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April 26, 2008

Payments News - Weekly Wrap - April 26, 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 Payments News Weekly Wrap Archive.

A Business Case for Contactless Payments?

Stimulated by an American Banker interview with Wachovia's card chief Steve Boehm, David Evans posts on the Catalyst Code blog about contactless payments: "Contactless – like smart cards – is unfortunately a technology in search of a business model to support it."

April 25, 2008

US Appeals Court Orders New Credit Card Case Trial re: Arbitration

The issue here is mandatory arbitration clauses in US credit card issuer agreements. Leslie Gevirtz reports for Reuters that the 2nd U.S. Circuit Court of Appeals has 'reinstated a class-action suit Friday against a group of banks that force their credit card customers to use arbitration instead of the courts to settle disputes.' The court's full decision icon_PDF_small.gif is available online.

MasterCard CEO Makes $11 Million For 2007

In an article titled 'MasterCard CEO gets paid $11 million for 2007', Madlen Read reports for the AP that 'MasterCard Inc.'s president and chief executive, Robert W. Selander, received compensation valued at $11 million in 2007.' Details are included in MasterCard's recent Schedule 14A filing with the SEC.

India's Reserve Bank To Require Payment Co. Registration/Authorization

In an article titled "RBI to regulate MasterCard, Visa and Western Union", India's Economic Times reports on a draft proposal posted to the Reserve Bank of India's website today implementing provisions of India's Payment and Settlement Systems Act of 2007 that would require "every person desirous of commencing or carrying on a payment system ... [to] submit an application to the Reserve Bank for authorization." READ MORE »

Irish National Payments Conference 2008

Last Friday, the Irish Payment Services Organization held its National Payments Conference 2008. The conference presentations are available online. I found the Nordea presentation (but it's not about Ireland!) particularly interesting.

Fiserv and SunTrust Are Trading Bill Payments for Trees

Fiserv and SunTrust have announced 'they will donate one tree for every SunTrust customer who signs up for electronic bill (e-bill) activation or pays at least three bills online or via a mobile phone between April 14 and June 30, 2008. With assistance from the Arbor Day Foundation, Fiserv and SunTrust have set a goal of planting more than 10,000 trees as part of the campaign.' READ MORE »

Headline News - April 25, 2008

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

April 24, 2008

PayPal, Sprint Nextel Work Together on Mobile Payments Application

In an article titled "PayPal Launches Its First Mobile Service on a Downloadable Application", Digital Transactions reports that PayPal is one of the mobile payments offerings included in Sprint Nextel's MyMoneyManager application. Sprint Nextel says "think of it as a web browser where you add bookmarks to all of your financial services providers on your phone." The article quotes Menekse Gencer, director of business development PayPal’s mobile group: "Our intent is to make PayPal ubiquitous on the handset."

Obopay Confirms $20 Million Financing Round

Obopay has announced the closing of its fourth round of venture funding, raising $20 million along with adding two new board members. Essar Communications Holdings Limited, the telecom subsidiary of Essar Global Limited, led the round. The two new board members are K B Rajendran, Senior Vice President, Essar Global Limited and Robert G. Hottensen, Jr., Senior Vice President for Public Equity at Olayan America Corporation. READ MORE »

US Retailers Offer Discounts For Tax Rebate Checks

Jayne O'Donnell and Erin Kutz write for USA TODAY that 'a handful of retail chains are dangling discounts and promotions to try to get people to spend their [tax rebate] checks in the companies' stores.' The article lists a number of retailers who are offering the opportunity for customers to exchange their rebate checks for gift cards typically with a 10% increase in value over the value of the rebate check itself.

American Express Reports 1Q08 Financial Results

American Express has reported its financial results for the first quarter of 2008 with net income from continuing operations down 11% compared to the same quarter last year while revenues net of interest expense were up 11%. READ MORE »

Wesabe Introduces New Tips Feature Based on Aggregate Purchase Data

Social personal finance website Wesabe has announced the launch of a new "Tips" feature that provides members with customized, side-by-side comparisons of competing businesses across a number of data points. Wesabe says that 'Tips gives members financial power by arming them with the most comprehensive mix of purchase behavior data, consumer satisfaction ratings and advice.' READ MORE »

MasterCard Files 14A Proxy Statement for Annual Meeting

MasterCard has filed its annual Schedule 14A definitive proxy statement with the SEC in advance of its upcoming annual meeting of shareholders scheduled for Tuesday, June 3, 2008 at MasterCard headquarters in Purchase, NY. Included are details regarding candidates for election to the board of directors along with compensation details for principal executive officers of the company.

