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June 19, 2009

PayPal - The Least Likely Financial Giant - Scott Thompson Interview

PayPal-ScottThompson-140px.jpgPayPal CEO Scott Thompson was interviewed at Wired's first Business Conference - “Disruptive by Design” - held in New York earlier this week. In the interview, Scott talks about the history of PayPal, how the company innovated to integrate with national payment systems in many countries around the world, and the innovations in risk management that have been fundamental to PayPal's success.

Read Scott's blog post about the interview - and you can watch the full video of the interview here. Highly recommended!

Citi's Ajay Banga Named President and COO of MasterCard

MC-AjayBanga-140px.jpgMasterCard has announced it has appointed Ajay Banga President and Chief Operating Officer, reporting to Robert W. Selander, currently President and Chief Executive Officer. Mr. Selander will continue to serve as Chief Executive Officer after Mr. Banga joins MasterCard on August 31, 2009.

Mr. Banga is currently Citigroup's Chief Executive Officer of Citi Asia Pacific, responsible for all of Citi's business lines in the region including credit cards and consumer banking, institutional banking, wealth management and alternative investments. READ MORE »

PayPal Updates Send Money Pricing for US P2P Payments - Now Free!

PayPal_logo-140px.jpgPayPal has announced that, effective today, "you can send money via PayPal to friends and family in the US for free" - as long as the payment is funded from your bank checking account or your PayPal account balance. You can also pay using a credit card and, if so, "you can choose to pay the fee or have the recipient pay it."

Acxiom Launches Online Digital Identity Card

Acxiom_logo-140px.jpgAcxiom has announced the introduction of a digital identity card as a beta offering for retail merchants, corporations, financial institutions and other organizations that wish to offer a privately branded identity card to their customers.

According to Acxiom, "a digital identity card allows consumers to establish new online accounts and log in to existing accounts with a unique, encrypted identity that is stored on the consumer’s personal computer. This is the digital equivalent of a privately branded identity card that is typically carried in a person’s wallet." READ MORE »

June 18, 2009

The End of Free Checking?

Probity_logo-140px.jpgIn an article titled "Is This The Beginning of the End of Free Checking?", Kelly Evans looks at Probity Financial Services - who offers checking accounts that aren’t free. Probity thinks its monthly charges are an attractive alternative to most banks’ standard practices with respect to overdraft fees, etc.

A Look at Small Business Credit - The Squeeze Is On!

worried man at desk-140px.jpgIn an article titled "Cutting Off Mom & Pop Credit", Andrew Martin writes for the New York Times about how a "crackdown on credit limits by card companies is squeezing the nation’s 27 million small businesses, exacerbating the problems brought on by a stagnant economy."

See this earlier post about the drastic action that Advanta had to take against its small business borrowers.

A Look at Potential Regulatory Impacts on Special Purpose Banks

bank-generic_logo-140px.jpgIn an article titled "Reg Plan Could Force GE, Retailers to Divest Banks" in today's American Banker, Maria Aspan writes that the Obama administration proposals for financial industry regulatory reform could result in certain kinds of special purpose banks, such as retailer-owned credit card banks, being eliminated.

As part of her reporting this story, Aspan spoke to a number of industry participants who "stressed that it remained early to understand the proposed reforms' full implications. But they agreed that, if the proposals are enacted as written, the days when retailers could issue their own credit cards would end — forcing the few remaining players to sell or close down their lending arms."

Norway's Norges Bank Uses Twitter to Send Rate Decision

Twitter_logo-140px.jpgNorway's central bank, Norges Bank, used Twitter yesterday to communicate its latest interest rate decision. "We believe we are the first in the world to use Twitter this way," Norges Bank spokeswoman Siv Meisingseth told Reuters. Follow Norges Bank on Twitter at:

Discover Reports Second Quarter 2009 Results

Discover_logo-140px.jpgDiscover Financial Services has reported results for its second quarter ending May 31, 2009. According to Discover, US sales volume decreased 4% versus the second quarter of 2008, reflecting lower gas prices and a general decline in consumer spending. Managed loans ended the quarter at $51 billion, essentially unchanged from the prior quarter and up 7% from the prior year. The managed net charge-off rate increased to 7.79% for the second quarter of 2009, up 131 basis points and 280 basis points from the prior quarter and the prior year, respectively. The managed net charge-off rate for the third quarter of 2009 is expected to be between 8.5% and 9%.

“While the rise in unemployment continued to have a significant impact on our financial results, I am pleased with our strong relative performance in both credit management and sales volumes,” said David Nelms, chairman and chief executive officer of Discover Financial Services. “We continue to focus on reducing expenses and maintaining a strong capital position as we manage through these challenging times.”

No Spinout for PayPal

PayPalBusinessWeek's Douglas MacMillan writes about meeting with PayPal president Scott Thompson recently where he dispelled rumors that PayPal might follow its sister business unit Skype and be spun out of eBay. Thompson noted that the acquisition last fall of Bill Me Later was easier to accomplish with the strength of eBay's balance sheet.

