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Issuers in Malaysia can enter into alternative arrangements with their cardholders for the payment of the credit card service tax that goes into effect on Jan. 1, a spokesperson from the Association of Banks in Malaysia, a trade group, tells PaymentsSource. Banks may enable cardholders to pay taxes via rewards points and cash-back rebates, the spokesperson says. Banks earlier had said they intended to charge customers for the tax instead of absorbing the costs. Earlier this year, the Malaysian government announced that a service tax of 50 ringgits (US$15 and 10 Euros) a year would be imposed on each primary credit card and 25 ringgits a year on each supplementary card. The association spokesperson says that debit cards, gasoline cards and private-label cards are not subject to the tax. “The tax would be collected by banks and other card issuers from credit or charge card holders and paid to the customs and excise director-general,” the spokesperson says.

Aided by one extra day in the holiday shopping season, total retail spending between Nov. 1 and Dec. 24 rose an estimated 3.6% compared with the same period last year, according to the MasterCard Advisors SpendingPulse report released Monday.

The number of contactless smart cards shipped per year will break the 1 billion mark by 2014, United Kingdom-based IMS Research predicts in a recent report. “The market for contactless is set to nearly double between 2008 and 2014 as the three largest end-user sectors–government and health care identification, transportation, and payment and banking cards–all gain traction, analyst Don Tait said in a statement. The report cites health care as the biggest sector, but transportation is booming. IMS also expects bank and payment cards to move the fastest toward contactless. Though there are relatively few shipments in that sector thus far, consumer awareness and adoption are growing, the firm says. However, adoption is not always smooth, according to research director John Devlin. “One key area that has yet to fully adopt contactless is mobile,” he says, citing the lack of a common certification standard as a chief cause. The lack of agreements between various stakeholders also is holding back the growth in Near Field Communication payments, the company says. IMS is not forecasting major contactless shipments in the mobile segment until 2012.

Monitise PLC, the British mobile banking vendor, says it plans a broader push next year into mobile retailing, initially in the United Kingdom, then across Europe and in the United States.

One more person-to-person payment application for mobile devices might seem merely like incremental progress toward mobile payments, but it demonstrates the increasing pressure to make phones into financial tools, analysts said earlier this month.

A new generation of person-to-person money transfer services is quickly gaining traction with banks, offering a way to regain a share of the electronic payments that was ceded long ago to nonbank rivals.

The state government of Victoria, Australia will launch the contactless ticket system for trains in Melbourne, a spokesperson for the Transport Ticketing Authority, which manages the ticketing system, tells PaymentsSource. “We are assuming that it will be at least a couple of weeks before the system can be [launched] on trams and buses,” the spokesperson says. The state government says that about 1,000 government workers have been testing the cards in the Melbourne area for about two months. Myki is designed to replace a number of ticketing systems in Victoria, primarily the Metcard (metropolitan Melbourne) and V/Line (regional) ticketing systems. “For the passenger‚s convenience, we will run the old ticket system alongside myki for at least six months before we scrap [the old system],” the spokesperson adds. The myki system has run into previous problems, including 11,000 instances of overcharging across the state and complaints from bus passengers in the region of Geelong about malfunctioning readers and wrongful charges. Matthew Sinclair, executive director with Australia-based Carpadium Consulting, tells PaymentsSource that if myki operators cannot get the system working in a town the size of Geelong, with a population of about 162,000, then the scheme likely will fail in a city as large as Melbourne, with a population of about 4 million. “And this will be a big problem because Melbournites are big users of public transport,” he adds.

Part one of our examination of prospectuses for recent credit card securitizations focused on higher-end balance activity among the top issuers. In this installment, it's lower-balance accounts' turn.

