nuBridges Seeks to Bolster Encryption Key Management

Data encryption provider nuBridges seeks to bolster encryption key management. A byproduct of encryption is a generation of encryption keys that allow authorized users and applications to lock and unlock the data, all of which need to be managed and protected on an enterprise level. According to Trust Catalyst Principal Kimberly Getgen in a 2009 report on encryption and key management1, “Eight percent of organizations have experienced problems with lost encryption keys, creating security concerns (50 percent), causing data to be permanently destroyed (39 percent), or disrupting the business (39 percent), while 19 percent of respondents said they directly lost business.” The 2009 Trust Catalyst report also shows that “rotating keys, decrypting and re-encrypting data” is the most difficult aspect of key management, according to the survey. In 2008, it was considered the second most difficult aspect, following “preparing for the unfortunate publicity and impact of data breach,” illustrating the rise of encryption key management anxiety among data security professionals.
One publicized mishap concerning backing up keys occurred last summer.
On July 9, The H, a European online security publication, reported that Germany’s first-generation electronic health cards and doctor’s “health professional cards” had suffered a serious setback because it was revealed that the private keys had not been backed up and the production ones had become corrupted. Had this not been a test run of the technology, this oversight in key management best practices would have meant that real data would have been erased.


Despite Credit Crunch 30% Opened a New Card Account

A new report finds 76% of U.S. online adults own at least one credit card. Age is a key indicator of credit card ownership, as 88% of
Seniors (ages 65 and older) report owning a card versus 54% of Gen Yers
(ages 18 to 29). Even with the slowdown in use of credit, a relatively large percentage of U.S. online adults are still opening credit cards. the survey results showed that 30% of U.S. online adults opened a credit card in the past 12 months. Among U.S. online adults who opened a credit card: younger consumers are most likely to be opening cards. As a generation, younger consumers are more likely to have opened a credit card account than older generations. Thirty-eight percent of “Gen Yers” who own a credit card reported opening one in the past 12 months versus
27% of Gen Xers (ages 30 to 43). Marketing and promotions are a clear
driver of interest. While no one response completely exposed the primary reason why US online adults decided to open credit card accounts, the
survey results show that marketing and advertising play a clear role and 18% of respondents stated that the rewards offered on a particular card
drove them to open a credit card account, and another 14% stated that their interest had been driven by a particular credit card offer. The need for credit drives younger consumers. Establishing credit is an important step in many financial consumers’ lives, and it shows up clearly in survey responses. When asked for the primary reason that they opened a new credit card account, 22% of Gen Yers explained that
it was simply their first card. Among US online adults who own a credit
card, Chase has the largest market share, with 39% of adults stating that they own a credit card from Chase. Bank of America and Discover come in second and third in penetration, with 29% and 27%, respectively. Consumers are using credit far less than before the crisis. The current recession has had a major impact on consumers’ use of credit. Forty-six percent of U.S. online adults who own credit card report they are using credit somewhat less or far less often than before the crisis. Just 6% of adults report using credit cards either somewhat or far more than before the crisis.



The Competition Bureau is warning consumers to be on the lookout for
scams and other unplanned surprises. With new scams invented daily and
scam artists well organized with the latest technologies and strategies,
consumers are cautioned NOT to provide credit card information by email
or personal information via mail by invitation, especially on
suspiciously ‘great’ deals. The Bureau is also advising against
providing personal information via email and depositing checks and to be
on the lookout for offers requiring payments to claim a ‘prize.’ It is
also recommended that consumers check with other sources such as the Better
Business Bureau to determine a company’s credibility; think about the
offer and ignore high-pressure tactics often used by scam artists;
responding to collect a prize for a contest that you did not enter is a
huge red flag and if the offer sounds too good to be true, it probably is!


Merchants Bank Joins the Surcharge Fee-Free Allpoint Network

VT-based Merchants Bank is now a member of the surcharge fee-free Allpoint Network.
Merchants Bank is a $1.4 billion asset bank with thirty-four full-service locations throughout Vermont. Founded in 1849,
Merchants has grown to be the largest bank by assets headquartered in
the state. Merchants has continued to expand, opening several new
branches in the past few years, and is now offering 35,000
surcharge-free ATMs nationwide at leading retailers such as 7-Eleven,
Target, and CVS Pharmacy through the Allpoint Network.
Allpoint is the largest surcharge-free ATM network with 37,000 ATMs in leading national and regional merchant locations across the United States and the United Kingdom.


