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March 11, 2005

Visa International White Paper: Financial Flows and Supply Chain Efficiency

Visa International has published a white paper titled "Financial Flows and Supply Chain Efficiency" (PDF) authored by Professor Warren H. Hausman of Stanford University.

Malcolm Williamson Having Fun

The Telegraph reports on the current activities of former Visa International CEO Malcolm Williamson.

He says he was preparing to retire at 60 when the Visa International chief executive job came along. "We changed plans entirely and moved to San Francisco for six years."

Dexit Adds Loyalty Offering to Payment Platform

Canada's Dexit has announced an agreement with SMART System Technologies to integrate the Dexit prepaid payment service and SST's loyalty product into a single offering.

"Dexit offers everyday small value payment services and welcomes the opportunity to provide its current and future customers with loyalty services by partnering with SST," said Renah Persofsky, President and CEO of Dexit.

"SST meanwhile provides loyalty services and now has the opportunity to extend its product line by providing its customers with the Dexit prepaid small value payments service through Dexit. This is very much a case where the sum will be greater than the total of the parts. Given SST's position in the United States, we view this arrangement as a critical next step to entering that market."

Separately, Dexit announced its financial results for 2004. Revenues were C$1.76 million with 47,000 registered consumers and 350 merchants accepting Dexit.

March 10, 2005

Discover Mulls Debit, Overseas Deals

Joseph Giannone writes for Reuters on comments made earlier today by Discover Financial's CEO David Nelms.

March 09, 2005

ARC: The Case of the Disappearing Check

MSNBC.com is running an AP story on accounts receivable conversion (ARC) of checks.

Part of the confusion for consumers is that there's no consistent language to describe the ARC transactions. Butnitz's bank may label them "automated checks," but another institution may call them "authorized transfers" and another simply "ARC."

Visa Charges Ahead

Time interviews Visa USA CEO Carl Pascarella.

JP Morgan Chase Eyes Payment System Like PayPal

Chris Sanders reports for Reuters on comments made by JP Morgan Chase's Heidi Miller regarding future plans for new payment services.

"Yes, we are looking at all our options," Miller said during an interview with Reuters, responding to a question whether the bank would create an Internet pay system like PayPal. She added the bank has a payments steering committee studying the best way for it to take advantage of changes in the way consumers and businesses make and receive payments.

Credit Card Currency Conversion Fees

David Lazarus writes in the San Francisco Chronicle about the various fees charged to credit card holders when they use their cards for purchases abroad.

Beginning next month, Visa is switching from charging 1 percent above and beyond any currency conversion costs to charging 1 percent simply for using your credit card in another country.

A Niche Among Giants

Tania Padgett reports in Newsday about MapCash Holdings, a Brooklyn NY-based company that markets stored value cards for use in the Caribbean.

You won't find anything about stored value cards in the liturgy at rabbinical school. Nevertheless, two rabbis from Brooklyn chose that field after finishing their studies, and now they're hoping to help bring the cashless culture to local immigrants with a business that enables people to wire money quickly and cheaply.

March 08, 2005

Empire Strikes Back

Steve Gelsi writes on MarketWatch.com abot Morgan Stanley analysts' opinions regarding American Express' likelihood of success in gaining a foothold with bank card issuers.

In a report entitled "The Empire Strikes Back," Morgan Stanley analysts said Visa and MasterCard's higher payments, called interchange fees, "should take away most of the incentive for banks to partner with AmEx."

More about PayPal Off eBay

Kevin Kelleher writes for TheStreet.com about the potential growth ahead for PayPal.

eBay paid $1.5 billion for PayPal in 2002, a figure that struck observers at the time as too rich but which seems like a bargain two and a half years later: PayPal is now worth between $6 billion and $7 billion, estimates Legg Mason. The merger has helped both companies grow: eBay gave PayPal a critical mass it needed to succeed, and PayPal gave eBay a higher transaction volume, as buyers and sellers took to its format.

March 07, 2005

Wal-Mart In Process of Forming Utah ILC

The Salt Lake Tribune reported on Saturday on Wal-Mart's plans to apply to organize a Utah-based industrial loan corporation.

Wal-Mart's pending Utah application represents only the latest initiative in a five-year effort to get into banking. Previous plans to buy financial institutions in California, Oklahoma and to partner with a bank in Canada were thwarted either by federal or state legislators.

UK Bank and Credit Card Fraud

Miles Brignall reports in the Guardian on last year's UK results with respect to bank and credit card fraud.

Bank and credit card fraud rose 20% last year, costing British banks £505m, with part of the increase due to the introduction of new chip and pin cards. Apacs, the clearing payments association that compiled the figures on the banking industry's behalf, said the amount stolen using bank cards rose from £420.4m in 2003 to £504.8m in 2004.

Shell Pleased with MasterCard Promotion Results

Shell Oil has announced that it has exceeded its goals for its marketing campaign with MasterCard and Citibank.

READ MORE »

Federal Reserve Connects to SVPCO-Image Exchange Network

The Clearing House Payments Co. has announced that the Federal Reserve is now linked to the SVPCO Image Exchange Network to facilitate the electronic movement of image files.

"The Federal Reserve and SVPCO-Image Exchange Network connection is a major milestone for the nation's payments system, and it will help usher in a new era of clearing checks in an all-electronic environment that will benefit institutions nationwide," said George Thomas, Executive Vice President of The Clearing House. "The early volumes being sent through the Image Exchange Network are significant, and we expect that to increase substantially in 2005."

March 06, 2005

Capital One to Buy Hibernia Bank

Dennis Berman writes in Monday's Wall St. Journal about Capital One's plans to enter retail banking by acquiring New Orleans-based Hibernia Bank. Terence O'Hara writes a related story on this acquisition in the Washington Post.

READ MORE »

ING Direct: Bare Bones, Plump Profits

Business Week reports on the growth of ING Direct, now the largest online bank.

Last year, ING Direct, a division of Dutch financial-services giant ING Group, became the largest online bank -- passing E*Trade Bank -- and the fourth-largest thrift in the U.S., according to Charlottesville (Va.)-based research firm SNL Financial.

Also included is an interview with ING Direct CEO Arkadi Kuhlman.

There are two core competencies we have: Marketing and technology. Our marketing events in new markets have been very successful, and we've seen increases in account openings by 150% to 250%. As for the $25 check, the industry's average customer acquisition cost is around $100, so a $25 mailing isn't that much. Plus we get a lot of business by referrals.

Credit Card Penalties, Fees Bury Debtors

As the Senate prepares to vote on changes in bankruptcy law this week, Kathleen Dan and Caroline Mayer report in a front page story in this morning's Washington Post on how credit card penalties and fees compound the problems of many financially strapped consumers.

According to R.K. Hammer Investment Bankers, a California credit card consulting firm, banks collected $14.8 billion in penalty fees last year, or 10.9 percent of revenue, up from $10.7 billion, or 9 percent of revenue, in 2002, the first year the firm began to track penalty fees.

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