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December 27, 2003

How Internet Banks Have Inched Ahead on Rates

Sunday's New York Times has an article by John Kimelman on how Internet banks are providing better rates on accounts to consumers.
Traditionally, banks in small communities have often offered some of the highest rates on money market deposits and C.D.'s, to try to keep up with loan demand. But the emergence of the Internet has led to the rise of branchless banks, which benefit from low overhead to offer better rates on deposits, also backed by the F.D.I.C.

Indeed, the three banks that now advertise the best rates are not found on neighborhood streets, according to Bankrate.com. They are the Bank of Internet USA, Virtual Bank and National InterBank.

Taiwan Leads Asia-Pacific in Smartcard Adoption

Amber Chung reports in the Taipei Times on smartcard adoption in Taiwan.
Taiwan is the most active country in promoting integrated chip (IC) cards in the Asia-Pacific region, said a report by MasterCard International released yesterday. The nation's business operators more clearly comprehend the advantages of IC cards than those in any other Asia Pacific country, it said.

The survey, conducted by MasterCard International in eight Asia-Pacific countries, said Tai-wan, Japan and Malaysia's merchants have the most abundant knowledge of IC card technology, while those in Hong Kong and Singapore are comparatively ignorant in this regard.

Micropayments May Get Less Costly

Analisa Nazareno reports in the San Antonio Express-News on micropayments discussions at the recent Future of Money Summit.

December 23, 2003

Korean Credit Card Crisis

Reuters reports on the serious credit card crisis facing Korea.
The crisis engulfing South Korea's debt-laden credit card sector worsened on Monday when the largest issuer, LG Card, was granted an extra $250 million in emergency loans and its third-biggest issuer, KEB Credit, suspended cash advances.

Is the World Ready for Proximity Payments?

Alorie Gilbert reports in Silicon.com on 'wave and go' credit card payments.
The goal of the Us-wide launch is to build a critical mass of both PayPass cardholders and retailers, said MasterCard vice president Murdo Munro. But if the Orlando trial is any indication, MasterCard faces a classic chicken-and-egg dilemma: consumers are unlikely to take an interest in PayPass unless enough retailers support the system, and retailers are reluctant to invest in PayPass equipment until enough customers use the cards.

Several McDonald's store managers that participated in the Orlando trial expressed disappointment in the technology because so few customers had used it. Chung Tran, a manager of one Orlando McDonald's, said he'd seen PayPass used only about three times during the past year. "People are always asking what the heck it is," Tran said of the PayPass reader.

Retailers' Lawyers get $220 Million in Fees

Forbes reports that the law firm that represented retailers in the anti-trust lawsuit against Visa and MasterCard will receive $220 million in fees and an additional expense reimbursement of $18.7 million.
Lloyd Constantine, lead lawyer for the retailers, had requested roughly $600 million in fees, saying the sum was 18 percent of the settlement plus expenses. But Gleeson in his approval said the requested fee was "excessive."

Mobile Commerce in India

George Smith Alexander reports on mobile commerce in India.
"The customers will be able to use their mobile and pay through their debit card/credit card the way they use Internet banking. The customer will be able to authenticate the transaction and he can make bill payments, mobile top-ups and also on-line purchases," says Visa International's regional head consumer and commercial marketing (Asia -Pacific region) Rahul Khosla.

December 22, 2003

First Data to acquire CashCard Australia

First Data Corp. has announced that it is acquiring CashCard Australia.
"Today's announcement is exciting as we believe this transaction will offer a significant range of benefits to our many clients," commented Greg Nash, managing director of First Data International Australia, New Zealand and South Asia operations.

"We believe the combined EFT switching and processing lines of business will provide the scale necessary to ensure the merged enterprise will remain cost effective, technology efficient and people-smart in this rapidly changing marketplace, leading to the development of even more competitive products and services."

Founded in 1983 by Australian Building Societies to build and operate a shared ATM network, Cashcard now provides a range of services to other major financial institutions and retailers, as well as operating a large Merchant ATM acquiring network.

Comments re: Amazon Stores

Bob Tedeschi reports in today's New York Times on the new categories of 'stores' on Amazon.com.

iPayment Acquires Portfolio from First Data

iPayment has announced that it has completed the acquisition of a portfolio of agent bank agreements and merchant accounts from First Data Corp.'s Merchant Services subsidiary for $55 million in cash. READ MORE »

Gift Cards - Responsible for Slow Retailer Sales?

Some retailers are pointing to revenue recognition of increased gift card sales as one reason this holiday season's same store sales results may be lighter than expected.
Sales of gift cards now represent about 8% to 10% of holiday retail spending, analysts estimate. But such spending can skew retailers' holiday results. Although consumers often purchase gift cards in December, retailers don't recognize revenue from such cards until they are redeemed, which often occurs weeks or months after Christmas.

"Gift cards really don't affect total sales," said Craig Johnson, president of retail consulting firm Customer Growth Strategies. "But they dramatically affect [same-store] sales," which seem unlikely to produce the kind of gains many investors were betting on this holiday season.

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