Alto Global Processing: More States Consider Ban On Credit Card Surcharges By Herb Weisbaum The Consumer Man


Charge a fee to use your credit card? It’s legal for merchants to do that, unless barred by state law. Ten states already ban such surcharges – California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas – and more may join the list.

The legislatures in 13 other states are currently considering bills that would prevent these so-called “check out” fees. Lawmakers in Hawaii, Illinois, Kentucky, Maryland, Missouri, New Jersey, Pennsylvania, Rhode Island, South Carolina, Utah, Vermont, Washington and Tennessee are responding to a rule change that took place late last month. A similar bill will soon be introduced in West Virginia.

Visa and MasterCard agreed to let merchants add a surcharge to credit card transactions as part of the settlement agreement in an antitrust lawsuit brought by retailers. Until Jan. 27, both Visa and MasterCard had prohibited merchants from charging the customer for the cost of processing that credit card transaction.

The settlement does not affect Visa or MasterCard debit cards. American Express still
prohibits a surcharge on any of its cards.

New Jersey Assemblyman Vincent Prieto (D-Secaucus) said he introduced a bill to ban surcharging because it would hit consumers in the pocketbook.

“The amount of the surcharge may seem miniscule on paper, but in the family budget 1.5 to 3 percent could add up to a shorter grocery list or less to spend on gas,” he said in a statement.

In Utah, Sen. Curtis Bramble (R-Provo) is sponsoring a bill that would prohibit surcharges on any type of “financial transaction card” which would include debit cards.

Major retailers are not expected to tack on a credit card surcharge, at least not any time in the immediate future. Wal-Mart, Target, Sears and Home Depot told NBC News they have no plans to add a credit card surcharge. But just the possibility has spurred some lawmakers into action.

“It’s a waste of the legislative process,” said Mallory Duncan, senior vice president of the National Retail Federation. “They could take steps to bring greater competition into the marketplace by prohibiting the price fixing of the hidden swipe fees merchants pay to process credit card transactions.”

Trish Wexler, spokesperson for the Electronic Payments Coalition, whose members include Visa and MasterCard Worldwide, told NBC News it has not taken a position on the issue.

“No one knows how checkout fees will work their way through the system,” Wexler said in an email statement, “but the settlement provides sufficient consumer protections while the process plays out.”

What about disclosures?

The advocacy group Consumer Action has published a booklet on credit card checkout fees. It warns shoppers to be on the lookout for these fees and advises them to express their dissatisfaction.

“Customers shouldn’t stand for it,” said Ruth Susswein Consumer Action’s deputy director of national priorities. “Our advice is to tell them you don’t like the fee and this makes you want to take your business elsewhere.”

The new rules from Visa and MasterCard require retailers who apply a credit card surcharge to post a notice at the store’s entrance. The exact percentage of the surcharge does not need to be disclosed until the point of sale. The customer receipt must list the amount of the surcharge.

Online stores with a surcharge will not be required to have a notice on the home page.
They only need to alert shoppers about this when they reach the page where credit cards are first mentioned. In most cases, that means the final step of checkout when the purchase is being completed.

Not the end of this story

The settlement that allows merchants to impose a credit card surcharge is only preliminary. The court has yet to issue its final ruling in this case. That’s expected later this year.

Once that happens, various retailers and business groups plan to challenge the settlement. That could drag into late 2014.

The possibility that the settlement could be modified will probably keep most businesses of any size from instituting credit card fees for the time being.


Herb Weisbaum is The ConsumerMan. Follow him on Facebook and Twitteror visit The ConsumerManwebsite.


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E-Z Pass Payments For Tolls, Parking, And Big Macs? By Austin Carr

Article written by Austin Carr on November 27. 2012Courtesy of  FastCompany.comWith nearly 23 million devices already on the road, here’s how vehicle e-payment services could be the next paradigm in mobile payments.

On Nov. 21, an estimated 39.1 million people braved slippery highways and bumper-to-bumper traffic traveling home for Thanksgiving. And if, like me, you’re one of those unfortunate drivers who survived the busiest travel day of the year, you probably wondered at least several times along the way: Who are all these dingbats stuck in the cash-only tollbooth lanes?

