NACHA has announced the results of a survey of consumer awareness of accounts receivable check conversion (ARC).

ARC allows companies that receive consumers' checks at remittance and lockbox locations to convert them into electronic ACH payments, the same, safe electronic payments system used for Direct Deposit. ARC is used for consumer bill payments such as credit cards, mortgages, insurance premiums, and telecommunications and utility bills. NACHA estimates that in 2004 there were 1.25 billion consumer checks converted into ARC payments, and that at its current growth rate may reach 2 billion payments in 2005.

When read a description of the ARC check conversion process, 69 percent of the consumers surveyed said that they are familiar with the process. When provided with an open-ended opportunity to express any objections or concerns about check conversion, 55 percent said they had none.

Fiserv has announced that its Fiserv EFT unit handled a total of 4.2 billion transactions during 2004, a 14% increase over the prior year. Its Accel/Exchange network also reported record volume handling 281 million transactions, a 26% increase. About 14.5% of that volume was for ATM transactions with 85.5% consisting of POS transactions.

Xign has announced that last year its Xign Payment Services Network has handled $50 billion in B2B transactions since its inception in July 2001. Xign also reported it has about 18,000 shared supplier active in its network.   » Continue Reading

Stephen Timm writes in South Africa's Business Owner about MoPay, an SMS-based mobile payment system.   » Continue Reading

The Tower Group has announced new research into business-to-business payments that sees a tipping point fast approaching where checks will become the exception rather than the rule.

"With the growth of corporate electronic payments poised to explode, we are rapidly reaching a critical point in the transformation of domestic cash management," said Susan Feinberg, senior analyst in the Wholesale Banking research service at TowerGroup and author of the research. "Many business to consumer payments are already made electronically, and a majority of US corporations indicate plans to migrate the bulk of their business to business payments to electronics within three years."

Given this, Feinberg added, "there is a growing urgency for banking executives to reorient their check-centric product management and development focus, to facilitate payment and remittance processing in a complex world of rapidly converging payment methods."

Ivan Schneider writes in Bank Systems & Technology about Leonard Heckwolf's perspective on the the move to electronic payments. Heckwolf, who just completed a two-year stint as chairman of NACHA, is senior VP at JPMorgan Chase where he's responsible for the bank's ACH and retail lockbox business.

Helen Loveless reports for ThisIsMoney.co.uk on the interest rates charged by store credit card programs in the UK.

Borrowing on a store card can prove ruinously expensive for those who repay only the minimum. It can take between 40 months and 157 months - 13 years - before a debt of £200 is cleared, according to research by price comparison service uSwitch.

Robin Sidel writes in the Wall St. Journal about the growth in card-based payments and some of the trends affecting the industry.

Business Week interviews Digital River's CEO Joel Ronning.

The thing that gives us confidence is a huge shift in the software business from physical delivery to digital. The software company doesn't want to deliver boxes to Japan any more. The consumer takes it home and throws the box out, and it takes a month to get there. We deliver it in minutes. Digital delivery is getting more accepted.

Business Week looks at Bank of America's consumer chief Liam McGee.

Visa USA has published its fiscal year 2004 Annual Report (PDF) including highlights of the year, financial results, etc.

Jed Horowitz reports for Dow Jones Newswires on comments made by Morgan Stanley CEO Philip Purcell at an investment conference regarding prospects its Discover business unit.

"The thing that would make me change my mind on Discover would be growth," he said at the conference. He added that Morgan Stanley isn't content with simply sustaining business profitability. "Restoring growth in Discover is the challenge."

See this page for information about the webcast of Purcell's comments.

Pay By Touch has announced that it has acquired a new patent portfolio of issued US patents for additional biometric payment solutions.

"Our acquisition of the issued patent covering biometric authentication of check-cashing and our recently announced alliance with global transaction processing leader Certegy brings a compelling proposition to our check-cashing authentication services," said John Rogers, founder, chairman and CEO of Pay By Touch. "This acquisition is indicative of our market momentum as retailers and shoppers continue to sign up for Pay By Touch."

