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« June 12, 2005 - June 18, 2005 | Main | June 26, 2005 - July 2, 2005 »

June 25, 2005

Taobao Plots eBay Offensive

Red Herring reports on the battle between eBay and Taobao in China.

“It’s a bit like the early days of the Internet,” says Paul Waide, an editor at Shanghai-based analyst firm Pacific Epoch. “They’re using metrics that don’t really mean anything. What everyone wants to know is how they’re going to turn those into revenues.”
By that he means Taobao doesn't yet have a business model -- it doesn't yet charge for the transactions it handles prompting the folks at eBay to point out that "free is not a business model." The parallel here is Japan where eBay ultimately lost the market to Yahoo! Japan who pursued a similar free listing strategy. Both Yahoo! Japan and Taobao are backed by Softbank.

Simpay: Pan-European Mobile Payment Initiative Falls Apart

Forrester's Michelle de Lussanet writes about yesterday's announcement that Simpay is shutting down.

The wait for a pan-European mobile payment scheme just got longer, with Simpay's announcement that it will not go ahead with its pan-European development. Forrester isn't surprised: The mobile channel isn't suited for large-scale payment collection because it's too unreliable and too expensive.

Forged Credit Cards In Japan Account For 80% Of Leak Losses

The Japan Times reports on losses resulting from the recent security breach at CardSystems Solutions.

The Tokyo office of Visa International Inc. said it has so far found the illicit use of 838 Japanese credit cards issued jointly with Visa, including 658 cases considered to have involved counterfeit cards at retailers. Losses caused through the use of forged cards totaled 79 million, yen or 86 percent, of all losses from unauthorized use following the theft of card information, the office said.

E-Commerce's Growing Pains

Leslie Walker reports for the Washington Post on eBay's 10th anniversary celebration.

Gary Neubert, a Tampa resident who has sold shipping supplies on eBay since 1999, said he has been steadily building traffic to his own Web site to bypass eBay's commissions whenever possible. Half his sales today come through his own site, he said. Neubert said he and others are increasingly exploring options outside eBay.
Verne Kopytoff takes a look behind the scenes for the San Francisco Chronicle.

Today's Headline News - Saturday, June 25, 2005

Note: This posting is updated regularly throughout the day.

June 24, 2005

To Catch A Thief

Tom Zeller Jr. reports for the New York Times on steps that "card not present" merchants take to defend themselves against credit card fraud.

"It's like dealing with the Velociraptors in 'Jurrasic Park,' " said Tracy L. Brown, a co-chairwoman of the Merchant Risk Council, an antifraud consortium of some of the largest retailers that accept credit cards online or over the phone.

"They systematically test the fence," Ms. Brown said. "They wait until the electricity is down on the fence and then they strike."

American Express Testing RSS Feeds

Matthew Haughey has posted an email he received from American Express inviting him to test Amex's new RSS feeds. [Hat tip: Scripting News]

Separately, Microsoft announced today that its next version of Windows, code-named Longhorn, will include support for RSS.

“RSS is key to how people will use the Internet in the future by automatically delivering the information that is important to them,” said Dean Hachamovitch, general manager for “Longhorn” browsing and RSS at Microsoft.

“We are investing heavily in RSS for Windows ‘Longhorn’ to make it easy for users to discover, read and subscribe to RSS feeds as well as enable developers to deliver powerful, smart applications that act on the information on behalf of the user.”

Details here.

First Data Announces Credit Card Processing Partnership with Citibank

First Data has announced that it has expanded its relationship with Citibank including signing a long-term processing agreement that includes expanding the existing relationship to include processing services for the Sears, Roebuck & Co. Card Portfolios.


Simpay Shuttered

The following notice was posted on Simpay's website this morning:

London — Friday 24th June 2005

Following the decision of one of its founding Members not to launch Simpay for the foreseeable future, the decision was made today at a General Meeting of Simpay not to pursue its activity on a pan-European scale as originally planned.

Instead, Simpay’s operations will be scaled back with immediate effect. Member operators will be able to exploit Simpay’s intellectual property rights at a national level, although international interoperability remains a goal. The members will make known their individual plans in due course.

All of the operators involved in Simpay continue to share the vision of the enormous potential of the mobile commerce market and the importance of providing a robust and straightforward payment facility to content providers.

