MasterCard Certifies STM and OTI Solutions

STMicroelectronics and OTI(On Track Innovations)have announced
that their joint contactless solution has been certified as level 1, level 2, and Chip Assessment Security Testing (CAST) by MasterCard. This will allow the solution to support both MasterCard PayPass and Visa
Paywave on one chip, for which OTI will provide the operating system,
application and the inlay technology. Card manufacturers can program
the card to support either MasterCard or Visa programs optimizing
inventory management. Last year, STMicroelectronic’s net revenues were
$9.85 billion and net earnings were $782 million.

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Credit Card Practices Bill Introduced

Senators Carl Levin and Claire McCaskill have introduced “The Stop Unfair Practices in Credit Cards Act” to stop credit card practices that unfairly deepen or prolong credit card debt held by consumers. The Stop Unfair Practices in Credit Cards Act follows an investigation and hearing by the Permanent Subcommittee on Investigations. The Act seeks to address the following: no interest on debt paid on time, no trailing interest; limits on penalty interest; apply interest rate increases only to future debt; no interest on fees, restrictions on over-limit fees; no “Pay-to-Pay” fees, reasonable currency exchange fees; prompt and fair crediting of card holder payments and fixed credit limits. The Stop Unfair Practices in Credit Cards Act has been endorsed by Consumer Action, Consumer Federation of America, Consumers Union, National Consumer Law Center, U.S. PIRG, and the Center for Responsible Lending.

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3M Launches a New Clear Credit Card Design

While early “clear” payment cards encountered operating problems with ATMs, 3M this week unveiled the first truly transparent, fully ATM-functioning payment card. The new infrared “Vikuiti Clear Card Filter” passes all international standards for payment cards. VISA International recently approved 3M as a manufacturer of a transparent inlay for use in VISA-branded payment cards worldwide. Although the magnetic stripe shows through the front of the card, it can easily be integrated into the design. Typography, solids, patterns, illustrations all reproduce well on the clear plastic substrate and it accepts traditional four-color printing in addition to a wide range of translucent inks. The card is powered by a proprietary multi-layer, IR light-blocking optical film from 3M. Laminated between two clear sheets of PVC, the film reflects the IR light generated by LEDs used in ATMs to detect the presence of a card.

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H&R Block Prepaid Card Balances Top $211MM

H&R Block reported it has signed-up more than two million accounts for its prepaid card with more than $211 million in payroll and other funds deposited to-date. The “H&R Block Emerald Prepaid MasterCard,” launched one year-ago, exploded during this tax season as its account base more than doubled and deposited funds soared from $14 million in early February. The Company noted that 40% of the clients were previously unbanked. The card is only available to tax clients completing their taxes in H&R Block 12,800 tax offices. The card is issued by H&R Block Bank. The Company estimates the card has saved clients more than $60 million in check-cashing fees.

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Security Intrusion Charges Dog TJX Cos

The TJX Companies reported yesterday it took an after-tax charge in the first quarter of $12 million due to the unauthorized computer intrusion(s) discovered late last year. For the second quarter, the Company expects to continue to incur these types of costs related to the intrusions, which the Company estimates will total $.02 – $.03 per share or approximately the same amount as the first quarter. The Company says it does not yet have enough information to reasonably estimate the losses it may incur arising from this intrusion, including exposure to payment card companies and banks, exposure in various legal proceedings that are pending or may arise, and related fees and expenses, and other potential liabilities and other costs and expenses. For complete details on TJX’s first quarter results visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

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Asta Funding Revenues Leap 33% in 1Q/07

NJ-based Asta Funding reported first quarter revenues of $33.1 million, a 33% increase over 1Q/06. Net income rose 13% to $12.6 million. Net cash collections from collection of consumer receivables acquired for liquidation was $76.1 million for the second quarter, up 37.0%. The Company says its $300 million portfolio purchase, which closed on March 5th, increased its first revenue. The portfolio acquisition has approximately $6.9 billion in face value receivables, mostly credit card accounts. The portfolio was purchased from several sellers under common ownership with whom Asta enjoys a 20 plus year relationship. The seller is Great Seneca Financial and its related entities. The deal nearly doubles the size of Asta’s assets acquired for liquidation on its balance sheet. For complete details on Asta Funding’s first quarter results visit CardData ([www.carddata.com][1]). (CF Library 2/12/07; 3/6/07)

[1]: http://www.carddata.com

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Study: Small Card Issuers Need to Outsource

A new research report has concluded that small credit card issuers can be segmented according to their strategic direction: committed issuers, portfolio sale/agent bank partners, and those re-evaluating their direction toward one of these approaches. The study says any issuer not in the top tier needs to be thinking about the optimal combination of in-house and outsourced capabilities that will deliver competitive product and a competitive return, while most importantly serving the needs and interests of the cardholders. The report from Boston-based Mercator Advisory Group determined there are more than six thousand institutions having credit card receivables less than $100 million on their balance sheets. Plus, there are perhaps an additional 2,000 institutions that have sold their portfolios and continue to function as agent banks.

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Points2U Comes to Online Bill Payment

Metavante has integrated its “Points2U” rewards program into its online bill payment service enabling financial institutions to award points for online bill payment activity, credit card and debit card use — all from one integrated rewards platform. “Points2U” is a points-based rewards program for credit card, debit card and online bill payment programs that features easy implementation, minimal upfront expense and a customizable rewards website that enables financial institutions to offer rewards their customers want, such as merchandise, gift cards and flexible travel certificates. Customers accumulating points through a “Points2U” rewards program can redeem them at either a bank-branded rewards website or 24/7 call center. Metavante is the banking and payments technology subsidiary of Marshall & Ilsley Corporation.

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HSBC To Launch New ATM Ad Campaign

i-design has announced that HSBC has signed to roll-out the company’s
ATM advertising solution. The advertising solution is called ATM:ad and
will be displayed on the bank’s ATMs across the UK. HSBC is also
given the option in the contract to utilize i-designs’ ATM screen
management product Builder. This campaign compliments the bank’
current self-service marketing strategy and network infrastructure.

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DOJ Nails a U.S. Internet Gambling Group

A federal grand jury in Salt Lake City last week returned a 34-count indictment charging seven individuals and four companies with conspiring to violate laws prohibiting Internet gambling. The indictment alleges the defendants operated a business that helped Internet gambling Websites to disguise credit card charges for gambling as charges for something else. The indictment also alleges the defendants’ businesses also assisted Internet gambling Websites by arranging fund transfers between bettors in the U.S. and various Internet gambling Websites using Western Union wire transfers. During the course of the conspiracy, the indictment alleges that the defendants facilitated the payment of more than $150 million to illegal Internet gambling Websites.

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MasterCard Sees Strong Return In APMEA

MasterCard International has reported strong 1Q07 results in the
Pacific,
Middle Eastern, and Africa (APMEA) regions. Gross dollar volume
increased by 18.1%, purchase volume increased by 21.5%, transactions
increased by 23.4%, card transactions increased by 27.1% and the
number of cards issued increased by 12.8% since 1Q06. Also reported was
nearly 187 million MasterCard cards have been issued by financial
institutions
across APMEA. The company also launched “Paypass”, Premium co-branded
cards, began e-commerce development, and started many other programs this
past year in APMEA. MasterCard processes over 16 billion transactions each
year and operates in over 210 countries and territories worldwide.

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