Tio Networks, the expedited bill-payment processor, recently signed agreements expanding customers’ bill-payment options with Cox Communications Inc. and Southern Company’s Georgia Power subsidiary, both based in Atlanta. The agreements enable both companies’ customers to pay their bills in cash at Tio’s self-service payment kiosks and retail locations where Tio operates payment centers. Burnaby, British Columbia-based Tio Networks owns1,500 kiosks and manages 18,000 payment centers nationwide. Tio Networks credits payments to customers’ accounts the same day, Tio executives say. Tio’s agreement with Cox, the nation’s third-largest cable television company with 6.2 million customers, expands its existing bill-payment services through Tio to a national basis from a regional contract that included only Phoenix and Las Vegas. Tio will deploy bill-payment kiosks in select retail locations throughout Atlanta for customers of Georgia Power, an electrical utility with 2.3 million customers. Tio signed both agreements in late November.

Citigroup Inc. elaborated on its denial that its systems had been breached last summer, suggesting that, if a breach occurred, it would have happened at a third party. "As with virtually all financial institutions, there are instances of fraud or breaches of third-party systems that result in our taking actions to protect our customers and Citi … , [but] there has been no breach of Citi's systems," the New York company said in a press release last week. It did not identify any third party that might have had a breach. The Wall Street Journal reported that morning that the Federal Bureau of Investigation has been looking into a Russian hacker group that targeted Citi during the summer. Citi was quoted in the story as denying it. The paper cited unnamed government sources who said the hacker group stole tens of millions of dollars from its target.

Royal Bank of Scotland early next year will begin charging cardholders in the United Arab Emirates a monthly maintenance fee on its credit cards. In a statement sent to cardholders in the U.A.E., the bank blames market conditions for the establishment of the fee. The bank says it will charge a monthly fee of 10 dirhams (US$3 or 2 euros) beginning on 1 Feb. A spokesperson for Dubai Bank tells PaymentsSource that their cards already carry similar fees. A spokesperson for U.A.E.-based RakBank says the financial institution has no plans to introduce such fees.

Australia-based energy firm AGL has decided not to charge its customers for paying by credit cards after it faced ire from the country‚s top regulator, according to the Sydney Morning Herald. The Energy and Water Ombudsman criticized AGL on its plans to charge customers an undisclosed amount for using their credit cards to pay bills. In a public filing made by the ombudsman to Independent Pricing and Regulatory Tribunal, the regulator asked whether AGL bills would be reduced for those who did not pay by credit card if the company was to start charging those who paid on credit. „As costs associated with administering credit card payments may previously have been a component of the general retail costs, can we expect to see an equivalent reduction in these costs if this fee is to be introduced?,‰ the ombudsman asked. Immediate comment from AGL was not available.

The alternative-payment processor mPayy Inc. on Thursday announced a mobile payment app for handsets that run the Android operating system from Google Inc.

A U.S. District Court in New Jersey last week rejected Heartland Payment Systems Inc.’s request for a preliminary injunction to prevent VeriFone Holdings Inc. from soliciting the payment processor's merchants who use VeriFone point-of-sale terminals, according to the terminal maker. Heartland is seeking to stop VeriFone from promoting a Web site where merchants may register for free terminal support directly through VeriFone to begin after Dec. 31, when VeriFone will stop providing Heartland with support. Heartland contends it can continue to support the terminals without VeriFone’s help. Judge Mary K. Cooper denied Heartland's request in an opinion dated Dec. 23, noting contradictory claims Heartland had made regarding its ability to provide ongoing service to clients using VeriFone systems, according to VeriFone. “The ruling means that despite Heartland’s considerable efforts, VeriFone can continue to offer direct support to Heartland merchants for VeriFone systems,” states a VeriFone spokesperson. Heartland is “disappointed” the judge denied the processor’s request for a preliminary injunction, the company said in a statement. “Heartland is considering its options with the circuit court. This opinion is a preliminary ruling, and Heartland intends to pursue damages in its state court action,” the statement said. The two companies are suing each other over a disagreement stemming from Heartland's development of an advanced encryption terminal. San Jose, Calif.-based VeriFone alleges Heartland is infringing on one of its patents; Princeton, N.J.-based Heartland claims VeriFone is engaging in unfair trade practices.

