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« January 4, 2004 - January 10, 2004 | Main | January 18, 2004 - January 24, 2004 »

January 17, 2004

Malcolm Williamson to Chair CDC Group

CDC Group has announced that Visa International CEO Malcolm Williamson will become Chairman of CDC.

January 16, 2004

What's Next for Internet Banking Vendors?

The latest GonzoBanker newsletter from Cornerstone Advisors includes an article by Steve Williams that examines the commoditization of the online banking vendor market.
Banks continue to grow confident in their ability to manage Web applications. With budget pressures abounding in 2004 and banks searching for cost reductions, Internet banking vendors need to realize that the old game is over and a new model must emerge for the long term.

New Terms for Credit Card Holders?

Jennifer Bayot of the New York Times reports on likely new terms for consumers holding credit cards from either J. P. Morgan Chase or Bank One as a result of the upcoming merger.
However the card is branded, it will most likely come with new terms. "Watch your mailbox," said Robert Hammer, a credit card industry consultant. "If you've never read a disclosure before, you'll want to read it now."

January 15, 2004

NPC Shares Plumment

CBS MarketWatch reports on National Processing Company's earnings call today -- and, more importantly, on the company providing 2004 guidance which has no growth over 2003. The company's stock dropped 16.5% on the news. Jon Gorney, CEO, blamed the lack of growth on national merchant contract pricing challenges.

A Side Effect of the JPM/ONE Deal: Chicago Loses

The New York Times reports on the impact on Chicago of the Bank One merger with JP Morgan Chase.
"Chicago sealed its fate 20 years ago," said Anil Kashyap, a professor of economics and finance at the University of Chicago's Graduate School of Business. "The state had very restrictive banking laws. So, many banks moved to places like North Carolina. And that's proved to be irreversible. Chicago is no longer a major banking center."

Giving Yourself Miles

The Wall St. Journal reports on how some consumers are using the purchase of gift cards to rack up mileage points on their credit cards.
One way people are using the gift cards is to buy money orders at the post office or Wal-Mart and then deposit them into their bank accounts. They can then use that money to pay their credit-card bill, and start the process over again.

According to the article, Cleveland-based CharterOne Financial is the primary source of the MasterCard-branded gift cards. Unlike other banks selling gift cards, CharterOne isn't charging fees for issuing the cards.

January 14, 2004

Which Bank Will Be Next?

The Wall St. Journal's Heard on the Street column for Thursday reviews the potential candidates for acquisition/merger following Wednesday's announcement of the JP Morgan Chase / Bank One merger.
Among the remaining potential names on the dance card are Detroit-based Comerica Inc., KeyCorpin Cleveland, U.S. Bancorp of Minneapolis, SunTrust Banks Inc., in Atlanta, National City Corp. of Cleveland, Sovereign Bancorp Inc. of Wyomissing, Pa., Union Planters Corp. of Memphis, Tenn., and SouthTrust Corp. of Birmingham, Ala.

Bank One Email Alerts

Bank One has introduced an impressive email alert capability which can inform customers of all sorts of activity on their checking, savings or credit card accounts. About nine months ago, Russ Jones posted an opinion piece asking for just this kind of service. He was delighted to learn that this new service had recently been made available.

Washington Mutual to Trial CD Auctions Using eBay

Washington Mutual has announced that it will be trialing the sale of $1,000 CD's using an auction process powered by eBay.
During the promotion, approximately 600 six-month CDs of $1,000 each will be made available for bidding during a six-week period, with approximately 100 CDs listed each week. Shoppers will be able to bid on the interest rate of their CDs -- with bidding starting at higher interest rates, and subsequent bids bringing down the interest rate until the auction listing closes. If the final bid meets an undisclosed reserve, the successful bidder is expected to get a competitive interest rate on his or her CD.

To view the WAMU CD auction site, see:

JP Morgan Chase to Acquire Bank One

The New York Times is reporting that JP Morgan Chase is acquiring Bank One in a deal worth $60 billion.

