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February 11, 2005

Jay DeWitt Joins Glenbrook

Glenbrook's Jay DeWittWe're delighted to announce that Jay DeWitt has joined Glenbrook as our newest partner. Most recently, Jay headed Global Payments at where he was responsible for this prominent e-tailer's payment acceptance strategies and operations. Jay is located in Glenbrook's Menlo Park office.


FDIC Identity Theft Study Comments

We submitted our comments to the FDIC this afternoon on its Account-Hijacking Identity Theft Study released in mid-December. A PDF of our comments is available online.

Providing Efficient Voice Bill Payment

Tom Smith writes in Speech Technology Magazine about Fort Knox National Company's use of voice technologies to deliver voice e-payments in a cost-efficient manner.

Troy Critchelow, vice president of product management, Fort Knox National Company, said, “Automated Speech Recognition (ASR) technology holds the key to allowing billers to benefit from consumer adoption of electronic payments and payment automation.  Through the use of ASR, telephone payment transactions can now be fully automated.  And given consumers’ preferences for voice interfaces, billers can exponentially cut the number of customers who opt-out to costly operators to make telephone payments.”

February 10, 2005

Introducing BayPay

BayPayAre you a payments professional living in the San Francisco Bay Area?

With some friends, we're exploring starting a payments professionals' networking group for the San Francisco area that we're calling BayPay.

Let us know if you're interested in learning more about BayPay.


PayPal In Perspective

PayPal's CEO Jeff Jordan reviewed the company's performance at today's eBay analyst meeting. He reported that PayPal's share of 2004 consumer ecommerce volume as 9 percent in the US and 5 percent globally.

He also reported on the deal announced last year with GE Consumer Finance to launch PayPal Buyer Credit with $28 MM of PayPal purchases using Buyer Credit in the fourth quarter of 2004.

Here's an interesting slide from today's presentation that how PayPal segments the off-eBay merchant opportunity.


Visa USA Forecasts Small Business Spending to be $4.7 Trillion in 2005

Visa USA today introduced its small business spending forecast and segmentation analysis. The small business segment - businesses with under $25 million in annual sales - accounts for one-third of all expenditures by businesses in the United States. According to Visa's CCE analysis, non-payroll spending by U.S. small businesses will increase an estimated 5.4 percent this year to $4.7 trillion, and expand further to reach $5.3 trillion in 2008.

Stanford Daily: PassMark Security

The Stanford Daily reports on the recent implementation of PassMark Security by the Stanford Federal Credit Union.

“When you log on, you see a picture and a pass phrase at random,” said Sam Tuohey, vice president of e-commerce and technology for the SFCU. “If you think that’s fine, you can do that. Otherwise, you can upload your own picture or browse the images online.”

Online Banking Users Jumps 47 Percent in Two Years

The Pew Internet & American Life Project has announced the results of a survey of online banking users (PDF) completed in November 2004.

Fifty-three million people, or 44% of internet users and one-quarter of all adults, now say they use online banking. Those figures amount to an increase of 47% over the number of Americans who were performing online banking in late 2002. Of all the major internet activities tracked by the Project since its inaugural survey in March 2000, online banking has grown the fastest. Internet users with high-speed connections, those with six or more years of experience, and those between 28-39 years old are the most likely to bank online.

February 09, 2005

Cyota Launches eVision Risk Management For Online Banking

Cyota has announced eVision, a proprietary online risk management solution that detects, analyzes, scores and manages online banking and online services in real-time.

ID Analytics Highlights Synthetic Identity Fraud

ID Analytics has announced new results from its statistical research into identity fraud that highlights that synthetic identities are more commonly used to commit identity fraud than true-name identities. The company estimates that synthetic identity fraud comprises 88.3 percent of all identity fraud events and 73.8 percent of the total dollars lost by U.S. businesses.


MasterCard Offers SMS to Detect Suspect Credit Card Transactions

PC Advisor reports that MasterCard is planning to add an SMS option to its fraud detection system that would allow credit card customers to be alerted when risky transactions are suspected.

Citigroup Plans Platinum Card Rival

Ron Lieber reports in the Wall St. Journal on plans by Citigroup to launch the Chairman card to compete with the American Express Platinum card.

Nokia Announces NFC Enabled Mobile Product for Payments

Nokia has announced a new Near Field Communications (NFC) shell for the Nokia 3220 phone that will enable consumers to conduct local purchase transactions.

"Visa is always looking for exciting, first-rate innovations that advance the field of contactless payment and we are pleased to join forces with Nokia in this pioneering effort," said Jim Lee, senior vice president, Product Technology and Standards, Visa International. "The development of the Nokia NFC shell serves as a natural extension of Visa's contactless card and phone programs around the world. Moreover, it aligns well with Visa's commitment to enabling payments anywhere, anytime, through any device."

"We are pleased that Nokia is developing technology that will support MasterCard(R) PayPass contactless payment technology in a mobile handset. This is a natural extension to the successful PayPass market trial that we carried out together in Dallas, Texas in 2003. MasterCard's research has consistently shown that consumers are interested in using their mobile phones for making convenient payments in the future," said Richard Fletcher, senior vice president, Mobile and Wireless Centre of Excellence, MasterCard International.

Banks Raising Minimum Credit Card Payments

Paul Nowell reports for the Associated Press on recent changes by two major credit card issuers, MBNA and Bank of America, to tighten payment requirements in response to suggestions by the Office of the Comptroller of the Currency.


