Javelin Strategy & Research has just released a new report titled "Prepaid Product Evolution - Align Processor Relationship With Strategic Goals" written by Bruce Cundiff. From the abstract:

"This Javelin research report makes use of consumer data analyzing the propensity to use prepaid products, and also in-depth interviews with prepaid program managers at financial institutions and other third parties to understand the key components of a prepaid processing relationship and how prepaid program managers must approach the establishment of such a relationship. "

Over the holidays, we've added more than a half dozen new payments, banking and security-related blogs to our list of Other Banking and Payments Blogs. On this one convenient page here on Payments News, you can quickly review the most recent postings from other blogs that we think are important and relevant to payments and banking professionals.

If you're an active blogger and think your blog should also be included, be sure to let us know (click on Feedback in the toolbar above) and we'll add yours as well! Send along your blog's home page and the location of your RSS feed - and we'll do the rest.

The Federal Reserve Bank of Kansas City has published three working papers on payment card fees and cardholder rewards:

• The Economics of Payment Card Fee Structure: What Is The Optimal Balance Between Merchant fee and Payment Card Rewards?
• The Economics of Payment Card Fee Structure: What Drives Payment Card Rewards?
• The Economics of Payment Card Fee Structure: Policy Considerations of Payment Card Rewards

A working paper titled "The Economics of Two-Sided Payment Card Markets: Pricing, Adoption and Usage" by James McAndrews and Zhu Wang of the Federal Reserve Bank of Kansas City provides a new theory to explain pricing, adoption and usage in two-sided payment card markets.

A working paper titled "Why Do Card Issuers Charge Proportional Fees?" by Oz Shy and Zhu Wang of the Federal Reserve Bank of Kansas City explains why payment card companies charge consumers and merchants fees which are proportional to the transaction values instead of charging a fixed per-transaction fee. "Our theory shows that, even in the absence of any cost considerations, card companies earn much higher profit when they charge proportional fees."

A working paper from the Federal Reserve Bank of Kansas City titled "Product Innovation and Firm Survival in A Network Industry" by Fumiko Hayaski and Zhu Wang studies product innovation and network survival in the U.S. ATM/debit card industry. "The findings suggest introducing the point of sale debit function in the mid 1980s played an important role driving the network consolidation."

A briefing paper titled "International Remittances" by Terri Bradford, Payments System Research Specialist at the Federal Reserve Bank of Kansas City, describes some of the means by which individuals remit funds internationally -- informal networks, money transfer operators, financial institutions and other options -- and discusses some of the factors that may influence the choice of provider.

CSC has announced that it has formed an alliance with direct debit solution provider Sentenial to offer a Single Euro Payments Area (SEPA) direct debit software-based payment solution. According to CSC, "the offering will enable European banks to provide corporate and public sector customers with a comprehensive SEPA direct debit service ahead of the November 2009 target date set by the European Payments Council. SEPA is an initiative of the European banking industry that aims to make cross-border electronic payments as fast, secure and efficient as domestic payments within one country." READ MORE

The Auriemma Consulting Group (ACG) has launched a “health checkup” service for retailers to help them evaluate co-branded card programme performance and identify options for improvement. According to ACG, it builds on a service that has been utilised by the vast majority of card issuers in the recent years. READ MORE

In the UK, Barclays has announced that its customers will "soon be able to pay their way with the wave of a card as the bank is set to be the first in the UK to roll-out contactless VISA debit cards to its customers. From March, most Barclays debit cards that are issued or reissued will have contactless technology built in as standard. More than three million customers are expected to be using contactless debit cards by the end of the year." READ MORE

MasterCard has announced organizational changes the company says are "designed to better align its global customer-focused strategy with customers' expectations in the new economic and marketplace environment, as well as ensure that it continues to innovate and deliver products and services that better position it for success now and in the future." READ MORE

• Scientific American Blog: Dirty money: Can the flu be passed on dollar bills?
• CreditCards.com: Card issuers offer rewards to build savings, pay off debt
• iPay Technologies Adds Payments Industry Executive to Enhance Product Delivery
• Internet Payment Exchange Enhances BillPay Assist Feature in eCareview
• Andrew Jaquith - Forrester Research: Data-Centric Security Requires Devolution, Not A Revolution
• Convenience Store News: Shell Rolls Out SaverCard
• PSD Blog - The World Bank Group: Disruptive technologies: M-Pesa vs. the banks
• Card Activation Technologies, Inc. Settles Litigation Against Sears Holdings Corp
• The Financial Services Club's Blog: Technology is a key for banking in 2009