Datacard Skimming Fighter

Datacard Group has introduced the “Magneprint” module for the “9000” and “7000” series card issuance systems which records a unique fingerprint or noise signature from each magnetic stripe during the card personalization process to help fight skimming. Datacard is collaborating with MagTek, Inc., a leading card reading solutions supplier and provider of Magneprint technology.

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Online Purchases

A new study has found that consumers would be more motivated to shop online if they were guaranteed they would not receive unwanted e-mails as a result of purchases. The study has found that consumers would also be more motivated if there was an extra layer of security for credit card transactions. The “MasterCard Internet Consumer Segmentation Research” found that 73% of the 1,000 study participants agreed that enhanced security features would influence their decision to purchase online in the next three months. Sixty-one percent of respondents are concerned that their credit card number will be intercepted by hackers.

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RBA RULES

VISA began its appeal today to the Australian Federal Court over new credit card rules issued by the Reserve Bank of Australia last year that became effective this year. VISA believes the RBA went beyond its legislative powers in calling VISA a “designated payments system” under the “Payments Systems Act.” VISA also says the RBA has inappropriately interfered with its relationships with bank, merchants, and cardholders. VISA says that VisaNet is not a payments system because it does not actually transfer funds, merely facilitating approvals for credit card transactions. Last year, the RBA issued new reforms on the credit card business permitting merchants to recover from cardholders the costs of accepting credit cards. The new standard went into effect January 1st. Also under the new RBA rules, interchange fees will decrease from around 95 basis points to approximately 55-60 basis points by July 1st. VISA and MasterCard argue that the RBA hasn’t complied with its obligations under the “Payment Systems Act,” and that the proposed changes don’t meet the public-interest test required under the act. MasterCard is expected to make its opening statement on Wednesday. Representing VISA is Freehills and representing MasterCard is Coudert Brothers.

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Check Collections

The FTC has sued three NJ-based corporate defendants and their principals to halt an alleged nationwide scheme to extract millions of dollars from consumers by falsely threatening them with arrest and prosecution unless consumers immediately pay them amounts that the consumers do not owe. The complaint also charges the defendants with misrepresenting the amount of the debt when they added extra charges without telling consumers. In addition, the defendants allegedly failed to inform consumers of their right to receive more information about the debt or to dispute the defendants’ claims prior to payment. The three corporate defendants include National Check Control, Check Enforcement, and Goldman & Co.

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CAL SECURE VBV

Cal, a member of VISA Europe, and the largest credit company issuing VISA cards in Israel, has launched “Verified by Visa” to it’s cardholders utilizing Cyota’s “SecureVbV.” “SecureVbV” is provided as a hosted service using Cyota’s regional facilities in the US, Europe and Japan, offering a risk-free approach that helps issuers launch “Verified by Visa” without any integration efforts or IT investment. “SecureVbV” is offered as an in-house solution as well. Cal provides monetary services to more than 13 banks, with approximately 1.2 million cardholders.

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Jean Coutu AIR MILES

The second largest pharmacy in Canada and eighth largest pharmacy in North America has signed a multi-year agreement to become a sponsor in Canada’s “AIR MILES Reward Program,” operated by Alliance Data Systems. The Jean Coutu Group will offer “AIR MILES” in its 248 stores throughout the province of Quebec. Jean Coutu’s Canadian network comprises 269 PJC outlets, 39 PJC Clinics and 2 PJC Sante Beaute, all franchised, in Quebec, New Brunswick and Ontario. The American Brooks Pharmacy network has 330 corporate pharmacies in seven states in the northeastern USA. More than 12.5 million Canadians actively collect “AIR MILES” reward miles at more than 100 brand-name sponsors representing over 12,000 retail and service locations across Canada.

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VISA FEES

Progressive Enterprises and Foodstuffs NZ are protesting new VISA fees
which go into effect June 1. The two large supermarket chains say they will
drop acceptance of VISA cards if the new fees go into effect. Foodstuffs
NZ says that 9% of its $5.7 billion worth of groceries sold last year were
made on VISA cards. VISA’s new fees for supermarkets will rise about 20% on
June 1st, to around 100 basis points. About one third of supermarket
spending is done on credit cards and VISA has about 50% of the New Zealand
market. MasterCard has not raised fees.

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MagTek CEO

MagTek has named Mimi Hart, who has been associated with the company for more than 28 years, to the position of Chairman, President and CEO. In addition to marketing and selling MagTek products her activities on behalf of MagTek included product development and participation in the early ANSI and ISO Committees, which formulated the standards for PIN and card usage.

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MASTERCARD 1Q/03

MasterCard reported that it took a $721 million pre-tax charge in the first quarter in connection with its signing of a “Memorandum of Understanding” for a settlement with plaintiffs in the “Wal-Mart” debit card lawsuit. For the first three months of this year, MasterCard posted a $425,391,000 net loss compared to a $53,596,000 profit one year ago. First quarter revenue was $512 million compared to $393 million for the three months ended March 31, 2002, an increase of 30%, of which $70 million was due to the acquisition of MasterCard Europe. The number of transactions processed increased to approximately 2.206 billion for the first quarter compared to approximately 1.946 billion for the year-ago quarter, an increase of approximately 13%. Operations fees were $315 million for 1Q/03, compared to $256 million for 1Q/02, an increase of 23%. Approximately $33 million of operations fees in the first quarter were due to the acquisition of MasterCard Europe. Operating expenses were $1.180 billion for the quarter, compared to $315 million for the three months ended March 31, 2002, an increase of $865 million or 275%, primarily due to the debit card settlement.

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Diebold Signs MS Bank

MS-based Richton Bank and Trust has selected Diebold Transaction Services to handle the processing for their ATM network and has begun issuing its first “MasterMoney” debit cards. Before converting to Diebold Transaction Services, employees at Richton Bank and Trust were forced to perform tedious daily reconciliation processes, but those manual entries are now automated by the daily settlement services initiated by Diebold.

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