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Congress, Fed Pressured to Reconsider Interchange Caps News March 14, 2011 • Issue 11:03:01 Industry Update ............................................. 14 Trade Association News: ETA to launch certifi cation program .............. 42 Dodd to address the ETA ........................... 42 Congress, Fed London steers toward open payments by 2012 Olympics ...................... 44 pressured to Merchant coalition backs interchange overhaul .................................. 46 Girl Scout cookie sales go mobile .................... 47 reconsider Features interchange caps SellingPrepaid: Prepaid in brief ......................................... 32 By Patti Murphy Has the prepaid tax refund moment arrived? ........................................ 33 The Takoma Group Compliance partnership made for two .......... 36 s the clock ticks down to the start of interchange regulation, pressure ISOMetrics: is mounting on Congress and the Federal Reserve Board staff to put The rise of the debit card ............................ 38 the brakes on a plan to cap debit card interchange. It's not just bank- Research Rundown ........................................ 74 A ers who are squawking, either. Book Review: SOUP: A Recipe to Nourish Fed Chairman Ben Bernanke and Federal Deposit Insurance Corp. Chairman Your Team and Culture Sheila Bair both expressed concerns about the proposed regulations during a Feb. 17, 2011, hearing before the Senate Banking Committee. "The full policy Ingredients essential to thriving enterprises .... 76 ramifications – who's paying for what, who's going to pay more and who's Boost Your Biz ...............................................78 going to pay less under this – is something that maybe wasn't dealt with as Views thoroughly as it might have been," Bair said. Thoughts on the economy (in hindsight) The Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer By Brandes Elitch, CrossCheck Inc. .............. 24 Protection Act of 2010 is named for the senator who proposed the interchange Cell phones as marketing tools provisions, Richard Durbin, D-Ill. Included during last minute negotiations over By Steve Schwimmer House and Senate versions of the reform bill, the Durbin Amendment instructs Renaissance Merchant Services ................... 28 the Fed to issue rules to ensure that the interchange fees charged to merchants for accepting debit cards and paid to card issuers are assessed at rates that are Education "reasonable and proportional" to costs incurred by issuers. Street SmartsSM: It also deep-sixes card company restrictions on merchant acceptance, such as Earning and keeping merchants' trust rules regarding network exclusivity, merchant routing, and discounts for pre- By Ken Musante, Eureka Payments LLC ......... 58 ferred payment methods (for example, debit cards or cash). Community banks It pays to keep your customers happy – those with assets below $10 billion – are exempt from the legislation. So are By Jeffrey Shavitz, prepaid debit cards. Charge Card Systems Inc. .......................... 62 Security in a mobile world Under orders to have final rules in place by July 21, 2011, the Fed released a set By Tim Cranny, Panoptic Security Inc. ........... 64 of proposed rules for public comment in December; comments were due by Feb. Stockholm Syndrome and the payment pro 22. The Fed's proposal (which is almost 100 pages long) offers two options for By Jeff Fortney, Clearent LLC ........................ 66 capping debit card interchange; either way, the most an issuer covered by the Helping Level 4 merchants rules would be allowed to collect would be 12 cents a transaction, which works comply with PCI DSS 2.0 out to be a 70 percent reduction in average debit card interchange assessment in By Joan Herbig, ControlScan ...................... 68 2010 (44 cents), according to the Fed's calculations. Leads, leads, leads - Part 2: Lead management Peggy Bekavac Olson, Opponents contend the Fed's proposal goes too far. "Based on our personal expe- Strategic Marketing .................................... 70 rience, and those of peers, this cap is neither reasonable nor proportional," said Michelle Mattson, Manager of Genisys Credit Union in Auburn Hills, Mich. Continued on page 3 See Interchange caps on page 51 3 AdvisoryBoard NotableQuote » Andrew Altschuler–AmeriMerchant » John Arato–MagTek Inc. While change is not always well- » Adam Atlas–Attorney at Law received, the reality is that mov- » Clinton Baller–PayNet Merchant Services Inc. ing from PCI DSS 1.2 to 2.0 has » Audrey Blackmon–TASQ Technology addressed a number of merchant- » Steve Christianson–All card Processing Inc. initiated questions and challenges. » Steve Eazell–Secure Payment Systems Inc. » W. Ross Federgreen–CSRSI See story on page 68 » Ed Freedman–Total Merchant