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June 17, 2002

American Banker: Hong Kong action may harm PayPal

AB reports that PayPal has disclosed that it is under investigation by the Hong Kong Monetary Authority.

June 16, 2002

IFX 1.3 Specification is published

The latest update to the Interactive Financial Exchange (IFX) specification has been published.

Washington Post: Choosing the right plastic for your payments

An article by Albert Crenshaw in his Washington Post "Cash Flow" column talking about credit vs. debit cards, etc.

Barrons: Hypercom could double or even triple

Barrons this week reports on Art Samberg and Neal Goldman's recommendations of Hypercom.
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.)

June 14, 2002

Citibank agrees to block online gambling

The AP is reporting tonight that Citibank has reached an agreement with New York State Attorney General Eliot Spitzer to block all online gambling transactions that use its credit cards.
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.

June 13, 2002

First Data Corp. -- Paris Analysts' Day Slides

FDC held an analysts' day last week in Paris. The slides from the presentation are available online here (22 MB Powerpoint download).

American Banker: Regulatory crackdown near for card issuers

AB is out tonight with a story running in tomorrow's edition about a comprehensive regulatory crackdown coming for credit card issuers.
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.

Bismarck Tribune: Privacy vote could start trend

Voters in North Dakota on Tuesday sent a firm message to the financial services industry when they voted almost 3 to 1 to prevent banks, credit unions, and other financial institutions from selling consumer information to others without first getting their customer's permission. This is an issue of increasing importance -- in my opinion, somewhat delayed because of the events of September 11th which put privacy issues, for the moment, largely on the back burner. The North Dakota vote seems to send a clear message to the financial services industry -- a message they certainly haven't wanted to hear. Here's the New York Times story on the vote.

Card Management: Friendly fire from the ACH

Could new electronic payment guns aimed at checks cause collateral damage to card payments, especially on the Web?

American Banker: Reality sets in on debit card profitability

AB reports on bankers imposing fees on consumers for using PIN's rather than signatures with their debit cards. Of course, smart merchants have installed systems which detect cards that can work either way -- and are prompting consumers for PIN's simply because the transactions are much less expensive for the merchants! Who's going to blink?
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."

San Jose Mercury-News: PayPal execs plan to sell shares

Yesterday, PayPal filed an S-1 with the SEC for a secondary offering of shares -- with all of the up to 6.9 million shares being sold by selling shareholders, primarily executives of the company. In the filing, the company also disclosed that it has moved its credit card merchant business from EPX to Wells Fargo Bank.

June 10, 2002

Supreme Court won't block MasterCard/Visa lawsuit

The US Supreme Court today refused to throw out a class action lawsuit against MasterCard and Visa.

American Banker: Can banks' clout break momentum of PIN debit?

Merchants are getting more aggressive about pushing PIN-base debit card acceptance over signature-based debit cards (which are more profitable to issuing banks). Who's going to win?

June 07, 2002


I just stumbled across MetraTech. They claim to be the world's first "web services-based billing, customer care, and revenue sharing software provider." They've got some serious investors.

Yaga acquires AirTunnel

Yaga, Inc. (, 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.

WSJ: Background checks for fliers

The Wall St. Journal reports on how the Transportation Security Administration is looking to go deeper on background checks for airline fliers.
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.

Microsoft: Federated Security and Identity Roapmap

This roadmap accompanied yesterday's announcement by Microsoft of TrustBridge, it's new cross-company trust strategy.

June 06, 2002

Microsoft announces "TrustBridge"

Microsoft has announced TrustBridge, its federated identity management approach designed to allow enterprises to establish cross-company trust.

June 05, 2002

Maximum hype: biometrics, web services, grid computing

Gartner's view is that these three are right are peaking now on the hype cycle.
"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.

Gartner: Outsourcing in financial services

Gartner looks at several aspects of outsourcing in financial services.

WSJ: Credit card award limits ease with latest wave of travel cards

The Wall St. Journal reports on new cards from Orbitz and Travelocity.
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.

June 03, 2002

New York Times: Making life difficult for Microsoft

John Markoff and Steve Lohr look at the Liberty Alliance, the cable industry, and wireless as examples of where various partners collaborated to attempt to slow Microsoft.
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.

Washington Post: In Terror War, Privacy vs. Security

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.

June 02, 2002

Liberty Alliance: Associate and Affiliate Memberships

The Liberty Alliance has provided information on its new Associate and Affiliate membership levels.

Esther Dyson: A Primer on Digital Identity

Esther Dyson writes about digital identity -- how it's a lot harder than money.
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.

Chicago Tribune: Household fighting image of predator

Household's home town newspaper discusses criticism of the company as a predatory lender.

June 01, 2002

New York Times: Beyond the big loss at Vodafone

Vodafone records the largest loss in British history -- yet its stock jumps higher on the news. Other revenues are anticipated:
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.

Sprint and eONE Global to establish mobile payments network

Sprint and eONE Global, an innovator in emerging payment technologies and an affiliate of electronic payments leader First Data Corp., have announced that they have signed a letter of intent setting forth plans to establish a mobile payments network in the United States to enable consumers to make purchases and payments with their wireless devices.


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