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« April 12, 2009 - April 18, 2009 | Main | April 26, 2009 - May 2, 2009 »

April 25, 2009

Over the Limit and Rate-jacking

One of the editorials in today's New York Times - titled "Over the Limit" - discusses Obama's recent meeting with credit card execs and suggests that if he's serious about pushing through reform of the credit card industry that "he could pressure Congress to end some of the industry’s worst tricks right now."

The Times concludes by focusing on the over-limit fee - the practice of card issuers charging a fee if a consumer exceeds their credit limit - and suggest consumers should be given the choice of a "hard or soft" (my language) limit on their credit card accounts.

In a related article titled "Sleeping as Your Debt Piles Up", Jim Dwyer writes about arbitrary increases in credit card interest rates - called "rate-jacking" - one of the most provocative techniques used by credit card issuers.

On CreditCards.com, Connie Prater provides a sample "rate-jack" opt-out letter that cardholders can use with some issuers to reject interest rate hiikes.

April 24, 2009

American Express Plans Major Campaign for Delta SkyMiles Cards

Maria Aspan reports for the American Banker in Monday's edition that "U.S. Bancorp and American Express Co. are squaring off for a marketing battle that will be waged with reward programs but could be won on reputation." At stake are the cardholders of the Northwest WorldPerks Visa card (issued by US Bank) - with US Bank also competing for those cardholders with a new FlexPerks Visa card! See the next story for late news tonight about litigation brought by Northwest against US Bank.

Northwest Airlines Sues US Bank Over Credit Card

Suzanne Ziegler reports for the Minneapolis-St. Paul Star-Tribune about a lawsuit filed today by Northwest Airlines (now merged into Delta) against US Bank trying to stop the bank's efforts to migrate cardholders from the soon to be defunct Northwest Worldperks Visa card (issued by US Bank) to U.S. Bank's new FlexPerks Visa card. Delta is, of course, planning to move those cardholders to its American Express SkyMiles card.

The Great Credit Card Battle To Come

Former Secretary of Labor and currently a professor at the University of California at Berkeley, Robert Reich blogs about the current credit card situation in the US. "For years, banks used every gimmick possible to get the public to use their cards -- regardless of the credit worthiness of the customer."

A Long List of Consumer Complaints About Card Issuer Treatment

In an article titled "Credit-Card Shocks Anger More Borrowers", Jennifer Waters reports for the Wall St. Journal on why many recent actions taken by credit card issuers have been so frustrating to many consumers:

"Welcome to today's credit-card world, where interest rates and fees can go up, and credit limits and rewards benefits can go down, seemingly at the drop of a hat and with little notice to borrowers - a situation that has consumers fuming and politicians taking notice."

Does Accepting PayPal Make For A Better Shopping Experience?

Saul Hansell of the New York Times has a post on the BITS blog titled "Undoing Meg Whitman’s eBay" in which he looks at the recent actions by eBay CEO John Donahue undoing several of the acquisitions done by former eBay CEO Meg Whitman. Hansell writes that Donahue is, however, excited about PayPal - but asks what PayPal is trying to be - and questions whether it adds value.

Bank Stress Test Reports Are Due

In an article titled "Edgy Banks Start to Get Word Today on Stress Tests", Eric Dash reports for the New York Times that the "Federal Reserve intends to disclose, in general terms, how it conducted the stress tests on Friday afternoon, but the government will not publicly reveal the results until May 4."

Headline News - April 24, 2009

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, 2009

A Look at Wells Fargo's New Small Business Invoicing Solution

Over on PaymentsViews.com, Glenbrook's Erin McCune takes a look at Wells Fargo's new small business invoicing solution - announced yesterday. Erin spoke earlier today with Richard Weeks, Senior Vice President at Wells Fargo’s Internet Service Group, to learn more about the new service.

American Express Reports 1Q2009 Financial Results

American Express has reported financial results for the first quarter of 2009 - including a decline in total revenues of 18% with income of $443 million. Amex reported US card spending of more than $63 billion and said it has $207 billion in open credit lines to consumers and small businesses. Merchant discount revenue also declined 18% with the average discount rate down slightly to 2.56%. Average cardholder spending declines 18% worldwide to $2,443.

