Archive for January, 2012

GE Capital Retail Bank Announces New Agreement to Provide Credit Card Program for Toys“R”Us

STAMFORD, Conn. WAYNE, N.J.–(BUSINESS WIRE)–

GE Capital Retail Bank today announced a definitive multi-year agreement
to provide the consumer credit card program in the United States and
Puerto Rico for Toys“R”Us, the world’s leading dedicated toy and
juvenile products retailer. GE Capital’s Retail Finance business, the
operating entity that provides financial solutions to retailers to help
grow their customer sales, will manage the Toys“R”Us relationship and
service the account.

The Toys“R”Us credit card program, which launches in June 2012, will
include a private label credit card and a co-branded card, providing
qualifying cardholders with benefits and convenience, as well as the
opportunity to earn special rewards for purchases made at any one of the
879 Toys“R”Us and Babies“R”Us stores nationwide or online at
Toysrus.com. GE Capital’s Retail Finance business works with retailers
to provide financial solutions to their end customers that help build
the retailer’s business. As part of the deal, GE Capital Retail Bank
will also acquire the existing card program assets of approximately $900
million from JP Morgan Chase. Financial terms were not disclosed.

“This portfolio acquisition broadens our U.S. retail credit card
programs with a respected retailer. The transaction, which we expect to
close in the second quarter of 2012, will build growth for GE Capital in
its high performing, core retail finance business. We look forward to
working with the Toys“R”Us team,” said Margaret Keane, CEO and president
of GE Capital’s Retail Finance business.

About GE Capital’s Retail Finance business

GE Capital’s Retail Finance business is among the country’s most
successful retail lenders, with more than 75 years of experience in
consumer financing. The business, which originates loans as a unit of GE
Capital Retail Bank, provides customized credit programs to retailers
and consumers in the United States and Canada that help drive sales.
This includes private label and bankcard credit programs to major
national, regional and independent retailers in the U.S., as well as
private label credit programs, promotional and installment lending,
bankcards and financial services for consumers through dealers;
contractors; manufacturers; healthcare practices; and service providers
across nearly 20 industries. More information can be found at www.gogecapital.com
and twitter.com/GoGECapital.

GE Capital is one of the world’s largest providers of credit. For over
one million businesses, large and small, GE Capital provides financing
to purchase, lease and distribute equipment, as well as capital for real
estate and corporate acquisitions, refinancings and restructurings. For
our 100+ million consumer customers, GE Capital offers credit cards,
sales finance programs, home, car and personal loans and credit
insurance. For more information, visit www.gecapital.com
or follow company news via Twitter @GECapital.

GE (NYSE: GE – News) works on things that matter. The best people and the best
technologies taking on the toughest challenges. Finding solutions in
energy, health and home, transportation and finance. Building, powering,
moving and curing the world. Not just imagining. Doing. GE works. For
more information, visit the company’s website at www.ge.com.

About Toys“R”Us, Inc.

Toys“R”Us, Inc. is the world’s leading dedicated toy and juvenile
products retailer, offering a differentiated shopping experience through
its family of brands. Merchandise is sold in 879 Toys“R”Us and
Babies“R”Us stores in the United States and Puerto Rico, and in more
than 600 international stores and over 150 licensed stores in 35
countries and jurisdictions. In addition, it exclusively operates the
legendary FAO Schwarz brand and sells extraordinary toys in the brand’s
flagship store on Fifth Avenue in New York City. With its strong
portfolio of e-commerce sites including Toysrus.com,
Babiesrus.com,
eToys.com
and FAO.com,
it provides shoppers with a broad online selection of distinctive toy
and baby products. Headquartered in Wayne, NJ, Toys“R”Us, Inc. employs
approximately 70,000 associates annually worldwide. The company is
committed to serving its communities as a caring and reputable neighbor
through programs dedicated to keeping kids safe and helping them in
times of need. Additional information about Toys“R”Us, Inc. can be found
on Toysrusinc.com.
Follow Toys“R”Us, Babies“R”Us and FAO Schwarz on Facebook at Facebook.com/Toysrus,
Facebook.com/Babiesrus
and Facebook.com/FAO
and on Twitter at Twitter.com/Toysrus
and Twitter.com/Babiesrus.

