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Christopher Peterson of the University of Florida - Levin College of Law has written a paper titled "Usury Law, Payday Loans, and Statutory Slight of Hand: An Empirical Analysis of American Credit Pricing Limits" (PDF). » Continue Reading
Visa International's Latin American and Caribbean Region has announced that POS volume increased 26 percent to US$116.3 billion during the four quarters ending on March 31, 2007. » Continue Reading
A recent survey commissioned by Cardways.com revealed that "81 percent of men and women prefer to receive gift cards for their birthday. Electronics ranked second followed by clothes and tickets to a show or sporting event." » Continue Reading
Parago, a provider of rebate, incentive and promotion solutions, has announced "FSV Payment Systems has been selected as a strategic partner for prepaid services. In the newly formed partnership, FSV Payment Systems will manage prepaid card processing while their partner, Meta Payment Systems will provide issuing bank services." » Continue Reading
JetBlue has announced "a partnership with Bill Me Later, a non-credit card form of payment for customers purchasing JetBlue travel. The payment method allows customers to safely and conveniently make JetBlue travel reservations at http://www.jetblue.com using the innovative payment system of I4 Commerce." » Continue Reading
First Data Corp. has announced that "its shareholders approved the merger agreement with an affiliate of Kohlberg Kravis Roberts & Co. (KKR). Of the shares that were voted, over 98% were cast in favor of the merger. Upon the closing of the merger, the Company's shareholders will be entitled to receive $34.00 in cash, without interest, for each share of First Data common stock held.
"I am very pleased to receive such broad support for this transaction from our shareholders," said Chairman and CEO, Ric Duques. "With most of the necessary conditions now having been met, we are well on our way to closing this transaction, as expected, in the third quarter."
The New York Times this morning published an editorial criticizing regulatory oversight of the credit card industry - saying that the "federal agencies that are supposed to regulate the banking and credit card industries have failed utterly to keep pace with deceptive and unfair practices that have become shamefully standard in the business."
TSYS Europe and Lloyds TSB have announced the launch of the Lloyds TSB money transfer card in the UK. "The new Silver account from Lloyds TSB includes an innovative money transfer prepaid product, aimed particularly at the growing number of newly arrived migrants living and working in the U.K." » Continue Reading
comScore has "released a report on U.S. e-commerce spending for the second quarter of 2007, which showed that non-travel (retail) e-commerce grew 23 percent versus year ago to $27.2 billion, while online travel spending increased 14 percent to $20.3 billion. Total U.S. e-commerce spending climbed 19 percent to $47.5 billion during the period." » Continue Reading
In an article titled 'Credit card industry resists change as fees shock many", Christine Dugas writes for USA Today about the Federal Reserve's proposals to require clearer disclosures by card issuers. She writes that the credit card industry "welcomes better disclosure but opposes curbs on its ability to raise fees or rates or change policies. Consumers have yet to see any significant easing of fees and rates that have sparked outrage."
Separately, John Poirier reports for Reuters that Rep. Carolyn Mahoney "plans to offer legislation to address some of the problems plaguing credit card customers who have been blindsided with interest rate changes and various fees."
The Credit Slips blog reports on six research papers to be presented at the upcoming conference "Recent Developments in Consumer Credit and Payments" sponsored by the Federal Reserve Bank of Philadelphia on September 20-21.
The annual report of the Federal Reserve Bank of St. Louis examines banking mergers and acquisiitons over the past two decades. "Our goal is to make certain that the banking industry evolves in a way that preserves the benefits of competition and ensures a safe and sound banking system. So, even if your bank has changed owners three times in the past two years, rest assured that the Fed (or another regulator) has scrutinized each transaction to make sure that the best interests of the industry, the local market, the bank and you are upheld."
Forrester's Mary Pilecki has published a new report titled "Coming Soon: Remote Deposit Capture For Consumers?" "With check writing quickly dwindling as a payments instrument, RDC for consumers might not have time to evolve into readiness for mass adoption, in which case it is likely to be a bridge technology relevant for a maximum of 10 years."
Vanessa Rozier writes for the Naples (Florida) Daily News about Wal-Mart's new MoneyCard - a prepaid Visa debit card. "Wal-Mart called the card a “life changer,” but it could be more of an industry changer, as the company grows into the banking industry."
We have received news of the following recent management changes:
Ryan Kim writes for the San Francisco Chronicle's business section about mobile banking - "Wells Fargo is the latest bank to add mobile service, following Citibank, Bank of America, Wachovia and SunTrust, all of which started similar services in the past few months. Most of the country's top 20 banks are either offering the service or trying it out."
