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June 23, 2007

Have Retail Bankers Left the Barn Door Open?

Cornerstone Advisors' Terence Roche writes for Gonzobanker about the new raid on retail bank revenues coming from the likes of Capital One with its new "Capital One decoupled debit card" product and HSBC/Tempo's new CVS-branded debit card. Earlier this week, we noticed that Sheetz has begun working with Capital One on its new debit card program.

Both of these innovative debit card products ride the ACH rails into the consumer's bank checking account - there's no need for the consumer to switch banks - rewarding the cardholder in the process with a much richer rewards program stimulating higher usage and frequency on the new entrants' cards vs. the bank's own traditional (and most likely unrewarded) debit card. Meanwhile, the retail banker is left with the costs of servicing the ACH-based payment and earns no revenue on the transaction itself.

A time for concern? Seems to us that retail bank payments strategists may want to be updating their board presentations! Read Roche's article and decide for your self!

InComm Adjusts Fees on Reloadable Prepaid Mio Cards

InComm has announced that the Mio Money Prepaid MasterCard and the Mio Now Card issued by BankFirst are now available to consumers with no monthly fees attached. When the card is used, consumers pay a fee - but there is no longer a monthly fee.


How Victim Snared ID Thief

Mike Weiss reports for the San Francisco Chronicle an amazing story of how an identity theft victim came across the thief who had stolen her identity while having coffee at Starbucks and then chased her until she was captured by the police, tried and convicted. The victim, Karen Lodrick, a design consultant, has written about her experience on her personal blog,

Cashing In On Those 0% Offers For Credit Cards

In an article titled 'How to Cash In On 0% Offers For Credit Cards", Jane Kim writes for the Wall St. Journal about how some folks are taking advantage of those 0% interest solicitations from card issuers and using them to fund investments in high yield savings accounts - with one individual reporting he makes about $1,300 to $1,400 a year with this strategy. Kim says the strategy has been nicknamed "app-o-rama" on personal-finance Web sites where it's regularly discussed. She also points out that, for the strategy to work, you have to pay attention to the details - just one late payment could destroy the interest-free status on the account, for example.

Visa Sets up Litigation Fund Ahead of IPO

David Wighton writes for the Financial Times about how Visa Inc. is approaching its potential litigation liability associated with various law suits pending against various Visa entities. He writes that Visa "plans to set up a litigation fund to protect investors in its forthcoming initial public offering from legal claims. Under the plan, Visa’s US member banks will take on responsibility for the outstanding legal actions and will contribute billions of dollars from their flotation proceeds to an escrow account to pay claims."

Mom-and-Pop Gift Cards

Gift cards go local - Ilana DeBare writes for the San Francisco Chronicle about how local merchants are now also selling gift cards. DeBare writes that "a small but growing number of neighborhood stores are starting to sell their own branded gift cards, spurred by advances in point-of-sale technology that make it relatively cheap and easy for them to process the cards."

Headline News - June 23, 2007

Note: Throughout the day, as Payments News happens, this post is updated. For job opportunities available for payments professionals, visit Employers looking to hire payments professionals can post their job openings there as well.

June 22, 2007

Who Subscribes to Payments News?

We periodically take a look at who's subscribing to the email distribution of Payments News. It's always interesting to see which companies are "tuning in" to our service.

So, if you're curious, here's our current top 10 list of subscribing companies: American Express, PayPal, MasterCard, Capital One, Chase Paymentech, First Data Corp., Bank of America, Wells Fargo, Discover, and Intuit.

This is hardly scientific - as many of our readers use the Payments News RSS feed to view our headlines in their RSS reader (rather than requesting a daily email subscription) and many more opt to just bookmark (or make PN their home page!) and visit us first thing in the morning and throughout the day using their web browser.

Blackberry and Treo users can also view a mobile edition of Payments News whenever they want by bookmarking our Payments News "River of News" newsfeed.

Hope you have a great weekend!

ViVOtech, mFoundry Partner For Mobile Payment, Banking Solution

ViVOtech and mFoundry have announced they will be working together to "provide mobile financial services to wireless customers. mFoundry’s and ViVOtech’s technologies, when combined, give consumers a simple new way to use their mobile phone for contactless payments, banking and commerce."


Visa Inc. Files S-4 Registration Statement

Visa Inc. has filed its initial Visa Inc. S-4 Registration Statement with the SEC related to the series of transactions for the planned combination of Visa Canada, Visa International and Visa USA into a single private stock company, Visa Inc. Visa Europe will remain a membership association and will become a licensee of, and own a minority interest in, Visa Inc. A number of supporting documents and exhibits were also included.

In it's press release announcing the filing, Visa said that "once the SEC has completed its review and declared the registration statement effective, Visa will undertake a global process to secure member approval of the restructuring."

Swiping Your Credit Card Is So Yesterday

Robert L. Mitchell writes for Computerworld about contactless payments - saying "there's just one problem: Only a tiny percentage of consumers have contactless cards today, and most retailers remain on the sidelines." He goes on: "what ultimately may drive acceptance of contactless technology with users, and ultimately merchants, is its integration with mobile phones."

Pay By Touch Biometric Check Cashing Service

West Texas National Bank has announced that it has adopted Pay By Touch's biometric check cashing service. Paycheck Secure powered by Pay By Touch lets consumers use a finger scan to quickly and securely identify themselves to cash a government or payroll check.


June 21, 2007

A Report from this week's Mobile Commerce Summit

Jim Bruene posts on his new Mobile Money & Banking blog about his experience earlier this week at the Mobile Commerce Summit. Jim says "the most interesting part for me was hearing the results of the BancorpSouth pilot with AT&T, Firethorn, and CheckFree." Read his post for the details.

