John Berry reports that the Federal Reserve has warned employees of its twelve regional banks that some jobs may be cut in coming months due to the decline in check volume cleared by the Fed.

In a typical letter sent this month to Fed employees, Robert D. McTeer Jr., president of the Dallas Federal Reserve Bank, said: "The Federal Reserve's national check business has experienced significant losses in volume and revenue over a period of many months. This volume loss is attributable to a number of factors including consolidations in the financial services industry and greater use of electronic payments."

Michelle Higgins reports on the growth in prepaid cards.

The new cards are the latest indication that competition among card issuers has never been more brutal. Americans who carry plastic already have an average of nearly eight cards in their wallet. To win new customers, card companies have been competing fiercely with new offers of 0% cash advances and other deals. But with the credit-card market so saturated, they are under pressure to find new sources of growth. "They're segmenting the market into finer and finer niches in order to capture more market share and define more payment uses," says card consultant Rob Markey, of Bain & Co. in New York. What's more, prepaid cards -- which describes all the new cards except for American Express's -- are a "very low loss-rate product," he says. That's because customers must cough up the money in advance. That is an important consideration these days with credit-card companies writing off record amounts of bad debts.

Ashutosh Sinha reports from New Delhi on the shortage of middle and senior managers to help run India's growth as the "back office of the world."

According to consulting firm McKinsey, revenue of Indian companies in the two industries could reach $21 billion to 24 billion by 2008 -- a 1,500 percent spike from $1.4 billion in revenue this year. These segments are forecast to employ over 2 million people. But to achieve that kind of growth, Indian companies need experienced managers who can sell the country's advantages to global companies. The shortage of employees with management experience doesn't bode well.

The Pune-based Centre for Development of Advanced Computing (C-DAC) will be targeting some of the countries, which have already bought its earlier PARAM 10000 version with a computing power of 100 gigaflops. C-DAC has already sold about 7 PARAM 10000 supercomputers with 100-gigaflop memory to eight countries so far, including Russia, Canada, Singapore and Germany. It has so far sold over 53 supercomputers, since it started developing it in the Eighties following a technology denial regime against the country by the developed world. C-DAC will be targeting both domestic and international customers for marketing the Padma supercomputer, which can be scaled up to 16-teraflops.

Lucy Conger writes about Elektra, a downscale household goods retailer in Mexico that is opening Banco Azteca, the first bank to aim at Mexico's middle and working classes.

Starting next year, Banco Azteca plans to introduce a range of products, including used-car and personal loans, debit cards, checking accounts and mortgages. Elektra's database of the credit payment histories of four million current and former customers will help the bank make credit decisions and cross-sell its products, analysts say.

A report by Doug Tillet and Liz Handlin of the Chicago Federal Reserve Bank on the market potential for serving the over 10 million unbanked individuals on the US.

IBM and JP Morgan Chase have announced a seven-year outsourcing agreement.

The agreement will enable JPMorgan Chase to transform its technology infrastructure through absolute costs savings, increased cost variability, access to the best research and innovation, and improved service levels. By moving from a traditional fixed-cost approach to one with increased capacity and cost variability, JPMorgan Chase will be able to respond more quickly to changing market conditions. JPMorgan Chase will outsource a significant portion of its data processing technology infrastructure, including data centers, help desks, distributed computing, data networks and voice networks. The agreement includes the transfer of approximately 4,000 JPMorgan Chase employees and contractors as well as selected resources and systems to IBM in the first half of 2003. Application delivery and development, desktop support and other core competencies will largely be retained inside JPMorgan Chase.

Susie O'Brien reports that major retailers in Australia are not planning to impose surcharges on credit card usage -- at least not right away.

Until now, the cost of processing credit card transactions has been met by retailers and businesses, but from tomorrow this cost can be passed directly to the consumer. Many businesses were adamant yesterday that they would not take this step unless forced to do so by spiralling costs. Others said they would investigate the move if it became a norm in their industry. The Australian Retailers Association said services such as gyms, doctors and dentists, tradespeople and professional groups were the most likely to introduce the charge. Association executive officer Brian Donegan said the pressure was also great on small retailers who paid banks up to 3 per cent of their turnover on credit charges.

Nor Faridah Rashid reports from Kuala Lumpur on MasterCard's plans to fight counterfeiting of cards by magnetic stripe skimming from deploying Magneprint, a technology developed by MasterCard International and MagTek.

