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A friend of Payments News files this field report: "I stopped at a Wells Fargo branch yesterday and got to use one of the new next-generation ATM machines. From a customer point of view, I thought they were switching from machines that required envelopes for deposits to machines that didn't. No big deal. Turns out these new machines are a lot more sophisticated than what I was anticipating." » Continue Reading
Ashley Seager reports for The Guardian on new data from the Bank of England showing "a fall of £311m in credit card borrowing in August, the first fall since May 1994 and the biggest drop since records began in 1993. Credit card lending has slowed sharply this year but this is the first time it has actually fallen."
According to a Reuters report, Retail Decisions Plc said yesterday it had agreed to a $314 million cash offer from RD Card Ltd, a private firm set up by Palamon Capital Partners.
Philip Yam writes on the Scientific American blog about Pay by Touch - asking questions about whether fingerprints can be "spoofed", whether germs on the fingerprint reader might be a concern, and about privacy concerns. He concludes by discussing the economics of Pay by Touch's ACH-based payment system, noting that, according to a company rep he spoke with, "several Pay By Touch retailers have dropped credit transactions entirely for the cost savings."
Mercator Advisory Group has announced the first of three reports of its 3rd Annual Survey of the Prepaid Market is now available. This report reveals that Open Networks, including American Express, Discover (Pulse), MasterCard, and Visa, all have established in-roads into a market segment once exclusively controlled by closed systems - In Store Gift Cards. The report notes that "the increasing adoption of the merchant retail locations as a place where consumers acquire their Open Prepaid Cards should be watched closely by financial institutions, since it creates an important new channel." » Continue Reading
BITS has released a 10 year retrospective titled "Decade of Difference" that takes a look back at the contributions made since BITS was founded in 1996.
First Data Corp. today announced that it has completed the distribution of a tax-free special dividend to its shareholders consisting of approximately 765 million shares of common stock of The Western Union Company. First Data is distributing one share of common stock of Western Union for each share of First Data common stock to First Data shareholders as of September 22, 2006. As a result of that distribution, First Data will no longer own shares of Western Union, and Western Union will be an independent company. Western Union common stock has been authorized for listing on the New York Stock Exchange (NYSE) and will trade under the symbol "WU." » Continue Reading
The Center for Financial Services Innovation (CFSI) has announced the inaugural members of its Innovators Roundtable: Citigroup, eFunds, Experian, H&R Block and Wells Fargo. According to the Center's Director, Jennifer Teacher, these companies were selected for their pioneering work in the underbanked market space, their national prominence, and the range of approaches and industry areas they represent. » Continue Reading
Shell Oil Products US has announced it has re-introduced a credit card incentive and marketing campaign for the Shell Platinum MasterCard® from Citi Cards. Shell and Citibank will triple the rebates on Shell gasoline to 15 percent for new cardholders who apply for the card between Oct. 1, 2006, and Dec. 31, 2006. That can mean a savings of 41 cents per gallon at $2.75 per gallon when using their Shell Platinum MasterCard from Citi Cards. » Continue Reading
The Reserve Bank of Australia has announced revisions to interchange fees to take effect November 1. The bank said that, using data supplied by issuers of credit cards and Visa and MasterCard, it has calculated that "the common benchmark to apply for the three years from 1 November 2006 is 0.50 per cent. This compares with the current average interchange fee in these schemes of a little under 0.55 per cent." For Visa Debit, "the Reserve Bank has calculated that the benchmark applying for the three years from 1 November 2006 is 12 cents. For a Visa Debit transaction of average size, the introduction of this Standard will result in a fall in the interchange fee from around 44 cents to under 12 cents." The bank has also suspended the "no surcharge" rule - allowing merchants to surcharge Visa Debit transactions if they so choose.
ING Direct has been an amazing success story. Earlier this week, ING Group held an Investor Relations Symposium in London to review the performance of its various business units - including ING Direct. The presentation slides (PDF) are available online. ING Direct USA's CEO Arkadi Kuhlmann was recently profiled in US News & World Report. He's also one of the heroes of the new book Mavericks at Work by William C. Taylor and Polly LaBarre.
