The Prepaid Press - January 2009 - (Page 8)

PREPAID BUSINESS Dec. 2008 / Jan. 2009 - 8 2008 Milestones by Gene Retske allow consumers to turn loose change into cash. Redbox DVD kiosks provide the latest movie releases at $1 per night, plus tax. http:// www.prepaid-press. com/news_detail. php?t=paper&id=2177 The acquisition of InComm by First Data sent ripples throughout the prepaid industry. The roll-up of InComm’s $300 million in revenue and $8 billion in transactions made this is a safe bet for First Data. Both companies had a dizzying history of rolling up a number of other companies prior to this announcement. Many analysts speculated that First Data could become the most significant player in the prepaid services arena by virtue of this acquisition. http://www.prepaid-press.com/news_detail. php?t=paper&id=2225 (See November Milestone below for updates on this story.) January U.S. Treasury Begins Pushing Prepaid Cards to Unbanked Social Security Benefit Recipients Targeted The debit card market made a quantum leap forward in January when the U.S. Department of the Treasury’s Financial Management Service announced that millions of unbanked Americans would soon be getting prepaid debit cards. Those receiving Social Security were offered a prepaid debit card to be used for benefit payments. Treasury selected Dallas based Comerica Bank to provide the card, called “Direct Express,” starting in early 2008. Although the program originally targeted the 4 million unbanked recipients of Social Security payments, Direct Express was part of an ongoing federal effort, called Go Direct, to get recipients to go paperless. Treasury estimated that up to $44 million in administration costs would be eliminated by the debit card program for the unbanked alone. http://www.prepaid-press.com/news_detail. php?t=paper&id=2081 February Coinstar to Expand Centers In Wal-Mart Locations Redbox DVD Kiosks To Expand Coinstar announced that it would reset and optimize Wal-Mart store entrances, and add new product offerings to customers. The company said that the expansion of Coinstar Centers in Wal-Mart represents a transition out of the test phase into a strategic roll-out. The announcement said that Wal-Mart intended to have over 3,000 Redbox DVD rental kiosks in the United States over the next 12-18 months. Redbox is currently installed in over 800 Wal-Mart stores, and Coinstar coin-counting machines (Coinstar Centers) are installed in over 400 Wal-Mart stores in the United States. Coinstar Centers and Redbox DVD rental kiosks are services that Coinstar said meets the needs of busy consumers. Coinstar Centers are self-service coin counting machines that March AT&T Targets Handset Traffickers Federal Suit To Stem Losses AT&T Mobility, the biggest US wireless company, filed a suit in federal court against Wireless Exclusive USA, LLC, based in Dallas, TX. In the suit, filed in the Northern District Court, AT&T said that the damages of the trafficking exceeded $76 million. The suit also named 50 unknown “John Does” and 50 XYZ Companies, who AT&T said were also involved in the scheme. This suit was the latest filed by a US prepaid carrier against those who purchase heavily discounted handsets intended for use by its wireless customers, reprogram them, and send them to overseas locations for sale. The purpose of the suit was to stem the losses due to the trafficking of their prepaid handsets. The international market for repackaged handsets is very large, and their ubiquitous availability in retail locations makes them tempting targets for traffickers. http://www.prepaid-press.com/news_detail. php?t=paper&id=2152 April Motorola to Split Two Companies to Result Communications giant Motorola announced in March that it would split into two separate, publicly traded companies. Despite rosy proclamations by the company about “creating value for all Motorola shareholders,” there was speculation that the company was actually trying to isolate problems in its handset division, Mobile Devices. Motorola said the decision to separate Mobile Devices and Broadband & Mobility Solutions businesses was the result of a review process by the Motorola management team and Board of Directors, together with independent advisors. The economic downturn has caused Motorola to delay the split until after the Third Quarter of 2009. Motorola’s stock dropped from around $10 in March 2008, when the split was announced, to $4.25 on December 19. http://www.prepaid-press.com/news_detail. php?t=paper&id=2183 May First Data to Acquire InComm Rollups and Mergers To Create New Behemoth June FTC Halts Bogus Prepaid Phone Card Claims Cards Failed to Deliver the Number of Minutes Promised in Ads At the request of the Federal Trade Commission, a U. S. District Court ordered a temporary halt to alleged deceptive advertising claims used to promote prepaid phone cards marketed by Alternatel, Inc.; G.F.G. Enterprises, LLC, also d/b/a Mystic Prepaid; Voice Prepaid, Inc.; Voice Distributors, Inc.; Telecom Express, Inc.; and their principals. The agency alleged that the marketers misrepresented the number of calling minutes consumers actually got on cards and failed to adequately disclose fees that reduced the value of the cards. On December 11, the parties, including the FTC, asked the court for a stay on the proceedings for 60 days, until February 11, 2009 to complete a proposed