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Tag Archives: Prepaid Cards

News Roundup June 2010

BANKS/BANKING

US regulators turn attention to pre-paid money laundering threat. In a bid to tackle money laundering and terrorist financing, the US Financial Crimes Enforcement Network (FinCEN) has proposed new rules to tighten regulatory control of non-bank pre-paid devices. The changes would “impose obligations on the party within any given pre-paid access transaction chain with predominant oversight and control, as well as others who might be in a position to provide meaningful information to regulators and law enforcement, such as prepaid access sellers”.

PREPAID/DEBIT CARDS

MasterCard Launches Online Bill Pay Service Prepaid Enables Issuers, Program Managers to Offer Pay-Anyone Capabilities. MasterCard Worldwide has announced a new bill pay service for MasterCard prepaid card issuers and program managers, and their cardholders. This new service leverages the capabilities of payment platform and services provider Aliaswire, combined with bill payment solutions of MasterCard RPPS, to offer MasterCard prepaid partners a feature-rich bill payment service that integrates with their prepaid card program, and enables MasterCard prepaid cardholders to pay bills online or via telephone.

AccountNow Offers New Visa Prepaid Card New AccountNow Gold Card Provides Extras. The AccountNow Gold Visa Prepaid Card lets cardholders borrow money with the iAdvance line of credit from MetaBank and build credit history. AccountNow Gold cardholders who enroll in Direct Deposit receive higher limits on all deposits and withdrawals. Gold Card customers also receive VIP customer service, and free online bill pay. There’s no monthly fee when $3,000 or more in deposits is placed on a card during a month.

Understanding Restricted Authorization Networks Cards Between Closed and Open Loop. Prepaid cards have long been divided into two types: open-loop cards accepted wherever their network brand (e.g. Visa, MasterCard, American Express, Discover) is honored and closed-loop cards accepted only by the issuing merchant. Not anymore. Restricted Authorization Networks (RAN) are quickly changing the traditional prepaid landscape and bridging the gap between open and closed loop cards.

Gift Cards Hit Facebook Platform Transaction Wireless Launches New Solution. Transaction Wireless, a provider of virtual and mobile gift cards, has launched a new gift card solution for social gifting. TW’s gift card “store” built on Facebook Platform allows friends – especially ones who routinely count on Facebook’s birthday reminders – to create customizable messages with instant delivery or a time-select option to arrive during a party, event or other special occasion. The card is delivered directly to the mobile phone and an email address for printing options.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , . By Roxanne Hamberry - Wednesday, June 30, 2010

News Roundup May 2010

PREPAID/DEBIT/CREDIT CARDS

National Gift Card Teams with American Express Will Offer American Express Prepaid Reward Cards. Under the agreement, National Gift Card says it is able to offer corporate customers below face value pricing on volume orders.

FiCentive Offers Print-on-Demand Card Production Launches Customizable MasterCard Corporate Incentive Cards. FiCentive (OTCBB:PYDS), a provider of turnkey prepaid card solutions, now offers a Print-on-Demand solution for its corporate clients toallow for more flexible options to produce fully customized MasterCard cards. FiCentive says custom cards can be delivered within days with no inventory costs or minimum commitments.

CHARGE Anywhere Completes Certification to Moneris To Enable Mobile Payments in Canada and US. CHARGE Anywhere, a payment gateway provider and mobile payment software developer, has completed certification to the Moneris Solutions platform for payment processing in the US and Canada.

American Express Launches PASS – Prepaid Reloadable Card for Teens. American Express yesterday launched PASS – “a prepaid reloadable Card parents give to teens and young adults, providing peace of mind to parents as a safer alternative to cash, credit and debit cards. PASS, which will be sold and marketed exclusively to adults, is currently available as a preview to American Express Cardmembers and will be available to the general public this summer.

Debit card rewards offerings grow more diverse. For consumers, the proliferation of rewards programs tied to debit cards can be confusing, experts say, because banks have taken a number of different approaches in designing reward programs. Some are straightforward cash-back offers, others are tied to checking accounts or similar products, while some have complex relationships with retailers that offer discounts.