Curtis Arnold writes for CardRatings.com about the Federal Reserve's proposal to amend Regulation Z (announced on May 23) to "improve the effectiveness of the disclosures consumers receive in connection with credit card accounts and other revolving credit plans by ensuring that information is provided in a timely manner and in a form that is readily understandable." The Fed is asking for public comments on the proposal - which must be received on or before October 12, 2007.
While on a recent family vacation, one of our visits was to the San Diego Zoo's Wild Animal Park just outside of Escondido, California. A wonderful experience indeed - except when it came to buying things. The card acceptance practices and technology at the Wild Animal Park could sure use some work. » Continue Reading
The press continues having a field day with the checking account overdraft fee/overdraft loan issue recently highlighted by the Center for Responsible Lending. In the Atlanta Journal-Constitution, Péralte C. Paul explores the issue - saying "for those who are checkbook challenged when it comes to balancing the all-too-important checking account, that $4 Starbucks latte can end up costing that much plus another $30 in overdraft charges if the funds to cover it are lacking."
Ehab Bandar writes on his Banking Unwired blog about Google Checkout - and how consumers might get confused. He believes that "the benefits of Google Checkout are only truly realized with an all or nothing approach."
Morriss Partee of EverythingCU.com blogs about what he really wants in the way of mobile banking services: SMS-based query/retrieval of useful information including account balance, details within budgeting categories, etc.
From the Shanghai Daily comes this report on China UnionPay's efforts to expand merchant card acceptance in China. "With the growth, UnionPay has 616,700 merchants and nearly one million points of sale."
Citi has announced that it will begin piloting a new mobile peer to peer payment service with Obopay to select new and existing Citi customers as part of a limited consumer trial in Boston and Chicago. » Continue Reading
Capital One and Yahoo! Shopping have announced a partnership "creating the Capital One Saving Zone, a portal on Yahoo! Shopping that offers exclusive deals on select merchandise to Capital One cardholders. At the Saving Zone, Capital One cardholders can receive up to a 40 percent savings on already discounted items, as well as an additional 10 percent off everything they purchase on the site using their Capital One credit card." » Continue Reading
Online Resources Corporation has announced a definitive agreement to acquire Internet Transaction Solutions, a biller service provider (BSP) to receivables management companies and utilities. » Continue Reading
The latest quarterly edition of the Payments Newsletter from Financial Insights (PDF) is now available. This edition looks at BerkShares, a local currency in western Massachusetts. "The main idea of BerkShares is to keep money in the local community by encouraging residents to spend with local businesses. The exchange rate on BerkShares results in an effective 10% discount on everything bought with the currency, but it may only be used at businesses that accept it."
MasterCard has announced the first MasterCard PayPass pilot programme in Italy, in partnership with Poste Italiane – business unit Banco Posta. » Continue Reading
This morning's Heard on the Street column by the Wall St. Journal's Robin Sidel reports on American Express - saying that some investers are concerned "that the company is increasing its exposure to consumers at a time when some of them may have trouble paying their bills."
First Data International has announced an agreement to acquire Check Forte, a Brazilian provider of data capture, switching and POS terminal management as well as network processing services to banks for bill payment transactions initiated at off-premises merchant locations. » Continue Reading
As anticipated earlier, GE Money has launched the Earth Rewards MasterCard - along with a new My Earth Rewards web site dedicated to this new "green" product. "Every time you use your Earth Rewards Card, a portion of your net purchases will go to offsetting the emissions created by your purchases and activities. For example, spending $25 contributes enough to offset the emissions associated with running a typical refrigerator for a month. Spending $500 offsets the emissions from driving almost 1,500 miles in an average car." The full press release is here.