TurboTax (Intuit) and Rush Card (UniRush Financial Services) have announced an alliance that tax filers using TurboTax for the Web to receive their refunds in as little as 10 days and deposited either into a checking account or to a prepaid Rush Visa card.   » Continue Reading

Reuters reports that Bank of America plans by year end to eliminate its fees for some of its customers to transfer money to Mexico. To benefit, there's a requirement that customers open checking accounts with the bank.

"Our goal in eliminating fees is to help millions of customers send money for free quickly and easily to friends and family in Mexico," said Liam McGee, Bank of America's president of consumer and small business banking, in a statement.

Wendy Zellner writes in Business Week about Wal-Mart's activities in financial services.

Many community bankers are convinced the behemoth won't rest until it has obtained full banking powers. "It's not a question of if Wal-Mart is going to be a bank, it's a question of when," says D. Anthony Plath, a finance professor at the University of North Carolina at Charlotte.

First Data Corp. has announced its financial results for the fourth quarter of 2004. The company reported earnings per share for the fourth quarter of 56 cents, an increase of 2 percent over the same quarter last year. Year over year revenue growth was 20 percent while expenses grew at 21 percent resulting in a growth in operating profit of 16 percent.

First Data has also announced that it will be providing processing services for the recently announced Wal-Mart Discover credit card which is being underwritten by GE Consumer Finance.

FDC seems to be using the new theme of "Making Life Easier" to describe its overall business.

Jennifer Saranow writes in the Wall St. Journal about Bank One's recently announced Overnight Check service.

Michael Cleary, executive vice president of retail marketing at Bank One, says the bank launched an electronic person-to-person transfer service four years ago called eMoneyMail, but took it off the market after two years when it didn't attract enough demand.

Bank One says customers using Overnight Check can send checks to anyone in the U.S. regardless of whether the recipient is a Bank One customer. The bank is also positioning the service as a last-minute bill-paying method, as not all bill issuers except electronic payments, according to Mr. Cleary.

Binyamin Appelbaum writes for the Charlotte Observer about Visa USA's NASCAR sponsorship campaign.

"When you look historically at NASCAR, it was fuel and lubricants and the tobacco sponsors," said Andrew Giangola, a spokesman for the company that runs the sport. "But in recent years, the two big ones have been pharmaceuticals and financial services."

Visa came first, signing up as the sport's official credit card in 1998, just as NASCAR was bursting onto the national stage with races from coast to coast and a network television contract. Giangola said the sponsorship was "a landmark" for NASCAR, underscoring its emergence as a sport whose average fan suddenly made more money than the average American.

O'Reilly Media is about to launch a new magazine titled "Make: Technology on Your Time".

The first issue includes an article titled "How to Make a Magnetic Stripe Card Reader". The table of contents reads:   » Continue Reading

The Tower Group has announced research results indicating that multiple state and federal regulatory efforts could jeopardize the success of prepaid products.

"Regulatory oversight is being pursued in the name of consumer protection. But the primary impact could be just the opposite," said Ed Kountz, senior analyst supporting the Bank Cards and Emerging Technologies research services at TowerGroup and co-author of the research.

"The Federal Deposit Insurance Corporation (FDIC), Federal Reserve Board, Office of the Comptroller of the Currency (OCC), and individual states are examining whether to reshape existing laws to regulate prepaid. But as they do so, the lack of accurate definitions and the failure to develop a harmonious regulatory framework around the valid consumer benefits of such products could unintentionally stifle the growth of certain payment products in this category," he said.

TSYS has announced that it has finalized an expanded processing services agreement with Bank of America that includes its entire credit card portfolio including its recently acquirer FleetBoston portfolio.

I was speaking with a colleague last week about digital identity systems. We got to thinking about all of the hoopla around federated identity systems that began with Microsoft's ill-fated launch of Hailstorm which then, of course, led to the rest of the industry's Liberty Alliance response.

