Archive for the ‘Card Association Information’ Category

The Real Implications of Debit Card Legislation

In Card Association Information on March 11, 2011 at 8:16 am
Submitted by Bill Handel on Wednesday, March 9, 2011

There is movement afoot to address the issue of debit card interchange.  Unless you’ve been on safari for the last three months, you are very much aware of the loud industry protestations resulting from the Federal Reserve’s Reg II, which was issued in December.  These preliminary rules would cap debit card interchange fees at $0.12 per transaction and would force financial institutions to offer a minimum of two competing networks through which merchants could process transactions.  Further, merchants would be able to direct transactions to whichever network best suited them (that is, cost them least). However, as a concession to small institutions, a carve-out was created for those with assets under $10 billion.  They would not be subject to the $0.12 cap on interchange fees, although they would be subject to the other provisions of Reg II.

A 10 to 20 basis point hit to earnings is not easy to stomach

As has been widely noted, these preliminary levels would have a significant impact on the industry.  Given the Fed’s study that found the current interchange fee averages around $0.44 ($0.56 for signature and $0.23 for PIN transactions), a cap of $0.12 results in a 73 percent reduction in debit card interchange income.  This is no minor result – the ROA impact is likely to range from a low of 11 basis points for institutions with a relatively weak retail franchise to more than 20 basis points for those institutions with a strong retail franchise.  In the midst of a very subpar economic recovery, low loan demand, high and persistent assessments, and high loan chargeoffs, a 10 to 20 basis point hit to earnings is not easy to stomach, especially when it will result in no real benefit to consumers.  This 10 to 20 basis point impact will be a direct transference into the pockets of merchants, especially the largest merchants, with some, of course, expected to find its way into political campaign coffers.

Is the under $10 billion carve-out concept workable?

It was believed that the carve-out for institutions under $10 billion would eliminate much of the opposition to this amendment.  The inclusion of the carve-out was a political consideration more than a concession to community-based financial institutions.  After all, if this could be positioned as impacting only the “Wall Street banks,” who was going to object, other than the Wall Street banks?  However, there has been a dawning realization that the carve-out concept probably is not workable; this has brought community-based financial institutions back into the discussion and thereby brought this issue back into the congressional spotlight.  It led to a curious moment during House hearings on this issue, when the vice president and treasurer of 7-Eleven, representing merchants, was asked how he would react if the government told him he could only price his Slurpees at the cost of the ice and syrup.  A fairly poignant moment.

So what are the possible actions that Congress or the Fed could take?

  • Outright repeal of the Durbin Amendment by Congress.  This is what many in the industry are asking for.  The likelihood of this is not, at the present, all that high.  In listening to Congress on this matter, they don’t seem to object to the concept of limiting debit card interchange income for Wall Street banks.  They object to the fact it is not likely community-based financial institutions can be effectively protected.
  • Put teeth behind the under $10 billion carve-out. The mood of many in Congress suggests they are looking for a way to ensure community-based financial institutions are not impacted by the Durbin Amendment.  There is a growing concern that a two-tier system is not workable — Chairman Bernanke even testified to this effect.  But any steps Congress can take to ensure the carve-out has teeth are uncertain.  They could require debit card processors to implement a two-tiered pricing structure (fits right within our free enterprise system!), or they could exempt small institutions from the requirement of offering two competing networks.  In either case, it seems apparent that Congress will have to act in this regard because the Fed is not likely to change their stance on minimum required networks without being forced to do so.
  • Delay implementation of the Durbin Amendment.  The July 22 date for implementation is hard-wired into the legislation, so a delay would require an act of Congress.  But Congress could do so and ask the Federal Reserve to conduct more analysis and ensure smaller financial institutions are protected.
  • Put pressure on the Federal Reserve to more fully address the “reasonable and proportional” requirements of the Durbin Amendment.  The Federal Reserve did not incorporate fraud and security costs into its estimates when calculating the proposed $0.12 cap on debit card transaction fees.  Pressure by the industry and Congress between now and April 22 could result in the Fed revising upward its $0.12 cap to a level that would be deemed more “reasonable and proportional.”  At what levels could the Fed settle?