A Look at the Proposed Consumer Financial Protection Agency

CFPA-v1-140px.gifIn an article titled "Banks Brace for Fight Over an Agency Meant to Bolster Consumer Protection", Andrew Martin and Louise Story write for the New York Times about concern among bankers about the Obama administration's regulatory changes that were proposed yesterday. The authors write: "Banks “are really dumbfounded by the scope of this agency,” Edward L. Yingling, the president of the American Bankers Association, said."

Headline News - June 18, 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.

June 17, 2009

Beaucoup Bucks? - Carol Coye Benson Takes a Look at BOKU

PaymentsViews_logo-140px.gifIn a post titled "Beaucoup Bucks" over on our sister website, Glenbrook's Carol Coye Benson takes a look at Boku, the new online payments service that was announced yesterday. Carol begins: "Boku is drop-dead easy for the consumer. The online demo is stunning in its simplicity. Never, ever, underestimate the importance of ease of use for a consumer. Especially for spontaneous purchases. In my opinion, this is right up there with 1-Click."

Inside the Financial Regulatory Reform Proposal

USGovernment_logo-140px.jpgEarlier today, the US Treasury released its proposals for financial regulatory reform. Here are some quotes from the proposal document based upon a very quick read:

Page 67: "In the credit card market, the opacity of increasingly complicated products led major card issuers to migrate almost uniformly to unfavorable methods for assessing fees and interest that could easily trap a responsible consumer in debt. Competition did not force these methods out, because consumers were not aware of them or could not understand them, and issuers did not find it profitable to offer contract terms that were transparent to consumers. For a variety of reasons, regulators have not brought enforcement actions under existing law."

Page 69: "One example is overdraft protection plans. These are a form of consumer credit, and consumers often use them as substitutes for other forms of credit such as payday loans, credit card cash advances, and traditional overdraft lines of credit. However, overdraft protection plans have not been regulated as credit, and, as a result, consumers may not overtly think of the plans as credit. Consumers may not, therefore, take the same care in their use of overdrafts that they take with other, more overt credit products. The CFPA would be authorized by existing statutes to regulate overdraft protection more like a credit product, with Truth in Lending disclosures as appropriate. The CFPA could also prohibit charging for overdraft coverage under a plan unless the consumer has “opted in” to the plan, just as the Credit CARD Act prohibits over-the-limit fees unless the consumer has “opted in” to over-the-limit coverage. It could also require affirmative consent at point of sale with debit transactions or at an ATM machine before collecting an “overdraft fee”. "

Also, here's a Fact Sheet on the reform proposals strengthening consumer protection.

US Treasury: "Financial Regulatory Reform: A New Foundation"

FinclRegulatoryReform-140px.jpgSaying that "we must act now to restore confidence in the integrity of our financial system", the US Treasury Department has released the Obama administration's plans to tighten regulatory oversight of the US financial system. Titled "Financial Regulatory Reform: A New Foundation", the plan will:
  • Require that all financial firms that pose a significant risk to the financial system at large are subjected to strong consolidated supervision and regulation
  • Increase market discipline and transparency to make our markets strong enough to withstand system-wide stress and the potential failure of one or more large financial institutions
  • Rebuild trust in our markets by creating the Consumer Financial Protection Agency to focus exclusively on protecting consumers in credit, savings, and payment markets.
  • Provide the government with the tools needed to manage financial crises so it is not forced to choose between bailouts and financial collapse
  • Raise international regulatory standards and improve international coordination

An earlier op-ed in the Washington Post provided an overview of the administration's proposals.

AcCells, mChek Showcase New Contactless Payments

mChekAcCells, a developer of contactless technology for the mobile phone industry and mChek, a provider of mobile payments in India and Sri Lanka, have announced what they're calling "a patent-pending breakthrough for Contactless Payments." According to the two companies, by "combining service initiation by AcCells mID and transaction authorization with the mChek SIM Toolkit, the solution presents a new level of user experience, transaction cost and efficiency. Most importantly the solution works with ALL existing mobile phones, does not require ANY change to infrastructure and platforms of Mobile Network Operators and/or Banking Infrastructure, and works in MNO-led or Bank-led environments." READ MORE »

Heartland Selects Voltage Security for End-to-End Encryption

HeartlandPayments_logo-140px.jpgHeartland Payment Systems has selected Voltage Security as a partner to develop end-to-end encryption (E3) software specifically suited to payments processing.

