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January 09, 2009

Changes Coming for Citigroup

In an article titled "Citigroup Takes First Step Toward Breakup", David Enrich reports for the Wall St. Journal about changes coming for Citigroup - including the retirement of Robert E. Rubin and rumors of a pending spin-off of its brokerage unit.

Payments News on the Apple iPhone

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Hope you have a great weekend! For a change, it's going to be warmer and sunny here in the San Francisco Bay Area - yes!

The Federal Reserve’s Role in Retail Payments

Stuart Weiner of the Federal Reserve Bank of Kansas City has published an article titled "The Federal Reserve’s Role in Retail Payments: Adapting to a New Environment" icon_PDF_small.gif in the bank's fourth quarter Economic Review publication.
The U.S. retail payments system is in the midst of a transformation. The shift from paper to electronics, the emergence of new instruments and payments channels, the rise in nonbank participation, the change in risk profiles—all are elements of this new landscape. The Federal Reserve takes as one of its mandates fostering a payments system that is safe, efficient, and accessible. How does the Federal Reserve fulfill this mandate in this new environment?

US Unemployment Spikes to 7.2%

This morning's jobs report from the US Department of Labor reports a loss of 524,000 nonfarm jobs during December resulting in an unemployment rate of 7.2%, the highest it has been since 1993, and up from 6.8% in November.

Headline News - January 9, 2009

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

January 08, 2009

Next Glenbrook Payments Boot Camp - January 20-21

The next Glenbrook Payments Boot Camp scheduled for January 20-21 in the San Francisco Bay Area is filling quickly. The January session will be taught by Glenbrook's Carol Coye Benson and Scott Loftesness. If you're interested in attending this session, please register as soon as possible to ensure you get a seat!

A Deal re: Mortgage "Cramdowns"?

Elizabeth Williamson reports for the Wall St. Journal that Citigroup has agreed to a deal with top Democratic senators that would "would allow judges to set new repayment terms for millions of mortgage holders who wind up in bankruptcy court." Williamson notes that the deal represents a change in direction by the financial services industry who have historically resisted efforts to allow judges to adjust mortgage loan principal amounts for consumers in bankruptcy.

US Consumer Credit Declined Dramatically in November

The latest G.19 Consumer Credit data released today by the Federal Reserve shows that US consumer credit decreased at an annual rate of 3.75% with revolving credit declining at an annual rate of 3.5%. reports that the decline is the largest percentage drop since 1998 and the largest ever decline in dollar terms.

Sneak Peek - m-Via Launches at CES

m-Via, a new mobile money remittance company, has posted a "sneak peek" of its new offering which will be launched at the Consumer Electronics Show in Las Vegas later today. m-Via says it is "the first solution for remitting money via ANY mobile phone from the USA to Mexico, South America and the Philippines. m-Via will only be sold via wireless retailers in the United States beginning in January."

Microsoft Tags

Microsoft has introduced the Microsoft Tag. Microsoft says that the tags...
"...tranform physical media (print advertising, billboards,product packages, information signs, in-store merchandising, or even video images)—into live links for accessing information and entertainment online. With the Microsoft Tag application, just aim your camera phone at a Tag and instantly access mobile content, videos, music, contact information, maps, social networks, promotions, and more. Nothing to type, no browsers to launch!"
Microsoft says over 100 mobile phones are already supported - including the Apple iPhone.

Here's a tag I just created that links to the URL for Payments News:

Payments News BarCode.jpg

Here's a video with more details. What can you think to do with tags in your organization?

Ingenico Protects Payment Card Data from Terminal to Host

Ingenico has announced a new open architecture security enhancement, the Ingenico On-Guard solution, that the company says "will encrypt cardholder data from the transaction terminal to the merchant host, thus adding a significant security layer to card transactions that used to communicate in the clear. The new solution will be available on the Ingenico terminals sold in North America." READ MORE »

January 07, 2009

A Look at India's mChek and Microfinance with Mobile Phones

India's mChek, a mobile payments and security company, has developed mobile banking and payments technology that it is applying to microfinance applications and mass banking in a pilot with Grameen Koota, a microfinance institution in India. In a series of videos, mChek introduces the service, demonstrates how it works and shares some initial results.

If you're interested in learning more about mChek's pilot results and its work with the bottom of the economic pyramid, contact Valerie Rozycki at READ MORE »

US Consumer Credit Worsens in December

Reuters is reporting that Fitch Ratings latest report on US consumer credit for December indicates that credit card defaults rose with chargeoffs up 31 percent vs. the same month a year ago. In addition, monthly repayment rates on outstanding credit card debt declined 246 basis points sequentially from November to 15.96%. "The outlook is gloomy, as consumers struggle with a deepening recession and the highest unemployment rates in 15 years."

Chase Card Services Unveils Enhanced Consumer Web Site

Chase Card Services has unveiled "an enhanced version of its popular Web site Chase Clear & Simple with new tools to help customers manage their accounts, tips to avoid unwanted fees and information to support their financial success. Through its relationship with AARP, Chase worked to create interactive tools, calculators, worksheets and other financial literacy resources for consumers 50 years of age and older." READ MORE »

Discover's US Spending Monitor Hits New Low in December

The Discover U.S. Spending Monitor fell for the fourth consecutive month in December, declining more than three points to a new low of 76.6 (based out of 100). Both components of the monthly spending index – consumer confidence in the U.S. economy and consumer spending intent – reached new lows during the month, as concerns about the economy may be weighing on post-holiday spending plans. READ MORE »

India Pay - Domestic Card Payment Processing in India

In an article titled "Card processing work to shift to India", India's Business Standard reports on India Pay, a new payment system planned to start next year.
Sources said over the next four to five years, processing of credit card transactions, which is so far done abroad will shift to India. Sources at the Indian Banks’ Association ... said that India Pay will handle all domestic transactions while it will work with payment networks like Visa and MasterCard for international transactions undertaken by Indian cardholders or foreigners on visit to the country."