All across the U.S., electronic tollbooths offer drivers myriad benefits in addition to the opportunity to whiz through tolls: discounts, reduced congestion, fuel savings, environmental improvements. There’s FasTrak in California; TxTag in Texas; and in the Northeast, E-Z Pass, an association of 14 states, which saw 2.44 billion transactions from nearly 23 million transponder devices on the road. Despite all the mysterious holdouts, that massive user base–only a percentage of the accounts active in the U.S. and Canada–could attract significant new use cases for this oft-overlooked form of electronic mobile payments, according to E-Z Pass executive director PJ Wilkins.

“It’s a very versatile application,” Wilkins says. “There’s a lot of interest in expanding the market. Customers want it–they’re asking for it everywhere. And we’re also getting feelers from other segments of the economy that want to capitalize on the tremendous amount of transponders out there.”

First, however, many industry insiders want to streamline the fractured systems. Think of the e-tollbooth industry like the smartphone market: Like the operating systems developed by Apple, Google, Microsoft, and RIM, electronic tollbooths too are fragmented–only over a slew of state toll authorities, each using roughly a half-dozen different transponder protocols. That means, an electronic tollbooth in California won’t accept tags from Florida, and vice versa. “What are you going to do? End up with five to six devices on your windshield? That’s not the way to do it,” Wilkins says.

Many toll agencies are working to make the systems interoperable–in fact, they are mandated to do so. A law enacted in July called MAP-21 requires electronic toll systems to be interoperable by 2016. With a unified and nationwide system of vehicle mobile payments–boasting likely tens of millions of customers–e-toll transponders could arguably become as appealing to the market as digital payment solutions from Square or Google or any number of brand-name players. (In other words, imagine the market for developers if it was mandated that all smartphone platforms run iOS or Android.)

No wonder the industry is already attracting attention from other business segments. According to Wilkins, major airports in New York and New Jersey are already using the systems to accept payments for parking–no more waiting in line for that parking attendant. And E-Z Pass has received interest from gated communities, which see the system as a possible security solution, and from trucking companies, which could potentially use E-Z Pass someday to track shipments going to and from ports and warehouses.

Perhaps most promising though? A number of years back, E-Z Pass did a pilot project with McDonald’s, which was interested in seeing if the system could streamline payments at drive-through restaurants. For a brief time, at five or so locations in New York, customers could pay for Big Macs via E-Z Pass, but ultimately, says Wilkins, “McDonald’s decided to go a different route.” The problem was that McDonald’s wanted to settle payments daily, whereas E-Z Pass and other toll authorities typically settle transactions on a weekly basis. “Our whole system wasn’t developed to do fast food,” Wilkins says. “If we’re going to get into that type of market–and I’m not saying we won’t–we’re going to have to get into our back-office processes.”

Still, it’s likely in the future that as the technology evolves, such payment solutions could be accessed at restaurants or utilized for other drive-in or drive-through applications. Some companies are testing tolling applications for iPhone and Android devices, Wilkins says, and even doing pilot projects with several toll authorities, perhaps signaling a time when drivers can pay via smartphone rather than toll transponder. “I think we’re going to have to eventually come to some level of comfort with other payment options,” Wilkins says.

Oh, as to why some customers avoid solutions like E-Z Pass and opt for endless cash-only lanes? “That’s always perplexed us,” says Wilkins, who adds that he’s spent a great deal of time studying this issue. There’s a variety of factors involved: Some customers don’t use toll roads enough to warrant opening an account; a large segment of the population is unbanked and believes solutions like E-Z Pass require a credit card; while others just generally shun the technology because, as Wilkins says, “The Big Brother is watching.”

But for the most part, drivers hate having to stop and pay tolls. Says Wilkins, “They just want to keep rolling.”


[Image: Flickr user VaDOT]

Alto Global Processing: MoneyGram and PayPal Agreement Brings Together Online and Physical Worlds

17 million active PayPal account holders will be able to load, send, withdraw funds from their accounts at MoneyGram locations around the world

DALLAS–(BUSINESS WIRE)–MoneyGram (NYSE: MGI), a leading global money transfer company, today announced a new global agreement with PayPal that will enable consumers to easily access money in their digital wallets in the physical world. PayPal’s 117 million active account holders will now have the option to put cash in and take funds out of their PayPal accounts at MoneyGram locations.

“Through this new initiative, more consumers will be able to take advantage of PayPal’s digital wallet, and shop at places like eBay or many of the millions of merchants that accept PayPal.”

This agreement brings together the world’s leading e-commerce payment company with the world’s second-largest global money transfer company to give consumers a fast, convenient and secure way to easily get funds out of their PayPal account and put cash in via MoneyGram locations. MoneyGram’s network currently includes more than 284,000 locations in 196 countries.

