Today, cost-cutting takes precedence over all else. Institutions consider operational efficiency is far more important than operational effectiveness and value enhancement. Rather than take a hard look at where they want to be competitively in five years, business decision makers focus on next year‚s automation projects and blame the regulators for making life harder. The return-on-investment credo is flawed, because it is used to justify short-term returns against a few selected projects, not overall long-term growth.
Amex Bank of Canada and TD Bank Financial Group announced an alliance in which TD will transfer commercial and corporate clients to the American Express credit card from Visa. Financial details of the deal weren't disclosed, but a spokesman for Amex indicated the arrangement is worth hundreds of millions of dollars. The move will involve about 300 corporate TD clients.
What other projects is National working on? We have this vision that your smart card will have biometric information. It will have your bank account and your passport and your medical data--but only your thumbprint can activate it. So you shove it into a slot and it says, 'Yeah, this guy's passport is real. Or 'yeah, this guy's got the bank account to back this up.' Or maybe you just load it up with $50,000 and burn it off over time. But if you ever lose it, (the card) doesn't have your thumbprint so it's useless. We're working with a particular technology where you don't leave your thumbprint; you rub it. We've been working on that for around six months.
Turning customer service centers into effective sales offices requires the kind of detailed personal data that credit card companies excel at -- past payment histories, spending habits and information about a customer's favorite stores. "Offers are individualized by looking at information like how customers are using their cards, their demographics and recent things we have offered them," said Steve Kietz, senior vice president of marketing in J.P. Morgan Chase Bank's credit-card business, which issues cards through its Chase Manhattan Bank USA subsidiary.
In a statement on its Web site, Paybox says it can see "no possibility for a single mPayment provider to develop the industry alone in the current industry conditions, especially amidst the discord between the other important market players (banks and telecommunications companies). The necessary growth and profitability can only be reached with many active market players, which have so far failed to appear."[Note: Russell Beattie pointed me to this item. Thanks Russ!]
Microsoft has insisted that Passport already complies with European data-protection rules. But European privacy authorities last year said the system raised "legal issues," including the "value and quality of the consent given" by users and the "security risks associated" with the transfer of their data to Passport's partners. By law, anyone wishing to store personal data related to residents of the European Union has to ask permission and give people the right to change or delete the data at any time. Anyone storing the data is also forbidden from sharing that data with third parties without asking the consent of the data subject.
M-commerce is generally divided into two categories -- micropayments, or those under $10, and macropayments, more-expensive purchases that are usually made by credit card or check. There's a general consensus that telecom operators are best placed to handle micropayments by charging for the services on monthly statements. Wireless operators already do this for things like special ringer tones and logos -- symbols such as hearts or cartoon characters that one can download and send to friends. Indeed, this area alone is now worth about $1.7 billion world-wide. Operators have turned the market into a lucrative niche by charging surchages of as much as 30% for the services. But the real battle centers on control of higher-margin, macropurchases. After some resistance, mobile operators have come to accept that they lack the risk-management expertise financial institutions have in dealing with consumer credit on a large scale. There are also a host of regulatory issues that would prevent wireless firms from running payment services in many countries. Still, mobile operators are reluctant to cede the territory to credit-card companies and banks without getting a piece of the action themselves. The problem is, the low fees charged by the current array of payment options leave little room for any new payment system to recover its costs. Credit-card commissions, which generally are about 3%, already leave the likes of Visa and MasterCard with razor-thin margins. And bank commissions on debit-card transactions tend to be even lower.
The world's biggest card network has put millions of dollars towards a campaign to convince its issuers and retailers to adopt Verified by Visa - a system that requires consumers to sign up for passwords that confirm their identities with issuing banks. So far, most banks and about 6,000 retailers have agreed to take part. "The official word is that they want to reduce fraud," says Avivah Litan of the Gartner Group. "But they firmly believe that credit card usage and purchasing will go up if there is less fraud." International losses from online fraud, which reached $1.64bn over the past 12 months, almost doubled in the past two years, Gartner Group research indicates. Last year, e-sales totalled about $91bn.
Bank of America spokeswoman Lisa Gagnon said by phone from the company's headquarters in Charlotte, North Carolina, that many, if not a majority of the No. 3 U.S. bank's ATMs were back online and that their automated banking network would recover by late Saturday.Why? I'll bet that a number of folks will want to understand how such an Internet outage could have affected the largest ATM network in the US.