Posted on Wednesday, August 13, 2008 by Bryan Johnson
Interesting because I thought PayPal would have much higher preferred status among this demographic.
Credit Card: 65%
Debit Card: 22%
Checking: 8%
PayPal: 3%
Other: 2%
Generation Y includes those born in 80's to 90's (18 - 28 year olds). Thank you First Annapolis for the data and Transaction Trends for publishing.
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Posted on Wednesday, August 06, 2008 by Bryan Johnson
The Justice Department unveiled possibly their largest indictment of credit card data hackers yesterday. Nine people from the U.S. Estonia, Ukraine, China and Belarus are being charged for allegedly stealing over 40 million credit card records from nine retailers.
They successfully stole credit card data by using 'sniffing' programs on both wireless networks and on cash registers. Once captured, the criminals would load the data onto the magnetic strip of blank credit cards and then withdraw cash from ATM's.
The issuing financial institutions of the stolen cards take large financial losses because cardholders are not responsible for fraud - they are. For example, Justice Department reports that at one Dave & Busters restaurant location the sniffing program captured roughly 5,000 cards that resulted in over $600,000 of losses to the finanical institutions that issued those cards.
The affected retailers include Sports Authority, Office Max, BJ's Wholesale Club, Marshall's, T.J. Maxx and a few others.
Other related posts:
The cost of a credit card breach
PCI Compliance basics
The cost to become PCI Compliant
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Posted on Wednesday, July 23, 2008 by Bryan Johnson
Visa & MasterCard have announced some pretty significant changes. Visa is out with two new categories: Debt Repayment and Government to Government. Tax Payment is officially coming out of pilot and interchange reductions at the pump. MasterCard introduces a recurring billing 'preauthorized request' - a great idea. All these will be effective October 3rd, 2008:
Visa Updates
Debt Repayment Programs for U.S. consumer auto loan, credit card, residential mortgage and student loan for debit card only.
- Availability for Financial Institutions Merchandise & Services, Non Financial Foreign Currency Money Orders (no wire transfers) and Travelers Cheques).
- Cannot be used for bad debt, uncollectible debt charge-off debt and debt sold to collection agencies.
Fuel - Trying to reduce the pain at the pump (and appease angry gas station owners):
- Consumer Debit Cards: a maximum interchange amount is now in place, replacing what was formerly a discount rate and transaction fee that varied with amount.
- Consumer Credit Cards: lowered by as much as .50 bps on certain cards and consolidated into a single rate for 6 different card types- Automated Fuel Dispenser (AFD) Partial Authorization
- Partial Authorization: POS Vendors will be required to support this functionality by 10/3/08. As some context, when a consumer swipes a card today today at an AFD an authorization is done for $50 to check validity and availability of funds before approving to pump. That's referred to as a 'Partial Authorization' so if the consumer only pumps $40 of fuel the initial $50 authorization, the merchant can capture for the $40. A problem with that method is that if a check (Signature Debit) or pre-paid card is used and the card does not have the available funds it will be denied. With the Partial Authorization implemented, the issuer would respond with the available amount instead of denying the transaction.
Tax Payments - Visa has had this program in pilot mode for several years now:
- Merchants are required to register for this - no sign up fees before April 1, 2009.
- Existing interchange rates will apply * Interchange rate of $2.50 will apply to consumer debit transactions that are qualified
- Service or convenience fee may be assessed. Fee can be variable for consumer credit and commercial cards but a flat fee must be charged for consumer debit transactions and may not exceed $3.95 (could they make it any more difficult?)
Commercial Card GSA - Introduction of Government-to-Government interchange program (G2G). Level II & III data is not required.
- $5,000 minimum has been removed * Special interchange rate for transactions over $8,750 is removed with interchange rate increasing .25 bps and $4.
- GSA Purchase cards will not be available for Commercial Card Level III rates.
MasterCard
Test transaction for Recurring Billing
- $1 authorization for account status before requesting full amount authorization. (nice work whomever came up with this idea!)
- What's going on MasterCard? Only 1 Update?
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