Magneprint is the first technology that proactively helps prevent card skimming by using the "intrinsic" physical properties or a magnetic stripe (which are unique to every card) to differentiate between an original and a cloned card.

Bob Tedeshi reports on results from the holiday season for online merchants and, in particular, the very strong sales of gift cards.

As online merchants began tallying the results of a stronger-than-expected holiday season, they were further buoyed last week by another bit of good news: gift certificates, a favored scrip among post-holiday bargain hunters, enjoyed their best season ever online. By Dec. 20, holiday sales of gift cards and e-mail gift certificates had soared 64 percent over last year, pushing the 2002 total toward the $250 million mark, according to comScore Networks, an Internet research firm.

D.C. Denison profiles SpeechWorks and edocs, two Boston-area companies providing technologies to enable customer self-service.

"Speaker verification," for example, is rapidly emerging as an important capability, allowing the system to identify a caller by his voice patterns. Verification is important not only for security, but also for enhanced convenience. "If the system recognizes you, it can immediately shift to your preferences," said Chambers. "It enables customers and companies to significantly streamline their interactions." Get ready for this: "Oh, hello Mr. Smith. Are you traveling to New York again?"

Sharon Kemp reports from Melbourne on the rapid growth in consumer debt in Australia.

Credit card companies such as Visa and MasterCard are as confident as ever. Visa says consumers have never been so debt-educated or diligent in clearing their card debt. Moreover, the global giant says fears of a Christmas blow-out in card debt were unfounded, based on RBA data that showed that for every $100 spent in December in three consecutive years to the end of 2001, $91 was repaid in January. "Although Australians are using their cards more, they continue to use them carefully," says Visa International executive vice president (Australia and New Zealand) Gordon Wheaton.

Ms Wolthuizen said consumers were most likely to incur a credit card surcharge on airline ticketing because of the industry structure ˆ big business with low competition. Market dominator Qantas has reportedly said it wants to charge extra for credit cards that do not carry the Qantas name, but an airline spokeswoman yesterday could not confirm the domestic and international carrier's intention.

Cecil Johnson reviews Rick Kash's book The New Law of Demand and Supply.

Sears Credit supplies Kash with an example of how knowing the wishes and needs of your most profitable demand segment pays off. The author tells of the panic that hit Sears Credit when the corporation decided to begin accepting MasterCard and Visa. Thought was first given to reducing the percentage rate on the Sears Card to compete. But that approach was discarded after research revealed that the percentage rate didn't matter that much to Sears' most profitable demand group. Those customers just wanted low minimum monthly payments and Sears' commitment to stand by its products. The Sears customers in the researchers' target group said they would continue to use their Sears cards in order to leave room on their other cards, which could be used at other stores. "If they maxed out those cards and the refrigerator broke down, only the Sears card stood between them and no refrigerator," Kash writes. The Sears Credit team used its findings, Kash writes, to enable Sears Credit to give up its monopoly and still increase business performance. "It raised the Sears share of credit card transactions in its stores, and its margins actually went up," he writes. "Over three years, its profits on the card rose by 44 percent."

Chris O'Malley reports on the growth in gift cards.

Buying a gift card from a bank is more involved than merely pulling a card off a rack at the home improvement store. Both Key and National City require purchasers to fill out name, address, phone number and Social Security number. At one National City branch, an employee also asked for date of birth and even collected the buyer's driver's license, disappearing with it into a back office.

John Tagliabue profiles René Carron, new chairman of Crédit Agricole.

Most French bankers enjoy their cheese. René Carron goes one better. He owns a herd of 60 cows, producing milk for tomme de Savoie, the cheese of his native Savoy. But then Mr. Carron, 60, the new chairman of Crédit Agricole, the big French bank, is no ordinary banker. The latest proof of the difference came two weeks ago, when, in a deft negotiating strike, he reached an agreement to acquire control of Crédit Lyonnais for $16 billion, in a deal that would create France's biggest bank, second only to Deutsche Bank as the largest in Europe.

Glenbrook research clients can now access a just published research note on Bill Me Later, a new consumer credit offering from I4 Commerce.

Apparently American Express' processing system bogged down handling the high volume of Westfield Shoppingtown's gift card requests.

On Thursday and Friday of last week, the credit card processing system for American Express - which handles the Westfield gift cards - got so overloaded that processings were delayed, Putman said. The Westfield cards are valid at any Westfield mall store that accepts American Express. The system should work better in the coming days, he said.

