But the prime driver of growth, Neal insists, will be card-processors and merchants upgrading their old POS systems because of compelling economic reasons. Hypercom's new ICE systems with signature verification, for instance, greatly reduce fraud. These systems have slugs of memory, so that customers with "loyalty" programs, such as supermarkets and drug chains, can not only process payments but can also keep track of members' purchases and points or discounts. And the machines can electronically record receipts, so merchants needn't store thousands of paper receipts to protect themselves from chargebacks. (If a charge is disputed and the merchant can't produce a receipt, he must absorb the entire cost of the purchase.)
Citibank, the nation's largest credit card issuer, has agreed to block all online gambling transactions that use its credit cards, the state attorney general said Friday. The agreement announced by the bank and Attorney General Eliot Spitzer is expected to significantly reduce illegal, underage and potentially addictive Internet gambling, Spitzer said. It applies to all Internet gambling transactions, not just those in New York.The New York Times is reporting on the story in its Saturday edition.
Though the details are still being finalized, the overall aim is to create a uniform account management structure in an industry that, in the absence of strict regulatory and accounting rules, has developed a broad range of practices. Among the areas where regulators are expected to demand changes are credit line management, over-limit accounts, workout requirements, and accounting for settlements. The standards are also expected to set new requirements for loan-loss reserves, specifying the amount banks must carry against accounts where borrowers are current, but also requiring institutions to hold reserves against the uncollectable portion of fee and finance charge income. In credit line management, regulators are expected to require that banks make sure they understand the implications of changes in policies for setting credit lines, particularly the impact on credit losses.
The executive in charge of Bank of America's debit card program - the nation's largest - warned recently that the growing trend of charging customers to use debit cards could doom debit products. "We may price folks away from this product, and then everyone's back to handling paper," Darrell Esch, a senior vice president at B of A, said in an address to the 14th annual Card Forum and Expo, sponsored by American Banker parent company Thomson Media. Mr. Esch called himself "no big fan of the fees."
Yaga, Inc. (www.yaga.com), provider of an advanced payment platform that enables businesses to create new revenue streams, today announced its acquisition of Campbell, California-based Air-Tunnel, a developer of m-commerce platform software that allows interactive communications, transactions and delivery of media between any application and any mobile device, in real time.
The Transportation Security Administration -- which President Bush Thursday proposed transferring to a new homeland-security agency from its current home within the Transportation Department -- is enlisting companies that analyze personal credit-card and insurance records. The aim is to target suspicious travelers when they make a reservation so that by the time they show up at the airport, authorities will be on alert.
"The 2002 Hype Cycle reflects the bursting of the technology bubble," said Alexander Linden, research director of emerging trends and technology at Gartner. "There are surprisingly few new technologies entering the Hype Cycle or approaching the peak. Far more technologies are stuck in the trough of disillusionment and several of these are unlikely to emerge from this stage quickly." Gartner said that peer-to-peer computing, WAP and wireless web services, location sensing, speech recognition on desktops and e-payments are among the technologies that are floundering. Gartner also suggested it would be two to five years before identity services, such as Microsoft's Passport initiative and the Sun Microsystems-led Liberty Alliance, would be accepted for high-value transactions. Privacy and security concerns would hold back acceptance, said Linden.Here's a deeper explanation of the hype cycle.
So in the third wave, card companies and their online travel-agency partners hope to target people who spend less on their cards and want more flexibility. For well under 10,000 points, cardholders can cash in for a $100 travel gift certificate. That chit has a specific value that doesn't fluctuate, making it simpler to understand and redeem. Frequent-flier miles can be difficult to value, since their worth depends on the cash price of the ticket for which they're being redeemed.
Microsoft has found its advances elsewhere slowed by wary industry partners and rivals. The company has had little success to date in convincing cellphone makers and the cable television operators to adopt pared-down versions of its Windows software. They have preferred rival offerings or, as in the Liberty case, cooperated to create a competing technology ˜ despite the billions of dollars Microsoft has spent to gain entry into these markets.
In the amorphous war on terrorism, government officials believe they have a new weapon: the growing number of financial institutions that use powerful technology to monitor confidential customer activity and report suspicious behavior to law enforcement and intelligence officials. Driven by little-known provisions of the USA Patriot Act, the anti-terror legislation that was approved after Sept. 11, banks, securities firms and other companies are deploying computer systems that draw together millions of transactions, sometimes automatically, in searches for money laundering, terrorist financing or other unusual patterns.
A lot of techies and marketers will be spending a lot of time and money to develop technology that manages identity. The winners in this game will be the ones who understand that people want to control their own information, without being confused by the tools that help them do it.
Another cause for hope is that the next wave of service enhancements, the so-called third generation, may be near. Repeated delays in Europe in introducing these services, such as data and video transmission, have contributed to the stock-price declines for wireless phone companies' stocks.