The global payments industry is robust and growing even through the worldwide recession, according to a new study released in September 2011. But the impact of rapid industry change on financial institutions and ISOs will mean significant adjustments as they fight to differentiate their services and demonstrate their value in the marketplace, the report said. The World Payments Report 2011, the seventh annual study sponsored by United Kingdom companies Capgemini S.A. and the Royal Bank of Scotland PLC, along with the European Financial Management Association, looked at trends in payment volumes and the payment tools used by the industry.

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According to a Sept. 26, 2011, Federal Reserve Board of Atlanta blog post, consumers could lose payment functionality with prepaid cards due to provisions of the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The Portals and Rails blog said general purpose reloadable (GPR) cards can be subject to the interchange fee cap, which could result in prepaid card providers eliminating card features in order to be exempt from the Durbin regulations.

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In the epic fight between giant technology companies and huge telecom companies to capture the emerging near field communication (NFC)-based mobile payments market, heavyweight contender Google Inc. appears to have won the first round with the Sept. 19 release of Google Wallet, an NFC-based mobile payment application. The fact that Google Wallet's NFC application was first to market, ahead of rivals ISIS Wallet and the Visa Inc. mobile wallet could prove advantageous to Google as it seeks to establish Google Wallet as the payment application of choice among consumers.

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The American Payroll Association said legislation currently working its way through the California congress would require employers that provide prepaid payroll cards to its employers to also provide free banking services. The ABA believes such a requirement goes "far beyond" what is obligated for any other payroll payment method. A payroll card bill (AB 51) passed the California Assembly in June 2011 and is currently being considered by the California Senate as SB 931. The APA said it succeeded in having the legislation altered to remove language that would have exposed employers to "massive penalties for minor offenses."

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PayPal Inc.'s relatively recent acquisitions have given it an approach to mobile payments that differs from mobile solutions offered by Google Inc., Visa Inc. and MasterCard Worldwide. PayPal, an eBay Inc.-owned company, reported its mobile wallet payment solution requires no new hardware or infrastructure, and its technology not only allows merchants and consumers new payment opportunities, but it also offers the ability to give and receive coupons, special offers and instant credit.

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The PCI Security Standards Council (PCI SSC) released point-to-point encryption (P2PE) requirements for hardware-based solutions; it also promised more encryption information to come. The 96-page PCI Point-to-Point Encryption Solution Requirements document provides the payments industry with its first requirements for hardware-based P2PE solutions that offer Payment Card Industry (PCI) Data Security Standard (DSS) compliance. The PCI SSC said when P2PE is used properly the scope of compliance is reduced, saving merchants compliance costs.

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Rogers Communications Inc., a Canadian cable television, Internet, and phone services provider, filed a request with the Canadian government for a bank license to enable the company to issue credit cards and financial products. This report came shortly after the Canadian Federal Government issued a discussion paper titled The Way We Pay. This look into the Canadian payments system criticizes the country's payment industry for being slow to adopt mobile payments and too concentrated in its ownership. According to published reports, approximately a dozen requests for Canadian bank licenses are pending. Rogers has more than 9 million wireless subscribers.

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The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, is providing administrative relief to the prepaid card industry as the deadline for compliance with the "prepaid access" final rule counts down. The final rule, which requires prepaid card businesses to comply with certain Bank Secrecy Act regulations, is scheduled to go into effect Sept. 27, 2011, but prepaid card providers have been given until March 31, 2012, to reach compliance with some of the mandates.

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A new study released in September 2011 predicts fraud and data breaches in the retail industry will increase in 2012. Meanwhile, a senior official in the FBI, testifying before a congressional committee that same month, confirmed this assessment and said the FBI is continuing to find new ways to stop cyber criminals who "can significantly threaten the finances and reputations of United States Businesses and financial institutions."

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Evolution Finance Inc.'s credit card comparison website CardHub.com conducted research into the fees that prepaid card providers charge consumers. CardHub.com concluded that NetSpend Holdings Inc. cards were the most expensive from a fee standpoint, while Green Dot Corp. and American Express Co. cards were the least expensive.

