Policy & Regulation

The Reserve Bank of India wants credit card issuers to improve their treatment of cardholders, according to a notice the financial institution released. The notice calls on issuers to stop sending credit cards to customers unless requested, offer clear information about card interest rates, release the main reason for a rejected card application and refrain from delaying to send card statements to customers. The circular contains recommendations. The bank released the suggestions after studying banks' credit card operations and reviewing complaints from credit cardholders, a Reserve Bank spokesperson tells CardLine Global.

Mandatory reporting of merchant credit and debit card transactions to the Internal Revenue Service could prove time consuming and costly for acquirers and the independent sales organizations, according to Paul Martaus, president of the Mountain Home, Ark.-based consulting firm Martaus & Associates Inc. A provision of the Housing and Economic Recovery Act of 2008 would require merchant acquirers to provide annual reports listing the name, address, taxpayer identification number, and the gross amount of credit and debit card transactions for each merchant customers to the IRS (CardLine, 7/28). Acquirers and ISOs likely would have to absorb the costs ofh collecting and securely storing merchants' information, Martaus says. Depending on how the IRS handles the provision, "there is a very strong likelihood that the ISOs themselves are going to have to go to every merchant location in the country they have clients in and reprogram all the terminals," says Martaus. In the past, acquirers and ISOs have not collected some information the IRS would require under the provision, such as taxpayer identification numbers. Consumers, though, may ultimately pay for the change. "Acquirers and ISOs will have to absorb the cost of this," but they will pass those costs to merchants, who will increase prices for consumers, Martaus says.

Western Union Co. said Friday that it is appealing a court ruling this month allowing Arizona to seize remittances sent to Mexico from other states.

A few weeks ago, I wrote a column about the wisdom of taking loans against your 401(k) account. The story mentioned a company called Reserve Solutions that allows customers to access their loan via a debit card at an A.T.M. or any merchant that accepts Visa.

United Kingdom-based Standard Chartered bank has begun issuing yuan-denominated debit cards in China after signing a card agreement with China UnionPay, a bank spokesperson tells CardLine Global. The bank earlier this month received permission from Chinese financial authorities to issue the cards (CardLine Global, 14 July). The bank is among the first foreign financial institutions to issue yuan cards in China. To promote the launch, the bank will waive its 20-yuan (US$2.90 or 1.90 euros) annual fee for the card. The bank also has applied for permission to issue yuan credit cards, the spokesperson says.

Merchant acquirers would have to report their retailers' credit and debit card transactions to the Internal Revenue Service as part of a provision of the Housing and Economic Recovery Act of 2008. The Senate on Saturday passed the bill, which the House passed last week. The bill awaits President Bush's signature to become law. "Acquirers will need to give the IRS a complete record of retailers' credit card and debit card activity so the IRS can learn more about unreported sales," says Paul Martaus, president of Mountain Home, Ark.-based consulting firm Martaus & Associates. Acquirers and the independent sales organizations with which they work would need to collect and securely store merchants' information, adds Martaus. Under the provision, a merchant acquirer annually would have to submit the name, address, taxpayer identification number, and the gross amount of credit and debit card transactions for each of its merchant customers. The reporting would begin after Dec. 31, 2010, according to the legislation. The provision could create "serious problems" for the acquiring industry, says Carla Balakgie, CEO of the Washington, D.C.-based Electronic Transactions Association.

The government of South Australia, a state in Australia, says it will test a chip card scheme that would enable gamblers to limit their spending at poker machines. The test will "formally commence" in mid-August, the government ministry in charge of gambling said in a statement. Australia-based Worldsmart Technology will conduct the test, which involves the company's J Card, or Jackpot Club card, according to the statement. The Jackpot Club is a rewards scheme that uses chip cards. Worldsmart declined comment to CardLine Global, as did government officials. The test will enable gamblers to set a daily limit on how much they can spend, with alerts informing them when that limit is reached. Officials already have installed technology for the test in four venues. At least 75 venues in South Australia take part in the Jackpot Club reward scheme, Worldsmart says on its Web site.

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The Payment Card Industry Standards Council has added unattended payment

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