Digital Money Forum - Day 2 - Mobile Payments

The afternoon session on day 2 of the Digital Money Forum was devoted to discussions about mobile payments. Samee Zafar from Edgar Dunn & Co. chaired the afternoon session and introduced Diane Coyle (who spoke on Mobile Money in Emerging Markets), Dirk-Jan de Haan (who spoke on experience from the Payter NFC trial in Rotterdam), and Guido Manglagalli from Visa EU who spoke about Visa's Mobile Platform and an NFC trial currently underway in London. READ MORE »

Digital Money Forum - Day 2 - Meet the Bloggers Panel

At mid-day today at the Digital Money Forum in London, five of us bank/payments bloggers took the stage for a lively discussion about blogs in financial services. The participants were Dave Birch from the Digital Money Forum blog (and the superb producer/director of this whole Forum!), Chris Skinner of TheFinanser.com, Colin Henderson of The BankWatch, Aneace Haddad of Aneace's Blog, and me, Scott Loftesness, of Payments News. The panel was introduced and deftly moderated by Steve Bowbrick. READ MORE »

UK Banks Lose Overdraft Charges Case

Consumer groups have been active in the US pointing out the overdraft charges that banks charge their checking account customers for non-sufficient funds. In the UK, the issue has been litigated and the BBC reports today that "the UK's biggest banks have lost a test case about overdraft charges." The Guardians headline reads "Customers in line for billions as banks lose unfair charges case." The court decision is available online icon_PDF_small.gif.

Digital Money Forum - Day 2 Morning Session

We're back at the Digital Money Forum in London for the day 2 agenda. This morning's topics are focused primarily on European payments issues - SEPA in particular in presentations by Charles Bryan and John Chaplin.

Aneace has done a great job on blogging the two SEPA sessions this morning. In particular, I enjoyed John Chaplin's eight SEPA predictions - along with the two "jokers" that could change everything.

WebMoney also presented on their ecommerce payment system based in Moscow. Colin blogs about WebMoney here.

Headline News - April 24, 2008

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

April 23, 2008

How Contactless Payment Cards Will Lead to Mobile Payments

Javelin Strategy & Research has released a new report titled 'Contactless Strategy & Forecast' (icon_PDF_small.gif Preview) that reports findings about how contactless technology will become mainstream for payment card transactions. According to Javelin, the report 'highlights how the promotion of non-network payment products will drive acceptance, thwart competition and pave the path for what card networks and issuers consider to be the eventual goal — mobile payments. In turn, the technologies and strategies described in the report will lead to radical changes in personal finance for every consumer, merchant and financial institution.' READ MORE »

Further Exploration about Innovation in Payments

This morning's panel titled 'Omelettes and Eggs: Innovation' at the Digital Money Forum explored the extremes of the issues of innovation in payments.

Perhaps the most basic question asked from the audience was 'why does innovation matter?' "Because it does" wasn't exactly the collective answer from the panel - but the question got to the point that it's not often that technology itself drives innovation. (Opening new markets is, to me, perhaps the best answer).

A venture investor asked the panel where theyd' put their own money to work. Among the answers from the panel: prepaid and mobile, opportunities that might emerge from new real-time 'instant' payments (e.g. FPS in the UK), innovations that truly address user (as opposed to merchant) needs and can demostrate user adoption, and a prepaid solution that truly addresses the needs of minors.

Transit As the Killer App in Displacing Cash With Cards

Just listened to a fascinating talk at today's Digital Money Forum in London by Ronnie O'Toole, Chief Economist of the National Irish Bank. Last November, the bank provided a pre-budget submission to the Irish Department of Finance that contained four recommendations about how to reduce inefficiencies in the Irish payment system (Dave Birch blogged about it here). One of the four recommendations was to require that taxis in the country be equipped to for card-based payments as a compulsory measure. We've seen other examples of where transit payments have been the focal point for shifting from cash to electronic payments. Glenbrook's Carol Benson blogged about her experience with card-based taxi payments in New York City late last year.