Then he made an interesting comment: arguably the largest federated identity system currently in use on the planet is Visa's Verified by Visa scheme.

Think about it: a three-party (cardholder, merchant, card issuer) identity management solution that already has millions of participating parties conducting more secure commerce transactions.

MBI and Drugstore.com have announced a collaboration to facilitate the purchase of items eligible for flexible spending account (FSA) reimbursement using MBI's Benefits Card.   » Continue Reading

LexisNexis has announced a strategic alliance with Verid to authenticate identity in phone and Internet-based transactions.   » Continue Reading

David Isaac writes for Investor's Business Daily about iPayment.

Not only does iPayment have other firms do much of the actual card-processing, but it also outsources its sales force. "They're almost a virtual company in a way," Merrill Lynch analyst Gregory Smith said. "You could think of them as outsourcing sales and outsourcing the back-end processing."

Steve Ellis, Executive Vice President of Wells Fargo's Wholesale Banking Group has been elected Chairman of NACHA's Board of Directors.   » Continue Reading

BioPay announced today that it has filed suit against Solidus Networks, Inc. d/b/a/ Pay By Touch, and Indivos Corporation.

BioPay's lawsuit, filed January 18, 2005, involves patents on the use of biometric technology in point-of-sale transactions. BioPay asks the court to declare patents held by Pay By Touch to be invalid and also asks the court to declare that BioPay has not infringed on Pay By Touch's patents.

American Express has announced earnings for the fourth quarter 2004 including a 17% increase in spending on Amex cards and a 16% increase in discount fees paid by merchants for accepting Amex cards. The company reported a growth in cards of 4.9 million.

Several of the world's leading smart card manufacturers have announced the creation of the Smart Payment Alliance (SPA), a new non-profit association dedicated to fostering and facilitating the usage of smart cards to make payments. Participating companies include Axalto, Gemplus International S.A., Giesecke & Devrient, and Oberthur Card Systems. The alliance has a website at: http://www.smart-payment-alliance.org and has posted a slide presentation introducing the alliance. (PDF).

Visa International today announced the first standardized metric to track business and government spending globally. The new index, the Commercial Consumption Expenditure (CCE), allows the global payment industry, including Visa and its 21,000 member financial institutions, to measure and forecast commercial expenditures.   » Continue Reading

Kelly Shermach reports on hardware and software solutions to better secure online banking authentication.

Ed Neumann, head of consulting services at Javelin Strategy & Research, said many banks show interest not only in hardware tokens but also in software that provides additional authentication. Few, however, will adopt hardware for their entire customer bases because of the cost of the devices.

"Banks don't want to pass the costs on to customers. They want as many customers online as possible," Neumann told CRM Buyer. Asking consumers to pay extra fees for hardware tokens will drive them away from the Web rather than toward it.

Ann Zimmerman and Robin Sidel report in this morning's Wall St. Journal on the new Wal-Mart credit card launched in partnership with GE Consumer Finance and Discover Financial Services.

The Anti-Phishing Working Group has reported the results of its analysis of phishing attacks reported during December. The full report is available online (PDF).

Matt Richtel writes for the New York Times about efforts to enable cell phones to be used for making payments at point of sale.

Ron Brown, executive director of the Infrared Data Association, a trade group representing companies pushing the technology for cell-phone credit cards, said that the new handsets could become "a major form of payment because cell phones are the most ubiquitous device in the world."

Jim Sams reports in the Palm Springs Desert Sun on how some credit card issuers are shrinking the grace period between statement and payment due date.

According to Consumer Reports, the 31-day grace period once common in the credit card industry is largely a thing of the past. Nowadays, most credit card banks give their customers 20 to 25 days to make payments. Some companies even require payments to arrive before a certain time of day, so a check that arrives even an hour late can trigger a late fee that typically ranges from $15 to $29.

Aaron Eistein writes in Crain's New York Business about investor frustrations with Morgan Stanley CEO Philip Purcell.

