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« July 2, 2006 - July 8, 2006 | Main | July 16, 2006 - July 22, 2006 »

July 14, 2006

Networks Begin to Make a Case for Cards at Vending Machines

Digital Transactions previews an upcoming story about cashless vending, touching on the general trend towards higher ticket sizes at vending machines.
Currently, no more than 3% of the 8 million vending machines deployed in the U.S. accept credit cards, according to Michael L. Kasavana, a professor in hospitality business at Michigan State University. That figure is expected to reach 50% in 2009, says Kasavana.
The article says that vending machines generate about $45 billion in sales annually, according to London-based Research firm Mintel International Group Ltd.

PASS Consortium to Payment-Enable Microsoft Windows Vista

A new payments consortium called PASS (Payments As a Secure Service) announced its formation at the Microsoft Developers Conference. The consortium, which is led by IP Commerce, intends to exploit new features in Windows Vista, including the operating system's enhanced security and discovery features.
Currently, small businesses interface with credit card companies and financial services firms in the financial ecosystem through highly proprietary relationships based on one-to-one technology connections. PASS redefines this relationship by enabling Independent Software Vendors, System Integrators and Value-Added Resellers to create service-oriented financial management solutions in software applications fulfilled by best-in-class providers through a single service provisioning system.
Participants in PASS include BankServ, Chase Paymentech, PayPal, and Pay by Touch among others.

Discover and First Data Sign Merchant Processing Agreement

First Data announced that it will be offering Discover Network card acceptance as part of an integrated service to small- and medium-sized merchants.
Under this agreement, First Data will provide processing services to merchants for Discover Network acceptance that promotes a broader range of payment options at the point-of-sale. Merchants, such as restaurants, retailers, and specialty shops, will receive an easy, cost-effective, all-in-one payment processing solution with the convenience of a single source for statements, settlement, and customer service. First Data sales channels will have full responsibility for pricing, processing, settlement, risk management and customer service for the merchant accounts.
First Data says it will begin pilot programs in selected geographic areas early this summer, with full market deployment coming in Q4 2006.

Headline News - July 14, 2006

Note: Throughout the day, as Payments News happens, this post is updated.

July 13, 2006

Webinar: Hot Topics in Small Payments

Executives from Chase, Peppercoin, TYS, and Visa plan to hold a Small Payments Webinar on July 19th. Moderated by Jeff Green of Card & Payments Magazine, the session will cover contactless payments, card acceptance in the everyday spending market, and emerging loyalty requirements. Jeff Gordan, an Arby's Roast Beef franchise operator, will provide the merchant perspective. Peppercoin will also be unveiling new Ipsos-Insight data on the growth and obstacles facing the contactless payments adoption, as well as which markets have the greatest potential.

The PayPal Exodus

As a follow up to the news that Jeff Jordan, president of PayPal, plans to leave the company in the fall, Rachel Rosmarin steps back in Forbes.com to look at key employee resignations over the last several years. While mostly balanced, there are a few jabs:
"There's brain drain at PayPal, and it reflects how things are going over there," says Eric Jackson, a former interim vice president of marketing at PayPal who left the company in 2003.
Be sure to see the "Where Are They Now" sidebar for a good overview of the other companies created by PayPal alumni.

Use of Payroll Cards Grows

Margarita Bauza of the Detroit Free Press writes about the use of payroll cards. "Payroll bank cards, popular with people who do not qualify for bank accounts or those who are more likely to use expensive check-cashing services, account for 21% of all consumer transactions. That translates to a $2.7-billion business in the United States alone. Boston-based consultant Aite Group says payroll card use is expected to grow to $27.1 billion in spending by 2009."

ChoicePoint Realigns Business Units

In a bid to realign its business footing, ChoicePoint announced plans to sell its direct marketing, forensic DNA and shareholder services businesses units. As part of the realignment, the company also announced that it is buying some of the assests of ePolicy, including one of the company's software products for the insurance industry.

MasterCard Single Platform for Authorization Transactions

MasterCard has announced a new system upgrade to its global processing platform that lets all MasterCard issuers around the world processing authorization transactions via a single, common interface.
"We are taking significant steps to make it easier, for example, for banks in say, Britain or Brazil to expand their card operations into Dallas or Dubai," said W. Roy Dunbar, president of MasterCard Global Technology and Operations. "Banks also will be able to pilot innovative, breakthrough payment technologies like SecureCode, PayPass and Chip/PIN cards without having to go through the trouble of making substantial changes to their own infrastructure to test these technologies."
The global authorization platform is scheduled to be operational by late 2007, with all banks transitioned by late 2009.

GAO Testifies on Industrial Loan Corporations

The US General Accounting Office has released testimony entitled "Industrial Loan Corporations: Recent Asset Growth and Commercial Interest Highlight Differences in Regulatory Authority".
The ILC industry has experienced significant asset growth and has evolved from once small, limited-purpose institutions to a diverse industry that includes some of the nation's largest and more complex financial institutions. Between 1987 and 2006, ILC assets grew over 3,900 percent from $3.8 billion to over $155 billion. In most respects, ILCs may engage in the same activities as other depository institutions insured by the FDIC and are subject to the same federal safety and soundness safeguards and consumer protection laws. Therefore, from an operations standpoint, ILCs pose similar risks to the bank insurance fund as other types of insured depository institutions.
The 32-page testimony is available as a PDF.

July 12, 2006

Obopay, Amp'd Mobile Partner For Mobile Payments

Obopay has announced that said it has entered into an extensive partnership with Amp’d Mobile that "marks a milestone in the adoption and deployment of mobile payment systems in the U.S." The two companies said they will offer the new mobile payment service, Obopay-Amp’d to every Amp’d subscriber in the coming months. Amp’d will promote the service to all Amp’d subscribers In addition, the two companies agreed to an aggressive joint promotion on university campuses across the country this fall.

