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Looking back at 2007, here are the most read news stories posted to Payments News this year:
In an opinion piece titled "The gift card shuffle" in the Los Angeles Times, Megan Daum writes about the "retail phenomena" of gift cards - saying that her gift card buying "experience left me feeling empty and a bit ashamed. It's as though I had opted to take a class pass/fail, not because the material was difficult but because I was too lazy to study; the gift cards seemed like the ultimate cop-out."
37signal's Jason Fried writes about the process they use for handling credit cards for payment for their online services (including Basecamp, Highrise, Backpack, etc.). Fried writes: "So, credit card processing and set up and all that stuff is a real pain in the ass. It’s definitely intimidating to get started. The industry just feels dirty."
Erick Schonfeld of TechCrunch writes about a patent application by Apple that "hints at a killer future feature that would let iPhone owners bypass long lines by placing orders at coffee shops and other retail outlets right from their phone." Over the years, there have been several "remote order and pay" initiatives - most recently including MyTango.com.
Online Resources Corp. has released results of a recent survey of U.S. households and billers regarding the effect of the current mortgage crisis on bill payment and collection patterns. According to ORCC, the survey shows that fallout from the mortgage sector is spilling over into the broader economy, impacting companies across industries and their ability to collect payments. » Continue Reading
APACS, the UK payments association, has just published a new report titled "Payment Myths" 
that it says "uncovers the facts behind payment trends in Britain." According to APACS, the booklet uses statistical evidence to help consumers better understand the payment options available to them and offers advice on the best ways to manage their finances; no matter what payment method they use. The report uses APACS statistics to show examples of the way we use cash, our susceptibility to fraud and the new demographic make up of online bankers – to name but a few.
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A Japanese inventor, Shigeru Arisawa of Tokyo, was issued US patent 7,311,246 on Dec. 25 for a "method and system of transmitting electronic value information between terminals." The patent has been assigned to Sony Corporation. » Continue Reading
The Federal Reserve Bank of Kansas City's Payments System Research Department has published a new Payment System Research Briefing by Terri Bradford titled "The Evolution of the ACH" . "This article ... summarizes the beginnings of the ACH, exciting changes underway today, and possible further changes in the future."
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Adam J. Levitin, Associate Professor of Law at the Georgetown University Law Center, has published a new paper titled "All But Accurate: a Critique of the American Bankers Association's Study on Credit Card Regulation". From the abstract: "This review article takes issue with three of the main assertions of the American Bankers Association's Study on Credit Card Regulation." » Continue Reading
Adam J. Levitin has a commentary published in today's Chicago Tribune titled "Complex Pricing of Credit Cards Should Be Simplified" in which he argues that the complicated pricing structure of credit cards makes it virtually impossible to determine the potential costs of carrying a balance. He believes that the complexity "helps explain the soaring growth of American credit card debt, now approaching $1 trillion." Levitin notes that while he qualifies "as a savvy and dedicated reader of financial contracts, but frequently I cannot calculate with certainty the costs of carrying a credit card balance, and my calls to card issuers' 800-number servicing lines have done nothing to clarify matters."
In a paper titled "Are Consumers Cashing Out?", Paul Bauer and Daniel Littman of the Federal Reserve Bank of Cleveland examine consumer usage of cash for payments - "Two indirect methods of measuring cash usage suggest that people are indeed switching from cash to more electronic forms of payment, but the process is happening slowly. Innovations in electronic payments may be gradually eroding the advantages of using cash, but cash is still preferred for many transactions."
MasterCard Advisors' SpendingPulse, a macro-economic report tracking retail sales nationally, has reported summary results for the 2007 Holiday shopping season concluding that, for the period between Black Friday and December 24, retail grew by a seasonally adjusted 3.6% over the same period in 2006. » Continue Reading
In a press release yesterday, the National Retail Federation says it "has welcomed a ruling by the European Commission that hidden fees currently charged by MasterCard to process credit card transactions in Europe – similar to those that cost U.S. shoppers $40 billion annually – drive up costs for consumers in violation of EC rules and must be withdrawn within six months." » Continue Reading
AP writers Rachel Konrad and Bob Porterfield write that "Americans are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come." Their story is based upon a review of the SEC filings of securitized credit card debt "representing about 325 million individual accounts."
