Posted by Britney Chan on Tue, Feb 14, 2012
Source: Bank Info Security
On Tuesday, Bank of America reversed its decision to impose a $5 monthly fee for basic accountholder debit transactions. Consumer outcry against the fees was the catalyst for BofA's reversal.
"We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee," said David Darnell, BofA co-chief operating officer. "As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so."
This news came after Atlanta-based SunTrust made a similar announcement, saying it planned to repeal the $5 monthly charge it recently implemented. And on Tuesday, Alabama-based Regions Bank said it would stop charging the $4 monthly fee it had instated for additional debit revenue.
JPMorganChase was the first to speak out against the fees, when last week it said it had decided not to impose debit charges. Wells Fargo also has decided to call off plans to add debit fees for accounts in certain markets.
Steve Kenneally, who works in the American Bankers Association's Center for Regulatory Compliance, says these decisions come at a time when banking leaders realize they are under the microscope of public opinion. "Everything they do will be magnified, good or bad," he says.
Most notable in the public opinion sphere are protests linked to the Occupy Wall Street Movement. Late last week, supporters of Occupy announced plans to protest some of the country's biggest banks in New York.
"I don't know that it's specifically the Occupy Movement," Kenneally adds, "but there's no doubt that public opinion is quick to interpret what banks are doing, even if the perception is wrong. Everyone is watching."
David Nussenbaum, a payments and financial crime subject matter expert at Ernst & Young, says viral consumer backlash against monthly service charges has definitely played a role in banks' recent decisions.
Nussenbaum suggests a public-relations initiative that describes how banks and credit unions invest in debit card security would help. "The largest players have hundreds of analysts monitoring costly real-time surveillance systems that help keep card fraud in check," he says. "The banks should communicate to the market this fraud management service and other value-adds. Perhaps then there will be a little more public sympathy for their capped interchange fees."
Banks' decision to cut debit-card rewards programs and implement additional debit transaction fees stems from debit interchange cuts or fee caps that took effect Oct. 1. The cuts, mandated by the highly controversial amendment introduced by Sen. Dick Durbin, D-Ill., to the Dodd-Frank Wall Street Reform and Consumer Protection Act, have been a source of contention for months.
To compensate for the debit-revenue loss, the Federal Reserve said it would offer card issuers a 1 cent incentive for investments they made in debit fraud prevention.
But industry experts have balked at the 1 cent bone, saying it's far too low to cover any significant investment.
"Not commenting on any one bank in particular, we thought it would be rational for banks to seek revenue in other places when they had to adjust for the revenue interchange cutback," Kenneally says. "But now we have the law of public perception, which is a little different than the law of economics, and it looks like some banks reacted."
In late September, banking and credit unions associations submitted a comment letter to the Fed, suggesting an increase in the debit incentive fee. [See Banks Seek Reprieve from Durbin.]
"If the rate is not increased, it won't be good for the industry," Kenneally says. "It will put a damper on the spending for anti-fraud technologies, because financial institutions simply won't be able to afford it."
Additional Revenue Sources?
Banks affected by the interchange cuts - those with more than $10 billion in assets - will likely have to seek other sources of revenue to compensate for the interchange loss. Unless the Fed agrees to increase the incentive linked to fraud prevention, they will have little recourse.
But Phil Blank, managing director of security, risk and fraud for Javelin Strategy & Research, says a reduction in fraud will result in a reduction in financial losses, ultimately a win for financial institutions, even if they don't get an incentive.
"[Financial institutions] must adopt and embrace a customer driven architecture: Providing consumers with two-way actionable alerts can eliminate card-not-present fraud overnight," he says. "Let's create an environment where we empower the consumer and, in doing so, the FIs will create more stickiness (e.g. less customer loss and churn), and will be able to migrate customers to lower cost and higher revenue channels."
Posted by Britney Chan on Wed, Feb 08, 2012
Source: Bank Info Security
The Federal Deposit Insurance Corp. has issued revised guidance describing potential risks linked to relationships with third-party entities that process payments for merchants. The key message: The onus is on banks to perform due diligence and ongoing monitoring of these relationships.
"Payment processors that deal with internet merchants may have a higher risk profile because such entities have tended to display a higher incidence of consumer fraud or potentially illegal activities than some other businesses," the guidance states. "Financial institutions should understand, verify, and monitor the activities and the entities related to the account relationship."
Institutions that fail to adequately manage these relationships may be viewed as facilitating a processor's or merchant's fraudulent activity and could be held liable, the FDIC states.
