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« August 21, 2005 - August 27, 2005 | Main | September 4, 2005 - September 10, 2005 »

September 03, 2005

Paper or Online?

Eric Dash reports for the New York Times on why many consumers still prefer paper checks.

Most are concerned with the security of their personal information and the perceived loss of control of paying their bills online, according to a survey of 1,000 Internet users who do not currently bank online. It was conducted in August by Synergistics Research, a consumer market research firm.

September 02, 2005

September 01, 2005

Economist: MasterCard IPO - Why?

The Economist speculates on reasons behind MasterCard's upcoming IPO.

But why, you might ask, would MasterCard's owners, who know a thing or two about finance, want to let it go? Why sell a fast-growing business, especially one whose scale and open, co-operative structure has allowed individual member banks to run their own, nicely profitable credit-card operations?

August 31, 2005

More on MasterCard's Planned IPO

Robin Sidel reports for the Wall St. Journal on MasterCard's plan for an initial public offering early next year.

Analysts and consultants were scrambling yesterday to calculate a potential valuation for MasterCard. Craig Maurer, an analyst at Fulcrum Global Partners in New York, estimated MasterCard in its entirety could be valued at $7 billion, or just under 2.5 times projected revenue for 2005.

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Card Issuers Sued Over Forcing Arbitration

Carrick Mollenkamp reports for the Wall St. Journal on a lawsuit recently filed in federal court in New York City alleging credit card companies held secret meetings where they colluded to promote arbitration.

MasterCard IPO Planned

MasterCard today announced plans for a "new corporate governance and open ownership structure that will include the appointment of a new board of directors comprised of a majority of independent directors, the establishment of a charitable foundation and a transition to being a publicly traded company."

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Smart Card Alliance Forms Contactless Payments Council

The Smart Card Alliance has announced the formation of a Contactless Payments Council to facilitate the adoption of contactless payments in the U.S. through education programs for consumers, merchants and issuers.

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Chase to Purchase Sears Canada Credit Card Business

Chase has announced it has entered into an agreement to purchase the credit card operation of Sears Canada including both its private-label Sears credit card accounts and its co-branded Sears MasterCard® accounts. The credit card operation includes approximately 10 million accounts and CAD$2.5 billion in outstandings.

"This purchase offers many opportunities for Chase, including partnering with another of the world's leading brands, expanding our private-label business and entering a new and exciting market in Canada," said William I. Campbell, Chairman, Chase Card Services. "We look forward to working closely with Sears Canada and its employees to offer great products and services that consumers find valuable."

August 30, 2005

China's Credit-Card Industry Set to Take Off

Andrew Brown reports for the Wall St. Journal on China's credit card industry.

An industry survey by McKinsey, which hasn't yet been released to clients, backed up optimism about the market, which is still in its infancy but growing exponentially. The report estimates more than 12 million credit cards have been issued in China, up from three million in mid-2003. (There are also hundreds of millions of debit cards that don't offer credit.)

American Express Enhances Membership Rewards Program

American Express has announced a new Membership Rewards program benefit allowing cardmembers to use Membership Rewards points to book travel directly on the American Express travel website without blackout dates or restrictions for airlines, hotels or cruises.

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Chase, United Are First to Offer Airline Rewards With ''blink'' Technology

Chase and United United have announced that the United Mileage Plus Visa* card is the first airline rewards card to feature "contactless" technology called "blink." The United Mileage Plus Visa cards with blink were first issued this summer to over 200,000 cardmembers in Colorado.

"With blink technology we're giving our United Mileage Plus cardmembers yet another way to enjoy the power and versatility of this extraordinary card," said Joe Venuti, senior vice president for Chase's Card Services division.

"We're confident the idea will take flight with our cardmembers, who will enjoy gliding through check out lines while accruing mileage earning benefits."

MBNA-AmEx Relationship Threatened

Monee Fields-White reports for Bloomberg on American Express' relationship with MBNA to issue co-branded Amex cards and whether that relationship will continue after Bank of America's acquisition of MBNA.

MBNA and Bank of America officials have yet to say whether the American Express partnership will continue after Bank of America completes its buyout in late 2005 or early 2006.

August 29, 2005

Mobile ID for Credit Card Purchases

Michael Copeland writes for Business 2.0 in its September issue about venture capitalists looking to fund new companies in particular market segments. At the top of the list is John Occhipinti of the Woodside Fund who says he wants to fund a company providing "fraudproof credit card authorization via cell phones and PDA's".

Another request comes from Ryan Floyd of Storm Ventures who's looking for "a clever resurrection of the smart-card concept: a software platform for cell phones that allows consumers to make purchases or open doors by waving their phones in front of tiny infrared or RFID readers."

If other VCs are looking for people to pursue specific opportunities in the payments arena, contact us at Glenbrook and we'll be happy to post an item here.

Ticket to the Future: Smart Cards in Public Transportation

Accenture has published a study on the use of smart card technology in public transportation (PDF).

Smart cards are the ticket to the future for most of the world’s transit operators. According to Accenture’s global research, some implementations have been successful, and many have achieved their original objectives. But smart card implementation was viewed by many respondents as being more complicated than originally anticipated: many viewed e-ticketing solely as a means of systems imple- mentation. This limited view increases the risk of a difficult implementation and limits the ultimate benefit to passengers.
Although not specifically mentioned in the study, one of the things that's particularly interesting about the requirements for payments in the transit environment is the need for very fast (< 100 ms) response times between the turnstile and the card to ensure delays and queuing don't occur.

August 28, 2005

PIN Numbers At Risk?

The BBC reports on a study conducted by Mike Bond, Steven Murdoch, and Jolyon Clulow of the security group at the Cambridge University computer lab regarding the security of PIN numbers mailed to customers in so-called PIN mailers.

Bad Checks

Thuy-Doan Le reports for the Sacramento Bee on how bounced checks are still costly for small businesses.

About $5.5 billion worth of check fraud attempts were made in the United States in 2003, according to the most recent numbers from the American Bankers Association. The numbers include both counterfeit checks and those written without sufficient funds.

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