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« December 7, 2003 - December 13, 2003 | Main | December 21, 2003 - December 27, 2003 »

December 19, 2003

Annals of Online Shopping: Tricky Deals

Doc Searls shares his online experience with Reservation Rewards -- they stepped in following his online purchase at a Yahoo! Store. He was curious why a survey following his purchase was also asking for his credit card information -- and proceeded to read (and capture) the fine print.
I wonder if Amazon and other relatively reputable outfits support this kind of scammy stuff. Be interesting to know. This certainly makes me think less of both Yahoo and the store I bought the goods from, since it isn't clear to me where one ends and the other begins.

Retailers Surveyed on Mobile Commerce

Bern, Switzerland-based Sicap has released the results of a survey of 514 retail professionals conducted by Indro Celia, professor of e-business, at the University of Applied Sciences of Central Switzerland regarding their attitudes towards mobile commerce.
52 percent of those interviewed were positive about the prospects for mobile commerce with 50 percent attracted to its revenue generating potential. Window-shopping was identified as the "killer" application that would drive mobile commerce growth. By enabling consumers to purchase store items displayed in shop windows consumers would be able to make purchases outside store opening hours as well as avoid queuing at checkouts. In contrast, retailers questioned the added value to consumers of other often quoted mobile commerce scenarios like paying at the point of sale (POS) in a store and toping-up prepaid accounts.

Who'd have ever guessed that window shopping might be the mobile commerce "killer app"?

Holiday Shopping

VeriSign announced some data on holiday shopping volumes being processed by VeriSign Payment Services:
Since Thanksgiving through December 16, 2003, VeriSign Payment Services has processed more than 23.6 million Internet merchant payment transactions totaling approximately $3.54 billion in online sales volume. During the same period last year, VeriSign processed 16.9 million transactions totaling approximately $2.89 billion in online sales volume.

The average size of a single consumer transaction during this year's holiday season is also up by more than 16 percent at $142 per transaction, versus approximately $122 per transaction last year. In addition, total sales volumes for all VeriSign payments merchants combined increased by more than 22 percent over the same holiday shopping period during 2002.

So far, the single busiest online holiday shopping day of the year for VeriSign payment merchants was the Monday following Thanksgiving, when VeriSign processed 1.68 million of their online transactions.

Plastic Makes Perfect

In a pretty comprehensive look at the subject, Catherine Donaldson-Evans reports on Fox News on the growth in gift cards this holiday season. Starbucks, in particular, has had great success:
Since the company launched its gift card in 2001, there have been more than 100 million redemption transactions that have resulted in net sales of more than $400 million, according to spokeswoman Kristine Jimenez-Ortiz.

Jimenez-Ortiz said the Starbucks gift card business has seen a 30 percent increase from year to year; for fiscal year 2003, 10 percent of all company transactions were paid for with a gift card.

The article goes on to note that much of Starbuck's success is related to customers being able to reload the cards.

December 18, 2003

First Data announces Central/Latin American Processing Center

First Data has announced a new processing center to serve clients in Central and Latin America from Panama City, Panama.
"This new company solidifies First Data's commitment to meeting the processing needs of financial institutions across Latin America and the Caribbean," said Pam Patsley, president, First Data International. "The combined strength of First Data and Banco General will enable PROCESA to deliver a state-of-the-art operation that meets the unique needs of its customers and enable its customers to aggressively grow their business and respond quickly to changing market dynamics. This company will build upon First Data's core strength of delivering a trusted third party processing solution."

International Money Transfer Consumer Guide

From Australia, Paul Stewart-Day is running a new website focused on providing advice regarding international money transfer services for consumers.

December 17, 2003

Checkfree moves into Walk-In Bill Payment Market

Checkfree announced this morning that it is acquiring walk-in bill payment provider American Payment Systems.
Based in Wallingford, Connecticut, APS provides walk-in bill payment services through an extensive national network of more than 8,000 retail and agent locations, which reaches 70 percent of consumers in the top 75 U.S. metropolitan areas. Today, APS enables 7 million households to pay for services in-person. The company serves hundreds of billers with contracted payment services and manages a growing network of non-contracted billers for electronic transaction processing. For 2003, APS expects to process nearly 120 million payments.

December 16, 2003

Consumers now favor Credit and Debit Cards over Cash and Checks

The American Bankers Association and Dove Consulting have released the results of a new nationwide consumer payments study that concluded that, for the first time, electronic payments have surpassed cash and checks as consumers' preferred payment method for in-store purchases.
The 2003/2004 Study of Consumer Payment Preferences found that cash and checks now account for 47 percent of consumers' in-store purchases, as compared to 57 percent in 1999 and 51 percent in 2001.  This evolution of payment behavior continues to be driven by the increasing popularity of debit cards.  Four years ago, debit represented only 21 percent of in-store transactions; today consumers report that nearly one out of three (31 percent) in-store purchases are made with a debit card. 

