NEWSOn July 8, 2012, Massachusetts Gov. Deval Patrick approved the state's budget for 2013, but rejected proposed reforms to its electronic benefit transfer (EBT) program that would have prohibited state government benefit recipients from using state-issued EBT prepaid cards to purchase such items as guns, alcohol, cigarettes and lottery tickets.
In vetoing the provisions, Patrick said he followed the recommendation of the special commission formed to research reported abuses of the EBT cards. According to Patrick, the commission rejected the restrictions for "reasons of feasibility, enforceability, cost and undue harm to households enrolled in cash assistance programs."
Several backers of the proposed reforms, including Sen. Robert Hedlund, R-Weymouth, disagreed with the governor's decision. The Boston Herald quoted Hedlund as saying, "A lot of people in the legislature, and a lot of taxpayers for that matter, believe there are a lot of problems with our EBT system."
In June 2012, two Democratic legislators urged three federal agency leaders to look into the business practices of prepaid campus card programs. Sen. Dick Durbin, D-Ill., and Rep. George Miller, D- Calif., penned letters to the heads of the U.S. Department of Education and the Consumer Financial Protection Bureau, expressing concern that students are being "nickel-and-dimed" via fees on prepaid campus cards.
In the letters sent to U.S. Secretary of Education Arne Duncan, Department of Education Inspector General Kathleen Tighe and CFPB Director Richard Cordray, the lawmakers said campus cards can come with weak consumer protections and "high" or "hidden" fees, including PIN debit, balance inquiry, dormancy, account closure and reload fees.
The Federal Trade Commission filed a lawsuit to halt the apparently deceptive advertising practices of another calling card provider. The FTC alleged that New York-based DR Phone Communications Inc. misrepresented the fees and the number of minutes on its calling cards. The FTC said the company agreed to temporarily stop its advertising claims, pending a trial in which the agency will seek to permanently halt the company's practices and return its "ill-gotten gains."
In an investigation into DRPC, doing business as drphonecom.com, the FTC found the minutes displayed primarily on posters at the POS were not accurate when compared to the actual calling card minutes provided. Additionally, the FTC said the posters claimed the programs had no hidden fees. However, the "small print at the bottom of the posters made vague reference to fees without adequately disclosing what those fees would be," according to the FTC.
ANNOUNCEMENTSFollowing the June 29, 2012, signage into law of the New Jersey gift card compromise bill, S. 1928, Safeway Inc. subsidiary Blackhawk Network said it will continue to sell gift cards in New Jersey. Blackhawk said it worked with New Jersey state lawmakers to "ensure that the continued sale of prepaid products would not come at the expense of consumer privacy."
Mobile telecommunication company Digicel Group Ltd. led a $17 million investment in Palo Alto-based Boom Financial (formerly m-Via). Boom Financial, which is focused on providing financial services to the unbanked in North, Central and South America, said it has raised over $30 million in funding to date.
Portland, Me.-based CashStar Inc. received $5 million in funding from new investor Intel Capital, along with existing investors Passport Ventures, FTV Capital, and Steven Boal, co-founder and Chairman of CashStar, as well as President and Chief Executive Officer at Coupons.com Inc.
In its June 2012 SpendTrend analysis, First Data Corp. said dollar volume on closed-loop prepaid cards was down 4.3 percent from June 2011. Dollar volume growth on debit and credit cards was sluggish as well, due to stubbornly high unemployment and unseasonably warm temperatures, according to First Data.
Atlanta-based prepaid card distributor InComm launched a line of game cards in Brazil for such online game developers as Habbo, Aeria Games and IMVU. Additionally, InComm partnered with Peela, a Brazilian issuer of prepaid entertainment cards, to market cards for Internet courses, magazine subscriptions and online games.
Prepaid card processor i2c Inc. said it is now processing payments in 216 countries and territories, including Latin America and the Caribbean, Africa, and Asia. In June 2012, i2c reported it was planning to bring a new data center online in Shanghai, China.
Gift card acceptance network operator Openbucks Inc. closed on a $4.8 million Series A funding round led by Yahoo co-founder Jerry Yang. Openbucks said the investment will support the development of its network, which allows gift card owners to use closed-loop gift cards in online games.
Sovereign Bank N.A., a subsidiary of Banco Santander S.A., issued MasterCard Worldwide-branded gift cards worth $1,000 apiece in coffee to 50 winners in the bank's "Morning Rush" sweepstakes. Sovereign Bank debit cardholders in the United States received one automatic entry into the sweepstakes per purchase made with their Sovereign Debit MasterCards during the six-week contest period.
The U.S. Department of the Treasury said 95 percent of individuals who receive monthly Social Security payments via MasterCard Worldwide-branded Direct Express prepaid cards are satisfied with the service. Additionally, 93 percent of cardholders would recommend the card to others, according to the KRC Research survey commissioned by MasterCard on behalf of the U.S. Department of the Treasury's Financial Management Service.
PARTNERSHIPSBlackhawk Network added Prepaid Resources LLC's BenefitsDirect to the distributor's PayPower Visa prepaid cards. BenefitsDirect is an automated direct deposit, enrollment and management service that will allow PayPower cardholders to reload cards via direct deposit, Blackhawk said.
Euronet Worldwide Inc. division and prepaid card processor epay agreed to provide processing services for PrepaYd Inc. subsidiary PrepaYd Wireless. Per the agreement, epay will process prepaid mobile airtime transactions.
Mobile application developer Gigaway Inc. joined with mobile payment provider Wipit Inc. to offer in-store rewards via Gigaway's mobile app Punchcard. Wipit allows consumers to pay for purchases in mobile apps or online using cash, and Punchcard provides rewards to retailers' loyal customers.
ACQUISITIONSMaritime payroll card company Brightwell Payments Inc. acquired payroll provider Directo Inc. to grow Brightwell's footprint among U.S. financial institutions, professional employment organizations, staffing firms, agricultural businesses and other payroll providers. Both firms are based in Atlanta.
APPOINTMENTSRichard Anderson joined TransCard LLC as Chief Financial Officer. Prior to joining TransCard, Anderson was President and CEO of payment card personalization and fulfillment services company Shoreline Business Solutions Inc.
Rêv Worldwide named Virginia Gambale to the international prepaid payment processor's board of directors. Gambale is an Independent Director at JetBlue Airways Corp. and a Managing Partner at technology and data communications advisory Azimuth Partners LLC.
Mobile imaging software solutions provider Mitek Systems Inc. hired Michael Strange as Chief Technology Officer. Strange was formerly Chief Technology Officer at Green Dot. 
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