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May 17, 2008

Payments News - Weekly Wrap - May 17, 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. Back to the future!: for fun, click for this same week's activity a year ago here on Payments News!

You can find all of our Weekly Wrap summaries in the Payments News Weekly Wrap Archive. They're published every Saturday and look back at the highlights of the week's news. Please send us on how we can improve the Weekly Wrap!

Glenbrook at NACHA's Payments 2008 Conference

Glenbrook's Jim Salters and Allen Weinberg will be attending the Payments 2008 conference being held this coming week - May 18-21 in Las Vegas at the MGM Grand.

Allen's chairing a panel titled "Payments Aren't about Payments Anymore" on Tuesday at 1:45 PM with Mark Lavelle (VP, Strategic Planning & Corporate Development, Bill Me Later), Todd Pearson (Vice President, PayPal), AJ Shanley (VP, Business Development, TrialPay) and Tracy Wilk (Director, Global Payments, Settlement & Fraud, Google).

Headline News - May 17, 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.

May 16, 2008

Consumers Tap into Savings to Meet Rising Delinquent Payments

Online Resources has released the results of its second survey of U.S. households looking at how bill payment patterns are being affected by the "ongoing economic softness. The survey shows that Americans’ personal financial stability continues to decrease, as the mortgage crunch, rising energy costs and a decreasing savings rate hit more households." READ MORE »

A Deeper Dive into the Cost of PCI Compliance

A few days back we wrote about some expert views on the industry cost of PCI compliance. We've had several interesting discussions in email from folks reacting to the $2 billion number that my expert friends at dinner came up with. One of those, long-time friend and former colleague, Walt Conway, sent along his own "very rough cut estimate" of the PCI compliance costs. Walt's been consulting with colleges and universities on PCI for the last couple of years - and I asked him if we could share his thinking here. READ MORE »

A Look at Mobile Wallets in India

MSN India reports on mobile wallets and payments in India saying that "current payment players in India are mChek, Obopay and PayMate." The article notes that the Reserve Bank of India is currently formulating the regulatory guidelines for mobile payments with the final draft expected by June 2008.

Paradise Lost

Paradise Lost - that's the title of the special report in this week's issue of the Economist. "This special report will ask how banks should be run and regulated so that the next time boom turns to bust the outcome will be less miserable for all concerned."

More About First Data Corp.'s Acquisition of InComm

In late April, First Data Corp. announced the acquisition of InComm, a marketer, distributor and technology innovator of stored value gift and prepaid products. At the time, specific terms weren't announced. Yesterday, First Data filed a 10-Q with the SEC reporting its financial results for the first quarter of 2008. In that filing, First Data disclosed more information about the acquisition: "The Company will acquire InComm for approximately $980 million, plus contingent future payments of up to $250 million over a three-year performance period." FDC says the acquisition is expected to close later this year.

Twittering Away

When I was in London a few weeks ago for the Digital Money Forum, I got introduced to Twitter, an addictive social networking service that allows you and your friends to follow each others latest thoughts. At the recent Finovate Startup conference in San Francisco, several of us in the audience (and around the globe!) were twittering back and forth about the presenters in real-time.

Anyway, the new Business Week has an article titled Why Twitter Matters. You can follow Payments News on Twitter (and get real-time updates about posts and my random thoughts). You can also use TweetScan to search for recent "tweets" about specific subjects - for example, here's a Tweetscan of every tweet mentioning PayPal. TweetScan even lets you setup an RSS feed of your favorite scans so you can monitor them in Google Reader, etc. Some big companies regularly monitor Twitter for mentions of their brands.

What's this got to do with payments, you ask? Nothing - but it's Friday and a pretty slow news day so far!

Mobilians Launches PhoneBill Payment Service in US

Mobilians International has announced commercial availability of its phone-based payment service on NHN USA’s ijji.com online gaming website. With Mobilians’ PhoneBill service, NHN USA’s customers now can purchase ijji.com “G-Coins” in multiple increments by charging them to their home phone bill. READ MORE »

Metavante Gets First PABP Issuing Certification from Visa Europe

Metavante Technologies Ltd. has announced that it has been granted Payment Application Best Practice (PABP) certification from Visa Europe for both card issuing and transaction acquiring. Metavante Technologies Ltd., a provider of prepaid and debit card processing and licensed software in Europe, is part of Metavante, a U.S.-based provider of banking and payments technology. READ MORE »

No Market for Interchange Fees

In an article titled Rising Credit Card Interchange Fees Equal Double Punch at Pumps, Convenience Store News reports on yesterday's testimony at the House Judiciary Committee hearing on interchange fees. "Last year, convenience stores paid $7.6 billion in credit card fees, a figure more than double industry profits of $3.4 billion."

Tom Robinson, president of the San Jose, Calif.-based Robinson Oil Corp. who testified at the hearing (his full testimony is here) went on: "Right now there is no market for interchange fees. The fees are fixed by the banks, hidden from the public and forced on merchants in a take-it-or-leave-it offer. The Credit Card Fair Fee Act will create a market for interchange fees for the first time by allowing merchants and the card associations to negotiate on equal footing."

May 15, 2008

APACS Reports UK Payments Data for 1Q08

APACS has published its latest quarterly Statistical Release icon_PDF_small.gif covering the first quarter of 2008. "In the first quarter of 2008 there were 1.8 billion plastic card purchases made in the UK totalling £91.1 billion. The number of purchases was 8.9% higher than in the first quarter of 2007, and spending was 8.9% higher. Debit cards accounted for 72.8% of all plastic card purchases compared with 71.1% in the first quarter of 2007."