The current average transaction fee from a signature debit card transaction was calculated to be $0.56 and the current fee of a PIN debit card transaction was calculated at $0.23.  In a compromise worthy of Solomon, the Fed could set the cap at $0.24, which is double the current proposed cap and more than the fee currently earned on PIN transactions.  The impact of this would be the demise of the signature transaction advantage for financial institutions, and an aggressive shift towards the PIN.  While this might make FI’s feel somewhat better, it still is going to take a considerable bite out of earnings.  For example, if the Fed doubled the cap to $0.24 per transaction, a 21 basis point negative impact on ROA is reduced to a negative 13 basis point impact on ROA.

However, the Fed could also decide to do nothing with the cap, leaving it at $0.12 and putting the onus back on Congress.  In effect, the Fed would be saying to Congress, “You enacted this legislation and we fulfilled our mandate.  We’re not going to clean up your mess.”

So how should a financial institution respond?

First, make the impact of this legislation tangible and meaningful.  Illustrate the cost of this regulation in real terms.  For example, to cover the losses generated by the Fed’s proposal, an average $750 million financial institution would have to:

  • Reduce its full-time employee count by 18 people, an effective reduction of 11 percent.  This assumes $4.5 million assets per employee and $65,000 in salary and benefit costs per employee.  Or …
  • Lower its rate on deposit accounts by 16 basis points, or …
  • Impose a $6.08 per month fee on checking accounts with balances below $1,000.  This assumes that 60 percent of checking accounts have balances of less than $1,000. Or …
  • Impose a monthly fee of $3.65 per debit card.

Second, once the true impact has been quantified in ways that will be meaningful for Congress, communicate this impact to Congress.

Which is the optimal outcome?

Obviously, the objective of any institution with assets above $10 billion is complete repeal of the Durbin Amendment.  Short of this, if an institution has assets under $10 billion, should they be satisfied with a stronger carve-out provision?

Not necessarily.

If Reg II is implemented, even with a better designed carve-out, we have entered the slippery slope of price-setting by the federal government, and this is dangerous territory.

  • How long do you think it will be before the merchants go after credit card interchange?
  • If the government can set price on debit card interchange, why can’t the government be able to set interest rates on deposit accounts or loans?  Or establish how much an institution can charge on checking accounts?
  • Also, don’t forget the lesson of the Alternative Minimum Tax.  First implemented in 1969 to make sure that millionaires weren’t able to use tax loopholes to avoid paying any income tax, it now impacts a vast swath of the middle class as incomes have risen over the years.  The same could easily be true of the debit card interchange carve-out.  What seems like a very large threshold will be crossed by many institutions eventually.  Right now, 59 banks will be subject to the Reg II interchange cap if the carve-out is successful.  Assuming industry assets grow at an average 7 percent annual rate, by 2020 there will be more than 140 banks subject to the interchange cap.  For credit unions, three would now be subject to the cap but, by 2020, at least 10 are likely to be subject to the cap.

There now appears to be serious dialogue on the Durbin Amendment taking place.  Smaller financial institutions may decide they would be satisfied with a more enforceable carve-out.  However, the long-term health of the entire financial services industry would be better achieved by the complete repeal of this provision.


Dodd-Frank Wall Street Reform and Consumer Protection Act Section 1075 “Reasonable Fees and Rules for Payment Card Transactions (Durbin Amendment)

In Card Association Information on October 6, 2010 at 4:13 pm

The Dodd-Frank Act gives the Federal Reserve Board oversight and rule making powers for specific parts of the Payment Card industry: debit interchange, debit network routing, and merchant card acceptance (offering discounts for preferred payment type, or setting minimum credit card amount).  The Federal Reserve Board’s interpretation and clarification of the language of the Act is still forthcoming, and the rules set by the Federal Reserve Board will determine the full effect of the Dodd-Frank Act on our industry and our operations.

