In a terse announcement, Visa USA said its overall effective interchange rate for the coming year will be 1.77%, up 0.6% from the 2006 system-wide rate. Without giving further details about its new rates, Visa said it will post a rate card laying out its entire schedule of fees on its Web site the same day the rates take effect. The Visa announcement follows by nearly two months a notice from rival MasterCard Worldwide concerning its new interchange rates . MasterCard, too, introduced relatively small changes, but generally reserved its higher rates for rewards cards carrying the richest perks. MasterCard’s new schedule also takes effect this month, though some rates become effective in June.
    Interchange, which is set by the bank- card networks, applies to each card transaction and is paid to issuers by acquirers, which ordinarily pass the fee on to the merchant with a markup. The fee is usually a percentage or a percentage plus a fixed fee. With steady increases over the years, interchange has become increasingly controversial. Merchants in recent years have complained it has climbed too high and now accounts for too great a portion of their costs.
    Indeed, despite the seemingly modest overall increase it implies, Visa’s new interchange schedule may not be well received by merchants, particularly those engaged in some 40-plus lawsuits filed against Visa, MasterCard and major banks by a wide range of retailers since 2005, alleging antitrust violations in the setting of interchange. These cases are being consolidated into a class action filed in federal court in Brooklyn, N.Y. “I’m certainly not pleased, nor will the other class members be pleased when they find out, nor will the millions of retailers that take Visa,” says Mitch Goldstone, co-owner of 30 Minute Photos Etc., Irvine, Calif., a lead plaintiff in one of the first cases filed. “It’s entirely in the wrong direction and speaks volumes of [Visa’s] lack of listening to their customers.”
    Visa, though, says some of the changes it is making with its new fee schedule may appeal to merchants. For example, the network is now allowing bars, beauty shops, and taxis to process tips on top of transaction amounts at the most favorable interchange rate. Previously, authorization amounts had to match settlement amounts to earn these rates, so tips resulted in higher fees. Visa is adding these businesses to restaurants, for which it had already lifted the tip restriction. The network is also adding charities, child-care operations, subscription-based businesses and fuel dealers to its so- called CPS Retail 2 merchant category, which carries the most favorable rates.
    Although Visa’s public announcement comes just two days before the effective date of the new rates, the San Francisco-based network says issuing and acquiring institutions were notified of the rate changes, along with the new approach to tips and the new CPS Retail 2 merchants, between October and December of 2006.

    The payments industry is evolving, driven largely by consumer preference for paperless transactions. A recent study by Dove Consulting indicated that consumers are increasingly choosing electronic payment methods, with cash and checks accounting for only 45 percent of consumers’ monthly payments, down from 57 percent in 2001 and 49 percent in 2003, according to the study. As a result, merchant acquirer companies are seeking strategic partnerships that provide differentiation through value-added products and services that capture customer loyalty and greater market share.

    Increasingly, these attacks target e-retail customers, since banks have become gradually sensitized to the risk. A phishing attack starts with a fraudulent email directed at a retail customer. The e- mail appears to come from the customer’s on-line vendor and contains a URL or web site link that, when clicked on, takes the Account User to a phish Web site and directs them to enter their account number, username, password or PIN, etc. This information is collected in a phish database that enables criminals to use the customer’s identity to steal funds, commit fraud or otherwise attack the institution.

    Under the agreement, First Data shareholders will receive $34 in cash for each share of First Data common stock they hold.

    As such, it’s important for individuals who provide products and services or who may become users of smart cards in these industries to be grounded in the basic fundamentals of this emerging and evolving technology.
    To remedy this situation, the Smart Card Alliance (www.smartcard alliance.org) has introduced a media-rich e-learning course that covers the technology and applications of microprocessor smart cards from A to Z, including how they work, where and how they are used, standards and specifications, etc. The course costs $99 per user.

    In connection with the termination, ECHO and Intuit agreed to release each other from all claims arising under or related to the terminated merger agreement.
    Additionally, ECHO recently announced that it has been cooperating as a witness in a federal investigation relating to its Internet wallet customers that provided services to online gaming websites. Pursuant to a non-prosecution agreement, the government will assure ECHO that it will not pursue any action against the company. ECHO has in turn agreed to return $2.3 million, which represents management’s estimate of the company’s profits from processing and collection services provided to its Internet wallet customers since 2001, and to continue cooperating as a witness in that investigation.

    The joint venture to be established by Metavante and Monitise will enable consumers to rely on a common interface to initially check account balances, transfer funds between bank accounts and pay bills any time from the device they always have with them — the mobile phone.

    FAC’s Pan Asian solution offers merchants the ability to transact and settle in multiple currencies including U.S. dollars, Canadian dollars, British pounds, Euros, Hong Kong dollars, Singapore dollars, Yen, South African rand and Australian dollars.

   

    The transaction will not affect Wells Fargo’s ATM banking network of 6,700 ATMs in 23 states. Financial terms of the transaction were not disclosed.

    First introduced in 2002, the American Express gift card is available online at http://www.americanexpress.com/gift, and nationwide at tens of thousands of locations, including supermarkets, drug stores, shopping centers, American Express Travel Service offices and banks. American Express gift cards sold in Citibank Financial Centers will bear both the American Express and Citibank logos.

    The acquisition will expand the products and services offered by iPrepay, Inc. to include the entire Blackstone suite of patented technologies.

    According to a new NFIB survey, small businesses recognize the importance their customers place on protecting their information (83 percent say it is very or extremely important to their customers). Moreover, some 87 percent believe that if customers saw how they handled their data, it would either affirm (48 percent) or strengthen (39 percent) the trust that customers put in their business. At least 84 percent of the businesses surveyed protect customer information through encryption or passwords.

    This partnership will provide state-of-the-art merchant processing solutions to all of COCARD’s sixty plus sales offices.