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« March 27, 2005 - April 2, 2005 | Main | April 10, 2005 - April 16, 2005 »

April 08, 2005

April 07, 2005

More Discover

Robin Sidel reports in Friday's Wall St. Journal on the potential spinoff of Discover from Morgan Stanley.

"With the right people and the right funding, there are a lot of interesting things that Discover can do," says Duncan MacDonald, an industry consultant. "They can put a real scare into the other networks."

Amex's Chenault Talks About Leadership, Integrity, and the Credit Card Business

Wharton's Leadership and Change reports on a discussion with American Express CEO Ken Chenault.

Applying Darwinian theory to the business domain, he told a Wharton audience on March 17 that "it's not the strongest or the most intelligent who survive, but those most adaptive to change. Over the past 10 years, the need for, and focus on, adaptability has accelerated."

Neteller: The Wages of Sin

Lea Goldman reports for Forbes on Neteller.

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DiamondCluster Reports Shift to Electronic Payments Quietly Eroding Banks' Margins

DiamondCluster has announced a new report that concludes that the increase in electronic payments will have major ramifications on the US payments industry including:

A shift in the payments battleground to the retail store and point-of-sale; the realization that the information about the electronic payment transaction may become as valuable to banks and others as the payment transaction itself; and, an understanding that old networks may be used in ways that aren't to banks' advantage.

Credit Cards Make Wallet-Size Billboards for Banks

Eric Dash reports for the New York Times on what banks are doing toenhance their brands through their credit card designs.

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Cyota Launches eSphinx Adaptive Strong Authentication

Cyota has announced eSphinx, a new adaptive strong authentication technology for online banking.

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April 06, 2005

PayPal Developers Conference

As part of eBay's Developers Conference 2005, PayPal will have its own track titled "PayPal Ecommerce Development and Integration". The conference is being held in San Jose on June 21-22, 2005.

NACHA Payments 2005

Glenbrook's Allen Weinberg will be hosting an Online Merchants panel discussion at NACHA's Payments 2005 Conference next week in San Antonio. Allen's session is Monday, April 11th, beginning at 8 AM.

Panelists include Mary Kay Bowman (Amazon.com), Kevin Dasch (Dell), Nick Luna (Microsoft), Ashok Misra (RealNetworks) and Ben Quigley (AOL).

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AFP Releases Payments Fraud Survey Results

The Association of Financial Professionals has released the results of its latest annual survey of payments fraud (PDF) suffered by corporations.

Reasons cited for not implementing payment controls include the view that the potential fraud loss is not worth the cost, the service is technically difficult to implement, or the bank does not offer the service. One-third of respondents indicated they would be willing to switch disbursement banks just to obtain fraud control services.

New US Bankruptcy Law Nears Passage

Michael Schroeder and Suein Hwang report in this morning's Wall St. Journal on the bankruptcy legislation nearing passage in Congress.

Credit-card companies, banks and their allies say the legislation, the biggest change to U.S. bankruptcy law since 1978, is an overdue correction to a system that is biased in favor of borrowers and too often protects deadbeats. Opponents condemn the bill as an overreaction that will inflict pain on consumers overwhelmed by debt that they can't pay because of health problems or layoffs.

Pharming

Dan Lee reports in the San Jose Mercury News on pharming, the latest technique to trick users into giving up their username and password information.

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Discover May Find Its Own Way

Andrew Countryman reports in the Chicago Tribune about the spin off of Discover from Morgan Stanley.

April 05, 2005

More on Discover Card Spinout

Ann Davis, Robin Sidel and Randall Smith report in this morning's Wall St. Journal about Morgan Stanley's announcement late yesterday that it intends to spinout its Discover Card unit.

The article mentions potential acquirers including JP Morgan Chase, Bank of America, HSBC, and Royal Bank of Scotland -- as well as American Express. GE's Consumer Finance group is another potential acquirer -- having recently launched new Wal-Mart and Sam's Club credit cards with Discover.

Although not mentioned in the article, other new entrants in the consumer payments field could also find Discover strategically attractive -- for its large existing consumer card base as well as for its large, established merchant acceptance base and its recently acquired Pulse debit network assets. One wonders how the major private equity players might feel about Discover vs. Sungard, for example.