Debit Interchange
Under the Dodd-Frank Act, the Federal Reserve Board has the responsibility to ensure that debit interchange fees are “reasonable and proportional” to the cost incurred by the issuer or payment card network.  This oversight applies to all debit networks in the USA, to both PIN and Signature debit, Consumer and Small Business—but does not apply to issuers with less than $10B in assets or for reloadable prepaid and government-administered debit card programs.
The Federal Reserve Board is allowed to consider the costs of fraud management and prevention expenses in determining what are “reasonable and proportional” costs.  This section’s impact could vary widely, depending on the Fed’s interpretation and rule making.  The Fed has 9 months to write rules, and this section is to be in force on July 21, 2011.

Debit Network Routing (“No Network Exclusivity”)
The Federal Reserve Board will also be responsible for overseeing the Dodd-Frank Act’s requirements that all debit cards operate on at least two competing networks and that any person who accepts debit cards as payment have the ability to direct the transaction to the preferred debit network.  The Fed has up to a year for rule making for this provision.

Merchant Card Acceptance
The Dodd-Frank Act contains two provisions that impact card acceptance by US merchants: one covering the use of discounts to incentivize preferred payment types, and one to set thresholds for the acceptance of credit cards for payment. These items do not have explicit “in force” dates, so should be effective now that the bill was signed into law on July 21, 2010.

Under the law, payment card networks are restricted from limiting merchants’ ability to offer discounts to incentivize customers to use payment types preferred by the merchants. Merchants would have legal protection under the law to offer customers discounts to pay with cash, check, or debit instead of a credit card. Merchants would not be able to offer a discount for payment with one card brand instead of another, or by cards issued by one issuer instead of another issuer. Merchants are also able to set a minimum transaction threshold for credit card transactions only.  The minimum amount must not exceed $10.00 (a merchant could set a smaller minimum if they wish).  The law allows merchants who are federal agencies or institutions of higher education to set maximum transaction amounts on credit card transactions. Merchants should be cautioned that minimum and maximum transaction amounts do not apply to debit card transactions under this law, and that the card associations can still cite violations of the regulations for debit card transactions.


In Card Association Information on September 20, 2010 at 9:57 am

We here at Visa wanted to take the opportunity to clarify a few recent posts about U.S. merchants setting a minimum purchase requirement for using a credit card. For our part, we want to proactively offer Visa’s perspective on this issue to minimize any confusion, particularly since Visa did not allow this practice in the past.

The answer is actually rather simple: We’ve changed our rules to conform to U.S. federal law.

Allowing minimums was one of the provisions of the recently enacted financial reform bill (the Dodd-Frank Act). This provision became operative as soon as President Obama signed the bill. So beginning July 21, the law gave U.S. merchants the ability to set a minimum on credit card transactions. The same law says those minimums can’t exceed $10.

It’s also important to note that this applies only to credit card transactions in the U.S.; the law doesn’t cover debit card transactions, and Visa’s no-minimum rule remains in effect for merchants who accept debit cards.

Not all U.S. merchants will decide to impose minimums for using a credit card. (In our view, that’s a good idea because it makes things more convenient for consumers.) There also may be some merchants who don’t fully understand the new law and will try to impose a higher minimum or one for debit. In those cases, consumers should let their card issuer know by calling the number found on the back of their card or on their monthly statement.

Posted by: Ted Carr, Visa Corporate Relations on September 2, 2010 at 7:44 pm

MasterCard: Debit Swipe Fees Won’t Have Material Impact Near Term

In Card Association Information on June 4, 2010 at 10:05 am

June 3, 2010 –

Proposed legislation limiting the fees that debit card issuers can charge to retailers will “not have any material impact” on MasterCard Inc. (MA), at least in the near term, said Gary Flood, president of global products and solutions at the company.

Limits to these fees, known as interchange or swipe fees, are part of the overhaul of financial regulations that passed the Senate last month. It also requires the Federal Reserve to determine that these fees, typically 1-to-2% of a transaction, for debit cards are reasonable and proportional.

MasterCard and rival Visa Inc. (V) receive a portion of the swipe fees in return for processing card transactions.

Flood was speaking during a Webcast Thursday of the Cowen & Co. conference technology, media and telecom conference.