The new service options created through this agreement represent the first global solution for consumers who do not have or use a bank account or credit card to fund and maintain a PayPal account, giving them access to e-commerce. In addition, for the first time, PayPal customers will have a global solution for putting cash into a PayPal account, and a global option to fund, withdraw, and send cash from a PayPal account. These services initially will be piloted in the United States in early 2013, followed by a phased roll-out in the United States and beyond.

“This agreement is a significant milestone for MoneyGram. It represents a new level of innovation and enhances our growth into new areas of the payments industry,” said Pamela H. Patsley, MoneyGram chairman and CEO. “We believe this agreement furthers our goal of making it easy for people to send and receive money in the ways they want, wherever they are in the world, and significantly increases the possibility of e-commerce to MoneyGram consumers.”

“With their global reach and world-class money transmitting capabilities, MoneyGram is the perfect company for us to innovate with,” said Mark Lavelle, Senior Vice President of Strategy and Business Development at PayPal. “Through this new initiative, more consumers will be able to take advantage of PayPal’s digital wallet, and shop at places like eBay or many of the millions of merchants that accept PayPal.”

About PayPal

PayPal is the faster, safer way to pay and get paid online. The service allows people to send payments without sharing financial information, with the flexibility to pay using their account balances, bank accounts (where available), credit and debit cards in various markets. PayPal is an eBay (Nasdaq: EBAY) company and enables global e-commerce with over 117 million active accounts in 190 markets and 25 currencies around the world. PayPal is headquartered in San Jose, California and its international headquarters is located in Singapore. More information about the company can be found at

About MoneyGram International

MoneyGram International, a leading money transfer company, enables consumers who are not fully served by traditional financial institutions to meet their financial needs. MoneyGram offers bill payment services in the United States and Canada and money transfer services worldwide through a global network of more than 284,000 agent locations – including retailers, international post offices and financial institutions – in 196 countries and territories. To learn more about money transfer or bill payment at an agent location or online, please visit or connect with us on Facebook.

Forward Looking Statements

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements with respect to, among other things, the financial condition, results of operations, plans, objectives, future performance and business of MoneyGram and its subsidiaries. Forward-looking statements can be identified by words such as “believes,” “estimates,” “expects,” “projects,” “plans,” “will,” “should,” “could,” “would” and other similar expressions. These forward-looking statements speak only as of the date they are made, and MoneyGram undertakes no obligation to publicly update or revise any forward-looking statement, except as required by federal securities law. These forward-looking statements are based on management’s current expectations and are subject to certain risks, uncertainties and changes in circumstances due to a number of factors. These factors include, but are not limited to: ongoing investigations involving MoneyGram by the United States federal government and several state governments which could result in criminal or civil penalties, revocation of required licenses or registrations, termination of contracts, other administrative actions or lawsuits and negative publicity; our ability to maintain key agent or biller relationships, or a reduction in transaction volume from these relationships; our substantial debt service obligations, significant debt covenant requirements and credit rating; our capital structure and the special voting rights provided to designees of Thomas H. Lee Partners, L.P. on our Board of Directors; sustained financial market illiquidity, or illiquidity at our clearing, cash management and custodial financial institutions; continued weakness in economic conditions, in both the United States and global markets; a material slow down or complete disruption of international migration patterns; litigation involving MoneyGram or its agents; which could result in material settlements, fines or penalties; fluctuations in interest rates; our ability to manage credit risks from our retail agents and official check financial institution customers; our ability to manage fraud risks from consumers or agents; the ability of MoneyGram and its agents to maintain adequate banking relationships; our ability to retain partners to operate our official check and money order businesses; our ability to maintain sufficient capital; our ability to attract and retain key employees; our ability to successfully develop and timely introduce new and enhanced products and services; investments in new products, services or infrastructure changes; our ability to adequately protect our brand and intellectual property rights and to avoid infringing on the rights of others; our ability to compete effectively; the ability of us and our agents to comply with U.S. and international laws and regulations, including the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010; changes in tax laws or an unfavorable outcome with respect to the audit of our tax returns or tax positions, or a failure by us to establish adequate reserves for tax events; our offering of money transfer services through agents in regions that are politically volatile or, in a limited number of cases, are subject to certain restrictions by the Office of Foreign Assets Control; a security or privacy breach in our facilities, networks or databases; disruptions to our computer network systems and data centers; our ability to effectively operate and adapt our technology to match our business growth; our ability to manage risks related to the operation of retail locations and the acquisition or start-up of businesses; our ability to manage risks associated with our international sales and operations; our ability to maintain effective internal controls; and the risks and uncertainties described in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of MoneyGram’s public reports filed with the SEC, including MoneyGram’s Form 10-K for the year ended December 31, 2011 and its Forms 10-Q for the quarters ended March 31, 2012 and June 30, 2012.



