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« July 19, 2009 - July 25, 2009 | Main | August 2, 2009 - August 8, 2009 »

August 01, 2009

India's Mandate re: Stronger Authentication for Card Not Present Use

In February of this year, the Reserve Bank of India adopted new rules on credit and debit card transactions within India that became effective today, August 1, 2009. The rules require India's banks to support two basic capabilities:
  • A system of providing for additional authentication/validation based on information not visible on the cards for all on-line card not present transactions (e.g., Verified by Visa or MasterCard SecureCode)
  • A system that provides "Online Alerts" to the cardholder for all 'card not present' transactions of the value of Rs. 5,000 (about US$104) and above

Here's an example of one card issuer's approach (Barclaycard) to educating its cardholders. Note the Q&A: "Can I opt out of VBV? No, this is not optional. All online transactions will have to go through VBV process."

In an article in yesterday's edition, India's Economic Times reported that "bankers hail additional authentication for card purchases" - noting that "customers will have to register their cards from tomorrow onwards with the respective merchants--Visa or Master Card and create a security password." A followup article in tomorrow's edition of the Economic Times asks whether the new mandate goes far enough!

July 31, 2009

OCC Reminds Credit Card Issuers re: Reviews of APR Changes

The Office of the Comptroller of the Currency has sent out a reminder to CEOs of national banks in the US reminding them that, effective August 22, 2010, banks must conduct the periodic reviews required by theCredit Card Accountability Responsibility and Disclosure Act of 2009 on any accounts on which the APRs were increased on or after January 1, 2009. To fulfill their obligations, banks "must maintain and have available such information concerning APR increases for such accounts as needed to enable them to conduct the required reviews."

Highlights from the MasterCard Earnings Call - Processing

In yesterday's MasterCard quarterly earnings call (from the transcript provided by SeekingAlpha.com), MasterCard CEO Bob Selander commented on MasterCard's processing opportunities - saying that "globally out of 100 transactions done with our cards, we’re still only processing about 40 out of those 100." He noted that "the ones that we don’t process are generally those domestic transactions that are handled by the bank formed consortiums or other domestic processing entities."

Google Checkout Adds Store Gadget to Make Online Selling Easier

Google-checkout_logo-140px.jpgGoogle Checkout has introduced the Google Checkout store gadget, a new Google Labs-developed feature that allows online sellers to "create an online store that's powered by Google Checkout and has inventory managed in a Google Docs spreadsheet." You can embed your online store anywhere you'd like -- on Google Sites, Blogger, or your personal website. Signup for it here.

Highlights from the MasterCard Earnings Call - Interchange Fees

In yesterday's MasterCard quarterly earnings call (from the transcript provided by SeekingAlpha.com), MasterCard CEO Bob Selander early on commented directly on the pending interchange-related legislation in the US Congress. He spoke about "the extraordinary value merchants receive, when they accept payment cards" noting that "the average consumer credit charge-off rate as a percentage of point of sale transaction volume is multiples higher than the average consumer credit card interchange rate in [our] system."

July 30, 2009

Major Australian Banks To Undertake Overdraft Fee Review

AustraliaFlag-140px.jpgNeil posts on the Money.AU blog that the big four Australian banking groups are reviewing their overdraft fees "after their rival National Australia Bank (NAB) has decided to cease charging customers who end up overdrawing their bank accounts." The NAB said it will stop charging overdraft fees beginning October 1st.

MasterCard Comments on Interchange Fees

On MasterCard's MasterCardNews Twitter feed this morning are several tweets from this morning's MasterCard quarterly earnings call about interchange fees. Included is a link to a MasterCard brochure titled "Benefits of Open Payment Systems and the Role of Interchange" that was originally released back in January.

Highlights from the Visa Quarterly Earnings Call - eCommerce

In yesterday's Visa quarterly earnings call (from the transcript provided by SeekingAlpha.com), CEO Joe Saunders commented about plans for an "enhanced consumer platform" for online shoppers:

While we have a commanding 48% payment volume share on the net, our ultimate goal is for an ever-increasing number of consumers to recognize that the fastest, safest, and easiest way to transact online is with a Visa branded product.

To that end, among other upgrades, we are on the cusp of rolling out an enhanced consumer platform that will ultimately assist Internet shoppers in three ways. First, pre-purchase activities like a best price search capability; second, check-out activities like aliasing and auto form fill; and third, post-purchase capabilities like tracking and shipping.

Saunders said he'd "have more to say about this in the coming months."