Amazon.com announced that it sold more than 56 million items worldwide from November 1 to December 23, 2002.

The largest sales day occurred on Monday, December 9, with 1.7 million units ordered, or 20 items per second worldwide. The second largest sales day, with 1.6 million units ordered, occurred on Wednesday, December 11, just a day before the holiday ordering deadline for Free Super Saver Shipping on Thursday, December 12.

Constance Hays reports on the weak holiday shopping season this year.

The idea that even Wal-Mart, the biggest success story in retailing in recent years, was struggling was taken as a sign of wider problems. "This confirms our previous thoughts that holiday sales could be the worst in a decade," Deborah Weinswig, a retail analyst for Salomon Smith Barney, wrote in a note to investors after the Wal-Mart announcement.

Carol Hazard reports on the battle between online and offline debit cards at the point of sale.

Banks make four times as much money with signature-based credit purchases, according to some reports. Retailers prefer the debit PIN purchases because they are less costly for them. In essence, merchants pay as much as 3 percent of the total transaction amount on a signature-based purchase, while they are charged no more than 25 cents for a PIN-based transaction regardless of the amount.

Dina ElBoghdady reports on retailers' interest in gift cards.

"Retailers are itching to see what happens with all the gift certificates out there," said C. Britt Beemer, chairman of consumer research firm America's Research Group. "There are literally billions of dollars at stake." Just how many billions is unclear. Many retailers declined to discuss numbers. But consulting firm Bain & Co. estimates that sales of gift cards could hit a record $38 billion for the year, up 15 to 20 percent from 2001.

MasterCard says it has made a major breakthrough in the battle against counterfeting of credit cards. Its new technology ˜ dubbed Magneprint ˜ will help tackle global losses of $4 billion annually thanks to counterfeit credit cards.

Part 1 of an interview with Douglas Flint, group finance director of HSBC, about the merger with Household.

Denny Walsh reports on U.S. District Judge Frank C. Damrell Jr's decision yesterday permanently barring enforcement of a new California law forcing credit card companies to warn their customers how long it will take and how much more it will cost to pay their bills with minimum payments. The court ruled that federal laws governing the operation of financial institutions pre-empt state laws in this area.

The Legislature passed the law last year, and it was scheduled to take effect on July 1. Led by the American Bankers Association and the National Association of Federal Credit Unions, card issuers sued on May 24. In an order on June 28, Damrell temporarily put enforcement on hold. The statute required two messages be displayed on the first page of a cardholder's statement, unless the issuer required a minimum payment of at least 10 percent of the balance or did not impose finance charges. The first message would have warned that minimum payments increase interest and the time it takes to retire a debt. There were two options for a second message. One would have provided examples for three balance amounts at the interest rate and minimum payment applicable to the account. Additionally, a toll-free number would have been listed for cardholders wanting more personalized information. The second option was to provide the cardholder with written, "customized" information regarding interest and duration of debt. Along with that would have been a referral to a credit counseling service or the number for the National Foundation for Credit Counseling.

Beth Cox writes about the Clash of the Titans, Visa vs. MasterCard.

Florida and Florida State play out their rivalry on the football field. Ford and General Motors compete for buyers both online and in showrooms across the country. And MasterCard-Visa? Their B vs. B tussle is being played out on the cutting edge of high-tech.

Even in South Africa, merchants can become very dependent upon credit cards! When the systems don't work, people get very upset.

"The problem started a couple of weeks ago, but we've been suffering of late due to the increase in customer volumes," said a visibly annoyed Grant Murie who manages the Santa Ana Spur at the V&A Waterfront. "At peak trading times, the Standard Bank system can't process any transactions. Bank officials said a statement on the matter would be issued later on Tuesday.

Christina Sessions reports on Alaskans rapid adoption of online bill paying services.

Alaskans appear to be ahead of the curve when it comes to using online bill payment. Debbie Sakamoto, public relations officer for Key Bank in Portland, Ore., said Alaskans led the national average for bill pay usage by 22 percent.

eOne Global announced this morning that it is acquiring BillingZone from PNC Bank and Perot Systems.

According to Raj Kushwaha, managing director and CTO of eONE Global, "The planned combination of BillingZone's services and First Data's existing paper document and check handling capabilities would create the most comprehensive offering available to large companies for automating both paper and electronic financial supply chain transactions. First Data is a leader in e-commerce and payment services - its existing infrastructure routes and settles billions of transactions every year." "The BillingZone acquisition brings together the market leading customers and channels of BillingZone with the scale and processing infrastructure of our parent company, First Data," Kushwaha added.