We have received news of the following recent management changes:
PayPal has announced that it has signed a settlement agreement with 28 United States Attorneys General. In entering into this voluntary agreement, PayPal said that it will, among other things, shorten and streamline its user agreement and communicate more information relating to its protection programs. PayPal reports that it has already complied with many of the terms in the agreement. » Continue Reading
Visa USA has announced that leading U.S. merchants continue to adopt the Visa No Signature Required Program, which waives the signature requirement for qualifying Visa transactions less than $25 across 17 merchant categories using existing magnetic stripe POS card acceptance terminals. The program, launched in April 2006, is designed to accelerate Visa acceptance and card usage at traditionally cash-intensive merchants. According to Visa, 7-Eleven, Inc., Clearview Cinemas, Dairy Queen, Domino’s Pizza, and Sonic Drive-In are among the newest merchants now participating in the program. Visa estimates indicate that by the end of 2006 as much as 27 percent of all Visa transactions may qualify for Visa's No Signature Required Program. » Continue Reading
Visa International has announced that, "for the ninth consecutive year, the World Travel Awards, the prestigious awards ceremony that acknowledges significant achievements in all areas of the travel and tourism industry, has named Visa the "World's Leading Credit Card." » Continue Reading
We have received news of the following recent management changes:
TSYS has announced it will be supporting a new co-branded Visa offered by Toyota Finance and Nikko Cordial Securities in Japan. » Continue Reading
Best Buy has announced enhancements to its customer loyalty program, Reward Zone, including the launch of the Best Buy Reward Zone program MasterCard card, issued by HSBC. The Reward Zone program will now allow customers to choose between two levels of rewards. » Continue Reading
Visa has announced the completion of major technology milestones, chief among them the company's completion of a five-year initiative to completely re-engineer its global authorization engine, the Visa Integrated Payment platform. According to Visa, the result is "a state-of-the-art, modular processing platform that is highly scalable, flexible and secure, and combines unsurpassed global reach with the processing power to support Visa's future growth and product innovation." » Continue Reading
Visa International has announced that the value of all purchases and cash withdrawals made with Visa Commercial payment solutions worldwide reached US$317 billion for the four quarters ended June 30, 2006, growing 24 percent year over year. » Continue Reading
East Japan Railway Company (JR East), NTT DoCoMo, JCB and bitWallet have announced that they have agreed to share a common platform to enable their e-payment brands - Suica, iD, QUICPay and Edy - to share the same point-of-sale reader/writer device and data center. The system is expected to begin commercial operation with the Suica and iD brands in January 2007, with QUICPay and Edy to be added subsequently. » Continue Reading
Philip Lowe, Assistant Governor (Financial System) of the Reserve Bank of Australia has given a presentation to the Australian Bankers' Association and the Australian Payments Clearing Association Forum titled "Payment Systems Evolution: Where to From Here?" (PDF). A background paper titled Payment Systems Developments and Architecture: Some Background (PDF) is also available. The presentation and background paper examine two related issues: whether the development of payment products in Australia has been keeping pace with that abroad and on the implications of a number of Australia's payment systems being based on bilateral technical and business linkages vs. a more centralized approach.
