Mike Langberg makes five big technology predictions for life ten years from now in 2012. Most interesting is his prediction regarding RFID:

Stores without doors will rely on RFID, or radio-frequency identification, tags to keep track of inventory and payment. These tiny semiconductors communicate a small amount of information, such as a product serial number, when queried by inexpensive transmitter/receivers. Only recently selling for several dollars, RFID chips should cost only a few cents next year and will be smaller than a grain of rice. In 2012, RFID chips will sell for less than a penny and be printed onto packaging and price tags -- the beginning of the end for cash registers. You walk into a store, put what you want in a bag and walk out the door. An RFID transmitter/receiver in the entryway instantly totals up your purchases and makes a deduction from the RFID credit card in your wallet. If nothing else, RFID could have spared Winona Ryder her recent and very embarrassing shoplifting arrest.

Scott Carlson reports on the growth in popularity of gift cards.

Nearly nine out of 10 Twin Cities' shoppers plan to give gift certificates, including gift cards, as a part of their holiday spending this year, according to survey released this week by the University of St. Thomas Institute for Retailing Excellence. The phenomenon of retail gift cards has exploded in the past three to five years, said Jim Nelson, a marketing manager at Datacard Corp., a Minnetonka-based designer of custom gift cards and maker of data-card equipment. Americans spent about $20 billion on gift cards in 2000; this year that figure could reach $50 billion, according to industry sources. Although buyers can have retailers load the little plastic cards with as little as $5, the average gift-card value is $60 this year, up from $51 a card a year ago, according to a survey from Denver-based First Data Corp.

Bryan Glick reports on the behind the scenes IT efforts at Barclaycard.

Christmas is coming, and your credit cards are getting fat. The constant swiping of the plastic in your pocket brings seasonal joy for the retailers and humbug for your bank balance, but it's also a major IT challenge for Barclaycard, the UK's largest credit card provider. Last year, the company processed seven million transactions per day in the run-up to Christmas. The computers running the authorisation system are capable of handling more than 300 transactions per second.

The Pew Internet and American Life Project has released a new study on the adoption and use of online banking by American consumers. Why do they do it? Convenience, period.

Convenience is the number one attraction for all online bankers, but younger Internet users are the most passionate about saving time. Eight out of ten (79%) e-bankers say that convenience was "very important" to their decision to first bank online - 82% of 30-49 year-old e-bankers agree, compared to 73% of 50-64 year-old e-bankers. Seven out of ten (71%) e-bankers say that the idea of saving time was "very important" to making that leap - 79% of 30-49 year-old e-bankers agree, compared to 66% of 50-64 year-old e-bankers.

Jeordan Legon reports on the new keychain-based payment devices.

Firms are using radio frequency signals, scanners and stronger plastics to make it easier for customers to give in to impulse. It's too soon to know whether the new plastic will go the way of the 8-track. But analysts say in the cutthroat credit card business, impressing finicky customers counts -- especially when a product makes it faster and more convenient to get through a checkout line.

Allen N. Berger of the Federal Reserve has published an interesting working paper on the economic effects of technological progress in the US banking industry.

In partnership with BankOne, UPS Capital has announced a new small business credit card.

"The UPS Capital Visa Business card provides exceptional value to small business owners in two important ways," said Dan Frate, chief operating officer of Bank One's card services unit. "It offers UPS shipping rewards for everyday spending and helps small business owners monitor, control and manage their expenses."

Shirley Leung and Ron Lieber report on McDonald's plans to finally accept credit cards.

If all goes according to plan, with the latest systems, a McDonald's customer will be able to place an order at a counter or drive-through, swipe his or her credit card, and get an approval in under five seconds -- no signature required -- in the same way that customers pay for gas at the pump. Cash, by contrast, can take eight to 10 seconds, says Jim Sappington, McDonald's vice president of U.S. information technology. The typical credit-card transaction takes 25 to 30 seconds from swipe to signature, according to The Nilson Report, a payment-card newsletter.

MasterCard International has announced the launch of the MasterCard Installment Card.

