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Entries in MasterCard (10)

Monday
Feb252013

MasterCard Rolls Out MasterPass Digital Wallet

Zoonar/Thinkstock(NEW YORK) -- MasterCard is introducing MasterPass, a new service that will make it even easier to shop and make purchases from virtually any mobile device, whether it’s a smartphone in the dressing room or a tablet at the coffee shop.

The service builds on MasterCard’s current PayPass Wallet services, which allow consumers to do things like make purchases by tapping their credit cards at NFC terminals, or use a dedicated checkout button for online purchases.  

With MasterPass, there’s new functionality like the ability to scan a product barcode while in the store aisle and make the purchase right then and there, within the store’s app.

“We think merchants want to create their own unique shopping experiences, their own apps...and the idea here is, we want to offer services that make it easy for those merchants to plug in payments into those apps they create,” said Ed Olebe, SVP and Group Head at MasterCard Worldwide.

An example of MasterPass’ technology would work similar to Amazon.com’s 1-Click ordering button, which lets customers make purchases almost instantaneously on the retail website, since their credit card information is already stored and charged automatically, and purchases are shipped to a default address.  With MasterPass, participating merchants can now embed the same functionality into their customized store apps, enabling customers to check out even quicker, via their smartphones and tablets.

“From whatever device, whether it’s your phone, your tablet, whatever -- why can’t you buy ... in a location that makes the most sense to you?  MasterPass really is this technology ... that enables these different types of shopping experiences,” said Olebe.

In addition to barcode scans, MasterPass will support the use of QR codes, tags and mobile devices used at checkout.  Merchants can take their digital offerings even further by offering MasterPass-enabled digital wallets.  The wallet will be open, and allow consumers to use other branded credit, debit and prepaid cards in addition to their MasterCards.

“We want to let consumers choose their own device and we’ve built the platform to enable that,” said Olebe.  

MasterPass will launch in the U.S. this summer.

Copyright 2013 ABC News Radio

Friday
Jul132012

Settlement May Lead Some Consumers to Pay 'Swipe' Fees

iStockphoto/Thinkstock(NEW YORK) -- Payment networks Visa and MasterCard, as well as a number of large retailers, have agreed to a $7.25 billion settlement that may allow merchants to impose a surcharge on consumers for credit card transactions and end a seven-year battle over credit card swipe fees.

Under the current system, merchants pay interchange, or swipe, fees to Visa or MasterCard that go to banks. The settlement may give merchants the right to recover the cost of the swipe fees from consumers.

Kroger, Safeway and Payless Shoe Source settled with Visa, MasterCard and more than a dozen large banks after U.S. retailers filed a class-action lawsuit in 2005. The settlement must be approved by the Eastern District Court of New York.

The settlement will allow greater transparency to consumers, attorneys for the merchants said, because merchants are now permitted to tell them that there are fees associated with credit card use and they are recouping a portion of it. Or, they could tell the customers that it is cheaper to pay cash.

"Although we have strong defenses to all claims, a settlement avoids years of litigation and uncertainties that are inherent in such cases," said Noah Hanft, MasterCard's general counsel and chief franchise integrity officer. "We believe that today's settlements should resolve all issues with the merchant community."

Joseph W. Saunders, Visa Inc. chairman and CEO, said the company believes "settling this case is in the best interests of all parties."

Patrick J. Coughlin, senior trial counsel at Robbins Geller and one of the lawyers for the plaintiffs, said the new rules will allow merchants to "put pressure on the credit card networks to lower interchange or 'swipe' fees, which are the second- or third-highest cost of doing business for many retailers."

Bonny E. Sweeney, the firm's senior antitrust partner and its principal litigator in the case, said the settlement refunds billions of dollars to retailers that paid "artificially inflated interchange fees."

Frank Keating, president and CEO of the American Banking Association, said retailers were showing "little regard for consumers."

"Let's be clear: Retailers, not consumers, benefit from today's resolution," he said in a statement. "This settlement even provides merchants with the ability to impose 'checkout fees' on customers just for using credit cards. This type of behavior is nothing new for retailers."

Michael Kon, Morningstar senior analyst, said the settlement wasn't a surprise.

He said the right to allow a consumer surcharge for credit card transactions, the core of the legal battle, will affect smaller merchants or "mom-and-pop shops" mostly.

"Businesses like small grocery stores might be more flexible in surcharging for credit card transactions, though they risk losing clients," Kon said.

Kon doesn't expect the settlement to make a significant difference to consumers because large merchants, like Target and Walmart, may be hesitant to impose a surcharge on consumer transactions.

"Paying with credit cards is much more convenient for merchants and shoppers," Kon said. "It might be a bad strategy to penalize someone using the most convenient way to pay."