TowerGroup has announced a new research report titled "Prepaid Cards: A Critical Market Foundation of Europe's SEPA Plans" that concludes that a sharp rise in the deployment of prepaid products over the next 10 years will be key to supporting bank profitability. However, TowerGroup also "believes that European banks success will be elusive as long as the use of cash remains high - underscoring the need for a true debit-based alternative that does not include identity recognition as part of the electronic payment." » Continue Reading
MobileLime has announced that Chevy Chase Supermarket is the first merchant in the Washington DC metro area to offer its patrons rewards and instant savings linked to their cell phone with Mobile Rewards from MobileLime. » Continue Reading
ShopNBC and GE Retail Consumer Finance have announced they have entered into an exclusive multi-year agreement to launch a new ShopNBC branded MasterCard as well as an improved ShopNBC private label credit card. » Continue Reading
TSYS Acquiring Solutions has announced plans to integrate Discover Network card acceptance into its offering for merchant acquirers and independent sales organizations (ISOs) - offering merchants consolidated servicing, statementing and settlement. » Continue Reading
The Mobile Marketing Association has announced that it has launched an m-Commerce Committee to develop best practices, standards and other guidelines for mobile-commerce initiatives. The committee will serve as a consortium between wireless carriers and key players in the m-commerce ecosystem, including brands, retailers and media. The committee's goal is to create a framework that provides consumers with a simple, consistent, user-friendly m-commerce experience across the industry. » Continue Reading
The Network Branded Prepaid Card Association (NBPCA), a non-profit, inter-industry trade association created to advance the success of network branded prepaid cards, has launched its first membership year with twenty-eight members, all leaders in the prepaid card industry. The NBPCA has developed a three-year business plan with specific deliverables for each year, the goal being to materially enhance the business environment for network branded prepaid cards. » Continue Reading
Joris Evers reports for CNET News.com about the new Banking Identity Safety Scorecard released by Javelin Strategy & Research that suggests Bank of America, JP Morgan Chase and Washington Mutual do the best job for their customers in preventing, detecting and resolving ID theft
Visa USA has announced the introduction of Visa Signature Business, a new premium business payment card Visa says is "designed to address the business and lifestyle needs of small business owners by delivering valued and relevant benefits, greater purchasing power, and flexible features." » Continue Reading
We have received news of the following recent management changes:
Atlanta-based InComm says it anticipates the greatest demand in history for its products and services this Holiday shopping season. "We've never seen demand so high," said Brooks Smith, InComm President and CEO. "We have a unique perspective in that we see the increased demand and resulting sales across all retail channels. We expect our gift card sales to at least triple last year's numbers, and our retail partners and their customers will benefit from expanded offerings at more convenient shopping locations." » Continue Reading
OPEN from American Express has announced the expansion of its OPEN Savings program with the launch of airline partners Delta Air Lines and JetBlue Airways. OPEN Savings gives small business owners automatic savings virtually every time they use an American Expres Business Card to make purchases at any OPEN Savings partner. » Continue Reading
Stuart Elliott reports for the New York Times about Discover's new advertising campaign - featuring scissors. Elliott suggests that unlike more humdrum ads for other credit cards, "one that shows scissors being used to slice and dice credit cards like so many vegetables may get noticed." See also Discover's new website featuring the new campaign.
MasterCard Worldwide has announced a "business-to-business advertising campaign to support the company’s recent unveiling of a new corporate identity and tagline, The Heart of Commerce™. The campaign, which targets customers, acquirers, issuers and merchants, builds on the company’s new corporate positioning, demonstrating its globally integrated structure and strategic vision to advance commerce worldwide." » Continue Reading
Tom Zeller Jr. reports for the New York Times on a statistic developed by the Privacy Rights Clearinghouse - roughly 93,754,333 private consumer records have been compromised in some fashion. What do consumers get if their data has been compromised? Typically, one year of free credit monitoring paid for by the company responsible for the compromise. Zeller goes on to report "in the battle to stop the great hemorrhaging of personal data, the enemy is us."
Paul Gores writes for the Milwaukee Journal Sentinel about how local businesses have begun using remote check capture services to make deposits of checks they receive into their checking accounts. Gores quotes one industry analyst who says "it's proven to be a very attractive product that is very easy for banks to sell." As it turns out, several Wisconsin companies are involved in providing remote deposit capture services nationally including Fiserv, Metavante and Wausau.
Peter Judge writes for the UK's TechWorld about near field communications (NFC) technology - reporting that some industry analysts believe that the mobile operators are slowing down the deployment of NFC for payment applications by insisting they have to recoup the cost from the contactless payment services NFC could enable.
Kim Hart reports for the Washington Post about Chevy Chase Supermarket and plans to implement a new pay-by-cellphone payment system developed by MobileLime within the next year. Hart reports that "Kevin Kirsch, 39, who co-owns the store with his father and brother, is hoping to ease customers into using their phones as a shopping tool by first sending coupons, giveaways and store updates via text messages."
Robin Sidel reports for the Wall St. Journal on efforts by MasterCard and Visa to ensure merchant compliance with the industry's PCI data security protection rules. Sidel reports that, beginning October 1st, Visa will begin focusing on the largest US merchants - a total of 334 merchants who in aggregate represent nearly 50% of Visa's annual US volume.
