Cards

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MasterCard Europe has "temporarily repealed" its interchange rates that European regulators say violate antitrust rules, the card company said Thursday. The action applies to cross-border interchange merchant acquirers pay card issuers when customers use cards carrying the MasterCard or Maestro debit brands. On 19 Dec. 2007, the European Commission ordered MasterCard to lower the rates within six months or face daily fines amounting to 3.5% of global revenues. On 1 March, MasterCard filed an appeal with the European Court of First Instance. The card organization is continuing that appeal, though MasterCard does not expect a judgment until "the second half of 2010," a MasterCard spokesperson tells CardLine Global. The interchange rates average 1% of the sale for MasterCard-branded cards and 0.5% for Maestro-branded cards, the spokesperson says. "MasterCard believes its cross-border interchange system has kept the cost of payment cards low for cardholders," Javier Perez, MasterCard Europe president, says in a statement. In March, the European Commission said it was investigating the interchange rates applied to Visa card transactions in Europe and the card organization's rule that merchants must accept all Visa-branded cards regardless of the issuer or type of transaction. Visa said it expects to reach a "negotiated settlement" with regulators (CardLine Global, 3 April).

Australian authorities have told online auction company eBay Inc. to delay plans to mandate PayPal, eBay's payment service, as the only online-payment option on the company's Australian site. The Australian Competition and Consumer Commission is investigating whether the rule is anticompetitive. EBay has said that buyers and sellers are less likely to dispute transactions routed through PayPal than transactions routed through bank accounts. The commission says it will wait for a response from eBay and other interested parties before making a final decision. EBay did not return a CardLine Global request for comment. EBay has created a two-step process to enable Australian sellers to ready themselves to accept either PayPal or cash on pickup, the commission says in a statement. As of 21 May, all sellers were required to offer PayPal as one of their accepted payment methods. The second step, scheduled to start Tuesday, would require that all transactions on eBay be paid either through PayPal or cash on pickup. The regulation bans direct deposits, money orders and personal checks as payment. The new policy "will substantially reduce competition to supply online-payment services to users of online marketplaces more generally," Commission Chairman Graeme Samuel says in a statement. Last month, the commission told CardLine Global that authorities also are concerned that eBay's mandate will result in higher PayPal sellers' fees (CardLine Global, 15 May).

Malaysia-based CIMB Bank says it expects to see more customers using online banking as increasing fuel costs discourage consumers from driving to bank branches. The bank's customers made about 1 million online transactions last year, the bank says in a statement. The bank did not say how many new online customers it hopes to attract. The bank recently introduced a service with Malaysian-based mobile operator Maxis Communications that enables the bank's online customers to add value to their prepaid phones by transferring funds from bank accounts. CIMB is a subsidiary of CIMB Group, which has 366 branches, 1,252 ATMs and more than 4.5 million customers in the country, the statement says.

United Overseas Bank Malaysia would double its debit and credit card base to 1.2 million under a projection bank officials released this week. The bank, a subsidiary of Singapore-based United Overseas Bank, plans to offer new card products and expand its payment networks in Malaysia to achieve that goal, according to a statement from the bank. The bank this week began issuing MasterCard- and Visa-branded platinum cards. The Singapore-based bank has issued more than 2.5 million credit cards in Asian countries.

United Kingdom-based InterContinental Hotels Group PLC says customers now can use China-issued bankcards to make online reservations and payments. The hotel company has signed a deal with ChinaPay E-Payment Service Co. Ltd., a subsidiary of China UnionPay, to provide the service. InterContinental says it is the "only international hotel group in China" to offer this service, according to a statement. Previously, InterContinental accepted only internationally branded credit cards for online reservations, and guests had to make all payments during checkout. The new service "allows [the group] to reach out to nearly 1.5 billion holders of locally issued bankcards across China," the statement says.

Idaho Central Credit Union, the state's largest credit union based on assets and members, is converting all 40,000 of its signature- and PIN-debit cards to PSCU Financial Services' debit-processing platform, the companies announced yesterday. The Chubbuck, Idaho-based credit union, which owns 21 ATMs, also signed an agreement with PSCU to manage Idaho Central's ATMs. ATM driving involves supporting multiple ATM manufacturers and providing 24-hour ATM monitoring. With the addition of Idaho Central's ATMs, PSCU now drives more than 700 ATMs nationwide. PSCU, a credit-union service organization, also will process all 11,500 of Idaho Central's credit card accounts. "We decided to move our debit and credit programs to PSCU because it is a comprehensive product that delivers features like fraud management, rewards and prepaids/reloadables that enhance service to our members," Shannon Marshburn, the credit union's vice president of operations, said in a statement. Idaho Central has $660 million in assets and 71,000 members.

InComm Inc., a stored-value card marketer, announced an agreement this week with American Cash Exchange Inc., a payments-products company, to distribute American's Poni card, a product enables Mexican immigrants to send funds to Mexico. The deal calls for InComm to distribute and process the cards in North America. Atlanta-based InComm plans to begin distributing the card in Texas during the fourth quarter, Jennifer Boutwell, an InComm spokesperson, tells CardLine in an e-mail message. Although sold in the United States, the cards have a face value of 2000 pesos (about US$192.66). The companies plan to offer other denominations, according to the press release. The card costs $10, plus foreign exchange, Boutwell says in her e-mail. The cards also come with a code that lets purchasers make a free call to Mexico so they can give fund recipients a code to withdraw the money using a Poni card from any one of 26,000 ATMs in Mexico, the release says. In her e-mail message, Boutwell notes that consumers who want to receive funds using a Poni card can buy their own card in stores in Mexico what equates to about 50 cents, so immigrants in the United States do not need to mail a card home. The cards purchased in Mexico work with any purchased PIN, Boutwell writes. Consumers can pick up funds transferred using the Poni card on the same day, and the purchase fee covers all ATM fees so the recipients get all the funds on the card, Boutwell writes. American Cash Exchange Inc. is based in Pennington, N.J.

