Contents tagged with Credit Card News

  • Department of Justice Final Judgment on Rule Changes

    In October 2010, both MasterCard and Visa entered into a proposed consent decree and final judgment with the Department of Justice that required both payment card networks to modify their policies and procedures regarding the merchant’s ability to recommend any preferred card brand or card type in United States. The consent decree and final judgment requires that both card schemes direct their acquirers to provide US and US Territory merchants with notice of the final judgment and a description of the their rules changes and the POS practices that merchants are expressly permitted to engage in pursuant to the terms of the judgment. The description of the rules changes can be found at the following links:


    Visa http:// … more

  • Debit Interchange Regulation Fallout

    ABC News reports that Wells Fargo to Test $3 Debit Card Fee. Major banks have already begun to change qualifications on free checking accounts and end debit rewards programs.

    An it appears that the anticipated result of these actions will be to steer consumers away from debit and toward reward credit and charge card products that carry more expensive merchant Interchange rates.

    "An Associated Press-GfK poll last month found that about two-thirds of consumers use debit cards more frequently than credit cards. When asked how they would react if they were charged a $3 monthly fee for their debit card, 61 percent said they'd find another way to pay. If the fee was $5 a month, two-thirds said they'd do the same. If the fee was $7, the figure rose to 81 percent."

    Our concern for small … more

  • Visa and MasterCard plan changes due to new debit Interchange regulations

    In June, the Fed announced final debit Interchange rules. Now we are starting to learn more about how Visa and MasterCard will approach the transaction routing provisions that ban exclusive affiliations between card networks and issuers of debit cards.

    Under these new rules, debit card issuers must add at least one unaffiliated network to each debit card. For example, Visa has exclusive arrangements with issuers to use both its signature debit and PIN debit networks. Now debit card issuers will need to add an alternative network to Visa.

    In response, Visa says they will implement a new Network Participation fee that will be based on a merchant's size and number of locations while at the same time lowering the variable rate charged per transaction. This Visa strategy is intended to … more

  • Fed announces final debit Interchange rules

    Breaking Interchange NewsAt the Federal Reserve meeting today the final debit card rules where announced and the debit Interchange cap has been raised to 21 cents plus 5 basis points per transaction (not to exceed a sum of these two components). The initial proposal in December called for capping debit Interchange fees to 12 cents per transaction. After taking eleven thousand public comments, the Fed has adjusted this cap to include a “fraud prevention adjustment” in order to compensate for the costs that banks and financial institutions incur to maintain security against fraud.

    The rule was slated to take effect on July 21, yet with less than one month to put in place all the mandated provisions, more time is required to implement these changes. For example, it will take … more

  • Visa backs Square with Investment

    Last year Visa completed its acquisition of CyberSource ( for approximately $2 billion in cash to expand its online payment, fraud and security capabilities. Since then Visa launched online shopping tool, Rightcliq; acquired PlaySpan Inc. (a payments platform to handle transactions for digital goods in online games, digital media and social networks); and signed strategic agreements to deliver P2P payments with CashEdge and Fiserv enabling U.S. Visa account holders to pay each other for the first time.

    Now Visa is making a strategic investment in Square, a mobile payments start. Square's card readers plug into the iPhone jack for swiping cards and have been criticized for lacking encryption security. Perhaps with Visa's involvement they will address this issue given on the … more

  • Banks change business models in response to regulations

    New reports about ways banks will react to the Fed's proposal to cap signature and PIN debit rates continue to emerge.

    According to the Wall Street Journal, U.S. banks are debating letting debit card transactions bounce like checks. And banks may charge more to merchants in order to guarantee debit card payments. While consumers could face bounce fees like they do for checks. Both developments could steer use away from debit cards to other forms of payment not regulated by Dodd-Frank.

    In addition it was recently reported that banks are considering a $50 cap on debit card purchases.

    Merchants that have relied on ATMs in store to avoid taking credit and debit card payments may soon find this strategy of steering customers to cash more difficult to implement as banks begin to increase ATM … more

  • Senate bill introduced to Delay Debit Interchange Regulation

    Senate bill 575 calls for a two-year delay to Fed's debit Interchange regulation. A similar bill is expected to be introduced in the House. Senator Jon Tester (D) who introduced the legislation believes they have the votes necessary.

    Read more at more

  • Banks consider $50 cap on debit card purchases

    With the pending government price controls on debit Interchange fees, as predicted, banks will find ways to steer customer payment choice to higher priced cards. One method under consideration is to limit debit card purchases to a $50 max. In addition, banks may begin charging monthly or transaction fees to use debit cards.

    Read Rules could change how you use debit cards for more information. more

  • VeriFone calls Square's Credit Card Reader Unsafe and Reckless (Video)

    VeriFone has published an An Open Letter to the Industry and Consumers bringing to the forefront the issue of mobile credit card processing security. 

    At issue is the ability for criminals to use unencrypted card readers to steal full mag-stripe data which can then be use to make fraudulent purchases.   Fraudulent card use is a problem for all merchants (and in particular card not present e-commerce merchants) who shoulder the losses. 

    Square has made headlines shipping hundreds of thousands of free dongles (square card readers that plug into the iPhone jack for swiping cards).  In its announcement, VeriFone demonstrates how promulgating cheap readers enables criminals while making the point that the payments industry needs to take card data security seriously.& … more

  • Will Interchange Regulation Push 884 Troubled Banks Over the Edge?

    Will government Interchange regulation push 884 banks on the brink of failure over the edge?

    According to a post, the number of banks on the Federal Deposit Insurance Corp.'s "Problem List" totaled 884. If these institutions are already hurting, will any survive the Feds plan to cap debit Interchange fees?

    The Independent Community Bankers of America speculates that the exemption for small banks (<$10 billion) to the Fed Interchange price cap will fail to protect these institutions for the following reasons:

    As the largest debit issuers, mega banks will influence networks to limit support of dual pricing schemes that make their cards less attractive to merchants.

    Merchants will discriminate against any high-cost cards customers present.

    Debit card … more