This growth in debit card use has come at the expense of both cash and checks.  While cash remains the single most frequently used payment method in stores, its share of the transaction mix has fallen from 39 percent in 1999 to 32 percent in 2003.  Checks also play a diminishing role at the point-of-sale, accounting for just 15 percent of purchases. Comparatively, consumer use of credit cards for in-store purchases has remained relatively constant at 21 percent.  At 2 percent, the "other" payments category is made up of prepaid cards.

Today's Wall St. Journal also reported the survey results.

Worrying less about Card Readers?

Jon Udell, writing in his InfoWorld weblog about how an authenticated world would be better than today's, is worried less about card reader deployment to read cards.
It's unclear how the governments and banks and airlines and other entities who currently issue cards will evolve the identity infrastructures this solution implies, how those infrastructures will cooperate, and how revocation can be managed in a scalable way.

That said, I worry less nowadays about card-reader deployment. Maybe because I figure that we'll just authenticate to our phones, and let them talk Bluetooth to PCs and other devices.

Gift Givers Love Plastic

Jennifer Inez Ward reports in this morning's Oakland Tribune on the rapid growth in popularity of gift cards.
Leaving paper gift certificates in the dust, electronic gift cards are taking off this holiday season as the plastic present becomes more and more the norm. According to a survey by the National Retail Federation, consumers plan to spend $17.8 billion on gift cards this holiday, which accounts for nearly 8 percent of all holiday sales. The survey found that 69.9 percent of consumers plan to buy gift cards during the holidays as well.

MasterCard and eFunds form Debit Processing Alliance

MasterCard and eFunds have announced they are forming a new debit processing alliance.
 "MasterCard Complete Debit Processing is built on eFunds' industry-leading processing system and software platform used by most of the major payment networks in the United States, supporting more than 80 percent of the nation's debit transactions," added Paul Walsh, CEO, eFunds Corporation. "We are excited to partner with MasterCard to provide financial institutions with scalable technology and professional resources necessary to profit from every step in the debit transaction processing chain."

The press release indicates that MasterCard will have responsibility for marketing and sales of alliance services.

December 15, 2003

Growing Vulnerability of ATMs to Viruses a Concern

TowerGroup commented today on the growing vulnerability of automated teller machines to viruses in a new report just published.
"Drawn by the allure of low-cost software development and enterprise-wide connectivity, financial institutions are using technologies so ubiquitous that institutions are at risk of being contaminated by a global community they can't control," said Jerry Silva, a senior analyst in the Delivery Channels practice at TowerGroup and author of the research.

"Financial institutions must face these new vulnerabilities and start dealing with the reality of a 'dirty' global network."

Strong -- but very appropriate -- words of advice!

FDC, Concord EFS, US DOJ/States - Proposed Final Judgment

The US Department of Justice has posted the proposed Final Judgment for the settlement of the First Data/Concord EFS anti-trust lawsuit. Basically, the judgment specifies the mechanics associated with FDC disposing of NYCE and prevents any reacquisition of any interest in NYCE for a ten year period.

NTT DoCoMo starts FeliCa Payments Trial

Using FeliCa technology from Sony, NTT DoCoMo is launching a trial of a couple thousand handsets equipped for making mobile payments.

Yahoo! PayDirect launches International Online Person-to-Person Payments

Yahoo! PayDirect this morning announced a new, international, online person-to-person payments service.
After the sender makes the initial remittance, the recipient receives a Yahoo! PayDirect World Card, which is delivered within five days. The PayDirect World Card is a stored-value card that can be used to withdraw local currency at any of the more than 800,000 Cirrus ATMs around the world, just like a traditional ATM card. The recipient doesn't have to have a bank account to receive or use the card. The recipient can, at any time, withdraw the entire balance up to local ATM limits, or make periodic withdrawals until the remittance is exhausted. The sender can re-fill the same card, up to the specified limit, at the Yahoo! PayDirect Web site from their bank account.

In lieu of the PayDirect World Card, recipients can also collect funds within minutes at any of the 60,000+ MoneyGram(R) international money transfer locations worldwide. In addition to saving time and money, senders also receive a free five-minute international virtual calling card to contact their receiver by phone after the money is sent.

Yahoo's partners in delivering this new service include HSBC, MoneyGram, DHL, eFunds, and Verso Technologies

First Data, Concord EFS settle lawsuit with DOJ et al

With the anti-trust trial scheduled to start today, First Data and Concord EFS announced early this morning that they had reached an agreement with the US Department of Justice, eight states and the District of Columbia that will allow the two companies to complete their proposed merger by the end of the first quarter 2004.
The proposed agreement with the DOJ calls for First Data to divest its 64 percent ownership of the NYCE Corporation, an electronic funds transfer network. In addition, First Data has agreed to hold NYCE as a separate unit pending the divestiture.


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