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« July 16, 2006 - July 22, 2006 | Main | July 30, 2006 - August 5, 2006 »

July 29, 2006

Don't Trust Email from Financial Institutions

On Thursday, the Wall St. Journal's Walter Mossberg provided some blunt advice to consumers about how to avoid the latest scams. At the top of his list: Don't trust email from financial institutions. According to Mossberg, "email is so easily manipulated by crooks that you simply should never, ever consider any email from a financial institution as legitimate."

Minsheng/Smartpay Deal - China's Biggest Opportunity?

Philip Lin writes for Pacific Epoch about the recent Smartpay announcement that it would be working with China Minsheng Bank to enable the banks' customers to pay for all sorts of goods and services with SmartPay technology using cellular SMS. Lin concludes "one thing seems likely - the "network effects" in this model will probably drive a "winner takes all" ending. And the winner will be a very valuable company, easily more valuable than any public tech company in China."

Opinion - Let The Market Decide On Interchange Fees

Wayne T. Brough, chief economist at FreedomWorks, writes a lengthy opinion piece on the subject of credit and debit card interchange fees suggesting that "the value of card payment networks must be considered before imposing arbitrary caps or restrictions on how these markets function. Regulating this market could harm consumers, innovation, and the economy as a whole."

A Look At Personal Lending On Prosper.com

Kara McGuire writes for the Minneapolis-St. Paul Star Tribune about personal lending on Prosper.com. "In a recent report, Online Banking Report founder Jim Bruene predicted that, within five years, there could be as many as 100,000 person-to-person loans in the United States per year, worth more than $1 billion."

FDIC Six-Month Moratorium On Industrial Loan Company Applications

The FDIC announced yesterday that its Board of Directors had approved a six-month moratorium on applications for deposit insurance by Industrial Loan Companies (ILCs), as well as on notices of change in bank control for existing ILCs. The FDIC will not make any final decisions or accept any future applications for deposit insurance or notices of change in control for ILCs during this period.

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July 28, 2006

Pay By Touch Named to AlwaysOn AO100 List

Pay By Touch has announced that it has been named to the AlwaysOn AO100 List as one of the top privately-held companies. The AO100 List recognizes the 100 most innovative and successful private firms in the United States based on market potential, customer adoption and investor value.

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China Mobile's Mobile Wallet Service

The Beijing Star Daily reported earlier this week that "China Mobile's Mobile Wallet service will be available to Industrial Bank account holders from August. On activation users will be able to pay their mobile phone bill, check their bank account balance, and buy lottery tickets and mobile phone insurance via their handsets. The services will be available via SMS or call center, and both activation and use are currently free."

Fighting Payment Card Chargebacks

Glenbrook's Allen Weinberg has published an opinion piece outlining how chargeback analysis and chargeback management can and should be viewed as a strategic opportunity for merchants.

More On UK Plastic Card Spending

APACS, the UK payments association representing card companies, has released spending figures for the UK that show that debit cards continue to dominate as the more popular method of plastic payment, accounting for 70 per cent of the purchases made in the UK in the first half of 2006.

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Bank of America Poised To Take No. 1 Bank Title From Citigroup

Bloomberg reports that Bank of America is close to passing Citigroup as the number 1 bank as measured by market value. According to Bloomberg, "shares of Bank of America, run by Chief Executive Officer Kenneth Lewis, climbed 61 percent in the past five years, increasing the market capitalization to $231 billion. Shares of New York-based rival Citigroup, which has expanded outside the U.S. and built up a top three investment-banking franchise, rose 1.6 percent, bringing its value to $233.9 billion." Valerie Bauerlein and Clint Riley also report this story for this morning's Wall St. Journal.

Paymate: Pay Via Mobile At Restaurants!

Moneycontrol.com reports from India on Paymate India's plans to offer its mobile payment service at top restaurants in Mumbai. "We will begin with high-profile restaurants and hip and trendy joints where the customer base is more inclined to take up paying using mobiles," said Mr Ajay Adiseshan, Founder and Managing Director, Paymate India. He says the company will target coffee bars next.

Study: Credit Card Issuers Ensnare Many in Debt Traps

Patricia Sabatini writes for the Pittsburgh Post-Gazette about a new report on credit card debt that "accuses card issuers of pushing consumers to borrow beyond their means and calls for new regulations to end the most abusive industry practices." According to Sabatini, "The Life and Debt Cycle" (PDF), a 35-page report released yesterday by the National Consumer Law Center in Boston, "says the industry's tactics are particularly devastating to older Americans who have fewer resources to dig themselves out of a hole."

MasterCard Selects Students to Lead Campus Financial Literacy Programs

MasterCard Worldwide has announced it has chosen 11 college students currently serving as Capitol Hill interns to lead financial literacy programs when they return to their campuses in the fall. The effort is part of MasterCard's Are You Credit Wise? consumer education program, which utilizes a peer-to-peer teaching model to educate college students on the importance of financial management skills and the responsible use of credit cards.

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Credit Card Spending Falls In UK

The BBC reports on APACS latest statistics finding that UK credit card spending was £58.4bn, down from £60.6bn during the first half of 2005. Spending on debit cards rose during the same period to £92.5bn, from £88.8bn at the same time last year.

Bank of America Exec Says End to Cuts Near

Ted Griffith reports for the Wilmington News-Journal on comments made yesterday by Bank of America's Bruce L. Hammonds in an interview after a Thursday speech to the Wilmington Rotary Club. Hammonds said he sees international expansion, including offering credit cards in China, as a key growth opportunity for the bank's Wilmington-based credit card business. He also said that the bank is nearly done with merger-related job cuts.

Headline News - July 28, 2006

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

July 27, 2006

Visa Changes CISP/PCI Merchant Definitions

Evan Schuman reports for eWeek on changes by Visa USA effective July 18th to the merchant levels for its Cardholder Information Security Program. The article reports that Visa has changed the definition of Level 2 so that it applies to all merchants not just ecommerce merchants. Level 2 is defined as any merchant processing 1,000,000 to 6,000,000 Visa transactions per year. Level 1 continues to apply to all merchants regardless of acceptance channel while Levels 3 and 4 continue to apply only to ecommerce merchants. According to the table on the Visa web site, merchants newly included in the Level 2 definition will have until Sept. 30, 2007 to be validated as complying with the PCI Data Security Standard.

New Papers From The Philadelphia Fed Payment Cards Center

The Payments Card Center of the Federal Reserve Bank of Philadelphia has announced that three new papers have been added to its website.

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SmartPay and CMBC Form China Mobile Payment Partnership

SmartPay Jieyin Ltd has announced a China mobile payments partnership with China Minsheng Banking Corp., Ltd.

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Citigroup Taps Lending Unit To Win Bank Branch Customers

Clint Riley reports for the Wall St. Journal on efforts by Citigroup to use some its CitiFinancial offices as "gateway branches" for opening new Citibank checking or savings accounts.

Online Bill Payments Get More Convenient

Luladey Tadesse reports for the Gannett News Service that "consumers fed up with writing checks and the hassle of buying stamps increasingly are switching to paying bills online." She reports that about 35 percent of bills were paid online last year by Americans, up from 25 percent in 2004, according to the online market research firm Harris Interactive Inc.

Americans Ready for Mobile Payments: Visa

Maria Bruno-Britz reports for Bank Systems & Technology that Americans are ready to use their mobile phones for payments. Accroding to a recent survey of 800 consumers conducted by Visa USA in which "61 percent of participants between 25 to 34 years of age said they were interested in making purchases with their mobile phone." Bruno-Britz reports on comments Michele Janes, director of the product innovation and coordination team at Visa who says "over the past six to 12 months, we've seen a drastic increase in interest among [card] issuers in mobile payments. Several of our issuers are asking about this."

Koreans Hold 2nd Largest Number of Cards After US

Lee Hyo-sik reports for the Korea Times that, according to the Bank of Korea, "Korean consumers had an average of 3.35 credit and debit cards each as card companies issued about 161 million cards in 2004 when the country’s population stood at about 47 million." This compares with an average of 5.15 cards issued per person in the US,3.05 cards per person in Japan, Singapore with 2.39 and Britain with 2.36.

Wachovia Returns To Credit Cards

Binyamin Appelbaum reports for the Charlotte Observer on Wachovia's plans to return to the credit card business on Monday, replacing its earlier deal where MBNA issued cards on its behalf. Following the acquisition of MBNA by Bank of America earlier this year, Wachovia exercised its option to pull the card issuing away from MBNA, receiving a $100 MM breakup fee from MBNA in the process. Appelbaum reports that company executives say that Wachovia's "new Visa cards will feature relatively lenient rules and penalties, including absolution for one late payment every 12 months." "We're choosing to play the game differently," said Steve Boehm, Wachovia's head of credit cards.

Retailers Say Visa and MasterCard Violate Antitrust Laws

AccountingWEB.com reports on last week's testimony by attorney W. Stephen Cannon, representing the Merchants Payments Coalition, to the Senate Judiciary committee accusing Visa and MasterCard of violating federal antitrust laws through their practice of setting the interchange rates charged by banks to complete consumer transactions.

July 26, 2006

Walk-In Bill Payment

Mercator Advisory Group has released a new report that finds walk-in bill payments represent a significant portion of the recurring bill payment market in the United States. According to Mercator, at the current rate of growth, over $80 billion in walk-in bill payments will be processed by 2009.

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Card Firms Curb Mailings -- A Bit

David Enrich writes for the Wall St. Journal about how the major credit card issuers have been rethinking their marketing strategies and investing more in other channels than mail - even though mail solicitations still account for over half of credit card applications received by issuers.

Credit Card Hike In Fees Hurt Small Businesses

Ohio Representative Tom Brinkman Jr. writes an opinion piece for Cincinnati.com about the impacts that rising card interchange fees are having on small businesses. According to Brinkman, "these hidden fees drive up the cost of goods and services for all consumers whether they pay with plastic, cash or check, and it makes it difficult for our community retailers to make a living. Some of my community's retailers paid more in interchange fees to Visa and MasterCard than they made in profit. That's not fair and it needs to change."

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