There are big potential implications for the industry from this deal. Combining Chase's card business with that of Bank One on the issuer side plus the combination of Chase Merchant Services with Bank One's majority ownership of Paymentech. Big implications for Visa and MasterCard too -- Bank One has been a Visa loyalist, Chase a MasterCard loyalist. Wow!

Cell Phone Ring Tones Hit $3.5 Billion in Sales

Amazingly, sale of cellular telephone ring tones has jumped 40 per cent in the past year to $3.5 billion in sales. Purchasing of ring tones is currently the predominant form of mobile commerce being done by consumers.

Harris Interactive Releases Debit Survey

Harris Interactive has released the results of a survey of consumers regarding debit cards that was sponsored by MasterCard.
According to the survey, convenience, security and ease-of-use are significant factors behind consumers' choice to use debit cards.

Visa USA Introduces "Visa Extras"

Visa USA has announced Visa Extras, a new payment card rewards program to help Visa member financial institutions deliver new rewards opportunities to consumer and small business cardholders -- particularly for everyday expenditures, such as travel, office supplies, groceries, gas, bills, clothing, dining and entertainment.
"Increasingly, today's consumers and small business owners are turning to Visa payment cards because of the overall value they provide versus paying with cash or checks, which don't provide any additional benefit," said Elizabeth Buse, executive vice president Visa USA.

"You don't need to be a big spender to benefit from Visa Extras as the program is specifically designed to reward cardholders for the personal and business expenditures they make every day at the places where they like to use their Visa cards."

For more details, see: [Note: I just tried to enroll an Amazon/BankOne Visa card -- it wasn't eligible to participate in the Visa Extras program.]

Biometrics Replace Time Clocks

Graeme Smith reports in Canada's Globe and Mail on McDonald's restaurants in Winnipeg using biometric palm scanners to replace time clocks for employee check-in/out.
The most common biometric terminals look like miniature bank machines, about the size of a breadbox. As a first step, an employee must usually type in a personal identification number or swipe a pass card. That calls up an encoded image of their hand, which the machine uses for comparison with the employee's handprint. They can replace door locks and time clocks, and track an employee's habits.

John Edwards, a dealer at Amano Cincinnati, a time-systems manufacturer based in Mississauga, Ont., said sales of biometric systems surpassed those of pass-card time clocks this year. "It's outselling my swipe-card terminals 10 to one."

January 13, 2004

Lipman Files for NASDAQ IPO

The Jerusalem Post reports that POS terminal supplier Lipman has filed for an IPO in the US.
Lipman, the world's fourth-largest supplier of electronic-payment products, said it filed with the Securities and Exchange Commission to offer 3m. ordinary shares, of which 2.25m. are being offered by Lipman and 750,000 by selling shareholders. The offering is expected to be completed in the last week of January.

Viewpointe Serves Up 650 Million Check Images in 2003

Viewpointe reports that its bank customers retrieved over 650 million check images from its image archive during 2003.
 "We are very excited about the level at which imaging has taken off," said John Lettko, Viewpointe's Chairman and CEO. "When Viewpointe was created, it was with the certainty that checking would make the historic move into electronics, and that Viewpointe would create a superior solution that provided customers with many options as the industry transformed. We have since confirmed the value of our unique image sharing solution and expanded our archive capacity to address anticipated demand as Check 21 becomes law. By extending our shared national archive far beyond basic image storage services, working to develop products and services our customers will need to execute image sharing and exchange, and delivering operational excellence that is unmatched in the industry, we are fulfilling our charter and providing options that ease our customers through this transition to electronic check processing."

Where Are Credit Cards Popular?

MapInfo shares some of its research on where credit cards are most popular.
"Understanding credit card usage in specific regions and markets can give businesses tremendous insight into the consumer, behavioral and lifestyle attributes of a particular population," said Chris Michels, PSYTE product manager for MapInfo.