An alternative to paper-based installment loans, this MasterCard payment solution, which is supported by consumer research and subject to a U.S. patent (6,315,193), provides member financial institutions with an opportunity to increase revenue while simultaneously reducing processing and operating costs. "Consumers worldwide spent more than $500 billion on unsecured installment loans in 2001," said Randall Wheeler, senior vice president, customer solutions, MasterCard International. "The launch of MasterCard's Installment Card gives our member financial institutions a new strategic asset to penetrate this category. In addition to serving as an alternative to the traditionally expensive and laborious installment loan process for members, our research indicates that consumers are positively pre-disposed to the MasterCard Installment Card based on the flexibility, control and convenience this payment solution provides."

Ben Woodhead reports in the Australian Financial Review on plans to create a common fund among the Australian banks to pay for technology upgrades.

The fund would share upgrade costs among Australian banks using a model already adopted in Asia, marking a significant departure from the present approach, under which each bank finances modifications to its own payment systems. Credit card giant Visa will formally propose the new model to Australian banks soon as part of discussions about the new investment required to support the shift to more secure smartcard payments in the next few years. Adding pressure to the discussions is an emerging threat from card companies Eurocard, Mastercard and Visa, which have suggested that Australian banks become liable for credit card fraud after 2006 - giving the banks greater incentive to implement more secure cards.

A UPI report in the Washington Times says that immigrants from Latin American and the Caribbean are going to send $25 billion in "remittances" from the US to their homelands this year.

A report released Friday by the Pew Hispanic Trust and the Inter-American Development Bank's Multilateral Investment Fund predicted that the amount of monies wired from expatriates in the United States to the "LAC" nations of Latin American and the Caribbean was growing at a record pace.

Lucas Mearian reports that MasterCard will announce tomorrow the completion of a new payment-processing system.

The peak shopping season, which began Nov. 15 and runs through Jan. 6, will top off a record year with more than $1 trillion in MasterCard transactions, according to Jerry McElhatton, senior executive vice president of global technology and operations at Purchase, N.Y.-based MasterCard.

San Jose Mercury News columnist Dan Gillmor reports from Hong Kong on the Octopus card.

Octopus is easily the world's most successful experiment to date in stored-value, electronic cash cards. Instead of pulling out bills and coins in subways, buses, fast-food restaurants and convenience stores, customers wave purses and wallets past devices that deduct dollars from their cards inside. These are not debit cards, the widely used system in the United States. With debit cards, money gets deducted from bank accounts during transactions. Octopus cards are the real thing when it comes to cash cards. They are equivalent to cash. You put value into them, spend it down and then replenish the money if you want to keep using it. They're like cash in another crucial way. If the user prefers, they are entirely anonymous -- that is, not linked to any bank account or other personal information.

Scott Bernard Nelson reports on the duel going on between retailers and banks regarding acceptance of debit vs. credit cards.

With as much as $3 billion in annual fees at stake, banks and retailers have decided to take their long-simmering debit card fight to consumers. It all boils down to a question more vexing than ''paper or plastic'': Should you press the ''debit'' or the ''credit'' button when you use your check card? Make the wrong choice, and it could cost you as much as 75 cents extra for each transaction. Make the right one and you might be eligible for frequent flier airline miles, store credit, or cash-back bonuses.

Christine Winter profiles WildCard Systems.

WildCard, founded in 1997 by Gary Palmer and partner Larry Park started as a company that provided "catastrophic cards" for insurance firms. The privately held company, which has grown to 200 employees, is backed by institutional investors, such as Sutter Hill Ventures, Greenwich Street Partners and Bank of America, which also uses Wildcards services for all its prepaid card products. Palmer said the company turned profitable in the later months of 2002, but will not be profitable for the year, though he is projecting that in 2003 the company will be in the black for the full year.

Allison Jackson reports on the future of the vending industry.

A recent 12-month trial at Sydney's Central Railway Station of vending machines operated by mobile phone led to a 10 per cent increase in sales compared with the coin-only machines. Mr Beder said younger consumers were more at ease with the technology, less concerned about paying a higher price and more likely to consume the products the vending machines sold.