Many analysts note that merchants already take into account credit card swipe fees when they set their prices, whether you pay by credit card, cash or check.

"I don't see them rushing to give this surcharge to a group of shoppers who choose to pay with credit cards," Kon said.

Sweeney agreed that the settlement doesn't directly affect consumers because not all merchants will impose a surcharge on consumers.

"The helpful aspect of the settlement is [that], whether merchants charge customers or not to recover acceptance, having this tool will increase competition in the payment card market and eventually lower merchants' costs, which will eventually bring down prices for consumers," she said.

When asked the likelihood that merchants will pass on the possible lower costs to consumers, Sweeney said, "The U.S. retail market is very competitive, so it seems likely that merchants will pass the savings to customers."

Copyright 2012 ABC News Radio

Monday
Apr022012

1.5 Million Credit Card Numbers May Have Been Compromised

iStockphoto/Thinkstock(ATLANTA) -- You probably had a bigger chance of facing credit card security headaches than winning the Mega Millions lottery.

While there were just three jackpot winners, as many as 1.5 million credit card numbers may have been compromised by hackers. The latest breach came from Atlanta processing firm Global Payments, which announced on Friday unauthorized access into its processing system.

“We are making rapid progress toward bringing this issue to a close. Our nearly 4,000 employees around the world are focused on providing exceptional service. We are open for business and continue to process transactions for all of the card brands,” said Global Payments CEO Paul R. Garcia.

Visa has pulled Global Payments from a list of hundreds of firms considered to be “compliant service providers,” according to the Wall Street Journal. If you tried to pay with Visa on Sunday you may have been shut out for a while. Visa says a 45-minute outage was caused by a technical problem that’s apparently unrelated to the Global Payments breach.

Copyright 2012 ABC News Radio

Sunday
Apr012012

Credit Card Processor Hit by Hackers

Comstock/Thinkstock(NEW YORK) -- Merchants and consumers could be the big losers in the latest case of hackers cracking the complex systems used to process credit and debit card transactions.

Visa and MasterCard acknowledged Friday that they've been alerting banks about a major breach at Global Payments, an Atlanta-based payment card processing firm.

Global Payments issued a statement late Friday saying it discovered the breach in March and reported it to industry officials and the FBI. The company scheduled a press conference for Monday morning.

Gartner banking security analyst Avivah Litan says unverified reports point to a New York City street gang with Central American ties taking control of "an administrative account that was not protected sufficiently."

"I've spoken with folks in the card business who are seeing signs of this breach mushroom," says Litan.

Security blogger Brian Krebs, who broke the story, says thieves cracked into the Global Payments network between Jan. 21 and Feb. 25. He says they may have swiped more than 10 million credit and debit card transactions records. .

MasterCard issued a statement advising cardholders to contact the financial institution that issued their cards with any concerns. Visa emphasized that no Visa systems were breached.

But criminals generally don't bother highly defended systems, and look for security flaws elsewhere. "Sooner or later they find some weakness in the highly complex chain of systems that they can exploit," says Geoff Webb, of data security firm Credant Technologies.

Credit card processors have been breached before. Heartland Payment Systems lost 130 million payment card records generated by 250,000 merchants and restaurants between 2008 and 2009.

And it's not just card processors that are being targeted. Last year hackers stole payment card information for more than 100 million customers of Sony's PlayStation Network.

And earlier this year, online shoe retailer Zappos disclosed hackers took e-mail and shipping addresses, phone numbers and account passwords for some 24 million customers, data useful for identity theft.

"Any business that's capturing payment data is a target," says Mark Bower, analyst at Voltage Security.

Gangs are adept at quickly manufacturing faked debit cards to make large cash withdrawals from ATMs. In such cases the individual's cash goes missing until a theft is reported and reimbursement carried out, which can take several days.

"You should always be watching your statements for unauthorized transactions; but right now people should be extra vigilant," says Steve Coggeshall chief technology officer at ID Analytics.

Retailers are also acutely exposed. Some 46 states have now enacted data breach disclosure laws that require merchants to notify customers whose card numbers are stolen.

Many of these data loss disclosure laws impose stiff fines if notifications are not done in a timely manner, says Ted Julian, of Co3, a Cambridge, Mass.-based start-up that helps retailers manage the repercussions of credit card theft.

Massachusetts has begun levying such fines. Other states could see a windfall in fines levied against merchants who are slow to notify consumers that their payment card data, credit or debit card number is in criminals' hands. "Merchants are definitely on the hook for these state disclosures, because they are the ones who have the consumer relationship," Julian says.