Services » Marc Gardner–North American Bancard » Chad T. Gay–PNC Merchant Services » Russ Goebel–Quantus Health Solutions LLC » Matt Golis–YapStone Inc. Inside this issue: » Curt Hensley–Impact Payments Recruiting CONTINUED » Scott Henry–VeriFone Inc. » Jared Isaacman–United Bank Card Inc. Company Profi le » Kevin Jones–SignaPay Ltd. » Jerry Julien–Equity Commerce LP FrontStream Payments Inc » Lazaros Kalemis–Alpha Card Services Inc. » Dee Karawadra–Impact PaySystem A company created with vision and smarts ............................................39 » Rod R. Katzfey–Consultant New Product » Alan Kleinman–Meritus Payment Solutions » Allen Kopelman–Nationwide Payment Systems Inc. A global e-commerce payment solution ..................................................75 » Mitch Levy–Merchant Cash and Capital » Dan Lewis–AmeriBanc National Ltd. Inspiration » Douglas Mack–Payex » Paul Martaus–Martaus & Associates The mind's the limit – so expand it ........................................................79 » Biff Matthews–CardWare International » Sonny McKinney–TransWORKS LLC Departments » Tim McWeeney–VeriFone Inc. Forum ..................................................................................................5 » Justin Milmeister–Elite Merchant Solutions » Michael Nardy–Electronic Payments Datebook ...........................................................................................77 » Steve Norell–US Merchant Services Resource Guide ..................................................................................80 » Michael Petitti–Trustwave Advertiser Index .................................................................................94 » Bill Pittman–SoundPOS LLC. » David H. Press–Integrity Payment Systems Miscellaneous » Steve Rizzuto–TransFirst » Charles W. Salyer–Ladco Leasing Inc. QSGS: Quick Summary Green Sheet ......................................................8 » Jeffrey I. Shavitz–Charge Card Systems Inc. Bottom Lines .......................................................................................14 » Lisa Shipley–Ingenico North America Water Cooler Wisdom ........................................................................79 » Dave Siembieda–CrossCheck Inc. » Rick Slifka–Exec-Links LLC » Anna Soloman–FrontStream Payments Inc. » Nick Starai–Network Merchants Inc. » Theodore Svoronos–Merchant University » Stuart Taylor–Hypercom Corp. » Scott Wagner–GO DIRECT Merchant Services Inc. » Dan D. Wolfe–Teledraft Inc. 4 President and CEO: Paul H. Green ...........................................................paul@greensheet.com General Manager and Chief Operating Offi cer: Kate Rodriguez .........................................................kate@greensheet.com CFO/Vice President Human Resources & Accounting: Brandee Cummins ...............................................brandee@greensheet.com Assistant VP, Editorial: Laura McHale Holland ..............................................laura@greensheet.com Senior Editor: Patti Murphy .............................................................patti@greensheet.com Associate Editor: Dan Watkins .............................................................dan@greensheet.com Staff Writers: Cheri Lieurance ........................................................cheri@greensheet.com Ann Train ................................................................. [email protected] Assistant VP, Production and Art Director: Troy Vera.................................................................. [email protected] Production Manager: Lewis Kimble ............................................................lewis@greensheet.com Assistant VP, Advertising Sales: Danielle Thorpe ....................................................danielle@greensheet.com National Advertising Sales Manager: Rita Francis ................................................................ [email protected] Advertising Coordinator: Kat Doherty ................................................................kat@greensheet.com Circulation Assistant: Vicki Keith ............................................................... [email protected] Correspondence: The Green Sheet, Inc. 800-757-4441 • Fax: 707-586-4747 6145 State Farm Drive, Rohnert Park, CA 94928 Send questions, comments and feedback to [email protected] Send press releases to ...............................................press@greensheet.com NOTE – Please do not send PDF versions of press releases. Print Production: Hudson Printing Company Contributing Writers: Tim Cranny ....................................................tim.cranny@panopticsecurity.com Brandes Elitch .......................................................brandese@cross-check.com Jeff Fortney .........................................................................
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