settlement. The stay was granted. http://www.prepaid-press.com/news_detail. php?t=paper&id=2302 July Florida AG Settles With Calling Card Providers Nine Companies Agree to Reforms, Auditing In a case that could set the standard for states dealing with calling card issues, Florida Attorney General Bill McCollum announced on June 11, 2008, that his office had reached a resolution of an action that began in August 2007. Nine companies agreed to cease all deceptive advertising, provide 100 percent of the minutes advertised, and submit to three years of auditing by the Office of the Attorney General to ensure that they are following the terms of their agreement. The companies were also to collectively reimburse the Attorney General’s Office more than $1 million for the cost of its investigation and future enforcement efforts. The companies who signed agreements with the Attorney General’s Office were IDT America, Inc.; Union Telecard Alliance (UTA); Total Call International, Inc.; Blackstone Calling Card, Inc.; CVT Prepaid Solutions, Inc.; Dollar Phone Enterprise, Inc.; STi Prepaid, LLC; Alternatel, Inc; and Cristel Telecommunications, LLC. The Attorney General specifically praised IDT, an international prepaid calling card provider that approached the Attorney General’s Office with information about the problems in the industry and cooperated fully with the investigation. http://www.prepaid-press.com/news_detail. php?t=paper&id=2305 August Prepaid Industry Leaders Speak Out Prepaid Press Expo 08 The Prepaid Press Expo 2008 was the largest gathering ever held of prepaid industry leaders from all segments of prepaid. There were over 1,200 executives, managers, analysts, consultants and researchers from calling card, wireless, gift and debit cards and other prepaid sectors, in attendance at the Expo. For three days, they met in conferences and in the exhibit hall to review trends and events, and talk about the industry. Convergence was a major theme; a trend that is bringing together the diverse elements of the prepaid industry. For the first time, prepaid calling cards, gift cards, wireless cards, and prepaid debit cards are all sitting together on the same racks. Prepaid cards are expanding from national retail chains to c-stores, bodegas and small independent grocery stores. http://www.prepaid-press.com/news_detail. php?t=paper&id=2382 September Visa Launches New Mobile Payment Services Platform Enables New Development In September, Visa launched four new programs to deliver payments and services via mobile devices, including two commercial mobile payments programs in Brazil and Korea, and two mobile offers and transaction notification pilots in the United States. The new programs were in addition to more than a dozen pilot and commercial programs around the world. Visa’s investment in its mobile platform came as more consumers in both developed and emerging markets adopt mobile devices. According to the GSM Association, there are nearly 3.5 billion such devices in the world with the greatest growth coming from developing countries. Visa said that as these numbers have increased and the devices grow smarter, there is greater opportunity to deliver new services around payment. http://www.prepaid-press.com/news_detail. php?t=paper&id=2407 October Oblio Wins Judgment Texas Jury Awards $2.5 Million Oblio won the first in a series of legal actions it initiated to stop what it said was fraud against it. A Dallas, Texas jury awarded Titan’s Oblio Telecom $2.5 million in a civil case filed August 21, 2007 against Clifton Prepaid Communications and its affiliates. There are other civil and criminal actions still pending. In the Clifton case, one principal, Aref Aref, had recently filed for personal bankruptcy, excluding him from the trial. Oblio said it intended to pursue fraud claims against Aref in his bankruptcy case and would “seek to have Mr. Aref’s debts to Oblio made non-dischargeable.” http://www.prepaid-press.com/news_detail. php?t=pt&id=1263 November First Data and InComm, Part II Combination Off In the beginning of November, First Data and InComm announced that they had mutually agreed to terminate First Data’s planned acquisition of InComm. Some analysts speculated that the capital needed to complete the private transaction had evaporated in the banking crisis. Instead, First Data and InComm signed a distribution agreement and said they would continue to support their joint customers with prepaid card processing, program management and a distribution network that would allow First Data and its merchants to sell prepaid products in InComm prepaid card mal http://www.prepaid-press.com/news_detail.php?t=paper&id=2177 http://www.prepaid-press.com/news_detail.php?t=paper&id=2225 http://www.prepaid-press.com/news_detail.php?t=paper&id=2407 http://www.prepaid-press.com/news_detail.php?t=paper&id=2302 http://www.prepaid-press.com/news_detail.php?t=paper&id=2152 http://www.prepaid-press.com/news_detail.php?t=pt&id=1263 http://www.prepaid-press.com/news_detail.php?t=paper&id=2081 http://www.prepaid-press.com/news_detail.php?t=paper&id=2183 http://www.prepaid-press.com/news_detail.php?t=paper&id=2490 http://www.prepaid-press.com/news_detail.php?t=paper&id=2305 http://www.prepaid-press.com/news_detail.php?t=pt&id=1351 http://www.prepaid-press.com/news_detail.php?t=paper&id=2382 http://www.pagepluscellular.com

