ISOs that service and support ATMs face a dilemma come April 2014, when Microsoft Corp. discontinues support for the Windows XP operating system. Without support for the operating system on which most of the 420,000 ATMs in the United States run, ISOs that fail to migrate ATMs to the newer Windows 7 may face increasing fraud risks on those ATMs. According to the ATM Industry Association, when April 8, 2014, rolls around, Windows XP support services, including security updates, nonsecurity "hotfixes," free or paid assisted support options, and online technical content updates will no longer be offered.

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Gift card distributor InComm said digital gift card purchasing peaked on e-commerce sites the day before Christmas 2013, with shopkick Inc. reporting that it delivered nearly seven times more digital cards on that day via its mobile app than it averaged on the biggest overall holiday shopping day known as Black Friday.

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Uncertainty reigns in the realm of contactless mobile payments. Near field communication (NFC), quick response (QR) codes, geolocation purchasing and Bluetooth have all been presented by various service providers as the solution for mobile payments in the brick-and-mortar space, yet nothing has taken hold as the preferred solution. But now comes a new variant: a combination of NFC and Bluetooth that attempts to leverage the advantages of both technologies. On Jan. 16, 2014, the U.S. Patent and Trademark Office made public a patent application filed by Apple Inc. in July 2012. The patent, titled Method to send payment data through various air interfaces without compromising user data, involves various proposed methods for establishing and maintaining connections between mobile devices and POS devices, and then allowing for secure transactions to be processed over those connections.

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As mail volumes continue to plummet, the U.S. Postal Service has proposed that a general-purpose reloadable prepaid card be created that would help to bolster revenues at the struggling quasi government agency. Along with a so-called "Postal Card," small dollar loans and money transfers could be offered to unbanked customers via postal locations, according to a Jan. 27, 2014, USPS report.

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First Data Corp. subsidiary TeleCheck Services Inc., and its affiliate TRS Recovery Services Inc., agreed on Jan. 16, 2014, to pay $3.5 million to settle Federal Trade Commission charges that the entities violated the Fair Credit Reporting Act (FCRA). This was the second such settlement in recent months. In August 2013, Certegy Check Services Inc. agreed to pay $3.5 million in a similar settlement with the FTC.

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Mobile telecommunication firm T-Mobile US Inc. launched itself into the alternative financial services arena with Mobile Money by T-Mobile. The service, which combines a smartphone app with a Visa Inc.-branded, general purpose reloadable prepaid card, is designed to transform "smartphones into personal money managers that can free people from excessive fees they often pay to use their own money," T-Mobile said.

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According to the Seattle Times, Starbucks Corp. had many happy returns in the fourth quarter of 2013. The Jan. 7, 2014, report said consumers in the United States and Canada loaded $1.3 billion onto Starbucks prepaid cards in the last three months of 2013. The load amount came from a memo Starbucks Chief Executive Officer Howard Schultz sent to Starbucks managers on January 6, the Seattle Times said.

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In December 2013, the Consumer Financial Protection Bureau called on financial institutions (FIs) to publicly disclose the debit and prepaid card program agreements they have with colleges and universities. The CFPB expressed concern that the agreements are designed to manipulate college students into opting into such programs. "Students and their families should know if their school, whether well-intentioned or not, is being compensated to encourage students to use a specific account or card product," said CFPB Director Richard Cordray. "When financial institutions secretly give kickbacks to schools, they are engaging in risky practices."

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More details about the Target Corp. breach are starting to emerge. On Jan. 10, 2013, Target projected the number of cardholder accounts compromised in the December 2013 breach was closer to 70 million than the previous estimate of 40 million, while other reports have put the number at well over 100 million. Additionally, news outlets reported on Jan. 16 that the malicious software injected into Target's network to steal cardholder data was written in Russian. But what is not getting as much media attention is that the problem of data security goes beyond the well-documented deficiencies of mag stripe payment card technology

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In December 2013, the Consumer Financial Protection Bureau called on financial institutions (FIs) to publicly disclose the debit and prepaid card program agreements they have with colleges and universities. The CFPB expressed concern that such agreements are designed to manipulate college students into opting into such programs.

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E-commerce giant eBay Inc. filed a patent for a prepaid wallet designed to spur impulse buying and increase check-out conversion rates. As reported on VerticalNews.com, the patent addresses the habit of web shoppers surfing online products and allows them to pay for those products before they surf away to other products or websites.

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With enactment of Colorado's new recreational marijuana use law on Jan. 1, 2014, while federal law still outlaws the practice, payment processors of pot dispensaries in Colorado, and one other state currently, are technically in violation of federal law. However, since the Obama administration is effectively looking the other way, merchant service providers apparently do not have to worry about the risks of fines and prosecution.

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The travails of bitcoin might make the cryptocurrency star in its own soap opera one day. The price valuation of bitcoin has fluctuated wildly since China moved to ban its usage in the Chinese economy in December 2013. And now bitcoin is experiencing more turmoil as China's e-commerce giant Alibaba Group moved to outlaw bitcoin from its e-commerce platform Taobao Marketplace. On Jan. 7, 2103, Taobao, which is China's equivalent of Amazon Inc. and eBay Inc. combined, said it would ban the use of all cryptocurrencies on its platform beginning Jan. 14.

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Fort Lee, N.J.-based prepaid phone card distributor Locus Telecommunications Inc. reached a preliminary settlement with plaintiffs in a nationwide class-action lawsuit. Among the lawsuit's allegations was that Locus distributed or sold prepaid calling cards and services to consumers without fully disclosing rates and fees.

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As Target Brands Inc. is finding out – following the high-profile data breach that occurred at its stores over the 2013 holiday shopping season − breaches are embarrassing and expensive. Several class-action lawsuits have been filed against Target to date. On Jan. 7, 2013, a class action was filed in the U.S. District Court for the District of Oregon at Portland. Among the suit's claims is that security investigator Brian Krebs reported on the 40 million bankcard compromise before Target notified its customers of the breach.

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Wiesbaden, Germany-based prepaid card provider Peaches AG believes prepaid electricity metering will play a substantial role in the convergence of electricity payments in Germany. 2014 will see a greater reliance on consumers accessing prepaid accounts via TVs and mobile phones to top up electricity accounts, the company predicted.

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With the 2013 holiday season in the rearview mirror, it is now the task of economic analysts to crunch shopping data and pinpoint potential new consumer trends. One such trend is showrooming and the effect it had on brick-and-mortar retail sales over the holidays. Showrooming is a growing phenomenon that involves consumers who peruse physical stores and simultaneously use smartphones to browse virtual stores for the same merchandise, only at cheaper prices.

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On Dec. 20, 2013, Sen. Robert Menendez, D-N.J., re-introduced a prepaid card consumer protection bill that is not materially different from bills he sponsored in 2010 and 2011. The Prepaid Card Consumer Protection Act of 2013, S. 1867, is designed to rein in so-called hidden fees and strengthen financial protections on prepaid cards. The legislation would restrict the fees prepaid card providers can charge cardholders and mandate that providers clearly disclose fee schedules before customers buy cards. The bill would also direct that providers offer consumer protections when prepaid cards are lost, stolen, or when providers go bankrupt.

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