We have received news of the following recent management changes:
AuctionBytes' David Steiner reports on his latest experiences buying online - using a shopping list of 10 items - at several ecommerce sites including eBay Express, Amazon, Overstock and Google Checkout. Some of his findings include not being able to pay with PayPal on Overstock even though it's promoted on the site, that eBay Express recently increased the number of sellers you can shop at in a single checkout from 5 to 10, and, while he likes Google Checkout, he'd really prefer to shop from multiple sellers and do a single checkout.
Julie Forster writes for the Twin Cities Pioneer Press that locally based companies Ingenix and Fair Isaac are each working on technology to help identify false claims that contribute to skyrocketing health-insurance costs. She reports that "at Ingenix headquarters in Eden Prairie, 220 doctors, nurses, mathematicians, lawyers, former law-enforcement officers and others work to detect scams and abuse. The company is working with ID Analytics, an identify-fraud company based in San Diego, to develop the technology."
David Lazarus writes for the San Francisco Chronicle about the infuriating card activation process currently in use by Bank of America for activating a debit card after receiving it in the mail. Lazarus - who also reports that the bank says it's now in the process of changing the irritating experience - describes the sales pitches the bank has inserted in its activation process designed to sell new cardholders on subscribing to an identity theft protection or extended-warranty service. What's particularly irritating about the bank's current process is that it doesn't provide any quick and easy mechanism (e.g. press "#" to skip this) to just get the %^&*$ card activated and be done.
Francine Brevetti writes for InsideBayArea.com about the growth in the remittance market - estimated to have reached $256 billion in transfers in 2005 and growing at more than 10 percent annually. Brevetti examines how banks have, over the last several years, been competing more effectively with the major players like Western Union and Moneygram.
The Technology Quarterly in the current issue of The Economist has an article titled Secrets of the Digital Divide that explores fraud detection systems - saying that "with an estimated $250m in annual sales, and yearly growth topping 25%, the largest and fastest-growing category of fraud-detection software is that used to spot fraudulent credit-card transactions."
Michael Arrington reports on his TechCrunch blog about a new "dropbox" feature he says PayPal is preparing for a "select range of users."
At its Investor and Analyst Conference earlier this week, First Data CEO Ric Duques listed seven trends in the payments industry: economic globalization, increased consumerism in developing countries, payment options = competitive advantage, emerging potential in mobile payments, double-digit growth of prepaid cards, online payments will grow at double-digit rates, and evolving consumer expectations.
David Berlind blogs for ZDNet about how banks are dealing with the the FFIEC guidance issued last fall to strengthen online authentication while trying to avoid changes that inconvenience their customers. According to Berlind, "the trick has been to come up with "1b" or "single factor+" solutions: solutions that primarily rely on what you know, but that also emulate, to the extent that they can, what you have (the 2nd factor in true multifactor security)."
We have received news of the following recent management changes:
Earlier this week, we announced the publication of Professor Ronald J. Mann's new book "Charging Ahead - The Growth and Regulation of Payment Card Markets". Mann is a professor at the University of Texas School of Law in Austin. We've had our hands on the book for a couple of days and thought we'd share some of our reactions to it here. All in all, we highly recommend Mann's new book! » Continue Reading
The latest Nilson Report has arrived featuring a look at midyear results for general purpose cards in the US (subscription only). This issue also has articles discussing PNC's re-entry into the payment card business, a new service from Quake for mobile remittances, and Discover's recent network expansion deals.
Intuit held an Analyst Day yesterday. Of particular interest is the Small Business presentation given by Senior Vice President Brad Smith which includes some great insights into the small business market in the US along with Intuit's success with its Innovative Merchant Solutions merchant card acquiring business.