It also seems that merchants have a stake in this outcome -- as Discover is typically the lowest-cost credit card for merchants to accept. Discover calls their network "merchant friendly" as a result. Merchants would naturally want to see that low-cost positioning to continue -- but a new owner of Discover might view the opportunity to increase merchant pricing as just one way to enhance Discover's revenue.

Speaking of Morgan Stanley, FT.com reports that Visa International will today make a case to the European Commission to try to dismantle a case originally brought by Morgan Stanley five years ago. A later Reuters report said that Visa at the last minute pulled out of the meeting due to Morgan Stanley's announcement late yesterday regarding Discover. An article over the weekend by Paul Meller in the International Herald Tribune provides more background.

AmEx's Ken Chenault Reshuffles His Cards

Julie Creswell reports for Fortune (sub. reqd.) on American Express' Ken Chenault and his "new AmEx" focus strategy.

Eyeing China's Alibaba

Bambi Francisco reports for MarketWatch.com on China's Alibaba and its Taobao and Alipay units.

As AliPay gains ground, eBay's PayPal has yet to launch in China. "What we've said about PayPal is to follow the eBay footprint," said Chris Donlay, a spokesman at eBay. "We've not announced any dates about PayPal going into China."

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Debt's Downward Spiral

George Boardman writes for the The Union.com about compulsive spending, credit card debt, and Debtors Anonymous.

April 04, 2005

Morgan Stanley to Sell Discover Card

The Wall St. Journal is reporting that Morgan Stanley's board of directors has approved the sale of the company's Discover Card unit. Other news stories are reporting that Morgan Stanley has declined to comment on the report.

Update: Morgan Stanley released a press release late this afternoon confirming the earlier story about plans to spin off its Discover Card unit.

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Ingenico Selects Peppercoin as Small Payment System Partner

Peppercoin and Ingenico have announced a partnership to offer Peppercoin's Small Transaction Suite to merchants.

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Serving the Underbanked

The Center for Financial Services Innovation has released Request for Proposals today for its second round of funding awards, designed to advance practical strategies to service underbanked consumers and offer them asset-building opportunities. The Center will invest in for-profit companies, as well as provide grants to nonprofit organizations.

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MasterCard Reports on Growth of PIN Debit Network

MasterCard has announced an 8 per cent growth in PIN debit cards issued worldwide to a year end 2004 total of 562.6 million cards. 8.4 million merchant locations globally are now equipped for PIN debit card acceptance, a growth of 8.7 per cent over 2003.

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Access to Sensitive Personal Data

Jonathan Krim writes for the Washington Post about the ease of online access to sensitive personal information.

Although Social Security numbers are one of the most powerful pieces of personal information an identity thief can possess, they remain widely available and inexpensive despite public outcry and the threat of a congressional crackdown after breaches at large information brokers.

April 03, 2005

Credit Cards, Consumer Credit and Bankruptcy

Ronald Mann has posted a new paper (PDF) that examines the relationship between credit cards and consumer bankruptcy in various countries.

The paper analyzes data on consumer credit, credit card use, and consumer bankruptcy in the USA, UK, Australia, Canada, and Japan. Mann concludes that there is a statistically significant relationship between the increased use of credit cards, on the one hand, and consumer bankruptcy, on the other.

Mann is Visiting Professor of Law, Harvard Law School and Ben H. & Kitty King Powell Chair in Business and Commercial Law, Co-Director, Center for Law, Business & Economics, University of Texas School of Law,

Homeland Security ID Card Is Not So Secure

The Electronic Privacy Information Center (EPIC) has published a brief analysis of the new US Department of Homeland Security's employee ID card. Each card costs the department about $8.50 to issue.

The Department of Homeland Security Access Card (DAC) has vulnerabilities associated with its use of radio frequency identification (RFID) and Bluetooth technologies, biometric identifiers and PIN backup system.

But there are also risks that come from the DAC's "mission creep"; the Department also wants the card to be used as a payment device for everyday items.

[Hat tip: Bruce Schneier]

Risks of DNA Identity Theft

Paul Saffo writes about the risks of DNA identity theft in today's Washington Post.

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About Those Gift Card Fees

Eileen Ambrose writes in the Baltimore Sun about gift cards and what to do when the cards lose value or impose fees.

"How big of a gift is it if it evaporates? It's a disappearing gift," said Jean Ann Fox, director of consumer protection for the Consumer Federation of America.

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