Earlier this month, Ovum commented on an article in Germany's Frankfurter Allgemeine Zeitung suggesting that T-Mobile would soon be quitting Simpay.
A key characteristic of the mobile payment field is the high number of international industry initiatives that have eventually failed to produce concrete results. If this morning's announcement is confirmed, then there is a risk that Simpay may not reach the critical mass of operators that is necessary to get the full benefits from establishing an interoperable framework.
Indeed. Simpay turned out to be yet another "group grope" mobile commerce initiative that failed to deliver.


Top Gun eBay Is In A Global Dogfight

Michael Bazeley reports for the San Jose Mercury News on eBay's growth and challenges.

China is turning out to be more drama-filled than some anticipated. Yahoo, which forced eBay to retreat from Japan, is making a play in China. And a brash entrepreneur named Jack Ma has launched Taobao, an eBay clone that Ma says is giving eBay a run for its money. Taobao’s parent company, Alibaba, runs an established and profitable online business-to-business e-commerce site and counts investment companies Softbank and Fidelity Capital as partners.

June 23, 2005

Merchants Speak: Credit Card Interchange Blog

The Credit Card Interchange Blog was co-founded by Mitch Goldstone and Carl Berman of 30 Minute Photos Etc., one of five merchant plaintiffs in the class action lawsuit regarding credit card interchange fees filed earlier this week against Visa, MasterCard and card issuing and acquiring banks.

Earlier today they posted "Credit Card Interchange Fees: Issues and Background" - 24 leading issues affecting credit card interchange fees.

WSJ Commentary: What's In Your Wallet?

Timothy J. Muris shares his opinion in Friday's Wall St. Journal on the merchant class action lawsuit filed against Visa, MasterCard and bank card issuing banks by several merchants earlier this week.

Given the enormous benefits of payment cards, government efforts to interfere with this market are taken at great risk.
According to the Journal, Mr. Muris was chairman of the Federal Trade Commission from 2001-2004 and has consulted with Visa U.S.A. on a variety of antitrust and consumer-protection issues.

eBay Launches ProStores Web Store Solution for Selling Off eBay

eBay this morning announced ProStores web store solution that allows small- to medium-sized businesses to create a customized e-commerce storefront, independent of the eBay marketplace.


PayPal Going "Off eBay"

PayPalJulia Wilkinson reports for on yesterday afternoon's keynote panel at the eBay Developers Conference that included the following comment from PayPal CEO Jeff Jordan:

Chatwani asked about PayPal's expansion strategy. Jordan said that while 2004 was the year they went international, 2005 was the year of "going off eBay," saying that non-eBay commerce was 10 times that of eBay. "PayPal wants to be the standard off eBay as well as on eBay," said Jordan.
Last Friday, PayPal launched Website Payments Pro, an all-in-one online payment solution for "off eBay" merchants that combines the features of a merchant account with a payment gateway into a single provider, PayPal.

Gartner Survey Shows Frequent Data Security Lapses and Increased Cyber Attacks Damage Consumer Trust in Online Commerce

Gartner this morning announced results of a survey of 5,000 US adults that concludes that "increasing reports of lost consumer data files and disclosures of unauthorized access to sensitive personal data are taking a toll on consumers' confidence in online commerce."

"While online banking customers continue to access bank accounts over the Internet, they are changing their usage patterns," said Avivah Litan, vice president and research director at Gartner.

"Nearly 30 percent of the online bankers say that online attacks have influenced their online banking activities. Over three-quarters of this group log in less frequently, and nearly 14 percent of them have stopped paying bills via online banking."

Identity Theft and Online Security Worries Are Causing Changes in How People Use the Internet

The Conference Board reported this morning that its latest Consumer Internet Barometer survery of 10,000 households indicates that online consumers have growing concerns about identity theft with more than 13 percent of all Internet users saying they or a member of their household has already been a victim of identity theft. Importantly, the latest survey indicates that "more people are buying less online."


Merchants Expand Credit-Card Fight

John Wilke and Robin Sidel report for the Wall St. Journal on merchants challenging credit card interchange fees and the lawsuit filed on behalf of merchants yesterday in Connecticut against Visa, Mastercard and their largest member banks (see next post).

