FINRA Warns About 401k Payment Cards

The Financial Industry Regulatory Authority warned investors about the potential pitfalls of using 401(k) debit cards to borrow money from their retirement funds. FINRA’s new Investor Alert, 401(k) Debit Cards – Think Before You Swipe, explains that a 401(k) debit card is like a debit and credit card rolled into one. It’s like a debit card because it allows you to access and spend your own money, rather than someone else’s. It’s like a credit card because you are billed each month for the charges you ring up. That bill includes a minimum payment due plus interest, fees and an additional interest charge that’s paid to the credit card vendor servicing the account.

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AUSTIN LOGISTICS & CAMELOT

Austin Logistics has partnered with Camelot Information System
business/IT consulting to provide its event-based decision support
solutions and exemplifying its expanding presence in China. Camelot
provides expansion for distribution and delivery of Austin’s decision
support solutions, has 1,700 employees and major business offices
throughout greater China and Japan. Austin Logistics provides predictive
analytic solutions, has done so for over 15 years and provides 80
product installations across North America, the United Kingdom and Asia
Pacific.

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Merchant e-Solutions Beefs-Up Pay Security

Merchant e-Solutions has added “Payer Authentication” security programs to its e-Commerce service offering and include support for Verified by Visa and MasterCard SecureCode, as well as alternative payment brands like Bill Me Later. MeS has developed the MeS Payment Network that includes a direct association connection for authorization. Proprietary payment solutions include the MeS Payment Gateway and MeS Virtual Terminal, which provide for better control of costs, interchange qualification, and service levels. The payment solutions provided by MeS are comprehensive and PCI compliant and designed with features that eliminate the need for merchants to store cardholder data, thereby reducing a merchant’s risk exposure.

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MasterCard Deploys CSC’s CAMS II Card System

VA-based IT technology provider CSC has announced that MasterCard Worldwide is using CSC’s “CAMS II Card & Merchant System” to power its debit and prepaid processing platform, MasterCard Integrated Processing Solutions. CAMS II, which is the functional and architectural foundation of MasterCard IPS, uses a high-performance transaction processing engine that scales to manage the industry’s highest volumes. With the CAMS II rules-driven system, MasterCard IPS enables companies to rapidly design, deploy and operate innovative payment products and services that can be customized by demographics or geography. Specific IPS services include PIN and signature debit and prepaid transaction processing, fraud detection, rewards and loyalty programs, and ATM network management. In addition to the software agreement, CSC is providing MasterCard with related professional services and has provided business domain expertise and program management, testing and Web development services during MasterCard’s development of IPS.

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Shipping Fees Drive Down E-Purchases

A new survey has found that unexpectedly high shipping fees are the number one reason consumers abandon online purchases. Checkout abandonment is a significant challenge for online merchants, with an estimated two out of every three consumers failing to pay for items they put in their shopping carts. The study conducted by PayPal and comScore also revealed that many consumers abandon their purchases for payment-related reasons. Of those surveyed, more than one in five shoppers didn’t complete purchases because their preferred payment option was not offered on the merchant’s Web site. Many shoppers simply think it is too much of a hassle to search for their wallets or purses – 21 percent did not complete online purchases because their wallets were not easily accessible.

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BofA Adjusts Consumer Banking Management

Bank of America is creating a new consumer banking management structure and has tapped Barbara Desoer as President of the consumer real estate operations of Countrywide Financial, Bruce Hammonds as President, Credit Card and Unsecured Lending, and Liam McGee as President of Consumer and Small Business Bank. BofA says the three represent the company’s most seasoned executives. BofA noted that deposits and cards currently account for about 95% of the profit of Global Consumer and Small Business Banking, which itself accounts for well over 60% of Bank of America’s earnings.

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U.S. Bank Will Refund MoneyGram China Fees

U.S. Bank will refund fees for MoneyGram remittances to China made by U.S. Bank consumer customers from any U.S. Bank branch and will match employee contributions made to eligible charities. The free transfers will be available from May 23 through July 31, 2008 in an effort to support relief efforts for victims of the earthquake that hit Sichuan Province in China on May 12.