Unlike traditional credit-card issuers, MasterCard, based in Purchase, N.Y., and Visa don’t lend to consumers. MasterCard and Visa make money from the fees they charge banks to process card payments on the plastic these banks issue. J.P. Morgan Chase & Co. (JPM) and Citigroup Inc. (C) are among the top issuers of MasterCard- and Visa-branded cards.

MasterCard shares recently traded at $202.20, up 0.6%, while Visa shares were up 2.4% at $72.94.


MasterCard Europe Unveils Next Generation Debit Card

In Card Association Information on June 4, 2010 at 8:01 am

Jun 4, 2010 04:02 AM Pacific – MasterCard Europe has unveiled a next generation debit card – with the first roll-out of a new display payment card.  According to the company, “Turkish bank TEB, a subsidiary of BNP Paribas, will be the first issuer to bring the display card to consumers with a Maestro® eCommerce authentication programme that kicks off in July across Turkey, with new features to be added onto the card in the near future. The UK’s Newcastle Building Society has also committed to the first pilot of the balance display functionality later this year.”

The ‘Display Card’ represents the next generation of payment card, providing the first interactive card in the market. It can work like any other payment card but has a small display window and touch-sensitive button. The cardholder can see information – numbers and/or text – on the small visual display, such as a dynamic passcode, an account balance and a spending limit. MasterCard selected Swiss-based security specialist NagraID Security as the technology partner for the programme.

TEB is the first bank in Europe to launch the new technology with authentication functionality and will add new features on the card in the near future.

“The card truly encapsulates our belief that simple to use technology is the key to unlocking the door to simpler cash-free payments”, says Jorn Lambert, Group Head, Core Products, MasterCard Europe. “Consumers are telling us that ease of use, control and security are required to replace costly cash. This card can deliver the levels of both information and security they seek.”

Bulent Ersoz, Card Payment System Director for TEB said, “We are proud to be the first bank to bring this new card to consumers here in Europe. This pilot kicks off with an initial offering to test authentication functionality but we are already looking towards further phases when we will test the additional functionality of the card in other card programmes. As we strengthen our eCommerce capabilities, we already have an eye to the future, where the card is the portal to so much more for our customers.”


Click for a Cause gives needy children free books

In Card Association Information on June 3, 2010 at 11:22 am

Kansas City, MO, June 3, 2010 PRNewswire — Visa Inc. is sponsoring a unique campaign for Children International called “Click for a Cause” that will put new books in the hands of impoverished children around the world.

The “Click for a Cause” campaign enables internet users to simply click a button to trigger a $1 donation from Visa to purchase a gift that can truly benefit children living in poverty — books. Through the campaign, Visa will provide Children International, a U.S.-based humanitarian organization, up to $50,000 toward the purchase of books to be placed in Children International’s nearly 100 libraries serving children in 11 countries around the world. The campaign is significant since most of the children the charity supports live on less than $1 a day, and would not otherwise afford books.

According to the Institute for Excellence, only 10% of 6th grade students in Zambia can read at their grade level. UNICEF reports 31% of teen girls and 27% of boys in the least developed countries cannot read, keeping children trapped in poverty throughout their lives.

Visa hopes the campaign will also raise awareness for the issue of basic literacy. Visa recognizes the inherent value of education and the ability to read as a means to reduce poverty. Literacy helps a child develop the tools needed to fight poverty and work toward a more stable and promising financial future.

Children International’s President and CEO Jim Cook said, “This is a great opportunity for us and for our children. Visa’s sponsorship of our “Click for a Cause” program will help us purchase more than 5,000 books for our libraries in impoverished communities around the world. Their support of this program definitely demonstrates Visa’s commitment to education and helping children find their way out of poverty.”

