Federal prosecutors reported on Feb. 28, 2012, that four Canadian men were indicted for running an illegal online sports gambling business and conspiring to launder money through payment processing. The next day, the FBI noted in a separate case that an individual who worked with online poker companies pleaded guilty to money laundering, fraud and gambling charges.

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In a Feb. 20, 2012, corporate blog post, mobile payment venture ISIS reported that a general purpose reloadable (GPR) prepaid card, as well as loyalty cards, will be included in its mobile wallet service. The blog labels the GPR card as the "Isis Cash card."

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Visa Inc. Chairman and Chief Executive Officer Joseph Saunders said in a Feb. 8, 2012, earnings call the company is implementing a "program for modified acceptance economics in the United States, which we believe will offer merchants greater incentive to route transactions over our network and an opportunity to lower their per-unit transaction's cost." In the same vein, MasterCard Worldwide confirmed it will begin charging a new acquirer licensing fee starting in July 2012.

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A survey of 1,000 adults conducted by Ipsos SA Public Affairs for the American Bankers Association found only 7 percent of respondents believe retailers are passing savings from recent debit interchange cuts on to consumers. The survey was released Feb. 20, 2012.

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It's not surprising Joe Kaplan's appointment to Chief Executive Officer at Total Merchant Services Inc. generates interest among so many in the payments industry. Kaplan made his first mark as an acquirer in 1994 when he started Superior Bankcard Service and, in less than a year, built it into the 12th largest nonbank acquirer in the United States. He eventually sold Superior Bankcard Service for $100 million and started a new company, Innovative Merchant Services, in 1999.

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The Prepaid Awards, sponsored by London-based online voucher provider Ukash, said regional award ceremonies to take place in several countries around the world will function as precursors to the international ceremony to be held Oct. 11 in London. The winners from each regional ceremony will automatically qualify for the international competition. Regional ceremonies will take place in Southern Africa, Canada, France and in the Germany/Austria/Switzerland region.

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An American Express Co. prepaid card offers the lowest yearly fees by far, according to a new online tool designed by payment card comparison website NerdWallet.com. The AmEx Bluebird general purpose reloadable (GPR) card costs $48 in total yearly fees, NerdWallet.com found; in comparison, UniRush Financial Services LLC's Baby Phat Prepaid RushCard Pay Monthly card costs over $284 per year in fees.

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A bipartisan bill designed to protect the U.S. infrastructure from a devastating cyber attack is quickly making its way through Congress despite potent opposition. The Cybersecurity Act of 2012, was co-sponsored by the Chairman of the Senate Homeland Security and Governmental Affairs Committee, Sen. Joe Lieberman, I-Conn.; the ranking member of that committee, Sen. Susan Collins, R-Maine; Commerce Committee Chairman Jay Rockerfeller, D-W.Va.; and Select Intelligence Committee Chairman Dianne Feinstein, D-Calif. The bill was introduced Feb. 14, 2012. The Senate Homeland Security and Governmental Affairs Committee held a hearing the next day.

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A couple of stories pertaining to payments in Europe caught our eye today. One is about new single euro payments area (SEPA) regulation; the other pertains to near field communication (NFC) ticketing. #h2SEPA regulation passed The European Parliament passed new SEPA regulation Feb. 14, 2012. The regulation is designed to make cross-border bank transfers faster, cheaper and safer, the European Parliament said in a release issued after the vote. The vote was 635 in favor, 17 against and 31 abstentions.

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United Continental Holdings Inc., the holding company for United Airlines and Continental Airlines, initiated the MileagePlus Gift Card Exchange program, which enables MileagePlus members to convert the balances on closed-loop, retailer-specific gift cards into flight miles. Over 60 major retailers, including Best Buy Co., Crate&Barrel, JCPenney, Peet's Coffee & Tea and Wal-Mart Stories Inc., are participating in the program.

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Heartland Payment Systems Inc., the official concessions processor of Super Bowl XLVI in Indianapolis, said it processed 43,982 credit and debit card transactions, a total of $924,500, over the Super Bowl weekend.

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A Swiss National Science Foundation research team composed of mathematicians and cryptographers working in San Francisco discovered what they believe is a flaw in the encryption algorithm commonly used for online data security that may call online data security into question. The researchers reported their findings Feb. 14, 2012. They are scheduled to formally present their paper at a cryptography conference in Santa Barbara, Calif., in August 2012, but they released it early reportedly because they believe the findings are of concern to operators using the public key cryptography system.

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Three New Jersey legislators sponsored a bill designed to limit fees charged on general purpose reloadable (GPR) prepaid cards and require GPR card providers to disclose certain information to consumers. Among its provisions, A 2144 would require monthly account statements be issued to GPR cardholders if they cannot access statements online, over the phone or via ATMs.