Avivah Litan, a financial fraud analyst at Gartner, says this is likely a first step toward heightened scrutiny. "I think the regulators are going to get more involved and require more due diligence on the processors," she says. "The banks need to take this guidance and meet with their processors and see how their processors are monitoring transactions for fraud," Litan says. "It's not easy. There are so many mandates now; but from the point of view of the regulators, they have no one else to lean on."
Six Expectations
To mitigate risk, regulators suggest banks review processors' transactional histories, as well as their clients. Adequate reviews may require involvement from multiple departments, including IT, operations, Bank Secrecy Act/anti-money laundering and compliance.
The guidance highlights six key points:
- Account relationships with high-risk entities pose increased risks for unfair and/or deceptive acts or practices;
- Payment processors pose heightened risks for money laundering and fraud when merchant identities are not verified and business practices are not reviewed;
- Banking institutions need to assess risk tolerance in overall risk assessments and develop due diligence policies and ongoing monitoring;
- Monitoring consumer complaints or unusual return rates could suggest inappropriate use of personal account information;
- Regulators expect banks to quickly respond when fraudulent or improper activities are identified; and
- Improper risk management on the part of banks and credit unions may result in penalties and other enforcement actions.
Ultimately, regulators are asking banks to do more diligence on their payment processors.
AML expert Kevin Sullivan says it's often the extensive payments chain of entities between financial institutions and their customers that increases risk.
"The bank has to do due diligence on any third party that they hire, and the third party needs to do quality due diligence on anyone they are going to subcontract [or do business] with," Sullivan says. "It is tough to maintain command and control over your business if you contract outsiders who contract more outsiders who contract additional outsiders."
Posted by Britney Chan on Tue, Feb 07, 2012
Feb. 9, 2-3:00 pm ET
Additional penalties for unsuccessful e-prescribers in Medicare are coming for 2013 and 2014. This year, practices must submit 10 e-prescriptions by June 30 to avoid next year's payment reduction. Under the program, providers who do not meet certain criteria or are not granted an exemption will face a 1.5 percent payment decrease for all Medicare Part B-covered professional services starting Jan. 1, 2013. The criteria and exemption categories have changed.
Join us for the latest information as Government Affairs expert Robert Tennant explains how to avoid 2013 and 2014 e-prescribing penalties, and how to earn an incentive in 2012. This webinar will highlight key changes to the program, and what you should do now to avoid future penalties.
Following this 60-minute webinar, you will be able to:
- Understand the requirements for earning a 2012 e-prescribing incentive, and how to avoid 2013 and 2014 penalties.
- Recognize the critical components and changes to the Medicare 2013, and 2014 e-prescribing program exemptions
- Identify the process necessary to apply for an exemption to avoid payment adjustments
Register now
Can't attend the live webinar? Order it on
CD or
on-demand now.
Posted by Britney Chan on Mon, Feb 06, 2012
Source: PR Newswire
Visa Inc. today announced that U.S. financial institutions have reported issuing an estimated one million Visa-branded, EMV chip-enabled cards as of December 31, 2011, demonstrating the significant progress the industry is making toward implementing Visa's U.S. chip roadmap.(1),(2) In August 2011, Visa announced plans to accelerate mobile innovation and the adoption of EMV contact and contactless chip technology in the U.S.
"Migrating the U.S. market to chip will help build an infrastructure for accepting NFC mobile payments, enhance international acceptance and reduce fraud," said Stephanie Ericksen, head of authentication product integration, Visa Inc. "Since announcing our roadmap last year, we have seen strong interest among U.S. issuers large and small to invest in chip technology, as today's milestone shows. The progress is all the more significant considering that just 18 months ago, there were no Visa-branded EMV contact chip cards issued in the U.S."
EMV chip technology refers to the microchip that is embedded in a credit or debit card, or even a mobile device for mobile payments. Sometimes misleadingly referred to as "chip and PIN," EMV chip is commonly deployed with a variety of cardholder verification methods including signature as well as PIN. Under Visa's approach, both methods, as well as "no signature required," will continue to be available to issuers and merchants in the U.S. according to their preferences. The critical security advancement is the EMV chip, which protects the cardholder by generating a unique code every time it is used, effectively eliminating the problem of counterfeit cards. The same chip technology also enables mobile NFC payments.
Consumer EMV chip card programs are available from financial institutions such as Chase Card Services, State Employees' Credit Union, United Nations Federal Credit Union, U.S. Bank, and Wells Fargo. The growing adoption of chip technology in the U.S. has been facilitated by Visa's flexible approach to cardholder verification, which provides choices to issuers and merchants as they deploy chip cards and terminals that support signature or PIN or a combination of the two, based on the unique needs of their customers.