About Children International:

Established in 1936, Children International is a humanitarian organization with its headquarters in Kansas City, Missouri. Children International’s programs benefit more than 335,000 children and their families in 11 countries around the world including Chile, Colombia, the Dominican Republic, Ecuador, Guatemala, Mexico, Zambia, Honduras, India, the Philippines and the United States. For more information about Children International or to sponsor a child, visit


Signing for Debit Card Purchases Can Now Mean Big Rewards with Citibank

In Card Association Information on June 3, 2010 at 2:26 am

New Checking Account Promotion Provides Five Percent Cash Back Bonus for Signature Debit Purchases –

NEW YORK, June 2 /PRNewswire-FirstCall/ — Signing on the dotted line has never been quite as rewarding as it is now with the launch of Citibank’s (NYSE:CNews) new checking account promotion.  Customers who open a new, qualifying checking account are eligible to receive 5 percent cash back on signature debit card purchases through November 30. Now, your everyday activities such as buying groceries, filling up your gas tank, or shopping at your favorite store can earn money back when you sign for those purchases using your Citibank Debit MasterCard®.

“With the rising popularity of debit card usage, this promotion is our way of giving new checking customers even more value for what they are already doing everyday – by simply signing for debit card purchases,” said Brad Dinsmore, Head of Retail Banking, North America Consumer Banking, Citi.  “This is a simple way for our new customers to get real value from choosing to bank with Citibank, whether they come to us for a personal or business account.”

The opportunity to get 5 percent cash back on qualifying signature debit card purchases is available to new customers opening eligible Citibank personal or business checking accounts between now and July 9, 2010.  During the six-month promotion Citi will automatically deposit a cash bonus – up to the maximum amount of either $250 for personal accounts or $500 for business and premier personal accounts – directly back into the customer’s checking account.

Participating customers can earn 5% cash back on qualifying signature purchases through November 30th including:

  • In-store purchases where they choose ‘credit’ and sign
  • Purchases made online, by phone or mail order
  • Low dollar-amount purchases that don’t require signature

For complete details visit

About Citibank

Citibank is a member of Citi, the leading global financial services company, which has approximately 200 million customer accounts and does business in more than 140 countries. Through Citicorp and Citi Holdings, Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. Additional information may be found at or


MasterCard and 1-800-FLOWERS.COM Provide Premier Offers and Promotions to MasterCard Cardholders

In Card Association Information on June 3, 2010 at 1:25 am

Find the perfect gift at the 1-800-FLOWERS.COM Birthday Gift Center presented by MasterCard

PURCHASE, N.Y.–(BUSINESS WIRE)–MasterCard Worldwide today announced a multi-year relationship with 1-800-FLOWERS.COM, Inc. (NASDAQ:FLWS), the world’s leading florist and gift shop, to provide premier offers and promotions to MasterCard cardholders. Cardholders can visit the Birthday Gift Center presented by MasterCard at to find unique offers and promotions.

“We are pleased to work with MasterCard and we believe our customers will enjoy our special co-branded program.”

While special offers and promotions for MasterCard cardholders will rotate regularly, beginning today, cardholders can enjoy a $15 savings pass with a minimum purchase of $29.99 when shopping online at the 1-800-FLOWERS.COM Birthday Gift Center presented by MasterCard. Visit for complete details.

“Consumers today place a huge priority on value, and MasterCard remains committed to delivering a smarter online shopping experience where cardholders can feel confident they are getting great deals,” said Phillip M. Miller, Senior Vice President, Commerce Development, MasterCard Worldwide. “MasterCard cardholders can take advantage of savings on 1-800-FLOWERS.COM simply by choosing MasterCard.”

“Sending beautiful flowers or a gourmet gift basket from 1-800-FLOWERS.COM is the perfect way to say ‘Happy Birthday,’” said Jim McCann, CEO and Founder, 1-800-FLOWERS.COM. “We are pleased to work with MasterCard and we believe our customers will enjoy our special co-branded program.”

Through the Birthday Gift Center presented by MasterCard, consumers choose from a wide variety of thoughtful gifts, including fresh floral bouquets to gourmet gift baskets. Within the Birthday Gift Center, consumers will find a gift guide to help them select the perfect gift.

About MasterCard Worldwide

MasterCard Worldwide advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes approximately 21 billion transactions each year, and provides industry-leading analysis and consulting services to financial-institution customers and merchants. Powered by the MasterCard Worldwide Network and through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to Follow us on Twitter:@mastercardnews.