Washington Mutual announced late last week that it had entered into an agreement with Unisys to capture check images in its financial center stores (branches).

Making this move now positions Washington Mutual to confront such industry issues as:

• escalating unit costs of processing paper checks;
• the shift to electronic transactions such as electronic bill presentation and payment;
• and the impact of the Check Clearing for the 21st Century Act, pending legislation to enhance the efficiency of the check system by allowing digital images in truncation, which can eliminate the need for a paper trail in check processing.

The FDIC released its latest economic outlook. Included is a look at the risks of deflation.

Clearly, deflation would have significant adverse effects on the banking industry, depending on its severity and duration. Past episodes of asset and goods price deflation often coincided with banking crises, particularly when the banking sector was already in a weakened financial position. Given the current income and balance sheet strength of the U.S. banking industry, short and mild deflation is likely to have a limited adverse impact. However, prolonged deflation would present more serious challenges to the industry by eroding the collateral value of assets and increasing the real debt burden of borrowers. Deflation could also lead to a decline in nominal income for households and businesses, reducing their ability to repay outstanding debts. In combination, these developments likely would lead to significant credit quality deterioration, while an increase in real interest rates would weaken loan demand. Despite these dangers, there are good reasons to think that serious deflation is unlikely to occur in the United States. One reason is a well-capitalized banking sector with relatively low levels of nonperforming loans. Another is the fact that policymakers appear to be alert to the dangers of deflation and determined to take steps to prevent it from taking hold. Finally, it appears that modern financial instruments and risk management tools contribute to the financial flexibility of households and businesses, reducing the potential for a widespread liquidity crisis. One example is the use of credit derivatives by commercial lenders to off-load credit risk. Another is the benefits of loan prepayment options that allow households and businesses to reduce their interest expenses by refinancing at lower interest rates. Together, these factors limit the possibility of a prolonged deflation that could seriously harm the banking industry.

A report on how its becoming difficult to find new concepts for affinity and co-branded credit cards.

Last year, card issuers mailed out 5.1 billion offers, but consumers responded to only 0.6 percent of the letters. Competition for new customers has intensified as the industry has consolidated; the top five banks hold more than half of the $635 billion in outstanding loans. The competition and lower interest rates also pressure issuers' profit margins, and banks are battling higher credit losses from record bankruptcies. That's where affinity and co-branded credit cards have helped. Such cards are designed to give consumers an incentive beyond low interest rates and fees to get and use new cards. Banks like such programs because consumers who use an affinity or co-branded card spend at least 30 percent more on it than on a regular classic, gold or platinum card. They are also more likely to pay off their bills.

A report on the increasing acceptance of credit and debit cards by quick service restaurants.

The quick-service industry, which includes restaurants that sell hamburgers, chicken, sandwiches, pizza, doughnuts, ice cream, yogurt, tacos and other prepared food items, reported sales of $113.5 billion in 2001, according to Morgan Keegan & Co, an investment firm in Memphis, Tenn. But only 2.8 percent to 3 percent of quick-service businesses report any card-based transactions, according to a Visa study released last month. That compares with 35 percent to 40 percent card use by consumers in other industries. Credit-card issuers and transaction service operators are pushing fast-food chains to accept plastic because doing so is expected to boost sales to higher levels. Fast-food chains also would have less cash to manage and keep on site, thereby reducing the chance for error and theft, experts said. The Visa study found that consumers spend 30 percent to 50 percent more when they use credit cards rather than cash.

Bob Tedeschi reports on the growth in online sales this holiday season. Turns out the various pundits who track these numbers don't agree.

Whatever the final numbers show, no one disagrees that people are now doing significant amounts of holiday shopping online. Mr. Schehr estimated that of the $800 the average Web shopper would spend on holiday purchases this holiday season, $235 would be spent online.

The company announced last night that telecom veteran Jim Voelker will immediately become its new chief executive officer, chairman and president.

Bradley Meacham reports on the growth of online banking.

Hiawatha Bray interviews comScore Networks' Dan Hess on the increased level of online shopping this year.

Q. How's business for Internet retailers? A. It's shaping up to be a very strong season for online retail. Back before the season began, we predicted approximately $14 billion in nontravel sales for the fourth quarter, which would give us growth in the order of 30 percent over last season, and we're on a path to hit that.

