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July 20, 2007

Merchants Welcome Congressional Concern Re: Credit Card Interchange

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."


SEPA - From Concept to Reality

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."

Wal-Mart and the Separation of Banking and Commerce

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."

Comments from Yesterday's Credit Card Interchange Fee Hearing

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.

Headline News - July 20, 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.

July 19, 2007

First Data Corp. Gets Colorado OK to Convert Industrial Bank

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.

Tips on Searching Payments News

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.

Competitive Forces Shaping the Payments Environment

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 Credit Card Interchange Hearing Now Available

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."

Consumer Behavior and Payment Choice

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.


Saving Pennies, Nickels and Dimes

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.

Kids Find a Way to Shop Online

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 Developer Challenge - Facebook Widgets That Use PayPal

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.

Banks Want You to Go Over Your Debit Limit

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".

Who's News - Payments Professionals Management Changes

We have received news of the following recent management changes:

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. Are you looking for a new payments-related job? Or are you needing to find someone great? Checkout the Payments Jobs job board.

July 18, 2007

PayPal Second Quarter 2007 Results

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."


Hearing on Credit Card Interchange Fees

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.

Private Equity Investment in Financial Services Technology Providers

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."


Lending Online to Strangers

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 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.

Healthcare Providers Want Electronic Payments

Payformance Corporation has released the results of a survey showing that healthcare providers want to transition to electronic claim settlement.


July 17, 2007

Some Thoughts re: Capital One's Decoupled Debit Card

Broox Peterson shares some of his thoughts in a commentary reflecting on Capital One's recent introduction of a new "decoupled debit" card program.


A Look at TrialPay's Pay by Trying Something New Service

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.


The Bancorp Acquires Stored Value Card Solutions Unit from BankFirst

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."



The Economist profiles Nick Ogden and his company VoicePay, a provider of voice authentication-based mobile payments.

Tempo Introduces Decoupled Debit for FI's, Hosted Payment Platform

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."


Maxed Out on Personal Debt

Anne Kate Smith interviews James Scurlock, author of Maxed Out, for 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 Launches PAYjr Visa Buxx Card for Teens

PAYjr has announced a prepaid card for teens that allows them to "upload pictures for the design of their card."


Wells Fargo Launches Enhanced Remittance Service

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."



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