CNET reports on AOL's new Internet access cards.

"Through research we found that this product appeals to those who don't want a commitment or a monthly fee," said AOL spokesman David Theis. "Some of them may not have a credit card or another billing method or may want to get online less frequently than unlimited usage." The cards are offered in all Target stores, and refill cards can be purchased in all Western Union locations. Starter kits will appear in Office Depot stores starting next month.

Paul Nowell reports on Bank of America's QuickWave proximity payment pilot.

QuickWave is not a credit or debit card, so customers don't swipe it through a machine, punch in a PIN number or sign a receipt. It's connected to customers' bank credit cards or debit cards so the charges show up on their monthly bank statement. Moments after they wave it over the pad, customers get a confirmation and a receipt. "It benefits the customer because it's fast, it's convenient and it's secure," Bank of America spokeswoman Lisa Gagnon said. "They don't have to have cash with them to make a purchase. It helps the merchants because it attracts customers to their stores."

Eve Mitchell reports on the surge in gift card usage by American consumers.

Radicchio, a non-profit group focused on evangelizing mobile commerce, shares a Financial Times article (PDF) authored by Fiona Harvey on why mobile commerce uptake has been slow in Europe.

Visa EU has announced Visa Direct, a new cross-border money tranfer service.

The new service is set to revolutionise cross-border payments, enabling Visa‚s member banks to offer a convenient, end-to-end money transfer service to their customers. As it operates across the existing Visa infrastructure it is straightforward and cost-effective for banks to implement. The service precedes the introduction of tighter EU regulation on cross-border transfers. From July 2003 banks within the Eurozone will no longer be able to charge more for low value (below •12,500) EU cross-border transfers than they do for domestic transfers. Visa Direct provides member banks with a ready-made, low-cost means of complying with the new regulations. It also gives them an opportunity to play a part in a European money transfer market worth an estimated •25 billion a year.

Kevin Taylor reports that the Bank of New Zealand will begin issuing American Express cards in addition to the Visa and MasterCard cards it already issues.

The BNZ general manager, credit cards, Pradeep Roy, said American Express had its own brand attraction, particularly among younger people. American Express has 1700 offices worldwide and was supported in 130 countries.

First Data Corp. has announced the formation of First aSuretee LLC.

First aSuretee was formed to provide the industry's first, simple, secure and scaleable method for authentication that taps the power of digital signatures without the complexities, cost or limitations associated with other security solutions. aSuretee(SM) technologies enable companies to implement an Account-Based Digital Signature (ABDS(SM)) Solution, a breakthrough authentication system that provides a cost-effective replacement for the handwritten signature in the digital world.

iPIN has announced that Alexandre Gonthier, company founder, is taking over as chief executive officer and that it has secured $8 million in its most recent round of funding from Accel Partners, Cardinal Venture Capital, Invision AG, Nexus Group LLC, Sutter Hill Ventures and Verbena Communications.

Melbourne's The Age reports on the contention between MasterCard and the Reserve Bank of Australia with respect to the court case on the RBA's reform of the Australian credit card system.   » Continue Reading

The Denver Post reports on the competitive threats to First Data's Western Union subsidiary.

The Australian press has been buzzing lately about credit card magnetic stripe skimming. Here's the latest article by Caitlin Fitzsimmons from Australian IT.

"Magnetic stripe cards provide secure authentication between the ATM and the bank host, but the card is just an automated entry of the account details," Mr Fletcher said. "Chip cards hold certain information secret and can authenticate to the terminal and provide data to the host."

Matt Richtel and John Schwartz report on changes to the credit card association rules enacted last week that apply to so-called "high risk" merchants.

Visa will charge its member banks a $500 registration fee and an annual renewal fee of $250 for each high-risk company they pay a credit-card charge to. Those fees will be passed on, with a markup, to the sites themselves. MasterCard is expected to roll out similar fees, industry analysts say. The sums are insignificant to larger sites, but could well drive smaller sites into the red; tens of thousands of adult sites are home-grown entities, industry experts say.