Greetings from London's Eleventh Annual Digital Money Forum

IMG_2398.jpg[Glenbrook's Scott Loftesness writes...] I'm in London this morning at the Eleventh Annual Digital Money Forum hosted by Consult Hyperion. This year's Forum is sponsored by Visa Europe and WebMoney with support from ACI.

At this morning's session, about 100 attendees will be discussing a range of payments related topics including innovation in general as well as the future of retail banking, the future of money and, indeed, the future of cash. I'll be participating on a panel discussion at tomorrow's session titled "Meet the Bloggers".

[Update: Colin's blogging from the Forum too - with pictures! So is Aneace!]

April 22, 2008

PCI Security Standards Council Issues Information Supplements

The PCI Security Standards Council has announced the availability of two Information Supplements providing further clarification for PCI DSS requirement 11.3 icon_PDF_small.gif, regarding penetration testing, and Requirement 6.6 icon_PDF_small.gif, regarding application code review and application firewalls. Both of these information supplements provide guidance to help merchants and service providers meet these two requirements in support of their PCI DSS compliance efforts. READ MORE »

American Express, Delta Air Lines Launch Delta Reserve Credit Card

American Express and Delta Air Lines have announced the launch of Delta Reserve Credit Card and the Delta Reserve for Business Credit Card, new premium co-branded credit cards for U.S.-based consumers. According to the two companies, 'the Delta Reserve Credit Cards are designed to cater to the needs of Delta’s on-the-go customers and provides Cardmembers with a greatly enhanced travel experience through benefits such as the ability to earn Medallion® Qualification Miles (MQMs) faster, share MQMs with family and friends for the first time ever, access to the dedicated Breezeway priority boarding lane and frequent traveler security line, Delta Crown Room Clubs access, and 24-7 concierge services.' The cards have an annual fee of $450. READ MORE »

New Forrester Report: NFC Technology Is Revitalizing Mobile Payments

Forrester's Benjamin Ensor and Alexander Hesse have published a new report titled "NFC Technology Is Revitalizing Mobile Payments". While that title certainly sounds optimistic, their subtitle adds a bit more drama: "But Mobile Contactless Payments Face Huge Adoption Hurdles". From the abstract: "But technology isn't the main barrier to wider mobile payment adoption in developed markets. Mobile contactless payment systems based on the NFC standard face many of the same adoption hurdles as other new payment systems."

Experian, Credit Builders Alliance Announce Data Reporting Partnership

Experian and Credit Builders Alliance (CBA) have announced the launch of a data-reporting partnership that enables CBA's members to report microloan repayment data to Experian to help thousands of small business entrepreneurs build a credit history. READ MORE »

Considering Cards with Built-In Spending Control Features

On the Credit Slips blog, in a post titled "MasterCard's Machiavellian Twist", Angie Letwin, soon to be Assistant Professor at the University of Texas Law School in Austin, writes about her recent paper titled "Beyond Usury: A Study of Credit Card Use and Preference Among Low-Income Consumers" and compares some of her conclusions about control features useful to consumers in managing their credit card use to the new features MasterCard recently introduced with its "inControl" commercial card product designed for corporate purchasing use. She hopes that "perhaps eventually this could lead to products that would help consumers control their own spending as well."

Running a Bank in the Cloud?

James Gardner, Head of Innovation and Research at a major UK bank, writes a great blog called BankerWatch. In one of his recent posts titled "A New Kind of Event Please," he laments the events that vendors try to stage to interest bankers in "hot issues" and, more likely, the vendors latest products.

Instead of those kinds of events, Gardner says he's looking for more interesting and thought provoking stuff such as: "I'd like an event that would tell me how to run a bank in the cloud."

Jeff Bezos, CEO of Amazon.com, spoke at Paul Graham's Startup School 2008 conference at Stanford over the weekend. Bezos spent his talk focused on "the cloud" - what Amazon's doing with web services (AWS). All you have to do is to look at the first slide in his talk to see how "the cloud" is becoming an important business.

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