The Fair Credit Billing Act is a US federal act that protects many important credit rights including your rights to dispute billing errors, unauthorized use of your account, and charges for unsatisfactory goods and services.
Summary
[Dave Birch] I had a few e-mails from people about the story in Engadget that was titled “RFID cards hacked easily with $8 reader”…
the crew at BoingBoing TV has posted up a little demo of how easy cracking the RFID encryption on an American Express card can be. All it takes is an $8 dollar reader easily available on eBay
[From RFID credit cards easily hacked with $8 reader - Engadget]
The actual title should have been “Well-designed American Express contactless cards work exactly according to specification and non-hacking non-exploit does not actually result in losses to either cardholder, retailers or American Express themselves”. Anyway, the reason I got a few e-mails was because people wanted to know where to get these $8 readers. I just checked on eBay (US) and the cheapest pre-owned contactless terminal I could find was over $60. The video actually shows him using a Vivotech Vivopay 5000 (which is a couple of hundred quid in the UK), so if this guy really can get them for $8 he’ll make far more money from reselling the terminals than he will from “hacking” ExpressPay cards.
Here we go once again. This is not a hack. This is not an exploit. This is not even remotely interesting on any level. It DOES NOT enable a perp to create a bogus American Express magnetic stripe card by reading an American Express contactless card…
You cannot use the alias PAN (ie, the PAN given up via the contactless interface, not the one printed on the card) in anything except a contactless transaction and you cannot use it to make a bent contactless card because you need the Amex security keys in order to generate the right digital signature. If you attempt to use the alias PAN in an online transaction, the Amex host will decline it.
I wouldn’t want to stop you from checking out the Engadget post though: some of the comments are fascinating because of what they reveal about what a random cross-section of geek opinion thinks about the payment card system. Do they honestly think that American Express and their consultants are so dumb that they never considered the possibility that someone with a reader might read the card?
These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]
Denver-based PaySimple has announced a new blog where it says “small business owners looking for ways to streamline their billings and collections process, find news about electronic payment industry trends, get insights on marketing and teambuilding in a small company, or simply looking for a place to connect with other small business owners.”
Denver-based PaySimple has announced a new blog where it says “small business owners looking for ways to streamline their billings and collections process, find news about electronic payment industry trends, get insights on marketing and teambuilding in a small company, or simply looking for a place to connect with other small business owners.”
Payments News from Glenbrook Partners - www.paymentsnews.com
As expected, the Fed cut interest rates again on Tuesday, this time by a staggering 75 basis points, lowering the prime rate to 5.25%. One would think that such a massive move would result in a lot more dollars in the pockets of consumers. After all, over half of credit cards surveyed by […]
As expected, the Fed cut interest rates again on Tuesday, this time by a staggering 75 basis points, lowering the prime rate to 5.25%. One would think that such a massive move would result in a lot more dollars in the pockets of consumers. After all, over half of credit cards surveyed by the Fed are tied to the prime rate. (The real number of cards tied to the prime rate is probably even higher since the Fed’s survey underrepresents the number of cards issued by the larger banks.)
Unfortunately, when you do the math, the actual savings in credit card interest will not amount to much for most consumers. According to the latest Fed figures, total revolving consumer debt, which is basically credit card debt, was about $947.4 billion in January 2008. The latest census figures that I could find estimate the number of U.S. households in 2005 as 113.1 million. That puts the average credit card debt per household at roughly $8400. This number is inflated since the Fed numbers include credit card debt of households who pay off their balances in full every month. For the sake of argument, however, let’s use the $8400 number. Over the course of the year, the 0.75% cut will save that family roughly $60, or $5 a month. It’s something, but not exactly an earth-shattering number.
The bigger problem is that some issuers are choosing not to pass their savings along to the consumer, in light of the uncertainty in the credit market. For instance, CapOne recently elected to decouple interest rates on its cards for customers with good credit from the prime rate. Other issuers are making heavier use of tiered interest rates, where the margin you pay above prime can vary depending upon your application and credit history. In this way, they can better manage their interest rates, without outwardly revealing any changes.
Of course, the best way to insulate yourself from all of these changes is to pay your balance in full every month, which is what I hope that all regular readers would do anyway.
This post is from Credit Card Watcher’s Credit Card Deals Blog.
The Fed Cuts Rates Again–But How Much Savings Will This Mean For You?
Summary
[Dave Birch] At the New Payment Channels conference in London, Julian Niblett gave a presentation about contactless from the major retailer perspective. He is head of cash for Boots, one of the U.K.’s largest retailers. They are a good case study, I think, because there are parts of their operation where contactless would work, but other parts where it would not. Therefore, they have to develop a sophisticated strategy and understand carefully where to make investment.
Their average transaction size is under £10, but that disguises a wide range range (from, say, cosmetics to snacks). So it’s not a simple case of converting big stores or small stores, high street or out of town. Within a store, some departments might benefit but in other departments it would be a waste of money. But how confusing would it be for customers to try and figure out where they could use contactless or not? And how much would it cost to train staff to handle customers properly in these circumstances.
The key figure that Julian gave that will be of interest to people here was that Boots banks £2.5 billion in cash every year and it costs them £1.5 million whereas they bank £2 billion in card transactions and it costs them £14 million. Hence he asks, quite reasonably from his point of view, why cards (that should be electronic and efficient) cost ten times as much as cash. He also gave an excellent insight into the way that retailers think when he said, and I quote, “we’ve had our fingers burned with chip and PIN”. I’m going to do what I can to persuade Julian to make a Digital Money podcast to explore his perspective further.
