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« January 16, 2005 - January 22, 2005 | Main | January 30, 2005 - February 5, 2005 »

January 28, 2005

Morgan Stanley May Consider Selling Discover Card

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 Acquires New Patent Portfolio

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."

January 27, 2005

Tax Refunds on Stored Value Cards

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.

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Bank of America to Drop Fees on Mexico Money Transfers

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.

Wal-Mart, Your New Banker?

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 Announces 2004 Financial Results

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.

January 26, 2005

Overnight Checks

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.

Visa Gets NASCAR's Loyalty

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.

January 25, 2005

How to Make a Magnetic Stripe Card Reader

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:

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Regulatory Efforts May Stifle Prepaid Products

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 Finalizes Expanded Agreement with Bank of America

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.

Federated Identity

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 Team on Flexible Spending Account Solution

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.

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LexisNexis Teams with Verid to Authenticate Identity

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

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A Look at iPayment

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 of Wells Fargo Elected NACHA Chairman

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

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January 24, 2005

BioPay Files Biometrics Patent Lawsuit Against Pay By Touch

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 Reports 17% Increase in Card Payment Volume

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.

Smart Payment Alliance

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 Unveils First Standardized Metric to Track Global Business and Government Spending

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.

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Secure Online Banking

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.

More on Wal-Mart, Discover Credit Card

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.

December Phishing Trends Reported

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).

Credit Card Cell Phones

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."

January 23, 2005

Credit Card Companies Get Tough

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.

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