U.S. Bancorp said it will offer a cobranded credit card with Zuffa LLC, the Las Vegas promoter of the Ultimate Fighting Championship martial arts events.

Merchant Acquirers Oppose IRS Proposal To Collect Receipts

Cam Commerce Solutions Inc., a Fountain Valley, Calif., provider of payment processing systems for small and midsize merchants, said Tuesday that it has agreed to sell itself to Great Hill Partners LLC, a Boston private-equity company.

MIAMI — Despite a slowdown in the growth of international remittance volumes that began last year, Wells Fargo & Co. said its remittance business achieved triple-digit growth in the 12 months through May, reflecting what it sees as an ongoing shift to banks from nonbank providers.

JPMorgan Chase & Co. has started offering a reward program that lets people earn points on multiple accounts.

In one of the latest efforts to reach out to environmentally conscious cardholders, two organizations have launched a test in the United Kingdom during which consumers can use debit and credit cards to track their carbon emissions. The Royal Society for the Encouragement of Art, Manufactures and Commerce, based in the UK, and France-based card processor Atos Worldline say they are testing a personal carbon-emissions calculator that uses Nectar-branded loyalty cards. The test is scheduled to last five months and will involve up to 1,000 participants, the Royal Society says in a statement. Test participants will receive carbon credits, though the amount was unspecified. Carbon credits give financial value to the cost of polluting the air. They are used in an effort to reduce greenhouse gas emissions. Each time a participant uses a Nectar card to buy fuel at a BP petrol station, Atos will deduct carbon credits from that participant's online account. Cardholders can track their carbon use online and trade surplus carbon credits through an online trading system. Atos is providing the technology for the immediate carbon calculations. Neither Atos nor the Royal Society responded to CardLine Global requests for comment. The trial will help show how a personal carbon-trading scheme could operate in practice, Matt Prescott, director of the society's CarbonLimited project, says in a statement. Adil Moussa, an analyst for United States-based Aite Group LLC, tells CardLine Global the card effort represents a "really interesting" addition to environmentally friendly card schemes already offered in Europe. "This one is clever in the sense that this carbon card is being tied into a credit card or prepaid card," Moussa says. "It's giving you a reason to use it." Other "green" credit cards, such as Barclaycard's Breathe Easy card, offer discounts on purchases of "green" merchandise such as household cleaners. (CardLine Global, 27 Nov. 2007). MBNA Canada Bank enables cardholders to earn points the bank uses to buy carbon-offset credits that support environmental projects (CardLine Global, 15 Nov. 2007). Moussa says such cards are about marketing. Companies "find a segment of the population and come up with products to cater to them," he says. "These products really strike a chord with some people." The U.S. Federal Trade Commission earlier this year said it was working to clarify carbon-offset claims made by issuers and other companies.

Visa Europe has introduced a payment card that enables consumers to enter one-time passcodes designed to reduced fraud for online transactions, a Visa Europe spokesperson tells CardLine Global. Visa says the technology is suitable for chip-based debit or credit cards. "Visa is now offering this to members as a pilot," the spokesperson says, declining to discuss which banks have expressed interest in the technology, how long the tests will last and how many of the "Visa PIN cards" issuers will distribute. Visa wants consumers to use the cards while making an online transaction or logging in to online-banking sites. A cardholder would press a button on the card to start the authentication process and, when prompted, enter the appropriate PIN. The card's display panel provides a one-time passcode, which the cardholder enters into the site's Verified by Visa window, the spokesperson says. "This is then forwarded to the issuing bank, which validates the passcode," the spokesperson says. "For online banking, once you've logged in and put in your account number, the passcode would be in place of the password. Again, it would be the issuing bank that validates."

Citibank, which operates the nation's eighth-largest bank-owned ATM network, will replace 61% of its 3,300 machines over the next year, Robert Julavits, a Citibank spokesperson, tells ATM&Debit News, a CardLine sister publication. Citi is purchasing ATMs from NCR Corp., Diebold Inc. and Nautilus Hyosung America Inc. to replace 2,000 Citibank-manufactured ATMs, Julavits says. The bank in the past few years has purchased 1,300 ATMs from NCR and Diebold. New York-based Citibank historically has assembled its own ATMs by buying modules, such as a receipt printers, individually from various ATM manufacturers, including NCR and Diebold. Spokespersons for Diebold, Nautilus Hyosung and NCR say the Citibank contract precludes them from discussing their arrangements with the bank.

Fiserv Inc. is working to offer its walk-in bill-payment service in branches of banks that are trying to reach the underbanked, a large and potentially lucrative market.

The Treasury Department hopes that encouraging the unbanked to receive their Social Security benefits on a prepaid card will save $42 million a year, despite several fees.

MIAMI — Wal-Mart Stores Inc. has sold more than 1 million of its prepaid MoneyCards, and customers have loaded more than $1 billion on to them, since they were introduced nearly a year ago, said Jane Thompson, the president of the retailer's financial services business.

The Commercial Bank of Ceylon says its debit cardholders now can receive discounts at more than 50 merchants under a new promotion, according to press reports. The bank offered no immediate comment to CardLine Global, but the financial institution previously had offered the promotion to credit cardholders, according to reports. The bank issues Visa-branded cards. Bank officials say consumer use of debit cards has been growing since financial authorities imposed a 1% "stamp duty" on credit card purchases, and the bank hopes the promotion sparks even more use, according to reports. The bank has 200,000 debit cardholders. The promotion will run until the end of the year.