But now that banks that long issued only Visa or MasterCard are free to issue any card, analysts believe that most will team up with American Express rather than Discover.

AmEx charges merchants higher commissions, so it can share more revenue with banks that issue its cards.

Fumiko Hayashi from the Payments Systems Research Department at the Federal Reserve Bank of Kansas City has published a new working paper: A Puzzle of Card Payment Pricing: Why Are Merchants Still Accepting Card Payments?

This paper presents models that explain why merchants accept payment cards even when the fees they face exceed the transactional benefits they receive from a card transaction.

MBNA held an investor day presentation earlier today. The slides from the company's presentation (PDF) are available online.

CheckFree reported results yesterday reporting that it had distributed 32.8 million electronic bills during the fourth quarter, an increase of 11% from the prior quarter. Active subscribers were 6.9 million at the end of the quarter and CheckFree derived an average revenue per transaction of $0.72 on a total of 142.9 million bill payment transactions from those subscribers with 83% of the payments handled electronically. Doing the math, that would indicate an average of 6.9 bill payments per subscriber per month generating $4.96 in monthly revenue/month/subscriber.

Retriever Payment Systems and Iron Triangle Payment Systems have announced they are combining effective January 1, 2005 with Retriever becoming a subsidiary of Iron Triangle.   » Continue Reading

Wal-Mart and GE Finance have announced plans to launch a new credit card on the Discover Network. The new card, Wal-Mart Discover, will be issued by GE Consumer Finance and will be available by March 2005.   » Continue Reading

Ted Griffith reports for Delawware Online on the first major job reductions in MBNA's 23 year history.

For Delaware, MBNA's announcement has major economic implications because MBNA for decades has been the "engine" of job growth in Delaware, said Henry Beckler, a Delaware banking industry veteran. Started in a former A&P supermarket in Ogletown in 1982, MBNA enjoyed rapid growth for more than two decades, ultimately surpassing DuPont as Delaware's top private employer.

MBNA is hosting an Investor Meeting and webcast later this morning.

Matt Hines reports for CNET News.com on the latest phishing attack statistics.

In a recent interview with CNET News.com, Mike Cunningham, senior vice president of fraud management at Chase Card Services, a division of financial services giant JPMorgan Chase, said that despite the proliferation of phishing schemes aimed at companies in his industry, consumers have yet to grow reluctant to conduct their business online.

"I don't believe customers are avoiding the online channel because of (phishing), I think they're becoming more wary and figuring out what sort of things banks will or will not send you via e-mail," Cunningham said. "We haven't seen any decline in use of online channels and, in fact, that business continues to grow."

Experian has announced the results of a nationwide study on the effects of debt on consumer credit scores.

Some consumers may think that debt will always have an adverse effect on their credit score. Debt by itself is not a negative factor as long as it is managed well and consumers are not extending themselves beyond their means.

In fact, the national average credit score for consumers with debt above the national average is higher than the average credit score for those with debt below the national average.

The study reported U.S. consumers' average debt of $11,224, 12 percent higher than last year's $10,024. National and statewide results for the study can be found on the Experian National Score Index(SM) Web site at http://www.nationalscoreindex.com.

Commerce Bank has announced some of its early results of its free Commerce Bank Visa Gift Card program, the nation's only fee free complete packaged gift card offered by a bank. Commerce Bank sold more than 220,000 of the cards, worth $14.5 million (an average of about $66 per card), during the recent holiday season.   » Continue Reading

Thomson has published the agendas for its upcoming CardTech/SecureTech conference to be held April 12-14 in Las Vegas.

Fair Isaac has announced an expansion of its alliance with TSYS to offer its TRIAD Strategy Design Service to card issuers.   » Continue Reading

PayPal has announced a new PayPal site in Australia and introduced the Australian Dollar as an additional currency to its service.

"We're very excited to launch new services that further enable PayPal users in Australia to participate in global e-commerce," said Mathias Entenmann, vice president of PayPal's international business. "PayPal continues to expand internationally in order to provide our customers around the world with a safe, easy and cost-effective online payment solution."