Dawn Wotapka reports on Speedpass.

Although radio-frequency identification, or RFID, systems are attractive to retailers looking for ways to track merchandise, provide a quicker transaction and offer new payment methods, they appear to be fizzling with consumers, at least locally. For two years, ExxonMobil's Speedpass, the nation's largest system, and other RFID programs have been available in the Triangle. Analysts say many consumers are unwilling to dangle something else with their keys and uninterested in adopting yet another way to pay -- especially one that doesn't feel secure. At the gas station, it's almost as fast and easy to swipe a credit card at the pump. Plus, not many consumers are even aware that the program exists.

Libby Copeland writes about gift cards.

There's another way of looking at gift cards, though, and that's from the receiver's end: You get what you want. This can't be underestimated. Receiving a gift card can be a delightful relief. It does away with awkward, dishonest thank-yous (Just what I wanted! Tie-dye!), with wonderings (Is this what he thinks of me? Tie-dye?), with yet more picture frames and, God forbid, Christmas pins. The gift card confers freedom from others' assumptions and from their half-hearted, eleventh-hour, anything'll-do mall frenzies.

Banks in India are reportedly considering building their own national debit/ATM network to reduce the fees they pay to Visa and MasterCard.

Essentially this would mean replicating Master Card‚s Maestro and Visa Electron networks in the country by a third-party. The objective is to save on the transaction fee that is paid to these international credit card agencies and remitted outside the country.

Consumers across Canada witnessed a major crash on the electronic funds highway during the shopping rush hour on Thursday. All point-of-sale or debit terminals and automated teller machines in Canada owned by Scotiabank were out of service during the busiest time of year for merchants as people tried to finish their Christmas shopping. Debit cards from Scotiabank weren't working either.

An interesting article about Fiserv's just closed acquisition of EDS' Consumer Network Services (ATM) business.

The company already provided electronic back-shop and data management support for 13,000 financial institutions and related clients in 60 countries. Prior to the purchase, Fiserv technology drove 5,000 ATMs. With EDS, Fiserv picked up service obligations for another 13,170 machines. Add to that Fiserv's existing point-of-sale and Internet transaction capabilities, and officials expect the company to process some 4 billion transactions annually through 18,170 ATMs and its other technology channels. "That puts us knocking on eFunds' door," said Fiserv spokesman Chuck Doherty. Based in Scottsdale, Ariz., eFunds is the country's second-largest ATM service provider, driving 21,000 machines. The largest service provider, Concord EFS Inc., Memphis, provides service to 56,000 ATMs.

Hal Varian writes in this morning's New York Times about the importance of online sales as a source of economic data.

It is much easier to collect online prices than offline prices, and with a little bit of ingenuity, you can even harvest data about costs and sales volume, information that is awfully hard to come by in the real world. The economists Michael R. Baye and Patrick Scholten of Indiana University and John Morgan of the University of California at Berkeley have collected data from online price-comparison sites for over two years. They offer summaries of this information at www.nash-equilibrium.com. Take a look, for example, at their measure of "Internet competitiveness," an aggregate statistic of various indicators of how competitive online prices are.

Mark Hollmer reports on HelloTech technologies.

Jonathan Epstein reports on the rapidly growing gift card market.

While gift cards fill a need, shoppers who want to avoid unpleasant surprises should be aware of the fine print that accompanies them, especially cards issued by banks. The newer bank cards, still a small segment of the gift card market, levy hidden charges and limitations on use.

Marina Strauss reports on how big retailers in Canada are relying heavily on bank cards for their profits.

At Toronto-based Hudson's Bay Co., which runs the Bay and Zellers, most operating profit -- 94 per cent of it -- came from card earnings last year, DBRS figures indicate. That's almost double the 44 per cent of HBC's total operating profit from card earnings in the previous year, DBRS said. Meanwhile, Sears Canada Inc. saw 57.5 per cent of its operating profit come from credit card earnings in 2001, up from 19.9 per cent a year earlier, DBRS said. At Toronto-based Canadian Tire Corp. Ltd., 26.4 per cent of its operating profit came from credit card earnings last year, up from 17.6 per cent in 2000.

Gay McNamara reports on the situation in Australia as merchants beginning January 1 are free to surcharge credit card transactions.

The Reserve Bank estimates the service fees on credit cards cost merchants about $1.5 billion a year, which is passed to consumers through higher prices. Small retailers are the hardest hit, paying an average 3 per cent to 3.5 per cent and some paying more than 4 per cent. But they were restricted from passing the cost to customers under credit card scheme rules.

