Retailers Lose Lawsuit Over RBA EFTPOS Reforms

The Federal Court has upheld the Reserve Bank of Australia’s designation of the EFTPOS system. The designation was challenged by several major retailers. The retailers were concerned that they would face at least $170 million per year in extra banking fees as a result of the changes in the EFTPOS system. The retailers believed they would face higher fees since the RBA reduced the fees between merchants and banks.
The Reserve Bank said it welcomes the decision of the Federal Court concerning the Bank’s designation of the EFTPOS system. The RBA says it will now complete its consultation on the draft standards for both the EFTPOS and VISA Debit systems released in February 2005. It will also consider access arrangements in the EFTPOS system.

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Cisco and Wincor Team for ATM Security

Wincor Nixdorf and Cisco have signed a deal to develop an integrated security solution portfolio for self-service networks that combines Cisco’s “Security Agent” technology and Wincor’s “ProTect/Enterprise Security Suite”. The solutions are intended to help banks protect themselves against the growing numbers of attacks on their networks. The new solutions from Wincor Nixdorf and Cisco will make it possible to pre-empt attacks before they are actually carried out. Cisco Systems provides network security. Wincor Nixdorf supplies IT solutions to banks (private client banking) and retailers.

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Americans to Charge $19B Black Fri Weekend

Debit cards will capture 23% of retail sales volume on payment cards between Thanksgiving Day and Christmas Day this year, compared to 20% last year, as credit cards fall out of favor. The busiest full week is expected to be between December 12th and 18th when Americans rack up more than $30 billion. During the 30-day shopping period, Americans are expected to charge $77.1 billion on general-purpose credit/charge cards, $28.2 billion on signature debit cards and $14.7 billion on limited-purpose store credit cards. The figures exclude groceries, gasoline, and travel related charges. The “Black Friday” weekend (Nov 25-27) should produce carded retail sales of $12.4 billion on VISA, MasterCard, American Express and Discover credit cards, $4.5 billion on VISA and MasterCard debit cards and $2.4 billion on store credit cards.

2005 Holiday Retail Sales on Payment Cards
Shopping Period TOTAL
($ billions)
Nov 25-27: $ 19.3
Nov 28-Dec 4: $ 24.2
Dec 5-11: $ 28.0
Dec 12-18: $ 30.4
Dec 19-25: $ 18.1
TOTAL: $120.0
Source: CardData (www.carddata.com)

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Payment Systems in Latin America Poised for Growth

A new report issued by London-based Economist Intelligence Unit
says the development of Latin American electronic payments systems has
been hampered by polarized income distribution, low penetration of the
banking system, low computer usage and the continuing prominence of
cash economies. However, the study found that collaboration between
governments and the financial services industry has led to
greater penetration of electronic payment products in Argentina, Brazil,
Chile, Colombia, Mexico and Venezuela. EIU notes that over the past
several years, all except Venezuela have implemented “Real Time Gross
Settlement” systems and the use of payment cards and direct transfers
has increased steadily. Examples of other progress: Brazilian officials
are addressing the interoperability of the country’s 29 ATM networks;
Chile is rapidly expanding its smart-card infrastructure; and Mexico has
launched a three-year private-public initiative to greatly expand the
number of chip-enabled point of sale terminals. The report is available
free of charge from the Economist Intelligence Unit which is sponsored
by VISA International.

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IBM Says Consumers have Card Security Concerns

IBM says its recent survey shows that 61% of American consumers are concerned for the safety of their personal and/or credit and debit card information during the holiday shopping season. Nearly half of those concerned believe their personal information is in jeopardy, while another 46% worry about their credit card information being stolen. About 39% are concerned about having their debit card information stolen. Of all cardholders who are concerned about having their identity or credit card information stolen say they are most worried about paying via credit card online (50%) and over the phone (49%) when making holiday purchases. Interestingly, IBM also found that 91% of Americans believe that the stealing of credit card information is considered identity theft.

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TCB Says Gift Spending will Decline Slightly

The Conference Board says it expects U.S. households to spend an average of $466 on gifts during the holiday season, down moderately from last year’s estimate of $476. The top holiday spenders will be New England households and the lowest holiday spending will be in the East South Central states. About 34% of all consumers will buy holiday gifts on the Internet, up from 33% a year ago. Also, households headed by individuals 45-54 intend to spend the most this year, with $505 the average expenditure.