"Following the holiday shopping season, when consumers tend to pull out their credit cards to make purchases more often, this analysis provides some timely profiles of particularly active markets. With MapInfo's PSYTE, companies can make more accurate predictions about consumer buying and lifestyle behavior and identify new potential markets or untapped areas within existing markets."

The Future Store

Detroit Free Press writer Greta Guest reports from the National Retail Federation show in New York this week on the Future Store, a store developed by the German Metro Group that experiments with new retail technologies.
Feedback from shoppers has been extremely positive, said Zygmunt Mierdorf, Metro Group chief information officer. He said the store has seen double-digit increases in sales and a 30-percent increase in traffic.

The store's most important new technology is RFID.

Outsourcing Remains Top Focus of Banking Execs

Fundtech reports that, based upon the results of a recent survey of wholesale banking executives, outsourcing remains a top priority with more than half indicating they expected to increase spending on outsourced applications and processing.

January 12, 2004

RFID in Financial Services

Glenbrook's Russ Jones has just posted a new opinion piece on RFID in financial services.
If implemented properly, with a careful eye on the special requirements of the financial services industry, RFID holds great promise. But if deployed prematurely or before all the privacy ramifications are understood, it might also provide some nasty and unfortunate surprises.

Credit Cards: What's Wrong with this Bill?

Consumer Reports has posted an article from its February 2004 issue advising consumers how best to dispute charges on their credit card bills.
Our examination of the regulations and interviews with Federal Reserve attorneys, regulators, card issuers, and consumers found that dispute rules are confusing, card issuers sometimes skirt them, and many consumers misunderstand the rights that they do and don’t have.

FAQ Issued on Customer Identification Program Rules

The staff of the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Financial Crimes Enforcement Network, National Credit Union Administration, Office of the Comptroller of the Currency, Office of Thrift Supervision, and the United States Department of the Treasury have issued a list of frequently asked questions addressing the application of Customer Identification Program rules.

The Death of Micropayments?

Elizabeth Millard reports in Ecommerce Times on micropayments.

In other micropayments news, Peppercoin has announced a deal with Smithsonian Folkways to make its entire collection of 33,000 American folk songs available online to consumers for 99 cents per song.

VIVOtech Introduces Contactless Gift Card

VIVOtech has announced VIVOgiftcard, a contactless gift card solution for retailers.
 "The market for gift cards is immense and constitutes a critical element for adding revenues and growing a retailer's business. Gift cards are the fastest growing segment in the payment space with sales expected to total $36 to $38 billion for 2002, up 20% from the prior year. Gift cards account for 5% or more of total sales at major retailers," said Jorge Fernandes, CEO and co-founder of ViVOtech.

"Now, for the first time, retailers can differentiate their gift card product, enhance loyalty programs and provide a means to measure these programs. And they can help consumers at the same time by solving the wallet share problem and offering a delightful payment experience -- fast, flexible, secure and extremely convenient."

Visa Creates Web-based Service for Commercial Payment Data

Visa USA has announced Visa Information Management, a new web-based portal service that offers organizations increased visibility of their procurement and payment data and enhanced reporting tools for Visa commercial transactions.
The Visa Information Management portal provides Visa's financial institutions with a sophisticated Web-service technology that makes it easier for their business customers to integrate Visa reporting tools into existing organizational processes and improve their procurement and payment procedures.

The service, which can be used either on its own or in conjunction with custom developed solutions from Visa's leading financial institutions, helps businesses and government agencies achieve greater efficiency and lower their administrative overheads.

January 11, 2004

Smart Cards for Drivers' Licenses in Calcutta

The Telegraph reports from Calcutta on the Indian government's plans to introduce smart cards for drivers' licenses and vehicle registrations.
The smart card, very handy in shape and size, made of a special type of plastic with a computer chip, will have all the details of the vehicle and the owner. Besides, there will be details of tax dues, certificate of fitness and insurance and pollution clearance. Punching the card in a master computer, to be installed in the PVD office, will display all the details of a vehicle on the computer screen. Similarly, the driving licence cards will contain the details of the holder, apart from its validity period.


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