NAFCU Selects Discover as Preferred Partner for National Payment Network Solutions. Discover’s robust national payment network solutions will provide NAFCU members with turnkey credit, debit and prepaid card programs built to attract and retain members through expanded, enhanced and competitive solutions.

MasterCard Aims for Faster Authorizations, More Message Data.… they’re also adding technological muscle to attract more transaction volume to their networks. In the latest example, MasterCard on Monday announced a host of upgrades to its worldwide processing network that include global enhancements as well as improvements in specific regions.

MasterCard Spots Signs of a Turnaround in Cardholder Spending. Despite what MasterCard Inc. executives labeled a strong quarter of earnings, U.S. credit card purchase volumes continued to fall in the three months ending March 31. In addition, MasterCards debit card count dropped by 1.6% even though debit transaction volumes grew.

Walmart MoneyCard Offers Cash Back Cash Back on Prepaid Debit Card for Gas Purchases. Walmart (NYSE:WMT) is now offering a cash-back incentive for consumers using a prepaid debit card. When customers use the Walmart MoneyCard to buy gasoline for their vehicles, they’ll receive 1 percent cash back on their gas purchases nationwide through Dec. 31, 2010.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , . By Roxanne Hamberry - Tuesday, June 1, 2010

Federal Reserve Board Issues Final Gift Card Rules

On March 23, 2010, the Federal Reserve Board issued its final rule, a summary and analysis of the final rule, and the official staff interpretation of the final rule in connection with Title IV of the CARD Act (the “Final Rules” or “Rules”).  The Final Rules are comparable to the proposed rules that were issued in November 2009, and follow the gift card related provisions set forth in the CARD Act addressing fees, expiration, disclosures, and various exemptions.  Set forth in this Bryan Cave Client Alert is a brief summary of key provisions of the Rules.

The Rules set forth various restrictions and guidelines with respect to gift card fees, expiration dates, and disclosures.  The Final Rules apply to any gift certificate, store gift card, or general-use gift card (including any reward/promotional card or any virtual/online gift card) that is sold or distributed to a consumer on or after August 22, 2010.

The Rules may affect any retailer, restaurant, consumer product supplier, hotel or travel provider that offers gift or reward cards – including loyalty programs – to consumers.  The Rules apply to retailers, processors and financial institutions involved in the issuance, distribution and sale of various types of gift certificate and gift card products.

Email This Content Email This Content Posted in Bank Regulations, Client Alerts. Tagged with , , , . By Margo Hirsch Strahlberg - Monday, March 29, 2010

News Roundup December 29, 2009 – January 28, 2010

Heartland Payment Systems

Payment card terminal maker VeriFone Holdings Inc. on Monday issued a press release trumpeting its victory in a courtroom skirmish with merchant acquirer Heartland Payment Systems Inc.

Albert Gonzalez, who in September admitted to hacking computers at TJX Co., BJ’s Wholesale Club, and Barnes & Noble, Tuesday pleaded guilty to stealing data from Heartland Payment Systems, Hannaford Brothers, 7-Eleven, and Target Co.

Details of the case reveal that prosecutors blamed Gonzalez and his partners of stealing over 130 Million credit and debit cards details by breaking into the systems of numerous retailers which include 7-Eleven Inc., the supermarket chain Hannaford Brothers Co., and Heartland Payment Systems, a New Jersey firm which processes card payments for several businesses.

Nearly a year after Heartland disclosed what turned out to be the biggest breach involving payment card data, the company remains a potent example of how compliance with industry standards is no guarantee of security

Heartland Payment Systems and Visa have announced “a settlement agreement under which issuers of Visa-branded credit and debit cards will have an opportunity to obtain a recoveryfrom Heartland with respect to losses they may have incurred from the 2008 criminal breach of Heartland’s payment system environment. Heartland will pay up to $60 million to fund the settlement program, which is subject to certain conditions, including a specified level of participation by U.S. Visa issuers. Visa will present details of the settlement to eligible issuers in the coming days.”

