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Breaking News articles for June 2011

Gift card reloading increased in 2010

Thursday, June 30, 2011

U.S. consumers still consider prepaid cards a popular gift-giving choice, according to First Data Corp.'s 2010 U.S. Gift Card Consumer Insight Study. While closed-loop gift cards remain more prevalent in 2010, there was a significant increase in the number of open-loop gift card purchases last year, the study said. Birthdays remain the most popular closed-loop gift card giving occasion, followed by Christmas. But the study also showed an increase in the percentage of consumers reloading both open- and closed-loop cards.

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Federal Reserve sets debit interchange at 21 cents

Thursday, June 30, 2011

A reasonable and proportional interchange transaction fee is 21 cents, plus a multiplier of 0.05 percentage points on the cost of every transaction to pay for fraud losses, according to a June 29, 2011, unanimous vote of the Federal Reserve Board of Governors. Also, an "interim rule" allows issuers to charge an additional 1-cent fee if they can "certify" they took measures over and above what would be expected to prevent fraud. The industry recently came within six Senate votes of halting the fee cap, but now it will settle for fees 9 cents higher than the 12-cent cap the Fed initially proposed in December 2010. In this sense, the final rule is a victory for card issuers and financial institutions.

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The 25 most dangerous software errors in 2011

Wednesday, June 29, 2011

Department of Homeland Security officials joined the Systems Administration, Networking and Security (SANS) Institute and the MITRE Corp's. Common Weakness Enumeration to release the 2011 list of most widespread, critical errors found in software, which itemizes the 25 most common programming errors that are used to breach critical stored data.

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Golf tourney to help soldiers with calling cards

Tuesday, June 28, 2011

At the Tiger Woods hosted AT&T National golf tournament held at the Aronimink Golf Club in Newtown Square, Pa., telecommunication provider AT&T is providing military personnel with free prepaid calling cards. During the tournament, which begins with practice rounds June 28 and runs through the final round on July 3, AT&T will contribute 10,000 prepaid calling cards as part of care packages to be assembled in a tent on tournament grounds.

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Visa to update forecast after Fed sets debit interchange

Monday, June 27, 2011

Visa Inc. said it will update its 2011 financial forecast on July 6, one week after the Federal Reserve Board discloses its final determination of debit interchange rate limits. The Wall Street Reform and Consumer Protection Act of 2010 carries in it an amendment promoted by Sen. Dick Durbin, D-Ill., that requires the Federal Reserve to set interchange rates that are "reasonable and proportional' to costs. After grappling with the requirement for the last year, the Fed is prepared to reveal its final rule for the debit card interchange rate June 29.

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CFPB seeks input on how to define a nonbank

Thursday, June 23, 2011

The Consumer Financial Protection Bureau issued a Notice and Request for Comment on how to define the term “larger participant” in certain financial markets the newly-formed bureau intends to regulate. That definition is considered a “key element” of the agency’s nonbank supervision program, the CFPB said.

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Federal Reserve to talk interchange fees

Thursday, June 23, 2011

A long anticipated final new rule capping debit card interchange fees is imminent. The Federal Reserve Board's discussion of the final rule will take place Wed., June 29, 2011, at 3:30 p.m. EDT. Under discussion at the meeting will be the Fed's proposed rule governing debit card interchange fees, the fraud prevention adjustment proposed in the new rate, the exclusivity restrictions and other related matters. The Durbin Amendment to the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010 requires the Fed to set debit card interchange rates that are "reasonable and proportional to the actual cost" for card issuers with more than $10 billion in assets. On Dec. 16, 2010, the Federal Reserve Bank responded to the Durbin Amendment with a proposed new rule that would cap debit card interchange fees at 12 cents.

