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« May 25, 2003 - May 31, 2003 | Main | June 8, 2003 - June 14, 2003 »

June 07, 2003

Visa is eager to drop $5 million at the Belmont

Patrick McGeehan reports in the New York Times about Visa USA's $5 million prize if Funny Cide wins the Belmont Stakes later today.
A victory by Funny Cide would actually cost Visa very little. The company bought its title sponsorship for an undisclosed sum from Triple Crown Productions, which stages the series. That fee included the cost of insurance against payoffs each and every year, Mr. Pascarella said. Mr. Pascarella said another near-victory would not necessarily cause Visa to consider dropping the sponsorship. But he said a Funny Cide triumph "would give us a reason to want to re-up the sponsorship early."

June 06, 2003

Australia: People using credit cards less

Melbourne's The Age reports on Reserve Bank of Australia (RBA) governor Ian Macfarlane's comments to the Australian House of Representatives Standing Committee on Economics, Finance and Public Administration. READ MORE »

American Express questions Visa, MasterCard initiatives

Earlier this week, American Express CEO Ken Chenault presented at an investor conference. In his remarks, he shared his perspective on recent events in the payments industry.

June 05, 2003

Final settlement signed in VisaCheck/MasterMoney antitrust trial

Lloyd Constantine of Constantine & Partners, the lawyer representing the merchant class in the antitrust case against Visa U.S.A. and MasterCard International, announced today that the final settlement agreements for this lawsuit have been signed by the parties involved.
"The pay out to merchants will be easy, fair, and equitable. The payment amount will be based on a merchant's volume of debit card transactions between October 25, 1992 and the May 2003 settlement," said Lloyd Constantine, the lead counsel for the merchants and a principle in the New York firm Constantine & Partners. "The changes in Visa and MasterCard's business practices, beginning August 1, will bring even larger economic benefits for merchants as offline debit interchange fees drop. In the long run, this settlement offers more choice and a positive pricing effect for consumers."

Wells Fargo launches anti-fraud initiative

Wells Fargo has announce a new anti-fraud initiative to protect its customers from fraudulent checks and ACH transactions.
"Not all bandits walk into banks and demand money. Behind-the-scenes thieves are also a threat," said Steve Ellis, head of Wells Fargo's Wholesale Services. "There are organized gangs of criminals printing counterfeit checks, altering payees' names on checks, and sending unauthorized electronic debits (withdrawals) to accounts. We're as committed to stopping them as Wells Fargo was to stopping stagecoach robbers in our company's early days. First and foremost, we want to protect our customers' assets."

June 04, 2003

Value of online bill payment to banks

A while back, comScore Networks published some findings regarding the demographics of online bill payment customers to banks:
comScore found that online bill payment users were more than twice as likely to remain active online banking customers compared to non-bill payment users. Online banking customers who did not use their bank‚s bill payment services showed an online attrition rate** of 34 percent, compared to only 16 percent for those who were active bill payment users. The comScore analysis also revealed that online users of online bill payment services hold an average account balance of approximately $4,800, which is double the $2,400 balance carried by the average online banking customer. Further, comScore found that younger and higher income consumers are more prone to use online bill payment services.

June 03, 2003

California Governor says he'll support financial privacy bill

Jennifer Coleman of the AP reports that California Governor Grey Davis has announced his support of a financial privacy bill "that would tighten restrictions on how companies can share customers' financial information."

$32,000 a second - for a year

Visa USA announced this morning that, for the first time, its annual sales volume exceeded $1 trillion.
The record usage means that an average of $32,000 went through the Visa system every second of every day over the 12-month period that ended March 31 - or nearly 10 percent of the 2002 U.S. Gross Domestic Product. "One trillion dollars is an almost incomprehensible number, but it represents clear evidence of the silent revolution we're witnessing in the way consumers pay for goods and services. It means $12 of every $100 consumers spent in the U.S. is spent using a Visa card," said Carl Pascarella, president and CEO of Visa USA. "This is an important milestone in the history of U.S. commerce. Clearly, more and more people rely upon the security and convenience of Visa credit, debit and other payment products. To put it into context, $1 trillion could buy 162,000 Harley-Davidson motorcycles every day for a year." By comparison, $1 trillion is greater than the combined volume of all other U.S. payment organizations, a field that includes MasterCard, American Express, Discover and others.
Just before I left Visa in 1994, I remember having a discussion with a colleague about growth in sales volume. 1993 had just ended with $500 billion in annual Visa sales on an international basis. We were focused on that total growing to $1 trillion globally over the next five years. As I recall, the US in 1993 was about 40+% of the global total -- so the growth in US volume over the last nine years has been pretty amazing. Of course, this is also one of those statistics that has a nice built-in inflation hedge too (the numbers just keep growing!). $32,000 a second -- at a $50 average ticket that works out to an average of 640 Visa transactions per second.

June 02, 2003

CyberSource announces web services for payment transactions

CyberSource announced today "the availability of the first payment solution based on web services architecture, including payment-grade transaction security."
CyberSource is the first payment services provider to offer the full spectrum of web services compliant clients. These clients support the SOAP communications protocol, XML document format, and WS Security data signature specifications to provide the level of security required for payment transactions. With CyberSource support of Web Services standards, including transaction security, developers can more quickly implement payment functionality. By accessing the CyberSource Web Services Development Language from a CyberSource or a UDDI resource, developers will be able to enable payment functionality via most major toolkits that support SOAP, such as Microsoft's Visual Studio.net, Apache Project's Axis, and any of the IBM developer kits, such as Emerging Technologies Toolkit.

Visa Check/MasterCard MasterMoney AntiTrust Litigation

The plaintiffs' legal counsel in the Visa/MasterCard debit antitrust litigation has posted on its web site additional information and documents on the settlement (including the settlement MOU's signed with Visa USA and MasterCard n April 30, 2003).

Stored Value Cards: Not as simple as they look

John Morgan from Perkins Coie writes about stored value cards and some considerations regarding their use.
Stored-value cards ("SVCs") are prepaid cards that may be used to purchase goods and services. SVCs are rapidly replacing traditional gift certificates due to their versatility and enhanced features such as the ability to reload, incrementally draw down balances, increase point-of-sale integration, and link to loyalty and other incentive programs. However, while SVCs provide convenience to customers, businesses offering SVCs need to be wary of the possible legal implications of using SVCs, including laws that concern banking, money-service businesses, financial privacy, anti-money laundering and unclaimed property.
Meanwhile, The Register comments on e-money in the context of prepaid accounts in Europe and the UK (see: UK FSA Consultation Paper 172 - Electronic Money: Perimeter Guidance).

Making RFID Payments Ubiquitous

Lynn DeRocco reports in RFID Journal on last week's announcement by Philips and Visa International.
Reinhard Kalla, VP and general manager of identification at Philips Semiconductors, sees contactless Visa payments using Philips technology as a big opportunity for both companies. He says the process will be not only convenient, but also private and safe for consumers and merchants. "Philips has been working for years in RFID with tags and labels, and contactless applications are also based on RFID," Kalla says, "You would use this technology as if it were a smart card." He adds that consumers will see "new and more exciting applications and content" resulting from the relationship with Visa in about a year.

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