If you close a credit card, you often lose your points immediately

Dear Cashing In,
Read your reply to a query about the Chase Sapphire card, which I have. If you cancel the card, do you lose the unredeemed points immediately or is there a grace period after the cancellation within which the points are still good? I heard 30 days. I have the same question regarding my FlexPerks account. Thank you. — Michel

Dear Michel,
If you cancel any Chase rewards card , you will lose your points. A spokesman for Chase tells me there is no grace period for your Chase Sapphire reward points once you cancel the card. “If a customer closes his or her account, the points are forfeited,” the Chase spokesman says. “We encourage customers to redeem their points prior to closing the account.”

So use those points now or risk losing them altogether. In fact, you need to protect your points even if you’re replacing your card with another Chase rewards card. If you have another Chase credit card linked to Chase Ultimate Rewards, such as Chase Ink Bold, you can transfer the points to that account from the account you’re closing, but make sure to do it prior to closing the account.

Same rules apply for points earned on your FlexPerks card. According to the disclosures page for the FlexPerks rewards program on U.S. Bank’s website: “Once you or we close your account for any reason, all accumulated FlexPoints may be forfeited.”

As long as you have an active account with FlexPerks, your points are good for five years from the end of the calendar quarter in which they were earned. If you decide to bow out or switch to a different rewards program, start spending those points.

Fortunately, it’s easy to use these particular rewards, especially if you translate them into cash: $5,000 points = $50 statement credit that you can spend on anything you want. If you have travel rewards, earned via the U.S. Bank FlexPerks Travel Rewards Visa Signature Card, you’re not limited to spending them on travel, but that’s where you’ll get the most bang for your buck. A FlexPerks point is worth one cent when redeemed for cash, but up to twice that when redeemed for an airline ticket. A reward ticket also comes with a bonus of up to $25 spent on baggage fees, in-flight snacks, etc.

With FlexPerks Travel Rewards, you can translate points into cash or a gift certificate using the formula above, which you can then use on hotels (specifically Hyatt, Marriott or Ritz-Carlton), car rentals (Hertz, Avis or Budget), or cruises on Carnival or Royal Caribbean. Or, you can spend them on airfare (20,000 FlexPoints = up to a $400 ticket) booked through Travelocity.

It’s important to remember that points attached to a bank’s rewards program — i.e., Chase’s Ultimate Rewards or U.S. Bank’s FlexPerks — are always more vulnerable than frequent flier miles or hotel reward points. That’s because miles and hotel rewards are managed by the loyalty programs of the airline or hotel chain, not by the credit card issuer. Once you’ve banked those rewards, they’re no longer controlled by a bank but by its partner airline or hotel chain, so canceling a credit card won’t affect them.

See related: 8 ways to maximize credit card rewards points , What to consider before getting a hotel rewards card

• If you close a credit card, you often lose your points immediately
• What to consider before applying for a cash back credit card
• Airlines offer better elite frequent flier deals

If you close a credit card, you often lose your points immediately

Dear Cashing In,
Read your reply to a query about the Chase Sapphire card, which I have. If you cancel the card, do you lose the unredeemed points immediately or is there a grace period after the cancellation within which the points are still good? I heard 30 days. I have the same question regarding my FlexPerks account. Thank you. — Michel

Dear Michel,
If you cancel any Chase rewards card , you will lose your points. A spokesman for Chase tells me there is no grace period for your Chase Sapphire reward points once you cancel the card. “If a customer closes his or her account, the points are forfeited,” the Chase spokesman says. “We encourage customers to redeem their points prior to closing the account.”

So use those points now or risk losing them altogether. In fact, you need to protect your points even if you’re replacing your card with another Chase rewards card. If you have another Chase credit card linked to Chase Ultimate Rewards, such as Chase Ink Bold, you can transfer the points to that account from the account you’re closing, but make sure to do it prior to closing the account.

Same rules apply for points earned on your FlexPerks card. According to the disclosures page for the FlexPerks rewards program on U.S. Bank’s website: “Once you or we close your account for any reason, all accumulated FlexPoints may be forfeited.”

As long as you have an active account with FlexPerks, your points are good for five years from the end of the calendar quarter in which they were earned. If you decide to bow out or switch to a different rewards program, start spending those points.