Copyright 2012 ABC News Radio

Thursday
Oct272011

Neiman Marcus Will Accept Visa and Mastercard 

Justin Sullivan/Getty Images(NEW YORK) -- Luxury department store Neiman Marcus, land of the $525 Gucci GG Jacquard Dress Shirt, has cultivated a ritzy exclusivity has long extended all the way to the cash register.  Customers are welcome to pay with a branded-Neiman Marcus credit card, American Express or cash.

Visa or MasterCard holders needed not apply.

But now, the Wall Street Journal reports, Neiman Marcus will begin accepting Visa and MasterCard at its 41 luxury outposts Nov. 1. The move is intended to sell more goods to younger, less wealthy customers.

Neiman Marcus may well need those new customers after a year of a weak profits driven by the chain’s reliance on charging ever-higher prices to its wealthy clientele in an awful economy. In the quarter ended July 30, the chain posted profits of $31.6 million on sales of $4 billion. Compare that to the $241 million in profit Macy’s Inc. posted for the same period on sales of $5.9 billion, and it's easy to see why Neiman is seeking to expand its clientele.

Still, some of Neiman’s wealthy consumers will no doubt be sad to see their prized, brown and beige-strapped Neiman cards lose some of their cachet.

Copyright 2011 ABC News Radio

Monday
Oct242011

Consumers, Small ATM Networks Fight Against ATM Fees

Goodshoot/Thinkstock(WASHINGTON) -- Consumers are fed-up with not just Bank of America's debit card fees but other banks' ATM fees as well: three anti-trust lawsuits are alleging Visa and MasterCard, the largest card networks, are unfairly "fixing" prices against both consumers and independent ATM providers.

In the most recent suit filed on Oct. 18, one man from New Jersey, Justin Genese, is proposing a class action against the top providers of automated teller machine (ATM) services for "orchestrating, implementing, and facilitating a conspiracy to fix the prices for ATM access fees."

An ATM user who obtains money from a machine not belonging to their bank is notified on the ATM's screen about a $2.50 fee or more surcharge.

Genese's suit is against Visa, MasterCard, Bank of America, J.P. Morgan Chase, Wells Fargo and two other financial companies, alleging that customers have "been forced to pay artificially inflated, supra-competitive ATM Access Fees" to the bank defendants and "bank co-conspirators."

All three suits, filed in the District of Columbia, say the largest ATM providers and other financial institutions are unfairly restricting market movement by preventing ATMs from charging different fees to consumers based on their type of debit card.

A similar suit filed by 14 independent ATM providers on Oct. 12 alleges that Visa and Mastercard are restricting competition by forcing them to charge all their users the same fee, regardless of their type of debit card.  The plaintiffs include ATM operators not affiliated with banks, including the National ATM Council, a trade association, and ATMs of the South.

The suit alleges that Visa, MasterCard and their member banks "have misused this power to fix the access fee for any transaction at a given ATM or terminal to be no less than the amount charged at that ATM or terminal for a Visa or MasterCard transaction...without regard to any cost saving to the ATM operator of obtaining service from one of the alternative PIN-based networks."

"The ATM restraints, therefore, effectuate horizontal price fixing that is unlawful per se," the suit alleges.

"If there was a truly competitive market, the levels of the fees would be lower," Jonathan Rubin, attorney for the ATM providers said. "They're in the business of selling convenience."

About half of the 400,000 ATMs in the country are operated by providers not affiliated with banks, according to Rubin.  He said his clients earn revenue by charging a surcharge to customers and a back-end switch fee.

Jim Issokson, MasterCard spokesman, said "the claims challenging certain MasterCard ATM rules are without merit."

"These rules were put in place to protect consumers from ATM operators seeking to impose discriminatory surcharges on our cardholders," he said.  "We believe these important consumer protections must be preserved and we will vigorously defend against the claims brought against us."

Lisa Westermann, a Wells Fargo spokeswoman, said, "We believe the allegations of the complaint are without merit and plan to vigorously defend the case."

Spokesmen for Visa and Bank of America declined to comment.  JP Morgan Chase did not respond to a request for comment.

Copyright 2011 ABC News Radio

Friday
Jul012011

WikiLeaks Spoofs Mastercard Commercials

LEON NEAL/AFP/Getty Images(WASHINGTON) -- WikiLeaks’ latest fundraising video takes a jab at Mastercard, one of the major credit card companies that is blocking over $15 million in donations to the anti-secrecy group. It also suggests the group’s work in exposing thousands of secret American diplomatic cables and military documents was the catalyst for the Arab Spring uprisings throughout the Middle East and North Africa.

Spoofing Mastercard’s signature “Priceless” ads, WikiLeaks founder Julian Assange makes an appearance in the minute-long video which tallies the group’s various expenses associated with running the website and defending it from attack and legal challenges.

