant categories.

About the Smart Card Alliance Contactless and Mobile Payments Council

The Contactless and Mobile Payments Council is one of several Smart Card Alliance technology and industry councils. The Council was formed to focus on facilitating the adoption of contactless and mobile payments in the U.S. through education programs for consumers, merchants and issuers. The group is bringing together financial payments industry leaders, merchants and suppliers. The Council’s primary goal is to inform and educate the market about the value of contactless and mobile payment and work to address misconceptions about the capabilities and security of contactless technology. Council participation is open to any Smart Card Alliance member who wishes to contribute to the Council projects.

About the Smart Card Alliance

The Smart Card Alliance is a not-for-profit, multi-industry association working to stimulate the understanding, adoption, use and widespread application of smart card technology.

Through specific projects such as education programs, market research, advocacy, industry relations and open forums, the Alliance keeps its members connected to industry leaders and innovative thought. The Alliance is the single industry voice for smart cards, leading industry discussion on the impact and value of smart cards in the U.S. and Latin America. For more information please visit http://www.smartcardalliance.org.

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Monday, October 19, 2009

Gas Branded MasterCard's Shut Down by Citi

Citi closes gas-linked MasterCards without warning

Citigroup shuts down many MasterCards without warning consumers; letters sent 5 days later

By Eileen Aj Connelly, AP Personal Finance Writer

Breaking News: NEW YORK (AP) -- Shannon Burdette tried to pay with her Shell Mastercard after filling up her gas tank this weekend but found the card rejected. Confused, she called the customer service line on the back of the card, issued by Citibank, and was told the account was closed because of something that appeared on her credit report. But when the Sykesville, Md., resident got a copy of her credit report online, the only negative thing she saw was "closed at credit grantor's request" on the Shell MasterCard account.

"They said there was a routine review," said Burdette, who maintained that she and her husband, Brian, used the card regularly and always paid the bill on time. Burdette isn't alone. People across the country have been reporting similar experiences in postings on various consumer Web sites.

Citi confirmed the basics. The bank said in a statement it "decided to close a limited number of oil partner co-branded MasterCard accounts." That includes not only Shell, but Citgo, ExxonMobil and Phillips 66-Conoco cards.

The close date was Wednesday, and letters were sent out Monday to customers informing them of the change, a Citi spokesman said. The bank would not say how many cards were shut down or how much available credit they represented.

But unlike the bank's move to shut down its Home Depot cards, Citi did not discontinue the sale of these cards altogether. It is still accepting applications, promising rewards like 3 percent cash back on fuel purchases and 1 percent cash back on other spending.

No law, including the Credit CARD Act that has started to take effect, prevents banks from closing down credit accounts without warning. Credit card issuers all maintain the right, typically listed in the fine print on credit card agreements.

Citi would not say why the cards in question were shut down, issuing a statement that said only it continuously evaluates its products. "It is kind of an extraordinary action, but these are extraordinary times," said Ben Woolsey, director of marketing and consumer research for CreditCards.com. He noted that Citi is not the healthiest bank. In fact, Citi posted $8 billion in consumer credit losses for its third quarter last week, including both mortgages and credit cards. Like many banks with big consumer lending portfolios, Citi is expecting defaults on credit cards to rise in coming months. Credit card delinquencies typically track the unemployment rate, which is at 9.8 percent and is expected to top 10 percent soon.

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SWIPE OUT PHISHING!

In the article below the author first suggests that phishing works because the majority of web users are not technically savvy, then goes on to say that even technically savvy users are falling victims to the next generation online banking Trojans such as urlZone. Thanks for clearing that up.

Guess you could say that phishing is successful because the most technically savvy people are the bad guys. There is one way to eliminate phishing. Eliminate what they phish phor. And what is that you may ask? Any form of online banking credentials that must be "typed"/"entered" into the browser space. If the information is not typed, but instead swiped and encrypted outside the browser space then we will have created an empty "net." And if the "net" came back empty every time the phishers threw it out there, they would stop phishing. There's only one way to wipe out phishing altogether, and that's to swipe vs. type.

Can Smartphone Mobile Banking Can Thwart Phishing Attacks

Online phishing has become a very serious problem and the root of the problem is the fact that the majority of computer users are not very technically savvy. Thus they fall easy prey to phishing attacks since they lack the instinct to check things such as a web browser's site address or security certificate. However even technically savvy users are falling victims with attacks such as the online banking re-write attack. In this attack cybercrooks are hiding evidence of a victim's diminishing bank balance by rewriting the online bank statements on the fly within the web browser!

As mobile banking becomes ever more popular it will most definitely be subject to similar attacks. The damage will likely be more severe since the penetration rates of mobile phones are higher than computers, and the average user is less familiar with a phone's extended features to be able to spot a potential attack.

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