Cards

WASHINGTON – Federal Reserve Chairman Ben Bernanke expressed doubt this morning on the workability of exemptions for credit unions and small banks from the debit interchange price controls required under the Dodd-Frank Financial Reform Act. Bernanke raised concerns about how the exemption for institutions under $10 billion will be enacted, noting that the market is likely to drive more transactions to lower-priced debit cards mandated for the institutions over $10 billion. “We are not certain how effective that exemption will be,” said the Fed Chairman during testimony before the Senate Banking Committee. “It is possible that because merchants will reject more expensive cards from smaller institutions or because networks will not be willing to differentiate the interchange fee for issuers of different sizes, it is possible that the exemption will not be effective in the marketplace.” Credit unions and community banks have argued that the exemption will force merchants to discriminate against their higher-fee cards, which will force the smaller institutions to charge the same, lower fee as large banks. Bernanke acknowledged that possibility this morning, saying "it's possible merchant will reject cards from smaller banks." Proposed rules unveiled by the Fed in December would limit fees for the biggest banks to seven to 12 cents per transaction, a 73% percent drop from the current 44-cent average. The stakes are huge for credit unions which earned an estimated $2.6 billion last year–well more than half of all their net income–from debit card interchange. Interchange for credit unions from debit transactions now exceeds by far all revenues earned on credit card transactions. Bernanke’s comments came the same time as the House Financial Services Committee was holding a hearing on implementation of the debit card provision, known as the Durbin amendment because it was sponsored by Illinois Sen. Richard Durbin. A credit union representative, Frank Michael, president of Allied CU of Stockton, Calif., was scheduled to testify, along with Sarah Raskin, one of the Fed’s seven Governors, and representatives from the banks, Visa and the merchants groups. WASHINGTON – Federal Reserve Chairman Ben Bernanke expressed doubt this morning on the workability of exemptions for credit unions and small banks from the debit interchange price controls required under the Dodd-Frank Financial Reform Act.

NCR Corp. is adding a reporting tool to its ATM fraud software to help banks detect when the machines have been infected by a virus.

Visa Inc. confirmed Wednesday that it has retained counsel and said it is weighing its next moves in fighting debit interchange regulation, but it stopped short of specifying what strategies it might use in the weeks ahead.

Skimming crimes — and their costs — are rising.

In a warm-up for tomorrow’s Capitol Hill hearing on the Federal Reserve Board’s proposed debit-interchange rules, merchants’ representatives during a press conference today said that unless the rules are left unchanged, merchants might be forced to lay off employees.

Better-than-expected merchant reaction to Intuit Inc.’s offer of free card readers and no monthly service fees to small merchants using its GoPayment mobile-payments service has prompted the company to extend the offer indefinitely, the Mountain View, Calif.-based company announced Feb. 16.

Economic improvements are helping Heartland Payment Systems Inc., which reported on Feb. 16 that higher spending led to a small jump in fourth-quarter net revenue.

As many as 1,000 credit union members around Maine are believed to have had their card accounts compromised and are now reporting unauthorized transactions on their accounts.

Puget Sound Energy is the first payment-accepting biller to join Doxo Inc.’s free online bill-payment website, the Web-service provider announced Feb. 16.

Hypercom Corp.’s stock rose slightly in morning trading Feb. 16 after the payment-terminal maker reported preliminary fourth-quarter net revenue of $140 million, up 19% from a year earlier.

ATM and kiosk manufacturer Itautec S.A. has begun selling its roster of Adattis ATMs, cash dispensers and kiosks to U.S. credit unions and community banks, the Brazilian company announced Feb.16.

BB&T Corp. is launching a prepaid card that costs slightly more per month than some competing products — but lacks many back-end fees that have caught the ire of advocacy groups.

Deborah McWhinney, the head of Citigroup's flagging personal banking and wealth management group, is leaving her post after a tumultuous two-year run in which she attempted to makeover the nation's third-largest bank following the spin-off of its Smith Barney brokerage unit in 2009.

The powerful senator who sponsored last year’s amendment to the Dodd-Frank Reform Act regulating debit card interchange is confident his provision will stand, even as the House begins deliberations aimed at changing the provision, or at least delaying its enactment.

Credit unions now have another reason besides good member service to ensure their ATMs are shipshape — potential $500,000 fines.

JPMorgan Chase & Co.’s mobile check-deposit service stood out to the financial services industry as one of the few to make it to market without technology from Mitek Systems Inc. But now even Chase counts itself among Mitek’s growing list of customers.

MasterCard Worldwide plans to bring payment security to U.S. consumers through passcode-generating display cards, the card brand announced Feb. 14 at the RSA Conference in San Francisco.

This story has been updated from its original version.

Visa Inc. has joined forces with Starbucks Corp. in what may be one of the emerging mobile-payment industry’s first national promotions designed to improve a payment brand’s status within a mobile wallet.

VeriFone Systems Inc. has turned its PayWare Mobile point-of-sale service into the equivalent of a multipurpose Swiss Army knife for payment acceptance, a necessary step to introduce the device to a global audience, according to the San Jose, Calif.-based payment-terminal maker.