Fortunately, it’s easy to use these particular rewards, especially if you translate them into cash: $5,000 points = $50 statement credit that you can spend on anything you want. If you have travel rewards, earned via the U.S. Bank FlexPerks Travel Rewards Visa Signature Card, you’re not limited to spending them on travel, but that’s where you’ll get the most bang for your buck. A FlexPerks point is worth one cent when redeemed for cash, but up to twice that when redeemed for an airline ticket. A reward ticket also comes with a bonus of up to $25 spent on baggage fees, in-flight snacks, etc.

With FlexPerks Travel Rewards, you can translate points into cash or a gift certificate using the formula above, which you can then use on hotels (specifically Hyatt, Marriott or Ritz-Carlton), car rentals (Hertz, Avis or Budget), or cruises on Carnival or Royal Caribbean. Or, you can spend them on airfare (20,000 FlexPoints = up to a $400 ticket) booked through Travelocity.

It’s important to remember that points attached to a bank’s rewards program — i.e., Chase’s Ultimate Rewards or U.S. Bank’s FlexPerks — are always more vulnerable than frequent flier miles or hotel reward points. That’s because miles and hotel rewards are managed by the loyalty programs of the airline or hotel chain, not by the credit card issuer. Once you’ve banked those rewards, they’re no longer controlled by a bank but by its partner airline or hotel chain, so canceling a credit card won’t affect them.

See related: 8 ways to maximize credit card rewards points , What to consider before getting a hotel rewards card

• If you close a credit card, you often lose your points immediately
• What to consider before applying for a cash back credit card
• Airlines offer better elite frequent flier deals

Crédit Agricole Selects Gemalto for Large-Scale Deployment of Contactless EMV Payment in France

AMSTERDAM–(BUSINESS WIRE)–

Gemalto (Euronext NL0000400653 GTO), the world leader in digital
security, announces it is behind Crédit Agricole’s large-scale
deployment of contactless
EMV banking cards in France. The Crédit Agricole group is market
leader in full-service retail banking in France and one of the largest
banks in Europe. Gemalto is the first to market the highly secure
Optelio contactless EMV banking card certified by GIE-CB (“Groupement
d’Intérêt Economique – Carte Bancaire”) with optimized EMV risk
management features for the French market.

The deployment opens the door to the world of contactless payment for
all of Crédit Agricole’s customers. Cardholders can enjoy a new payment
experience by simply waving or tapping their card in front of a
contactless reader at the point-of-sale for purchases under 20 euros,
while transactions above that amount will require a PIN confirmation.
The technology saves time for both merchants and cardholders and greatly
reduces cash handling.

The card also features additional protections that reinforce security
and complement the traditional EMV payment functionality. These added
features provide improved flexibility while maintaining a high level of
risk management for Crédit Agricole.

“Leveraging their global expertise in EMV and contactless rollouts
worldwide, the Gemalto team put forward the right product at the right
time for our program in France,” according to Crédit Agricole.

“With this new project, Crédit Agricole is keen to offer their
customers secure and reliable payment solutions, while benefiting from
the latest technological innovations,” added Gabrielle Bugat,
Senior Vice President, Gemalto. “Contactless is one of the key
cooperation and development areas for 2012, both for Gemalto and Crédit
Agricole.”

About Gemalto

Gemalto (Euronext NL0000400653 GTO) is the world leader in digital
security with 2010 annual revenues of €1.9 billion and over 10,000
employees operating out of 87 offices and 13 Research Development
centers in 45 countries.

Gemalto is at the heart of our evolving digital society. Billions of
people worldwide increasingly want the freedom to communicate, travel,
shop, bank, entertain, and work—anytime, anywhere, in ways that are
convenient, enjoyable and secure. Gemalto delivers on the growing
demands for personal mobile services, identity protection, payment
security, authenticated online services, cloud computing access, modern
transportation, e-healthcare and e-government services. Gemalto does
this by providing secure software, a wide range of secure personal
devices, and managed services to wireless operators, banks, enterprises
and government agencies.

Gemalto is the world leader for electronic passports and identity cards,
two-factor authentication devices for online protection, smart
credit/debit and contactless payment cards, as well as subscriber
identification modules (SIM) and universal integrated circuit cards
(UICC) in mobile phones. Also, in the emerging machine-to-machine
applications Gemalto is a leading supplier of wireless modules and
machine identification modules (MIM). To operate these solutions and
remotely manage the software and confidential data contained in the
secure devices Gemalto also provides server platforms, consulting,
training, and managed services to help its customers achieve their goals.

