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« May 11, 2003 - May 17, 2003 | Main | May 25, 2003 - May 31, 2003 »

May 23, 2003

Gaming panel shelves ATM slots

Liz Benston reports from Las Vegas on a decision by the Nevada Gaming Commission that blocked plans to equip slot machines with debit card readers.

Credit card games in India

The Business Standard reports on credit and debit card activities in India.
Says Uttam Nayak, deputy country manager (South Asia), Visa International, "Thirty million people are eligible for credit cards while 130 million bank account holders are eligible for debit cards. That is the potential for growth." Banks expect card usage to grow 100 per cent in the next year. Currently, roughly 55 per cent of credit cards are active. The usage growth will depend on how many outlets accept cards.

Network 365 wins NTT DoCoMo mobile payments business

Network 365 announced this morning that it has been selected by Japan's NTT DoCoMo to provide DoCommerce, a secure mobile payments service.

May 22, 2003

Securities firms, retailers could enter banking

Friday's Washington Post has an article by Kathleen Day regarding proposed legislation that would allow retailers and manufacturers to own full service banks nationwide.
At issue is whether Congress should expand the power of obscure entities known as industrial loan companies. These state-chartered, limited-purpose banks -- which operate in Utah, California, Colorado, Nevada and Minnesota -- generally specialize in one area, such as offering credit cards. The owners of these companies are not regulated by the Federal Reserve and may include automakers, discount department stores and other firms that are largely unrelated to financial services.

Verified by Visa, MasterCard SecureCode

Sun has published an interesting article about the payer authentication solutions now being implemented by Visa and MasterCard.

Micropayments Redux

We're picking up some interesting "chatter" on our radar regarding renewed interest in micropayments on the Internet. We're thinking there's enough interest that it's worthy of doing some more digging to learn more about what others are thinking. If this is a subject you're interested in -- particularly if you think you have stuff to sell where a micropayment solutions would be valuable to you, please let me know directly -- or -- also feel free to post a comment here. Quoting from a Barton Biggs' piece earlier this week:
As Philostratus wrote: "the wise perceive things about to happen."
Are micropayments, finally, about to happen? I've started a new page to log my new learnings about micropayments.

Clear2Pay announces financing

Brussels-based Clear2Pay has announced it has closed a new round of equity financing.
"The successful implementation of the Visa Direct environment in London, is proof that we are indeed able to implement the Clear2Pay vision in existing and complex environments. Financial service providers can literally make quite some money by improving efficiency in their payment systems and integration with their customers. This is an area where we at this very time, when inter-bank fees are under heavy scrutiny, need to focus on. The bilateral payment systems we know today automate existing processes and cannot deliver that promise. I strongly believe in what I call 'the New Wave': internet based payment systems which handle transactions at a multi-lateral level. The bank retains and strengthens its role as the primary payments processor and customer relationship owner, whilst at the same time enhancing efficiency, improving ease of use and cutting costs." said Michel Akkermans, CEO and Chairman of Board of Directors of Clear2Pay.

eMac Digital selected by McDonalds; Goes independent

eMac Digital has announced that it has been selected by McDonald's to supply its next-generation POS system. It also announced that Accel-KKR, co-founder of eMac Digital, is buying out an equity stake in the company previously owned by McDonald's. eMac Digital provides a variety of services to the global foodservice industry.

Loyalty patent cross-licensing agreement announced

Catuity, Visa USA, Visa International and Welcome Real-Time have announced they have entered into a patent cross-license agreement.
Under the Visa Loyalty Program Patent Agreement, Catuity, Visa and Welcome will cross license existing and future patents for Visa smart loyalty programs. This cross license will be worldwide and royalty-free until the last patent expires. The cross license will extend to all Visa affiliates, members and merchants. Participants will develop and promote interoperable loyalty solutions by integrating the Visa interoperability toolkits within their platforms. These toolkits, demonstrated by Visa, Welcome and Catuity during Cartes 2002, allow cards with one technology to be used in terminals connected to a different loyalty platform, and for data from different loyalty processing centers to be aggregated to enable customer service activities.