Earnings are a lagging indicator of corporate performance—when you want to see where a consumer-focused company actually is and where it's going, you need to go to the mailbox and look at their marketing material.

Judging from the unsolicited offers Glenbrook's Bryan Derman has been receiving of late, we may be growing late in the days of the great credit card industry. See Bryan's opinion piece "Wither the Empire?" on the Glenbrook website.

eBay's PayPal subsidiary reports that its annual payment volume increased in 2004 to $18.9 billion, a 55% year-over-year increase from the $12.2 billion in 2003. Fourth quarter 2004 volume was $5.6 billion, a 51% increase from 2003 and a 21% increase from the third quarter. PayPal revenue grew to $200 million, up 53% from the prior year and 20% from the prior quarter.

PayPal reported 63.8 million total accounts at the end of 2004, an increase of 58% from the prior year. Active accounts at the end of 2004 were 20.2 million compared to 13.2 million a year earlier.

PayPal's transaction loss rate increased 41% from the third to fourth quarters to 0.31% in the fourth quarter, roughly equal to the same quarter a year earlier.

Complete details are in eBay's earnings press release (PDF) released earlier this afternoon.

The Financial Express reports from India on the growth in plastic card payments in India.

The total spend in India on a payment card is still less than 1% of the country’s percentile. This indicates that the growth potential of the payment card industry is enormous. Around 30 million people are eligible for creditcards and 150 million people are eligible for debit cards.

The Federal Reserve Bank of Phildelphia has published a research discussion paper by Mark Furletti and Stephen Smith analyzing the consumer protections available to credit and debit card users (PDF).   » Continue Reading

TSYS has announced it has signed an agreement to purchase the 50 per cent equity stake that Visa USA holds in Vital Processing Services.

Formed in 1996 as a joint venture between Visa U.S.A. and TSYS, Vital specializes in attractive, cost-effective, turn-key alternatives for acquirers that outsource their merchant business. Beverly Wells will remain the president, a position she has held since 2003.

An 8-K filing by the company reports that it is paying $95 million for the 50 per cent interest it is acquiring.   » Continue Reading

Tami Luhby reports in Newsday on American Express' settlement of a lawsuit that challenged Amex's disclosure of its 2 percent fee levied on foreign currency conversion.

The company agreed to pay up to $75 million to U.S. cardholders who made purchases in a foreign currency from Mar. 28, 1997 to Oct. 15, 2004, according to a preliminary class action settlement. In addition, the credit card company agreed to include information about the fees on its monthly statements and other mailings to cardholders.

Simson Garfinkel writes about biometrics in Technology Review.

Congress gave a sizable Christmas present to the nation’s biometrics industry last month. The word biometrics appears 35 times throughout the National Intelligence Reform Act of 2004, and it establishes the use of biometrics for aviation security, creates a “biometric center of excellence,” expands an FBI biometric system for criminal background checks, requires friendly visa waiver countries to add a biometric to their passports, and mandates the collection of “biometric exit data” for people leaving the United States.

Separately, a press release from Food Service Solutions discusses its system to enable K-12 students to pay for their school lunches using their fingerprints.

“Parents didn’t want to doll out $1.60 for their child every day, or give them a $10.00 bill and wonder if they’d ever see the change,” says Pat Anthony, Foodservice Director for the Wilson School District. “Parents wanted to pre-pay for lunch, but keeping track of accounts with paper and pencil was untenable. And we didn’t want to buy into a system where parents would end up taping PIN numbers to their kid’s hands.”

Eric Young writes in the San Francisco Business Times about Bank of America successfully retaining its position as a major sponsor of the San Francisco Giants, edging out Wells Fargo Bank for the deal.

The team also is close to finalizing terms of an extended sponsorship with San Francisco-based Visa USA Inc., sources said.

Arian-Michele Moore from Celent Communications writes about smart card technology adoption in the US Market for Bank Systems & Technology.