I would ask Julian’s question the other way round though: since cash clearly costs banks more to handle, how come they charge only £1.5 million? Something is wrong here. Boots are happy that cash is cheap because someone (ie, banks, or more properly, bank customers) are losing money. So where is the right balance here for society as a whole? Should Boots get a 1p MSC and the banks eat the cost? Should Boots get a 2p MSC and the banks get a subsidy from somewhere? How are we to go about deciding what’s right?
Why not let the market decide? Price has to play a role and by making it transparent we can let consumers choose. I’ve just been reading a comparative study of the Dutch and Norwegian markets that concluded that transparent pricing speeds the transition to non-cash by about 20%: in other words, if customers have to pay the real costs of using cash then they will use the alternatives. I’m pretty sure that this means that the use of cash will fall significantly: the attributes that people say they value (eg, anonymity) just aren’t worth that much to them.
It isn’t just techno-determinist e-money monomaniacs like me that spend their time wondering what will happen as cash dies out. Business people, too, are starting to think about it too. Here’s Andrew Mullins, MD of the Evening Standard, talking about their decision to introduce the contactless Eros card to pay for the newspaper:
But cash, at least, may soon be on the wane in affluent, early adopting places like London, Mullins at The Standard said. “The motivation for the introduction of the card was that we believed that central London was going to become a tap-and-go society,” he said.
[From Cashless purchases at the newsstand - International Herald Tribune]
If you potter around London for more than five minutes you’ll notice it isn’t yet a tap-and-go society, but I’m sure we’re heading in the right direction.
These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]
UK consumers rely heavily on credit card debt for a variety purchasing activities.
What about UK businesses?
A recent report suggests business can find flexibility, ease and convenience by using credit cards instead of petty cash.
The report says:
“Through the use of a credit card for day to day expenditure businesses can benefit from streamlining their cash management processes, and will not have to worry about finicky paperwork and receipts, as well as not having to worry about keeping cash on the premises. With credit cards management of …
Discover Financial Services is holding a financial community briefing in New York City this morning. A webcast is underway and the presentation slides are available online in an 8-K filing with the SEC.
Discover Financial Services is holding a financial community briefing in New York City this morning. A webcast is underway and the presentation slides are available online in an 8-K filing with the SEC.
Payments News from Glenbrook Partners - www.paymentsnews.com
If Congress has its way, credit card companies might be changing the way they do business. There has been a recent move to force credit card companies to review and rewrite some of their more controversial practices. Right now, consumers are complaining that they are at the mercy of the industry’s whims. Interest rates change frequently and, sometimes, without any good reason. The companies argue that their own circumstances – with rates of default and delinquency the highest they’ve been in years – make such practices necessary. But customers and their advocates aren’t buying it. The credit card industry takes in billions of dollars each year, critics say, and can afford to treat their customers better.
Some of the practices under review include: universal default, too-short customer notice of changes to terms and conditions, and the retroactive application of new interest rates to a customer’s entire existing balance.
Universal default occurs when a customer’s credit score is lowered and their credit card company raises their interest rate as a result. There are many problems with this practice. For one, it’s too easy to implement. If a customer makes a late car payment, their credit card interest rate could suffer as a result. And higher interest rates make credit card payments higher, increasing the likelihood that the customer will default with many lenders instead of just the original one.
Credit card companies are also being asked to give more notice to customers when their rates are about to change. Right now, companies are only required to give a fourteen day notice by mail. Customers argue that, by the time they receive the mailed notices – if they receive them at all – they only have a few days to decide how to deal with the changes. If the new bill is passed, that notice period will be increased to nearly a month. Companies will also be required to send out bills 25 days in advance of their due dates, compared to the two-week cycle now in place.
The new bill could also change the way card companies handle punitive interest rates. Some companies will take the higher rate and retroactively apply it to the full amount of the customer’s balance. Customers feel that this is unfair; if they have been paying in a timely manner for years, why should they have high interest applied even to the debt that has been meticulously paid month after month? Companies are being asked to apply such rates only to the portion of the balance that caused the increase.
Credit card companies aren’t happy with the proposed changes. They are facing difficult times, they say, and rules and regulations forcing them to change their practices will only hurt their ability to offer credit to a large number of customers. They maintain that the credit card industry is competitive already, and that customers have no need of legislation to protect them from creditors.
Whichever stance you take, it’s possible that the credit card industry will be making a major overhaul in their business practices. In addition to the bill proposed last month by the House Financial Services Committee, the House Judiciary Committee wants merchants to be able to negotiate the amount they have to pay for credit card transaction fees. Despite card companies’ protests, change is on the horizon.
This article has been provided by Creditor Web. At CreditorWeb.com you can compare over 100 credit cards from multiple banks and apply for credit cards online. Read more…
Credit Card Articles from CreditorWeb.com - www.creditorweb.com
Citi has just sweetened the signup offers for a number of its mileage/point-earning cards. The tradeoff is that you will need to reach a minimum spending limit in order to earn them. Here’s a summary of changes: Citi PremierPass Card Before: 5,000 bonus points after your first purchase is made within 2 months Now: 10,000 bonus […]
Citi has just sweetened the signup offers for a number of its mileage/point-earning cards. The tradeoff is that you will need to reach a minimum spending limit in order to earn them. Here’s a summary of changes:
This post is from Credit Card Watcher’s Credit Card Deals Blog.
Citi Increases PremierPass and AA Card Signup Bonuses
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