VISA, MasterCard and Major U.S. Banks Charged With Antitrust Violations for Fixing Credit Card Interchange Fees

Robins, Kaplan, Miller and Ciresi LLP announced this morning that it has filed an antitrust class action lawsuit "in the U.S. District Court for the District of Connecticut against Visa, MasterCard, Bank of America, Citibank, Bank One, Chase Manhattan Bank, JPMorgan Chase, Fleet Bank, Capital One and other major banks on behalf of merchants alleging collusive practices of their setting, by horizontal agreement, credit card interchange fees at supra-competitive levels."


Card Issuers Take Swipe at Rules

Mitchell Pacelle and Christopher Conkey report for the Wall St. Journal on moves by the banking industry to deal with moves in Congress to deal with data breaches or identity theft.

The unremitting wave of security breaches has generated an enormous push for action on Capitol Hill. Congress seems likely to pass some sort of notification requirement later this year -- a point conceded by nearly everyone in the debate. The question is whether industry lobbyists or consumer groups will prevail on the fine print.

ATM Fees Moving Higher

Jane Kim reports for the Wall St. Journal on increases in fees for ATM usage.

One reason ATM fees are increasing is that more customers are using credit and debit cards more than cash, says Tony Hayes, managing director at Dove Consulting Group Inc. That means fewer trips to the ATM and less fee revenue for banks. So banks are making up for that loss of revenue.

Today's Headline News - Thursday, June 23, 2005

Note: This posting is updated regularly throughout the day.

June 22, 2005

Ubiquitous Technology, Bad Practices Drive Up Data Theft

Jonathan Krim reports for the Washington Post on 2005, the "year of the data breach."

"We've used weak practices for some time," said Chuck Wade, an Internet security and commerce consultant. "The vulnerabilities are well known, and we have not been improving the security measures . . . as we should have been."

Morgan Stanley Reports Discover Card Results

Discover CardMorgan Stanley announced quarterly earnings results this morning for the quarter ending May 31, 2005 -- including results for its Credit Services unit which is primarily made up of Discover Card. Financial details were included in the Financial Supplement (PDF).

Discover reported 45.9 million accounts of which 19.3 million were active. Transaction volume increased 4 percent year over year to $25.4 billion and 314 million transactions for the first quarter at an average ticket of $80.89. Merchant, cardmember and other fees were $486 million, up 4 percent.

Managed credit card loans remained flat at $46.8 billion while net interest income fell $108 million due to a narrower interest rate spread. Average receivables per active account were $2,426, up 4 percent. Payment volume per active account was $1,306, up 8 percent. Net credit chargeoffs were the best in four years declining to 4.94 percent from 6.48 percent.

Credit Services also reported 452 million Pulse PIN debit transactions for the quarter.

Regulators Start Inquiry in Data Loss

Eric Dash reports for the New York Times on an investigation begun last week by the Federal Financial Institutions Examining Council into the security breach at CardSystems Solutions.

Visa Launches Hispanic Financial Education Campaign

Visa USA has announced the launch of its Hispanic Financial Education Campaign, a new program aimed at providing Hispanic consumers with tools for financial decisions.


Union Bank of California Offers UPICs

Union Bank of California has become the first west coast bank to offer its business customers the Universal Payment Identification Code (UPIC).

Developed by the Electronic Payments Network, the ACH business of The Clearing House Payments Co. L.L.C., a UPIC is a unique bank account identifier that allows companies to receive electronic payments without divulging their sensitive banking information. UPICs are for credit payments only and are portable from one institution to another.


Would-be Identity Thieves Keep TSYS On Its Toes

Tony Adams of the Columbus, GA Ledger-Enquirer profiles TSYS' risk management efforts.

At his company's annual meeting in April, TSYS Chief Executive Officer Phil Tomlinson bluntly told shareholders the credit-card processor fends off 100,000 hacking attempts each week.

Ask Glenbrook - Paying AOL Subscription Via Phone Bill?

Here's a recent Ask Glenbrook question we received:

Q. How can you pay for AOL on your phone bill?

A. AOL does offer its customers the option to pay for their monthly subscriptions on their phone bills if they do not have credit cards, debit cards, or checking accounts available to pay them directly. Due to the additional processing cost involved, AOL charges an additional $5.00 per month for this service, which they obtain through a processor called PaymentOne.


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