Auction Bytes maintains a chart of payment options suitable for auction sellers.

Caroline Mayer writes about how add-on fees have taken over.

Citigroup started offering payment by phone -- for $9.95 per transaction -- after it saw a number of customers sending their payments by overnight mail. "That wasn't very economical, and our $9.95 fee is certainly better than a $15 to $20 overnight fee" as well as cheaper than a late fee, said Citigroup spokeswoman Maria Mendler. Citigroup late fees range from $15 to $35, depending on how much money is owed. And cardholders can always pay online, where payments are processed quickly without any fee.

Paul Boutin reports on Visa winning a lawsuit over the domain name evisa.com.

Electronic Frontier Foundation legal director Cindy Cohn clarified the decision's relevance in an e-mail: "Apple Computer, no matter how famous it becomes, cannot restrict the use of the word 'apple' to refer to the fruit. Yet here, the court has held that the Visa credit card company can restrict the ability of Americans to use the word 'visa' to when they offer travel-related information and services." Cohn said the EFF was considering an appeal next week.

Daniel Dasey reports on a rash of fraudster attacks on credit and ATM cards in Australia. ABC News reports an arrest in one of the cases.

Ellen Kelleher and Vanessa Valkin report on yesterday's stories about the merchant class action lawsuit against Visa and MasterCard.

Fiserv announced that it is acquiring the Consumer Network Services business from EDS for $320 MM cash.

CNS is one of the nation‚s largest electronic funds transfer (EFT) transaction processors and automated teller machine operators. The deal is expected to close by the end of the year, pending regulatory review. The 2003 processing and services revenues from this business are projected to be $150-160 million.

HSBC announced this morning that it is acquiring Household International. An investor presentation on the merger was posted this morning on the Household website.

John Wilke reports on newly unsealed court documents in the antitrust lawsuit brought by many of the nation's largest retailers including Wal-Mart.

Depositions and internal company memos depict the companies as paying banks millions of dollars to curtail rival debit-card transactions, demanding that merchants take their debit cards or lose access to credit-card sales, and even trying to disguise their debit cards so merchants couldn't tell them from credit cards.

"The only substantial dispute now is what relief the court is likely to ultimately award against Visa and MasterCard," said Lloyd Constantine, lead counsel for the merchants, and a principle in the New York firm of Constantine & Partners. "These documents are compelling evidence of how Visa and MasterCard violated U.S. antitrust law by attempting to monopolize the debit transaction market and forcing merchants, through tying of products, to accept offline debit transactions. Those offline debit transactions are slower, less safe and cost merchants and their customers much more than online PIN debit, cash or checks."

Raghu Mohan reports from India on the growth of revolving credit card products and the introduction of debit cards.

Riva Atlas reports on how banks make money on free checking accounts.

Banks make money from free-checking customers in three ways. Because such accounts generally pay no interest, they provide a cheap source of money for the banks, which can then reinvest the money elsewhere, Mr. Stein said. The banks also use the accounts to attract new customers who will then buy their other products, like insurance or mortgages. Banks also charge many fees, particularly for covering bounced checks.

The Cartes Bancaires CB Mag has an article that describes how to use the new Moneo e-purse smart cards.

Jonathan Pearlman reports on how thieves used a device attached to a Sydney ATM to copy more than 100 cards.

The thieves copied the information contained on the cards' magnetic strips using a matchbox-sized machine fitted beneath the card-entry slot of a St George ATM in King Street, Newtown. St George's fraud investigators believe the device was attached to the ATM for no more than an hour at a time and that customers were filmed entering their pin-numbers using a camera placed nearby. Some customers reporting the theft to police recalled seeing the device.

Constance Hays reports on the credit losses at Sears resulting from aggressive marketing of the Sears gold MasterCard.

Deb Gruver updates her story from last Sunday on personal preferences for cash and plastic.

