The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, issued the final rule concerning which financial service providers qualify as money services businesses (MSBs) and are therefore subject to the anti-money laundering (AML) regulations contained in the Bank Secrecy Act (BSA).
The final rule released on July 18, 2011, defines MSB as any business that conducts $1,000 worth of transactions per person per day or any entity that engages in money transmission of any amount. Such businesses must comply with the BSA's AML rules.
The rules also include MSBs based outside the United States that conduct business within U.S. borders. This addition was necessitated by the Internet and other technologies that allow foreign-based entities to operate as MSBs in the United States.
The ruling can be accessed here.
To clarify how prepaid card businesses are affected by the new AML regulations, FinCEN issued a separate final rule that distinguishes MSBs of stored-value instruments – such as prepaid cards – from issuers, sellers and redeemers of traveler's checks and money orders. The final rule:
The final rule is available at www.fincen.gov/statutes_regs/frn/pdf/Prepaid_Final_7-22-201.pdf.
The Attorney General of Connecticut is questioning the expiration date policy of deal-of-the-day website Groupon Inc. By having expiration dates on some of its discount offers, the popular discount provider may be in violation of Connecticut's gift certificate law, according to Jepsen. A press release reported that Attorney General George Jepsen wanted Groupon to explain the terms under which its discounted gift certificates, called "Groupons," are sold and redeemed by consumers, how much revenue those sales generate in the state and how frequently expiration dates are imposed on Groupons. Connecticut law prohibits expiration dates on gift certificates.
Cashplus prepaid MasterCard provider Advanced Payment Solutions Ltd. won contracts to provide prepaid card programs to the U.K. councils of Merton, Nottinghamshire and Bury. APS called the contracts evidence that the program manager's service provides government agencies functionality and innovation.
BillMyParents, the teen payment solutions brand of Socialwise Inc., reported a tenfold rise in its website traffic over the previous 90 days. BillMyParents attributed the increase to its multiplatform marketing campaign, which included digital ads, a television commercial and its sponsorship of a reality TV show.
U.K.-based program manager Caxton FX Ltd. rolled out a Visa Inc.-branded travel card that will be accepted at 31 million outlets across 170 countries and give cardholders the benefits of the Consumer Purchase Protection and no ATM fee charging. The Caxton FX Visa card will be issued by the U.K.'s Raphaels Bank.
Irving, Texas-based First Choice Power launched new payment options for its prepaid energy customers. Participants in the electric company's QuickPay program can now pay for energy use via mobile phones.
Online gift card exchange Plastic Jungle Inc. landed an AlwaysOn Global 250 award for the second year in a row. Corporate event organizer AlwaysOn selected winners based on five factors: innovation, market potential, commercialization, stakeholder value and media buzz. Winners were recognized at the ninth annual Innovation Summit held July 28, 2011, in Santa Clara, Calif.
Campus card program manager CardSmith LLC integrated its payment platform with Agilysys Inc.'s POS system, InfoGenesis. The integration expands CardSmith's system to a 100 percent web-enabled meal plan and campus card processing solution.
Discover Financial Services certified TxVia Inc. to process prepaid cards over the Discover network. The relationship will support processing for a number of TxVia clients, including InteliSpend Prepaid Solutions, which Discover partnered with in January 2011.
Flint Telecom Group Inc. subsidiary Power2Process signed a strategic processing agreement with First Data Corp. for the reloading of phone cards via First Data's STAR Network, which boasts over two million retail and ATM locations in the United States.
Fidelity National Information Services Inc. (FIS) reached an agreement with the Association of British Credit Unions Ltd. to provide bank identification number sponsorship, card acquisition and transaction processing services for the association. ABCUL, which will issue its own prepaid cards on FIS' platform, said prepaid cards are a safe way for credit unions to issue loans while reducing cash holdings.
U.S. Bancorp's chief financial institution U.S. Bank teamed with Monitise Americas, the U.S.-based mobile payment software arm of U.K.-based Monitise PLC, and processor FIS to offer a new mobile application for U.S. Bank ReliaCard Visa cardholders. The application gives ReliaCard users free mobile access to prepaid accounts.
Mint Technology Corp. acquired the payroll card portfolio of United Arab Emirates-based Workers Equity BSC. Mint subsidiary Mint Middle East LLC, located in Dubai, builds and manages payroll card programs. The deal adds approximately 180,000 prepaid cards to Mint's portfolio.
The merger that formed benefits card program manager Evolution1 keeps intact the upper management from the two companies. Robert E. Patricelli, founder and retired Chief Executive Officer at Evolution Benefits Inc., will serve as Chairman of the Board. Chris Byrd, President and Chief Operating Officer at EB, assumes the same positions at Evolution1. And Jeff Young, CEO of Lighthouse1, becomes Chairman and CEO of the new company.
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