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« December 10, 2006 - December 16, 2006 | Main | December 24, 2006 - December 30, 2006 »

December 23, 2006

An Interview With Fred H. Cate

Law.com's Privacy and Data Protection Legal Reporter interviews Fred H. Cate, distinguished professor of law and adjunct professor of informatics at Indiana University, about his view that concerns about security breaches among the general public and lawmakers are overblown and misplaced fear.

December 22, 2006

Too Many Ways To Pay Into Too Many Systems

In an article titled 'The U.S. Payments System: Needing Consolidation, or Fine As Is?" by Christopher Westfall, Managing Editor of the KPMG Banking Insider, one senior banker is quoted as saying "right now there are too many ways to pay into too many systems." Westfall's article looks at efforts underway examining potential consolidation of US payments - in particular, convergence of the ACH and check image exchanges.

A Look At Blackhawk Network

Josh Fineman writes for Bloomberg about Safeway's Blackhawk Network subsidiary - reporting that "the unit is bringing unexpected gains to the third-largest U.S. grocery chain." Fineman notes that Blackhawk distributes the gift cards of more than 185 retailers, including Starbucks Corp., Barnes & Noble Inc. and Apple Computer Inc.'s iTunes.

Taking Charge At Discover - An Interview With David Nelms

In an article titled Taking Charge at Discover, Liz Moyer and Tara Weiss write for Forbes about David Nelms, CEO of soon to be independent Discover Financial Services. In their interview of Nelms, he comments "the ability to provide debit services made a huge change."

Market Structure and Credit Card Pricing: What Drives the Interchange?

Zhu Wang of the Payments System Research Department of the Federal Reserve Bank of Kansas City has written a new paper titled "Market Structure and Credit Card Pricing: What Drives the Interchange?" (PDF) that "presents a model for the credit card industry, where oligopolistic card networks price their products in a complex marketplace with competing payment instruments, rational consumers/merchants, and competitive card issuers/acquirers. The analysis shows card networks demand higher interchange fees to maximize card issuers' profits as card payments become more efficient. At equilibrium, consumer rewards and card transaction volume also increase, while consumer surplus and merchant profits may not. The model provides a unified framework to evaluate credit card industry performance and government interventions."

Pricing and Welfare Implications of Payment Card Network Competition

Fumiko Hayashi of the Payments System Research Department at the Federal Reserve Bank of Kansas City has written a preliminary new paper titled "Pricing and Welfare Implications of Payment Card Network Competition" (PDF) that examines how competition among payment card networks—three-party scheme networks and four-party scheme networks—affects pricing as well as the welfare of various parties.

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Paper, Plastic......or Phone?

Terri Bradford, Payments System Research Specialist at the Federal Reserve Bank of Kansas City, has written a briefing paper titled "Paper, Plastic......or Phone?" (PDF) that examines mobile-phone payment and banking alternatives in the United States. The paper explores prospects for growth, available technologies, and the outlook for one or more technologies coming to dominate the market.

December 21, 2006

Predictions - Banking 2007

Bankwatch's Colin Henderson blogs about his predictions for banking in North America in 2007. One of Colin's points caught my eye: "Quietly, web 2.0 offerings will start to chip away at the traditional banking business model by levering social internet to eliminate costly bank processes. Social lending, brokerage models, account acquisition models." Be sure to read his full list! Colin will be speaking at the Lift conference in Geneva in February.

EFT/ATM Network Processing Review

Mercator Advisory Group has published a new report titled "EFT/ATM Network Processing Review: Purchasing Services, Building Volume" - a review of the major EFT and ATM processors' offerings to financial
institutions that examines debit processing, the significant cost differences between PIN debit and signature debit, and the impact of rewards programs on issuers, merchants and the consumer.

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Contactless Payments: US Consumer Attitudes and Acceptance

The latest issue of Smart Card Talk, the newsletter of the Smart Card Alliance, has arrived featuring an article titled "Contactless Payments: Consumer Attitudes and Acceptance in the United States". The article is based on a survey commissioned by the Smart Card Alliance and conducted by Javelin Strategy & Research in August, 2006. The article describes the results of the survey and the implications of these results for financial institutions contemplating adoption of a contactless payment option.

Chevron, Texaco Accept American Express Prepaid Cards At The Pumps

Chevron has announced that it has implemented partial authorization at the pump, claiming to be the first major gasoline brand to do so. Partial authorization allows American Express Prepaid Cards, including American Express Gift Cards and American Express Traveler Cheque Cards, to be approved at Chevron and Texaco gasoline dispensers by recognizing the dollar balance on the card.

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MasterCard PayPass Trial In Ohio Turnpike Tollbooths

MasterCard Worldwide has announced that it is "managing a consumer trial of contactless “Tap & Go”™ payments in selected exit lanes and service plazas on the Ohio Turnpike. The trial is being conducted in partnership with the Ohio Turnpike Commission, USA Technologies and Paywerks, Inc."

