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« June 27, 2004 - July 3, 2004 | Main | July 11, 2004 - July 17, 2004 »

July 10, 2004

PayPal v. Google

PayPal co-founder Peter Thiel talks to Investors Business Daily about PayPal's IPO two years ago as compared to Google's upcoming IPO.
PayPal started the IPO process a little earlier (in its life). It wasn't profitable then, but became profitable in early 2002. Google became profitable earlier, but it held off going public.

Both companies in some ways are very similar. They made Internet business models more workable. PayPal took the online payments model, which had largely failed, and got it to work. Google took online advertising, which was more or less failing in 2001, and got that to work.

READ MORE »

July 09, 2004

EU Challenges French Banks, Cartes Bancaires

The European Commission has announced it has sent a statement of objections to nine major French banks and Groupement des Cartes Bancaires relating to certain fees and rules regarding the issuance of CB cards in France that the Commission believes may limit competition. READ MORE »

JP Morgan Chase's Card Chief Resigns from MasterCard Board

Jathon Sapsford reports in this morning's Wall St. Journal that the head of JP Morgan Chase's credit card business has resigned (subscription required) from the board of MasterCard International.
J.P. Morgan and MasterCard both said the resignation of Richard Srednicki from the board of MasterCard doesn't have any bearing on whether the newly merged bank will go with Visa or MasterCard. "The action was a necessary step given the governance rules of the card associations and the merger and combination of Bank One's and Chase's credit-card businesses," said J.P. Morgan spokesman David Chamberlin.

Australia: CashCard Urges ATM Fee Reforms

CashCard, Australia's largest ATM operator and a subsidiary of First Data Corp., has submitted comments to the Reserve Bank of Australia urging reforms in the fees associated with ATM transactions including setting the ATM interchange fee to zero.

MasterCard: Smart Cards Can Cut Fraud

The Star (Malaysia) reports on comments by MasterCard country manager Jim Cheah about his optimism that the adoption of smart cards will significantly reduce credit card fraud losses.

First Data Downplays Loss of Chase

Virgil Larson reports in the Omaha World-Herald on the announcement of First Data Corp.'s loss of JP Morgan Chase's card issuing processing business to TSYS.
First Data declined to talk about the impact that the loss of a major client and 17 percent of First Data's accounts would have on its Omaha operations, which employ 6,300 people. The number of cards being lost appears to be disproportionately higher than the revenue involved. More than a year ago, slightly more than half the number of cards was said to represent about $150 million, about 1 percent of the revenue of First Data's Card Issuing Services division, which includes First Data Resources in Omaha.
Note: $150 MM in revenue actually represents about 10 per cent of FDC's card issuing services division revenue, not 1% as Larson reports.

July 08, 2004

WildCard, US Bank Introduce Macerich Mall Gift Card

WildCard Systems and US Bank have announced they are working together to introduce a new Visa Debit gift card to be sold in Macerich-owned shopping malls. READ MORE »

More on TSYS/Chase Deal

Chuck Williams reports in the Columbus (GA) Ledger-Enquirer (TSYS' home town) on the TSYS win of all of JP Morgan Chase's credit card processing business announced last night.
The deal strikes a blow at First Data Resources, a Nebraska-based processor that is in direct competition with TSYS. First Data had been processing the 87 million cards that will now fall into TSYS computers. First Data is the nation's largest electronic payment processor, while TSYS is second. This deal could flip-flop the two, putting TSYS at the top.

Separately, First Data Corp. this morning issued a press release confirming last night's Chase/TSYS announcement.

First Data Corp., a global leader in electronic commerce and payment services, today confirmed that it has been notified by JPMorgan Chase of its intention to move its card processing business from the First Data system.

"First Data will continue to work with JPMorgan Chase to ensure a smooth transition," said Charlie Fote, chairman and chief executive officer, First Data. "First Data expects this to occur within the next 18 months."

Visa International Launches Debit Smart Cards in Taiwan

The Taipei Times reports on Visa International's launch with several member banks of smart card-based debit cards in Taiwan.

July 07, 2004

JP Morgan Chase Selects TSYS for Credit Card Processing

JP Morgan Chase and TSYS announced late today that Chase has selected TSYS to provide credit card processing for the merged card portfolios of the former Bank One Corp. and JPMorgan Chase. A definitive contract is expected to be completed within a few weeks. READ MORE »

Offshoring of Jobs Accelerates

Amy Wu reports in today's San Francisco Chronicle on a recent study by Deloitte showing a large increase in offshoring of jobs by financial services firms.
The report forecasts that by 2010, the world's 100 largest financial institutions will move $400 billion of their cost base offshore, saving an average of just under $1.5 billion annually each. The survey also forecasts that by 2010 more than 20 percent of the financial industry's global cost base will have gone offshore.

Merchant Acquiring - An Opportunity for Growth?

Edgar Dunn's Ken Howes explores the merchant card acquiring business (PDF). Howes suggests that some of the industry folklore about that side of the business needs to be re-examined and explores some new opportunities for business growth.

New Federal Law Protects Consumers' Credit, Identity

Your Credit Card Companies, a group of financial services companies whose membership includes Capital One, Chase Manhattan Bank USA, Citigroup, Discover Card, MasterCard and MBNA, has published a press release on the Fair and Accurate Credit Transactions Act of 2004 (FACT Act) highlighting the benefits of the act for consumers.

July 06, 2004

OMG's Electronic Payments Interoperability Working Group Issues Request for Information

The Object Management Group has announced that its Electronic Payments Interoperability Working Group (EPI-WG) has issued a Request for Information to the finance industry and other users and processors of electronic payments seeking to shape a standard electronic payments framework that lets institutions everywhere interoperate without replacing existing systems. The RFI is available online. READ MORE »

Demon Customers

AP writer Joshua Freed reports in the San Francisco Chronicle on "demon customers" that some retailers and banks find unprofitable to service. READ MORE »

NEC Claims Leadership in Fingerprint Identification Technology

NEC has announced that its fingerprint identification technology ranked first in an evaluation conducted by the US Department of Justice. The full evaluation report is available online.

Charles Drucker to Head Fifth Third Processing Solutions

Fifth Third Bank has announced that Charles Drucker has been appointed president of its Fifth Third Processing Solutions merchant acquiring business unit. READ MORE »

Barclaycard Pilots Two-Factor Authentication

Munir Kotadia reports on Silicon.com about Barclaycard's pilot of two-factor authentication technology with 5,000 of its UK credit and debit card customers. In partnership with nCipher, the bank has issued small card readers to its customers that contain a numerical keypad and display. By inserting a smart card into the reader and entering a PIN, a unique code is displayed on the reader which can then be input by the cardholder to complete a transaction, logon, etc. The combination provides a higher level of assurance about the transaction because it combines something the customer knows with something the customer has.

Merchant Protection of Credit Card Data

The AP's Mark Jewell reports in USA Today on the security procedures followed by card-accepting merchants to protect sensitive credit card data as highlighted by a recent compromise at BJ's Wholesale Club. READ MORE »

Banks Profit from Riskiest Card Holders

Mitchell Pacelle reports in a front page story in today's Wall St. Journal on the fees and variable pricing strategies being used by credit card issuers. READ MORE »

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