Wesabe has announced the release of an open-source Firefox extension that lets members automate the secure upload of bank data to their Wesabe account. After members "record" download sessions with their banks, the scripts auto-start and play to deliver updated transaction information to Wesabe. » Continue Reading
Visa USA has announced the "launch of an enhanced Visa Signature Dining Web site and a unique partnership with Zagat Survey, one of the most trusted resources for restaurant ratings and reviews. The new www.visa.com/signaturefood site was built to fulfill Visa Signature cardholders’ appetite for epicurean experiences and information, enabling them to view Zagat’s restaurant ratings and reviews; access unique experiences, such as wine tastings, cooking classes and private chef events; and make dining reservations through the Visa Signature Concierge." » Continue Reading
BanX has announced plans to increase nationwide efforts of the Company's BanXcard Maestro Card - say it is "a safe substitute for traditional checking accounts that allow users to load cash on BanXcards at thousands of card-loading retailers including convenience, grocery and department stores and gas-stations." BanX claims its fee structure is simpler and less expensive when compared to Wal-Mart's MoneyCard. BanX's card is issued by BankFirst. » Continue Reading
Dave Birch blogs about research done by the Swedish central bank looking into the costs of various forms of payments in that country. He goes on to discuss some recent McKinsey numbers saying "European banks lose a lot of money on the non-SEPA payment instruments (ie, cash and cheques), they make reasonable money on SEPA instruments and they make a lot of money on payment-related (rather than direct payment) revenues."
Claudia Deutsch writes for the New York Times about GE Money's expected launch today of the GE Money Earth Rewards Platinum MasterCard - a card that "allows cardholders to forgo a 1 percent cash rebate on purchases and earmark that amount for projects that reduce greenhouse gases."
Jim Bruene blogs about Key Bank's new checking account promotion - "Open a Key Bank free checking account. Make two automated deposits of $100 or more and take home an Apple iPod nano worth $150." He notes that TD Canada Trust is doing something similar.
Javelin Strategy & Research has published a new report titled "2007 Online Banking and Bill Payment: Trends, Forecasts, and Strategies for Reinvigorating Growth and Adoption" that suggests that "consumers can financially do well by doing good, improving financial control while eliminating the paper bills, statements and checks that harm the environment through forest destruction, wastewater, fuel consumption, air pollution and landfill waste." » Continue Reading
Wells Fargo has launched Wells Fargo Mobile - "a browser- based mobile banking solution, available to all of its customers nationwide. With this new service, Wells Fargo allows its customers to access their Wells Fargo financial relationship through a web browser on their mobile device." The bank is using a new URL: http://wf.com for access to the mobile service. » Continue Reading
The Center for Financial Services Innovation announced has announced the "CFSI Catalyst Fund, L.P., a private equity limited partnership created to cultivate new financial services companies and solutions focused on the underbanked." » Continue Reading
Arden Dale writes for the Wall St. Journal that "credit card use is soaring among small businesses. Many entrepreneurs find it's faster and simpler to sign up for a card than to apply for a bank loan." Or, because they can't qualify for a bank loan.
Consumers are maintaining their existing credit card relationships rather than rolling outstanding balances over to other cards, according to research recently conducted by Auriemma Consulting Group. The research found that "only 15% of credit card holders had transferred a balance in the past year, and 43% of those respondents said their last balance transfer was for an amount of $2,000 or less. Besides not carrying credit card balances in the first place--so not having anything to transfer--the most frequently cited reason respondents gave for not moving the amount they owed from one credit card to another was satisfaction with their current interest rate." » Continue Reading
In a press release, TSYS has acknowledged that "Synovus Financial Corp., which owns 80.8% of TSYS' outstanding stock, will ask its Board of Directors to consider whether to distribute its ownership interest in TSYS to Synovus' shareholders in a spin-off transaction."
Yesterday, American Express reported financial results for the second quarter 2007. Amex reported that spending on its cards increased 15 percent with more than two million new cards issued in the quarter, a 10 percent increase. Amex's average merchant discount rate was 2.57% - unchanged.
Visa USA, Visa International and Arcaneo have announced a "strategic alliance aimed at helping companies integrate commercial payment cards with enterprise meetings management technologies. Both organizations are working together to create solutions that provide businesses with the information they need to accurately manage meeting expenses and assess their return on investment." » Continue Reading
We have received news of the following recent management changes:
Mercator Advisory Group has published a new report titled "Sizing Canada's Growing Card Market" that presents an overview of the current state of the Canadian payment card market, an analysis of recent market trends and metrics, a discussion of EMV compliance, and a review of contactless payment and new products and reward programs. » Continue Reading
JPMorgan Chase has announced a new report titled “Controlling and Cutting Travel & Entertainment Costs” that examines how "some of the nation’s leading companies share cost- and time-saving steps that they have taken to maximize their travel program and help minimize the impact of rising business travel costs." » Continue Reading
Aite Group has published a new report titled "Prepaid Cards: The State of the Industry" saying that it "expects the value of branded and private label prepaid card transactions to amount to US$178 billion by 2010, up from US$113 billion in 2007." » Continue Reading
The Smart Card Alliance has published a white paper (PDF) and accompanying presentation (PDF) on merchant implementation of contactless payments. "This guide assists any merchant who is considering deployment of contactless payments. Merchants can use the information in this guide to decide whether contactless payment is right for them and to plan for, implement, and roll out contactless payments successfully."