Those close to the payments industry and with an eye on the progress of smart technology know that smart cards will one day take over magnetic stripes and revolutionize the payment industry. It is only a matter of when and how. Industry estimates of when smart cards will have a strong US presence range from five to 10 years and beyond. Celent does not expect them to have a significant presence for at least seven years.

Paul Meadowcroft of Thales writes in SC Magazine on payment card fraud prevention and the opportunity for unconnected EMV smart card readers.

The move towards two-factor authentication for all transactions using smart cards is an important example of a security model that is able to grow organically and embrace and integrate new transaction technologies and channels, as and when required. This kind of flexible, yet secure and dependable system, is key for today's advancing e-business world and, crucially, is now a commercially possibility.

Brian Krebs writes in the Washington Post about the growth in online phishing attacks.

Retail Decisions has announced two enhancements to its ebitGuard fraud prevention service: use of neural network technology to better detect abnormal cardholder behavior and dynamic data validation to matches a consumer's billing and shipping information with public record data.   » Continue Reading

Pay By Touch and Certegy have announced a marketing alliance to allow Pay By Touch users to cash government and payroll checks at Pay By Touch merchant locations.   » Continue Reading

IBM researcher Amit Fisher has developed a model that allows retailers to estimate the potential lifetime value of relatively new customers.

It works by not only ‘learning’ from the spending patterns of a single customer, but also from the online activity of other more established customers. This way, by monitoring the buying behavior during the initial visits of a new customer, the model can assign the customer to a group and predict spending patterns based on those with the same 'buying profile'.

Once the model predicts that a visitor to a website has a high probability of purchasing, the company can decide, for example, to customize the experience by making relevant new offers to the right customers or prioritizing the customers’ requests so that they get faster online service.

These new methods could provide a much more effective solution to web traffic management than the ‘first come first serve’ policies currently in place for most web sites. Such technologies are already being used in various domains, especially in the financial arena.

Alan Cane also reports on this story in the Financial Times.

Chinaview.com reports on the growth in China's bank card business.

 "Since 1985 when China started to issue bank cards, the country has become the second-largest holder, following the United States which has about 850 million cards issued," said Lin Caiyi, deputy director of the Strategy & Development Department of China UnionPay - the sole national payment network for Chinese banks.

The credit card sector has also enjoyed rapid development, with the number issued jumping from 1.55 million at the end of 2002 to the current level of over 10 million, according to figures made public by Lin at the 2005 China Credit Card Business Forum held in Shanghai over the weekend.

"However, these cards are used very infrequently and the transaction volume generated from their use is very small, especially in terms of personal consumption," she said.

Dibya Sarkar reports for FCW.com on plans by the Departments of Homeland Security and Justice to survey 36,000 businesses this spring to examine the type and frequency of computer security incidents.

Rantala said the full-scale survey will help determine what types of attacks are most common nationally. She said people tend to think that if you have one computer attack, you shore up everything and that prevents anything else from happening. But they fail to consider that hackers develop methods of attack quicker than businesses can respond to them. "In other words, they can open the door faster than we can relock it," she said.

PayPal has announced the launch of local service in Italy.   » Continue Reading

Texas Instruments has announced plans to deliver ISO/IEC 14443 compliant RFID chips that meet MasterCard's PayPass security requirements.   » Continue Reading

First Data Corp. has announced that it has entered into an agreement for GE Consumer Finance to acquire FDC's First Data Loan Company Canada small business MasterCard portfolio in Canada. FDC will provide card processing services for the accounts.   » Continue Reading

Erica Sagon writes in the Arizona Republic about no signature card transactions.

The no-signature method has raised concerns about fraud, but Gracia said, "It's as secure as any transaction that is signed for."

If that makes you wonder why people have been signing receipts for years, McKinley said it was more of a psychological exercise than a defense against fraud. "I don't think anyone pays a whole lot of attention to signatures anyway," McKinley said.