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E-MONEE

FL-based EFT provider E-Monee is implementing electronic payment systems in Dubai for expatriate construction workers to satisfy a government mandate. Dubai’s Ministry of Labor has been charged with implementing the government’s mandate for employers to pay all salaries including those of low-income workers through the banking channels.
With E-Monee, employers will be able to credit salaries to workers’ accounts automatically, enabling workers to access hundreds of ATMs and thousands of POS units at very nominal costs and with no minimum monthly
balance requirements. In addition to this, they will be able to remit
funds back home in a method that is cheaper, safer and more convenient
than current alternatives. In addition to meeting the current mandate,
E-Monee’s objective is to roll out this solution to all GCC countries,
to enable the entire expatriate workforce servicing that area to benefit
from this convenient and cost-effective technology, as far as securing
their salaries and moving their money is concerned.

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SCOTIABANK BERKLEY VISA

Scotiabank has partnered with Berkeley Payment Solutions to introduce
its suite of prepaid corporate Visa cards to the Canadian market. The
new suite of payment solutions feature branded, re-loadable
prepaid Visa cards, providing the ease-of-use of a credit card with the
appeal of cash with a reward option redeemable anyway,anywhere. Nissan
Canada has selected the 2 organizations to spearhead the “Nissan Rogue
Test Drive Direct-mail” reward program, providing participants with a
Nissan prepaid Visa card, and the “Bonus Days” program in December 2007,
offering customers a choice of a Nissan-branded prepaid Visa gift card
or a rebate upon the purchase of one of four Nissan vehicles.
Additionally, Scotiabank and Berkeley also worked with LG Electronics
Canada for the launch of the “LG Shine” cell phone in October 2007 as
part of its “Born to Shine” campaign.

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RISING DEFAULTS

Standard & Poor’s credit rating agency has released figures showing
credit card and mortgage delinquencies are continuing to rise for 1Q/08,
especially among subprime mortgages bundled into securities rated
between 2005 and 2007 with a default rate of 21.73%. Subprime mortgage
defaults were up from 19.41% in 4Q/07 while prime mortgage
delinquencies, however, rose to 2.41% in 1Q/08 and were up from 2.11% in
4Q/07. Meanwhile, credit card delinquencies rose to 5.88%, up from 5.6%,
while charge-offs rose to 6.51% in March, up from 6.17% in December.

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Emerald Prepaid MasterCard Goes Mobile

H&R Block Emerald Prepaid MasterCard cardholders will have access to mobile phone text messaging to check their balances and receive account reload mobile alerts. This tax season, H&R Block issued 2.6 million cards. H&R Block customers continued to use the cards for purposes beyond receiving their tax refund, loading payroll direct deposit and other funds on the card. In addition to text message balance inquiry, the Emerald Card offers clients payroll direct deposit; connection to line of credit;access to a savings account; link to money transfer services and nationwide ATM access and point-of-sale purchasing wherever MasterCard debit cards are accepted. H&R Block will start piloting the text messaging capabilities made available by Metavante Mobile Financial Services, powered by Monitise Americas technology.

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SCM & SONY

SCM Microsystems has signed a memorandum of understanding with Sony to
develop and supply FeliCa contactless card readers targeting
international enterprise, mobile and banking markets. The product
portfolio will consist of FeliCa “Physical Access Control Terminals”
(PACT) and SCM terminals/readers developed under the cooperation,
anticipated for introduction by 4Q/08. FeliCa was created by Sony and is
based on radio frequency identification (RFID) technology allowing for
contactless transactions over an environment-friendly solution. SCM
Microsystems provides Digital World contact and contactless smart card
reader technology for the transfer of digital content while the Sony
Corporation provides device and information technology products for the
consumer market, professional market, and had sales of approximately $88
billion in 2007.

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