Discount retailer Dollar General Corporation, and Visa USA have announced that consumers will be able to use Visa credit and check cards at more than 8,000 Dollar General stores in 34 states, beginning tomorrow, September 22. Dollar General has been accepting PIN-based debit cards since 2003. » Continue Reading
Jackie Crosby writes for the Minneapolis-St. Paul Star Tribune about the University of Minnesota's plan to allow tuition payments to be made by credit card. According to Crosby, "students will be able to pay using American Express, MasterCard and Discover cards, but not Visa, which sought to collect higher fees to provide the service." The university will be charging a 2.75% convenience fee on the credit card payments it accepts.
The Payments System Research department of the Federal Reserve Bank of Kansas City has published a new working paper titled "Payment Industry Dynamics: A Two-Sided Market Approach" by Zhu Wang and James McAndrews. The paper explores the "micro-foundations of two-sided payment markets, and emphasizes the roles that consumers' income distribution and merchants' size heterogeneity play in adopting new payment devices. The findings suggest that both the increasing concentration of payment card networks and the growth of consumer income relative to card service costs may help explain the puzzles surrounding payment card interchange fees."
The Payments System Research department of the Federal Reserve Bank of Kansas City has published a new working paper titled "Payment Card Rewards Programs and Consumer Payment Choice" by Andrew Ching and Fumiko Hayashi. The paper "seeks to analyze the effects of payment card rewards programs on consumer payment choice by using consumer survey data." » Continue Reading
Ecommerce malls are back. In the early days of ecommerce, there were some true believers who felt that the real-world shopping mall would transform into online malls. Some tried, most failed. Today, they're back. In the latest mall news, American Express today launched the Bonus Points Mall, "a new benefit that enables Membership Rewards enrollees to earn two points for virtually every dollar spent at more than 100 top brand name online retailers." » Continue Reading
Market Platform Dynamics recently interviewed YeePay CEO Bin Tang about the Payments Ecosystem Challenges and Opportunities in China and has posted it on their Paying with Plastic website. YeePay recently announced the completion of a round of financing led by Draper Fisher Jurvetson, DFJ Dragon and joined by Intel Capital China, WR Hambrecht and several other institutional investors » Continue Reading
Darry Madden writes for the Brattleboro, VT Reformer about the city's just finalized plans to deploy a smart card-based parking payment system. Madden says "rarely does anything related to parking get characterized as "so cool." According to the story, initially the card will be a simple parking card available at convenient spots downtown. But eventually some would like to see it accepted at area businesses, like any debit card. "That way, in this cashless economy, anyone with a parking card could buy a cup of coffee, for example."
Melissa McGrath writes for the Idaho Statesman that WinCo Foods has started accepting debit cards - but not credit cards. McGrath quotes Mike Reed, a WinCo spokesman, who says "debit cards don't charge nearly as much as credit cards. The costs of (debit cards) are pretty close to check-handling fees." WinCo is, to some extent, following the strategy of Costco who only accepts PIN-debit or American Express cards. Other merchants try to "steer" consumers to PIN-debit transactions because of the cost savings vs. signature debit or credit cards. The settlement in the merchant litigation vs. Visa and MasterCard in June 2003 allowed merchants to accept either only debit cards or both debit and credit cards with those brands. Debit cards are also now clearly marked as being debit cards so merchants can quickly identify them.
Amazon Business Solutions has launched "Fulfillment by Amazon" and "WebStore by Amazon," which Amazon says gives "small and medium-sized businesses access to Amazon's order fulfillment, customer service, customer shipping offers, and underlying website technology to improve the experience they offer their customers." » Continue Reading
GlobalCollect has announced the integration of Ukash and paysafecard, two prepaid solutions, into its online payment platform WebCollect. According to GlobalCollect, "cash is still the only purchasing power for those who do not possess a card or a bank account such as young online shoppers. These prepaid solutions are also targeting shoppers who do not want to disclose payment details online due to fears around identity theft and security or those who desire anonymity and discretion." » Continue Reading
We have received news of the following recent management changes:
mBlox and O2 have announced they'll be holding a seminar next Tuesday, September 26, in London to discuss "Mobile Banking: The 5th Channel To Customers". "Attendees on the day can expect detailed information on: the financial benefits of mobile banking; how to ensure customers have the best possible experience of mobile banking and a case study from MasterCard that demonstrates how SMS can help cut fraud. Speakers are confirmed from mBlox, LogicaCMG, MasterCard Worldwide, Garanti Bank, Informa Telecoms and Media and O2."