About 1-800-FLOWERS.COM, Inc.

1-800-FLOWERS.COM, Inc. is the world’s leading florist and gift shop. For more than 30 years, 1-800-FLOWERS® (1-800-356-9377 or has been providing customers with fresh flowers and the finest selection of plants, gift baskets, gourmet foods, confections, balloons and plush stuffed animals perfect for every occasion. As always, 100% satisfaction is guaranteed. 1-800-FLOWERS.COM has earned the 2009 Gold Award in the Online Flower Delivery category from TopTenREVIEWS; was listed as a TOP TEN MOBILE RETAILER by Internet Retailer magazine in 2009; and was recognized by Computerworld magazine as a Premier 100 IT Leader for 2010. The Company’s BloomNet® international floral wire service ( provides a broad range of quality products and value-added services designed to help professional florists grow their businesses profitably. The 1-800-FLOWERS.COM, Inc. “Gift Shop” also includes gourmet gifts such as popcorn and specialty treats from The Popcorn Factory® (1-800-541-2676 or; cookies and baked gifts from Cheryl&Co.® (1-800-443-8124 or; premium chocolates and confections from Fannie May® confections brands ( and; wine gifts from Ambrosia® ( and Geerlings&Wade(SM) (; and gift baskets from 1-800-BASKETS.COM® ( as well as Celebrations® (, a premier online destination for fabulous party ideas and planning tips. 1-800-FLOWERS.COM, Inc. is involved in a broad range of corporate social responsibility initiatives, including continuous expansion and enhancement of its environmentally-friendly “green” programs, various philanthropic and charitable efforts and special private-sector skills training programs for military veterans. Shares in 1-800-FLOWERS.COM, Inc. are traded on the NASDAQ Global Select Market, ticker symbol: FLWS.


Discover(R) U.S. Spending MonitorSM Falls 1.1 Points in May

In Card Association Information on June 2, 2010 at 8:23 am

Consumers ages 18-39 Sour on the Economy, Finances; Discretionary Spending Intentions Decline for First Time in Four Months

RIVERWOODS, Ill., Jun 02, 2010 (BUSINESS WIRE) –Consumer confidence declined in May as 18- to 39-year-olds who showed a surge in confidence in April soured on the economy and their finances in May, according to the Discover U.S. Spending Monitor.

The Monitor – a poll of 8,200 consumers that tracks consumer confidence and spending intentions on a daily basis – declined 1.1 points in April to 90.4 (based out of 100), after two consecutive monthly gains. Overall, 31 percent believe economic conditions are improving, a 3-point decline from last month’s record high.

Confidence Declines Among 18-to 39-Year-Olds

Fifty-two percent of younger consumers rated the economy as poor, an increase of 7 points from the previous month. By comparison, older consumers who rated the economy as poor increased only three points. Other indicators:

  • The number of consumers ages 18 to 39 who felt economic conditions were worsening increased 4 points to 44 percent.
  • Those same consumers who felt their personal finances were getting worse increased 5 points from the previous month to 44 percent.
  • 25 percent of 18-to 39-year olds felt their finances were getting better in May, a point lower than April.

“The optimism consumers between the ages of 18-39 showed the past couple months reversed course in May,” said Julie Loeger, senior vice president of brand and product management for Discover. “It is unclear whether this is simply a one-month anomaly or a sign of worse to come. Hopefully, consumer confidence among this age group will rebound heading into summer.”

Discretionary Spending Intentions Fall For the First Time in Four Months; Overall Spending Remains Flat

The decline in economic and financial confidence helped end a four-month increase in discretionary spending intentions. Overall, 10 percent of consumers said they would spend more on discretionary items, a 1-point decline from April. 56 percent of consumers planned to keep their overall spending flat in the month ahead.

There was also a 1-point decline in the number of consumers planning to increase spending in the following categories:

  • Home remodeling or new appliances (decreased from 18 percent to 17 percent)
  • Vacations or furthering their education (decreased from 16 percent to 15 percent)
  • Sporting events, restaurants or hobbies (decreased from 11 percent to 10 percent)

More Consumers Rate the Economy as Poor, but 48% Have Money Remaining After Paying Monthly Bills

Fifty-one percent of consumers rated the economy as poor in May, a slight (1-point) increase from April. Forty-five percent feel economic conditions are getting worse, a 2-point increase from the previous month.