Aneace Haddad blogs about his company's mobile payment solution using NFC - and includes a video demonstrating how it works. "Rather than simply doing a basic, boring payment transaction, the demo shows the payment terminal also delivering a targeted promotion to the customer, based on criteria set by the merchant. Enter the amount on the POS terminal, tap the phone and the payment receipt is printed, which now includes an offer that says “Buy one value meal, get a free dessert”."
We have received news of the following recent management changes:
The Merchants Payments Coalition issued another press release today saying that "merchants welcomed lawmaker concern over credit card interchange practices at a hearing this week in the House Judiciary Committee's Antitrust Task Force. The Merchants Payments Coalition (MPC) chairman and senior vice president and general counsel of the National Retail Federation Mallory Duncan told the panel that the collective setting of interchange fees by Visa and MasterCard is a violation of federal antitrust laws. MPC advocates a payment system that is transparent and open to competition." » Continue Reading
The European Central Bank has published the fifth in a series of progress reports on the Single Euro Payments Area (SEPA) (PDF). In particular, the bank has called on the banking industry to set up a rival debit card scheme to challenge the dominance of Maestro in the EU - saying "such a scheme would stimulate competition and would ensure the close involvement of European banks in the governance of the scheme. ... Any additional European debit card scheme should operate under EU law and should, accordingly, process personal data in line with EU data protection laws."
Arthur E. Wilmarth, Jr. of the George Washington University Law School has published an article in the Connecticut Law Review titled "Wal-Mart and the Separation of Banking and Commerce" (PDF). His conclusion is clearly stated: "Congress should prohibit further acquisitions of ILCs by commercial firms."
Yesterday, the US House Judiciary Committee Antitrust Task Force held a hearing to examine credit card interchange fees. Mehgan Belanger reports for Convenience Store News on the many inconsistencies and "opposing facts regarding the fees that banks charge merchants for accepting credit-card payments."
Progressive Grocer also reports on yesterday's hearing.
The upcoming acquisition of First Data Corp. by KKR required it to deal with recent changes in Colorado law affecting FDC's industrial bank, First Financial Bank. "The Colorado State Bank Board agreed to a four-part transaction that will effectively convert First Data's industrial bank, First Financial Bank, into a non-depository trust called First Data Trust Co. LLC."
Separately, First Data reported second quarter financial results earlier today.
One of our partners asked me today about the search box in the upper right corner of every Payments News page. We recently changed how that box works - and probably didn't explain that change very effectively. So, let me try again.
The upper right search box is a Google custom search engine that's been specifically optimized by me and a group of volunteer helpers to focus search results on web sites that are somehow payments related. As a result, it's actually the best possible Google search you can do - for payments-related content. If you bookmark Payments News - or use it as your home page - you'll always have this payments-customized search handy.
If you're wanting to only search Payments News pages for something specific, you can use the search box that's "below the fold" in the right sidebar. That search by default only searches Payments News content pages. Hope that helps explain things!
More information about search is available on the Payments News Search page.
The Federal Reserve Bank of Chicago has published "Competitive Forces Shaping the Payments Environment: What’s Next? - A Conference Summary" (PDF) by Tiffany Gates, associate economist, and Katy Jacob, research specialist. The paper is a summary of the Chicago Fed's seventh payments conference held on May 10–11, 2007.
Testimony from today's US House Judiciary Committee Antitrust Task Force hearing on credit card interchange is now available on the task force's web site. Click on the name of the witness to access the prepared testimony.
The Merchants Payments Coalition issued a press release regarding the testimony of Mallory Duncan, Senior Vice President and General Counsel of the National Retail Federation and Chairman of the Merchants Payments Coalition. Duncan "called the collective setting of interchange fees by Visa and MasterCard a violation of federal antitrust laws that costs merchants and their customers more than $36 billion every year."
