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July 05, 2008

Payments News - Weekly Wrap - July 5, 2008

To all of our friends in the United States, we hope you had a really great 4th of July!

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!

Looking for more? Checkout our Other Payments and Banking Blogs page for more from the blogosphere about the worlds of payments and banking.

Quote of the week: by Robert X. Cringely: "So where is the next wave of financial start-ups that view ME, not Citibank, as the customer?"

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!

More Regulation of the Credit Card Industry Likely Coming in '09

In an article in today's New York Times titled "Credit Card Overhauls Seem Likely", Jane Birnbaum writes that consumer groups' pleas to lawmakers for help "may well mean that the industry will face some significant regulation by early next year."

In early May, the Federal Reserve proposed new rules to prohibit unfair practices regarding credit cards and overdraft services that would, among other provisions, protect consumers from unexpected increases in the rate charged on pre-existing credit card balances. The Fed is still soliciting comments on the proposed changes - although the comment window closes later this month. The comments are posted publicly on the Fed's web site - so far, over 9,800 comments have been submitted.

July 04, 2008

Fireworks in Financial Services

Hope you've had a great 4th of July! I've briefly stepped away from the BBQ to write this post!

One of my favorite writers is tech columnist Robert X. Cringely, a weekly columnist for the PBS web site. He's got a unique style that's great fun to read. Today's column is no exception - it's a beauty that's titled "Independence Day: Because we're so much more than just consumers"

Cringely's had it with the loan referral sites on the web - saying he's looking for real solutions that "actually put consumers first and don't just say they do while selling our identities out the back door to some marketing mafiosi." He asks "so where is the next wave of financial start-ups that view ME, not Citibank, as the customer?"

Read his column - it's just great! Financial services fireworks on the 4th of July!

July 03, 2008

Happy 4th of July!

To all of our friends and readers in the United States, best wishes for a wonderful 4th of July holiday weekend. We hope you share special times with family and friends, enjoy the outdoors (but not the mosquitos), and perhaps a hometown parade and a bit of BBQ too! If need some more payments-related commentary while we're off celebrating, be sure to check out of Other Payments and Banking Blogs page! We'll be back here on Monday morning to recover!

A Primer on Smart Cards

In his column this week titled "A Primer on Smart Cards", David Pogue writes for the New York Times about smart cards - saying that "smart cards have always fascinated me, especially when I read about their potential for streamlining small cashless purchases." Pogue interviews Randy Vanderhoof, executive director of the Smart Card Alliance.

Web Browser Insecurity and Online Banking

Bruce Schneier this morning linked to a new paper titled "Understanding the Web browser threat: Examination of vulnerable Web browser populations and the insecurity iceberg" by researchers from Google Switzerland and IBM Internet Security Systems. The conclusion of the article, based upon an extensive analysis of Google log data, is that 637 million users globally (45.2% of the total) "were not using the most secure web browser version".

Bankers with online banking web sites will find this paper of interest. It might trigger some thoughts with respect to steps an online bank might take based upon examining the online banking user's browser version and, if seriously old and exposed, to suggest that to the user that they really need to upgrade to avoid potential vulnerabilities.

For example, 37signals, a provider of online project management and collaboration tools, announced today that it would no longer support users running Internet Explorer 6 and below starting next month. They did it because of browser/design compatibility issues but PayPal's recently made comments about taking similar steps because of security vulnerabilities in older browsers.

Bill Me Later Now Available on Amazon.com

Last December, Bill Me Later announced that Amazon.com would be accepting Bill Me Later payments and that Amazon had made an equity investment in the company. Amazon.com now is accepting Bill Me Later - details here. Amazon.com is also now a featured store on the Bill Me Later home page - ironically, right next to its bookstore rival Borders.com.

Capital One's Decoupled Debit MasterCard Spotted in the Wild

Morriss Partee, CEO of EverythingCU.com, blogs on the Payment Industry Insider blog about an email he recently received from Capital One offering him "big rewards for his debit purchases - without changing banks." Partee writes: "No longer a regional effort tied to rewards at a supermarket chain, they now (presumably) have gone national, and have tied it to their own reward program. On top of that, they are charging the consumer $19.95 per year for the service."