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July 11, 2006

House Passes Bill To Limit Online Gambling, Card Usage

The AP reports that the House has passed legislation today that would "prevent gamblers from using credit cards to bet online and could block access to gambling Web sites." Reps. Bob Goodlatte, R-Va., and Jim Leach, R-Iowa sponsored the bill.

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Cellfire Secures $10 Million Series B Led by Menlo Ventures

Mobile coupon service Cellfire has announced that it has secured $10 million in Series B funding led by Menlo Ventures. Cellfire is a free downloadable application that provides coupons from a local and national retailers within the user's geographic region.

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MasterCard, MTA, Citigroup Trial NYC Subway "Tap & Go"

MasterCard Worldwide, the Metropolitan Transportation Authority, MTA New York City Transit and Citi Cards and Citibank have announced the beginning of a six-month contactless payment trial in select New York City subway stations with pre-selected Citi credit card and Citibank customers.

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Card Sorting Exercises - A Consolidated Stored Value Card

Khoi Vinh, Design Director for NYTimes.com, blogs about his desire to consolidate all of the various stored value cards in his wallet into a single card - saying "I'm no financial engineer, obviously; I’m just a guy who wants a lighter wallet. Consolidating stored value cards is one possible solution — I’m not going to hold my breath for it."

Elvis Presley Prepaid Visa Debit Card

Rock on! Elvis Presley Enterprises and EDP Licensing, Inc. have announced the launch of the first Elvis Presley Prepaid Visa card. According to the website, the card is issued by First Premier Bank.

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PayMate Mobile Payment Service Raises Millions

Matt Marshall writes for the San Jose Mercury News' SiliconBeat blog about PayMate, an India-based startup focusing on enabling mobile payments that has recently received venture financing. According to Marshall, "the investment continues the partnership formed by Google founding investor Ram Shriram and one of Silicon Valley's best-known venture firms, Kleiner Perkins."

HealthScore Credit Score For Healthcare Lending

Canopy Financial has announced HealthScore, a new credit score intended to be used specifically for predicting and managing the unique risks associated with lending to consumers with high-deductible health plans.

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TSYS Acquires Card Tech Limited

TSYS has announced the acquisition of Card Tech, Ltd., a privately owned London-based payments firm that has implemented its payments software for six of the 25 largest global banks and three of the largest global card issuers. Worldwide, the company has approximately 190 clients from 70 countries -- primarily banks. Its applications are certified by all of the major global payment networks. The all-cash transaction closed on 11 July 2006. The new company will be known as TSYS Card Tech.

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Mobile Commerce Back On The Move

Michal Lev-Ram writes for Business 2.0 about mobile commerce - saying its time has finally come. In the article, Lev-Ram looks at BillMonk, PayPal Mobile, Obopay, TextPayMe, and MyTango. According to Dan Schatt, a senior analyst at Celent, "The stars are finally aligning. This will happen a lot faster than most people realize."

Earning Points With Your Debit Card

Marshall Loeb writes for MarketWatch about debit card reward programs from Washington Mutual, North Fork Bank, Chase, and Citibank.

Bill Would Close Wal-Mart Bank Loophole

Reuters reports that a "bipartisan bill aimed at closing a loophole that allows retailers such as Wal-Mart Stores Inc. to own industrial loan companies (ILC) was introduced in the U.S. House of Representatives on Monday. Sponsors Paul Gillmor, an Ohio Republican, and Barney Frank, a Massachusetts Democrat, said their legislation would restore the traditional separation between banking and commerce." A copy of the proposed legislation (PDF) is available online.

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July 10, 2006

"Like Many Americans, She Can't Stop Spending"

Betsy Stark reports for ABC News about the growth in the debt burden of American consumers over the last decade - "while the average family's income grew by 9 percent, credit card debt has increased 81 percent; student loan debt is up 137 percent and mortgage debt jumped 154 percent" - and profiles 27 year old Erin Browne who, Stark reports, "like many Americans, she can't stop spending."

Lawmakers Aim To Keep Big Retailers Out Of Banking

John Poirier reports for Reuters that "U.S. House of Representatives lawmakers this week will propose restricting ownership of banks by commercial companies in a legislative push to derail the efforts of retailing giants to move into financial services."

Google Eyes PayPal, Other Payment Methods

Digital Transactions reports that the executive in charge of Google Checkout, Benjamin Ling, has PayPal under consideration as one of the payment methods that the new service may eventually support. Ling's also critical of eBay's decision to not allow eBay sellers to use Google Checkout as a payment option.

Consumer Groups Blast Fed Credit Card Report

Kathy Chu reports for USA TODAY that consumer groups are up in arms about a new Federal Reserve report that finds little evidence that card issuers are offering credit to consumers "indiscriminately" - saying that the report is "unduly protective of banks." See last week's Payments News story for a link to the PDF version of the report.

Visa, MasterCard To Unveil New Security Rules

Jaikumar Vijayan reports for Computerworld that "Visa USA and MasterCard International will release new security rules in the next 30 to 60 days for all organizations that handle credit card data" according to comments made last week by Eduardo Perez, vice president of corporate risk and compliance at Visa.

China: Portable Payments

Li Weitao reports for China Daily on the mobile payments field trial launched last month on Xiamen by China Mobile, Nokia, Philips and E-Tong Card. According to a recent survey by ACNielson in Shanghai, more than 80 per cent of respondents hoped to integrate banks cards and smart cards into their mobile phones.

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