Patty Sullivan/Sophia Stoller, +1-214-303-9533
Larry Meltzer, +1-214-379-3701


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Alto Global Processing: PayByGroup Announces Public Beta Launch: Eliminates Hassles Around Group Purchasing

MOUNTAIN VIEW, Calif.–(BUSINESS WIRE)–500 Startups alum PayByGroup, a free, web-based application to eliminate the hassle and reduce those “awkward moments” associated with multiple-party purchases, today announces its official public beta launch. With collaborative consumption on the rise and the proliferation of social platforms and collaboration tools making communication easier, but still not solving the problems of real commitment and payment, PayByGroup is an instinctive choice for consumers accustomed to purchasing, gifting, and renting with close friends, family members, and other tight-knit communities.

“The platform is a game-changer in terms of eliminating the friction often associated with these activities and providing a simple channel for users to spread the word to potential participants via email, Facebook and Twitter.”

PayByGroup enables group organizers to determine who is truly engaged and committed before making a purchase. The platform can be applied to a wide array of categories including ticket purchases (think sports and music), kids’ activities that require parental coordination, and group gifting for special occasions like weddings, baby showers, and retirement parties. For consumers who regularly spearhead travel or large-scale purchases with extended family or friends, PayByGroup’s solution is a boon:

“For many people, finding out who is committed and what everyone owes takes quite a bit of time, energy and coordination, and frankly can be quite uncomfortable,” said Camilo Acosta, CEO of PayByGroup. “The platform is a game-changer in terms of eliminating the friction often associated with these activities and providing a simple channel for users to spread the word to potential participants via email, Facebook and Twitter.”

PayByGroup’s intuitive setup process allows organizers to choose how to split the cost, and the service can even adapt to charging different amounts based on how many people join.

Added Mr. Acosta: “Given that no one is charged until a minimum threshold is reached, everyone that joins in is assured they won’t be left going alone. Our dashboard is designed to allow group purchase coordinators to track the progress of their ‘event’ and watch the status of fund collecting.”

A tracker located on the screen shows what percentage of the funding goal was met and how much money has been committed to date. Once the funding goal of the group purchase has been met, the organizer is notified, the credit cards provided by the participants are charged, and the funds are transferred to the organizer’s bank account within 3-5 days.

About PayByGroup

Mountain View, California-based PayByGroup is a member of the 500 Startups investment family and was founded to alleviate the hassles of group purchases. Frustrated by the lack of a service allowing them to easily pay by group for their purchases, the founders developed PayByGroup to alleviate this pain and fill a much needed void in today’s group-minded, collaborative marketplace.




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Kristen Tischhauser, 310-994-6441

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Alto Global Processing: ECB Report Examines The Costs Of Making Payments In The EU

How much does it cost to make a payment? A new report released by the European Central Bank (ECB) today analyses the social and private costs of making retail payments in 13 European countries and discovers that they are substantial, amounting to around €45 billion, or almost 1% of their combined GDP. If extrapolated to cover the 27 Member States of the European Union (EU), these costs would be around €130 billion.

study is the first comprehensive cross-country analysis of the aggregated costs of making payments when purchasing goods and services. It was conducted by the ECB in cooperation with the central banks of Denmark, Estonia, Finland, Greece, Hungary, Ireland, Italy, Latvia, the Netherlands, Portugal, Romania, Spain and Sweden.

Based on a representative sample, the study finds that cash payments account for nearly half of the total costs. As the most commonly used payment instrument, cash has, on average, the lowest social costs per transaction, at €0,42, closely followed by debit cards with costs of €0,70 to society. Cheques are the most expensive form of payment, with unit costs of €3,55. However, in some countries, cash does not always have the lowest unit costs. In five of the countries covered, the costs were lower for debit cards. Such rankings depend on characteristics specific to each country’s payment system, on the market size and its development, and on payment behaviour.

