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April 12, 2008

Payments News - Weekly Wrap - April 12, 2008

Here's a review of this week's top stories on Payments News. If you missed it, last week's Weekly Wrap is here.

You can find all of our Weekly Wrap summaries in the Weekly Wrap Archive.

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April 11, 2008

Wells Fargo Adds Single-Use Accounts to Commercial Cards

Wells Fargo has announced that it will 'offer proprietary single-use accounts to its commercial card customers for business-to-business (B2B) purchases. Both Visa and MasterCard commercial card customers will be able to use the pre-approved accounts that reduce fraud and control spending.' READ MORE »

Charges Fly Over Interchange Fees carries an AP story on the on-going debate between the card companies and US merchants over payment card interchange fees. 'Visa and MasterCard defend the fees as a way to pay for the convenience and security of credit card transactions. The banks that issue cards are on the hook for any fraudulent transactions, rather than consumers, and the banks also take the credit risk that the consumer may not pay.'

First Data Offers Regrets About Frontier Airlines

The Denver Business Journal cites a statement issued earlier today by First Data Corp. on the Frontier Airlines bankruptcy filing.

A Look at GE

What do you call a company that sells jet engines, runs multiple television/cable networks, has a huge global financial services operation, and just reported a significant earnings miss this morning? That's GE. And the reason for what one columnist called GE's "gasp-inducing first-quarter results"? Financial services primarily - both commercial and consumer. Details in this press release and accompanying presentation. A webcast of this morning's earnings call is also available.

US Consumer Confidence Tanks

RBC has published the latest edition of its RBC CASH (Consumer Attitudes and Spending by Household) Index reporting that 'pessimism among U. S. consumers continues to spread as Americans' sentiments concerning the future turn particularly gloomy.' READ MORE »

SunTrust's Commercial Card and Expense Management Platform

SunTrust has announced the launch of its Enterprise Spend Platform - calling it 'an industry-leading end-to-end commercial card management solution, offering businesses, government entities and non-profits comprehensive online capabilities for control beyond simple card management in travel and entertainment, procurement and payables.' READ MORE »

Frontier Airlines Files Chapter 11 - Blames Credit Card Processor

Frontier Airlines this morning announced it had voluntarily filed to reorganize under Chapter 11 of the U.S. Bankruptcy Code late last night. The airline is continuing normal flight operations today. READ MORE »

April 10, 2008

Visa Names Tim Wilson as Head of Visa Canada

Visa Inc. and Visa Canada have announced the appointment of Tim Wilson as Head of Visa Canada effective May 30, 2008. Wilson will be replacing Derek Fry, who recently announced his retirement after 12 years as the President of Visa Canada.


Addressing Weaknesses in Global Financial Markets

Federal Reserve Chairman Ben S. Bernanke spoke earlier today about how the recent turmoil in financial markets came about and how the recent recommendations by the Treasury Department should help to address the root causes. In a very readable summary of the situation, Bernanke writes: 'Although many factors played a role, to a considerable extent the current problems arose in the implementation of the so-called originate-to-distribute approach to credit extension. The originate-to-distribute model breaks down the process of credit extension, from origination to the ultimate financing, into component parts, or stages, in a manner reminiscent of how contemporary manufacturers distribute the stages of production across firms and locations. This approach has had considerable benefits, including increased access of small and medium-sized borrowers to the broader capital markets, but pitfalls in its implementation are now evident.'

PayPal's Practical Approach to Managing Phishing

Michael Barrett, PayPal's Chief Information Security Officer, blogs about the progress PayPal has made in dealing with phishing attacks - and shares a paper titled 'A Practical Approach to Managing Phishing' icon_PDF_small.gif that Michael wrote with his colleague Dan Levy and presented today at the RSA Conference in San Francisco. The secret? There's no one 'silver bullet' - but a multi-layered strategy has made a significant difference for PayPal.

Convenience Store Sales Up But Rising Credit Card Fees Hit Profits

The National Association of Convenience Stores reports that convenience store industry sales reached a new high of $577.4 billion in 2007 (up 1.4 percent), but that profits dropped by $1.4 billion, 'largely because of higher credit card fees.' In its press release, NACS goes on to say that "the net effect is that the industry's credit card fees are now more than double the industry's pretax profits."


Issues with Usage Controls on US Government Purchasing Cards

The US Government Accountability Office has published a report titled "Governmentwide Purchase Cards - Actions Needed to Strengthen Internal Controls to Reduce Fraudulent, Improper, and Abusive Purchases" icon_PDF_small.gif concluding that 'internal control weaknesses in agency purchase card programs exposed the federal government to fraud, waste, abuse, and loss of assets. When testing internal controls, GAO asked agencies to provide documentation on selected transactions to prove that the purchase of goods or services had been properly authorized and that when the good or service was delivered, an individual other than the cardholder received and signed for it. Using a statistical sample of purchase card transactions from July 1, 2005, through June 30, 2006, GAO estimated that nearly 41 percent of the transactions failed to meet either of these basic internal control standards.'