Three law firms representing credit unions and other card issuers with litigation pending againstHeartland Payment Systems, are urging card issuers to reconsider signing on to the offer.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , . By Roxanne Hamberry - Thursday, February 4, 2010

News Roundup — December 1, 2009 to December 22, 2009

Consumer Financial Protection Agency

On December 11, 2009, the U.S. House of Representatives approved sweeping new legislation to modernize America’s financial rules in response to the current recession. HR 4173, the Wall Street Reform and Consumer Protection Act, passed by a vote of 223 to 202 and includes a comprehensive set of reforms that addresses many of the problems that the nation faces today. Among the various actions facilitated by the bill, if signed into law, the Act would create the Consumer Financial Protection Agency and establish an orderly process for shutting down large, failing financial institutions that are deemed “too big to fail”.

Broox Peterson presents a short opinion piece on HR 4173. Whether the Senate version will survive intact is anyone’s guess. An article highlighting Sen. Christopher Dodd‘s (D-CT) sponsorship of the bill appeared on National Public Radio on November 10, 2009.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , , , , , . By Stan Santos - Tuesday, December 22, 2009

News Roundup — October 26, 2009 to October 30, 2009

Gift Cards

The Consumer Federation of America issued a press release on October 27, 2009 in relation to a survey that demonstrates the depth of consumer misunderstanding when it comes to gift cards. According to the survey results, approximately 33% of a representative sample of slightly over 1,000 adult Americans know how much gift cards cost and only 54% are aware that “six to 12 months after purchase, some of these gift cards charge a monthly fee”. Here is related article in the Washington Post published on October 25, 2009 in relation to the rise of prepaid cards as opposed to traditional bank accounts and credit cards.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , . By Stan Santos - Friday, October 30, 2009

News Roundup — October 12, 2009 to October 16, 2009

Prepaid Cards

The latest issue of Selling Prepaid E-Magazine is now online. One of the top feature articles in this month’s issue is a story on the National Branded Prepaid Card Association‘s response to FinCEN‘s request for public commentary on input from the prepaid card industry concerning the definition of the term “stored-value”.

According to an economic study released on October 15, 2009, consumers who opt-in regarding network branded prepaid card usage could pay as much as 70% less in fees compared to more traditional checking and debit card accounts, making prepaid cards a far more cost-effective and valuable financial tool for many.

Consumer Financial Protection Agency

Broox Peterson points out a few flaws in the current draft of the CFPA bill, HR 3126, that may have been fixed in the markup that took place during a House Financial Services Committee hearing on October 14, 2009.

Data Security

WIRED finally sheds light on a series of hacker attacks that occurred in 2005 and in 2006 on Wal-Mart.

The White House’s official blog offers this look at what Americans can do to protect their online presence.

Over on ZDNet Australia, Simon Sharwood reports how National Australia Bank is currently contemplating adding another layer of security in order to offer its customers added peace of mind.

In a move that has the potential to make it MUCH more difficult for retailers to defend themselves against civil data breach lawsuits, the judge overseeing the Hannaford data breach case has reversed himself, resulting in the involvement of the Maine Supreme Court.

Rep. Yvette Clarke (D-NY) has urged President Obama to quickly appoint a cybersecurity czar, citing concerns a wide array of online threats against the public and private sectors.

A massive click fraud ring has recently been discovered operating in China that involved 200,000 different IP addresses and racked up more than $3 million worth of fraudulent clicks across 2,000 advertisers in a two-week period. Although the ring has now dissipated (or more likely, been folded into another scam), the danger of such schemes remains.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , . By Stan Santos - Friday, October 16, 2009

News Roundup — September 9, 2009 to September 18, 2009

Consumer Financial Protection Agency

John Pottow has an opinion piece regarding the proposed CFPA in the Detroit Free Press. He observes that the proposed agency would help small banks relative to big banks because of reduced fixed regulatory costs and would improve the market for simple financial products that are the strong suit of small banks.

Mr. Pottow is an internationally recognized expert in the field of bankruptcy and commercial law. He is a professor of law at the University of Michigan Law School where his area of expertise concentrates on the issues involved in regulation of cross-border insolvencies. In addition, he is a frequent commentator on national and international media outlets such as NPR, CNBC, CNN, C-SPAN and the BBC.

