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July 31, 2003

Edy gives cash a run for the money

Japan's Daily Yomiuri reports on bitWallet's Edy cards.
Edy uses integrated circuit cards that can transmit data simply by bringing an Edy card close to a reader, a process Miyazawa described as being much faster than that for credit cards. The same technology is used in East Japan Railway Co.'s Suica cards used to pay railway fares.

July 28, 2003

Interview: Wells Fargo's Dick Kovacevich

Sunday's San Francisco Chronicle included a great interview with Wells Fargo CEO Dick Kovacevich.
Q: How good is Wells at measuring how much money you're earning from each customer relationship? What portion of your customers is profitable?. A: About 63 percent are profitable, and the others we call potential. The average consumer has 15 financial relationships. If you can get only four of those, you are profitable. If you get 8 or 9 or 10, you are really profitable. And you can give them lower prices like Wal-Mart because you can spread your costs. In that sense, we have more in common with the Wal-Marts and Home Depots of the world than we do with other banks.

July 23, 2003

Business Week: Why biometrics is no magic bullet

Business Week reports on biometrics.
o doubt, biometrics will spread as more corporations use the technology to control access to key facilities and as government bodies such as the Federal Aviation Administration and the Pentagon do the same. But don't expect to see fingerprint readers on car doors or facial-recognition kiosks for admitting hospital patients anytime soon. For the most part, biometrics appears to be a technology whose time has not yet come.

Learning more about PayPal

PayPal recently held a two day Developers Conference in San Francisco. Slides, video and audio recordings of the sessions at the conference are now available online. My partner "Russ Jones" comments:
I absolutely love this! The page contains *everything* presented at the recent PayPal Developer's Conference -- PowerPoint slides, streaming videos, streaming audio, and manuals. This perfectly captures the essence of the new service platforms and underscores the effort that companies like PayPal are expending to establish themselves as dominant platforms in the industry.
Russ is right on (of course!). Companies that envision themselves as platforms have to evangelize very effectively. It's not about constructing moats around castles, it's about throwing great parties and inviting the brightest you can find!

Wal-Mart.com Launches Online Check Acceptance

Last week Wal-Mart.com launched acceptance of checks as payments for online purchases using Certegy Check Services. READ MORE »

Over 8 million settlement notices mailed to US merchants

Constantine & Partners, the law firm acting as lead counsel for merchants in the Visa Check Card / MasterCard MasterMoney antitrust litigation, announced this morning that over 8 million notices of settlement have been mailed to US merchants.
The mailing list was developed from merchant data provided by Visa, MasterCard and the 80 largest merchant acquirers/processors, as augmented with the names of potential class members who registered with the Administrator since Notice of Pendency was given in September and October of 2002. Class notice also will appear in major national publications and merchant trade press through August 4, 2003, and is posted on the case website InReVisaCheck-MasterMoneyAntitrustLitigation.com.

July 21, 2003

Visa launches Verified by Visa in China

Visa Asia Pacific announced this morning that it has launched the Verified by Visa service in China.

Gartner: Identity theft up 80 per cent

In a press release this morning, Gartner reports that it estimates 7 million US adults were victims of identity theft in the 12 month period ending June 2003, a 79 per cent increase over results from a survey of consumers conducted in February 2002.

Visa announces new smart card

Visa International has announced the launch of a new smart card costing US$1.98.
The new card -- called the GP-Entry card -- conforms to the GlobalPlatform specifications and has 8K of EEPROM memory and a Visa payment application that supports major authentication technologies, such as Static Data Authentication (SDA) and Dynamic Data Authentication (DDA). It is specifically designed for Visa member banks looking to implement a GlobalPlatform card with basic functionality. There are currently nine card products in the program supporting DES and PK security with a variety of ROM and EEPROM memory sizes. Prices range from $1.98 for a GlobalPlatform card supporting DDA with 8K of EEPROM to $3.47 for a GlobalPlatform dual interface card also supporting DDA with 16K of EEPROM. The program also includes a static/native card priced at less than a dollar. All prices are based on white plastic cost and include the Visa Smart Debit/Credit (VSDC) application in ROM.