Innovation in Payments - A Survey of Experts

During March, a good friend of mine, John Chaplin, conducted a survey of global payments 'experts' (myself included) on the question of innovation in payments. Chris Skinner, another of the participating experts, does a great job outlining the findings from John's survey in this blog post. If you'd like a copy of the survey findings, email me or Chris and we'll be happy to send along a copy.

Securing Online Banking

Brian Krebs writes for his Security Fix blog at the Washington Post about changes to the banking code in the UK that stress that online banking customers have the responsibility to keep up-to-date anti-virus, anti-spyware, etc. software installed on their computers - and wonders why more US banks don't make available hardware tokens to secure online access (the way PayPal optionally does).

A Slow News Day

I've had this general sense of late that everything seems like it's just slowing down - and today's news cycle seems to illustrate that. There's almost no interesting payments-related news today worth reporting. Just things like retail sales disappointed again in March (been to a store lately)? Hope you're not trying to get home on American. We'll keep our eyes out for anything worth reporting but, in the meantime, If the weather's decent in your area you might want to just take the afternoon off!

April 09, 2008

Rethinking Card Reward Programs for a Weak Economy

TowerGroup has published a new report titled 'Pointing in the Right Direction: Rethinking Card Payment Rewards in a Challenged Economy' by Brian Riley, senior research analyst in the Bank Cards practice that examines existing reward and loyalty programs and explores how credit card issuers may rework their programs to inspire customers to maintain the terms of their accounts.


US Online Retail Sales Forecast to Reach $204 Billion This Year has released The State of Retailing Online 2008, its 11th annual study conducted by Forrester Research of 125 retailers. The study found that 'online retail will continue to be a bright spot in the industry with retail sales rising 17 percent this year to $204 billion. Apparel ($26.6 billion), computers ($23.9 billion), and autos ($19.3 billion) will be the largest three sales categories.'


Bank of America's School Supply Purchasing Product for Teachers

Bank of America has announced the launch of the Bank of America Visa Supply Shelf card, 'a prepaid debit card that allows teachers to make quick, hassle-free purchases of classroom supplies. The card, ranging in value from $25 to $750, can be used at designated school supply merchants, either in their stores or from their websites.' READ MORE »

April 08, 2008

Last Call - Glenbrook Payments Boot Camp - NYC - April 16-17

The New York City session of the Glenbrook Payments Boot Camp is a week away. Glenbrook's Payments Boot Camps provide a 'deep dive' on all aspects of the US payments systems - covering cash, checking, cards, ACH, and emerging payments including alternative online payments and mobile payments. If you'd like to attend next week's session in New York City, please register without delay! After New York, our next Payments Boot Camp will be in the San Francisco Bay Area on June 11-12.

Out of Africa - Leading the World In Mobile Banking

Regis Nyamakanga writes from Johannesburg for Business Day about Fundamo, a South African mobile banking provider. 'Van Rensburg (CEO of Fundamo) said the major driver for the adoption and fast roll-out of mobile wallet was the increase in international money flows delivered to and from mobile phones.'

More on the Credit Card Interchange Fee Wars

In today's Wall St. Journal, the sponsors of the Credit Card Fair Fee Act legislation (Rep. John Conyers and Rep. Chris Cannon) respond to the Journal's earlier editorial against the act. They argue the act is pro-competitive because it 'facilitates direct negotiations between merchants and the credit card industry on interchange fees.'

CyberSource, mPoria Partner for M-commerce

CyberSource and mPoria have announced a strategic channel partnership in which CyberSource will offer mPoria's GoMobile! m-commerce technology to its network of online merchants. 'GoMobile! enables merchants to quickly and cost-effectively build and launch a mobile shopping site, giving retailers access to more than 250 million wireless subscribers nationwide.'


Obopay Selects iovation For Fraud Protection

iovation has announced that mobile payments provider Obopay is implementing iovation ReputationManager, iovation’s device-based fraud management service, 'to reduce the risk of online payment fraud by enhancing its ability to proactively identify devices that have been associated with fraudulent activity.'


More on TSYS n>gen

Tony Adams writes for the Columbus (GA) Ledger-Enquirer about TSYS' announcement yesterday of its n>gen next generation processing platform designed to 'cater to a faster and more mobile business and consumer world.'

April 07, 2008

Fed Releases Consumer Credit Figures for February

The Federal Reserve has updated its G.19 Consumer Credit statistical release noting that 'consumer credit increased at an annual rate of 2-1/2 percent in February; revolving credit increased at an annual rate of 6 percent, and nonrevolving credit increased at an annual rate of 1/2 percent.'


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