Table of Contents Feed for the Digital Edition of The Prepaid Press - January 2009

The Prepaid Press - January 2009 Economic Crisis Sharpens Focus on Stored Value Cards Industry Veterans Weigh In on 2009 Prepaid Opportunities Contents From the Publisher: Ready for Change? The Prepaid Press Thanks its Editorial Advisory Board Regulatory Rundown 2008 Milestones Prepaid Wireless Providers Capitalize on Economic Downturn Prepaid Telecom in Brief APCC Services Settles With Calling Card Providers Boost Mobile Offers All-in-One Prepaid Package SonarTel Prepaid Customers Can Use Accounts in More Countries BillSoft Selected by Integra Telecom Pingo Adds PC “SoftPhone” Calling kajeet, the Cell Phone Service for Kids, Wins Award Prepaid Wireless Roundup The State of Prepaid Technology: Wholesalers & White Label Services New Millennium Releases Wireless Survey Results 5 Minutes With Paul Amick, EVP & Co-Founder, PhoenixSoft Millions Could Cut Cell Phone Bills in Half New Virgin Poll Reveals Buying Habits The Legal Line BioPay Expands Offering for Underbanked IDT to Sell European Prepaid Payment Business iPayStation Launches Network for Distributor Stored Value Solutions Appoints New VP Cellular South Offers Mobile Banking for Regions Bank Javelin Research: Processor Important in Prepaid MiCash Announces New Prepaid Debit Card Monitise and eCommLink Partner Platamovil Selects PhoenixSoft’s Cirrus Softswitch Prepaid Market Forecasts to 2011 Payments & Processing in Brief Prepaid 101: Gift Cards SCA’s PrizeSuite Enables Promotions MT&L Offers Gift Card Removal and Destruction Heartland Payment Systems Acquires Chockstone Amex and Rymax Offer Gift Cards TransCard Announces Corporate Gift Card Website Gift Cards & Promotions in Brief Our Advertisers Contact Us

The Prepaid Press - January 2009

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