July 16, 2003

Visa USA and SafeCHECK to combine check conversion services

Visa USA and SafeCHECK announced this morning that they've agreed to combine their check electronification efforts.
The combined service, to be run by Visa, will form a bank-owned, integrated electronic check processing solution that can significantly reduce the billions of dollars of paper check handling costs incurred by merchants and financial institutions annually.
The press release also cites NACHA statistics reporting that merchant adoption of check conversion at POS is growing at a rate of six per cent each month. Yesterday, an article in Bank Systems and Technology by Celent analyst Gwenn Bezard reviewed the current state of check conversion at the point of sale in the US.
Although there are signs that the complex alchemy of turning a check into an electronic payment will become mainstream at the lockbox, it is unlikely to happen in the next two to three years at the point-of-sale. This should encourage the industry to think beyond the "conversion" box, and consider other alternatives, such as financial incentives and disincentives.

eWeek: MasterCard I/T profiles

eWeek has two articles this week profiling MasterCard's information systems technology. The first article by Executive Editor Stan Gibson comments on the IT investments made by MasterCard. The second article, also by Gibson, is an interview with Jerry McElhatton, MasterCard's president of global technology, and Robert Reeg, senior Vice president of systems development. It includes an interesting sidebar listing many of MasterCard's IT-related assets.

American Express expands ExpressPay

American Express announced this morning that it is expanding its ExpressPay pilot in the Phoenix area.
ExpressPay is an easy-to-use alternative to cash for making purchases at merchants where speed and convenience are important - such as quick serve restaurants, supermarkets, drug stores, gas stations, and corporate cafeterias. Users simply hold the ExpressPay key fob next to a companion reader at checkout to make purchases. Payment is authorized in seconds and no signature is required. ExpressPay links directly to an existing credit, charge or debit card to fund the purchase.
ExpressPay operates in two different modes. You can directly link it to an American Express card account and each payment will be posted to that account. Alternatively, you can load value into your ExpressPay account from an American Express, MasterCard, Visa or Discover Card and each payment will be deducted from the prepaid account balance. American Express has a website for ExpressPay customer service. A comprehensive FAQ is also available.

July 15, 2003

Citigroup to acquire Sears Credit Card Business

Citigroup announced this afternoon that it is the successful bidder for the credit card business of Sears. This is a big deal -- moving Citigroup to 20% market share in credit cards and the clear leader in private label cards.
„This acquisition provides us with an opportunity to take a leadership position in the private label segment and solidify our current bankcard leadership position,‰ said Sanford I. Weill, Citigroup chairman and chief executive officer. „This relationship with Sears gives us unique access to a large distribution channel and customer base. We look forward to growing the value and profitability of this portfolio by applying our expertise. We have demonstrated our capability at integrating new businesses over the last few years and to add to our bottom line. This acquisition should be no different.‰ „This transaction creates significant growth opportunities for Citigroup in this segment of our business,‰ said Robert B. Willumstad, president of Citigroup and chairman and chief executive officer of Citigroup‚s Global Consumer Group. „Sears is a unique franchise as 60 percent of U.S. households are Sears customers, including a significant Hispanic customer base -- a key focus of our consumer business marketing efforts. Through over 2,700 Sears outlets across the U.S., we will have access to low cost, high volume customer acquisition points that currently add over four million credit card customers annually.‰
Citigroup has provided a presentation with more background on the acquisition.

July 14, 2003

Good Guys likes Verified by Visa

InternetRetailer.com reports on Good Guys' positive experience with Verified by Visa.
GoodGuys.com started participating in Visa U.S.A.`s Verified by Visa system about eight months ago, but saw little participation by shoppers for the first several months, Parker says. But participation began increasing two months ago, and now 35-40% of orders are processed with the Verified by Visa system. Although he`s unable to explain the recent rise in customer participation, he notes that customer surveys and direct e-mail feedback have all pointed to positive customer experiences. GoodGuys.com operates as a separate entity from the Good Guys Inc. chain of retail stores. "I`ve never had any negative feedback," Parker says. "Customers say they feel safer shopping with us knowing their card is protected. It makes their lives easier and it makes our lives easier."