First Data Reports 16% Revenue Growth in 1Q08

Although taken private by KKR last fall, First Data Corp. continues to announce its financial results - and today reported financial results for the first quarter of 2008. Consolidated revenues were up 16% to $2.1 billion while adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were up 8% to $586 million. FDC also commented on Chase Paymentech, its largest merchant alliance, noting that it "expects the alliance to end prior to its existing expiration date in 2010." The company is holding a conference call tomorrow morning to review its results. READ MORE »

PayPal Pay Later Now Available for eBay Purchases

PayPal has announced that its credit offering - PayPal Pay Later - is now available for payments on eBay.com . "Starting today, eBay buyers in the United States can take advantage of Pay Later’s financing offer of no payments for 90 days for qualifying purchases between $50 and $199." READ MORE »

House Judiciary Committee Interchange Hearing Testimony

The testimony of several of the witnesses at today's heading on interchange fees by the US House Judiciary Committee is now available online in PDF format. Included is testimony from: Thomas L. Robinson (Vice President of Regulations, National Association of Convenience Stores), Joshua R. Floum (General Counsel and Corporate Sec., Visa Inc.), Steve Cannon (Chairman, Constantine Cannon, LLP), Joshua Peirez (Chief Payment System Integrity Officer, MasterCard Worldwide), John Blum (Vice President of Operations, Chartway FCU), and Edward Mierzwinski (Consumer Program Director U.S. PIRG).

Electronic Payments Coalition Comments on Interchange Hearing

In a press release, the Electronic Payments Coalition commented on today's hearing before the House Judiciary Committee Antitrust Task Force on H.R. 5546: "The Electronic Payments Coalition is pleased that the House Judiciary Committee Antitrust Task Force is holding a hearing today to take a closer look at H.R. 5546, the "Credit Card Fair Fee Act." Members of the Task Force will be given an opportunity to learn quite explicitly that this ill-conceived legislation is nothing short of price controls -- action that would result in less competition, fewer consumer choices, and reduced access to affordable credit and debit options." READ MORE »

MasterCard Comments on GAO Credit and Debit Card Report

In a press release, MasterCard Worldwide said that "it is pleased that the Government Accountability Office (GAO) report examining interchange fees recognized the benefits the federal government receives from both payment card usage and acceptance. MasterCard urges Members of Congress to review the report before taking action to regulate interchange fees, which would have a negative impact on consumers, small financial institutions, and ultimately merchants." READ MORE »

NRF Says Interchange Fees Cost Families Over $400 This Year

The National Retail Federation in a press release urged the House Judiciary Committee to support antitrust legislation that would require Visa and MasterCard to negotiate with merchants over credit card processing fees. The NRF said "a hidden fee charged by the two card giants is projected to cost the average U.S. family more than $400 this year." READ MORE »

Bank of America, Wells Fargo Form Payment Processing Joint Venture

Wells Fargo and Bank of America have announced the formation of a joint venture to operate a single, combined automated clearinghouse (ACH) platform for both companies and their clients. The new entity, called Pariter Solutions LLC, will be the country's largest processor of ACH payments. READ MORE »

MasterCard Comments at Today's Interchange Fee Hearing

In a press release, MasterCard commented that "merchants do not need price control legislation or an antitrust exemption to lower costs for payment card acceptance, as they already have real opportunities to negotiate fees." Joshua Peirez, Chief Payment System Integrity Officer at MasterCard Worldwide, gave his testimony at the hearing. READ MORE »

NACS Comments on Interchange Fees at Today's Hearing

The National Association of Convenience Stores has issued a press release on today's House Judiciary Committee hearing on interchange fees. Tom Robinson, president of San Jose, California-based Robinson Oil Corporation testified today at the hearing. READ MORE »

Merchants Welcome Judiciary Committee Hearing on Interchange Fees

In a press release, the Merchants Payments Coalition says that "merchants welcome encouragement from Democrats and Republicans alike in support of HR 5546, the Credit Card Fair Fee Act, bi-partisan legislation that would end credit card industry price fixing, which is the subject of a hearing today by the House Judiciary Committee Antitrust Task Force." READ MORE »

Credit Card Users Just Spend More

In an article titled 'Credit Cards Cost, No Matter What', the Washington Posts's personal finance columnist Michele Singletary writes that, even if you're paying off your credit card charges each month, you spend more when you use credit cards that if you just paid by cash. She suggests trying an experiment: "If you don't believe the research, try this experiment: For one month, don't use a credit card. Make all your purchases with cash."

Visa Introduces the Visa Meetings Card

Visa Inc. has announced the Visa Meetings card, the newest member in its suite of commercial payment solutions to help businesses more strategically manage this expense category. READ MORE »

Visa's Operating Regulations Now Available Online

As announced last week, today Visa Inc. has made available its various regional Operating Regulations on its corporate web site - except for Visa Europe which remains and separate entity.

Headline News - May 15, 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.

May 14, 2008

House Judiciary Committee Holds Hearing on US Interchange Fees

As we mentioned here on Payments News on Monday, the House Judiciary Committee is holding a hearing on Thursday, May 15th beginning at 11 AM Eastern time on H.R. 5546, the “Credit Card Fair Fee Act of 2008”. As of tonight, the committee's website doesn't list the witnesses who will be testifying - but it promises that a live webcast of the hearing will be available.

As an editorial comment, many of us in the payments industry find the "solution" proposed in this legislation to be overly complex. Read the actual text of the draft legislation - and you may reach the same conclusion! We wonder whether the merchant community in fact would be well served by the remedies proposed. A very basic question comes to mind: "Is this the best you can do?"

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