The report looks at the so-called private and social costs. Private costs are those incurred by individual participants in the payments chain – including items such as transportation of cash, management of electronic transactions, acquisition of new customers, credit risk analysis, provision of terminals, fraud prevention and fees for other participants. Social costs are defined as the aggregate costs to society as a whole, excluding fees and tariffs for participants in the payment chain. About half of these total costs are incurred by banks and interbank infrastructure providers, while retailers bear 46% thereof.

“This study is a true joint venture of the ECB and the national central banks involved,” said Benoît Cœuré, Member of the ECB’s Executive Board. “Its results underline how much retail payment services matter for European society and in the economy as a whole. The study will shed light on the debate about how the European market for payment services will look in the future and how overall cost efficiency can be improved even further.”

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Alto Global Processing: CNP Fraud Spikes as Ability to Catch or Prevent Card-Present Fraud Improves By Tom Goldsmith

It’s become much more difficult to produce counterfeit credit and debit cards, thanks to improved card design and better protection of card data that could be used to make fakes.And with the arrival over the next few years of EMV technology, it will be even more difficult to create counterfeit cards.

That hasn’t deterred the criminals engaged in organized card fraud, however. According to the analytics firm FICO, as card-present fraud has declined, there has been a real spike in card-not-present (CNP) fraud, essentially via the internet and by telephone.

“Continued improvements in fraud controls have succeeded in keeping the fraud genie in the bottle; but fraud fraudsters continue to evolve their attempts to circumvent our efforts, adapting to consumer behavior and simply following the money,” said Doug Clare, vice president of Product Management at FICO. “More online shopping has created a shift towards more online fraud, which is proving to be a popular, relatively safe and anonymous means for fraudsters to exploit any weakness in fraud systems. Consumers and issuers should remain diligent when using cards for point of sale and ATM transactions.”


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Alto Global Processing: U.S. Bank and Plastic Jungle Partner on Credit Card Rewards

U.S. Bank announced that it has partnered with Plastic Jungleto enable FlexPerks Travel Rewards Visa Signature cardholders to easily and safely exchange select merchants’ gift cards for highly valued FlexPoints, reward points that can be redeemed for travel, merchandise and more.

“We’re continually seeking innovative ways for our FlexPerks cardholders to earn FlexPoints and offering a simple, safe and quick exchange of unredeemed gift cards for valuable FlexPoints is certainly an inventive approach,” said Cliff Cook, chief marketing officer for U.S. Bank Retail Payment Solutions. “With the holidays over and spring break time here, the gift card exchange is timely for cardholders looking to accumulate some extra FlexPoints for travel.”


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Alto Global Processing: How You Can Help Child Hunger

ConAgra Foods® is committed to the fight to end child hunger. Their goal is to donate five million meals this school year*—but they need our help to meet this goal.

Click the link to see how you can help!

Their Mission

According to the U.S. Department of Agriculture, an estimated 16 million children live in households that are food insecure, meaning they don’t have access to enough food to live active healthful lives. The ConAgra Foods Foundation is committed to raising awareness of child hunger in America, aggressively pursuing sustainable solutions to end it and building a community of people who are passionate about joining them in this fight to end child hunger.

As the philanthropic arm of ConAgra Foods, a leading food company, they support worthy causes that reflect the company’s social responsibility efforts. The key focus areas of their Foundation are child hunger and nutrition education. They work to ensure children have access to both food and facts about food to eat nutritiously, to live balanced lifestyles, and to succeed in school and life.

This is the essence of the ConAgra Foods Foundation’s Nourish Today, Flourish Tomorrow mission, which seeks to meet immediate needs as well as find innovative, long-term solutions in the areas of child hunger and nutrition education, by:

  • Investing in direct service programs such as Kids Cafes, summer feeding programs and Cooking Matters that feed and educate those in need.
  • Building capacity in leading nonprofits, such as Feeding America and Share Our Strength, to serve more people as well as create and bring to life innovative solutions to end child hunger.
  • Creating awareness and educating people about the problem of child hunger in America and then encouraging them to get involved.

How They Do It

They know they can’t do this alone. It’s why they’re committed to building a community of people who are passionate about ending child hunger. As they work toward this goal, they invest in partnerships with high-impact, nonprofit organizations that take an innovative approach to addressing needs in the areas of child hunger and nutrition education. They do this while continuing to build on their history of funding pilot programs that are proven to be groundbreaking, sustainable solutions.