July 12, 2003

Visa International: The Virtuous Cycle - Electronic Payments and Economic Growth

Earlier this month, Visa International published a white paper titled The Virtuous Cycle - Electronic Payments and Economic Growth (PDF). It contains a number of interesting conclusions. For example:
Based on an analysis of a cross-section of 50 countries, increasing the existing share of electronic payments in a country by a margin of just 10 percent will generate an increase of 0.5 percent in consumer spending. For example, in a country that has a 20 percent card share of US$30 billion in consumer spending, enlarging that share to 22 percent will generate roughly US$150 million in incremental consumer spending.
And:
Electronic payment networks have the potential to provide cost savings of at least 1 percent of GDP annually over paper-based systems through increased velocity, reduced friction and lower costs. For the U.S. economy, that translates into roughly US$60 billion in annual savings. In the U.K., savings would be on the order of US$10 billion annually.

ID Federation Specs ready for financial services

Thor Olavsrud reports on the FSTC's review of SAML and the Liberty Alliance's Identity Federation Framework.

July 09, 2003

The wave of the future is at hand

An article in Baseline Magazine reports on proximity payments.
Big retailers can speed up the payment process˜and pocket the money they used to pay Visa and MasterCard in the process. Generally, Visa and MasterCard charge retailers about 1.9% of the total purchase for debit and credit transactions across their network. MasterCard charges less for "quick payment" merchants, like fast food and movie chains, but won't say how much. By comparison, Speedpass charges a flat rate of about 20 cents per wireless transaction. So, when a consumer chooses Speedpass instead of a credit card on a $100 transaction, the merchant puts $1.70 back in his pocket.

July 07, 2003

RFID in retail - game over?

Business Week reports on Wal-Mart's decision to require its top 100 suppliers to start using RFID for some applications by January 2005.
Given Wal-Mart's enormous size and influence, the technology could spread quickly: Not only will other retailers be forced to adopt it to remain competitive, the wider use will also bring down installment costs. "A lot of people don't want to be the first in the water," says Kevin Ashton, head of the Auto-ID Center, a consortium that is developing RFID. "But one Wal-Mart is worth 101 other companies."

WSJ: Lawsuits may benefit American Express

This morning's Heard on the Street column in the Wall St. Journal (subscription required) reports on how the recent lawsuits in the credit card industry may benefit American Express.
One factor in Amex's favor: Fees paid by merchants to it are as much as half a percentage point higher than those paid to Visa and MasterCard. That makes it harder to sign up merchants, but easier to sign up banks. "Financial institutions will look into their portfolio of existing cardholders, identify some that aren't particularly profitable, and see if they can migrate them to an Amex product that generates higher fees from merchants," says David Robertson, the publisher of the Nilson Report, a trade publication following card-industry trends.

July 05, 2003

Moneris readies for chip cards in Canada

Moneris Solutions, Canada's largest processor of credit and debit card payments, put out a press release yesterday on the migration to chip cards in Canada. Included is a strategic partnership with Ingenico for POS terminals.
"Moneris Solutions believes the move to chip technology will, over the long term, be highly beneficial to consumers and merchants alike," said Jim Baumgartner, President and CEO, Moneris Solutions. "Moneris is committed to investing the substantial resources required to make chip technology a reality in the Canadian marketplace. As the only remaining Canadian-based processor of scale, Moneris believes it is uniquely positioned to launch chip technology in a manner that makes sense for Canadian merchants."

July 02, 2003

Why old tech is beating new in B2B bill payment

The American Banker reports this morning on how traditional EDI continues to slow progress of Internet-based EIPP solutions.
The most basic reason for this is that EDI systems work. Companies typically work with a private networking partner, called a value-added network. Buyers send EDI-formatted purchase orders to their suppliers through the VAN and receive both shipping confirmation notices and invoices. Some can also transmit electronic payment instructions through the VAN to financial institutions, though the majority of payments are still made with paper checks. These systems have been in place for years, sometimes decades, and are commonly used by many of the nation's largest corporations. Velosant and other EIPP vendors may rue this situation, but EDI vendors are sitting pretty, largely because big companies have put so much money into their technology.

July 01, 2003

BitPass launches new online content and services payments solution

BitPass, a content and services payments company we've been helping, soft launched their new service last night. READ MORE »

EU may go digital with passports

Thomas Fuller reports in the International Herald Tribune on a European Union plan to use biometric technology in passports.
Under the U.S. Enhanced Border Security and Visa Entry Reform Act of 2002, countries whose citizens enjoy visa-free travel to the United States - as is the case with most if not all of Western Europe - must issue passports with biometric identifiers no later than Oct. 26, 2004.

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