President Obama Discusses Credit Card Principles Following Meeting

From a White House press release: "President Obama met with representatives from the credit card industry this afternoon to discuss the impact of the current economic crisis on consumers. He has been a strong proponent of cleaning up the practices of the credit card industry since he was a Senator and he called for measures to strengthen consumer protection in the credit card market during the campaign." READ MORE »

Senators Ask Fed For Emergency Freeze on Credit Card Rates

U.S. Senators Charles E. Schumer (D-NY) and Senate Banking Chairman Christopher Dodd (D-CT) have called on federal regulators to implement an emergency freeze on interest rates tied to existing balances on credit cards. READ MORE »

New on Payments Views: Why Debit Cards Aren't a Product...

In a new PaymentsViews.com article titled "Why Debit Cards Aren't a Product...and Why 'Decoupled Debit' Could Change All That", Glenbrook's Carol Coye Benson asks whether debit cards are products - or features?

Credit Cardholders’ Bill of Rights Clears Financial Services Committee

Yesterday, the US House Financial Services Committee approved legislation that would "provide credit card customers crucial protections against unfair, deceptive, and anti-competitive credit card practices, which include double-cycle billing, due-date gimmicks, and retroactive interest rate hikes. The bill would also increase the advance notice of impending rate hikes and give consumers the information and rights they need to manage their credit responsibly." READ MORE »

First Data Becomes Visa Merchant Acquirer in Canada

First Data has announced that it has entered into a relationship with Visa in Canada, becoming the first merchant acquirer in the country to directly participate in all three major schemes: Visa, MasterCard and Interac. READ MORE »

NFC Technology Takes Next Step With the Nokia 6216 Classic

Nokia has announced its third fully integrated Near Field Communication (NFC) device, the Nokia 6216 classic, Nokia's first SIM-based NFC device. According to Nokia, "with NFC consumers will benefit from greater ease of use, more convenient sharing of content - such as images, weblinks, audio files or contact data - as well as secure payment and ticketing transactions, all with just one tap of the device." READ MORE »

April 22, 2009

Can't Travel? Attend FinovateStartup via Webcast Instead!

Jim Bruene's FinovateStartup conference is coming up next Tuesday in San Francisco. Tonight, Jim announced a new option for attending - via webcast instead of traveling to San Francisco.

Pelosi: Credit Cardholders' Bill of Rights Protects Americans

Speaker Nancy Pelosi released the following statement on the Credit Cardholders' Bill of Rights, which was approved by the House Financial Services Committee today and will be considered on the House floor next week.

"The Credit Cardholders' Bill of Rights protects Americans against the unfair and often abusive practices of credit card companies. Americans should never be subject to excessive credit card fees, sky-high interest rates, and unfair, incomprehensible agreements that credit card companies revise at will. But during a recession, with so many families in economic peril, these practices can be devastating.

"This legislation is a departure from an era of government indifference to anti-consumer practices. I commend Congresswoman Carolyn Maloney for her tenacious work on this legislation in the face of continued opposition from corporate interests. I look forward to a strong, bipartisan vote in favor of the Credit Cardholders' Bill of Rights and to working with the Senate to send this critical pro-consumer legislation to President Obama for his signature into law."

A Look at PayPal's 1Q2009 Financial Results

PayPal's parent eBay announced financial results for the first quarter 2009 today. PayPal's revenue grew 11% year over year to $645 million. PayPal's purchase volume grew 18% on an foreign exchange-neutral basis to $15.9 billion. PayPal reported 73.1 active accounts, up 22%. PayPal's revenue ("global take rate") came in at 3.81% of payment volume with transaction expense rate at 1.16% and a transaction loss rate of 0.28%

Hypercom, Ingenico, VeriFone Launch SPVA Payment Security Alliance

Hypercom, Ingenico, and VeriFone have announced the formation of the Secure POS Vendor Alliance - SPVA, a non-profit business organization chartered with implementing common payment security standards among vendors of secure point-of-sale (POS) devices used by retailers, acquirers and cardholders alike. READ MORE »

Authorize.Net Introduces New Fraud Prevention Capabilities

CyberSource has announced that its Authorize.Net small business solution will be releasing a new Advanced Fraud Detection Suite (AFDS) - calling it "a robust, rules-based fraud detection system that allows online merchants to identify and handle suspicious transactions using multiple filters, tools and custom settings." READ MORE »

Wells Fargo Reports 1Q2009 Financial Results

Wells Fargo has reported financial results for the first quarter of 2009 - reporting record profits of $3.05 billion on revenues of $21 billion. Revenues from cards and other fees were $1.8 billion.

