Discover Financial Services has announced that "it has reached an agreement with Visa Inc. and MasterCard Inc. in the settlement of a lawsuit seeking damages for practices that suppressed third-party issuing on the Discover Network and the acceptance of its cards. "

Under the terms of the settlement agreement, Discover expects to receive up to $2.75 billion in the settlement of its lawsuit against Visa and MasterCard. Discover will receive approximately $862 million of the settlement in the current fiscal quarter and up to approximately $472 million per quarter in 2009.

Visa said it is responsible for $1.8875 billion of the settlement amount. In a press release, Visa said that amount "includes $1.7425 billion from the escrow created under Visa's retrospective responsibility plan, $80 million from Visa Inc. to obtain releases from MasterCard, and an additional $65 million which will be refunded by Morgan Stanley under a separate agreement related to the settlement."

MasterCard announced it will pay $862.5 million reflecting the terms of a judgment-sharing agreement with Visa that was finalized in July, 2008. In addition, MasterCard reported that, in connection with the settlement, Morgan Stanley, Discover's former parent company, agreed to pay MasterCard $35 million. READ MORE »

In an article titled "Worst Practices: Residual Interest", Adam Levitin writes on the Credit Slips blog about residual interest charges on credit cards - saying that "residual interest has not gotten nearly as much attention as it should (and it is often confused with double-cycle billing). Residual interest is a nasty billing trap that drains away discretionary income (also known as potential savings) from American consumers, and should be at the top of the Congressional hit list for predatory credit card billing practices."

In its latest issue, the Economic Review published by the Federal Reserve Bank of Kansas City includes an article titled "Can Smart Cards Reduce Payments Fraud and Identity Theft?" by Richard J. Sullivan.

From the summary: "Sullivan explores why smart cards have the potential to provide strong payment authorization and thus put a substantial dent into the problems of payments fraud and identity theft. But adopting smart cards in the United States faces some significant challenges. First, the industry must adopt payment smart cards and their new security standards. Second, card issuers and others in the payments industry must agree on the specific forms of security protocols used in smart cards. In both steps the industry must overcome market incentives that can impede the adoption of payment smart cards or limit the strength of their security."

comScore has announced results of a study of the online credit card industry, based on both passively-observed online behavioral data as well as a survey of more than 2,000 Internet users conducted in September 2008. "Study findings revealed that for the first time in the five most recent quarters, the total number of credit card applications submitted online at the top ten credit-card issuer sites declined, dropping 6 percent in Q2 2008 versus the same period in 2007." READ MORE »

Bankrate.com has published the results of its 2008 Checking Study - finding that "the costs of checking account fees have risen again this year to an all-time high." Bankrate's 2008 Checking Study details the average fees associated with using and maintaining an interest bearing account, including bounced check fees, ATM surcharges, and monthly services fees, plus tips on how to avoid them. The study also found that bounced check fees ("NSF or nonsufficient funds fees") increased 2.5 percent to an average of $28.95. READ MORE »

eBillme has announced its latest quarterly eBillme Online Spending Index finding that the impact of the credit crunch is expected to effect holiday shopping as projected consumer spending online remains steady at $100 - $250 on average - and finding "that the credit crunch is causing shoppers to reduce their credit card usage and impacting consumer access to credit resulting in a shift to cash alternatives." READ MORE »

CashEdge has announced the launch of Small Business Me-to-Me Transfers, an online funds transfer product designed specifically to help financial institutions meet the needs of small businesses. READ MORE »

Creative Mobile Technologies (CMT) has announced a 10-year deal with Taxi Affiliation Services, a Chicago based company providing services to Yellow, Checker and Blue Diamond taxicabs in the City of Chicago. Yellow, Checker and Blue Diamond, together form the nation's oldest and largest continually operating taxicab fleet, and comprise 2,600 taxicabs in Chicago. CMT's deal will bring Chicago taxi passengers a credit card payment system in the rear seats of vehicles. READ MORE »

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