Money Movers/Chase Launches Process Pink

Chase Paymentech’s ISO partner Money Movers of America (MMOA) has launched “Process Pink” as part of its merchant payment processing business to make substantial monthly financial contributions to the National Breast Cancer Foundation. Every time a consumer makes a credit card purchase at a “Process Pink” participating merchant, a portion of MMOA’s revenue from the credit card processing fees is donated to the NBCF. “Process Pink” grew out of a desire on the part of MMOA’s principals to leverage the core business of merchant processing for the advancement of significant challenges such as finding a cure for breast cancer. As part of this arrangement, MMOA and its customers will be permitted to advertise their support for the NBCF.

SMART CARD PROGRESS

With magnetic stripe credit card skimming on the rise and shifts in
fraud liability, the migration of Latin American Banks to smart card
deployment is becoming increasingly rapid with Banco Real ABN Amro, for
example, having issued 2 million smart bankcards and projections of 4
million issued in 2008. Additionally, the bank protects over 3,000
clients monthly with its magnetic card fraud protection service,
which generates U.S. $12.5 million annually, and 28% of Brazilian POS
terminals now have chip readers. Meanwhile, Banorte de Mexico has issued
0.7 million EMV credit cards out of a total of 1.3 million, has equipped
30,400 of its 33,700 merchant terminals with chip technology and
estimates include 6 million of the 16 million credit card accounts have
been chip-upgraded. This growth in fraud protection was due greatly to
skimming and cloned card fraud having grown at a 43.5% CAGR between 2004
and 2006 in Brazil alone, as disclosed at the Smart Card Alliance/CTST
Conference.

Consumer Spending Index Sinks to 2001 Lows

The Deloitte Research “Leading Index of Consumer Spending” reports that it has reached its lowest level since 2001. The “Index” attempts to track consumer cash flow as an indicator of future consumer spending. The “Index,” comprising four components: tax burden, initial unemployment claims, real wages and real home prices, fell to 1.3%, from a revised gain of 1.51% a month ago. The tax burden is expected to continue to fall with slowing income growth. This remains the only positive factor supporting consumer spending in the months ahead. Unemployment claims increased 16.1% in March, compared with last year. Real wage growth was negative. The decrease was marginally lower compared to the previous month. This comes at a time when personal income increased 4.4% in the first quarter of 2008 compared to a year ago. Rising food and energy prices continue to be a concern for consumer spending. The fall in house prices intensified further with house prices falling nearly 12% compared with a year ago. The home market shows no sign of bottoming out with residential spending falling 26.7% in the first quarter of 2008. vs. the first quarter of 2007.

U.K. Faces Credit Card Deterioration Too

Moody’s Investors Service’s UK credit card indices have begun showing signs of deterioration with the aggregate index delinquency rate up for a third consecutive month while projections include an increase in charge-off rates over the coming months. Factors contributing to this deterioration include a combination of increased living costs, a suspect rise in unemployment and decreased credit. Meanwhile, credit card outstandings rose in March by GBP 400 million to a record GBP 55.1 billion, according to CardFlash International. This is the third consecutive month of growth following several monthly declines in 2007. Year-on-year credit card outstandings (not seasonally adjusted) were only up 2%. According to the Bank of England, the increase in net consumer credit in March (GBP 1.2 billion) was below that in February and below the previous six-month average.

Credit Card Debt Impacts Summer Vacations

A new survey conducted by TransUnion’s TrueCredit reveals that 33% of respondents will not go on vacation this summer while 28% who do will spend less than last year. The cost of fuel for 72% of respondents was cited as a reason while 35% are concerned about credit card debt. Additionally, Americans are taking a long-term view of their finances. Nearly half (49%)say the statement, “I’m a long hauler. I devise and adhere to long-term plans for my money” best represents their personal financial philosophy, while 25% agree with the statement, “I’m a baby stepper. I set short-term plans and stick to them.” Zogby International was commissioned by TransUnion’s TrueCredit.com to conduct an online survey of 8,683 adults.

