DSW Settles FTC Card Security Charges

OH-based shoe discounter DSW has agreed to settle FTC charges that it failed to take reasonable security measures to protect customer credit card data. Retail Ventures, the parent of DSW, confirmed in March that credit card and other purchase information from a portion of DSW Shoe Warehouse customers was stolen. According to the FTC, DSW’s data-security failure allowed hackers to gain access to the credit card, debit card and checking account information of more than 1.4 million customers. About 96,000 checking accounts were compromised. DSW operates approximately 190 stores in 32 states. The compromised information affected consumers who shopped at 103 stores during December, January, and February. The settlement requires DSW to implement a comprehensive information-security program and obtain audits by an independent third-party security professional every other year for 20 years.

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MEI Intros a Cash Acceptor+Card Reader

Mars Electronics announced the first implementation of its “MEI CASHFLOW Combo Acceptor,” the industryâ™s only combination cash acceptor and credit card reader unit. The MEI Series 2000 Combo Acceptor features a Series 2000 bill acceptor and a debris-resistant, swipe-style credit card reader. Credit card transactions are integrated through the kiosk for delivery to the vendorâ™s backend system. MEIâ™s Series 2000 bill acceptors use advanced optical scanning technology to identify and validate legitimate bills in virtually any condition. The equipment will accept wet, damaged, and crinkled bills and coupons; and meets the MEI Gold Standard for water resistance with full fluid protection and jam resistance, preventing shorted boards.

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Developers Diversified Signs a MasterCard Deal

Developers Diversified Realty has entered into a multi-year sponsorship
and marketing agreement with MasterCard International. The agreement
provides MasterCard with exclusive representation at
Developers Diversified’s shopping centers in Puerto Rico, including
brand identification at each property and promotional opportunities
centered around MasterCard’s global “Priceless” moments campaign. In
addition, MasterCard will build brand identity at the shopping centers
through common area display, interactive exhibit and customer service
kiosk space. Developers Diversified currently owns and manages over 500
operating and development properties totaling approximately 113 million
square feet of real estate in 44 states including nearly six million
square feet in Puerto Rico.

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Small Business Spending Remains Strong

Consumer and business spending through November indicates that small business growth remains strong nationwide. The latest joint research by the National Federation of Independent Business and VISA USA shows that 42% of respondents reported that sales are “good,” while 57% cited their sales prospects for the next three months as a reason for being optimistic when looking ahead. VISA says spending on VISA cards was $758 billion for the period from Jan. 1st to Oct. 31st, a 12.7% increase over the same period last year. Discretionary spending such as the travel and entertainment sector rose by 14.4% for the period from Aug. 8th to Nov. 13th. The joint report also says that non-payroll spending by U.S. business and government agencies will continue a pattern of solid growth, increasing an estimated 6% this year to $16.2 trillion.

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Rewards Network Names a New CFO

Chicago-based Rewards Network has promoted Christopher Locke to SVP/CFO, replacing Kenneth Posner, who has resigned. Locke joined Rewards Network in May 2005 as Senior Vice President, Business Planning, Analysis and Assurance. Prior to joining the Company, he served as Chief Financial Officer of WS Telecom Acquisition Corporation / Wan Technologies beginning in December 2003. From 2000 to 2003, Locke was an independent consultant primarily serving private equity firms and privately held companies in an interim Chief Financial Officer capacity. Rewards Network is a provider of loyalty and rewards programs to the restaurant industry. As of September 30, 2005, Rewards Network had 3.5 million active member accounts and 10,259 restaurants in its programs.

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ADP Lightspeed Tests New NXT DMS

ADP Lightspeed has begun BETA testing for their new release of the “NXT Dealer Management System” for automotive, motorcycle, marine and RV dealerships that will process all payment methods at the point of sale including credit card, debit card and gift card. The new system enables all PC’s in a dealership to become full point-of-sale registers. Detailed reporting has been enhanced to simplify the “end of day” cash drawer routines. In addition, fully customized dealership gift cards can be issued and settled in the same way a dealer swipes a normal credit card. DP Dealer Services Group is the third largest business unit of ADP with approximately $7 billion in revenues and more than 500,000 clients.

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Charge-Offs Spike in Q3; Delinquency Trends Up

Charge-offs for credit card-backed bonds in the U.K. continued to
deteriorate during the third quarter, hitting a record 5.4% compared to
4.1% one-year ago. Considering that delinquencies are still trending
higher, reaching 3.4% in 3Q/05, it is unlikely that charge-offs will
stabilize until mid-2006. According to FitchRatings, the rise in
charge-offs during the third quarter was led by the Pillar, Affinity,
and Arran trusts. However, rising charge-offs are beginning to slow in
some of the trusts. Meanwhile, the monthly payment rate on credit card
ABS appears to have stalled in the third quarter to 16.9%. FitchRatings
says the MPR appears to have been affected by much reduced balance
transfer activity. The Fitch yield index stood at 19.6% at the end of
September, up from 19.4% in June and reflecting the increases in yield
seen in four of the seven trusts.

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Four Issuers to Share Cardholder Data

Barclaycard, Co-operative Bank, Egg and Abbey are joining hands to share cardholder data to help stem rising losses. The move will also help the banks minimize the impact of “rate tarts” or cardholders regularly switching balances to take advantage of promotional interest rates. The four issuers plan to begin the data sharing program in the first quarter. APACS is now seeking other issuers to join the program.
While issuers have access to consumer information such as account payment history, balances and credit limits, the new program will offer issuers access to monthly spend, monthly payments, cash advances, recent credit limit increases and bounced payment checks.

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GPN Signs a Major San Diego Casino

Global Payments has inked an agreement to provide San Diego’s Barona Valley Ranch Resort & Casino with its “VIP LightSpeed” suite of cash access products and services which includes the “PlayerCash @dvantage” credit and debit card cash advance service and the “ATM Cash @dvantage” product. VIP LightSpeed is an Internet-accessible, PC-based platform that provides cash access services for traditional and electronic check cashing, ATM check cashing, credit and debit card cash advances, player histories and credit reports. In addition, VIP LightSpeed provides a full spectrum of management reporting tools that speed the processing of transactions and reduce the risk associated with check-cashing and cash advance services. Global Payments is a provider of electronic transaction processing services.

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BioPay Deploys in OH/WV C-Stores

Virginia-based BioPay has launched its biometric payment technology in Duke and Duchess Shoppes in Ohio. The service is the first of its kind in a convenience store in Ohio. Duke and Duchess Shoppes, a chain of 100 stores across Ohio and West Virginia, will implement BioPay’s payment system with an initial launch of 10 of its convenience stores to give their customers faster checkouts and greater convenience when making a purchase. BioPay’s payment service, a processing solution that allows customers to make purchases with a simple, secure placement of the finger, offers merchants a low-cost form of payment, while reducing incidents of fraud. Duke and Duchess Shoppes will be offering a free cup of coffee or soft drink at enrollment and receive a buy one get one free coupon after the consumer’s first BioPay purchase. BioPay is a Biometric Transaction Company, processing today more than 17 million transactions in excess of $7 billion.

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