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Visa Inc. reported in a Sept. 1, 2011, bulletin that thieves can now skim credit cards from POS PIN entry devices (PEDs) using Bluetooth technology. Visa said thieves are removing the original PEDs and replacing them with modified devices. The rogue devices skim account and PIN information entered at the POS and transmit the data automatically via Bluetooth to the crooks. Surveillance video reveals the criminals are able to swap the PEDs in seconds.

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Beginning Oct. 1, 2011, Visa's regulated debit card interchange rates will be set at the maximum allowable rate for categories that include consumer and commercial prepaid cards. The rates for other prepaid card categories may be raised or lowered, Visa said.

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Payment software company S1 Corp., locked in a fight for its life with ACI Worldwide Inc., is urging stockholders to ignore a sweetened ACI offer to buy S1. ACI has offered $6.20 in cash and 0.1064 shares of ACI common stock for each S1 share held. This is an increase of 50 cents a share over ACI's original offer. S1's preference is to move forward with its $320 million offer to buy and merge with Israeli payment processing company Fundtech. Soon after S1 went public with its ambitions to merge with Fundtech ACI ambushed S1 with its $540 million offer to buy S1.

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In May 2011, Michaels Stores Inc. reported a network breach that involved about 90 tampered PIN pads in retail locations across 20 states and resulted in the compromise of tens of thousands of cardholder accounts. Cards had been skimmed on the tampered terminals as far back as December 2010. According to Mike Alford, Managing Director of U.K.-based fraud prevention specialist Alaric International, the Michaels breach would have been detected earlier if the card issuing banks involved had used Alaric's self-learning fraud detection model, called Fractals (short for Fraud Risk Analysis – Creation, Testing and Learning System).

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On Sept. 2, 2011, The Green Sheet reported SmartMetric Inc. promised to file a patent infringement suit against Visa Inc. and MasterCard Worldwide. SmartMetric revealed the following week it has made good its promise by filing a complaint in the U.S. Central District of California. In SmartMetric v. MasterCard and Visa (No. CV11-7126), SmartMetric alleges the two card brands are infringing on its U.S. patent (No. 6,792,464, also known as '464) "by selling, offering to sell and using contact and contact/contactless credit card systems that use datacards that, when inserted into a data card reader, help to establish a connection to a network."

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Commenting on the release of an update to the PCI DSS Wireless Guidelines Information Supplement, security experts agree that securing wireless payment networks is possible but more difficult than securing hardwired networks. Despite having more potential security holes, wireless networks can still meet the Payment Card Industry (PCI) Data Security Standard (DSS) requirements, according to the experts. "As any security professional will tell you, there is no such thing as an absolute security – there will always be an evolution of attack sources and methods," said Al Hannagan, Senior Vice President of Internal Risk and Compliance at Trustwave Holdings Inc., a provider of on-demand data security and PCI compliance management.

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SmartMetric Inc. Chief Executive Officer and President C. Hendrick said his company will sue Visa Inc. and MasterCard Worldwide to protect a SmartMetric patent. SmartMetric alleges Visa and MasterCard infringe on its U.S. Patent 6,792,464 (also known as '464') in their use of contactless or radio frequency identification technology to connect to a network.

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When business travelers and vacationers use open-loop, network-branded prepaid travel cards, the cards are usually denominated in one currency. But a partnership between loyalty platform provider Touchdown Prepaid and global prepaid card company Rev Worldwide launched what they call Europe's first multiple currency travel card.

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The Federal Trade Commission is returning approximately $1.9 million to consumers who apparently were tricked into buying prepaid debit cards when they filled out payday loan applications online. In the scheme, payday loan applicants unknowingly were charged up to $54.95 per application for unrelated prepaid debit cards with zero balances, the FTC said.

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SignaPay Ltd. is hosting a "fun run" to open the Western States Acquirers Association conference in San Francisco Sept. 21 to 22, 2011. The run is a way for attendees to network while seeing one of the country's most beautiful cities, according to SignaPay President Kevin Jones. The run will "allow industry professionals to casually engage, share ideas, network, and see San Francisco from a different and beautiful perspective," he said.

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U.K.-based The Prepaid Awards revealed the 2011 finalists for its fourth annual competition. The winners will be honored at an Oct. 6, 2011, event held at the historic Royal Courts of Justice in London. The event is sponsored by global e-money network provider Ukash.

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