Victoria Lavrentieva reports on the growth in Visa cards in Russia.

Russ Wiles reports on Phoenix-based Hypercom.

The BBC's ecommerce reporter, John Moylan, reports on the 100% growth in online shopping in the UK, outpacing the US.

Alan Wechsler reports on the University of Albany's deployment of a campus card system.

The smart card revolution is so popular that there's even a National Association of Campus Card Users. The Alabama-based group is holding a four-day conference in March in New Orleans with seminars like "Penn State ID+: What Worked, What Didn't" and "Banks Are Great! But I Wouldn't Want to Marry One ..."

Jane Armstrong writes about a skimming attack on her bank account.

Two weeks ago, I was robbed. Twice. The bandits struck while I was out of the country, visiting the Oregon Coast during American Thanksgiving. The first theft happened on a Friday afternoon, when I would have been climbing around a rock jetty at Rockaway Beach. The thieves got $1,000 in cash. The next day, while I lolled on a deck chair overlooking the Pacific Ocean, they stole another $1,000. They didn't break into my house or steal my purse. They ransacked a savings account using a counterfeit debit card. My own card was safely tucked in my wallet.

Alorie Gilbert reports on MasterCard's new PayPass proximity payments card.

Chris O'Malley writes about the surge in interest in gift cards.

"The proliferation of gift cards is tremendous," said Robert G. Markey Jr., vice president of consumer retail financial services at Bain & Co. in New York. Bain estimates that sales of gift cards -- proprietary store cards and Visa/MasterCard versions -- have grown from about $13 billion in 1998 to $38 billion in 2002, and "this may be on the low side," Markey said.

Bank of America is paying $1.6 billion in cash for a 24.9 percent stake of Mexico's third-largest bank, Grupo Financiero Santander Serfin.

U.S. banks have been scrambling to attract the $10 billion money-transfer market between the United States and Latin America, with commissions in excess of $1 billion. Funds being transferred to the region are expected reach $18 billion by 2003, according to a November report by the Pew Hispanic Center. Banks have captured less than 7 percent of the money-transfer market, which is dominated by First Data Corp.'s Western Union.

Michael Liedtke reports on the California state law the prohibits expiration dates on most gift certificates in California.

Since 1997, state law has prohibited expiration dates on most gift certificates in California. Still, many merchants keep adding warnings that threaten to wipe out the value if they're not used by a certain date. "Retailers are still out there trying to skin the public," said Myron "Mike" Klarfeld, a San Diego lawyer who helped write California's law against gift card expirations. The alleged violations have spurred a flurry of class-action lawsuits filed by Klarfeld and other lawyers who want the courts to ensure Californians can use gift certificates at their leisure. A lot of money is at stake, with the rise of prepaid debit cards turning gift certificates into increasingly popular items. Shoppers nationwide are expected to spend somewhere between $20 billion and $30 billion on gift certificates this year.

Keith Kalawsky and Derek DeCloet report on the difficulties being experienced by CIBC.

One statistic illustrates why some investors have lost faith in Mr. Hunkin's executive team. When he became CEO, he set a goal to outperform all other major Canadian banks in total shareholder return. But CIBC has been left in the dust by three of its rivals: Royal Bank of Canada, Bank of Nova Scotia and Bank of Montreal. It has shrunk to smallest of the Big Five, with a $16-billion market capitalization.

Cash is good but a smart card is better, e-wallet advocate Mondex Taiwan said yesterday. Mondex Taiwan, a subsidiary of MasterCard, announced that 600 Hi-Life convenience stores would be accepting its store value card starting next Tuesday. "You can purchase anything from newspapers to pientang (lunchboxes) using our Mondex card," said company spokesman Harrison Hou. "You don't have to worry about loose change and large bills anymore." Mondex's electronic cash program can store value for up to five currencies and is globally inter-operable, said Hou. In Taiwan, cardholders are allowed to store up to NT$10,000 in their e-wallets, he continued.

MasterCard has announced PayPass, a new "contactless" card payment program that provides consumers with "a simpler way to pay." More info available at www.paypass.com.