You can read more about Capital One's Debit MasterCard at the Capital One web site. A comprehensive FAQ on the product is available. Rewards are only earned on signature-based (not PIN-based) purchases. Note that the new debit card is also "paperless" - a paper statement of account activity is only available upon request each month and has a $3.00 fee.

eBay Cancels Plans to Go PayPal-Only in Australia

Ina Steiner writes for AuctionBytes that eBay has cancelled plans to go to a PayPal-only marketplace in Australia following an inquiry by the Australian Competition and Consumer Commission that would have likely resulted in a ruling preventing eBay from doing so.

eBay Australia continues to require that all sellers offer PayPal for payment - but it won't be requiring removal of other payment methods. In a statement to the eBay community, eBay said "eBay regrets any uncertainty that this process has caused among the Community and believe that today’s decision will remove further doubt."

France: Pegasus Contracts with Gemalto for NFC Mobile Payments

Gemalto has announced that five banks in France are currently using its Allynis service as part of the "Payez Mobile" trial for contactless mobile payment: BNP Paribas, Crédit Agricole-LCL, Crédit Mutuel-CIC, Caisse d’Epargne and La Banque Postale Groups.

According to Gemalto, "the Pegasus group, which consists of seven major banks and four mobile operators in France, launched the program in November 2007 with 1,000 user clients and 200 merchants in Caen and Strasbourg. The renewal of the Gemalto service contract until the end of 2008 reasserts its recognition as a trusted third party among the various parties involved in the mobile NFC ecosystem." READ MORE »

Payments Professionals Management Changes

We have received news of the following recent management changes:

  • NetSpend has announced several senior management appointments including Frank Cotroneo as chief operating officer responsible for NetSpend's operations, finance and accounting, and business information, Anh Vazquez executive vice president responsible for NetSpend's online channel, and Tom Cregan as executive vice president and general manager, responsible for NetSpend's check cashing, payday loan, and general retail channels.

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 02, 2008

The ING Direct Story

Currency Marketing's blog has a post today with an edited podcast of a recent keynote speech by ING Direct USA CEO Arkadi Kuhlman to the CUES Experience conference held in mid-May. Kuhlman's speech begins about 10 minutes into the podcast. Highly recommended listening!

As a reminder, there's a great Harvard Business School case on ING Direct written by James L. Heskett that's well worth reading. See this earlier Payments News post for details.

Visa Updates Milestones for payWave Contactless Cards

Visa has announced "significant milestones in the adoption of Visa’s contactless technology feature, Visa payWave, demonstrating continued global momentum for the technology around the world. Visa payWave-enabled cards allow consumers to simply “wave and go” making every day transactions faster and more convenient." READ MORE »

Interchange Fees and the Price of Gas

Adam Levitin, associate professor at the Georgetown University Law Center, writes on the Credit Slips blog (where interchange fees are this week's topic) about Visa's changes to interchange fees for fuel transactions announced last week.

Also, Levitin's recent paper titled "Priceless? The Economic Costs of Credit Card Merchant Restraints" (to be published in the UCLA Law Review) is available online.

Mobile Operators To Define Requirements For NFC Handsets

The GSMA has announced plans to release later this summer "a preliminary set of minimum requirements for handsets containing Near Field Communications (NFC) chipsets. Developed by mobile operators supporting the GSMA's Pay-Buy-Mobile initiative, the requirements will help handset manufacturers to develop NFC-enabled phones that are compatible with operators' planned mobile NFC services and quickly realise economies of scale. Forty-four mobile operators from across the world support the Pay-Buy-Mobile initiative." READ MORE »

A Focus on Mobile Payments in Europe

The GSMA, the global trade body for the mobile industry, and the European Payments Council, which represents 8,000 banks in the European Union and EEA and Switzerland, have announced they will be working together "to accelerate the deployment of services that enable consumers to pay for goods and services in shops, restaurants and other locations using their mobile phones." READ MORE »

Australia - Responses to the Reserve Bank's Reform Review

In April, the Reserve Bank of Australia released the preliminary conclusions of its 2007/08 review of the payments system reforms undertaken by its Payments System Board. Interested parties were invited to make written submissions by June 30th on these conclusions and the analysis underpinning them. The RBA has made those submissions available online.

Headline News - July 2, 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.

July 01, 2008

A Look at US Consumer Credit Card Debt

In an article titled "The Check Is In The Mail - There's No Credit Crisis. Most Americans Don't Let Their Consumer Debt Get Out Of Hand", Newsweek's Jane Bryant Quinn writes that "although the overall burden of debt isn't as bad as the headlines make it sound, a small but growing minority is indeed in crisis. The banks are their enablers. Credit cards are so profitable that banks have been dealing preapproved cards to practically anyone with a heartbeat and a mailbox."