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First Data Updates 2006, 2007 Outlook

First Data Corp. held an investor/analyst call this morning to update its 2006 and 2007 outlook. A recording of the webcast and the presentation materials are also available.

Global Payments Introduces Mobile POS Solution

Global Payments has announced the introduction of a Mobile POS Solution using the WAY Systems Mobile Transaction MTT 1556 Credit/Debit terminal. The company says the product "combines the security and performance of a traditional POS terminal with the ease of using a mobile phone."

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PayPal Stays Independent In China - For Now

Nicholas Ning writes for the Shanghai Daily about comments made by eBay CEO Meg Whitman regarding PayPal in China saying that it will remain independent - but that she's also open to partnerships with local companies if regulation permits. There have been recent rumors about an upcoming Chinese government regulation that could require a local partner for financial services businesses.

A Nation of Shopkeepers, Mostly Online

James K. Glassman, resident fellow at the American Enterprise Institute, looks at the growth in online retailing and ecommerce - including some results from a survey he helped PayPal conduct earlier this year. "Online sales remain small in relation to total consumer purchases--only about two or three percentage points--but they are gaining tremendous speed while bricks-and-mortar retailers are laboring hard just to run in place."

MasterCard, USA Technologies Expand MasterCard PayPass Deployment

MasterCard Worldwide and USA Technologies have announced that "Cadbury Schweppes Americas Beverages (CSAB) will equip vending machines in several U.S. markets with the e-Port cashless transaction solution to begin accepting all major credit cards, including those enabled with MasterCard PayPass contactless payment functionality."

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ING DIRECT Free Gas Promotion In Atlanta

Better than toasters! ING DIRECT has announced it is running a promotion this morning providing "free gasoline to Atlanta commuters during today’s morning rush hour. Drivers who visit three Shell stations between 6:30 and 9:30 a.m. will receive a free gasoline fill-up as part of ING DIRECT’s campaign to lead Americans back to savings."

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Retailers Play Up The 'Gift' In Gift Card

Ylan Q. Mui writes for the Washington Post about the new variety of retailer issued gift cards showing up in stores this holiday season - as retailers are trying to make them more fun than just plain old mag stripe cards.

An Interview With Richard Mould, Barclays Bank

Dave Birch has posted his podcast interview of Barclay's Richard Mould, head of contactless payments and responsible for the recent deal between Barclays and Transport for London's Oyster card.

December 20, 2006

Visa Gift Card Survey Says Spouses, Moms Hardest To Buy For

According to a new study commissioned by Visa USA, significant others and moms are the most troublesome on holiday shoppers’ lists, and the majority of Americans (83 percent) expect to spend up to three hours researching, shopping and buying a single gift.

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Bankrate Looks At Payroll Cards

In an article titled 'Payroll cards offer convenience at lower cost", James A. Ambrosio writes for Bankrate.com about the advantages of payroll cards - particularly for the unbanked.

Who's News - Payments Professionals Management Changes

We have received news of the following recent management changes:

  • Beverly Kennedy has been named Chief Operating Officer of PayFlex Systems USA, Inc., an administrator of employee benefit programs. Kennedy joins PayFlex from First Data Corp. where she served as President of Healthcare.
Announce yourself! Have you recently taken on a new position in the payments industry? If you'd like to share the news with your colleagues, be sure to tell us about it.

A Home Town Look At Discover's Upcoming Independence

Becky Yerak writes for the Chicago Tribune about yesterday's announcement of the upcoming spin-off of Discover from Morgan Stanley - quoting David Nelms, Discover's chairman and chief executive, as saying the spin-off is "good for us and good for Chicago."

A Perspective On Intuit's Acquisition Of Digital Insight

Glenbrook's Carol Coye Benson had been initially skeptical about Intuit's recent announcement to acquire Digital Insight - as she says "after all, banks have had a long and somewhat rocky road with Intuit over the years and some seem to still have very mixed feelings about their basic value proposition." But Carol has recently become convinced that the new Intuit/Digital Insight business combination could provide some very real value to a bank's small business customers.

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Gift Card Theft Not As Widespread As Advertised

Richard Dalton writes for Newsday that reports of gift card numbers being stolen off racks in stores and then hijacked once loaded with funds are not a large-scale issue. Dalton reports that "Newsday examined about two dozen gift cards from a variety of retailers with an online presence. Nearly all of them had scratch-off codes to prevent theft."

Obopay Launches Mobile Payments On Helio

Obopay has announced partnering with Helio to offer the Obopay end-to-end mobile payments solution to Helio members.

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Annals Of Card Payments

Banksys sends word this morning from Brussels that on Saturday, December 16th, the milestone of 1 billion electronic transactions for 2006 was reached in Belgium. Banksys continues - saying "armed with their debit cards, Belgians have set a new record on December 16th. One week before Christmas, Banksys, the Belgian electronic payment services provider, recorded a yearly total of more than one billion transactions, for the first time in our country’s history."

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