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TCF appeals debit interchange fee ruling

Tuesday, June 21, 2011

On June 16, 2011, the U.S. Court of Appeals for the Eighth Circuit Court heard oral arguments in TCF National Bank's effort to block the Durbin Amendment to the Wall Street Reform and Consumer Protection Act of 2010. TCF attorney Timothy Kelly argued that excluding bank costs from the Federal Reserve's calculation of "reasonable and proportional to the actual costs" amounts to rate regulation, and that rate regulation that excludes costs is unconstitutional. In October 2010, TCF Bank, a subsidiary of TCF Financial Corp. of Wayzata, Minn., sued Federal Reserve Chairman Ben Bernanke and other Federal Reserve officials to stop implementation of the Federal Reserve's pending rule capping the amount of money banks with more than $10 billion in assets can charge for debit card transactions.

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Prepaid card industry loses pioneer, leader

Tuesday, June 21, 2011

The Prepaid International Forum Chairman and cofounder Christopher Reddish died on Friday, June 17, 2011, while competing in the Morgan Cup yacht race across the English Channel. The 46-year-old Reddish, a crew member on one of the 72 yachts that participated in the race, fell overboard and drowned approximately 17 miles southeast of the Isle of Wight.

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Citigroup breach estimate soars

Monday, June 20, 2011

Citigroup Inc. reported its May 10 data theft was more extensive than originally thought. It was believed 200,000 Citi customers lost personal information and credit card data in the breach. This number was based on Citigroup's statement that approximately 1 percent of its North American accounts had been breached. An update published on the Citigroup website June 15, 2011 says 360,369 U.S. accounts were compromised.

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VeriFone expansion driving profits

Friday, June 17, 2011

VeriFone Inc. reported expanding business drove profits in its second quarter results released June 2, 2011. The company heralded all time high revenues for the sixth consecutive quarter and growth exceeding 20 percent for the fourth consecutive quarter. VeriFone Chief Executive Officer and Executive Director Douglas Bergeron discussed his company's growth and expansion plans in a conference call about second quarter 2011 earnings results.

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Bling Nation may rise again

Thursday, June 16, 2011

Bling Nation, the upstart mobile payment firm created to challenge the major credit card companies' hold on the payments industry's near field communication (NFC) market, suspended service in May 2011 pending a retooling of the company. Most of the sales team has reportedly left the company. Bling Nation was started in 2008 by two Brazilians, Wences Casares and Meyer Malka, who founded Patagon, the largest online brokerage in Latin America. The company developed an integrated acquiring and processing platform for local and regional banks. Bling Nation's objective was to get customers to allow payment stickers – in reality, NFC form factors – on the back of their cell phones to make contactless payments.

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Prepaid wristbands are a hit at U.K. festival

Thursday, June 16, 2011

Research conducted at the 2011 Isle of Wight Festival held June 10 to June 12 concluded that MasterCard Worldwide prepaid contactless wristbands were popular with festival goers. Survey respondents overwhelmingly agreed the wristbands, rendered contactless by MasterCard's near field communication scheme called PayPass, were quicker and easier to use for concessions purchases than credit or debit cards.

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The Green Sheet gets resourceful

Thursday, June 16, 2011

In its mission to educate the payments industry and provide actionable intelligence for ISOs and merchant level salespeople, The Green Sheet has added new resources to its award-winning magazine and website. Among the new features are a buyers guide and an up-to-date outline of current state and federal legislation that targets the industry.

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Lawsuit tossed over prepaid card fiasco

Tuesday, June 14, 2011

A superior court judge in Fresno, Calif., threw out a $75 million breach of contract lawsuit filed against the Kardashian sisters for pulling their support from the infamous prepaid Kardashian Kard. Superior Court Judge Jeff Hamilton said attorneys for Revenue Resource Group LLC failed to prove they could win their case against the reality TV celebrities. The MasterCard Worldwide-branded loyalty card was launched Nov. 9, 2010, and terminated Nov. 29, 2010, when Dash Dolls LLC, the company run by Kim, Khloe and Kourtney Kardashian, backed out of the endorsement deal it inked with RRG following criticism by Connecticut Attorney General Richard Blumenthal and the nonprofit consumer advocacy Consumers Union on the fees charged on the Kardashian Kard.