“Heartland is developing a complete end-to-end encryption solution designed to protect cardholder data at all stages of a transaction – from card swipe through delivery to the card brands,” said Bob Carr, Heartland’s chairman and chief executive officer. “Together with Voltage, we are developing a comprehensive solution that currently does not exist.” READ MORE »

Yodlee, Andera Partnership for Online Account Opening and Funding

Yodlee_logo-140px.jpgYodlee and Andera have announced that they have signed nearly 100 new banks and credit unions since launching their partnership in August, 2007, a full 70% of which are now utilizing Yodlee technology to help verify funding accounts in real-time. READ MORE »

June 16, 2009

BOKU Launches New Online Payments Service for Mobile Consumers

BOKU Online Payments ServiceBOKU has announced the launch of a new mobile payments service, along with the acquisition of both Paymo and Mobillcash businesses -- two leading providers in the global mobile payments industry.

According to BOKU, its mobile payments service "enables global consumers to make online purchases of digital and virtual goods with their mobile phones. The company is creating a new standard for mobile transactions by bringing bank-grade mobile payments to the Web, and enables merchants and publishers to provide fast and reliable mobile payments to over 1.6 billion consumers globally. In a related announcement today, the company raised $13 million in venture funding led by Benchmark Capital, with participation from Index Ventures and Khosla Ventures, and unveiled its management team." READ MORE »

US Consumer Financial Protection Agency Proposed

USGovernment_logo-140px.jpgBinyamin Appelbaum reports for the Washington Post this afternoon that the Obama administration has proposed a new agency, the Consumer Financial Protection Agency, that would "protect consumers of financial products such as mortgages and credit cards."

Forrester: 63 Million US Households To Pay Bills Online By 2014

Forrester_logo-140px.jpgThe number of US households paying bills online will grow from 48 million this year to 63 million by 2014, according to a new report titled "US Electronic Bill Payment And Presentment Forecast, 2009 To 2014" by Forrester Research. A 5.4 percent compound annual growth rate reflects a maturing market where growth rates will shrink in the years ahead, but it also reflects a market that is not yet saturated.

Forrester sees a shift in the online bill payment market as more consumers turn to banks and bill payment consolidators like Yodlee and Corillian because of several factors, including: the convenience of having multiple bills aggregated at a single Web site, the elimination of bill payment fees, and innovative marketing efforts to drive adoption. By 2012, consolidators’ share of the online bill payment market will surpass direct billing by merchants for the first time, according to Forrester. READ MORE »

"The Battle Over Personally Identifiable Information is Lost"

TowerGroup_logo-140px.jpgA new research report titled "Protecting Personal Information: We Lost the Battle, Can We Win the War?" by TowerGroup declares that the financial services industry has lost the battle to protect consumers' personally identifiable information (PII) data. TowerGroup's George Tubin points out that "in light of the loss or theft of hundreds of millions of data records containing PII, the financial services industry must consider the ramifications of past, present and future data losses." READ MORE »

Yodlee Powers 85% of All Online Personal Financial Management

Yodlee_logo-140px.jpgYodlee has announced that usage of Yodlee-powered PFM solutions nearly doubled to more than 17 million Personal Finance Management (PFM) users worldwide. According to Yodlee, its PFM solutions are "currently used by 6 of the top 10 U.S. banks, more than 100 leading financial institutions around the world and the most successful non-bank PFM portals." READ MORE »

ThreatMetrix Tackles Mobile Commerce Security on Smartphones

ThreatMetrix_logo-140px.jpgThreatMetrix has unveiled a new mobile security application for smartphone users called SafeAndSurf - a web browser that securely stores a smartphone user's personal data until he or she is ready to sign-on to a social network, execute an online banking transaction, or complete an ecommerce purchase. According to the company, "SafeAndSurf is the only mobile security application to safeguard a smartphone user's personal information and also allow the user to automatically insert that information to transaction data fields, a combination that allows consumers to shop, bank and play on their smartphones more safely and easily." SafeAndSurf is available today for use on the Apple iPhone. READ MORE »

Bangkok Bank Launches Mobile Banking and Payments

BangkokBank_logo-140px.jpgFiserv has announced that it is now providing its Mobile Money service to Bangkok Bank, one of the only banks in Thailand using an international mobile banking solution. Customers can now access Bangkok Bank's internet banking platform, Bualuang iBanking, on their mobile phone, enabling them to view account information, pay bills, transfer funds and top up their mobile phone account. The application is available in both English and Thai languages. Powered by technology from Atlanta-based M-Com, Inc. Mobile Money from Fiserv was launched in September 2008. READ MORE »

MasterCard Partners with UKash to Launch rePower in Europe

Ukash_logo-140px.jpgUkash has announced that it is partnering with MasterCard and will help facilitate the launch of the MasterCard rePower service in Europe - a service that allows consumers to load cash onto their MasterCard and Maestro prepaid cards at Point-of-Sale (POS) locations. READ MORE »

June 15, 2009

US Credit Card Issuers Settle for Reduced Balances

In an article titled "Credit Bailout: Issuers Slashing Card Balances", David Streitfeld writes for the New York Times about how some credit card issuers are "settling delinquent accounts for substantially less than the amount owed."


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