The most humorous response was from a man who said he carries $10,000 in his wallet at all times. I'd like to meet this man! (Over a $500 bottle of wine, I think I'd kindly suggest he put that money to better use.) "What's in that wallet is my money," he told my answering machine, somewhat defiantly. His wife, he said, has her own money. He clearly thinks being a "real man" involves a fat wallet.

David Lazarus reports on the experience of Norman Shopay of Benecia who recently had the interest rate on his credit card significantly increased.

Norman Shopay of Benicia is the credit industry's worst nightmare: a customer who pays attention to his bills, files away supporting documents, takes copious notes and has the chutzpah to push his point even when a greedy card issuer insists that he's wrong. As it turns out, Shopay was correct to stick to his guns. And more than a few other consumers would be smart to follow his example.

Julie Gordon writes on the increased usage of debit and credit cards in Ft. Collins, Colorado.

The average American household has 10 credit cards, said Vickie Bajtelsmit, associate professor of finance at Colorado State University and author of "The Busy Woman's Guide to Financial Freedom." Visa spokeswoman Janet Yang said U.S. consumers carry about 383 million Visa-branded cards, including credit cards and debit cards.

Junko Yoshia reports from the Cartes 2002 show in Paris.

Hampered by the market saturation of prepaid telephone cards and by serious delays in Europe's third-generation mobile-phone rollout, smart cards are fast losing their 1990s glow of consistent double-digit annual growth, according to attendees at the Cartes 2002 smart-card conference here this week. Even sales for so-called multiapplication smart cards, supposedly a key driver for advanced cards with bigger memories and more processing power, have been disappointing, said Jorgen Rasmussen, president of cards at SchlumbergerSema, a business unit of Schlumberger Ltd. "There was a lot of hype in multiapplication cards," he said, acknowledging that making a business case for them has been hard.

John Patrick is a real Speedpass fan. He also tried to take one apart to see what's inside a Speedpass.

Steven Milunovich Peppercorn.

Kay Dibben reports on the rapid growth of credit card skimming in Australia.

Criminals posing as sales staff are stealing customers' credit card details as they stand across the counter ˆ then producing duplicate cards to rack up thousands of dollars worth of purchases. Known as "skimming", the crime has increased 300 per cent across Australia over the past 18 months. Consumers are most at risk at service stations and restaurants.

BBC reports on Nationwide's roll-out of a signature based biometric system.

Nationwide has been researching the use of biometrics for identify customers for two years and is convinced that the system will be extremely robust. "We have 70 processes that need a signature and that generates a huge amount of paper. We anticipate significant cost savings," said a spokesman for Nationwide.

Sean Silcoff profiles Toronto-based online gaming processor Cryptologic.

Lewis Rose has enemies in high places. He runs one of Canada's fastest growing, most profitable and financially sound software firms, in one of the Internet's few prosperous industries -- gambling. Unfortunately for the new chief executive of Toronto-based Cryptologic Inc., several U.S. politicians have targeted the offshore and largely unregulated industry, and their five-year campaign to stifle the business is on a roll.

Business Week reports on Moneo, the new French ecash card.

Moneo backers aren't naive enough to expect a cashless society. Even after three or four years, they project that no more than 15% of French consumers will use Moneo. "It's going to take a long time to develop," says Pierre Fersztand, director of the BMS consortium. "We are not going to replace pocket change overnight." Debit cards didn't catch on overnight, either, so who knows? With enough buzz, a Moneo card might someday be what every Frenchman uses to buy his café au lait and croissant in the morning.

Caroline Mayer reports on how hard luck consumers try to deal with their debts.

American Express CEO Ken Chenault spoke at today's Forrester's Executive Strategy Forum about the impact the Internet has had on American Express.

As with many companies, our Internet strategy has evolved. Relative to many of our peers, we moved online early. Netscape, the symbol of Internet emergence, came into being 400 weeks ago. At American Express we‚ve been online for 360. Initially we regarded the Internet primarily from the topline -- as a source of potential revenue. We viewed the Internet as a new business opportunity - we‚d use it to expand into banking and brokerage, and to become an online destination site for our customers. What we found instead was that the economic benefit of being online would be gained in other ways -

• through the addition of more new customers to our existing businesses,
• as a more efficient means of cross sell,
• and through lower servicing costs.