Retail Credit Card Delinquency Heads North Again

Fitch Ratings has published ‘Credit Card Movers & Shakers’ containing
October 2009 performance.

Late payments on outstanding U.S. credit card balances rose again in
October, falling just shy of record highs as U.S. consumers continue to
struggle with debt loads amid the weak employment situation.

Detailed in Fitch’s latest Credit Card Performance Indexes, the results
show late payments rising to their highest levels in five months and
indicate higher chargeoffs in the months to come.

However, during October, Fitch’s Credit Card Chargeoff Index declined 66
bps to 10.09%, marking the third consecutive improvement. The
three-month average excess spread also showed further improvement,
increasing by 50 bps to 6.25% for the fourth consecutive month to its
highest level since October 2008.

Despite the ongoing unfavorable trends, Fitch expects continued
stability for current ratings of senior credit card ABS tranches given
available credit enhancement and structural protections afforded to
investors. The outlook for subordinate tranches remains negative. Fitch
expects U.S. unemployment will peak at 10.3% in second-quarter 2010 and
remain above 10% throughout 2010.

‘Credit Card Movers & Shakers’ is available on the Fitch Ratings web
site at ‘’ under the following headers:

Structured Finance then ABS then Newsletters

Additional information is available at ‘’.


TJX Hacker Pleads Guilty and to Serve 20 Years

The TJX hacker, Albert Gonzalez, who inflicted major payment card damage to Heartland Payment Systems, Hannaford Brothers, 7-Eleven and others is pleading guilty in federal court. He is expected to receive a sentence of between 15 and 25 years in prison. The latest agreement was filed in U.S. District Court in New Jersey, where the Heartland charges were filed in August. A federal judge transferred the case to Massachusetts, where Gonzalez is seeking to merge it with two other cases to which he has already pleaded guilty. Gonzalez was charged in August, accused of stealing more than 130 million debit and credit cards from card-processor Heartland and other companies. He had previously been charged in May 2008 and in August 2008 in Massachusetts with intrusions into TJX, OfficeMax, Dave & Busters, among other companies. He pleaded guilty to those charges in August and is scheduled to be sentenced in Massachusetts on Dec. 21 in both cases.


Experian and Convoke Partner for Charge-Offs

Experian has partnered with Convoke Systems to offer the “Convoke Systems Platform” centralized repository used
to manage and provide real-time data on charged off accounts. The “Convoke Systems Platform” provides access to data, documents and chain of
title information for accounts that have been charged off and sold to
debt buyers or assigned to collection agencies and law firms. This
service provides quick and secure online access to information such as
the original application for credit, statement history and itemized
balance due, all of which are required or are becoming a requirement to
verify and validate legitimate consumer debt. Additionally,
the “Convoke” Platform benefits consumers by ensuring the
accuracy and integrity of their data and also helps in resolving and
validating account disputes. As charged-off debt and whole loans are
being bought and sold numerous times, the process of establishing the
chain of title generally has been complicated, making it difficult to
validate and resolve collection accounts.


Noodles & Company Dishes Out a New Gift Card

Mac & Cheese, Pad Thai, Chinese Chop Salad and Pesto Cavatappi can now be facilitated for your loved ones with the new “Lunch Buddy Gift Card” says Noodles & Company has launched a gift card that sits on a tabletop easel and displays the giver’s photo. To personalize the card, the user can visit the “Lunch Buddy Support Center” to upload and print their photo. Or, select a photo of a stand-in “buddy” from a photo gallery provided on the site. Givers can even guarantee their buddy’s availability for the virtual lunch date by using a calendar blocker feature to choose a specific day and time for the lunch. “Lunch Buddy” cards are available in any amount at a Noodles location, or in $20 amounts if ordered online. And, like a buddy, the cards never expire. They can be reloaded at any Noodles location and reused for as many “lunch dates” as desired. Gift givers also are invited to participate in the “Lunch Buddy Photo Contest” launching in mid-December.


