FFIEC Releases Retail Payment Systems Booklet

The Federal Financial Institutions Examination Council this week issued revised guidance for examiners, financial institutions, and technology service providers on the risks associated with retail payment systems. The new “Retail Payment Systems Booklet” provides guidance on the risks and risk-management practices applicable to financial institutions’ retail payment system activities, including checks, card-based electronic payments, and other electronic payment media such as person-to-person, EBT, and ACH. The booklet will be distributed electronically at [www.ffiec.gov/guides.htm][1].

[1]: http://www.ffiec.gov/guides.htm

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HSBC Hires Former OCC Deputy Comptroller

HSBC North America has named David Gibbons, former deputy comptroller for special supervision for the OCC, as SVP/Chief Risk Officer. In this newly created position, Gibbons will be responsible for the risk profile of HSBC’s North American operations and will report directly to William F. Aldinger, chairman and chief executive officer of HSBC North America Holdings Inc. HSBC’s North American businesses serve more than 60 million customers in five key areas: personal financial services, consumer finance, commercial banking, private banking, and corporate investment banking and markets.

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AOS-Hagenuk Selects a North American Market Reseller

AOS-Hagenuk B.V. has named SCB Solutions as a reseller of its secure smart card readers for the North American market. SCB Solutions is an integrator of smart card technologies for enterprise, health care and education markets. AOS-Hagenuk offer both on-line and off-line smart card reader systems based on EMV, Common Criteria, FINREAD, etc. To-date more than 2.5 million AOS terminals have been delivered to tier one banks in Europe. The Company also provides customized product designs such as its popular “PocketID” personal authenticator.

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RBC Royal Bank Launches a No-Fee Rewards Card for Light Spenders

Competition is ramping up as RBC Royal Bank rolls out a no annual fee rewards card targeted at consumers who have lower-to-moderate monthly spending. The new “RBC Rewards VISA Classic” awards one point for every two dollars spent, instead of the typical one-for-one rewards offered on RBC cards. The points carry a nominal value of one cent each. Reward redemptions start at 2,500 points and include travel and merchant gift certificates. The card carries an 18.5% interest rate. RBC Royal Bank also offers the “RBC VISA Classic II” for $35 annually, “RBC VISA Platinum Preferred” at $110 per year, and, the “RBC VISA Platinum Avion” for $120 a year. All three of these cards offers one point for each dollar charged. Additionally, the issuer offers a “RBC U.S. Dollar VISA Gold” card for those desiring to avoid fluctuations in the exchange rate. The “U.S. Dollar” card awards 1.5 points for each dollar charged and carries a USD$65 annual fee. The “RBC Rewards” program was launched in April 2003.

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Infineon Technologies’ President/CEO Resigns

Munich-based Infineon Technologies AG confirmed that President and CEO Dr. Ulrich Schumacher has resigned. The Head of the Corporate Center, Matthias Poth, and the Head of Communications, Christoph Sieder, also resigned their positions at the company. Meanwhile, Infineon opened its RFID Solution Excellence Center and System Lab in Graz. From the 140 employees of the Graz Development Center, around 40 people will be occupied with RFID activities. Infineon is implementing a comprehensive approach to the RFID-based logistics segment, incorporating smart label technology, which consists of the RFID chip and the antenna both integrated into paper or plastic, smart label readers, the system platform to integrate RFID-supported logistics applications into a company?s operations, and accompanying services for development, roll-out and maintenance of logistics systems. Infineon RFID system solutions can be adapted, for example, to applications in the automotive and textile industry, meeting sector-specific requirements for logistics processes in production and supply chain management.

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National Payments Network Selects ACI’s BASE24

SIMTEL, an organization set up by the Rwandan government to modernize the national payments network, has chosen ACI’s “BASE24-es” as the foundation for The Republic of Rwanda’s new national inter-bank card payments network. SIMTEL is also implementing the ACI Card Management System for the management of VISA “Smart Debit and Credit” card accounts and for card personalization. “BASE24-es” will enable SIMTEL to acquire, authenticate, route, switch and authorize card transactions on behalf of the commercial banks in Rwanda. BASE24-es is powered by an intelligent scripting engine that enables users to change the rules governing authentication and authorization without having to write new source code. SIMTEL is a privately owned company. Shareholders are made up of the National Bank of Rwanda (the Central Bank), and all six licensed commercial banks in Rwanda, as well as the Savings, Union Bank and the Post Office.