MasterCard PayPass is an enhanced payment card that features a hidden embedded computer chip and antennae. A cardholder simply taps or waves his or her MasterCard PayPass card on a specially equipped merchant terminal. The card then transmits payment details wirelessly, eliminating the need for a cardholder to hand over his or her card for a merchant to swipe through a reader. Account details are communicated directly to the special terminals and are then processed through MasterCard's highly trusted acceptance network. Moments after a consumer taps the terminal with his or her PayPass card, they receive payment confirmation and are on their way. MasterCard PayPass is built around globally interoperable standards and relies on the ISO Telecommunications Standard #14443 to transmit Track 2 data via radio frequency. In North America, where the majority of transactions are authorized on-line, the payment application data is based on the magnetic stripe information. The card/terminal interaction is based the MasterCard Proximity Chip - Online Profile, which is a subset of EMV/ISO7816 commands.

Caitlin Fitzsimmons reports on the application of iris scan biometric technology to ATM authentication.

VeriSign managing director Gregg Rowley says the security of the personal identification number (PIN) is also questionable. He says banks will move to smart cards over the next few years and biometrics will be the next step after that. "Biometrics - such as a fingerprint scan or iris or retina scan - will replace the PIN," Rowley says. "Most insecure is a magnetic stripe with a PIN, more secure is a smart card with a PIN and even more secure is a smart card with biometrics." Rowley says the iris scan is the best option because people will not want a laser beamed into their eyes for the retina scan, while a fingerprint reader will wear out and become dirty.

Mark Long reports on TI's involvement in creating the Timex-built wireless wrist-watches for the ExxonMobil Speedpass Network.

When Speedpass-enabled customers arrive a the McDonald's drive-thru window, they simply order their food from the menu board, drive on to the payment window and wave their RFID-equipped wristwatches or key chains at the Speedpass reader. The reader/antenna then passes that information onto the appropriate value added network to verify the customer's profile and credit information. Upon authentication, the Golden Arches light up to indicate that the tag is read. The system then automatically bills purchases to the credit/check card of the customer's choice, prints a receipt, and the customer is on his way. There are no extra fees when using this method of payment.

Diana Washington Valdez writes about the volume of money transfer from the US to Mexico.

Despite the sluggish U.S. economy, the amount of money Mexican immigrants sent to relatives back home is expected to reach a record $13 billion this year, according to a Pew Hispanic Center and Inter-American Development Bank report. The massive flow of U.S. money to all Latin American countries shows no sign of slowing down and is projected to reach more than $18 billion by the end of 2005.

The latest edition of the Glenbrook Flash newsletter is now available on the Glenbrook Partners site. Online subscriptions are also available.

John Burtzloff from CardService International shares his recommendations on choosing a point of sale system.

Concord EFS has announced that it has been selected by McDonald's to provide card-based payment processing in the US.

The Australian Bankers Association is setting up a task force to address fraud including ATM and credit card skimming.

Paul Andrews reports on the surge in online commerce this holiday season.

Shoppers this season are suffering from "Sunday-afternoon fatigue," Davis said. They fight the crowds during the day at the mall and then, once Johnny and Sue are in bed, go online to purchase the items they were too impatient to stand in line for. Then there's the "Monday-morning spike," Davis said. Shoppers come to work with gift lists in hand and take advantage of high-speed connections to do their ordering. These suggest a couple of trends. First, it seems obvious shoppers are using the mall to kick the tires. They still want to see and feel the items they're purchasing, but they don't actually buy at the store. But shoppers don't want to "stand in line" online either. Broadband is an obvious incentive, as the "Monday-morning spike" indicates. What does all this say about the future of retail? One might conclude online may supplant the need for physical outlets.

The Sept. 11 attacks put the threat of domestic terrorism on everyone's radar screen. But Wednesday's events highlighted the particular vulnerability of shopping places as so-called soft targets for terrorists. "Retailers are the low-hanging fruit for someone who wants to get themselves into the headlines," said George Wallace, chief executive of Management Horizons Europe Ltd., a retailing consulting firm in London. "These are public places with high numbers of traffic, they're easy to get into, and it's a quick and easy headline."

Peppercoin is an "amazing new, low-cost electronic payment system for processing micropayments."

In the summer of 2002, a group of experienced Internet business and technology professionals established the management team of Peppercoin to lead the commercialization efforts of the core Peppercoin technologies and execute the company's business plan. The Company also raised its first round of outside equity financing from an esteemed group of institutional and individual investors. Peppercoin is a privately-held company, based in Waltham, Massachusetts.

Sherri Goodman reports on the success merchants are having with gift cards.