We have succeeded by thoughtfully integrating our offline and online activities. The Internet has become an extension and an evolution of how we conduct our business, with a little bit of revolution thrown in as well. And we have found that our business models - in payments and in financial services - are particularly amenable to capitalizing on the Internet‚s advantages. We have used the Internet to change:

• The way we serve and acquire our customers;
• The way we develop our products and services;
• And, it has improved the economics of our businesses.

Wells Fargo Bank has announced a new international currency payment service. PayPal is the first customer of the service.

Using Wells Fargo's new service, U.S. companies can expand their businesses to international markets without setting up complicated separate banking relationships with foreign banks, and they can better reach out to local markets by pricing products in local currencies. By using this new service, no foreign exchange conversion is needed since the funds are settled in the local currency -- providing a less expensive payment solution and allowing companies to focus on sales growth. Reporting is customizable for the corporation; Wells Fargo supplies the data in a standardized format for merchants to import the data into their internal accounting and reporting systems.

The partnership I'm a part of (Glenbrook Partners) has announced a new research service.

Glenbrook Partners today announced the availability of a new research service that will provide clients with value-added opinion, analysis, and insight into the pressing issues of the financial services industry. Glenbrook Research will cover card payments, commercial payments and financial supply chain, emerging payments, digital identity and authentication, biometrics, and mobile commerce.

The DaVinci Institute has a call for speakers out for its March 2003 conference on the Future of Money.

Credit and debit card fraud has increased by 53% during the last two years, industry experts have revealed The cost to individuals and banks of credit and debit card fraud is nearly £430m each year.

Jim Bohman profiles GE Card Services Dayton-based Retail Sales Finance organization and CEO Glenn Marino.

"Cardholders who carry private label cards are more loyal to that retailer than those that do not," Marino said. "And retailers drive that loyalty with special weekend circulars." He said Visa and MasterCard, don‚t have those customer lists.

Andrew Shain reports on the move to keychain-based mini-cards.

Card issuers are betting people will enjoy the convenience of dangling the mini cards among their discount grocery tags, gym passes and house keys. And with the average American household carrying 14 credit cards, marketers hope the tiny ones become the favorite when shoppers reach the cash register. Many people will get to see the mini cards soon: Bank of America is mailing them to 1.2 million of its customers.

Deb Gruver writes about her preference for paying with plastic, or with checks.

Now, to get to the point of all this: The reason I prefer dealing in debit cards and formerly, checks, is because I think I plow through more money when I have cash. It's that whole burning-a-hole-in-my-wallet thing. I don't know that it's necessarily true that I spend less because I rarely carry cash, but it's the theory I've stood by for years.

Six Continents Hotels has announced that guests of Crowne Plaza, Holiday Inn and Holiday Inn Express hotels in the United States during the time period between October 24 and October 27, 2002 may have been erroneously charged 100 times what they should have been charged due to a processing error at First Horizon Merchant Services. Approximately 26,000 card holders were affected by the error.

From the UK, Emma Nash reports on online fraud and steps being taken, including Verified by Visa, to reduce it.

Credit card giant Visa set out some time ago to improve online security but, at the same time, provides the consumer with additional confidence in the security and validity of the transaction. The result was Verified by Visa, unveiled in April. Using its 3D Secure technology, online buyers enter a password as well as their card details when conducting a transaction on a site that has signed up to the Visa scheme. In addition, retailers which adopt Verified by Visa will no longer be liable for any "card not present" charge backs, regardless of whether the cardholder has used Verified by Visa or not, something that has been costing unsuspecting consumers dear for many years. Jon Prideaux, executive vice president at Virtual Visa, insisted that we have to face up to the fact that online fraud happens, and take appropriate measures to stifle it. "This is a real problem. The loss rate is 20 times more than in the real world, and that comes down to the merchants," he said.