“The best way to generate capital is to earn it,” said Wells Fargo President and CEO John Stumpf. “This has long been the hallmark of our company and we’re now seeing the initial signs of the earnings and capital-generating power of the combined Wells Fargo-Wachovia in our first quarter together, serving one of every three U.S. households."

Wells Fargo reported credit card chargeoffs grew to 10.13% with the bulk of those losses in the legacy Wells Fargo card portfolio. Its credit card portfolio has $22.8 billion in credit card outstandings (down 3%) which represents less than 3% of the bank's total loans. The bank also reported having 15.5 million active online customers and 3.7 million active bill pay customers (24% of online banking customers).

A Look at Credit Card, Mortgage Politics in Washington

In an article titled "Banks Sway Bills to Aid Consumers", Stephen Labaton and Eric Dash report for the New York Times on the politics swirling in Washington over pending legislation regarding curtailing certain credit card issuer practices and renegotiation of mortgage terms in bankruptcy.

Regarding credit cards, President Obama is scheduled to meet with a group of industry executives tomorrow at the White House. During his campaign last year, Obama set out changes he would push for regarding credit card issuer practices - saying he would "establish a five-star rating system so that every consumer knows the risk involved in every credit card ... [and] establish a Credit Card Bill of Rights to stop credit card companies from exploiting consumers with unfair practices."

Meanwhile, the American Bankers Association has sent a letter to the House Committee on Financial Services - which is marking up pending credit card legislation today. The ABA writes:

H.R. 627 is unnecessary and potentially counterproductive in light of the sweeping credit card rules adopted by the Federal Reserve Board (Fed), Office of Thrift Supervision (OTS), and the National Credit Union Administration (NCUA) in December 2008. Enactment of H.R. 627 adds further restrictions on the ability of credit card issuers to factor in risk when making credit decisions, and increases the already extensive operational challenges facing the industry as they prepare to comply with the Fed’s rules.

The Bancorp Bank, Planet Payment Offer Multi-Currency Solutions

The Bancorp Bank and Planet Payment have announced an agreement to provide Planet Payment’s suite of products and services to Bancorp’s merchants and third party servicers in the U.S. payments market. As part of the business arrangement, Bancorp will utilize Planet Payment’s multi-currency processing platform to provide merchants with tools to increase their sales and operate their businesses more efficiently. READ MORE »

April 21, 2009

This Week's Milestone: 6,000 Email Subscribers to Payments News!

Earlier this week, we enrolled our 6,000th email subscriber to Payments News! This is quite a milestone for us - back in the early days of PN we celebrated our 500th subscriber!

If you're newly on-board as a Payments News subscriber, welcome! Be sure to tell us how we're doing by emailing us: feedback@paymentsnews.com!

Is your organization interested in sponsoring Payments News? Contact me directly: editor@paymentsnews.com.

Capital One Reports 1Q2009 Financial Results

Capital One has reported first quarter 2009 financial results. In its credit card business, credit card purchase volume declined 11.9% vs 1Q2008 and the number of loan accounts declined over 13%. The U.S. credit card charge-off rate increased to 8.4 percent for the first quarter of 2009 vs. 5.85% a year ago.

Equifax Launches 'Identity 2.0'

Equifax has announced "a suite of products and industry initiatives to protect consumers' identity online and enhance security for personally identifiable information. Led by Ron Carpinella, vice president of identity management and identity marketing, Equifax's "Identity 2.0" program builds a pipeline of products that make online transactions easier and more secure for consumers and businesses. The Equifax I-Card(TM) and its enhanced authentication offering, eIDverifier(R), are two of the company's initiatives." READ MORE »

New GlobalPlatform White Paper on NFC Mobile

GlobalPlatform has published a new white paper titled "The GlobalPlatform Proposition for NFC Mobile: Secure Element Management & Messaging" that is intended to outline its technical contribution and commitment to the near field communication (NFC) mobile market. The paper details how GlobalPlatform Specifications are able to support all roles in the NFC ecosystem and outlines the roles and responsibilities of each player in the maintenance of an end-to-end security chain to ensure the secure management of over-the air applications between a service provider’s back office and the secure element on a chip.

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