What a week it's been for the nation's financial system. Federal regulators seized the assets of Washington Mutual Inc., the nation's largest savings and loan, and sold them to JPMorgan Chase & Co. for $1.9 billion. Citigroup Inc. plans to acquire Wachovia Corp.'s retail franchise and banking operations for $2.16 billion. And on Monday, Sept. 29, 2008, lawmakers on Capitol Hill defeated the $700 billion financial institution rescue package by a vote of 228 – 205. The same day, the Dow Jones Industrial Average finished the day down 777.68 points – or 7 percent of its total market value that day – making it the largest point drop in the history of the stock market. The news has been ominous. But how will it affect the payments industry?

read more

In an attempt to regulate what it regards as abuses and unfair practices in the credit card industry, the U.S. House of Representatives passed HR 5244, the Credit Cardholders' Bill of Rights, by a vote of 312 to 112. This legislation would protect cardholders from arbitrary interest rate increases and unfair fees. The bill, introduced by Rep. Carolyn Maloney, D-N.Y., and Rep. Barney Frank, D-Mass., would remove upfront fees on subprime credit cards (high interest cards issued to consumers with poor credit history), interest rate increases on existing card balances, and late fees on payments mailed at least a week before the due date.

read more

In September 2008, Visa Inc. introduced unembossed consumer debit, credit and business debit cards in the United States. Unembossed payment cards feature a printed account number and cardholder name, rather than the traditional embossed, raised lettering currently found on most U.S. credit and debit products.

read more

Moneris US, a wholly owned subsidiary of Canada's largest processor Moneris Solutions Inc., signed an agreement to purchase Eureka, Calif.-based processor Humboldt Merchant Services LP. The deal is subject to regulatory approval by the Federal Reserve but is expected to close before the end of 2008, at which time Moneris will acquire Humboldt's portfolio of over 18,000 merchant clients, which accounts for an annual processing volume of $2.5 billion.

read more

Richard Brierley-Jones, Executive Vice President of eWise Systems Ltd., the network provider for NACHA – The Electronic Payments Association's Secure Vault Payments in the United States, founded the International Council of Payment Network Operators in early 2008 for one purpose: to create and implement standards for global interoperability of alternative online payment networks.

read more

Revolution Money Inc., which established a new payment network in 2007, recently expanded the reach of the MoneyExchange RevolutionCard. A PIN-based, interchange-free payment vehicle, the MoneyExchange RevolutionCard enables online, person-to-person payments to other cardholders, ATM access, and physical and online retail store purchases from a single account.

read more

The Interac Association, the not-for-profit cooperative founded in 1984 by Canada's five financial institutions for the purpose of processing electronic transactions, is negotiating with the Competition Bureau, which is comparable to the Federal Trade Commission in the United States, to restructure the association into a for-profit organization. In 1996, Interac signed an agreement with the Competition Bureau that stipulated the association be managed on a not-for-profit basis after the bureau accused Interac of conspiring with the five financial institutions to set the interchange debit fee structure – in other words, price fixing.

read more

Michael E. Shatz, publisher of The Merchant's Guide LLC, a publishing and consulting firm, said that congressional interest in regulating interchange fees has significantly increased the sales of his new book, "Understanding Credit Card Interchange Fees in Card Not Present Environments." The book, which was reviewed in The Green Sheet, July 14, 2008, issue 08:07:01, focuses on training merchants how to understand the principles and nuances of card not present credit card interchange fees. The guide is designed to help merchants understand interchange fee structures and their financial consequences, providing merchants with a knowledge base for working with their payment processors in getting the best transactional fee results.

read more

The Society of Payment Security Professionals, an organization formed in April 2008 by risk management firm Aegenis Group Inc., has created two new industry level certification programs focused on nine different aspects of payment card security, risk management and auditing. The Certified Payment Card Industry Security Manager (CPISM) and the Certified Payment Card Industry Security Auditor (CPISA) are certification programs designed to give payments industry professionals, including ISOs and merchant level salespeople (MLSs), a comprehensive knowledge of the security and regulatory issues imposed on the bankcard processing industry.

read more

The legal case that pitted smart card security researchers against a big city transit authority came to an unsettled conclusion recently. On Aug, 19, 2008, a federal judge lifted a gag order that had prevented three Massachusetts Institute of Technology undergraduates from revealing security vulnerabilities in Boston's CharlieCard and CharlieTicket electronic transit fare systems. By lifting the temporary restraining order, the U.S. District Court of Massachusetts judge allowed the three MIT students to freely discuss security weaknesses they reportedly exposed in the stored value CharlieCard and CharlieTicket systems managed by the Massachusetts Bay Transit Authority.

read more

First Data Corp., the world's largest payments processor, unveiled its new GO-Tag stickers at the Democratic National Convention in August 2008. The limited edition GO-Tag contactless payment pin was distributed to 5,000 delegates and media representatives and used to purchase up to $10 in refreshments at participating Pepsi Center concession stands. "We're still compiling the data to understand how many were actually redeemed, but we had everyone from delegates to the head of the Pepsi Center to reporters and camera crews coming back time and again," said Ginger Sayor, Vice President, Mobile Commerce Solutions at First Data. "It was all about sharing information about contactless technology and making sure that everyone has a positive experience at the point of sale."

read more