"In 2011, Wells Fargo led the way with an EMV smart card pilot to 15,000 customers who travel frequently to countries where chip-based payments is the standard," said Eric Schindewolf, vice president of product development for Wells Fargo Consumer Credit Card. "Based on the overwhelming success of the pilot, we are now considering making this program more widely available."
Posted by Britney Chan on Fri, Feb 03, 2012
Source: MSNBC
The recession served as a wake-up call for many of us to get a better handle on our finances, and for a lot of folks that meant replacing one piece of plastic, the credit card, with another, the debit card.
But now, regulatory changes have made those debit cards less of a cash cow for financial institutions. That’s left many banks scrambling to introduce new fees to make up for that lost money.
The problem: Consumers are dead set against the fees, and they
don’t necessarily want to start using their credit cards again, either.
A new report from Javelin Strategy & Research finds that few have sympathy for the banks. In fact, 70 percent of the people surveyed for the report said they think banks are the ones benefiting from the new regulations.
Many expect the financial institutions to lose billions of dollars in revenue because the new rules limit how much money they can make every time a retailer swipes a debit card.
“Banks are looking kind of like bad guys lately, and I think it has a lot to do with consumers not really understanding what was going on,” said Beth Robertson, director of payments research for Javelin Research, which does research on financial services for financial institutions and others.
The survey of 3,000 people, conducted by Javelin Research in October, also found that about seven in 10 respondents are satisfied with their debit cards, which allow you to pay with plastic but draw directly from your bank account.
They don’t want things to change.
If their bank started charging them a fee to use a debit card, 32 percent of consumers would switch to cash rather than pay the fee. Another 26 percent said they’d switch to another bank, while 25 percent would use a credit card instead.
Some would go for an even more arcane form of commerce: 13 percent said they’d use checks instead.
“Because of what’s been happening with the economy (people are) really wanting to control their use of credit,” Robertson said.
Some customers may not be able to use credit cards more because they have lower credit limits than before the recession and credit crunch. Others may have found it easier to keep their spending under control if they use a debit card rather than a credit card, even if they pay the credit card off each month.
And others may find that they just aren’t getting as good of a deal on their credit cards, said Bill Hardekopf, CEO of lowcards.com. His research shows that the average advertised annual percentage rate for a credit card is now 14.05 percent, compared with 11.64 percent when the an earlier set of credit card regulations, known as the CARD Act, was passed in 2009.
That legislation limited how much banks can charge credit card users for things like paying late or going over their limit.
Of course, many big banks already tried to institute a straight, monthly debit card fee, and soon rescinded those plans when faced with broad and fierce consumer outrage.
But experts say that while consumer may have won the monthly debit fee battle, they should be prepared for other, more subtle fees to start sneaking up on them.
Robertson said banks also will try to figure out ways to market the new fees as new customer perks. For example, some may try charging fees for mobile banking, or creating a fee service for expedited online bill payments.
Posted by Britney Chan on Thu, Feb 02, 2012
As of Jan. 1, 2011, developed in accordance with the Housing and Economic Recovery Act of 2008, a new federal regulation was enforced to help the Internal Revenue Service (IRS) identify merchant card transactions that went unreported.
Now, certain Independent Sales Organizations (ISOs), acquiring banks, processors and third-party payment providers will be required to track and report merchants' gross credit card, debit card and third-party payment (alternative payment companies like PayPal) receipts before the deduction of chargebacks, returns and refunds. Exemptions may apply in certain circumstances, such as if the total payments settled for the year are less than $20,000.
The purpose of the law is to improve voluntary tax compliance by business taxpayers and help the IRS determine whether their tax returns are correct and complete. Under the proposed requirements, merchant service providers must report these card transactions to the IRS yearly via a 1099-K form for each merchant. This reporting applies to transactions beginning on January 1, 2011—the first information returns will be filed in January 2012 with the gross amounts of transactions from 2011. Merchants must report this income on their business tax returns.
The law also requires ISOs, acquiring banks, processors and third-party payment providers to verify the tax identification number (TIN) and legal name associated with that number for each merchant customer. It is important to note if there is a discrepancy between the merchant’s TIN and associated legal name in the acquirer’s records and the IRS records, or if the merchant does not provide its TIN, the IRS will require the processing company to withhold 28 percent of the merchant’s future payment card transactions until the issue is resolved. The “backup withholding” provision of the law goes into effect for transactions on and after January 1, 2012.
NTC Texas is an ISO and Elavon is a merchant acquiring entity. As a result of this new law, we are implementing procedures and system enhancements to prepare merchants for the impact of these requirements. Validating merchants' tax information against the IRS' TIN is the first initiative taking place.