Among the costs, according to the video: 20 secure phones priced at $5,000, legal bills in five countries valued at $1 million, upkeep of servers in over 40 countries costing $200,000, the loss donations lost due to banking blockade worth $15 million, and an extra $500,000 to cover costs associated with Assange’s court-ordered house arrest in Great Britain.

The clip delivers the kicker as the camera tilts up to a slightly smiling, slightly smirking Assange watching crowds protest during an Arab Spring uprising: “Watching the world change as a result of your work: priceless,” the narrator says. “There are some people who don’t like change. For everyone else there’s WikiLeaks.”

Last fall WikiLeaks released the first batch of State Department cables which exposed unfiltered American diplomatic correspondence between its embassies abroad and the headquarters in Washington, D.C. As the Arab Spring took hold in early 2011 WikiLeaks suggested the uprisings were inspired by evidence of corruption in those countries that was exposed in the leaked cables.

The State Department, meanwhile, has argued the uprisings had little to do with the leaked cables and more to do with homegrown movements building on longstanding frustrations with governments in the region.

So far there’s been no response from Mastercard, which has taken legal action against parodies of its ads in the past. In 2000 the company sued presidential candidate Ralph Nader who released a political ad that mimicked the Mastercard commercials. In 2004, however, a court ruled in favor of Nader.

Copyright 2011 ABC News Radio

Thursday
Feb172011

Lower Interchange Fees Could Mean Higher Checking Fees

Photo Courtesy - Getty Images(WASHINGTON) - A top Federal Reserve official Thursday acknowledged that banks may turn to higher checking and other fees to make up for a proposed cut to debit interchange fees for retailers that resulted in huge stock cuts for Visa and Mastercard.

Representation for retailers testified Thursday before the U.S. House of Representatives Financial Services Subcommittee on Financial Institutions and Consumer Credit to rally for the proposed cuts, which could cut interchange fees by an average of 73 percent. They called the fees, which are the charge retailers pay for accepting debit and credit cards, a huge cost with no price competition.

“The inability of merchants to go to a competitor bank to get a better deal on swipe fees is simply devastating,” said Doug Kantor, an attorney representing the Merchants Payments Coalition.

Federal Reserve Governor Sarah Bloom Raskin said banks may make up for the higher-than-expected fee decrease by increasing fees in other areas.

“Card issuers may choose to make up their lost interchange fee revenue by imposing higher fees, or reducing rewards programs, for debit card use or for deposit accounts in general. On the other hand, consumers will benefit to the extent merchants pass on their interchange fee savings in the form of lower prices,” Raskin said.

Copyright 2011 ABC News Radio

Wednesday
Dec082010

MasterCard's Website Hacked by WikiLeaks Supporters

Photo Courtesy - MasterCard(PURCHASE, N.Y.) -- Hackers launched a coordinated attack on MasterCard's website Wednesday in response to the company's decision to cut off money transfers to WikiLeaks.

The credit card company issued a statement saying its corporate website, MasterCard.com, was "experiencing heavy traffic" and that its "working to restore normal speed of service."

An activist group known as 4chan and an online hacking group called Anonymous are reportedly behind the attack that's being called "Operation: Payback.  They are believed to be targeting companies that have severed ties with WikiLeaks and its founder, Julian Assange.

Following the attack, Anonymous posted on their twitter account Wednesday: "http://www.mastercard.com/ is DOWN! #ddos #wikileaks Operation:Payback (is a [expletive]!) #PAYBACK."

Copyright 2010 ABC News Radio

Monday
Oct042010

Justice Department Sues American Express, MasterCard and Visa

Photo Courtesy -- PRNewsFoto | American Express(WASHINGTON) -- The U.S. Department of Justice announced Monday that it filed a civil antitrust lawsuit challenging rules that American Express, MasterCard and Visa currently have in place that prevent merchants from offering rewards, discounts and information about card costs.  As a result, consumers ultimately end up paying more for purchases. 

 “With today’s lawsuit we are sending a clear message: We will not tolerate anticompetitive practices,” said Attorney General Eric Holder.  “We want to put more money in consumers’ pockets, and by eliminating credit card companies’ anticompetitive rules, we will accomplish that.”

According to the statement from the Justice Department, a proposed settlement with Visa and MasterCard has also been filed, that, if approved by the court, would require for the two companies to allow merchants to offer consumer discounts, incentives and encourage the use of less costly methods of payment.

The proposed settlement states that merchants that only accept Visa and MasterCard will be allowed to take advantage of the relief immediately.  However, ongoing litigation against American Express will seek to allow merchants that accept its credit card to engage in the same kind of relief named in the proposed settlement with MasterCard and Visa.

Once American Express files its response to the government's lawsuit, the court will determine a pretrial schedule for the case against the company.        







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