Visa Inc. has filed a Form 10-K Annual Report with the SEC as well as the first amendment to its previously filed Form S-1 Registration Statement. » Continue Reading
According to Chase Paymentech, Americans rushed to the web on Tuesday, Dec. 18 to complete their 2007 online holiday shopping as Christmas delivery deadlines loomed, resulting in a single-day Chase Paymentech Pulse Index high of $169 million in sales and more than 3 million orders. This notable sales spike is more than 42 percent higher than Friday, December 15th, the peak Pulse Index shopping day in 2006. » Continue Reading
Amazon.com has introduced another new web services offering - this one called DevPay. "This new service allows entrepreneurial developers to wrap their own business models around Amazon S3 and Amazon EC2, taking advantage of Amazon's existing customer base and billing infrastructure. With DevPay, developers can focus on being creative and innovative while dispatching the less-than-glamorous aspects of dealing with bank accounts, credit cards, and so forth to us."
Romina Abal of Edgar, Dunn & Company has published a new article titled "Rich Opportunity in the Unbanked Segment" . "New and unique data from the PaymentDynamicsSM 2007 Preferred Payments Study shows that the conven- tional wisdom regarding the unbanked is overly simplistic at best, and in many ways, simply inaccurate. For instance, many financial institutions may be sur- prised to learn that more than half of the unbanked have attended college, or that only a third of them are rated as having sub-prime credit scores."
TSYS has announced that China UnionPay Data Services Co., Ltd. (“CUP Data”), TSYS’ joint venture with China UnionPay (“CUP”), has successfully completed a bankcard conversion for Shanghai Pudong Development Bank (“SPDB”), one of the largest joint-stock commercial banks in China. » Continue Reading
A coalition of U.S. merchants opposed to unfair credit card fees says it welcomed a ruling by the European Union (EU) Competition Commission that MasterCard’s credit card interchange fees for consumers must be cut across the 26 member nations of the European community. » Continue Reading
Discover Financial Services has announced its financial results for the fourth quarter of 2007 reporting that its U.S. Card managed loans reached $48.2 billion, up 5% from last year driven by a 6% increase in credit card sales volume. Discover says that its "U.S. Card credit quality remained strong, although delinquency rates increased from last quarter reflecting weakening in the U.S. economy. The fourth quarter managed credit card net charge-off rate was 3.84% and the 30+ days delinquency rate was 3.59%."
Rachana Khanzode reports for the Financial Express in India about Atom Cards - a mobile optical payment technique using 2D-bar codes displayed on the mobile handset and captured by the retailer.
Universal Air Travel Plan (UATP) has announced "a partnership with HomeATM ePayment Solutions, a global online payment solution and web security engineering firm. The partnership will initially offer an alternative payment option to the global commercial airline community." » Continue Reading
The Economist takes a look at the growth in holiday season shopping online - with a nice graph showing US online shopping spending each year since 2003 based on comScore data.