At Reuters, Felix Salmon has the full text of President Obama’s speech at Federal Hall, delivered in New York City on September 14, 2009. His analysis can be viewed here while the Republican rejoinder is here. Over at the Wall Street Journal, Michael Corkery posted a live blog of the proceedings which you can view here.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , , , , , , . By Stan Santos - Friday, September 18, 2009

News Roundup — August 24, 2009 to September 8, 2009

Prepaid Cards

On August 24, 2009, the New York Daily News published an article regarding prepaid cards and so-called “hidden costs”. Of possible interest is a quote from Kirsten Trusko, president of the Network Branded Prepaid Card Association, located towards the end of the piece that helps to balance the article’s slant against the prepaid and debit card industry.

Increasing popularity of reloadable prepaid cards, particularly among the unbanked and the underbanked, has begun to raise concerns among consumer advocates who view the cards as lacking important protections offered on bank cards. As more merchants become active in issuing these cards, advocates are lobbying for more oversight. For reference, see the recent Consumers Union report released on August 13, 2009.

The September 2009 issue of Selling Prepaid E-Magazine is now online. One article that may be of interest describes the perceived advantages of having/using prepaid cards in financial transactions over traditional methods such as paper checks, credit cards or debit cards.

An article published on September 6, 2009 in the Chicago Tribune describes how the U.S. Treasury has been campaigning to get Social Security and Supplemental Security Income recipients to switch to prepaid debit cards from paper checks.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , , , , , . By Stan Santos - Tuesday, September 8, 2009

News Roundup — July 23, 2009 to July 28, 2009

Congressional Testimony

On Friday, July 24, 2009, the House Committee on Financial Services held a hearing at 10:30 am entitled “Regulatory Perspectives on the Obama Administration’s Financial Regulatory Reform Proposals — Part 2″. An archived webcast can be viewed at the linked site. Two panels of witnesses were in attendance. Panel 1 featured Timothy Geithner in his capacity as Secretary of the Treasury. Panel 2 consisted of Ben Bernanke, Sheila Bair, John Dugan, John Bowman and Joseph Smith, Jr. Mr. Dugan is the Comptroller of the Office of the Comptroller of the Currency. Mr. Bowman is the acting director at the Office of Thrift Supervision. Mr. Smith is the Commissioner of Banks of the State of North Carolina and was present on behalf of the Conference of State Bank Supervisors.

Pending Legislation

On July 23, 2009, Congressmen John Tanner (D-TN) and Sam Johnson (R-TX) as Chairman of the Subcommittee on Social Security and Ranking Member of the Subcommittee respectively, introduced legislation meant to enhance the privacy of Social Security numbers in government and private sector recrds in order to protect Social Security programs from fraud and to combat identity theft. The bill is entitled “The Social Security Number Privacy and Identity Theft Prevention Act of 2009″ and is identical to legislation unanimously reported by the Committee on Ways and Means in the 110th Congress. Here is a summary of talking points contained in the bill.

On July 23, 2009, House Republicans, led by Financial Services Committee Ranking Member Spencer Bachus (R-AL), introduced comprehensive legislation to modernize and streamline the regulatory structure of the financial services industry.

H.R. 3310, otherwise known as “The Consumer Protection and Regulatory Enhancement Act” provides for the resolution of insolvent non-bank financial institutions – no matter how large or systemically important – through the bankruptcy system. It creates a Market Stability and Capital Adequacy Board that is charged with monitoring the interactions of various sectors of the financial system, and identifying risks that could endanger the stability and soundness of the system. It establishes an Office of Consumer Protection, with enhanced authority, within a consolidated regulatory agency to streamline in one place responsibility for rulemaking and enforcement of Federal consumer protection laws. The legislation also restores the Federal Reserve’s monetary policy mandate by relieving it of current regulatory and supervisory responsibilities. Taxpayer subsidies of Fannie Mae and Freddie Mac would end, as would Federal regulators’ reliance on use of credit rating agencies.

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Email This Content Email This Content Posted in News Roundup. Tagged with , , , , , , , . By Stan Santos - Tuesday, July 28, 2009