Rachel Pleasant writes in the Lakeland, Florida Ledger about more fast food restaurants now accepting credit cards.   » Continue Reading

Bloomberg News reports that Walgreens said Friday that it will continue accepting American Express cards, reversing a decision it announced last month.

Walgreen was too high-profile of a merchant for American Express to lose," said David Robertson, publisher of the Nilson Report, a trade journal for credit card executives. "They probably lowered the fee Walgreen pays to accept American Express transactions and maybe agreed to some other cross-promotional deal."

Acting Comptroller of the Currency Julie L. Williams gave a speech (PDF) this week that spoke to credit card consumer disclosures.

I could make a similar point about credit card disclosures. This industry is highly competitive and card issuers are always soliciting for new customers.

But whether you are opening a brand new account, or considering a balance transfer from an existing account, how easy is it for you to compare important terms beyond the APR? Can you shop for a card based on an issuer’s ability to raise your rates or change other fees and terms?

San Francisco-based research firm Financial DNA has announced its Emerging Payments 2005 conference to be held on May 12 in San Francisco.

Joseph Menn reports in the Los Angeles Times about frustrations that many users have with trying to use the Internet.

Stephen Seemayer had the first Pong video game system on his block. A decade later, the Echo Park artist was the first of his neighbors to get a personal computer. And in 1996, he was so inspired by the World Wide Web that he created a series of small paintings for viewing over the Internet.

Now the 50-year-old Seemayer is once again on the cutting edge: Sick of spam clogging his inbox and spyware and viruses crashing his system, Seemayer yanked out his high-speed connection.

"I'm not going to pay for something that I can't use," he said.

The Payments Cards Center of the Philadelphia Federal Reserve Bank has posted updated information on two recent conferences held by the Center: Forum on Validation of Consumer Credit-Risk Models and Assessing the Impact of Electronic Benefits Transfer.

The Tower Group has announced the release of a new study of private label merchant card programs.

For years, private label credit card portfolios were the tightly guarded assets of U.S. retailers and oil companies. But recent shifts in the consumer credit landscape are driving even the largest in-house issuers of private label credit cards to either outsource their card businesses or sell them outright. Fueling this move are factors including competition from general-purpose credit cards, an increase in the volume of bad loans (or chargeoffs) and margin pressures.

Kathleen McLaughlin reports in the Christian Science Monitor on the expansion of consumer credit options by the banks in China.

Credit cards are fast gaining acceptance, accounting for 10 percent of all transactions in 2003, and usage, with 1 million Chinese cardholders, and the numbers growing every month, according to the central bank.

Discover Financial Services and the Pulse EFT Association have announced the completion of their merger following approval by Pulse's financial institution members.

LakeWest Group has released the results of its sixth annual Point-of-Sale Benchmarking Survey of top 100 specialty retailers.

This year respondents identified their top priorities as increased customer flow-through, better customer information gathering, hardware replacement, improved store labor management, and seamless channel integration.

"Customer service continues to be the key priority for retailers as they focus on gaining a better understanding of their customer, improving inventory management, and more effectively managing store personnel," said Robert Antall, CEO of LakeWest Group. "As retailers look to differentiate their offering, they are addressing areas such as channel integration, customer purchasing patterns across channels, and providing special order options to the customer."

A recent Global Risk Management survey by Deloitte reports that four out of five major financial firms now have a chief risk officer.

Global financial services institutions are facing growing exposure to risk from a variety of factors, including mega-mergers, off-shoring, outsourcing, greater regulation, and the need to manage an increased volume of lending.

Vance McCarthy writes in Integration Developer News about JPay, a new set of open application program interfaces intended to eash the cost, time and complexity for supporting electronic payments.

The JPay API will support payments in an open, Web-like environment, and specifically allow Java applications (typically Web applications or Java enabled content servers) to utilize a third-party payment service. The proposal is being back by some of the leading names in transaction-driven Java, including Oracle, IBM, Sun, HP and Siemens.

More information about JPay is available on the JPay home page.