Hypercom has announced that "It has entered into exclusive negotiations with Thales SA, a leading international electronics and systems group serving defense, aerospace and security markets worldwide, to acquire the e-Transactions business line of Thales." The company also announced that it has obtained a $60 million financing commitment from Francisco Partners and that Philippe Tartavull has been named Chief Executive Officer and President of Hypercom Corporation. » Continue Reading
In a move it says is "aimed at enabling consumers in Mainland China to buy directly online from North American retailers," Alipay has announced a cooperation agreement with Philliou Selwanes Partners (PSP), a New York City based consulting and advisory firm, to promote the acceptance of its Chinese payment service to North American merchants. » Continue Reading
Intuit and Electronic Clearing House have announced they have "signed a definitive agreement for Intuit to acquire ECHO. Under the terms of the agreement, Intuit will pay $17 per share in cash in exchange for each share of ECHO common stock, including shares issuable upon exercise of options. The total purchase price is approximately $131 million on a fully diluted basis." » Continue Reading
MasterCard Europe has announced that "it will appeal to the European Court of First Instance today's decision by the European Commission regarding MasterCard Europe's default cross-border interchange fees." » Continue Reading
This morning, Neelie Kroes, European Commissioner for Competition Policy, announced that the European Commission has "adopted a decision that MasterCard's multilateral interchange fees, or MIF, for cross-border payment card transactions with MasterCard and Maestro branded debit and consumer credit cards in the European Economic Area (EEA) violate EC Treaty rules on restrictive business practices." MasterCard has six months to comply with the Commission's order to withdraw the fees. A number of documents about the decision are available online in PDF form including her speech, a press release, and an FAQ.
With respect to Visa, Kroes went on to add: "Let me finally say a few words regarding the other large payment card scheme in Europe, VISA. Back in 2002, the Commission adopted an exemption decision concerning VISA's MIF. This exemption expires in a few days, on 31 December and from that moment on VISA will be responsible to ensure that its system is in full compliance with EU competition rules."
Jim Bruene's announced the latest edition of his Online Banking Report newsletter - this issue titled on "Person-to-Person Lending 2.0: Disruptive service or market niche?".
From the abstract: "Person-to-person lending is the perfect product for the Web 2.0-social-networked consumer. Why, then, has growth been relatively slow compared to other networked services? Because it’s a difficult business. Not only are P2P lenders competing with 20,000 other financial institutions for good borrowers, the are up against thousands of investment alternatives for funds to lend, all the while waging a fierce battle with fraudsters and deadbeats. It’s not a business for the faint of heart. "
The AP is reporting that the China Banking Regulatory Commission has announced that "Citigroup Inc. and four other banks will become the first foreign institutions allowed to issue credit cards on their own in China once they meet regulatory standards"
We have received news of the following recent management changes:
Google Checkout has posted a page of charities that are using its Google Checkout for Non-Profits service. As a reminder, "Google Checkout for Non-Profits is a fast, convenient donation process that helps you attract more donors and increase online giving to your organization – and you can use it to process donations by charging credit or debit cards for free until 2009."
In an article titled 'Google’s Checkout perks paying off', Yi-Wyn Yen writes for Fortune's TechLand blog about Google Checkout and some new figures that Google provided yesterday about its performance: "Google says web shoppers who’ve signed up for Checkout are 10 percent more likely to click on an ad that features a Checkout button and 40 percent more likely to make an online purchase once they reach a site."
Saul Hansell of the New York Times has been exploring "what's wrong at eBay" on the Times' Bits blog. He quotes Scot Wingo of Channel Advisor who says "“EBay has gone from the channel of first resort to the channel of last resort" for online sellers. First resort these days is the seller's own web site, followed by Amazon, and then by eBay.
After years of slow progress, business-to-business (B2B) payment conversion from check to electronics is accelerating. Significant new product developments and announcements from MasterCard, American Express, JPMorgan Chase and others, as well as developments in the use of ACH and wire payments, are contributing to a new sense of urgency in this enormous marketplace.
Glenbrook is taking its popular Payments Boot Camp format and applying it to the subject of B2B payments. The new workshop, called "eB2B Payments At The Tipping Point" will be an intense, two day workshop covering both the "basics" (how A/P and A/R interface with payments, how paper and core electronic B2B payments work) and the wide array of new products and services that are addressing this opportunity. » Continue Reading
Payment card authentication solutions provider QSecure has announced that it has closed a Series C Preferred Stock financing round totaling $5 million led by QSecure's existing investors Allegis Capital, Worldview Technology Partners, Société Générale and UMC Capital. » Continue Reading
Gartner has announced results from a survey of online US adults finding that $3.2 billion was lost in 2007 from phishing attacks with 3.6 million adults having been affected. According to Gartner, "thieves are increasingly stealing debit card and other bank account credentials to rob accounts — targeting areas where fraud detection is weaker than it is with credit card accounts." » Continue Reading
American Express and First Data Corp. have announced the signing of an agreement whereby First Data will offer American Express Card acceptance as part of an integrated solution for small- and medium-sized merchants. » Continue Reading
Anthony Ramirez writes for the New York Times about New York City's cab drivers and their disdain for accepting credit cards. The head of the New York Taxi Workers Alliance says "The whole technology is economically disastrous for the drivers."