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Under pressure from retailers and Congress, the Internal Revenue Service confirmed on Feb. 9, 2012, it will not require merchants to reconcile actual gross transaction receipts reported on their 1099-K forms with the aggregate gross receipts they report on their taxes. The Housing and Economic Recovery Act of 2008 requires merchants to report the gross amount of yearly transactions to the IRS on form 1099-K. The reporting requirement went into effect Jan. 1, 2012. In October 2011, the IRS added a line to business tax returns requiring merchants to reconcile actual gross receipts with the aggregate gross receipts on their 1099-K report.

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Separate reports released by CyberSource Corp. and Trustwave in early 2012 detailed incidents and costs of data breaches and online fraud in 2011. #h2CyberSource's survey Visa Inc. owned CyberSource issued the 2012 edition of its Online Fraud Report on Jan. 24. The 13th annual report of its kind, it takes a slightly different analysis of fraud than other, similar reports in that it calculates total fraud rates based on chargebacks and credits issued to customers by merchants instead of assessing chargeback activity only. A total of 325 electronic e-commerce companies, representing $83.3 billion in online sales, responded to the survey.

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Moves are underway at both the federal and state levels to restrict what goods and services food stamp recipients can purchase with electronic benefit transfer (EBT) cards. The Welfare Integrity Now (WIN) for Children and Families Act of 2011 passed the U.S. House of Representatives on Feb. 1, 2012, and a Florida bill introduced January 2012 passed out of the Florida Senate's Children, Families, and Elder Affairs Committee.

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At the Feb. 8 opening of the Smart Card Alliance 2012 Payments Summit in Salt Lake City, payments industry leaders tried their hand at forecasting the fate of Europay/MasterCard/Visa (EMV) introduction in the United States, near field communication (NFC) and mobile payments, and transit payments. In a brief session hosted by Randy Vanderhoof, SCA Executive Director, executives from MasterCard Worldwide, Isis, PayPal Inc. and the New York Metropolitan Transportation Authority answered questions about the changing payments landscape.

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The Electronic Transactions Association and the Southeast Acquirers Association are both planning good things for payment pros this spring. #h2ETA asks for Star Award nominations Preparing for its 2012 Annual Meeting & Expo in Las Vegas April 17 to 19, 2012, the ETA is taking nominations for its Star Awards. The Star Awards recognize people and companies that are making a difference in the payments industry through innovation, business initiatives or working with the ETA.

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The Consumer Financial Protection Bureau issued a final rule designed to increase consumer protections on international money transfers. The rule will require money transfer providers to disclose exchange rates and fees so that senders of money transfers will know precisely how much money is being sent, the CFPB said.

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Several affiliated calling card companies agreed to pay $2.32 million as part of a settlement of charges brought by the Federal Trade Commission. The regulatory body alleged that the companies engaged in deceptive advertising and marketing practices around calling cards targeted at immigrant communities. The FTC said the companies' prepaid phone cards delivered an average of only 45 percent of calling minutes advertised.

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Fifteen leaders of the prepaid telecommunication industry gathered in Washington to create the American PrePaid Phonecall Association. The APPPA is designed to promote "high-value prepaid telephone services to consumers and serving as the voice of the industry." Gustavo M. de la Garza Ortega, founder and President of Mexico telecommunication company Grupo Marcatel, was elected Chairman of the APPPA. Pete Pattullo, Chief Executive Officer of cloud-based prepaid services company Network Enhanced Telecom LLP (doing business as NetworkIP), was elected Vice Chairman. And Gene Retske, retired editor of The Prepaid Press, will serve as the Executive Director and oversee day-to-day operations.

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The Federal Deposit Insurance Corp. revised guidelines for banks doing business with payment processors. In a Jan. 31, 2012, letter, the FDIC recommended banks assess the risks associated with each processor with which they do business because some processors carry a higher risk of fraud. In the letter, Sandra L. Thompson, FDIC Director of the Risk Management Supervision Division, and Mark Pearce, FDIC Director of the Depositor and Consumer Protection Division, wrote, "While payment processors generally effect legitimate payment transactions for reputable merchants, the risk profile of such entities can vary significantly depending on the make-up of their customer base."

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Facebook Inc. made $557 million from its payments business in 2011, up from $106 million in 2010, the company disclosed Feb. 1, 2012, in a much anticipated initial public offering (IPO) filing in advance of the social networking site becoming a publically traded company. The Securities and Exchange Commission document gave potential investors insight into Facebook's payments revenues and its future plans for building its payments business.

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Several payments industry companies released earnings reports Jan. 31, 2012 and Feb. 1, 2012. Here are some of the highlights: #h2First Data First Data Corp.'s fourth quarter revenue was $2.69 billion, down $43 million or 2 percent, compared to the same period a year ago. The company said it lost $115 million in debit network fees compared with the fourth quarter 2010. Excluding debit network fees and some other items the company is allowed to discount in its adjusted revenue calculations, First Data's adjusted revenue increased $47 million or 3 percent year over year to $1.73 billion.

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On Jan. 23, 2012, the Financial Crimes Enforcement Network (FinCEN) launched the "MSB Registration Web site" – web pages within FinCEN's website designed to educate about the compliance responsibilities of money services businesses (MSB) and facilitate registration of MSBs.

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