An investigation conducted by Consumer Reports found irregularities with some prepaid calling card products. Certain cards imposed fees and drained the value on cards before calls could be completed, while other cards listed fees and surcharges that weren't imposed when calls were made, the consumer watchdog reported.

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A bill introduced in the U.S. Senate May 17, 2012, would end nuisance lawsuits filed over some ATM operators' failure to comply with a federal requirement to display a fee notice on the cash dispensary machines. Sen. Michael Johanns, R.-Neb., ranking member of the Senate Banking Subcommittee on Security, International Trade and Finance, introduced S.3204. The bill resembles legislation introduced in the House, HR4367, calling for an end to the requirement that a fee notice be physically attached to the ATM.

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Rick Oglesby, a Senior Analyst with the business technology research and advisory firm Aité Group LLC, said PayPal Inc.'s move into the brick-and-mortar merchant realm represents "a big opportunity for the acquiring space." And he told The Green Sheet PayPal's decision to focus on cloud-based POS providers that can turn on multiple markets at a time is a "no-brainer strategy" that makes inroads into a new and growing segment of the payments market. However, he pointed out PayPal remains less a payment network than a payment brand, and in the background, PayPal is still using the traditional card brand payment rails.

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The Consumer Financial Protection Bureau proposed a rule that sets up procedures for how it would go about informing a nonbank entity that it is under scrutiny by the agency for potential consumer abuses. "This proposal allows us to reach nonbanks that we would not otherwise supervise, while providing industry with a streamlined process that is fair and efficient," said Richard Cordray, Director of the CFPB.

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PayPal Inc., the payment arm of eBay Inc., intends to provide its payment options everywhere – online, in the mobile arena and, now, offline. PayPal President David Marcus and PayPal Vice President of Retail and Prepaid David Kingsborough made this clear during a May 24, 2012, press event at company headquarters in San Jose, Calif., where they indicated PayPal is nearing critical mass in the payments space with its new offline POS agreements. The company now has agreements with all three major POS terminal manufacturers and four new POS software vendors to integrate PayPal payment software on their terminals and in their software.

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Following are some recent research findings that caught our eye. #h2Motorola explores mobile POS readiness A Motorola Solutions Inc. survey of retail, hospitality and field services merchants in North America and Europe revealed 66 percent of respondents are interested in mobile POS solutions; 42 percent either currently use or plan to pilot mobile POS solutions within the next three years. "As retailers battle for shoppers' hearts and wallets, mPOS serves as a valuable tool that can help turn browsing into buying," said Michelle Crissey, Motorola Solutions Customer Solutions Lead. "When the power of mPOS is in the hands of every retail associate, shopping becomes an experience and associates are always in a position to make the sale."

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The Consumer Financial Protection Bureau initiated a fact finding process to determine how to regulate the general purpose reloadable (GPR) prepaid card market at the federal level. The newly formed agency issued a call to the industry and other constituents to offer input about how the market should be regulated to ensure the funds of prepaid card users are protected and that consumers are given appropriate information about card terms and fees to make informed financial decisions.

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A group called UGNazi claimed responsibility for breaching online software and services provider WHMCS Ltd. on May 21, 2012. UGNazi stole hundreds of thousands of customer records, as well as took over WHMCS' Twitter account. UGNazi also deleted all files from the WHMCS server and launched a distributed denial of service (DDoS) attack. The attack rendered WHMCS temporarily unable to deliver its web hosting control panel and client management, billing and support services to its customers.

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We noticed calls for cooperation from two distinct sectors of the payments industry on May 21, 2012: one to work for Europay/MasterCard/Visa (EMV) technology implementation in the United States; the other for an international, coordinated effort to fight cyber attacks.

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The New Jersey Senate Budget and Appropriations Committee approved a bill on May 17, 2012, that would repeal the controversial gift card provisions of New Jersey's updated abandoned property law. S1962 would remove stored-value (gift) cards from the ranks of escheatable property the state could seize after cards go unused by consumers for two years.

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CO-OP Financial Services is testing a two-way video member service using Diebold Inc. ATMs on the CO-OP Network. Under a joint agreement, the two companies are developing a way to optimize the ATM channel to enable sales, additional teller functions and customer service migration to self-service endpoints. This is an effort to help financial institutions mitigate costs and maintain high-level customer support.

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Isis, the mobile commerce entity created by JVL Ventures LLC, took another step toward launching its much anticipated mobile wallet when it identified the first of its local merchant partners in Austin, Texas, and Salt Lake City. JVL was formed by three of the largest U.S. wireless mobile networks: AT&T Mobility LLC, T-Mobile USA Inc. and Verizon Wireless.

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Maybe because it's spring, partnerships seem to be what the payments industry is talking about lately. Here is a sample from the first two weeks of May 2012: #h2Ingenico, POS Portal offer mobile POS Ingenico S.A. said POS reseller POS Portal Inc. will distribute Ingenico's Telium series POS products to U.S. ISOs. The Telium products include countertop terminals, near field communication-enabled mobile devices and customer-facing terminals.

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At the annual Prepaid 2012 to be held mid-June in London, a new innovators' showcase called the Prepaid Dragons' Den will allow companies to pitch prepaid card products and programs to judges and event participants. Conference organizer Clarion Events Ltd. said three or four companies will be chosen to pitch solutions to European program managers, retailers, transport operators, local government authorities, banks, mobile network operators, corporations and gambling operators.

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The Federal Reserve's final rule implementing the Durbin Amendment to the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010 was blasted from both sides in two separate briefs submitted to the U.S. District Court in Washington D.C. The court is considering an effort to overturn the rule, which cut debit card interchange fees in half. Sen. Richard Durbin, D-Ill., the author of the Durbin Amendment, offered strong support to the plaintiffs in the lawsuit filed by a coalition of merchants, restaurants and retailers against the Board of Governors of the Federal Reserve.

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The Federal Communications Commission issued a public notice to caution consumers that some prepaid calling card companies are not providing the calling minutes advertised. Despite taking aggressive action against such companies and fining them a total of $25 million in the last nine months, "some carriers appear to be continuing these misleading practices," the FCC said.

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In a May 2012 conference call, Visa Inc. Chief Executive Officer Joseph Saunders revealed the card company's debit card business is under investigation by the U.S. Department of Justice. He also discussed the company's second fiscal quarter 2012 profits, growth strategies, and new products and solutions. The quarter ended March 31. "On March 13 … the U.S. Department of Justice Antitrust Division issued a civil investigative demand requesting additional information about PIN-authenticated Visa Debit and elements of our new debit strategies, including the fixed acquirer fee," Saunders disclosed.

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Consumer advocacy groups lead by The National Consumer Law Center sent a letter to the Comptroller of the Currency asking that a payday loan program facilitated with prepaid cards be shut down. The program instituted by payday lender Community Choice Financial Inc., managed by Insight Card Services LLC and with prepaid cards issued by Urban Trust Bank evade state usury and payday loan laws, according to the letter.

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Studies show improperly installed payment application software is the culprit behind most of the breaches and data theft among retailers in low-end merchant card categories. The payments industry's security standards watchdog, the PCI Security Standards Council (PCI SSC), said May 9, 2012, it is responding to this epidemic of data theft by offering training and certification to payment software integrators and resellers. PCI SSC General Manager Bob Russo said that after the first training and certification process is complete, the council will publish a list of Payment Card Industry (PCI) Data Security Standard (DSS) certified integrators and resellers on its website.

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Three big names in payments, POS manufacturer VeriFone Inc., wireless network provider Verizon Wireless and payment processor First Data Corp., each released news about their vision for the next generation of payments on Tues., May 8, 2012. #h2VeriFone's SAIL joins social media, mobility VeriFone introduced its open payment platform SAIL at the CTIA - The Wireless Association convention in New Orleans.

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The Democratic National Committee is in the process of returning $50,000 in Wal-Mart Stores Inc. gift cards to the big box retailer, according to media reports. The cards, which Wal-Mart gave to the DNC as an in-kind contribution, are reportedly being returned by the DNC as a favor to labor unions.

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On May 7, 2012, Visa Inc. reported it is doubling its "no signature required" limit to $50 effective Oct. 1, 2012. Visa said its new $50 Visa Easy Payment Service limit will apply to the following U.S. merchant categories: discount stores, grocery stores and super markets.

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Following are research highlights from recently released payments industry reports. #h2Compass Plus paper discusses EMV migration A Compass Plus white paper, Making EMV Work Across New Markets, discusses the growth of Europay/MasterCard/Visa (EMV) as a global payment standard and offers best practices for making the switch as financial institutions in the United States begin migration under mandates established by the major card brands.

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Visa Inc. and MasterCard Worldwide are warning card-issuing banks the breach at Global Payments Inc. began no later than June 2011, former Washington Post reporter Brian Krebs said on his Krebs on Security website. The card companies originally estimated the break-in and theft, first reported March 30, 2012, occurred between Jan. 21 and Feb. 25, 2012. Krebs' May 1, 2012, report said Visa and MasterCard have issued seven updated alerts to their issuing banks since the Global Payments' breach was discovered. Each alert pushed the time frame for the onset of the breach further back.

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Near field communication (NFC) technology application developer Skycore LLC entered a pilot that utilizes its codeREADr app for smart phones along with wristbands embedded with NFC technology. Android smart-phone users wearing the wristbands can reload the value on the wristbands via the mobile app. The pilot involves Baltimore-based ticketing service provider MissionTix.com LLC, which offers the wristbands online. The wristbands allow users to attend multiple events by the same venue, or participating venues, without having to be issued new tickets.

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Glynnis Bohannon, the mother of a teenage boy, filed a class action lawsuit in March 2012 against Facebook Inc. that challenges the social network's payment policy regarding minors. The suit was filed in Santa Clara County Superior Court in California. Bohannon claims her son, a minor, asked for permission to spend $20 on Facebook credits. He gave his mother $20 cash, and she provided her credit card number. She claims Facebook marketing then pushed her child into using her card number to purchase several hundred dollars worth of Facebook Credits for the online game he was playing.

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The PCI Security Standards Council released new point-to-point encryption requirements for hardware-based solutions April 27, 2012. The new requirements augment the PCI Point-to-Point Encryption Solution Requirements released by the council in September 2011. PCI SSC General Manager Bob Russo said the updated point-to-point encryption requirements bring the council "one step closer to helping merchants take advantage of this technology to simplify PCI DSS validation efforts and mitigate potential breaches."

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In March 2012, Wal-Mart Stores Inc. reported it was experiencing a "sudden increase" in the frequency of a text message scam involving a bogus Wal-Mart gift card offer. Wal-Mart said the "smishing" scam, as opposed to an email-based phishing scam, involved consumers receiving simple message service (SMS) text messages that offered free Wal-Mart gift cards in exchange for entering personal information on a website.

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