New Elavon IRS Reporting Requirements Summary
- NTC Texas and Elavon will collect and verify your TIN and the legal business name and address for your merchant accounts.
- Beginning this 2011 tax year, NTC Texas and Elavon are responsible for reporting your gross total annual dollar amount of payment card transactions to the IRS in 2012.
- In 2012, NTC Texas and Elavon must file a Form 1099-K, an information return with the IRS and provide a copy to you for the 2011 tax year.
Please click here and choose your country to locate the forms you will require.
Contact Us for any questions about the new IRS reporting requirements, or for questions about filling out your forms.
Posted by Britney Chan on Wed, Feb 01, 2012
Every year most of us make New Year’s resolutions. Let’s make a business resolution to boost your business, because it will do something we all love -- save us money! As the economy has shifted, what a business owner needs to do to be successful in 2012 has now changed. NTC Texas has provided a quick refresher on the do’s and don’ts for your business as we begin this New Year.
1. Become PCI Compliant
If you are a merchant of any size accepting credit cards, you must be in compliance with PCI Data Security Standard (PCI DSS). Compliance with PCI DSS is crucial for those who accept credit cards, online or offline. Protecting your customer’s payment card data is the most important thing to your business. Contact NTC Texas to make sure your business is PCI Compliant today.
2. Update and Clean Your Payment Card Terminals
Credit card processing terminals are a common sight in almost every business; they let businesses process credit cards efficiently and securely so be sure to keep your credit card machines clean of dust and crumb, which can can quickly clog printers and hinder stripe readers.
There is a wide variety of terminals offered to merchants, be sure yours is up-to-date. To determine which terminal will best fit your needs, whether it is a swipe terminal, terminal with a printer, terminal without, mobile/wireless terminal, or a terminal that connects to your PC, visit our website and review a variety of payment card terminals for your processing needs.
3. Make Sure Your W-9 Information Matches What You Report to the IRS
Businesses are now required to report all annual gross payments processed by credit or debit cards to the IRS. Credit card payments will be reported using Form 1099-K with copies sent to the business and to the IRS. MerchantConnect SRS will provide merchants with a timely, easy-to-understand breakdown of their credit and debit transaction activity that was settled by Elavon and reported to the IRS. NTC Texas will ensure the Tax ID Number (TIN) and Legal Business Name is on file to avoid IRS-mandated backup withholding.
4. Don’t Email Secure Information
Why is Email Security important? The reason is very simple; we live in a world that makes us very vulnerable online to predators, who seek to steal our identities, account numbers, social security numbers and many other sensitive personal identifying information. It is the responsibility of every business to protect themselves, their clients, and their employees’ sensitive personal identifying information.
5. Don’t Miss an Opportunity to Expand Your Business with Online Processing
Open your online store with a secure e-commerce payment solution. NTC Texas offers a variety of proprietary PC Credit Card Processing Software and Internet products that can turn your desktop PC into a POS (Point of Sale) credit card processing solution. From the single location merchant to a large multi-location chain, we have a PC product to help you take charge and link your business to success.
6. Don’t Neglect Your Monthly Merchant Account Statements
Reading and understanding your monthly merchant processing statements can be difficult, but being able to read and understand your merchant account processing statements is crucial to maintaining the best merchant account for your business. Additionally, important notices and/or messages are provided and can be found at the top of the first page of your statement. If you're having trouble deciphering your statements, contact NTC Texas for assistance.
7. Don’t Ignore Automated Chargeback Letters
In the chargeback process, the burden of proof lies with the merchant. The merchant will be given an automated letter with the opportunity to provide supporting documentation to prove the legitimacy of the transaction. If the merchant is successful, the transaction is credited back to his account. If the merchant is unsuccessful, or does not respond in a timely fashion, they will be financial responsible for returning funds to the consumer who filed the dispute.
Posted by Britney Chan on Fri, Jan 13, 2012
Source: http://equinoxpayments.com/news/payment-industry-leader-hypercom-usa-changes-name-to-equinox-payments-llc
Hypercom USA, a leading payment terminal manufacturer and secure software developer, today announced it has formally changed its corporate name to Equinox Payments, LLC. In addition to selling new Equinox terminals, software and services, the company will continue to support Hypercom-branded products in the U.S.
“Equinox payment terminals sit at the intersection between the physical store and the virtual world of payment processing where our products achieve a balance between robust devices and secure applications,” said Equinox President Clint Jones. “The name Equinox embodies our strategic vision for the company: industryleading hardware complemented with industry-leading software.”