BARCLAYCARD EXEC

Barclays PLC has named Kevin Sullivan as Managing Director,
Communications for Barclaycard US. Prior to joining Barclaycard US in
2005, Sullivan spent eight years at Chase in a variety of senior
relationship, sales and marketing roles in the Card Services unit. Prior
to that, he helped to build new categories of credit card acceptance in
the U.S. Merchant group of MasterCard. From 1989 through 1992, he worked
in travelers cheque marketing at American Express. Barclays recently
acquired the $4 billion “Goldfish” credit card business from Discover.
Barclaycard provides credit cards in the U.K., Germany, Spain, Italy,
Portugal, Africa, India and the UAE. In South Africa, Barclaycard
operates through ABSA and in the Nordic region, it operates through
Entercard, a joint venture with Swedbank.(CF Library 2/7/08)

NRF Welcomes Card Protection for Retailers

The National Retail Federation and National Council of Chain Restaurants applaud the Senate passage of legislation that would protect retailers and restaurants from frivolous lawsuits over credit card expiration dates printed on customers’ receipts. At issue is a provision in the Fair and Accurate Credit Transactions Act (FACTA) intended to prevent credit card fraud. Under FACTA, merchants were told they could no longer print more than the last five digits of a credit or debit card number “or” the card’s expiration date on receipts after December 4, 2006. Many merchants interpreted the law as meaning they could either truncate the card number or leave off the expiration date, but that they were not required to do both. Most truncated the card number but some continued printing the expiration date, reasoning that the expiration date was of no value without the full card number. Merchants have been hit with more than 300 class acts lawsuits contending that FACTA required them to take both steps, and seeking fines as high as $1,000 per incident, the maximum allowed under the 2003 law. FACTA does not allow individuals to sue, instead giving enforcement authority to the Federal Trade Commission, but the lawsuits were brought under state laws citing FACTA. The legislation would protect merchants from lawsuits for expiration dates printed between the time the FACTA rule went into effect and the time the measure is signed into law. But merchants would still be required to both truncate card numbers and leave off expiration dates going forward.

EURONET EXEC

Euronet Worldwide has appointed Gareth Gumbley as managing director of
its Prepaid Processing Segment to oversee strategic planning, operations
and management of Euronet’s prepaid subsidiaries on a global basis.
Gareth has demonstrated strong growth through leadership roles with an
extensive international presence in the payments processing business as
a managing director of Euronet’s prepaid businesses in Australia-New
Zealand since November 2004, most recently effective in expanding the
company’s prepaid business into India. Prior to his joining Euronet,
Gumbley was the CEO of Dialect Solutions Group online payments business
while Euronet’s global payment network includes 11,917 ATMs,
approximately 51,000 EFT POS terminals, a prepaid processing network of
394,000 point-of-sale terminals across approximately 193,000 retailer
locations in 14 countries and a consumer-to-consumer money transfer
network of more than 68,000 locations in 100 countries.

L.L. Bean Terminates its BofA Card Deal

Retailer L.L. Bean will discontinue its credit card program with Bank of America as of June 30th. Customers will continue to receive free shipping and free monogramming on orders placed with the current L.L.Bean Visa Card through June and continue to earn L.L.Bean Coupon Dollars on all purchases made through June 30, 2008 with your current L.L.Bean Visa Card L.L.Bean Coupons issued to you at any time will remain valid until their stated expiration date. Information about the new card program will be provided in the next few weeks.

CARD FRAUD

Computer fraud committed with the contribution of 38 individuals in the
U.S. and Romania has led to the indictment of 33 of the suspects. Having
charged the 33 individuals before federal grand jury in Los Angeles and
7 in a District of Connecticut Court(2 of whom were charged in both
states) with a 65-count indictment on international Internet
racketeering to which thousands of individual victims and hundreds of
financial institutions fell victim to. The scheme was run by the Romania
perpetrators who obtained thousands of account numbers by phishing
through SPAM emails. After directing the victim to the site, they were
prompted to enter access device/personal information allowing
“suppliers” to collect information and send to the U.S.-based “cashiers”
through instant message. The scheme, holds the city of Los Angeles,
violates the RICO Act, constitutes as conspiracy in connection with
access devices, the production/use/trafficking in counterfeit access
devices, bank fraud, aggravated identity theft, unauthorized access to a
protected computer, possession of device making equipment and
forfeiture. Additionally, U.S. law enforcement authorities are executing
9 arrest warrants in the Los Angeles area and Romanian law enforcement
authorities are executing search warrants in Romania in connection with
the indictment.

MyECheck Signs Symmetry Direct for E-Check

CA-based alternative payment provider MyECheck has signed online retailer Symmetry Direct as a client and will provide check processing services. This agreement will allow Symmetry customers to use their checking accounts as an additional form of online payment. MyECheck’ software debits U.S. checking accounts, even accounts that ACH cannot debit and provides faster clearing and funds availability, substantially reduces charge-backs and risk and improves cash-flow, all at a much lower cost than credit or debit cards. eChecks processed on the MyECheck system are typically accepted in 1 to 3 seconds with check guarantee approval rates averaging over 90%, with many merchants exceeding over 95%.