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« June 25, 2006 - July 1, 2006 | Main | July 9, 2006 - July 15, 2006 »

July 08, 2006

The Credit Game Is Getting a Second Scorekeeper: VantageScore

Damon Darlin reports for the New York Times on VantageScore, the recently introduced alternative to the long-standing FICO scores produced by Fair Isaac. According to the three credit bureaus that created VantageScore - Experian, TransUnion and Equifax, it improves risk prediction of future credit performance by weighing more factors. VantageScore also reportedly is more accurate at assessing consumers with "thin files" - having a short credit history.

New 'Chip and PIN' May Cause Confusion Overseas

James Gilden writes for the Travel section of the Los Angeles Times about how American travelers might experience some difficulty using their mag stripe based credit cards in countries that have recently migrated to "chip and PIN" card technology - like the UK. "If a merchant doesn't want to take a magnetic-strip card, the traveler needs to be persistent," says Brian Triplett, senior vice president of emerging product development for Visa USA said. "Request the merchant to look into it," Triplett said. "Don't take that first 'no' for an answer."

Out Of India: Paymate

Rabin Ghosh reports on Paymate, a mobile commerce startup in India that has secured $5 million in venture funding from two of Silicon Valley’s leading venture capitals firms, Sherpalo Ventures and Kleiner Perkins Caufield & Byers.

July 07, 2006

NACHA Publishes New Education, Training Materials

NACHA has announced the availability of new education and training materials for businesses and financial institutions to implement NACHA's new rules on identifying business checks that are ineligible for conversion. The new rules, which become effective September 15, 2006, provide methods for corporate Originators to identify business checks that are ineligible to be converted and provide corporate Receivers with methods to opt-out of check conversion.

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A Look At Coinstar’s Cards for Coins

Mark Mahorney writes on the blog Seeking Alpha about Coinstar's prepaid cards for coins program - saying "I know it’s not very logical, but I think I’m a lot more likely to toss my coins into their machine if I can get a card for some free coffee or a free book."

A Look At Target's Credit Card Issuing Business

Business Week takes a look at Target's credit card issuing business - which it says was responsible for three-quarters of the company's 15% earnings gain in the first quarter - and reports that "a close look at Target's $5.8 billion credit-card operation reveals a portfolio growing at four times the rate of other lenders and brimming with riskier borrowers -- a dangerous combination."

Wright Express Bidding For Retail Decisions?

Ben Harrington reports for the UK's Daily Telegraph on reports that Wright Express has entered the bidding to acquire Retail Decisions. Harrington also reports that Comdata and FleetCor as well as a private equity firm may be among other potential bidders for Retail Decisions.

Australia: Credit Cards Should Go Chip and PIN

The Sydney Morning Herald reports on a review by the Australian House of Representatives, Standing Committee on Economics, Finance and Public Administration, of the Reserve Bank of Australia and Payments System Board Annual Reports 2005 which includes recommendations that the payments industry in Australia consider implementing "PIN authorisations for credit cards, online functionalities for EFTPOS cards and chip technology for all cards." The committee also reviewed the Reserve Bank of Australia's actions regarding interchange fees and concluded "that the benefits of the reform, at this point, outweigh any alleged disadvantages." The full committee report (PDF) is available online.

How Google Checkout Could Threaten PayPal

Wade Roush writes for MIT's Technology Review about Google Checkout and the threat it could represent to PayPal for consumer ecommerce payments to merchants - even with its lack of a person-to-person payment capability. Roush suggests that, for consumers, it's a "relatively small step to give Google a credit card number and let the company track online purchases, especially when the promised reward is simpler transactions in the future, along with tools like the purchase history and transaction tracker."

[Editor's note: Seems like Wade has his merchant value proposition reversed - our understanding is that Google provides a credit toward Google Checkout fees based upon the amount the merchant spends on Google AdWords - at the rate of a $1 credit for every $10 spent on AdWords. We also noticed last night that Google is running its own AdWords ads promoting Google Checkout with the language: "Running an eCommerce site? Learn how you can process sales for free."]

July 06, 2006

Debit Authorization Holds Frustrate Debit Cardholders

Audrey Blackwell writes for the Okeechobee News about the authorization holds that debit card issuers often impose on cardholder transactions when purchasing gasoline.

$600 Million Distribution Coming to Merchants

Constantine Cannon, Lead Counsel for United States merchants in the Visa Check/MasterMoney Antitrust Litigation, CV 96-5238 has announced that it has "directed the Claims Administrator to mail checks to Class Members for overcharges on Visa and MasterCard signature debit and credit card transactions during the period October 1992 to July 2003. These payments are being made to Class Members whose claim forms had been submitted and approved for payment by March 31, 2006. This distribution of 494,000 payments involves more than $600 million."

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MasterCard Worldwide Launches 'Win 500 Flights Sweepstakes'

MasterCard Worldwide has announced a new consumer promotion entitled the "MasterCard Win 500 Flights Sweepstakes," offering "MasterCard cardholders the opportunity to win a grand prize of 500 round-trip airline tickets to any destination in the world." MasterCard PayPass cardholders get a double entry into the promotion when they use their contactless cards.

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eBay Updates Accepted Payments Policy - No Google Checkout

eBay has updated its Accepted Payments Policy to add Google's recently launched Google Checkout service to the list of payment services not permitted on eBay.

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Better Than Cash?