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Huntington Bancshares to Top 900 ATMs

Huntington Bancshares and Cardtronics have closed a deal to add 33 ATMs in Walgreens locations in northern Ohio to bring Huntington’s total ATM footprint to more than 900 machines. All Huntington-branded ATMs in Walgreens stores will be surcharge-free to Huntington customers. Huntington Bancshares Incorporated is a $33 billion regional bank holding company headquartered in Columbus, Ohio. Cardtronics is a owner/operator of ATMs and has a nationwide U.S. network of more than 25,000 locations operating in every major market and in all 50 states as well as 1,000 locations throughout the UK.

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FAIR PRACTICES CODE

The Reserve Bank of India has issued final guidelines on credit card practices and is requiring banks and non-banking finance companies to have the “Fair Practices Code” in place before the end of November. Under the comprehensive guidelines, issuers must give cardholders at least one fortnight, or 14 days, for making payment before the interest starts getting charged. Changes in charges (other than interest) may be made only with notice of at least one month and the issuer cannot levy fees for an account closure. Issuers must also give cardholders documentary evidence within a maximum period of 60 days if the cardholder disputes any charges. Unsolicited cards are prohibited under the new guidelines and may require an issuer to refund to the cardholder twice the value of the charges reversed. The RBI also says the card issuing bank/NBFC should not unilaterally upgrade credit cards and enhance credit limits. Prior consent of the borrower is required. Issuers are also required to maintain a “Do Not Call Registry.” The guidelines were framed by the Working Group on Regulatory Mechanism for Cards and first released in March.

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Contactless Micropayments Under Development

ViVOtech and USA Technologies are teaming to deliver the first contactless cashless credit card transaction technology to the micro-payments segment. The Companies have integrated USA’s e-Port cashless transaction technology with ViVOtech’s ViVOpay contactless readers and software services. The integrated technology platform enables vending machines to accept contactless payments, allowing vending operators to increase the average dollar amount spent per machine at peak hours, while reducing cash handling costs. The contactless credit card initiative is targeting the micro-payments segment that is defined by transactions that are $5.00 dollars or less. ViVOtech provides an end-to-end transaction platform that allows consumers to make contactless payments with radio frequency-enabled credit cards, debit cards, key fobs, cell phones, PDAs and identity cards. USA Technologies provides networking of wireless non-cash transactions, associated financial/network services and energy management.

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BCG Says American Consumers are Trading Down

The Boston Consulting Group says a survey it recently conducted shows that the vast majority of American consumers are “trading down” this holiday season. The research firm says this is the first time in five years of annual surveys that American consumers have been this cautious. BCG says it found that 40% of consumers are planning to spend less over the next three months and only 23% are planning to spend more. At the same time, BCG notes that 92% of consumers indicate they will “trade up” in at least one category to get better products or services. The top three are personal computers (47%), sit-down restaurants (42%), and bedding (42%).

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Travelers to Spend $1300 for Holiday Travel

A recent American Express Travel survey shows that Americans planning to travel have budgeted an estimated $1,267 for their total holiday travel-spend this year. Forty-five percent prefer using credit or charge cards to pay for travel expenses, and 26% plan to use reward points earned by using credit cards to pay for some or all of the costs incurred. Nearly 60% said they would consider or plan to purchase a prepaid product. AmEx found that 28% of travelers will book directly from online travel agencies and Web sites and 19% will book directly from airlines, hotels and car rental companies via telephone.

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Capital One Survey Finds 77% Concerned About ID Theft

A new national survey sponsored by Capital One Bank finds that 77%
of Canadians are concerned about identity theft, but only 10% feel
that the information available to guard against
identity theft is fully adequate. However, the survey finds that 45%
of Canadians do not review or monitor their credit reports on a
regular basis for errors or suspicious loans. One-in-five Canadians (21%) feel that they are not well- or not at all informed on the issue of
identity theft and 51 % of Canadians say “No” when asked if they keep
unused
credit. As of October, there have already been 9,034 reported victims of
identity theft, totaling $7.2 million in losses.

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