Michael Barbaro reports on MasterCard's latest SpendingPulse report - which surprisingly shows "spending on women’s apparel dropped nearly 6 percent during the first half of the Christmas season". Meanwhile, Visa says it's expecting that "overall retail sales in the United States will recover as last-minute discounts and extended store hours attract value-conscious consumers."
Glenbrook's Jacqueline Chilton shares her thoughts about some alternative ways to gift this holiday season.
Kathleen Pender writes for the San Francisco Chronicle about a new California state law, SB250, that takes effect on January 1st requiring retailers in California "to redeem unused or partially used gift cards or certificates for cash when the value on the card is less than $10." Pender also notes that the law "does not apply to cards that can be used at multiple retailers, such as those issued by malls or ones with a card-company logo such as Visa, MasterCard, American Express or Discover. Federal law covers those."
Mike Meyers writes for the Star-Tribune about the decline in paper check processing at the Federal Reserve Bank of Minneapolis. "The change is taking place at a geometric pace -- last year, 7 percent of the checks going through the Minneapolis Fed were electronic, this year the share rose to 35 percent, and next year, two-thirds of the transactions are expected to be composed of bits and bytes, not paper."
Experian has announced that Experian and Microsoft have developed a proof of concept identity management service using Microsoft Windows CardSpace. The company said that "as ID fraud activity intensifies, this service streamlines identity authentication and provides a safer and simpler way to pay online." » Continue Reading
Celent has published a new report titled "Where the Banks Aren't: Nontraditional/Nonbank Advances in Branded Prepaid Cards". "Payment network-branded prepaid cards represent the "next big thing" in consumer payment cards. However, banks have yet to pursue the growth potential of general purpose reloadable cards for the unbanked population, which represents an untapped US$192 billion market." » Continue Reading
Suzanne Choney writes for MSNBC about Bill Me Later - but also about eBillMe and PaidByCash. Sounds ominous: "The Electronic Retailing Association advises consumers to make sure they read the fine print and know their rights when dealing with alternative online payment programs."
We have received news of the following recent management changes:
Fidelity National Information Services has announced the signing of an agreement with mFoundry to offer hosted mobile banking and payment solutions to its banking and credit union clients using mFoundry’s Spotlight Financial Platform. » Continue Reading
In an article titled 'E-Commerce Credit Card Alternatives Soaring In Popularity', Evan Schuman writes that "some of the largest E-Commerce chains have suddenly started to embrace non-traditional payment methods, with one analyst firm finding a startling 267 percent increase in such acceptance in February, when compared with the identical survey done in mid-October."
Meanwhile, HitWise looks at the growth in traffic associated with Bill Me Later. HitWise reports that Bill Me Later's traffic is up 271% from last year while PayPal's traffic is down 1% and Google Checkout is down 34%
Aite Group has announced a new report titled "Core Processors: Will Integration Pay?" that it says "examines the key drivers of high performance in the core processing vendor space, and the impact of tightly integrated sales strategies and product offerings." » Continue Reading
PayPal has announced that it has hired four top industry veterans "to help drive the company’s continued global growth. The four new members of PayPal’s executive leadership team are Jack Stephenson, senior vice president of strategy and new ventures; Mary Anne Gillespie, vice president of sales; Barry Herstein, chief marketing officer; and Robert Mansell, vice president of product development." » Continue Reading
NACHA has announced that it has formed a Mobile Banking Work Group to develop an ACH payment platform strategy for mobile banking. The group’s participants will include representatives from across the industry recruited from NACHA’s councils. » Continue Reading
Euronet Worldwide has announced that it delivered a letter to the Board of Directors of MoneyGram International on December 4, 2007, in which Euronet offered to acquire MoneyGram in a tax-free, all-stock transaction.