As the use of Gemalto’s software and secure devices increases with the
number of people interacting in the digital and wireless world, the
Company is poised to thrive over the coming years.

For more information visit www.gemalto.com,
www.justaskgemalto.com,
blog.gemalto.com,
or follow @gemalto
on Twitter.

Best credit cards for Valentine's Day

Even though it falls on the same date every year, Valentine’s Day still takes many of us by surprise. If you’re in a new relationship, you’re trying to figure out how far you can go with gifts, flowers and dinner on the town. And if you’ve been with the same partner for years, you’re probably trying to figure out how to raise the stakes. Fortunately, some of the best rewards credit cards can help treat your loved one to a February 14 they won’t forget.

Top Valentine’s Day credit card offers

A handful of today’s top rated credit cards can help you pass the Valentine’s Day test, but not in the way you think. Instead of putting yourself in debt to bankroll a special evening, consider using your credit card’s special features to streamline your planning. Check out a few of our editorial team’s favorite love offerings from major credit card issuers:

• Discover Open Road. This version of the Discover Card offers one of the most unusual signup bonuses on the market: a $150 Restaurant.com gift certificate. If you’re not familiar with the website, Restaurant.com offers deeply discounted deals to eateries in most major cities. It’s not hard to stretch that $150 credit into $300 or more in dining rewards. One caveat: you won’t be able to use that credit on Valentine’s Day, but you can certainly shift around your “dining out” budget for the rest of the month with help from this special offer.
• Bloomingdale’s Ultimate Premier Insider from American Express. As a rule, we generally avoid retail store credit cards. They rarely offer great value, and their interest rates tend to balloon beyond the point of practicality. However, a partnership between Bloomingdale’s and American Express means that your frequent shopping trips can help you keep your next gift a secret. Spend $2,500 a year at Bloomie’s, and you’ll get free gift wrapping and local delivery, plus help from a personal shopper who can help you pick out a great V-Day surprise.
• Marriott Rewards Premier Visa Signature Card from Chase. Sometimes, the route to your Valentine’s heart leads straight out of town. This travel rewards credit card bestows you with instant Silver Elite status in the Marriott Rewards program. That means you’ll have direct access to an experienced guest services professional who can help you plan everything you need for a romantic getaway at any of Marriott’s 3,700 hotels and resorts throughout the world. While you dine and play during your trip, you’ll earn a 20 percent premium on your Marriott Rewards points, plus enough bonus points to cover next year’s surprise trip.
• Citi Gold / AAdvantage Visa Signature. When your romantic getaway means getting really far away, Citi’s partnership with American Airlines can help you score some inexpensive plane tickets. Between a generous signup bonus and AA’s reduced mileage awards, you can quickly earn enough miles to escape to somewhere really romantic. Plus, the Citi Private Pass program gives you access to exclusive events and hard-to-get tickets for theater, sports and concerts in many cities across the country.

Each of these four cards offers something even better for your relationship than a low interest rate and a money-saving signup offer. All four cards provide access to personal concierge services that can help you plan exciting gifts, meals and experiences for your special someone. Concierges don’t always work directly for your credit card issuer: Visa Signature and Discover Card outsource their concierge requests to outside companies. However, their partnerships with ticket agencies, florists, tour operators and restaurants can elevate your date to epic levels.

Credit card concierge can save Valentine’s Day

In lieu of a personal assistant, your credit card company’s concierge service works as a team to track down gifts and experiences your loved one will adore. If you’ve ever struggled to come up with ideal gifts or dining suggestions, just provide your concierge with your budget and some baseline ideas. A concierge might suggest some special deals from partner vendors, or reference some recent requests from fellow cardholders. American Express, Citi, and Chase all hold event tickets and restaurant reservations for their cardholders, adding value by making a venue’s “sold out” sign irrelevant.

Yet, even concierges from the best credit card rewards programs run into challenges filling last minute requests for flowers, chocolates and dinner reservations on Valentine’s Day. Instead of relying on a credit card’s concierge to save the day, it’s best to connect with them early on if you want help planning a truly romantic experience.