Will Sturgeon reports from the UK for Silicon.com on the use of "verbal signatures" for two-way authentication between banks and their customers.

A number of banking customers have become concerned about the apparently random methods used by some banks to contact them, with unsolicited calls singled out as a source of confusion in these days of phishing, where criminals, typically posing as banks attempt to trick users into divulging details such as passwords and log-ins.

eFunds has announced that it has signed a definitive agreement to acquire ClearCommerce, a privately held provider of fraud prevention and payment processing solutions for card not present transactions, for an initial purchase price of $19.4 million.

Julie Hauserman reports in AuctionBytes.com on PayPal's confidence that it can meet various regulatory challenges.

PayPal spokeswoman Sara Bettencourt says the company doesn't foresee problems. "We don't actually see compliance with regulations as a challenge," Bettencourt said. "We have a large, dedicated team within the company that focuses on this."

Monty Phan reports in Newsday on the sentencing of Philip Cummings to 14 years in prison after he admitted to contributing to the largest case of identity theft in U.S. history.

First Data Corp. announced this morning that it has completed the acquisition of the credit card processing unit of FinecoBank S.p.A.   » Continue Reading

David Lazarus writes in the San Francisco Chronicle about some of the risks associated with electronic payments.

"All this technology has been pushed aggressively by banks but they haven't put in sufficient safeguards for consumers," said Ken McEldowney, executive director of Consumer Action, a San Francisco advocacy group. "Consumers have to take some personal responsibility for their accounts," he said. "But the burden is on banks to fix the problem."

Bruce Mohl reports in the Boston Globe on litigation brought by the Massachusetts state attorney general against mall operator Simon Property Group charging that the terms of Simon's gift card program violates state law.

Both the dormancy fee and the one-year expiration date would appear to violate the Massachusetts gift card statute, which requires gift cards to be redeemable at full face value for at least seven years.

Liz Pulliam Weston writes for MSN Money on building a credit score.

Newswise reports on a new loan program launched by some credit unions called Salary Advance Loans.   » Continue Reading

Can you believe paper being faster than electronic payments? This morning Bank One announced a new Overnight Check service that is available to its checking account customers through its online banking website BankOne.com.   » Continue Reading

Moneris Solutions, InfoTouch and Merchant Partners have announced they are teaming to integrate payment processing with touch screen technology and help the retail industry transition to a touch screen point-of-sale (POS) infrastructure.   » Continue Reading

Verifone Holdings has filed an S-1 registration statement with the SEC. According to the financials included in the S-1, the company reported revenues of about $390 million for the year ending October 2004 and $0.6 million in net income.

In his new article "Looking Back, Looking Ahead" (PDF), Tom Brown of Second Curve Capital takes a look back at financial services industry highlights from 2004 and ahead on what to expect in 2005.

Scott Reeves writes for Forbes.com on American consumer debt and strategies to get out of it.

The typical U.S. household carries $9,200 in credit card debt. The U.S. Federal Reserve reports that debt levels of U.S. households fell $8.7 billion in November after a sharp drop in charge-card and credit activity.

Liz Pulliam Weston reports for MSN Money on technologies to better secure electronic payments.

Personally, I want financial institutions and retailers to do more to make sure the person withdrawing money and charging purchases is actually me. I’m not going to let them implant a chip or scan my retinas (another “biometric” authentication process that gives most people the willies), but I wouldn’t mind carrying a key fob that would make my accounts more secure.

Bloomberg reports on the UK's Competition Commission's inquiry into store card rates.

The commission is investigating whether companies such as GE Consumer Finance and HSBC Holdings Plc are stifling competition in Britain's 4.8 billion-pound market ($9 billion) for store cards, allowing them to charge interest rates as much as 10 percentage points higher than for ordinary credit cards.

P.J. Huffstutter writes in the Los Angeles Times about the "freight dogs" that fly paper checks around the country at night -- and the impact that Check 21 is likely to have on them.   » Continue Reading

Stored Value Systems has announced that it has launched a gift card program for Arby's.