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The Green SheetGreen Sheet

The Green Sheet Online Edition

September 24, 2012 • Issue 12:09:02

Prepaid in brief

The Green Sheet, Inc. NEWS

Governments worldwide go prepaid

MasterCard Worldwide noted a global shift occurring in government benefit payments, with governments around the world moving to prepaid cards. Most recently, South Africa distributed over 2.5 million prepaid debit cards to its benefit recipients, with plans to release 10 million cards by March 2013, MasterCard reported. The card brand cited other developments, including Italy and Romania issuing benefit cards to its citizens via their post office networks and the United Arab Emirates issuing payroll cards to government contract workers.

Travel card usage grows in Brazil

Brazilians who vacation in the United States, and especially in Florida, are apparently using travel cards in greater numbers. In the Aug. 13, 2012, edition of Portals and Rails, the blog of the Federal Reserve Bank of Atlanta, it was reported that Brazilians choose general purpose reloadable (GPR) cards for travel to avoid a new tax imposed by Brazil on foreign credit card purchases and to lock in favorable exchange rates for the duration of trips.

"In 2011, the Brazilian government imposed a new financial operations tax of 6.38 percent on foreign transactions made with Brazilian-issued credit cards," Paul Graham, Assistant Vice President and Branch Operations Officer at the Miami Branch of the Federal Reserve Bank of Atlanta, wrote on the blog. Another benefit of travel cards for Brazilians is the cards offer favorable exchange rates and fixed rates that insulate tourists against rate fluctuations, he noted.

Fraudster sentenced in WorldPay hack

A U.S. district court judge sentenced a "money mule" to two years and six months in federal prison for her role in the 2008 fraud scheme against Atlanta-based processor WorldPay US Inc. (formerly RBS WorldPay Inc.) that netted fraudsters $9 million. Sonya Martin, a 45-year-old resident of Nigeria and Chicago, was convicted of conspiracy to commit wire fraud.

The court said Martin took part in a Chicago "cashing crew" that took account information stolen from WorldPay's systems to withdraw approximately $80,000 from various Chicago ATMs on one morning in November 2008. In February 2009, the processor reported the breach, where 1.5 million open-loop gift and payroll card numbers were compromised, but only 100 of the card numbers – all from payroll card accounts – were allegedly used in the scam.

The Green Sheet, Inc. ANNOUNCEMENTS

BitInstant reveals paycard ambition

Alternative commerce platform provider BitInstant said on its corporate blog that it intends to roll out a MasterCard-branded payroll card denominated in Bitcoins, the virtual currency backed by data mined on the web. "BitInstant's partners, who are issuing the card, have been working with MasterCard for many years, and the specific relationship will be between these partners and MasterCard (not directly between MasterCard and BitInstant)," wrote Erik Voorhees, Director of Marketing and Communications at BitInstant.

Edenred reports rise in prepaid issuance

Paris-based prepaid card provider Edenred said it issued 9.5 percent more cards in the first half of 2012 than it did in the first six months of 2011. Edenred attributed the growth to higher penetration rates in existing markets, the increase in face values on cards, expansion in Mexico and beginning operations in Finland.

Warburg Pincus invests in InComm

Prepaid card distributor InComm received funding from private equity firm Warburg Pincus LLC. Terms of the minority investment were not disclosed.

Omni Prepaid makes top 10 in 'Steel Town'

The Pittsburgh Business Times named Omni Prepaid LLC, the parent company of GiftCards.com, to the Pittsburgh Top 100 fastest growing companies list. Its eighth place ranking on the 2012 list marks the company's fifth consecutive placement on the list.

Pew finds GPR cards are 'risky'

The Pew Charitable Trusts, a nonprofit organization that operates a public policy think tank, issued a report that characterizes GPR cards as checking account alternatives that come with added risks. Also, in its review of a representative sample of 52 different prepaid cards, Pew found that variable fee structures and disclosures make comparison shopping between cards "very difficult."

Plastyc named to Inc. 500/5000 list

UPside Visa prepaid card provider Plastyc Inc. joined the ranks of the fastest growing U.S. companies with its inclusion on the 2012 Inc. 500/5000 list. Plastyc said that, according to Inc.'s calculations, the company had a three-year revenue growth of 655 percent.

Blackhawk to go public

Safeway Inc. is making plans to enter into an initial public offering for its subsidiary Blackhawk Network. Safeway intends to execute the IPO in the first half of 2013.

IdeaBank Challenge winner seeks satisfaction

The U.S. Department of the Treasury, the Doorways to Dreams Fund and the Center for Financial Services Innovation named the winners for the IdeaBank portion of the MyMoneyAppUp Challenge. The grand prize winner received $1,000 in cash for a mobile app idea that allows users to track the satisfaction quotient of purchases over time. Overall, $2,500 was awarded. The submitted ideas are posted at http://ideabank.mymoneyappup.challenge.gov.

The Green Sheet, Inc. PARTNERSHIPS

CorFire processes Dunkin' Donuts payments

CorFire, the mobile commerce processor of SK C&C USA, said it is providing virtual mobile payment capabilities for the Dunkin' Donuts mobile app, which includes a virtual gift card. The app was developed by CorFire and incorporates social media functions such as mobile gifting via emails and text messages.

The Green Sheet, Inc. ACQUISITIONS

Wright Express to add Fleet One

Fuel card processor Wright Express Corp. agreed to acquire its competitor Fleet One for $369 million in cash. The transaction, which is expected to close in the fourth quarter of 2012, will add 210,000 active card accounts to Wright Express' portfolio.

The Green Sheet, Inc. APPOINTMENTS

Luminaries join BillMyParents' board

Teen card company BillMyParents Inc. named Jesse Itzler and Sol Barer, Ph.D., to its board of directors. Itzler, the co-founder and former Vice Chairman of Marquis Jet Partners, operates his own charity, the 100 Mile Man Foundation. Barer is the founder and former Chairman of the Board of biopharmaceutical firm Celgene Corp.

Round welcomed to Kaiku Finance

In conjunction with the launch of the Kaiku Visa Prepaid Card, Kaiku Finance LLC introduced Jon Round as Chief Executive Officer. Round, who brings over 20 years of payments experience to Kaiku, reportedly helped launch the first Visa prepaid card programs in Canada and the U.K. end of article

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