First Annapolis Navigator - June Issue

The June 2008 edition of the First Annapolis Navigator is now available (registration required). This month's feature article is "Chase Paymentech and the Acquiring Industry: A Conversation with Mike Duffy." Other articles include: "The Resurgeance of the Argentinean Credit Card Market", "Whack a Mole – Chasing Fraud in the Payments System", "Where the ISOs Are" and "Oil Prices Move Well into Record Territory".

New Jobs for Payments Professionals on PaymentsJobs.com

Are you looking for new challenges? Our sister web site, www.paymentsjobs.com, has several new job postings for payments professionals:

Are you hiring? Be sure to post your openings for payments professionals on PaymentsJobs.com!

Got several jobs to post? for a package discount.

More on Visa's Debit Card Rule Change

Earlier today, the US Department of Justice and Visa announced that Visa agreed to changing its operating rules to allow PIN-based debit transactions on small purchases without requiring cardholders to enter their PINs. At the end of the day, the card issuer decides whether their debit cards will support this mode - or not.

Coverage of the Visa rule change late today included an article titled "Visa Stops Requiring PIN For Debit-Card Purchases" by Robin Sidel in the Wall St. Journal and an article in Digital Transactions titled "A Visa Rule Change, Prompted by DoJ, Could Foster PINless Debit".

Revolution Money: "We're Paypal Meets Mastercard Without the Fees"

On Portfolio.com's Tech Observer blog, Sam Gustin writes about Revolution Money and quotes Jason Hogg, CEO of Revolution Money, as described the company as "we're PayPal meets MasterCard without the fees".

Visa re: Non-Visa Debit Transactions on Visa-Branded Cards

Visa Inc. has announced that it has "revised its U.S. Operating Regulations to expand the conditions under which non-Visa debit transactions can be processed without PIN validation on Visa-branded debit cards, effective July 1, 2008. The revision to the Visa USA Operating Regulations was made in response to inquiries by the Department of Justice and the Attorneys General of Washington, D.C., Ohio and New York. It will give merchants and financial institutions more processing options."

US Dept. of Justice Investigation Results in Visa Debit Rule Change

The US Department of Justice (DOJ) has announced that, as the result of a DOJ antitrust investigation, "Visa Inc. has rescinded a rule that required merchants to treat Visa-branded debit cards differently when used as a PIN-debit card (and processed via non-Visa networks) from the same cards when used as signature debit cards and processed on the Visa network. The Department said that it had been investigating whether the rule adversely affected competition in the debit card industry by restricting certain PIN debit transactions, particularly small-value and Internet transactions, and by potentially interfering with the introduction of new types of PIN debit services." READ MORE »

Huntington Introduces Huntington Mobile Banking

Huntington has launched Huntington Mobile Banking, calling it "a secure, convenient and easy way for Huntington customers to access their bank accounts anytime, anywhere, using a cell phone, smart phone or any other mobile device with browser access." Mobile Banking blogger and Huntington's mobile banking product manager Brandon McGee blogs about the launch of Huntington Mobile Banking. READ MORE »

CFSI Releases New Research on Small-Dollar, Short-Term Credit

The Center for Financial Services Innovation has released a new paper titled “A Fundamental Need: Small-Dollar, Short-Term Credit” by CFSI’s Michael J. Herrmann and Jennifer Tescher that explores "recent trends in small-dollar value, short-term credit, placing it within the context of the longstanding demand for these loans and the successes and failures of those who have provided them. Regulatory pressure and market changes are spurring private-sector innovation in this market niche. Herrmann and Tescher identify factors that are likely to lead to success in developing and delivering new products that are profitable for the provider and fair to the consumer."

Juniper Forecasts $300 Billion in Mobile Payment Volume in 5 Years

Juniper Research has published a new analysis of the mobile payments opportunity titled "Mobile Payment Markets: Digital & Physical Goods 2008 - 2013" that forecasts that the gross transaction value of payments made via mobile phone for digital goods (such as music, tickets and games) and physical goods (typically gifts and books) will exceed $300 billion globally by 2013. READ MORE »

InComm Helps Power Gift Cards at Seiyu Stores in Japan

InComm has announced that, beginning today, Seiyu shoppers can purchase a range of iTunes Cards at all 392 retail locations throughout Japan through in-store technology powered by InComm's Fastcard point-of-sale activation (POS) technology. Rolling out first with iTunes Cards, Seiyu will expand the offering at all retail locations offering a wide-variety of gift card selections over the next few years. READ MORE »

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