The current issue of The Columbia Journal of Transnational Law has an article titled "Better than Cash? Global Proliferation of Payment Cards and Consumer Protection Policy" (PDF) by Arnold S. Rosenberg, Assistant Professor of Law, Thomas Jefferson School of Law, in which he suggests that the "American use of credit cards is not normative" and is, in fact, a global anomaly.

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BankServ DepositNow! A/R for QuickBooks

BankServ has announced DepositNow! A/R for QuickBooks - "a new system that lets QuickBooks users deposit checks to their bank accounts electronically from their offices and automatically update their accounting records at the same time. It is the first commercially available remote deposit product that is integrated with Intuit's QuickBooks software, which is currently in use by more than 3 million small businesses in North America."

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Debit Plastic Feels 'Real'

Lisa E. Phillips writes for eMarketer about consumer attitudes toward debit cards and debit card rewards programs based upon the recently announced TNS' Financial Services Consumer Credit Card Program Study.

PayPal's Jeff Jordan Plans Fall Departure

eBay has announced that PayPal President Jeff Jordan "plans to leave his position in the fall to spend more time with his family" and that Rajiv Dutta will replace Jordan as President of PayPal.

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July 05, 2006

Live Chat Comes To Online Banking

Valerie Bauerlein reports for the Wall St. Journal on the increasing use of live chat services by major banks to provide real time help to online banking customers. According to Bauerlein, at least six of the twelve biggest banks have either launched live chat or are in the midst of rolling it out. She cites evidence from Bank of America and Citigroup about the significant positive effects live chat has on close rates for things like home equity loans and mortgages.

GE's Road to Credit

Kathryn Kranhold and Robin Sidel report for the Wall St. Journal on GE's expansion of its "road to credit" program that provides private label cards with low credit lines to consumers who otherwise might not qualify for traditional credit cards.

Wal-Mart And Financial Services

Robin Sidel and Ann Zimmerman report for the Wall St. Journal on Wal-Mart's presence in the financial services business - citing its current offerings of check cashing, bill payment, money orders and remittance services provided through a partnership with Moneygram - and exploring its plans for the future if its application for a Utah ILC is approved.

Newport's Card Accepting Parking Machines Frustrate Motorists

Sean Flynn reports for the Newport Daily News about citizen frustrations with a recently deployed card accepting pay-and-display parking system in Newport, RI. "It's a nightmare," said Richard Korn, co-owner of Yesterday's and The Place restaurants in Washington Square. "People have been getting tickets for the past eight weeks because the machine doesn't work. It's made for so many irate customers and angry visitors to Newport. It's unbelievable." [Editor's note: Sounds like the first law of payment systems - consumer convenience - has been violated with this system!]

Zions Bank Embraces Biometric Check Cashing Service

Zions First National Bank, a subsidiary of Zions Bancorporation, and Pay By Touch have announced the introduction of biometric check-cashing to 12 locations throughout Utah and Idaho. The new service, powered by Pay By Touch, uses a finger scan to quickly and securely identify customers when they are cashing a government or payroll check.

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Visa USA and First Data Corporation Settle Legal Dispute

Visa USA and First Data Corporation have announced they have settled a legal dispute that has been pending since 2002 over the processing of Visa payment card transactions. According to the two firms, "as part of this settlement, First Data and Visa agreed to work together to build a stronger business relationship to focus on streamlining the payments processing business. To achieve this, Visa will provide financial support to pursue mutual business opportunities and cost cutting initiatives that are expected to drive new innovation, reliability, security and new merchant acceptance. First Data will transition existing private arrangements between itself and Visa member financial institutions onto VisaNet."

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Tele'imbere: Africa Pioneering Mobile Banking

Oscar Kimanuka reports from Nairobi for AllAfrica.com on the growth in mobile phone usage in Africa, enabling new businesses as well as mobile banking services. Kimanuka reports that, according to Dr Mohammed Yunus, founder of the Grameen Bank of Bangladesh "one can reasonably make a statement that people are poor today because of the failure of the financial institutions to support them in the past."

Retail Decisions In Play

According to a statement released yesterday, Retail Decisions says that "it has received an increased indicative proposal which may or may not lead to an offer being made to purchase the entire share capital of the Company. The Company has also received a number of other unsolicited approaches from third parties. In view of these events, the Board of Retail Decisions has concluded that it should engage in discussions with bona fide potential offerors in order to assess if an acceptable offer will be forthcoming."

Debt Collectors Play Rough

Sewell Chan reports for the New York Times on sharp increases in complaints about "aggressive and sometimes unscrupulous tactics by debt collection agencies." According to the FTC, the tactics used include "misrepresenting the nature, size and status of a debt; making constant harassing and abusive phone calls at all hours; contacting a debtor's relatives, employers and neighbors; failing to investigate claims by consumers that a debt is paid, expired or fraudulent; and threatening to sue or seek prosecution."

99Bill Partners with ICBC to Launch New Payment Services

99Bill has announced a cooperative agreement with Industrial & Commercial Bank of China (ICBC) to activate phone-based payment services that make it possible for users to make purchases and handle payment without logging on to the Internet.

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The Nilson Report - Issue 859

The latest Nilson Report has arrived featuring an in-depth look at point of sale purchase volume at merchants by card issuer in 2005 (subscription only). This issue also has articles discussing general purpose cards in the Middle East and Africa, a look at first quarter 2006 results for Visa and MasterCard in the US, an update on Visa's new dynamic currency conversion rules and on Visa's deal with Verified ID to ease airport screening for travelers.

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