Heartland Payments Systems
The Department of Justice indicted three individuals on Monday, August 17, 2009, in what it has called the largest case of cybercrime and identity theft ever prosecuted. The three suspects, one American and two unnamed Russian co-conspirators, are allegedly responsible for the data security breach suffered by Heartland Payments Systems in January 2009. The DOJ’s press release is here, the indictment is here and an article from August 2008 (with reference to a similar data breach suffered by the parent company of T.J. Maxx) can be viewed here.
U.S. Supreme Court
The Court has released its calendar of cases for November 2009. Of note is Bilski v. Doll (08-964), a case that could have a broad impact on the prepaid card industry.
Data Security
A white paper published by ACI Worldwide and IBM, looks at business and technology responses in wholesale payments to the post-financial crisis landscape, and assesses whether a service-oriented architecture approach could help to meet these challenges head-on.
A year-long study of the cyberwar between Russia and Georgia (the country) was published recently, along with some dire warnings to businesses and individuals located in the United States. The study was prepared by the U.S. Cyber Consequences Unit and was distributed as a classified document to government and military organizations earlier in August. A version of the US-CCU checklist published in 2007 can be viewed here. The U.S. CCU is an independent, non-profit (501c3) research institute, formed for the purpose of providing assessments of the strategic and economic consequences of possible cyber-attacks and cyber-assisted physical attacks.
Christopher Soghoian, an outspoken advocate of privacy rights, has been hired by the FTC to work in their privacy division and identity protection in its Bureau of Consumer Protection. You may recall Mr. Soghoian from an incident in 2006 when he published information showing how easy it was to generate a copy of a Northwest Airlines boarding pass. In addition to his exposure of security flaws in airline travel, he has co-authored updates to Indiana’s data breach legislation and has been active in disclosing vulnerabilities in social Internet applications ranging from Facebook to Firefox.
New types of malware have appeared on the horizon since the attention lavished on the Conficker botnet earlier this year. These new rogue programs are increasingly more difficult to eliminate and may hint at a new class of “badware” in the immediate future.
In other security-related news, Microsoft researchers have unveiled an anti-hacking concept that could help track or pin down hackers or malicious content to origin servers. The flip side of such a service would be to “de-anoymize the Internet” through the ability to unmask the IP addresses of host servers with 99% accuracy.
Evan Schuman has a lengthy blog post on the manifold issues that plague retailers and online merchants in relation to m-commerce, ranging from websites capable of engaging in transactions to lack of security, to incompatible platforms (for various wireless devices and browsers) to payment processing, URL naming/domain registration and overall business strategy.
Upcoming Events
The Federal Reserve Bank of Cleveland will be holding a conference to frame policy issues by providing financial regulators with insights into regulation of nonfinancial products marketed to the general public. The symposium will be held on September 11, 2009. General information and registration details can be found here.
On September 24 and 25, 2009, the Federal Reserve Bank of Philadelphia will present a conference focusing on important issues in consumer credit and payments. The agenda and schedule can be viewed here. Registration is here.
Congressional Oversight Panel
On August 20, 2009, a press release was issued by COP Chair Elizabeth Warren welcoming former SEC Commissioner Paul Atkins to the Panel.
Debit Cards
An editorial published on August 19, 2009 in the New York Times calls for regulation of overdraft protection, bounced-check fees and debit cards.
Payments Fraud — People’s Republic of China
Retail Decisions, a card issuer and a world leader in fraud prevention and payment processing, announced on August 19, 2009, in conjunction with Chinabank Payment, a leading payment service provider and a prepaid card issuer in China — that attempted card-not-present fraud for China’s airline sector increased from 5% to 8% in the last six months. This is an increase of over 60% and is statistically significant given that China’s online payment market will reach 538 billion Yuan in 2009 (approximately US$787.7 billion), an increase of 128% compared with 2008, according to a recent study. An analysis of the PRC’s online payment market shows that this figure will reach 1.67 trillion Yuan (or US$244 billion) in 2012. With increasing volume, Chinese merchants can expect card-not-present fraud to increase dramatically in the coming years.
Mobile Banking — United Kingdom
Parliament is proposing the introduction of a national smart ticketing system that will let travellers pay for bus and train journeys using mobile phones and bank cards by tapping them against specially equipped readers. Consultation documents (and proposals) can be viewed here. Similar proposals are being contemplated by Chicago and New York City.
Mobile Payments
An application officially announced during the week of August 17, 2009 extends to any cell phone or mobile device the capability of accepting credit cards, a function that up to now mobile merchants have found mostly restricted to smart phones such as the iPhone or BlackBerry. The wCharge Credit Card Terminal, quietly introduced early this year by Transaction Wireless Inc., runs on most handsets and processes card transactions through Website Payments Pro, a service of PayPal Inc.
Credit Cards
In an article published in the New York Times on August 21, 2009, Ron Lieber discusses various methods that individuals can utilize in order to reduce their personal debt, including support for debit cards.
Publications
The Federal Reserve has published a staff working paper entitled “And Banking for All?”. The paper presents data from a survey of low- and moderate-income households in Detroit to examine bank account usage and alternative financial service products. For the vast majority of households, annual outlays on financial services for transactional and credit products are relatively small, around 1% of annual income. This estimate is far lower than those extrapolated by previous work using the posted fees of financial services alone, suggesting that LMI households do not always choose the most expensive financial services option. You can view the paper here.
Related Posts
- News Roundup — August 6, 2009 to August 14, 2009 - August 14, 2009
- News Roundup — August 24, 2009 to September 8, 2009 - September 8, 2009
- News Roundup — June 22, 2009 to June 26, 2009 - July 2, 2009
- News Roundup — May 18, 2009 to May 29, 2009 - May 29, 2009
- News Roundup — September 28, 2009 to October 7, 2009 - October 7, 2009