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Citigroup breach brings federal heat

Monday, June 13, 2011

The number and frequency of data thefts from high-profile corporations has caused some lawmakers to question whether these companies are learning from others' mistakes. The latest such victim is Citigroup Inc. (Citi). The bank reported June 9, 2011, the information from more than 200,000 of its customer credit cards was stolen. The company said no debit card information was taken. A Citi spokesman sent the following statement about the breach to The Green Sheet, "During routine monitoring we recently discovered unauthorized access to Citi's Account Online.

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Processor pleads guilty in poker indictment

Friday, June 10, 2011

Bradley Franzen, President of a Costa Rican company that matched online poker companies with U.S. payment processors to illegally facilitate online poker payments, pleaded guilty May 23, 2011, to fraud, money laundering and illegal gambling. Franzen admitted to creating phony businesses processors could use to disguise online poker payments. Processing Internet gambling payments has been illegal in the United States since 2006. Franzen, 41, is originally from Illinois. He faces up to 30 years in prison for his admitted crimes, but prosecutors agreed to recommend sentence leniency in return for Franzen's plea.

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Calling card fraud alleged

Thursday, June 9, 2011

On behalf of the Federal Trade Commission, the U.S. District Court for the District of New Jersey ordered a temporary halt to the allegedly deceptive advertising claims made by Millennium Telecard Inc. The FTC said the prepaid phone card marketer misrepresented the number of calling minutes that the prepaid cards delivered and charged hidden fees that could drain the value on the cards.

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Tester fails to stop Durbin

Wednesday, June 8, 2011

An attempt led by Sen. Jon Tester, R-Mont., to delay a drastic cut in debit interchange fees failed June 8, 2011. Tester sought to secure the 60 votes needed in the Senate by offering a new amendment on June 7 that would have postponed for one year the implementation of the Durbin Amendment to the Wall Street Reform and Consumer Protection Act of 2010.

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Bank supports prepaid regulation

Tuesday, June 7, 2011

In a keynote address delivered at the 2011 American Payroll Association Annual Congress in Salt Lake City June 2, a First California Bank executive said he welcomes increased regulation in the prepaid debit card industry. "We believe increased regulation will help deliver a safe and sound product into the market and bring the prepaid debit card industry into the mainstream," said Jim Tingey, President of the Electronic Banking Division of First California Bank. "As industry standards are adopted and more disclosure is made available to consumers about the fees being charged, both consumers and the corporate world will become more comfortable with this large and growing business."

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PCI DSS effectiveness questioned

Tuesday, June 7, 2011

In a May 31, 2011, blog post, Federal Reserve Bank of Atlanta official Cindy Merritt questioned the long-term effectiveness of the Payment Card Industry (PCI) Data Security Standard (DSS). The requirements wouldn't be necessary if the United States would do what Europe and most of the world have already done: switch from mag stripe to chip and PIN technology, according to Merritt. Merritt, the bank's Assistant Director of the Retail Payments Risk Forum, wrote in her blog, "PCI guidelines are necessary, unfortunately, because of cards that use mag stripe technology instead of the more secure chip and PIN technology.

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Seattle law firm scrutinizes prepaid

Friday, June 3, 2011

Seattle-based class-action law firm Hagens Berman Sobol Shapiro LLP began an investigation into the prepaid card industry following the Attorney General of Florida office's May 19, 2011, announcement that it had subpoenaed five prepaid card providers, charging them with possibly engaging in deceptive and unfair business practices.

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Square, iZettle introduce new iPad apps

Thursday, June 2, 2011

Square Inc. introduced new features for its free iPad, iPhone and Android POS solution May 23, 2011. The new Square Register application for iPad works like a cash register recording checkouts and tracking sales. Meanwhile, iZettle AB, a Stockholm firm started in 2010, said it will have a free iPhone application and mini chip card reader available to Sweden consumers by June.

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