Electronic gift cards and gift certificates are projected to be the third most purchased item by holiday shoppers, according to a November survey by the National Retail Federation (NRF). Clothing ranked No. 1, followed by books, DVDs and compact discs at No. 2 in the nationwide poll of 8,569 consumers. John Bechard, president and chief executive of Salt Lake City-based Gift Check Solutions, agrees -- and has the numbers to back it up. The company, which specialized in gift certificates when it incorporated in 1998, has steadily shifted its focus from paper to plastic over the past two years. In 2000, 95 percent of Gift Check Solutions' business was in certificates and only 5 percent in plastic. In 2001, the business was split evenly between paper and plastic. This year Bechard estimates 90 percent of his clients want gift cards.

Nashville-based iPayment filed a preliminary S-1 Registration Statement with the SEC on Friday.   » Continue Reading

Mark Calvey reports on Visa USA's upcoming launch of a rewards program for its debit cards.

"The program will be easy to implement for card issuers," said Elizabeth Buse, executive vice president of new market development and deployment. Visa is building the infrastructure for the program and will use its hefty marketing muscle to promote the program when it launches in the second quarter of next year. "This is Visa building a platform and a marketing message," Buse said. Visa, which has been working on the program for the past year, declined to discuss how much is being spent on the new rewards program.

Daniel Dasey reports on an ACNielsen survey which concluded that most Australians would ditch their credit cards rather than pay a proposed surcharge to use them in shops and restaurants.

The ACNielsen study found 73pc of credit-card holders would switch to cash if a fee were introduced for buying goods on their cards.

Jane Armstrong reports on debit card fraud in British Columbia -- similar to earlier losses in the Montreal area.

Police in Montreal said debit-card fraud is skyrocketing, accounting for $37-million in losses this year, compared with $4.5-million in credit-card fraud. They say debit-card fraud there has jumped 25 per cent in the past year. Canada's banks won't say how much they have lost to debit-card fraud, but they're eating the losses. Fraud victims have been compensated and the banks don't want the thefts to scare people off using their cards.

Winston Chai reports from Singapore:

To make a mobile payment, cell phone users have to call a dedicated telephone number and key in their passport or ATM (automated teller machine) card numbers. They will then be prompted for a bank-issued personal identification number (PIN), and a confirmation SMS (Short Message Service) message will be sent to their handphones. To complete the purchase, consumers have to display the confirmation SMS message to the cashiers.

Bernard Simon reports on the big five Canadian banks: Royal Bank of Canada, Scotiabank, the TD Bank Financial Group, Canadian Imperial Bank of Commerce and Bank of Montreal.

Jenny McCune has authored a basic introduction to credit card fraud issues for merchants.

Steve Dawson reports from Singapore on a service lets users store credit-card details in phones and use them to pay for purchases, such as movie tickets.

Best-selling phone manufacturer Nokia first introduced its wallet application in its 6510 model during the first quarter of this year. Since then, it has been a feature on seven of its latest models. Nokia has developed the wallet application according to open Electronic Commerce Modelling Language standards. That means that it can be installed and implemented by other phone manufacturers as well. The forthcoming announcement also involves Visa, whose credit-card accounts will be the first that customers can use with the system, and Nets, whose technology is the infrastructure on which it will all be based.

California State Senator Jackie Speier (D-Hillsborough) has re-introduced a new financial privacy bill (SB1 - The California Financial Information Privacy Act) in the California Senate after a similar measure was killed last year.

"It's a new Legislature, a new year and a new opportunity to bring financial privacy protection to Californians," said state Sen. Jackie Speier, D-Hillsborough, as she began her fourth attempt to pass privacy legislation. This time, Speier has a powerful ally -- Senate President Pro Tem John Burton, D-San Francisco -- who vowed to "do everything" to ensure the bill passes.

My partner Carol Coye Benson writes:

There's a sea change happening in the world of digital identity. Suddenly, crypto-geeks and impassioned aficionados of biometrics, software tokens, and smart cards are being pushed to the side. The suits have arrived! Digital identity is no longer about security; it's now a marketing conversation.

eOne Global's mobile commerce subsidiary Encorus Technologies has a new, updated web site available.

Encorus Technologies is a software company working in the wireless payments space, a family member of the First Data Corp., the world's largest supplier of transaction processing services. It is driving the development of an open, global, mobile payment standard, working with mobile network operators and their customers and merchant acquirers. The company is already working with the Vodafone Group, T-Mobile International and Sprint.