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AmEx Loses Ground as the Primary Business Card

A new study suggests that American Express is no longer the primary business card used by small businesses and middle market companies, but is gaining ground as the primary corporate card among micro-market businesses. The research of 2,800 companies found that VISA is the primary corporate expense card for 44% of businesses with annual revenues between $1 million and $20 million, and 45% of businesses with annual revenues between $20 million and $250 million. The Informa Research Services report says the base of micro market companies, with annual revenues below $1 million and that use expense cards, has grown from 21% in 2002, to 31% in 2003. During this period, American Express expanded its share from 14% to 27%, as MasterCard declined from 31% to 18%. VISA’s micro market share increased from 51% to 54% in 2003. In the small business segment, American Express’ primary relationships declined from 36% in 2002, to 23% in 2003. During this period, VISA’s share grew from 40% to 44%, and MasterCard’s increased from 24% to 32%. In the middle market segment, American Express’ primary relationships declined from 50% in 2002, to 45% in 2003. During this period, VISA’s share grew from 35% to 45%, and MasterCard’s increased from 15% to 20%.

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BC Ferries to Test Cubic’s Express Vendor Self-Ticketing Machines in July

BC Ferries of British Columbia is launching a six-month pilot project for an automated cashless self-ticketing system in July. San Diego-based Cubic Transportation Systems has been awarded the contract.
Cubic will deploy its “Express Vendor,” a ticket vending machine which accepts credit card-only payment and issues a paper receipt and boarding pass. There are more than 600 “Express Vendor” machines deployed in New York. The units are designed for wall-mounting or free-standing, and also features user-friendly interfaces and programming in up to eight languages. Since its start in 1960 as a two-vessel, two-terminal operation, BC Ferries now operates a fleet of 35 vessels serving more than 45 ports of call along the British Columbia coast.

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Bank of Thailand Raises Minimum Payments After Raising Minimum Income for Credit Cards

Bank of Thailand is raising minimum payments from 5% to 10% on all new cardholders and will require that the new payment schedule be applied to existing credit card users in 2007. The decision by the central bank is effective April 1st. Card issuers in the country will also be required to cancel cards that are 90 days past due. Issuers are also now prohibited from enticing consumers with free gifts to generate applications. In 2002, the central bank required a minimum monthly salary requirement of 15,000 baht for credit card applicants. Interest rates on credit cards were also capped at 18%. Last year, the number of credit cards in the country rose 23% to 4.22 million, and card loans increased 34% to 76.2 billion baht. Delinquency currently runs about 5%.

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MasterCard Hires a Top Australian Federal Policeman to Combat Fraud in Asia/Pacific

MasterCard International has hired a former Director of National Investigations for the Australian Federal Police to spearhead its development of solutions to manage risks and enhance fraud control in Asia/Pacific. Tim Morris, who served with Australian Federal Police for 18 years, will become MasterCard vice president & regional head for Security & Risk Management for Asia/Pacific. He will be based in Singapore, working closely with law enforcement agencies to combat payment card crime, as well as work with government institutions to provide support in aid of legislation for card fraud. During his tenure with AFP, Morris created a new counter terrorism division and led the Australian contribution to the successful investigation into the bombings in Bali. He was also a member of the Australian Prime Minister’s business task force on critical infrastructure protection and a member of the inter-governmental committee on identity fraud.

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Solicitations Drop 12% as 50% of Issuers Pull Back

Direct mail credit card offers declined 12% last year to 4.3 billion after peaking at 5.0 billion two years ago. Over the past five years, Americans have received 20.5 billion solicitations, responding to about 125 million of the offers. Synovate’s “Mail Monitor” reports that during 2003, U.S. issuers sent 1.27 billion reward offers and 900 million cash rebates offers to consumers. In 2002, 810 million rewards offers and 680 million cash rebate card offers were sent. Response rates remained at 0.6% compared 0.7% in 2000. Synovate says that, on average, each month 69% of U.S. households received 4.8 offers during 2003 compared to 75% of households receiving 5.1 offers during 2002. The researcher says that 90% of credit card direct mail comes from the 10 largest card issuers. Half of those issuers cut back last year causing the overall decline in mail volume.

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ING Selects Axalto Smart Cards for the New Sony PlayStation Co-Branded MasterCard

ING has selected Axalto to provide smart cards for its MasterCard co-branded program. The “ING/Sony PlayStation MasterCard” is targeted at students -and professionally active customers in the 20-30 age bracket. The smart card features discount prices on “PlayStation 2” consoles and games as well as a differentiated card body. The bank is using SMS to promote the card. Axalto, formerly known as Schlumberger Smart Cards & Terminals, as delivered 3 billion smart cards to date.

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