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October 17, 2008

Glenbrook's Advanced Session on Emerging Payments - Nov. 12th

Join us this November 12th in Mountain View, California for a one day, Advanced Workshop on Emerging Payments taught by Jay DeWitt, Russ Jones, and Allen Weinberg from Glenbrook Partners.

At this workshop, we'll be talking about the potential impacts of the current financial market crisis on the payments industry, as well as diving deep into topics such as PayPal's acquisition of Bill Me Later, and the learnings from several recent NFC trials for mobile payments.

Registration is now available online. Questions? Contact Carol Coye Benson via email at bootcamp@glenbrook.com.

The College Credit Card Trap

Today's New York Times comments that colleges need to reform their credit card practices - "to only do business with credit card companies that steer clear of commonly used but unscrupulous credit card terms that take advantage of students. That means an end to hidden fees or unreasonable penalties, including universal default, under which interest rates go up when the customer fails to pay a bill not related to the credit card account."

The Times editorial was motivated by a study done earlier this year by the US Public Interest Research Group.

Behaviorally Informed Financial Services Regulation

The New America Foundation has published a new paper titled "Behaviorally Informed Financial Services Regulation" by Eldar Shafir, Michael Barr, and Sendhil Mullainathan.

From the abstract: "Regulation is largely stuck in two competing models-disclosure, and usury or product restrictions. This paper explores a different approach, based on insights from behavioral economics on the one hand, and an understanding of industrial organization on the other. At the core of the analysis is the interaction between individual psychology and market competition. This is in contrast to the classic model, which relies on the interaction between rational choice and market competition."

Forbes Looks at Visa

In an article titled "Hard Charger", Stephane Fitch writes for Forbes about Visa and CEO Joe Saunders.

Learning from Mobile Payments Experiences in Korea

Dave Birch writes on the Digital Money Forum Blog about an SK Telecom presentation on their learnings from mobile payments initiatives in Korea.

Merchants Coalition Fighting Interchange in Canada

In an article titled "Coalition seeks lower price for credit-card services", Laura Severs writes for Business Edge about efforts by a coalition of card-accepting businesses in Canada to fight interchange fees.

Headline News - October 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.

October 16, 2008

A Payments News Milestone

Payments News continues to grow in regular readership - we're delighted that so many of our friends find it to be of value. Earlier this morning, a Bank of America staffer became the 5,000th email subscriber to Payments News - a new milestone! We crossed 4,000 email subscribers in late May - so roughly 8 new Payments News email subscribers have joined every business day since then.

Thanks again for all of your comments and suggestions. If you've got more feedback for us, please send it along anytime by clicking on the Feedback link in the top menu bar - we're all ears and really do appreciate hearing from you! To send us news that you'd like to have covered on Payments News, please email it along to us: editor@paymentsnews.com.

Payments News is a "sideline" for us at Glenbrook! Our real "day job" is the strategy consulting work we do for a wide range of clients involved in electronic payments - along with our payments education program serving payments professionals. Carol Coye Benson and I just today finished a chock-full two-day Payments Boot Camp here in the San Francisco Bay Area. If you're interested in attending the next one of our Payments Boot Camps, we'll be in Denver on December 3-4, 2008.

Check2Card Eliminates Check Cashing Fees

Metropolitan National Bank (New York) and its wholly-owned subsidiary CashZone have announced the launch of the CashZone Prepaid Visa Card "Check2Card" Program in select PriceRite stores. CashZone Check2Card is a program that allows CashZone members to convert paychecks and most government-issued checks, for no charge, into instantly available funds (or "loads") on a CashZone Prepaid Visa Card. READ MORE »

An Update on Person-to-Person Lending in the US

In an article titled "Lending Alternative Hits Hurdle", Brad Stone writes for the New York Times about some recent challenges being faced by the person-to-person lending companies in the US market. Last week, Zopa announced it was exiting the US market. Yesterday, Prosper.com announced it stopped accepting new lenders pending registration of its securities with regulatory authorities. Earlier this week, Lending Club announced it had completed its registration of $600 million in securities.

RBS WorldPay to Support RevolutionCard Acceptance in US

Revolution Money has announced that RBS WorldPay (formerly RBS Lynk) will be offering RevolutionCard as a payment option to its merchants. According to the companies, the agreement extends the RevolutionCard network to nearly 300,000 online and physical merchant locations. READ MORE »

Fiserv's CheckFreePay to Enable Walk-In Bill Pay at Retail Checkouts

Fiserv has announced its CheckFreePay walk-in bill payment service has partnered with PayScan America to utilize PayScan's patented bar code bill payment process to offer "an enhanced retail payment solution that will enable walk-in consumers to pay their household bills quickly and easily at retail checkout lanes and self-service kiosks." READ MORE »

An Update on UPIC Payments

The Clearing House has announced that it is seeing accelerating usage of Universal Payment Identification Codes (UPICs) by public and private sector entities across the U.S. UPIC payments have grown to a record $4 billion in the third quarter of 2008, up 61% compared to the same period a year ago. A UPIC is used for credit payments only and thus lowers the possibility of unauthorized debits, checks and demand drafts. The UPIC was developed by the Electronic Payments Network (EPN), the ACH business of The Clearing House, in conjunction with the financial services industry. READ MORE »

What Makes a Smart Card Secure?

