Visa customers able to swipe cards again after temporary outage

By The Canadian Press - Monday, January 28, 2013 at 10:02 PM - 0 Comments

TORONTO – A nationwide Visa outage appeared to be resolved by Monday night as the credit card company said a network issue at a third-party processor was to blame.

The problem, Visa said, did not lie with the Visa network.

A Visa spokeswoman said a power outage at payment processor Tsys resulted in the failure of some payment transactions.

The company said it provided back up processing assistance where possible until operations returned to normal.

Royal Bank of Canada and TD Canada Trust were among the big banks who had said their customers were being affected by the outage. Some self-serve transaction systems were also affected.

Both banks confirmed their Visa cards were working again by Wednesday night, delivering the news through their official Twitter accounts.

Hundreds of credit card users across the country took to the social media website earlier in the day to complain that their cards were being declined when they tried to use them.

RBC drops expiry date, most fees on prepaid Visa cards in wake of federal reform

By The Canadian Press - Wednesday, November 21, 2012 at 7:36 PM - 0 Comments

TORONTO – With an eye to the holiday shopping season, the Royal Bank has become the first major financial institution to move on upcoming regulations to make the fees and conditions for prepaid plastic cards more transparent.

RBC (TSX:RY) said it is dropping expiry dates on its prepaid Visa gift cards, which run in value from $25 to $500, and all fees beyond the initial $3.95 activation charge.

“The (government) regulations are proposed regulations at this point, but we decided we needed to go in advance and go over and above, particularly in the run-up to Christmas,” said Anne Koski, head of RBC’s pre-paid card division.

Koski said a survey conducted by the bank found more than four in 10 respondents said the existence of an expiry date, after which any unspent funds are forfeited, was a reason not to purchase the cards.

RBC said its prepaid cards will continue to show an expiry date but a new card can be requested at no charge if a balance remains after that date.

Last month, Finance Minister Jim Flaherty announced his intention to make expiry dates illegal on the cards and to demand upfront disclosure on any hidden fees.

Flaherty’s press secretary, Kathleen Perchaluk, issued a statement welcoming RBC’s early response.

Other institutions are expected to follow suit, before or after new regulations are issued — likely in January.

The Bank of Montreal said it does not issue gift cards, but does offer prepaid travel credit cards whose funds do not expire.

While still a small segment of the market, prepaid plastic has become an option for consumers without conventional credit or debit cards, young adults, and for parents who want to introduce their children to using credit while limiting the risk of theft and over-spending, as well as for those buying them for gifts.

Koski said the cards are especially popular in the weeks as months before Christmas as gifts to children, who can use them as they would cash — or to shop online.

But the sector has faced criticism for hidden fees that reduce the face value of prepaid credit cards. These can include monthly or annual fees, maintenance costs, as well as ATM charges.

The most notorious example occurred two years ago when Hollywood celebrity Kim Kardashian backed away from endorsing a prepaid card bearing her name after a public outcry over the card’s usage fees, including a close to $60 activation fee.

The card even grabbed the attention of the attorney general of Connecticut.

The Financial Consumer Agency of Canada offers a tip sheet on their webpage about the prepaid cards, advising consumers to be aware of hidden costs. The agency points out that a $4.95 activation fee on a $50 card represents almost 10 per cent of the prepaid value.

The new regulations in Canada would require an information box disclosing the fees displayed prominently on the exterior package and other documentation prior to issuance.

The Opposition has called the new rules a “small step in the right direction,” but charged that Flaherty was still ignoring the issues of sign up, usage and reload fees which could cost between $1 and $40.

Jack Dorsey: Genius @work

By Ken MacQueen - Wednesday, November 7, 2012 at 7:50 AM - 0 Comments

It’s a Wednesday, so Jack Dorsey is sipping tea in a 20th-floor lounge of Vancouver’s Fairmont Pacific Rim hotel, chatting with a Maclean’s reporter about the Canadian launch of Square Inc.—a mobile credit card reader and business management system—and the second revolutionary idea he has helped create in his 35 years. Canada is the first stop in Square’s global expansion. “We want to carry every transaction in the world,” he’s said, never one to dream small. Wednesdays are reserved for marketing, communications and growth. As chairman and co-founder of Twitter, the ubiquitous 140-character micro-blogging site, and CEO and co-founder of Square, he’s learned to compartmentalize.

The rhythm of his San Francisco-based business week goes like this: Mondays are for management issues at the two private companies with multi-billion-dollar evaluations. Tuesdays it’s engineering and design. Wednesdays are for evangelizing the brands—tools, he believes, of a new world order. Thursdays are for outside business partners and suppliers. Fridays he tends to employees, performances and goals, and recruits talent for companies undergoing exponential growth. Sundays are for strategic thought, and job interviews. On the sixth day he rests. He remains an influential force as chairman of Twitter, but he’s more engaged in the day-to-day operations of Square. Continue…

Ottawa moves to regulate prepaid credit cards, will ban expiry dates

By The Canadian Press - Tuesday, October 23, 2012 at 10:24 PM - 0 Comments

OTTAWA – Ottawa is stepping in with new rules for the largely unregulated prepaid credit card market.

