Bizzy’s Business Links of the Day (061705)
Some Specifics on Increases in Required Credit Card Minimum Payments
A quote famouly attributed to Mark Twain, but according to this link never actually verified, is that “When the end of the world comes, I want to be in Cincinnati because it’s always twenty years behind the times.”
So I suppose I should congratulate the Cincinnati Enquirer, my hometown paper, on only being a bit less than two months behind other publications that reported upcoming increases in required minimum payments mandated by banking system overseers, specifically The Office of the Comptroller of the Currency.
But the Enquirer does come through with a few specifics for a couple of banks:
Beginning July 1, many banks will increase minimum credit-card payments from 2 percent of the principal balance, fees and interest to 3 percent or higher.
Other banks are raising them gradually through the end of the year, to comply with the early 2006 deadline set by the comptroller.
All U.S. Bank credit-card holders will see minimum payments increase July 1 from 2 percent to 3 percent of the outstanding principal, says spokesman Steve Dale. Customers have already been notified about the change.
At MBNA Corp., the nation’s third-largest credit-card issuer, the new minimum payment formula is 1 percent of the principal balance, plus fees and interest, each month, spokesman Jim Donahue says. That begins July 1 for new customers and Oct. 1 for existing customers. Previously, some cardholders may not have had to pay anything toward their loan principal.
My understanding is that the eventual target for minimums is supposed to be 4% of the outstanding balance.
Wifi Workaround?
Since Cincinnati gets its fair share of grief for Twain’s alleged quote, it seems only fair to note a WiFi initiative that appears to have the potential to break the deadlock between telcos that want to control all WiFi and cities and other governments that want to provide it for free:
Test sites for free wireless Internet access could be operational across the region within a few weeks, the founder of the effort said Thursday.
And Ryan Rybolt, who is leading up Project Lily Pad, said the free Wi-Fi “hotspots” could be a way to further attract young professionals to the area.
He spoke at a Cincinnati USA Regional Chamber event geared toward such young professionals.
“We want to crawl before we run and make sure we can do it for four to five spots before we get to 50 spots,” said Rybolt, who also is chief operating officer for Blue Ash-based Infintech, an electronic financial services provider.
“We want to make sure we work out all the technical bugs because we know once we get started, it will turn quickly from us asking for permission to places coming to us wanting to be a part of this.”
Rybolt said the initial sites being considered are Hyde Park Square, Fountain Square and Findlay Market.
The Project Lily Pad effort will be a public/private partnership, with business sponsors fronting the $2,000 or so a year it would cost to keep a Wi-Fi “hotspot” up and running in exchange for credit on signs in the area plus mentions on the launch Web page - much like an Adopt-A-Highway program.
“We want this to be a turnkey operation, where eventually all we need is the application, a sponsor, and we’re ready to get it set up,” Rybolt told a gathering at the chamber’s offices.
The cost to sponsors would be tax deductible, Rybolt said.
He said several businesses are already signed up or are close to doing so, with Time Warner Cable of Cincinnati’s RoadRunner business division providing the technical installation for each site.
…… Efforts to widen free Wi-Fi access are under way in cities throughout the country, with Austin, Texas, a prime example. Philadelphia also is trying but has run into resistance because of the use of public funds.
But according to Rybolt, no other city is using the sponsorship model.
To me, this would appear to bust objections by the telcos and free-marketeers such as the Institute for Policy Innovation (link is to home page; study that decries public ownership of WiFi is in print and not available online) that governments should stay out of WiFi.
I’m looking forward to the day I can do Hyde Park Square blogging, or catch on e-mail between meetings at Fountain Square. How cool.
UPDATE: It turns out that my take on IPI’s reaction is correct. Bruce Cleland of IPI was kind enough to respond my e-mail inquiry about the proposed WiFi setup and said in part:
While so far as I know IPI has not published anything specifically on this model I see no reason we would not support it. Essentially it is the television broadcast model, or terrestrial radio model - something of value is provided to the public via the funds of those who advertise.
Our objection has always been government stepping in where the free market should/could be operating.
MasterCard Mess
In what looks to be the largest instance of compromised data ever, MasterCard disclosed a security breach that potentially affects a whole lot of people:
MasterCard International said on Friday it was alerting member financial institutions of a security breach that could affect over 40 million credit cards, of which nearly 14 million are MasterCard-branded.
The breach took place at CardSystems Solutions in Tucson, which processes transactions on behalf of financial institutions and merchants.
MasterCard said it is giving member financial institutions the specific card account numbers that may have been compromised. MasterCard-brand cards include MasterCard, Maestro and Cirrus.
The company learned the final details of the breach this week, according to spokeswoman Jessica Antle. “It looks like a hacker gained access to CardSystems’ database and installed a script that acts like a virus, searching out certain types of card transaction data.”
The credit card information exposed in the breach did not include any Social Security numbers, birth dates or other highly sensitive personal data, Mastercard said.
I would give more info, but I don’t see any indication of what particular MasterCard-branded or other cards are affected; I will update if I learn something. The chances that any given reader of this post might be affected appear to be more than minimal.
I will tell you that though I can’t prove the “experts” wrong, I don’t like, and am very skeptical, of this spin reported in the article:
Rather than a rash of illicit activity, experts say, the slew of reports may have more to do with companies wishing to protect themselves in the wake of a California state law requiring businesses to notify its customers when their personal information has been exposed in a security breach.
UPDATE: It appears, according to this item in ZDnet, that “only” 68,000 MasterCard accounts are in jeopardy. Color me skeptical:
- First, if thieves manufacture working cards (and assuming the thieves have the extra 3- or 4-digit security code, which I would suspect they do), they can probably use it anywhere that does not require a signature, which around here is more and more places: gas stations, grocery stores for purchases below $25. And for that matter, who checks signatures any more, and against what?
- Second, the MasterCards were only 14 million of the 40 million cards compromised. What is the status of the rest?