May 21, 2003

First Data Corp. files registration statement for proposed merger with Concord EFS

First Data Corp. announced this morning the filing of its S-4 registration statement with the SEC regarding the proposed merger with Concord EFS. FDC also announced that it has been notified by the Payment System Working Group, a sub-group of the National Association of Attorneys General, that it plans to request a copy of the information that First Data has thus far supplied to the US Department of Justice regarding the proposed merger. FDC said it will be supplying the requested information.

Consumer Preference for PIN Debit

The combination of yesterday's announcement of the UK Northampton chip and PIN trial coupled with Star's latest consumer survey results got me exploring a bit this morning. A Google search on "consumer preference for PIN debit" turns up some interesting results including the top item - a presentation by Star System on last year's survey results and results from a similar survey also done in 2002 by Paymentech. Bottom line: these surveys say that US consumers express a clear preference for PIN over signature primarily because they perceive it as faster.

May 20, 2003

Star finds growing interest in small value electronic payments

Star announced the results of a recent study finding that consumers are indicating a growing desire to make small payments by debit card.
The survey of 11,263 consumers, the largest in the electronic payments industry, also found that consumers who make both PIN-secured and signature debit purchases are the most active among all debit cardholders in terms of number of transactions. Respondents who used only signature debit used their card an average of 13 times per month, while those who used only PIN-secured debit used their card almost 9 times (8.9) per month. But usage frequency jumped to almost 19 times (18.8) per month among those who made both types of transactions.

Lloyd Constantine - Anti-trust lawyer

Lynda Richardson profiles anti-trust lawyer Lloyd Constantine in this morning's New York Times. Constantine was the lead attorney on the recently settled merchant lawsuit against MasterCard and Visa USA.
He says this recent case will reshape an industry in which the two companies used their dominance in the credit card market to exact excessive fees from merchants when customers used their debit cards. He calls them "the cartel of Visa and MasterCard." "We believe people do better when things are free," he says. "The regime we're ending is a system where there were no choices." He also expects the settlements to cut the fees that merchants usually pay each time they accept Visa- or MasterCard-branded debit cards, saving merchants and consumers as much as $100 billion over the next 10 years. "To me, that's 100 times more important than $3 billion," he says.

Chip and PIN transactions begin in the UK

The Register reports on the start of trials in Northhampton in the UK using smart cards with consumer PIN verification technology designed to reduce card fraud. More information about the initiative is available at the Chip and PIN website created by the card industry in the UK to provide consumer and merchant information about the program.

Online shopping decisions significantly impacted by enhanced security

MasterCard reports on the results of a recent survey of consumers which indicates that enhanced security features are important to increasing consumer online shopping.
Assurance that personal information would be kept private, a guarantee that consumers would not receive unwanted e-mails as a result of purchases and an extra layer of security for credit card transactions were among the most important factors influencing the degree to which consumers would make purchases online. More than 1,000 consumers participated in the study, "MasterCard Internet Consumer Segmentation Research," which was conducted during fourth quarter 2002.

May 19, 2003

Avoiding Biometrics

Over the last year or so, we've been doing a lot of work with various biometric authentication technologies -- including my partner Allen Weinberg's latest Advisory Report "See Me, Hear Me, Touch Me" that discusses how biometric technologies might apply to applications in the financial services industry. Over the weekend, we came across this story in CNN's Offbeat news section. We've heard of folks trying hard to avoid being identified, but this one takes the cake!
Shortly after he was arrested, prosecutors said Olusajo tried to conceal his identity by soaking his fingers in a jail toilet, then chewing away the softened skin. He was unsuccessful, according to prosecutors.
Amazing!

MasterCard's 10-Q available online

Last week, MasterCard filed its most recent 10-Q report with the SEC. It includes some additional information on the merchant settlement. For the first quarter of 2003, MasterCard reported revenues of slightly over $500 MM as compared to $392 MM the year earlier. MasterCard's net income would have been about $50 MM for the quarter except for the settlement costs charged in the quarter of $721 MM. As part of it's 10-Q filing, MasterCard also filed a revised Executive Incentive Plan.

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