The SmartCard Alliance has announced a new white paper titled "What Makes a Smart Card Secure?" that was developed by the Smart Card Alliance Contactless and Mobile Payment Council’s Security Work Group "to provide an overview of smart card security features and other security designs inherent in smart card-based systems." READ MORE »

The Rapid Growth in US Remote Deposit Capture

Celent has published a new report titled "State of Remote Deposit Capture 2008: Sprint Becomes a Marathon" noting that "The past year has seen remarkable remote deposit capture solution adoption among midsize banks, community banks, and credit unions. By the end of 2008, two-thirds of all US banks and 40% of all US financial institutions will have adopted RDC."

Citigroup Reports Third Quarter 2008 Financial Results

Citigroup has reported its third quarter 2008 financial results. In its cards business in North America, Citi reported a decline in purchase volume of 3% year over year along with a 3% decline in the number of open credit card accounts. Average managed loans in its North America cards business grew 4% while credit losses grew 68%. "The managed net credit loss ratio increased 262 basis points to 7.13%." Floyd Norris of the New York Times comments on Citi's overall financial results.

US Credit Card Issuers Need to Rethink Their Card Programs

Reflecting on the issues he identified in a paper written a couple of years ago, David Evans writes on the Catalyst Code blog: "Banks that have been waiting to rethink their card programs—from loyalty to pricing to product redesign should make a crash effort to save this profit stream."

PayPal's Third Quarter 2008 Financial Results

eBay reported third quarter 2008 financial results yesterday - saying that "PayPal had a strong quarter with $597 million in net revenue, an increase of 27% year-over-year. Net total payment volume (TPV) for the quarter was $14.81 billion, an increase of 28% year over year. The net revenue and net TPV growth was driven primarily by the continued excellent growth of merchant services globally and increased penetration on eBay. Global active registered accounts increased to 65 million, representing 19% year over year growth."

Glenbrook's Russ Jones takes a look at PayPal's third quarter results. SeekingAlpha.com has posted a transcript of eBay's Q3 2008 Earnings Call.

October 15, 2008

S&P Study Highlights Growing Strain on American Consumers

Standard & Poor's has announced results of a new survey finding that "as the downturn in the economy deepens, U.S. credit card users are increasingly having a difficult time managing their personal debt." READ MORE »

Citi's ThankYou Network Introduces Prepaid Card Rewards Option

Citi’s ThankYou Network has announced it has made arrangements with Citi Prepaid Services to introduce a new prepaid card rewards option for members of ThankYou Network. The prepaid cards – available in three denominations, $25, $50 and $100 – can be used everywhere Visa debit cards are accepted. READ MORE »

Victrio Launches Voice-Based Anti-Fraud Call Screening System

Mountain View, California-based Victrio has introduced "a new credit risk management solution that identifies fraudsters by their voice during credit card authorization phone calls. It works by comparing the callers’ voice against a database of known criminals. If there is a match, authorization can be denied before the damage is done. The company is targeting big-ticket online merchants as well as banks and other credit card issuers." READ MORE »

JP Morgan Chase Reports Third Quarter Financial Results

JP Morgan Chase has reported financial results for the third quarter. In its Card Services business segment, the bank reported a 63% decline in net income on a year over year basis as its provision for credit losses was up substantially. Charge volume on its cards was up 5% year over year but essentially flat versus the second quarter. Merchant processing dollar volume at Chase Paymentech was up 9% with transaction volume up 14%.

US Retail Sales Declined 1.2 Percent in September

The U.S. Census Bureau has announced that advance estimates of U.S. retail and food services sales for September, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $375.5 billion, a decrease of 1.2 percent (±0.5%) from the previous month and 1.0 percent (±0.7%) below September 2007.

A Look at Checking Overdraft Fees

The three highest-priced markets in the U.S. for average overdraft (OD) service fees on consumer checking accounts are Miami, Washington D.C. and Denver, while Florida ranks as the highest-priced state for OD fees, and the South leads as the highest-priced region for consumer OD fees, according to a nationwide survey conducted by Moebs Services. READ MORE »

NFC Forum Sponsors Mobile Transactions Workshop

The NFC Forum, a non-profit industry association that advances the use of Near Field Communication (NFC) technology, has announced that it is sponsoring and participating in the Mobile Transactions Workshop at the Mobile Internet World Conference and Expo, October 22 at 2:30 PM, at the Boston, Massachusetts Convention & Exhibition Center. READ MORE »

October 14, 2008

A Look at Citi Obopay Mobile P2P Fees

Earlier today, Citi and Obopay announced a new mobile person-to-person mobile payments pilot. According to the fee schedule announced for the pilot, sending money has a transaction fee (paid by the sender) of $0.25 for amounts up to $50 and 1.5% of the amount for transactions above $50. So, for example, on a $500 transaction, the sender's fee would be $7.50. Note that Citi and Obopay are waiving all send money fees through the end of October.

Following Finovate 2008

Today, the Finovate 2008 conference is being held in New York City. You can follow the companies presenting over on the NetBanker blog.

Discover Settles Lawsuit Against Visa, MasterCard

David Glovin reports for Bloomberg.com that Discover Financial Services has settled its antitrust damages lawsuit against MasterCard and Visa. Visa and MasterCard have separately issued press releases - noting that the details on the settlement are still being finalized.

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