The original article can be found at CardRatings.com:
Best credit cards for Valentine’s Day

Crédit Agricole Selects Gemalto for Large-Scale Deployment of Contactless EMV Payment in France

AMSTERDAM–(BUSINESS WIRE)–

Gemalto (Euronext NL0000400653 GTO), the world leader in digital
security, announces it is behind Crédit Agricole’s large-scale
deployment of contactless
EMV banking cards in France. The Crédit Agricole group is market
leader in full-service retail banking in France and one of the largest
banks in Europe. Gemalto is the first to market the highly secure
Optelio contactless EMV banking card certified by GIE-CB (“Groupement
d’Intérêt Economique – Carte Bancaire”) with optimized EMV risk
management features for the French market.

The deployment opens the door to the world of contactless payment for
all of Crédit Agricole’s customers. Cardholders can enjoy a new payment
experience by simply waving or tapping their card in front of a
contactless reader at the point-of-sale for purchases under 20 euros,
while transactions above that amount will require a PIN confirmation.
The technology saves time for both merchants and cardholders and greatly
reduces cash handling.

The card also features additional protections that reinforce security
and complement the traditional EMV payment functionality. These added
features provide improved flexibility while maintaining a high level of
risk management for Crédit Agricole.

“Leveraging their global expertise in EMV and contactless rollouts
worldwide, the Gemalto team put forward the right product at the right
time for our program in France,” according to Crédit Agricole.

“With this new project, Crédit Agricole is keen to offer their
customers secure and reliable payment solutions, while benefiting from
the latest technological innovations,” added Gabrielle Bugat,
Senior Vice President, Gemalto. “Contactless is one of the key
cooperation and development areas for 2012, both for Gemalto and Crédit
Agricole.”

About Gemalto

Gemalto (Euronext NL0000400653 GTO) is the world leader in digital
security with 2010 annual revenues of €1.9 billion and over 10,000
employees operating out of 87 offices and 13 Research Development
centers in 45 countries.

Gemalto is at the heart of our evolving digital society. Billions of
people worldwide increasingly want the freedom to communicate, travel,
shop, bank, entertain, and work—anytime, anywhere, in ways that are
convenient, enjoyable and secure. Gemalto delivers on the growing
demands for personal mobile services, identity protection, payment
security, authenticated online services, cloud computing access, modern
transportation, e-healthcare and e-government services. Gemalto does
this by providing secure software, a wide range of secure personal
devices, and managed services to wireless operators, banks, enterprises
and government agencies.

Gemalto is the world leader for electronic passports and identity cards,
two-factor authentication devices for online protection, smart
credit/debit and contactless payment cards, as well as subscriber
identification modules (SIM) and universal integrated circuit cards
(UICC) in mobile phones. Also, in the emerging machine-to-machine
applications Gemalto is a leading supplier of wireless modules and
machine identification modules (MIM). To operate these solutions and
remotely manage the software and confidential data contained in the
secure devices Gemalto also provides server platforms, consulting,
training, and managed services to help its customers achieve their goals.

As the use of Gemalto’s software and secure devices increases with the
number of people interacting in the digital and wireless world, the
Company is poised to thrive over the coming years.

For more information visit www.gemalto.com,
www.justaskgemalto.com,
blog.gemalto.com,
or follow @gemalto
on Twitter.

Best credit cards for Valentine's Day

Even though it falls on the same date every year, Valentine’s Day still takes many of us by surprise. If you’re in a new relationship, you’re trying to figure out how far you can go with gifts, flowers and dinner on the town. And if you’ve been with the same partner for years, you’re probably trying to figure out how to raise the stakes. Fortunately, some of the best rewards credit cards can help treat your loved one to a February 14 they won’t forget.

Top Valentine’s Day credit card offers

A handful of today’s top rated credit cards can help you pass the Valentine’s Day test, but not in the way you think. Instead of putting yourself in debt to bankroll a special evening, consider using your credit card’s special features to streamline your planning. Check out a few of our editorial team’s favorite love offerings from major credit card issuers:

• Discover Open Road. This version of the Discover Card offers one of the most unusual signup bonuses on the market: a $150 Restaurant.com gift certificate. If you’re not familiar with the website, Restaurant.com offers deeply discounted deals to eateries in most major cities. It’s not hard to stretch that $150 credit into $300 or more in dining rewards. One caveat: you won’t be able to use that credit on Valentine’s Day, but you can certainly shift around your “dining out” budget for the rest of the month with help from this special offer.
• Bloomingdale’s Ultimate Premier Insider from American Express. As a rule, we generally avoid retail store credit cards. They rarely offer great value, and their interest rates tend to balloon beyond the point of practicality. However, a partnership between Bloomingdale’s and American Express means that your frequent shopping trips can help you keep your next gift a secret. Spend $2,500 a year at Bloomie’s, and you’ll get free gift wrapping and local delivery, plus help from a personal shopper who can help you pick out a great V-Day surprise.
• Marriott Rewards Premier Visa Signature Card from Chase. Sometimes, the route to your Valentine’s heart leads straight out of town. This travel rewards credit card bestows you with instant Silver Elite status in the Marriott Rewards program. That means you’ll have direct access to an experienced guest services professional who can help you plan everything you need for a romantic getaway at any of Marriott’s 3,700 hotels and resorts throughout the world. While you dine and play during your trip, you’ll earn a 20 percent premium on your Marriott Rewards points, plus enough bonus points to cover next year’s surprise trip.
• Citi Gold / AAdvantage Visa Signature. When your romantic getaway means getting really far away, Citi’s partnership with American Airlines can help you score some inexpensive plane tickets. Between a generous signup bonus and AA’s reduced mileage awards, you can quickly earn enough miles to escape to somewhere really romantic. Plus, the Citi Private Pass program gives you access to exclusive events and hard-to-get tickets for theater, sports and concerts in many cities across the country.

Each of these four cards offers something even better for your relationship than a low interest rate and a money-saving signup offer. All four cards provide access to personal concierge services that can help you plan exciting gifts, meals and experiences for your special someone. Concierges don’t always work directly for your credit card issuer: Visa Signature and Discover Card outsource their concierge requests to outside companies. However, their partnerships with ticket agencies, florists, tour operators and restaurants can elevate your date to epic levels.

Credit card concierge can save Valentine’s Day

In lieu of a personal assistant, your credit card company’s concierge service works as a team to track down gifts and experiences your loved one will adore. If you’ve ever struggled to come up with ideal gifts or dining suggestions, just provide your concierge with your budget and some baseline ideas. A concierge might suggest some special deals from partner vendors, or reference some recent requests from fellow cardholders. American Express, Citi, and Chase all hold event tickets and restaurant reservations for their cardholders, adding value by making a venue’s “sold out” sign irrelevant.

Yet, even concierges from the best credit card rewards programs run into challenges filling last minute requests for flowers, chocolates and dinner reservations on Valentine’s Day. Instead of relying on a credit card’s concierge to save the day, it’s best to connect with them early on if you want help planning a truly romantic experience.

The original article can be found at CardRatings.com:
Best credit cards for Valentine’s Day

Credit card or loan to tackle debt?

PERSONAL loans are now going head-to-head with credit cards in the battle for debt consolidation business.

Debt consolidation, where several high-interest debts are rolled into a single lower-rate loan, used to be the exclusive domain of personal loans.

Now credit card providers are pitching at the same market, leading to some very appealing balance-transfer offers.

Such offers range from zero per cent interest for six months to around 4.99 per cent for the life of the outstanding balance.

As a guide, financial researcher Canstar looked at two different debt-repayment scenarios where $10,000 is paid off over three years: a personal loan charging 10 per cent interest, and a credit card charging zero per cent for six months and a low rate of 12 per cent thereafter.

If you were to make monthly repayments of around $323, the debt would be repaid in three years using either the credit card or personal loan.

The key difference is the total interest charge for the card would be about $1353 compared with $1619 for the loan.

That’s a saving of $266 thanks to the zero-interest introductory period.

But, and it’s a very big but, paying $323 each month on a card balance of $10,000 would be well above the card issuer’s minimum repayments.

If the minimum repayments were based on three per cent of the card balance, and that was all the cardholder repaid monthly, there would still be an outstanding debt of $4500 at the end of three years.

Choose the option that you think will not only do the best thing by your pocket, but also by your temperament and money management history.

MasterCard Urging Merchants, Banks To Upgrade Card Technology

(Updated with details about mobile payments in paragraph 12 and comment from industry executive in paragraphs 15 and 16.)

NEW YORK -(Dow Jones)- MasterCard Inc. (MA) is pushing merchants to upgrade their checkout systems to handle high-tech credit and debit cards that store information inside a computer chip rather than a magnetic stripe.