Highlights from the Visa Quarterly Earnings Call - Prepaid

In yesterday's Visa quarterly earnings call (from the transcript provided by SeekingAlpha.com), CEO Joe Saunders commented about the growth opportunities ahead in the prepaid market:

In the U.S., we believe this is a $1 trillion potential market while globally it could be as high as $3 trillion.

Stacked up against worldwide Visa payment volume for the 12 months through March of $2.7 trillion, it’s easy to see that even a nominal penetration of this market could be needle moving for us.

The largest opportunity globally is penetrating the under-banked segment with general purposed reloadable cards.

USA Technologies, Visa to Expand Visa payWave Acceptance

USATechnologies_logo-140px.jpgUSA Technologies has announced the signing of an amendment to its existing agreement with Visa to expand the deployment of its ePort cashless payment solution for vending machines by another 2,500 terminals, for a total of up to 4,000 terminals, that are expected to be installed in markets nationwide. READ MORE »

MasterCard Announces 2Q2009 Financial Results

MasterCard Logo.jpgMasterCard has announced financial results for the second quarter of 2009.

MasterCard reported net income of $349 million, up 26.4% year over year. Net revenue was $1.3 billion, a 2.7% increase.

MasterCard’s gross dollar volume was down by 0.6% on a local currency basis, versus the second quarter of 2008, to $595 billion. Worldwide purchase volume during the quarter was down by 0.7% on a local currency basis, versus the second quarter of 2008, to $450 billion. US purchase volume declined 8.8% - reporting the largest decline of any of MasterCard's regions.

A webcast and accompanying presentation are available online.

July 29, 2009

Visa Announces 3Q2009 Financial Results

visa_logo-140px.jpgThis afternoon Visa Inc. reported financial results for its fiscal third quarter 2009.

The company reported adjusted quarterly net income of $507 million (excluding the gain on the VisaNet do Brasil shares) on net operating revenue of $1.6 billion, an increase of 2% over the prior year. Visa's payments volume growth declined 5% over the prior year to $617 billion and total volume, on a nominal basis and inclusive of cash volume, was $969 billion, a 7% decline over the prior year. Total processed transactions, which represent transactions processed by VisaNet through June 30, 2009, totaled 10.3 billion, an 8% increase over the prior year.

Visa, US Bank Launch Syncada - Global Financial Supply Chain Network

Syncada_logo-140px.jpgVisa and U.S. Bank have announced Syncada – a joint venture that the two companies say "provides a business-to-business (B2B) network for corporations and governments to process and track invoices, make and receive payments around the world, and have payables or receivables financed through local and global financial institutions." As part of the joint venture, Visa said it has made a capital investment in Syncada. READ MORE »

1-800-FLOWERS.com Launches eCommerce Site Inside Facebook

In a TechCrunch post this morning titled "1-800-FLOWERS.COM Sets Up Shop Inside Facebook", Robin Wauters writes about the online retailer's new eCommerce store launched on its Facebook page inside Facebook. According to Wauters, "Registered users can now order all kinds of floral products from the popular florist and gift shop without ever leaving the social network."

Visa, MasterCard Quarterly Earnings Upcoming Today, Tomorrow

bank-generic_logo-140px.jpgIt's earnings season for the major card companies again. Later today at 5 PM Eastern, Visa will be announcing financial results for its fiscal Q3. Tomorrow morning, MasterCard will be announcing financial results before the market opens at 9 AM Eastern.

OLS.Switch Certifies with Electronic Check Acceptance Authorizer

OLS_logo-140px.jpgOn-Line Strategies has announced it has completed certification and production implementation of an Electronic Check Acceptance interface with a major authorizer as part a Fortune 100 client project. According to OLS, "OLS.Switch is a payment transaction processing engine, built using best-of-breed technologies to implement a unique new design supporting the latest industry standards, regulations, and best practices for payments and settlement processing." READ MORE »

RFinity Plans September Test of microSD-based NFC Payments

RFinity_logo-140px.jpgIn an article titled "Brigham Young University to test new NFC microSD solution", Sarah Clark writes for Near-Field Communications World about RFinity, an Idaho Falls-based startup that has developed technology to use an NFC application embedded in a microSD card that "enables a secure one-time token to be generated each time a transaction takes place and ensures that a user's credit card details never need to be transmitted, even in an encrypted form."