The article also mentions National Payment Corporation of India, a new company established by nine banks to focus on "electronics payments, ATM transactions and processing of card payments."

[Editor's note: We'd love to learn more about these payment card processing initiatives in India. If you can share details, please contact me directly.]

Gemalto First To Market with Chip Card Authentication Reader

Gemalto has announced that its Ezio Pocket Reader is "the first fully certified reader made available to the market for MasterCard Advanced Authentication for Chip. The Advanced Authentication for Chip specification allows two-factor authentication on any EMV card already in use, whether or not it has been personalized according to the MasterCard Chip Authentication Program™ (CAP)." READ MORE »

Declines in US Retail Sales May Be Stabilizing

In an article titled "Erosion in Retail Sales Slowed a Bit in December", Stephanie Rosenbloom writes for the New York Times that MasterCard Advisor's SpendingPulse data show that the declines in sales leveled off at about 20 percent in December - and that “the first time in a long time that we had numbers that were a little better than the previous month.”

Headline News - January 7, 2009

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

January 06, 2009

Prepaid Products-Align Processor Relationship With Strategic Goals

Javelin Strategy & Research has just released a new report titled "Prepaid Product Evolution - Align Processor Relationship With Strategic Goals" written by Bruce Cundiff. From the abstract:
"This Javelin research report makes use of consumer data analyzing the propensity to use prepaid products, and also in-depth interviews with prepaid program managers at financial institutions and other third parties to understand the key components of a prepaid processing relationship and how prepaid program managers must approach the establishment of such a relationship. "

New Blogs Added - Is Yours Included?

Over the holidays, we've added more than a half dozen new payments, banking and security-related blogs to our list of Other Banking and Payments Blogs. On this one convenient page here on Payments News, you can quickly review the most recent postings from other blogs that we think are important and relevant to payments and banking professionals.

If you're an active blogger and think your blog should also be included, be sure to let us know (click on Feedback in the toolbar above) and we'll add yours as well! Send along your blog's home page and the location of your RSS feed - and we'll do the rest.

The Economics of Two-Sided Payment Card Markets

A working paper titled "The Economics of Two-Sided Payment Card Markets: Pricing, Adoption and Usage" icon_PDF_small.gif by James McAndrews and Zhu Wang of the Federal Reserve Bank of Kansas City provides a new theory to explain pricing, adoption and usage in two-sided payment card markets.

Why Do Card Issuers Charge Proportional Fees?

A working paper titled "Why Do Card Issuers Charge Proportional Fees?" icon_PDF_small.gif by Oz Shy and Zhu Wang of the Federal Reserve Bank of Kansas City explains why payment card companies charge consumers and merchants fees which are proportional to the transaction values instead of charging a fixed per-transaction fee. "Our theory shows that, even in the absence of any cost considerations, card companies earn much higher profit when they charge proportional fees."

Product Innovation and Firm Survival in A Network Industry

A working paper from the Federal Reserve Bank of Kansas City titled "Product Innovation and Firm Survival in A Network Industry" icon_PDF_small.gif by Fumiko Hayaski and Zhu Wang studies product innovation and network survival in the U.S. ATM/debit card industry. "The findings suggest introducing the point of sale debit function in the mid 1980s played an important role driving the network consolidation."

International Remittances - Payments System Briefing Paper

A briefing paper titled "International Remittances" icon_PDF_small.gif by Terri Bradford, Payments System Research Specialist at the Federal Reserve Bank of Kansas City, describes some of the means by which individuals remit funds internationally -- informal networks, money transfer operators, financial institutions and other options -- and discusses some of the factors that may influence the choice of provider.

CSC, Sentenial Strategic Alliance for SEPA Direct Debit

CSC has announced that it has formed an alliance with direct debit solution provider Sentenial to offer a Single Euro Payments Area (SEPA) direct debit software-based payment solution. According to CSC, "the offering will enable European banks to provide corporate and public sector customers with a comprehensive SEPA direct debit service ahead of the November 2009 target date set by the European Payments Council. SEPA is an initiative of the European banking industry that aims to make cross-border electronic payments as fast, secure and efficient as domestic payments within one country." READ MORE »

Auriemma Launches Co-Brand Cards “Checkup” Service For Retailers

The Auriemma Consulting Group (ACG) has launched a “health checkup” service for retailers to help them evaluate co-branded card programme performance and identify options for improvement. According to ACG, it builds on a service that has been utilised by the vast majority of card issuers in the recent years. READ MORE »

Barclays To Roll-Out Contactless Visa Debit Cards in UK

In the UK, Barclays has announced that its customers will "soon be able to pay their way with the wave of a card as the bank is set to be the first in the UK to roll-out contactless VISA debit cards to its customers. From March, most Barclays debit cards that are issued or reissued will have contactless technology built in as standard. More than three million customers are expected to be using contactless debit cards by the end of the year." READ MORE »


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