Raleigh, NC-based State Employees' Credit Union has introduced a new enhancement to its credit card payment program that allows cardholders to select a different fixed percentage amount for their minimum monthly payment. According to the credit union, the change was made to accommodate members who want to more aggressively reduce their credit card debt. Prior to the recent enhancement, the minimum payment default amount was 3% of the credit card balance. With the new option, members may now choose to have their default percentage set at an increased percentage amount of 4%, 5% or 6% of their balance. SECU also offers an "Auto Pay" feature that automatically drafts the minimum credit card payment from an SECU account to assure there is never a delinquency.
Earlier today, First Data Corp. held an Investor and Analyst Conference in New York City. A replay of the webcast of the conference will be available for listening to for the next few days. The presentation slides (PPT) are also available online.
Gertrude Tumpel-Gugerell, Member of the Executive Board of the European Central Bank, gave a speech at the EFMA Cards and Payments Conference in which she looked at the future of retail payments in Europe. Among her comments, she says "the experience in Norway is a good indication that cards can become a good replacement for cash as long as they become a more convenient payment instrument than cash." Both the text and presentation slides (PDF) from her speech are available online. Her slides include one very interesting graph showing the consumer payment preferences in France based upon the amount of the purchase.
Sarmad Ali writes for today's Wall St. Journal about how SMS-based text messaging is the latest way consumers are ordering their morning coffee (and more) while in-bound to the office. Ali writes about New York-based Mobo Systems, Menlo Park-based MyTango, and UK-based Software For Restaurants and their different flavors of remote order and pay. Several years ago, a Seattle-based company named Ontain pioneered remote order and pay services (using a simple IVR approach instead of SMS-based text messaging) and conducted several trials in various markets with, among others, Starbucks. Ontain's approach failed to achieve commercial success, however, and likely was one of those cases of being ahead of its time.
Amy Hook of MarketWatch reports in today's Wall St. Journal about a slight downward trend in credit card balances of college students. Several recent articles have highlighted a decline in the acceptance of credit cards by colleges and universities for tuition payments - as university administrators are steering students to pay tuition bills using electronic checks instead of cards and, in the process, saving merchant card discount fees the universities would otherwise have to pay.
First Data International has announced a strategic, long-term agreement with Barclaycard, the UK-based international cards and lending business. Under the terms of the agreement, First Data International will provide credit card and loans processing for Barclaycard's new partnership programmes in the UK on its VisionPLUS processing platform, as well as a full range of contact centre services and managed services to include plastics personalisation, applications processing, payment processing, statements, letters and PIN mailers. Barclaycard intends to migrate existing partnership programmes and other portfolios to the VisionPLUS platform over time. » Continue Reading
Morgan Stanley reported financial results for its third quarter ending August 31 - including results for its Discover card business unit. According to the company, "net sales volume was a record $25.7 billion, a 15 percent increase from a year ago, reflecting increased cardmember usage and the acquisition of the Goldfish credit card business."
Verid recently announced a deal with RSA Security to incorporate Verid's KBA (Knowledge Based Authentication) solution into RSA's "adaptive authentication" product suite. Glenbrook's Carol Coye Benson spoke yesterday with Kevin Watson, Chairman & CEO of Verid, to learn more about KBA and the company. » Continue Reading
We have received news of the following recent management changes:
Finpago and WageWorks have announced the FSAok AnyCard that automatically selects prescription and over-the-counter medication purchases at participating merchants and submits them for reimbursement when paid for with a card registered to participate in the program. » Continue Reading
Priyanka Joshi writes from New Delhi for the Business Standard about PayMate's new mobile payment service. Joshi quotes PayMate's founder and managing director Ajay Adieseshann who says he "wants 100 million mobile subscribers, but is aware that critical mass must first be acquired. We are willing to wait - and remain committed to our goal of being the Visa/Electron of the mobile payment world."
Fiserv has announced that a growing number of U.S. financial institutions have discovered significant increases in one-day funds availability along with lowering labor costs by deploying its Virtual Item Exchange (VIE). » Continue Reading