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« December 12, 2004 - December 18, 2004 | Main | December 26, 2004 - January 1, 2005 »

December 24, 2004

Banks Test ID Device for Online Security

Jennifer Kingson reports in the New York Times on banks testing two-factor authentication techniques for online access.

The devices, which are handheld and small enough to attach to a keychain, are expected to cost customers roughly $10. They display a six-digit number that changes once a minute; people seeking access to their accounts would type in that number as well as a user name and password. The devices are freestanding; they do not plug into a computer.

December 23, 2004

American Express Takes Flak Over Merchant Acceptance Fees

Barbara Hagenbaugh reports in USA Today on merchant reactions to the fees merchants pay to accept American Express cards. READ MORE »

Fraud Liability Shift Begins in UK January 1, 2005

Isabel Berwick reports in the Financial Times on the upcoming liability shift about to take place in the UK that will shift the liability for fraudulent transactions to merchants from card issuers -- if the merchant has failed to deploy new chip card and PIN capable point of sale equipment.

About 85 per cent of retailers have installed chip and pin so far, with some shops still waiting for banks to deliver the machines. Others, mostly luxury retailers, have decided to take the risk, claiming that they know their customers and that the cost of running the machines is expensive.

Ecommerce Sales Surge

Pete Barlas reports in Investors Business Daily on the growth in online ecommerce sales this holiday shopping season.

Christmas sales over the Internet are booming, far outpacing the growth of sales in physical stores, say reports. U.S. consumers using Visa debit and credit cards spent $16.8 billion online from Nov. 1 through Dec. 21, a 34% hike over the year-ago period, says Visa.

December 22, 2004

PowerPay Speeds Stadium Lines

Cynthia Cho reports in the Wall St. Journal on RFID-based PowerPay and its deployments at several football stadiums this season.

Lenovo, Visa International Form Alliance

China Daily reports on a new alliance between Chinese computer maker Lenovo Group and Visa International.

Lenovo will become the preferred information technology equipment vendor for Visa International worldwide.

Celent Projects Significant Smart Card Usage in US by 2012

Celent Communications has published a new report examining the state of the smart card payment industry that projects that "smart cards will have a significant presence by 2012 in the U.S. and Europe, despite the lack of initiatives in the U.S. over the past few years. The analysts say smart cards, also called chip cards, will overtake magnetic stripes and revolutionize the payment industry."

READ MORE »

Shoppers Should Rethink How They Pay

Christopher Conkey reports in today's Wall St. Journal on the range of payment options available to consumers this holiday season.

From cash and checks to credit cards and the increasingly popular debit cards, it's easy to get confused. Debit purchases, for example, are often made with "check cards," while recent banking regulations are spurring many check payments to be scanned at cash registers as if they were debit cards. It has created what leading expert Mark Budnitz, a professor at Georgia State University College of Law, calls "a complicated and bewildering exercise for consumers."

Gift Cards Alter Merchant Revenues

AP Business Writer Anne D'Innocenzio reports on how the surge in gift card sales is altering merchant financial results.

Gift card sales are not booked as revenues until the cards are redeemed. And, with more merchants eliminating fees that erode card values if cards are not used immediately, recipients have little incentive to spend right away. Greater use of the cards also is forcing retailers to consider stocking less merchandise earlier in the season and increasing the flow of goods in January, Slater said.

Global Payments Acquires Europhil

Global Payments is expanding its worldwide presence in the money transfer industry through the acquisition of Europhil.

READ MORE »

Card to Card Money Transfer

The Hindu Business Line reports on the launch of card to card money transfer services in India by IDBI Bank and Visa International.

WebLoyalty - Friend or Foe?

David Lazarus reports in the San Francisco Chronicle on WebLoyalty, a Connecticut-based direct marketing firm.

Webloyalty is able to obtain people's credit card numbers directly from many of its partners and will charge monthly fees for a service some people might not realize they've signed up for.

Cyota Closes New $7.25 Million Financing Round

Cyota has announced that it has closed a new $7.25 million financing round led by Bessemer Venture Partners.

READ MORE »

December 21, 2004

Inter-Institutional Transfers Catch On

Susan Foulds of Watchfire GomezPro comments on recent launches of inter-institutional transfers by Citibank and Bank of America.

IITs are defined as fund transfers among accounts held by the same customer at two different institutions. That could mean a lot of things, but here we will focus on the recent trend at Citibank and Bank of America: IITs as ACH transfers among deposit and possibly investment accounts.

Simpay: Reaching an Untapped Market?

Susanna Schwartz writes in Billing World about Simpay, the European mobile commerce consortium.

The design of the payment platform is nearly complete, and expected to officially launch by Q2 2005. The vendors involved are Valista, Encorus, Privnet and Qpass, which are working with the founding operators to enhance specs.

The Simpay hub has recently been outsourced to Encorus, a mobile payments services company—majority owned by First Data Corp.—which will continue the development of Simpay's transaction processor. The acceptance testing will be conducted by Encorus in upcoming months. Simpay has built a test script and simulator hub, which transmits messages among members. It also has completed various business schemes, operating regulations and governing documentation.

Final Rules Issued on Disposal of Consumer Information

The federal bank and thrift regulatory agencies have announced final rules to require financial institutions to adopt measures for properly disposing of consumer information derived from credit reports.

Current law requires financial institutions to protect customer information by implementing information security programs. The final rules require institutions to make modest adjustments to their information security programs to include measures for the proper disposal of consumer information. They also add a new definition of "consumer information."

The final rules take effect on July 1, 2005. The full text is available online for downloading (PDF).

CSC Benchmarks Card Management Software

Computer Sciences Corp. (CSC) has announced the results of a performance and scalability benchmark test of is CAMS II card and merchant system. CSC's five-month testing project demonstrated that the strategic in-house card management platform can process a simulated workload of 100 million active cardholder accounts.

"Most U.S. credit card processing is outsourced to third parties who achieve scale economies through product standardization," said Theodore Iacobuzio, vice president of research at TowerGroup, a leading financial services research and advisory firm. "An in-house alternative would contribute to a sea change by enabling more flexible credit-card processing at scale, under the issuers' direct control."

AMR Research Explores Contactless Payments

AMR Research has published an alert on contactless payments.

Conclusion: Despite the promise, no new payment system gains hold rapidly.  There’s too much inertia in the system from consumer education, to POS infrastructure, to payment devices in consumers’ hands.  Retailers should carefully watch the success of CVS and merchants accepting MasterCard’s PayPass.  Retailers should resist jumping in until they feel there are a reasonable number of RF-enabled cards or keyfobs in circulation in their geography. 

December 20, 2004

JCB Acquires One-Third Interest in EMVCo

JCB has announced it has acquired a one-third ownership in EMVCo, LLC, joining MasterCard International and Visa International with each having equal interests in the organization.

READ MORE »

Bank of America Customers Spend Record $100 Billion in 2004 with Debit Cards

Bank of America has announced that its customers spent a record $100 billion on their debit cards for goods and services during 2004. Bank of America, the largest debit card issuer in the country with over 22 million cards issued, is the first financial institution to pass that milestone within any year.

READ MORE »

Trapped by Debt?

MSN Money's Terry Savage has advice for consumers who are struggling with high levels of revolving credit card debt.

READ MORE »

MasterCard Reports 9.2% Growth for Fourth Holiday Shopping Weekend

MasterCard reports that it saw an increase of 9.2 percent in transaction volume for the fourth holiday shopping weekend as measured through Saturday evening.

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