The Federal Trade Commission and seven state attorneys general have charged a payment processor with violating federal and state laws by debiting, or attempting to debit from consumers’ bank accounts on behalf of numerous fraudulent telemarketers and Internet-based merchants. » Continue Reading
Alas, the end is drawing near. Gavin Chan, Product Marketing Manager for Google Checkout, posted today on the Google Checkout blog that Google was extending the free transaction processing period for merchants through the holidays to February 1, 2008.
Celent has published a new report titled "Electronic Money: Contactless Payment in Japan".
Wesabe has announced the release of Wesabe Mobile, a free, secure banking platform for mobile devices, that "lets members use any web-enabled cell phone or PDA to monitor their account balances and recent transactions for thousands of banks and credit cards worldwide. Wesabe Mobile also provides members with an easy way to record and track where they are spending cash." » Continue Reading
Laura Smitherman writes for the Baltimore Sun about home-town favorite Bill Me Later's recent deal with Amazon.com. "Amazon.com and other retailers choose Bill Me Later because its 3 million users tend to spend more than the average customer and to return more frequently to participating merchants." Saul Hansell of the New York Times blogs about Bill Me Later on the Times' Bits blog: "What Mr. Marino has built is a rare thing: a new widespread payment method."
Forrester has a new report out by Benjamin Ensor, Alexander Hesse titled "Will The iPhone Boost Mobile Banking?" - and they say "we think that the iPhone is an important evolutionary step for mobile banking."
edatanetworks USA has announced "a multi-year agreement with RBS Lynk to develop and launch a Visa gift card program that will operate within the Automated Cause Marketing (ACM) technology." » Continue Reading
Amazon.com has announced it has signed an agreement with Bill Me Later to make the Bill Me Later payment option available on the Amazon.com website. Amazon.com also announced that it is making an equity investment in Bill Me Later, Inc. Note that Bill Me Later is not yet available on the Amazon.com web site - "the companies are working closely together to make the service available as soon as possible..." An FAQ is available. » Continue Reading
Grianne Gilmour, Rebecca O'Connor and Christine Seib report for The Times in London on the impact rising credit card rates may have on consumers in the UK. "Rising credit card rates will add pressure to over-stretched households struggling to cope with increased mortgage payments and higher utility bills."
We have received news of the following recent management changes:
Amazon's Web Services has introduced a new "Pay Now" widget "to make things very easy for web developers who would like to accept Amazon Payments on their site." More info available in the FAQ.
The 2007 Federal Reserve Payments Study released today concludes that "in 2006 more than two-thirds of all U.S noncash payments were made electronically. From 2003 to 2006, the period covered by the study, all types of electronic payments grew while check payments decreased. The Federal Reserve’s 2004 Payments Study found that the number of electronic payments and check payments were roughly equal in 2003."
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Guardian Analytics has announced the release of FraudMAP, a fraud prevention solution for protecting online accounts from fraud and identity theft. According to the company, "FraudMAP delivers fraud detection, forensics and ongoing risk monitoring based on strong analytics and rich, predictive models of individual behavior. The unique solution was built from the ground up to automatically detect new online fraud threats without requiring fraud rules development or algorithm training." » Continue Reading
comScore has released an update of its report on holiday season e-commerce spending for the first 37 days (November 1 - December 7) of the November - December 2007 holiday season - reporting that more than $18 billion has been spent online during the season-to-date, marking an 18-percent gain versus the corresponding days last year. Thursday, December 6 recorded $803 million in online sales, up 28 percent versus year ago, making it the heaviest online spending day in history.
MasterCard Worldwide has announced "the issuance of the 20 millionth MasterCard PayPass device globally." » Continue Reading
