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Breaking News articles for April 2013

Cordray appointment shadows court appeal

Tuesday, April 30, 2013

On April 25, 2013, the U.S. Department of Justice appealed the U.S. Supreme Court to overturn a lower court ruling that three so-called recess appointments made by President Barack Obama on Jan. 4, 2012, were unconstitutional. Richard Cordray, Director of the Consumer Financial Protection Bureau, which has regulatory authority over the prepaid card industry, was another appointment made by Obama on that day.

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Valitor ordered to process WikiLeaks donations

Monday, April 29, 2013

The Icelandic Supreme Court upheld a lower court ruling and ordered Visa Inc. and MasterCard Worldwide partner Valitor to restart processing donations on behalf of WikiLeaks, the international, online, non-profit organization known for publishing secret government information from anonymous sources. Valitor had ceased processing WikiLeaks donations after WikiLeaks disclosed confidential U.S. government documents in November 2010.

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Judge threatens retailers with contempt

Friday, April 26, 2013

On April 24, 2013, Judge John Gleeson of the Federal Eastern District of New York ordered six national retail trade associations to explain in writing by April 30, 2013, why he should not hold them in contempt and order that their jointly sponsored website be shut down.

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CFPB findings may support prepaid's argument

Thursday, April 25, 2013

On April 24, 2013, the Consumer Financial Protection Bureau released its findings concerning the small but growing payday loan and deposit advance loan markets in the United States. The CFPB's report may validate the argument posed by the prepaid card industry that prepaid cards offer a better, low-cost option for unbanked and underbanked consumers.

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Contactless technology in greater supply

Wednesday, April 24, 2013

On April 23, 2013, at the CARTES America conference in Las Vegas, the Munich, Germany-based Smart Payment Association said shipments of payment cards embedded with contactless technology are growing at the fastest rate ever recorded. Twenty-three percent of all smart payment cards shipped in 2012 came with contactless technology, according to the association.

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Blackhawk raises $230 million in IPO

Tuesday, April 23, 2013

Safeway Inc. subsidiary and gift card mall innovator Blackhawk Network sold 10 million Class A shares and raised $230 million in its initial public offering (IPO) on April 19, 2013, about $30 million more than the Pleasanton, Calif.-based company previously estimated. The trading day closed with Blackhawk shares trading at $26.01, up 13 percent from the initial $23 share price set by Blackhawk, and up from the expected range of $20 to $22. At the IPO price, Blackhawk's market value would be approximately $1.2 billion.

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Amazon applies for anonymous payments patent

Monday, April 22, 2013

Amazon.com Inc. filed an application with the United States Patent and Trademark Office April 16, 2013, to patent a mobile payment system that would not disclose the identities of the parties to transactions. The technology was developed by five Seattle-area inventors working for Amazon subsidiary Amazon Technologies Inc. The Amazon application describes a mobile system for transactions in which the buyer does not have to disclose personal information to the seller. Servers acting for an independent third party act as an intermediary providing electronic tokens to authorize payments while holding and securing the otherwise undisclosed personal information of the two parties.

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ETA expo draws Washington, tech innovation

Friday, April 19, 2013

The Electronic Transactions Association is expecting more than 3,000 attendees at the 2013 ETA Annual Meeting & Expo to be held in New Orleans April 30 to May 2, 2013. With an exhibit space of 150,000 square feet, the largest in event history, the ETA had signed up about 200 exhibitors by mid-April in the nearly sold out complex. Additional requests were still coming in, the ETA said.

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NACHA seeks input for QR code guidelines

Thursday, April 18, 2013

The Council for Electronic Billing and Payment, a committee of NACHA – The Electronic Payments Association, is prepared to embark on an evaluation of the quick response (QR) code guidelines it released in December 2012, and it seeks participation from the payments industry. The CEBP said evaluation of the QR Encoding for Consumer Bill Payment Guidelines will last from May 1, 2013, to June 30, 2014. The guidelines identify standards for using QR codes in both biller direct and consolidator/aggregator billing and payment models. Recommendations include the size of QR codes, what data the codes should contain and how that data should be formatted in the code. The document describes ways QR codes can be employed, such as to view bills, make bill payments, and enroll consumers in e-bill and online banking services.

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Survey finds wide variance in prepaid fees

Thursday, April 18, 2013

In a survey of 24 prepaid cards, banking product comparison site Bankrate.com said fees vary widely by card and by how consumers use the cards. The survey found that the amount of fees cardholders pay is related to how often the cards are used. Bankrate said two-thirds of the cards surveyed either charged no monthly fee or offered a fee waiver, which is typically contingent on how much money is automatically loaded onto particular cards.

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RILA rejects proposed interchange settlement

Wednesday, April 17, 2013

On April 11, 2013, the Retail Industry Leaders Association, which represents some of the largest retail companies in the United States, elected to opt out of and object to the proposed $7.25 billion class action settlement negotiated on behalf of 8 million merchant plaintiffs and defendants Visa Inc. and MasterCard Worldwide.

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Schnucks breach exposes 2.4 million cards

Tuesday, April 16, 2013

St. Louis-based grocery chain Schnuck Markets Inc. confirmed on April 15, 2013, that approximately 2.4 million credit and debit cards used at 79 of its 100 store locations may have been compromised as a result of a breach of its POS network. The breach occurred between December 2012 and March 29, 2013. According to Schnucks, only track 2 card number and expiration date data were accessed in the breach affecting specific stores in Missouri, Iowa, Illinois and Indiana that Schnucks listed online.

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AmEx serves up value for college students

Tuesday, April 16, 2013

In a move targeted at the generation Y consumer demographic, American Express Co. teamed with student textbook provider Chegg Inc. to allow college students to receive textbook refunds loaded onto AmEx's digital prepaid account program, called Serve. Chegg, which connects students online to help for homework and access to scholarships, e-textbooks and physical textbooks, now allows students to have refunds from its textbook buyback program loaded into Serve digital accounts.

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Accord reached on EMV liability shift

Monday, April 15, 2013

In advance of a contactless payment-related deadline imposed by MasterCard Worldwide on the U.S. ATM industry, the National ATM Council Inc. and the card brand reported they had reached agreement on ways to support the transition of U.S. ATMs to the Europay/MasterCard/Visa (EMV) chip and PIN standard, which is considered more secure than the security afforded mag stripe-enabled cards. By April 19, 2013, MasterCard expects the U.S. ATM industry to have its ATMs configured to accept non-U.S.-issued and EMV-enabled MasterCard Worldwide branded Maestro cards. For ATM operators that do not have their ATMs properly configured to accept the cards by the fast approaching deadline, a liability shift will occur where those ATM operators will be responsible for any fraud that occurs on those cards when non-EMV-compliant machines are involved.

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Virtual currency getting real world attention

Friday, April 12, 2013

The virtual currency known as the bitcoin is attracting the attention of the U.S. Department of the Treasury and the payments community as an alternate payment system, even as the value and security of bitcoins remain in question. On March 6, 2013, BitPay, a processor of bitcoin payments, integrated its service with Amazon.com's Fulfillment-by-Amazon (FBA) web service. BitPay called the integration the first move into large-scale e-commerce for "companies wishing to accept payments over the bitcoin peer-to-peer payment network." On April 11, 2013, OpenCoin Inc., a San Francisco-based company, said it closed funding for development of its Ripple protocol, a payment system designed to allow people to exchange any amount of money in any currency, including bitcoins.

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Tech talent draws Total to California

Thursday, April 11, 2013

National acquirer Total Merchant Services Inc. is closing its operations in Basalt, Colo., and moving its headquarters to Woodland Hills, Calif., the company said March 27, 2013. Joe Kaplan, Total Chief Executive Officer, said, "Our Basalt location has enabled us to build Total into who we are today, and we are extremely grateful to all of our employees. Although a very difficult decision, we feel it's the right move for Total in the long term."

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Prepaid metering found to reduce energy usage

Thursday, April 11, 2013

A research project commissioned by the DEFG Prepay Energy Working Group concluded that a link exists between prepaid electricity metering and energy conservation. The researchers disclosed in The Effect of Prepayment on Energy Use that energy usage was reduced by 5 percent to 15 percent when customers switched to energy prepayment plans, with an average energy savings of 11 percent.

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EU investigating MasterCard

Wednesday, April 10, 2013

A formal investigation by the European Union Commission about whether MasterCard Worldwide is hindering competition in the European Economic Area (EEA) in violation of EU antitrust rules opened April 9, 2013. In a press release about the investigation, the commission stated it is concerned some of MasterCard's cross-border and Internet fees and practices may be anti-competitive.

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Fraudster sentenced in theft of processor's data

Tuesday, April 9, 2013

Vladislav Anatolievich Horohorin, a fraudster associated with a group of cyber criminals that hacked into an Atlanta-based card processor was sentenced to 88 months in prison and ordered to pay $125,000 in restitution by a U.S. Federal Judge in Washington, D.C., April 5, 2013. According to the FBI, hackers breached the Atlanta processor and sold the data they stole to brokers like Horohorin, who then applied the information to counterfeit payroll debit cards used to withdraw $9 million from ATMs around the world.

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Chicago's new transit card program takes flak

Tuesday, April 9, 2013

The Chicago Transit Authority is promoting its coming general purpose reloadable (GPR) transit card, in the face of criticism from the Chicago media over the card's controversial fees. In the wake of the criticism, the CTA eliminated a reported $10 "research" fee that was to be charged certain cardholders for making customer service calls, as well as a $2.95 fee to reload the card online using a bankcard.

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U.K. rejects payment council for regulator

Monday, April 8, 2013

Payment companies in the United Kingdom have until June 25, 2013, to respond to a new plan to end payments industry self-regulation and appoint a regulator for retail payment systems. HM Treasury, the financial policymaker of the U.K. government, issued a paper titled Setting the strategy for UK Payments in July 2012. The paper offered alternatives for "improving the way that payments strategy is made in the UK" and said the government favored introducing a national Payments Strategy Board to "set strategy" for the industry.

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Vantiv issues 2013 payment trends top 10

Friday, April 5, 2013

Cincinnati-based acquirer Vantiv Inc. released the Top Ten Payment Trends for 2013. Topping the list is "omni-commerce," which Vantiv and its research partner Mercator Advisory Group characterized as the way in which consumers use multiple channels to research products before making purchases. The researchers said the second and third biggest trends for 2013 are mobile payments proliferation and mobile wallets, respectively. Banking relationships round out the top 10, with many consumers expecting their financial institutions to provide them with digital wallets, the researchers found.

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Secret Service warns of rising prepaid fraud

Thursday, April 4, 2013

In March 2013, the United States Secret Service issued a warning to the prepaid card industry that fraudsters are increasingly targeting the back-end computer systems of prepaid card processors. The agency said that, using a variety of remote attacks, hackers gain entry to networks with the ultimate goal of obtaining administrative access to prepaid accounts.

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Websites under fire for urging settlement rejection

Wednesday, April 3, 2013

Plaintiff attorneys, who negotiated for nearly 7 million retailers in a proposed antitrust settlement of claims that major card companies unfairly set interchange rates, asked a federal judge March 29, 2013, to direct the website Merchants Object! (http://merchantsobject.com) and similar sites run by retail trade associations to modify their content to eliminate what the attorneys call "unauthorized and misleading" communications about the proposed settlement with retailers.

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Gov't prepaid prescribed for financial health

Tuesday, April 2, 2013

The Center for Financial Services Innovation and public policy think tank Hudson Institute Inc. released a joint survey that said government benefit payments loaded onto prepaid cards can improve the overall financial well-being of benefit recipients. The study also said prepaid cards and other alternative financial instruments provide a glimpse into the future of benefit disbursements.

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Lawsuit claims user authentication patent infringement

Monday, April 1, 2013

Security technology firm StrikeForce Technologies Inc. filed a patent infringement lawsuit against three companies concerning multichannel security technology that controls access by third parties to host computers. StrikeForce said it sued phone-based two-factor authentication solution provider PhoneFactor Inc.; bankcard processor Fiserv Inc.; and First Midwest Bancorp Inc., the holding company for First Midwest Bank, to protect its patented technology as cyber-attacks continue to increase.

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