One in Five Consumers Hit by Payment Card Fraud in Past Five Years

ACI_logo-140px.jpgACI Worldwide has announced that its recent global card fraud survey found that "18 per cent of consumers questioned have been victims of credit or debit card fraud in the past five years. The research, of more than 2,400 consumers across eight countries, also found that if an individual or someone they knew was hit by card fraud, 22 per cent would change financial institutions, and a further 27 per cent would consider changing financial institutions." READ MORE »

MasterCard's Rob Reeg's Op-Ed on Interchange Fees

MasterCard Logo.jpgIn an op-ed piece titled "Credit card transactions benefit both merchant and customer" the St. Louis Post-Dispatch, MasterCard's Rob Reeg, president of Global Technology and Operations for MasterCard Worldwide, writes about interchange fees and current efforts by many merchants lobbying Congress to "push for a new law that would shift the fees for using a card onto consumers while merchants keep the benefits, and the profits." Reeg cites the example of the Reserve Bank of Australia's mandated cuts in interchange fees a few years ago - and where, he says, "rather than passing along the savings to their customers, merchants pocketed the funds." He concludes by urging Congress to reject "the merchants' anti-competitive legislation."

July 28, 2009

The Plastic Safety Net - New Report from Demos

Demos-SafetyNet_logo-140px.jpgDemos has published a new report titled "THE PLASTIC SAFETY NET - How Households are Coping in a Fragile Economy" by Tamara Draut and Jose Garcia.

From the abstract:

"While the economic recession continues to threaten the financial security of low- and middle-income households, its effects have been heightened by the reality that, even before the downturn, millions of households were experiencing difficulties meeting the most basic expenses. Now, as families experience declining home values and tightened credit markets, many are falling behind on their mortgage and credit card payments.

The following report shows how skyrocketing costs, dwindling savings, stagnant wages and medical debt have forced low and middle-income families to turn to plastic as the de-facto safety net.

The report is based on a survey conducted between April and August 2008-consisted of 1,205 phone interviews with low- and middle-income households whose incomes fell between 50 percent and 120 percent of local median income; such households comprise roughly half of all households in the country.

Citibank Launches Citi Mobile For Smartphones

Citi_logo-140px.jpgCitibank has announced it is expanding its mobile offering for US consumers to smartphones - including most BlackBerrys, Palm devices and iPhones. The bank says that "now, more Citibank customers can access and manage their bank accounts -- anytime and anywhere -- via their smartphone's mobile browser." READ MORE »

TSYS Updates China Progress

tsys_top_logo.gifTSYS has announced that China UnionPay Data Services Co., Ltd. (CUP Data), TSYS’ joint venture with China UnionPay (CUP), has signed five new long-term bankcard processing agreements, and won several major domestic and international awards during the last six months.

"The new agreements include credit card processing contracts with Yaodu Credit Cooperative; Shandong Provincial City Commercial Banks Alliance, an alliance of 14 city commercial banks; Yunan Rural Credit Union and Guangxi Beibu Gulf Bank. The new agreements also include a prepaid processing contract with KargoCard, a Malaysia-based retail marketing company that will be introducing innovative stored-value and reloadable gift card programs to retail brands and merchants in Asia." READ MORE »

Western Union Finds US Consumers Expressing Cautious Optimism

WesternUnion_logo-140px.jpgThe latest Western Union Payment Services Money Mindset Index defines US consumers’ current money mindset as “cautious optimism” - "as consumers are more effectively managing their spending and expecting the economy to improve. Despite this optimism, respondents have conflicting feelings about the importance of credit scores. Given the current credit lending restrictions, consumers need to become savvier to ensure their credit score does not adversely affect their financial goals." READ MORE »

GE Capital Provides Webcast Update

GE Capital provided a business update on its financial results and outlook earlier today. A webcast replay along with the presentation slides are available online.

Wells Fargo Introduces Online, Same Day Bill Payment

WellsFargo_logo-140px.jpgWells Fargo has announced the nationwide availability of its newest online bill pay feature - allowing customers to make “just in time” online bill payments to merchants, such as utility, auto finance and mortgage companies. According to the bank, the new service helps customers avoid missing payments or making late payments. Wells Fargo has teamed up with Western Union to provide the new same-day service. READ MORE »

Javelin: More US Consumers Are Likely to Use P2P Payments

mobilepayments-140px.jpgJavelin Strategy & Research has released a new report - Mobile Person-to-Person Payments: Mounting Telco Activity in a Mobile Channel Segment That Financial Institutions Can’t Afford to Lose - that finds that "financial institutions must act now to implement person-to-person mobile solutions before carriers capture the market."

Javelin says "that conditions are growing ripe for potential widespread consumer use of mobile devices to send payments between one another: smartphones are now used by 17 percent of consumers, mobile banking is used by many, and use of the internet for banking and shopping has been common for years. These are just some of the conditions that have created an increased likelihood that consumers will soon begin to use mobile person-to-person (P2P) transfers." READ MORE »

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