The Emerging Payments Research Group of the Federal Reserve Bank of Boston has published "Consumer Behavior and Payment Choice: 2006 Conference Summary" (PDF) by Margaret Carten, Dan Littman, Scott Schuh, and Joanna Stavins. » Continue Reading
Bank of America reported second quarter financial results this morning. Included in the results was a statistic about its Keep the Change debit card savings/reward program: "Keep the Change(TM) passed the 5 million mark of customers who have saved more than $500 million since the inception of this innovative program." Even pennies, nickels and dimes add up over time! Keep the Change is an optional free service announced in October 2005 that allows customers to have the bank round up purchase amounts to the nearest whole dollar - putting the difference into a savings account. The bank provides an annual 5% match.
Internet Retailer reports on a recent survey by Stars for Kidz that reported that "77% of children 8 to 14 have completed an online transaction."
PayPal is challenging its developer community in a PayPal Developer Challenge content to develop Facebook widgets that use PayPal. The grand prize available in the Challenge is $10,000.
Michelle Singletary, personal finance columnist for the Washington Post, follows up on the "Out of Balance" report from the Center for Responsible Lending last week and says that "many users have discovered, the debit card has the same problem as its credit card cousin -- you can spend over your limit, causing yourself all kinds of financial havoc." She suggests that financial institutions should "restrain their fee frenzy".
We have received news of the following recent management changes:
eBay reported second quarter 2007 financial results today - saying that "PayPal had another exceptional quarter, with accelerating Total Payment Volume (TPV) and revenue growth. PayPal’s Merchant Services business recorded outstanding results, as PayPal expanded its global footprint to new geographies and currencies during the quarter." » Continue Reading
The US House Judiciary Committee Antitrust Task Force is holding a hearing this Thursday, July 19, on the subject of credit card interchange fees. According to the Task Force's web site, testimony at the hearing will be provided by John Buhrmaster, President, First National Bank of Scotia, New York; Mallory Duncan, Senior Vice President and General Counsel, National Retail Federation; Edward Mierzwinski, Consumer Program Director, U.S. PIRG; Tim Muris, Of Counsel; O’Melveny & Meyers; and Steve Smith, President and Chief Executive Officer K-VA-T Food Stores, Inc.
TowerGroup says that while historically private equity has not been strongly attracted to the technology companies serving the financial services industry, private equity firms are now "starting to see beauty in the financial technology sector, reflected in the value of its products, its revenues and its client base. Stickier revenue models, more spending by clients, and a global business environment that demands innovation will encourage private equity firms to take a closer look at the technology providers to the financial services industry, accelerating investment in this sector." » Continue Reading
In an article titled 'Options Grow For Investors To Lend Online", Jane Kim writes for the Wall St. Journal about new web-based services enabling investors to lend money to strangers online. She reports that Prosper.com has about $60 million in loans outstanding so far this year and cites the Online Banking Report's estimate that a total of about $100 million in loans will be originated by all providers this year.
Payformance Corporation has released the results of a survey showing that healthcare providers want to transition to electronic claim settlement. » Continue Reading
Broox Peterson shares some of his thoughts in a commentary reflecting on Capital One's recent introduction of a new "decoupled debit" card program. » Continue Reading
We met recently with Alex Rampell, CEO of TrialPay, a Mountain View, California-based company that provides merchants with a new payment method that allows customers to pay for products by trying or buying from a network of advertisers. » Continue Reading
The Bancorp has announced "an agreement with BankFirst, a South Dakota banking corporation, to acquire its "Stored Value Solutions" ("SVS") business. SVS is a leader in the stored value card industry, also known as the prepaid card industry, with more than 3.7 million prepaid cards issued at June 30, 2007." » Continue Reading
The Economist profiles Nick Ogden and his company VoicePay, a provider of voice authentication-based mobile payments.
Tempo Payments made two announcements this morning. The first, a "Decoupled Debit Option for Financial Institutions" that "enables financial institutions and other issuers to rapidly deploy comprehensive ACH-based debit card programs." The second, the "availability of the Tempo Payment Platform, the first hosted solution that enables financial institutions and other issuers to rapidly deploy innovative card payment solutions." » Continue Reading
Anne Kate Smith interviews James Scurlock, author of Maxed Out, for Kiplinger.com. Turns out he started out wanting to make a movie about why Americans are so overweight - but then changed to "the other addiction we all have: debt".
PAYjr has announced a prepaid card for teens that allows them to "upload pictures for the design of their card." » Continue Reading
Wells Fargo has announced that "Wells Fargo ExpressSend customers with qualifying accounts now can have transaction fees discounted or waived and have more choices in how they remit money to Mexico, El Salvador, Guatemala, China, Vietnam, India and the Philippines." » Continue Reading
We have received news of the following recent management changes:
