The Financial Services Technology Consortium (FSTC) has announced that the General Services Administration (GSA) is requesting information on the capability of commercial and other entities to provide identity credential services to support public access to Internet-based online government services. A copy of the RFI is available for download.
Digital Transactions, In an article titled 'Study Warns of Contactless, Other Rising Risks for Top Acquirers", writes about a recent TowerGroup report titled "Taking Charge: Essentials of U.S. Bank Card Acquiring" and speculates that implementation of RFID technology by major retailers might represent a risk to major US acquirers.
Glenbrook's Linda Elliott has been following the banking industry's efforts to comply with the FFIEC Internet Banking Guidance issued almost a year ago. Here, Linda provides the following update on what the industry has been doing - and talking about:
The implementation deadline for FFIEC Internet Banking Guidance looms at the end of this year, and after almost a year of studying both the guidance and their options, banks are beginning to show their hands in addressing the guidance. Clarifications from the FFIEC last month added little to the set of considerations for most institutions, but re-iterated that the implementation target is the end of the year, and that ‘do nothing’ was not considered a valid response, even if a bank is willing to accept the inherent risk in that approach.
The Guardian reports on a decision by RBS to abandon providing its cardholders credit card cheques (aka as "convenience cheques"). In the UK, pressure has been building against the banks as regulators and consumer groups have been challenging the practice while the banks claim they provide the cheques for their cardholders' benefit. According to one industry analyst, the cheques "cost more than using your card, you don't get an interest-free period even if you pay off the balance immediately, and you don't get the same protection as when you use your card."
The Payments System Research Department of the Federal Reserve Bank of Kansas City has published an article by Barbara Pacheco, senior vice president of financial services, titled "The U.S. Retail Payments System in Transition: Federal Reserve Initiatives" (PDF). In the article, she writes that "the big story is the adoption of the debit card for everyday purchases, with transaction volume increasing 25 percent per year. Embraced by consumers who want the convenience of a card with the discipline of the tie to a checking account, the number of debit card transactions surpassed those made by credit card in 2003."
We have received news of the following recent management changes:
Chase Paymentech Solutions has announced a new data security compliance program targeted to small-to-medium sized merchants -- those who process less than 20,000 e-commerce and/or one million card present transactions of a single card brand annually.
Dave Alexander writes for the Muskegon Chronicle about the launch of new Debitman-based debit cards by Muskegon, Michigan-based Wesco that he says "will provide the regional chain of gas stations and convenience stores relief from high bank card transaction fees and provide discounts to customers." Wesco and Debitman announced the new card program last week.
Evolution Benefits has announced a pilot test with the Hartford Public Schools of TeacherDollars, a new debit card program developed with funding from The Robert & Margaret Patricelli Family Foundation, card technology from Evolution Benefits, and program leadership from the Hartford Public Schools.
Jerry Gleeson reports for the Journal News (NY) about New York State's plans to begin paying unemployment benefits into accounts that will be accessed via debit cards.
MasterCard has announced zero liability protection for small business cardholders effective September 1, 2006 along with a "Build Your Business" sweepstakes to promote its small business product offerings. MasterCard is also launching a new MasterCardBusiness.com site, "where small business owners can find further information about the "Build Your Business" promotion and zero liability protections, as well as tips on how to manage employee benefits, ways to market their businesses on a budget, and helpful money management advice."
China Unionpay (CUP), China's only national electronic payment and interchange network operator, has announced it has opened its first regional representative office in Singapore. The new representative office will "facilitate collaboration in the regional payment industry, as well as further develop trade ties between Singapore and its neighboring countries. CUP is planning to launch similar offices in Europe, the United States and other parts of Asia in the future.
Fredricka Paul reports for The State News that Michael Kasavana, Michigan State University National Automatic Merchandising Association-endowed professor, predicts that vending machines that accept credit and debit cards will become more popular in coming years. "By 2009, half of the six million vending machines will be capable of having cashless technology," Kasavana said. "About half of those will have card readers."
RSA Security has announced that Goldleaf Technologies is now offering the RSA Adaptive Authentication solution to its banking and credit union customers.
The American Bankers Association has released results of a recent survey of consumers that concludes that although branch banking still ranks first overall among consumer's usage, younger customers behave very differently.
The new issue of the Visa Quarterly focuses on emerging markets in an interview with Visa International's Debbie Arnold, vice president and managing director for emerging markets. Other articles include Financial Literacy Unveiled, Visa's Remittance Solutions, a look at WAY Systems' Mobile Transaction Terminal, and Credit Bureaus and Visa.
First Data Corp. has announced that Todd Strubbe has returned to the company as president of First Data Debit Services. Strubbe will oversee First Data's debit processing business which includes the STAR Network, reporting to David Bailis, president, First Data Financial Institution Services.
YeePay has 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.
The Washington Post's Caroline Mayer writes about a colleague's frustration with his Chase-issued Amazon.com Visa card and its paper-based reward certificates. He says "It's no surprise I guess. While they want to make it easy for me to spend my money, they'd like to make it hard for me to spend their money."
David Kesmodel reports for the Wall St. Journal about concerns raised by the Independent Community Bankers of America about pending legislation in Congress that "would require financial institutions to block payments between U.S. residents and online casinos." Bankers and the ICBA are concerned that the ACH system provides no information about the nature of a recipients business and "would require a massive – and costly – overhaul to allow banks to identify transactions."
Lore Croghan writes for the New York Daily News about how the "25-and-under crowd is hooked on debit and credit cards" - including using them for small purchases. Croghan writes about a recent Visa USA survey about using cards for small purchase amounts.
With the cost of gasoline at record levels, payments companies aren't missing any opportunities to promote new card programs designed to help consumers save money on gas. Today, Ecount announced seeing a 500% growth in demand for their Fuel Card program over last year - saying that the dramatic increase in demand is due to numerous companies turning to the Ecount Fuel Card program to help provide relief from high gas prices for their employees and customers. Separately, National Payment Card LLC has announced the launch the "first ACH payment card for the gas industry" - saying it provides a way for consumers to pay less for gasoline through an immediate cash reward and for station operators to substantially lower their processing costs for participating consumers compared with the current charges of credit and debit card interchange and processing fees.
Glenbrook has announced the addition of a new session of our popular two-day intensive Payments Boot Camp program to be held in Denver on November 7th and 8th. Each of the Glenbrook Payments Boot Camps is taught by full partners at Glenbrook with many years' experience in the business, operations, technology, marketing and risk management of payments. Glenbrook Payments Boot Camps are a great professional networking venue as well - with many opportunities to talk with other attendees both during the workshop and at a reception on the first night. Learn more about the Denver Payments Boot Camp and registration details at the Glenbrook web site.
Jane Kim reports for the Wall St. Journal that some banks have begun paying higher interest rates on checking accounts in an effort to attract new accounts. But, no surprise, she cites industry experts who say that checking accounts are still "a lousy place" for consumers to save.