Such technology is common in foreign countries, where banks for years have issued chip-enabled cards to their customers to cut down on fraud and meet regional standards or country regulations. It has yet to catch on in the U.S. market.

The technology, which adheres to card industry standards known as EMV, is considered to be more secure than magnetic-stripe cards because customer data is encrypted inside a chip, making it harder to hack into. While a handful of U.S. banks and credit unions have begun issuing the cards here in the last two years, mostly to customers who travel abroad, retailers have held off on upgrading their payment terminals because of costs.

“The U.S. has become an island in waters that are surrounded by EMV,” Chris McWilton, president of U.S. markets for MasterCard, said in an interview Monday. “We’re the only major market in the world that hasn’t adopted the EMV standard.”

MasterCard competitor Visa Inc. (V) last year announced a similar plan intended to spur adoption of the technology, which some analysts said would be slow to gain traction without agreement from competing card-processing networks.

“It’s only effective if the other networks do the same,” said Julie Conroy McNelley, a senior analyst with market research firm Aite Group LLC.

Merchants don’t want to spend money on technology if the benefits and requirements differ among card companies, McNelley said.

MasterCard plans to shift liability starting in October 2015 to merchants who have not upgraded their checkout equipment to process transactions made with chip-based cards if a customer pays with such a card and fraud occurs, McWilton said. Banks currently pay for most card-fraud costs.

The company will also allow merchants to reduce some security-audit activities if they upgrade to certain EMV terminals. That relief would phase in beginning October 2013. However, they must still be in compliance with the security requirements.

MasterCard is urging banks that issue its cards to adopt the standard, and will hold them liable for some forms of card fraud if they have not issued chip-based cards to their customers, depending on whether a merchant has EMV terminals, McWilton said.

“Our thinking here is what we’ve got to do is … get the infrastructure and the ecosystem for payments in the United States to eventually enable a better customer experience,” McWilton said.

A move to EMV equipment by merchants could also advance mobile-payment technology, experts said. The terminals that handle chip-based cards are often compatible with systems that allow customers to tap and pay with a smartphone embedded with payment technology. Such systems are just now being rolled out or tested in the United States.

A handful of banks, including J.P. Morgan Chase Co. (JPM), Wells Fargo Co. (WFC) and U.S. Bancorp (USB), as well as some credit unions have begun offering EMV cards to customers who travel abroad frequently.

Their motivation is to cut down on complaints from customers who frequently run into problems trying to use their magnetic-stripe cards overseas. Many overseas merchants insist on accepting chip-enabled cards, and some machines, like ticket kiosks, can’t handle magnetic-stripe cards.

A wider scale deployment by U.S. banks isn’t likely until merchants begin to upgrade, said Randy Vanderhoof, executive director of the Smart Card Alliance, an organization that promotes the technology.

“At that point it will make economic sense for the issuing banks in the U.S. to start converting their mag-stripe portfolios over to” chip-based cards, Vanderhoof said.

MasterCard’s move follows initiatives announced last year by Visa, which is trying to boost merchant adoption by allowing certain retailers to avoid some annual security assessments while eventually shifting the liability for card fraud onto the shoulders of merchants who don’t upgrade.

Visa’s security incentive is set to kick in this October and its liability shift is scheduled for October 2015.

MasterCard and Visa do not lend or issue cards to consumers; rather, they process transactions for the banks that issue their cards to customers.

Both companies’ plans require the banks that handle card transactions for retailers, known as merchant acquirers, also be equipped to handle chip-based cards by April 2013.

MasterCard took into consideration Visa’s timeline when establishing its schedule, McWilton said, adding that merchants, banks and other parties said it was important to have a uniform roadmap to work toward.

Copyright © 2012 Dow Jones Newswires

Hackers Can Read Credit Cards Through Your Wallet

Some blank credit cards, a $50 RFID reader and $300 card magnetizing device: all a hacker needs for contactless credit card fraud. (Click to enlarge)

Pull out your credit card and flip it over. If the back is marked with the words “PayPass,” “Blink,” that triangle of nested arcs that serves as the universal symbol for wireless data or a few other obscure icons, Kristin Paget says it’s vulnerable to an uber-stealthy form of pickpocketing. As she showed on a Washington D.C. stage Saturday, she can read all the data she needs to make a fraudulent transaction off that card with just a few hundred dollars worth of equipment, and do it invisibly through your wallet, purse, or pocket.