The number of small-business owners who think the economy is getting worse declined this month compared with November, according to new survey data Discover Financial Services released today. Discover’s Small Business Watch improved slightly in December to 77 from 76.5 in November. The Watch is a monthly report measuring the relative economic confidence of 750 randomly selected small-business owners based on their responses to six questions. Its creators established a base index of 100 when the Watch began in August 2006. The number of small-business owners who think the economy is getting worse fell in December to 49% from 53% in November. Some 24% of small-business owners see no changes in the economy, up from 16% who said so in November. Some 25% of respondents see the economy improving, down from 28% in November, and 2% are not sure. Some 51% of small-business owners have experienced cash-flow problems within the last three months, down from 52% who said so last month, while 45% have experienced no cash-flow problems up from 41% who had no cash-flow problems in November, and 4% are not sure. Some 74% of respondents said the recession has reduced their retirement savings, while 19% said the recession has had no impact and 6% have seen their retirement savings increase.

While securitization of residential mortgages that lack government backing remains moribund, credit card and other consumer lenders have issued about the same amount of asset-backed bonds this year as they did in 2008 thanks to a federal rescue.

First Data Corp. has acquired an 81% stake in ICICI Bank’s point-of-sale terminal business for US$80 million, a source from the India-based bank tells PaymentsSource.com.

Consumers in the Midwest initiated 10.8% more transactions from Dec. 1 to 14 than during the same period in 2008, according to a First Data Corp. SpendTrend 2009 Holiday Special Edition report. The report is based on credit, debit and electronic benefits transfer transactions First Data processed for its merchant customers. The Atlanta-based payment processor says the Midwest also led U.S. regions in sales-volume growth at 9.3%. First Data did not provide specific transaction or spend totals. Transaction volume in New England grew by 8.5% to rank second, though the region had the fourth-largest sales-volume growth at 6.5%. Transaction volume grew by 8.4% in the Mid-Atlantic region, while sales volume increased by 6.9%. In the South, transaction volume grew 7.5%, while sales volume grew by 6.4%. Consumers in the West conducted 7.2% more transactions and spent 6.6% more. Transaction volume in the Southwest grew 5.7%, while sales volume rose 5.8%, First Data says. The payment processor says transaction volume at value merchants, defined as discount merchants such as Walmart Stores Inc., grew by 14.9%, while sales rose 13.5%. Petroleum-sales volume outpaced all other merchant categories with a 43.7% increase, while transaction volume rose 13.5%. The data illustrate that consumers remained focused on value, which resulted in the large transaction volume increases in petroleum transactions and among value merchants, according to First Data. First Data representatives were not available for additional comment.

Consumers in the Southeast region of England are more likely to have plastic payment cards than are consumers in other parts of the country, suggest survey data from the UK Payments Council, a trade group that helps set strategy for payments in the United Kingdom. The council based its findings on surveys of 3,859 adult consumers it conducted earlier this year. Ninety-seven percent of respondents from the Southeast reported having payment cards, while only 86% of respondents from West Midlands region said they did, making that region the lowest in England for plastic card ownership, the council says in a statement. Fifty-nine percent of consumers on the Southeast reported using mobile or Internet banking, the highest rate among England’s regions, while only 46% of consumers in the Northeast did, the lowest rate. Consumers in East Anglia make the fewest ATM withdrawals–51 per person each year, the council says. In general, more consumers in the southern parts of England have payment cards than do consumers in the northern parts, the council adds.

Residents of the Asia-Pacific region cite changes in salaries, job security and cost-of-living expenses as their top financial concerns entering 2010, the results of a recent Visa Inc. survey suggest. Of the 5,520 survey respondents across 10 nations, 48% cited changes in the cost of living as their top concern, while 44% cited increasing their savings and the same percentage cited job security as potential troubles in 2010. Within the region, however, differences emerge. In China, respondents cited payment card fraud, increasing savings and job security as their top three concerns. Hong Kong residents said they expect changes in their salaries, job security and cost-of-living expenses to cause them worry in 2010. In Taiwan, the value of consumer retirement funds, changes in salaries and job security ranked as the top three concerns for next year. Among respondents in Japan, the top concerns were increasing savings, changes in salaries and cost-of-living expenses. Visa did not provide individual nation results. The survey, conducted in August and September, also canvassed consumers in Australia, India, Indonesia, Korea, Malaysia and New Zealand.