Passion for Plastic

Dana Flavelle reports in the Toronto Star on the growth in Visa transactions in Canada.

Among credit card issuers, VISA holds 38 per cent of the Canadian market, followed by MasterCard with 17 per cent, American Express at 5 per cent and Diner's Club with less than 1 per cent. But all of them are eclipsed by Interac, which accounted for 40 per cent of purchase volumes, according to the Nilson Report, which tracks payment methods.

Fast Food Fuels Migration to Plastic Payment

Barrie McKenna writes in the Globe and Mail about the growth in acceptance of card-based payments in several emerging market segments including fast food restaurants.

These and other new markets for credit and debit cards recently pushed the United States past a historic threshold. The U.S. Federal Reserve Board reported in December that electronic payments exceeded cheque payments for the first time ever. Debit cards account for much of the trend, with transactions rising 24 per cent between 2000 and 2003.

One of the fast-growing areas of card purchases are small transactions, or micropayments. With Apple Computer's iTunes selling for 99 cents, no amount is too small.

February 08, 2005

Visa USA Reports Over $1 Trillion in Sales Volume for 2004

Visa USA has announced that sales volume on Visa-branded cards grew to a record $1.045 trillion in calendar year 2004, a 19.1 percent increase over 2003. Consumer credit card sales volume grew more than 11 percent to $517 billion while Visa's debit card sales volume grew 19.7 percent to $346 billion.

"By any measure, 2004 was a record year for Visa USA and our Members," said Carl Pascarella, president and CEO of Visa USA. "Visa's performance last year is proof that we continue to deliver what consumers and businesses value most - payments that are convenient, secure and accepted at an unsurpassed number of locations worldwide. That's why Visa continues to be the payments brand that cardholders turn to most often."


Visa USA Studies "New Affluents"

Visa USA has announced the results of a new study that has identified a consumer category of "new affluents" who trade prestige and luxury for value, pragmatism and the adventure of doing more with what they have.

"The power and potential of this consumer group is enormous," said Elizabeth Buse, executive vice president, product development and management, Visa USA.

"The more clearly we understand their beliefs and needs as distinct and different from earlier models of wealth, the more effective we can be in helping our Members and merchants unlock this potential."


More on MoPay

MoPay, the South African mobile payments company, has announced a new SMS-based service.


Consumer Revolving Credit Growth

The Federal Reserve has reported that consumer revolving credit grew at an annualized rate of 1.8 per cent during December, up slightly from the prior month. The amount of revolving credit outstanding was $790.5 billion.

February 07, 2005

Keeping Patent Applications Secret

Patent attorney Dennis Crouch blogs about a strategy some financial services firm utilize to prevent publication of their patent applications.

Financial institutions have a history of being quite secretive in their practices.  In one sense, this practice stops with the emergence of the patentability option.  In order to obtain a patent, an inventor must publicly disclose the details of the invention.  However, many institutions are opting to request that at least the patent application be left unpublished in order to maintain secrecy of the patent until the date the patent is issued (if ever).

How Airlines Can Reduce Their Payments-Related Expenses

Pascal Burg of Edgar, Dunn and Company has written a comprehensive white paper (PDF) exploring techniques that airlines are using to reduce their payments-related expenses.

We estimate that the total cost of accepting payments by card for the US airline industry amounted to approximately $1.5 billion dollars in 2003 which represents the total merchant fees paid by all US airlines to MasterCard and Visa "acquiring" banks and the likes of Amex and Diners Club. This is equivalent to $12.50 per average airline ticket.

PayPal Names Scott Thompson Senior VP and CTO

PayPal has announced that Scott Thompson has joined the company as senior vice president and chief technology officer.

"Scott is one of the most respected technology professionals in the financial services industry, and we are thrilled that he is joining the PayPal team," said Jeff Jordan, president of PayPal. "Scott's expertise will help lead PayPal to our ultimate goal of becoming the global online payments standard."

Thompson comes to PayPal from Inovant, a subsidiary of Visa formed to oversee global technology for the organization. As executive vice president of technology solutions at Inovant, he was responsible for all development, support and maintenance of Visa's global payment system, which processed tens of billions of transactions in 2004.

Electronic Authentication Partnership Elects First Board

The Electronic Authentication Partnership (EAP) has announced the election of its first board of directors. The EAP promotes interoperability among public and private online authentication systems.

The obstacle to widespread online authentication isn't technology, it's a lack of accepted rules for trust," said James Lewis, the Interim Chair of the EAP and Director of the Technology and Public Policy Program at the Center for Strategic and International Studies (CSIS). "The EAP's Trust Framework (PDF) is a major achievement by a public-private partnership that gives companies and individuals a way to determine how much they can trust a credential issued by someone else."

"In conducting the pilots," Lewis said, "the EAP will be able to count on the oversight of a talented Board that draws from a broad cross-section of the authentication industry."


Colorado Lawmakers Consider New Gift Card Rules

Kristi Areliano writes in the Denver Post about Colorado legislators considering new limits on terms and fees for gift cards.


Online Banking Victim Sues Bank of America

Ian Katz reports in the South Florida Sun-Sentinel about Joe Lopez and his complaint filed last week against Bank of America. The complaint is believed to be the first legal action by a customer against a U.S. bank to recover money apparently stolen by cybercriminals.

Deluxe and Primary Payment Systems Form Alliance

Deluxe and Primary Payment Systems have announced they're forming an alliance to help financial institutions perform identity verification at their new account desks in real time.



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