Finance Minister Jim Flaherty is to announce Wednesday that in the future, issuers of prepaid cards will not be able to impose expiry dates and must be up front about hidden fees and conditions.

The move is part of the government’s expanding code of conduct measures to govern credit and debit transactions, that had previously not applied to the relatively new prepaid market.

While still a small segment of the market, prepaid plastic has become an option for consumers without conventional credit or debit cards, young adults, and for parents who want to introduce their children to using credit while limiting the risk of theft and over-spending.

But the sector has also faced criticism for exorbitant hidden fees that reduced their face value and fooled customers. These can include monthly or annual fees, maintenance costs, as well as ATM charges.

The most notorious example occurred two years ago when Hollywood celebrity Kim Kardashian backed away from endorsing a prepaid card bearing her name after a public outcry over the card’s usage fees, including a close to $60 activation fee.

The card even grabbed the attention of the attorney general of Connecticut.

The new regulations in Canada would require an information box disclosing the fees displayed prominently on the exterior package and other documentation prior to issuance.

A government official said the measures are in response to concerns about some features of prepaid cards issued by large financial institutions, adding that in some products, “terms, conditions, fees and limitations” were not always made clear.

The official said the government wants to make sure consumers know what they are agreeing to before making the purchase.

Dwolla: The credit card killer?

By Alex Ballingall - Wednesday, January 11, 2012 at 10:20 AM - 0 Comments

Widespread reliance on credit cards may have seen its heyday, thanks to a 12-person tech startup in—of all places—Des Moines, Iowa. Called Dwolla, it was founded by a 28-year-old university dropout named Ben Milne after he grew frustrated paying thousands of dollars to process credit card payments at his speaker business. Dwolla is an online payment mediator that allows people to buy things by transferring money from cellphones, email addresses and Facebook accounts. And rather than taking a percentage cut off every transaction—like PayPal and others that rely on credit card transaction systems—Dwolla charges 25 cents for every transfer over $10. For everything else it’s free.

The company already handles between $30 million and $50 million per month and has raked in more than $1.3 million from investors. “We don’t believe in credit cards,” Milne told Business Insider. “The current model needs to be blown up.” With momentum like this, Dwolla might end up doing just that.

Credit card tricks

By Chris Sorensen - Thursday, July 7, 2011 at 10:25 AM - 3 Comments

Photograph by Jessica Darmanin

Credit card fraud is big business in Canada. Last year, crooks racked up nearly $366-million worth of charges on lost, stolen or otherwise compromised cards, targeting nearly half a million customers, according to figures from the Canadian Bankers Association. That explains why the industry has been pushing the adoption of more secure microchip cards that require users to slide their plastic into a terminal and enter a PIN, similar to the way debit cards work. But a word of caution: just because you have a new chip card in your wallet doesn’t mean you’re safe.

While the industry says it has already seen instances of fraud drop since the new cards were first introduced two years ago, the expensive process of moving cardholders and merchants to the new technology has also created new opportunities for crooks—including some scams that can make it appear as though it’s the cardholder that is at fault, possibly leaving them on the hook for losses.

The problem stems from the fact that chip cards are still equipped with a magnetic stripe. That’s so cardholders can pull out their plastic at stores that may not have the latest equipment, or use them in the United States, which so far has balked at the cost of adopting the technology. Like regular credit cards, the stripes can be “skimmed” by thieves using special equipment and a compromised terminal. The new twist is that if crooks also manage to observe the cardholder entering their PIN—either by watching over their shoulder or by setting up a hidden camera—it may be possible for them to use the forged cards either in bank machines without chip and PIN technology, or on machines designed to fall back on verifying magnetic strips (to accommodate foreign visitors without chip cards).

Continue…

Policy alert

By Aaron Wherry - Tuesday, March 29, 2011 at 1:42 PM - 53 Comments

Jack Layton promises a cap on credit card rates.

The first policy announcement from the NDP campaign would allow the federal government to regulate credit card interest rates so that they could not be any higher than five points above the prime rate, which the Bank of Canada has currently set at three per cent. That would mean credit card companies could not charge more than eight per cent interest on the monthly bill — the same idea the NDP put forward on the 2008 campaign trail and then introduced in a private member’s bill last year.

The U.S. debt problem: now a minor motion picture

By Duncan Hood - Thursday, September 4, 2008 at 5:37 PM - 4 Comments

You just know that personal debt in the U.S. has got outta hand when they start making movies about it. This film, I.O.U.S.A., opened a couple of weeks ago. No word on whether it will play in Canada.

Meanwhile, I just received a newsletter from fee-only financial planning firm Kerr Financial predicting a credit card crash in the U.S. that’s very much along the lines of the housing crash they’ve already had… Continue…