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The Green SheetGreen Sheet

The Green Sheet Online Edition

August 08, 2011 • Issue 11:08:01

Prepaid in brief

The Green Sheet, Inc. NEWS

FinCEN clarifies MSB definitions

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.

FinCEN issues 'prepaid access' final rule

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:  

  • Renames "stored-value" as "prepaid access"
  • Focuses on regulating sellers of prepaid access products that pose the greatest money laundering risks
  • Exempts prepaid access products that can be loaded with a maximum of $1,000, as well as some payroll products
  • Exempts closed-loop prepaid access products sold in amounts of $2,000 or less.
  • Excludes government benefits and health care benefit account cards
  "The final rule addresses regulatory gaps that have resulted from the proliferation of prepaid access innovations over the last 12 years and their increasing use as an accepted payment method," said FinCEN Director James H. Freis Jr.

The final rule is available at www.fincen.gov/statutes_regs/frn/pdf/Prepaid_Final_7-22-201.pdf.

Groupon's expiry policy investigated

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.  

The Green Sheet, Inc. ANNOUNCEMENTS


APS advances Cashplus in U.K.

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.  

Website traffic up at BillMyParents

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.  

New Visa travel card unveiled

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.  

Texas power company taps into options

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.  

Plastic Jungle wins AlwaysOn award

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.

The Green Sheet, Inc. PARTNERSHIPS

CardSmith to process through Agilysys

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.  

TxVia teams with Discover

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 subsidiary to process over STAR Network

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.  

FIS inks deal with CU association

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.  

MoneyGram re-ups with Canada Post

MoneyGram International renewed its agreement with Canada Post to continue to provide money transfer services at over 6,200 post office and postal outlet locations throughout Canada.  

ReliaCard is focus of new trio

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.

The Green Sheet, Inc. ACQUISITIONS

Mint adds payroll card portfolio

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 Green Sheet, Inc. APPOINTMENTS

Evolution1 retains C-level continuity

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. end of article

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