The decline in economic confidence didn’t affect how consumers currently view their finances. Overall, 35 percent currently view their finances as good or excellent, a 14-month high. Looking ahead, consumers were not as optimistic. Forty-seven percent felt their finances were getting worse, a 3-point increase from the previous month.

Despite the decline in confidence, 48 percent of consumers expect to have money left over after paying monthly bills. For fourteen months now, this number has been below 50 percent, though May’s 48 percent W is the highest since February.

The number of consumers expecting an income shortfall in the month ahead remained the same at 37 percent.

For more Discover U.S. Spending Monitor survey data, charts and information, please visit

About Discover U.S. Spending Monitor

The Discover(R) U.S. Spending MonitorSM is a monthly index of consumer spending intentions and capacity that is based on interviews with a random sample of 8,200 U.S. adults conducted at a rate of 275 per night. In addition to spending, the survey asks consumers their opinions on the U.S. economy and their personal finances. The Monitor began in May 2007 with a base index of 100. Surveys are conducted by Rasmussen Reports, an independent survey research firm (

About Discover

Discover Financial Services (NYSE: DFS) is a direct banking and payment services company with one of the most recognized brands in U.S. financial services. Since its inception in 1986, the company has become one of the largest card issuers in the United States. The company operates the Discover card, America’s cash rewards pioneer, and offers personal and student loans, online savings accounts, certificates of deposit and money market accounts through its Discover Bank subsidiary. Its payment businesses consist of Discover Network, with millions of merchant and cash access locations; PULSE, one of the nation’s leading ATM/debit networks; and Diners Club International, a global payments network with acceptance in more than 185 countries and territories. For more information, visit

SOURCE: Discover Financial Services

Visa Eases up on Triple DES Deadline in Face of ‘Migration Challenges’

In Card Association Information on June 1, 2010 at 8:26 am

(May 28, 2010) Visa Inc. has “relaxed enforcement” of the July 1, 2010, deadline for petroleum retailers to install software that meets the so-called Triple Data Encryption Standard (also called 3DES or TDES) in response to requests from the major oil companies, including ExxonMobil, the card network said in a statement released this week.

While the July 1 deadline remains in effect, “Visa will provide some flexibility regarding non-compliance fines for certain acceptance segments, but will continue to encourage full compliance as quickly as possible by working closely with acquirers in managing the TDES migration plans,” Visa said in the statement.

A petroleum industry trade publication has reported that ExxonMobil sent a letter to jobbers stating that Visa has given ExxonMobil-branded retailers until Dec. 31 to upgrade their point-of-sale systems. Shell, ConocoPhillips, and BP also reportedly had requested extensions.

A Visa spokesperson wouldn’t specifically discuss any requests for extensions of deadlines from petroleum retailers. But Visa “has heard feedback from acquirers and merchants that there are migration challenges in some merchant categories,” according to the statement.

To continue to accept PIN debit, many fuel retailers have to replace existing payment-processing equipment to comply with the PCI PED Standard, which requires Triple DES encryption to protect keypads in automated fuel dispensers, as well as point-of-sale card terminals located inside the stations’ convenience stores. Triple DES software encrypts the PIN when entered into the keypad so it cannot be read even if captured by a skimming device.

But fuel-pump manufacturers have been slow in getting new, PCI-compliant automated dispensers with PIN pads into the market, creating a shortage of equipment that delayed implementation. The leading U.S. manufacturers of fuel dispensers—Greensboro, N.C.-based Gilbarco Inc. and Dresser Inc.’s Austin, Texas-based Dresser Wayne, focused initially on developing Triple DES applications for new pumps in January 2009.

Retrofit kits for older pump models didn’t begin appearing until the spring of 2009.

An estimated 750,000 to 800,000 automated fuel pumps in the United States are equipped with card readers and PIN pads.