Consumer Confidence Still Swings Wildly in Dec

Consumer confidence is again in a wishy-washy state. After faltering last month, consumers are now showing some signs of optimism.
The composite “RBC CASH” (Consumer Attitudes and Spending by Household) Index for December stands at 39.0, an eight point increase from November’s reading. The RBC “Investment Index” rose 10 points this month, to 46.9 from a 36.6 level in November. The RBC “Current Conditions Index” for December is standing at 37.0, up eight points from the November reading of 28.8. The RBC “Jobs Index” for December edged-up to 54.1, compared to 50.9 in November. The RBC “Expectations Index” for December jumped to 40.4, an 18 point rise from its 21.9 reading in November. RBC says overall consumer confidence remains low and susceptible to negative news, which could create more pointed
fluctuations in consumer confidence in the near- to medium-term period.

Dec 08: 15.3
Jan 09: 13.3
Feb 09: 1.6
Mar 09: 8.2
Apr 09: 38.3
May 09: 43.0
Jun 09: 34.3
Jul 09: 22.4
Aug 09: 37.5
Sep 09: 40.0
Oct 09: 51.8
Nov 09: 30.2
Dec 09: 39.0
Source: RBC CASH


CRL Slams the Credit Card Industry for Abuses

Credit card companies are at their drawing boards brainstorming ways to bypass Federal Reserve Board rules and a new federal law set to take full effect in late February 2010, as 80 million families with one or more credit cards continue to be hit with unfair interest rate hikes and fees. Issuers that hold over 400 million credit card accounts conduct practices the legislation is targeting, including manipulation of interest rates, padding of miscellaneous fees and a deceptive policy on late-payment fees. This, according to a new research report from the Center for Responsible Lending entitled “Dodging Reform: As Some Credit Card Abuses Are Outlawed, New Ones Proliferate,” show practices make it all but impossible for the average person to determine the real cost of credit card debt with issuers’ eagerness to exploit loopholes in the new federal rules underscores why lawmakers need to pass legislation to create the Consumer Financial Protection Agency. The report also spotlights the “pick-a-rate” practice, for which a card company tells cardholders their interest rate will be pegged to the prime rate, adding language to the issuer to pick the highest prime rate in a 90-day period – no longer a single day.


Intl Payments Corp Hires Verus Exec as President

Merchant service provider International Payments Corporation has tapped Ron Carter, previously with Verus Financial Management,
as President. Carter served as President and COO of Verus Financial Management, where under his leadership the company’s revenues grew from zero to approximately $30 million in EBITDA before it was sold in a $325 million transaction to Sage Payment Solutions. At Vital Processing Services, then a partnership between TSYS and Visa, Carter served as Executive Vice President. Carter served as President of Network Systems at Alliance Data, where he led the acquisition and integration of Sears Payment Systems and Harmonic Systems. These acquisitions and others were part of strategy implemented just prior to the IPO of Alliance Data. Prior to ADS,Carter was the President of Buypass Corporation, now a wholly-owned subsidiary of First Data Corporation (FDC). Carter’s extensive experience in both operations and acquisitions will accelerate IPC’s recently announced $150 million strategic plan to acquire Independent Sales Organizations and merchant credit card portfolios.


Aite Group Analyzes Healthcare Payments

A new report from Aite focuses on the opportunities for card networks to expand their presence in healthcare payments.
The Impact report provides a high-level market overview
of each market opportunity, organized by amount of potential dollars
gleaned, and based on qualitative interviews with decision-makers at
card networks. The healthcare industry recognizes the advantages that card industry
infrastructure can bring to the healthcare payments process. As demand
for such programs grows, card networks that aggressively pursue
partnering with payments solution vendors will benefit tremendously from
transaction-based revenue opportunities. In fact, Aite Group estimates
that the revenue opportunity from consumer directed healthcare (CDH),
patient-to-provider and payer-to-provider payments will amount to
US$10.5 million in 2012.