Online and Mobile Digital Content Markets

Mercator Advisory Group has announced a new report titled "Online and Mobile Digital Content Markets" that it says "frames the challenges and opportunities posed by digital content across multiple distribution channels and as advertising or paid content."


Danal's US Subsidiary Closes $9.5 MM Funding for Mobile Payments

As anticipated earlier in a Wall St. Journal story, Danal, Inc., the US subsidiary of South Korea-based Danal Ltd. has announced that it has received $9.5 million in venture financing led by Morgenthaler Ventures with participation from the Korean parent company as well.


Sheetz Testing Branded Capital One Decoupled Debit Cards

QSR Magazine is reporting that Sheetz has begun "testing an innovative new program that provides debit card customers with rewards similar to those available to credit customers — The Sheetz Debitz MasterCard" with Capital One. Rewards are available on purchases at both Sheetz as well as anywhere else MasterCard is accepted. This is the first merchant using Capital One's recently announced "Decoupled Debit" product that we've come across.

Obopay Adds Merchants to Mobile Merchant Platform

Obopay has announced the addition of several new mobile merchants and application providers to its Mobile Merchant Platform - including" innovative wireless community and media services provider Xringer Inc., mobile recycling program RIPMobile, online marketplace provider, mobile gaming platform developer Exit Games, and mobile search and advertising firm 4INFO."


MasterCard, FIFA Settle Dispute

MasterCard Worldwide and FIFA have announced that they "have reached agreement resolving the contract dispute related to MasterCard’s first right to acquire the sponsorship for the 2010 & 2014 FIFA World Cups. As a result of the agreement, MasterCard will discontinue its sponsorship of the 2010 & 2014 FIFA World Cups, with FIFA agreeing to compensate MasterCard for that discontinuation. Both parties also agreed to terminate legal proceedings in the U.S. and Switzerland. With this settlement, MasterCard and FIFA have found a mutually agreeable resolution of this dispute." Bloomberg is reporting that MasterCard was paid $90 million by FIFA as part of the settlement.

American Express Creates Three Membership Rewards Levels

American Express has introduced new Membership Rewards program levels that the company says are "aligned with specific Card products designed to better meet Cardmember lifestyle and reward program usage needs."


More Convenient Than Cash

According to a new survey commissioned by Visa, 82 percent of respondents agree that Quick Service Restaurant purchases made with debit or credit cards are more convenient than dealing with cash. And 68 percent say using payment cards is faster than paying with cash.


JPMorgan Chase, McKesson Focus on Healthcare Payments

The Healthcare Solutions business of JPMorgan Chase and RelayHealth, the connectivity services company of McKesson Corporation, have announced a strategic relationship to offer an integrated set of claim and payment processing solutions. The two companies say "this relationship will transform the way that insurers, healthcare providers and consumers interact to settle claim payments, moving to a fully electronic model."


Just Charge It to Your Cellphone - A Look at Danal

Rebecca Buckman writes for the Wall St. Journal about Danal Co., a Korean company about to enter the US offering mobile payments. She says Danal "is targeted at young people, some of whom don't have credit cards and want a quick, easy way to pay for low-cost digital goods." The US subsidiary is expected to be financially backed by Morgenthaler Ventures, according to Buckman.

Online eCommerce Payment Preferences

We ran a Facebook poll last night asking those between 18 and 24 years of age "When you buy something online, how do you prefer to pay?" Here are the results - based upon a sample of over 400 responses - hardly scientific but interesting nonetheless:Picture 2.png

No surprise, the debit card is most favored among this age group - but PayPal's showing is also especially strong. New entrant Google Checkout barely moves the needle in this particular survey and almost no one likes to pay by providing their checking account details (also known as eCheck).

Subprime Consumers More Likely to Pay Bankcard Debt Before Mortgage Debt

According to the latest Experian study on the subprime lending market, subprime consumers -- those with an Experian credit score of 620 or lower -- are more likely to be 30 days or more late on their mortgage payments than on their unsecured bankcard obligations. As consumers have historically paid mortgage debt over bankcard debt, this finding represents a significant departure from conventional behavior.


June 20, 2007

A Look at FNBO Direct

Business Week has posted a recent video interview with Rajive Johri, President of First National Bank of Omaha, who talks about his strategy with his online bank, FNBO Direct.

Discover Financial Services Reports Second Quarter Results

Discover announced second quarter results today reporting that its US card business grew managed credit card receivables 6% over the same period last year to $46.9 billion on a growth in sales volume of 5% to $22.1 billion. The company reported an over 30 day delinquency rate of 2.97%, 23 basis points lower than last year’s second quarter and 34 basis points below the first quarter of 2007. The net charge-off rate of 4.00% was up 82 basis points from the same period last year and 19 basis points from the first quarter of 2007. Debit card transactions processed on the PULSE Network grew 19% to 559 million.

Euro Alliance of Payment Schemes

Reuters reports on plans by some European banks to link their national debit card systems together as an alternative to either Mastercard's Maestro scheme or V-Pay operated by Visa Europe. According to the report, debit cards issued in Germany, Britain, Italy, Spain, Portugal and Austria will initially be part of the new EAPS system.

Leave the Cash at Home - Verizon, Obopay Partner for Mobile Payments

In a press release headlined "Leave the Cash at Home", Obopay has announced that "Verizon Wireless customers will soon have another option when they shop other than just cash or credit -- they will be able to pay using their wireless phones."



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