Equinox manufactures, sells and supports all payment terminals and peripherals previously offered in the United States by Hypercom, including the T4200 countertop, M4200 mobile and L5000 customer-activated product families, as well as all software, terminal management systems and other services related to these products. Equinox also offers the L4150 and L5000 payment terminal series to U.S.-based large retail customers for certain international applications.
“With the recent proliferation of alternative payments, we are experiencing increased demand to load, host and manage third-party applications on our devices,” said Will Rossiter, SVP Sales and Marketing. “Our EMV and contactless products, such as the L5300 and L5200 customer-activated devices, act as a platform to support merchant and customer-facing applications, such as digital wallets and other near-field communication offerings—all with an emphasis on security.”
Former Hypercom USA product names will remain unchanged, but will be branded Equinox or co-branded Equinox and Hypercom. Equinox will maintain the Hypercom USA brand for an extended period of time to reinforce Equinox’s continued support of Hypercom-branded products and services in the U.S.
Posted by Britney Chan on Fri, Dec 30, 2011
How mobile payments, NFC and person-to-person apps will change the way that people pay each other in the coming year.
Okay, so cash isn’t going to disappear anytime soon, but 2012 looks to be a pivotal year in the transition towards a world where we have options besides just cash and credit.
What’s wrong with the way things are? Let’s start with cash. It’s dirty, it costs a lot to withdraw from the ATM, nobody will reimburse you if it’s stolen, not to mention that walking around with a bulging wallet seems strangely anachronistic in a world where super-slim smartphones do everything from recording video to telling you where your friends are eating dinner.
So, what’s going to happen in 2012?
If anything, it’s companies’ eagerness for a piece of of the mobile payments pie that’s keeping NFC (near field communication) technology from really taking off, as evidenced by Google and Verizon’s spat over putting Google Wallet on the new Galaxy Nexus. Yes, it’s a painful delay, but it also legitimizes the entire market — giant corporations don’t fight tooth and nail over something that they don’t think is going to be profitable.
Even more encouraging is the rise of mobile products, which lets merchants run credit cards through their smartphones. The old 9-to-5 employment model where you get a gold watch after 40 years is dead. More people than ever are working as independent contractors, which means more people need easy ways to get paid.
Another area where we can expect to see big changes? Person-to-person payments. This year saw a huge jump in products that let you transfer money from one bank account to another.
After using Chase’s QuickPay to pay rent, the idea of writing and ripping out a check seems woefully outdated. Other banks are also jumping on the person-to-person payment trend, meaning by the end of 2012 you may never have to write a check again.
In 2011, PayPal broke out several intriguing new products, including a Facebook payment app and NFC Android-to-Android payments, all of which don’t bode well for the future of cash and checks. In certain tech-savvy social circles, I’m sure there are people who barely even touch a credit card, let alone cash.
Don’t get me wrong — I’ve read the reports about the slow adoption of mobile payments in 2012. But we have to remember what we’re comparing the current progress to.
Five years ago, you needed cash to pay a New York City cab driver, lest you get an earful of angry epithets. Today, you can simply pass your iPhone near the MasterCard PayPass terminal installed in every cab and your fare is paid. No, it’s not the universal standard, but it’s still pretty impressive.
ChargeAnywhere smartphones and person-to-person payment apps aren’t as ubiquitous as analysts would like, but that doesn’t mean we aren’t on our way to a future where all of our transactions are done through computers and smartphones. The more accessible these technologies become to smaller banks and merchants, the closer we’ll be to a more convenient, cash-free world.
Source: Techland
Posted by Britney Chan on Fri, Dec 30, 2011
What is version 5010 of the X12 HIPAA Transaction and Code Set Standards?
HIPAA 5010 are new standards that regulate the electronic transmission of specific healthcare transactions, including eligibility, claim status, referrals, claims, and remittances. Covered entities, such as health plans, healthcare clearinghouses, and healthcare providers, are required to conform to the new transaction set standards.
What are the major differences between HIPAA 4010A1 and HIPAA 5010?
As of January 2012 there are changes across all of the healthcare payment transactions, some of which include:
• The ability to support new-use cases brought forward by the industry;
• Clarification of usage to remove ambiguity;
• Consistency across transactions;
• Support of the NPI regulation; and
• Removal of data content that is no longer used.
Why was it necessary to upgrade to HIPAA 5010?
The upgrade to HIPAA 5010 was important for several reasons:
• Industry experience with the 4010A1 implementation uncovered some unanticipated issues and requirements; and
• HIPAA 5010 will be able to accommodate the forthcoming and mandatory ICD-10-CM and ICD-10-PCS code sets, which are scheduled to be implemented on Oct. 1, 2013.