At the Shmoocon hacker conference, Paget aimed to indisputably prove what hackers have long known and the payment card industry has repeatedly downplayed and denied: That RFID-enabled credit card data can be easily, cheaply, and undetectably stolen and used for fraudulent transactions. With a Vivotech RFID credit card reader she bought on eBay for $50, Paget wirelessly read a volunteer’s credit card onstage and obtained the card’s number and expiration date, along with the one-time CVV number used by contactless cards to authenticate payments. A second later, she used a $300 card-magnetizing tool to encode that data onto a blank card. And then, with a Square attachment for the iPhone that allows anyone to swipe a card and receive payments, she paid herself $15 of the volunteer’s money with the counterfeit card she’d just created. (She also handed the volunteer a twenty dollar bill, essentially selling the bill on stage for $15 to avoid any charges of illegal fraud.)

Paget magnetizing a counterfeit card with a volunteer’s wirelessly-stolen credit card data on stage at Shmoocon. (Click to enlarge.)

If anyone still doubted that the trick had worked, Paget accidentally flashed the volunteer’s credit card number on a screen in front of an audience of hundreds of hackers and security researchers. “You were planning on cancelling that card, weren’t you?” she added somewhat sheepishly.

Contactless cards are far more common than they might seem: According to the Smart Card Association, about 100 million of the RFID-enabled cards are in circulation.  Visa calls its technology payWave, MasterCard dubs it PayPass, Discover brands it Zip, and American Express calls it ExpressPay. According to a show of hands among Shmoocon’s audience, dozens of the several hundred conference attendees in the room had contactless cards, and about a quarter of those weren’t aware of it until Paget asked them pull out their cards and check for contactless symbols.

Paget, a well-known security researcher for the consultancy Recursion Ventures who was known as Christopher Paget until a gender change last May,  used a simple method for his hack: impersonating a legitimate contactless point-of-sale terminal with her own RFID card reader. (That’s the striped panel pictured above.) In one practical version of the scam, Paget says, a fraudster could simply bump up against his victim with that reader in a coat pocket and invisibly scan the RFID signal through material like a leather wallet or cloth pants. In a demonstration just before her talk, Paget read a card in my wallet through my back pocket without touching me, successfully obtaining the card’s information.

The scheme, Paget points out, doesn’t involve any hidden bug in the system, but rather the more fundamental problem that any commercially-available RFID reader can read the data from a contactless card as easily as a store’s point-of-sale device does. “Whatever encryption or other security there might be, it doesn’t matter,” she says. “The reader just spits out the number as if I’m the point-of-sales terminal, which is totally stupid. This is an embarrassingly simple hack, but it works.”

The attack Paget demonstrated is far from new. The security industry has known since 2006 that contactless credit cards can be read wirelessly without the owner’s knowledge. But in current versions of the cards, the user’s name, PIN and the three-digit CVV on the back of the card aren’t included in the wirelessly-read information, which the industry has argued means the attack isn’t practical.

Randy Vanderhoof, executive director of the industry group the Smart Card Alliance, points out that despite previous research on the contactless attack, no real-world instances of the fraud have ever been reported. “We’ve got six years of history, a hundred million users of these cards, and we haven’t seen any documented cases of this kind of fraudulent transaction. The reason we think that’s the case is that it’s very difficult to monetize this as a criminal,” says Vanderhoof. “The premise that this is a new threat is absolutely false and isn’t supported by [Paget's] demonstration.”

In fact, contactless cards do offer one security feature traditional cards don’t: Along with the card’s 16-digit number and expiration date, the cards are set to offer up a one-time CVV code with every scan. Those codes can only be used for one transaction, and have to used in the order they’re generated. If a payment processor that detects multiple transactions with the same code or codes being used to make transactions in the wrong order, it will disable the card. So a contactless card scammer can only use each stolen number for one transaction, and if the victim of a the scam uses the card again before the thief has time to make a fraudulent payment, all transactions on the card will be blocked.

“The truth is that consumers should be embracing this technology because it’s making them safer,” says Vanderhoof. “Efforts to try to discredit the use of chip technology in cards is only making the technology more vulnerable.”