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« January 11, 2009 - January 17, 2009 | Main | January 25, 2009 - January 31, 2009 »

January 24, 2009

Paying with Your Cellphone in the US - Please Stand-By!

In an article titled "Cellphones as Credit Cards? Americans Must Wait", Leslie Berlin writes for the New York Times about why America is not on the verge of mobile payments at POS.

For that to happen, all the players will have to work together to define standards, determine revenue-sharing, expand the network of electronic readers and think through the other parts of what he calls “this 2,000-piece puzzle.”

Unfortunately, it's not a pretty picture.

New Books on PCI-DSS Compliance

With all of the news this week surrounding the payment card data breach at Heartland Payments Systems, we've added a new section to the Payments News Bookstore with several new books covering the topic of PCI-DSS (Payment Card Industry-Data Security Standard) compliance. If you're aware of any we've missed, please send us Feedback and we'll add them to the bookstore.

In addition to these books about the subject, the PCI Security Standards Council website is a great starting point for learning more about PCI-DSS.

January 23, 2009

The Importance of Interchange

In a blog post titled "Digital Money Forum: You can't get away from interchange", Dave Birch writes about how merchant pressures to reduce interchange fees could reduce the business case for some new card payments products. He concludes...

It's not clear to me that either the politicians or the retailers understand how sensitive some new opportunities are to interchange calculations, so a reduction in interchange will inevitably mean a reduction in innovation. If that's the goal, fine.

Following Dave's theme, in our Payments Boot Camps we speculate about what might happen to innovation in payments if interchange were to suddenly be significantly reduced or eliminated. What do you think?

Update: Aneace Haddad blogs about why the interchange wars are over...for now - noting that...

...Retailers are happier than ever to have a customer come in and buy something, even if they must pay interchange, which now seems like a pittance in comparison to the huge discounts that they are giving."

Heartland CEO Calls for Industry Cooperation to Fight Criminals

Heartland Payment Systems issued a press release today saying that it had "added more than 400 merchants to its client base in the past few days - exceeding results for the same period from last year" - and including a statement from founder, chairman and CEO Robert O. Carr on the response his organization has made to the announcement earlier this week of a payment card data breach at Heartland. READ MORE »

New Job Openings at Visa on PaymentsJobs.com

Visa Inc. has listed two new job openings on our PaymentsJobs.com career site:Both positions are at Visa's HQ in San Mateo, California.

Looking for payments professionals for your business? Post your job openings on PaymentsJobs.com.

January 22, 2009

Capital One Reports 4Q2008 Financial Results

Capital One has reported financial results for the fourth quarter of 2008. In Capital One's US Card business, purchase volume in the fourth quarter declined over 10% vs. 4Q2007 and was down 5% from the third quarter of 2008. Chargeoffs on the US Card business increased from 4.84% to 7.08% between 4Q2007 and 4Q2008.

Glenbrook 2009 Payments Education Schedule Updated

We've just updated our schedule of payments education courses offered through May 2009. Included are two Glenbrook Payments Boot Camp sessions - one in New York City in March and a second in the San Francisco Bay Area in May. We'll also be holding two workshops on Emerging Payments - one in the San Francisco area and a second in New York. A new workshop on Web 2.0 in Financial Services will be held in San Francisco in March and a workshop on Business to Business Payments will be held in New York in May.

You can find the complete schedule here - registration for all of these sessions is now open. We also updated the downloadable agendas for each of these classes.

January 21, 2009

Economics of Payment Cards: A Status Report

The latest issue of Economic Perspectives from the Federal Reserve Bank of Chicago includes the article "Economics of payment cards: A status report" icon_PDF_small.gif by Wilko Bolt and Sujit Chakravorti.

This article surveys the recent theoretical literature on payment cards (focusing on debit and credit cards) and studies this research's possible implications for the current public policy debate over payment card networks and the pricing of their services for both consumers and merchants.

PayPal's Fourth Quarter 2008 Financial Results

eBay reported fourth quarter 2008 financial results this afternoon - saying its

Payments business unit [PayPal + Bill Me Later] posted another solid quarter with $623 million in revenue, an increase of 11% year over year. Net total payment volume (TPV) for the quarter was $15.99 billion, an increase of 14% year over year. The revenue and net TPV growth was fueled by expanded adoption of PayPal Merchant Services across the Web and the inclusion of Bill Me Later, acquired on November 7, 2008. Active accounts reached 70 million, an increase of 23% year-over-year. The Payments business will continue to focus on greater penetration into the Marketplaces business as well as the acquisition of new merchants."

READ MORE »

Gift Cards and Retailer Bankruptcy

Cristin Frederick has written an article titled "Gift Card Value when Issuers Go Bankrupt" icon_PDF_small.gif which is included in the Winter issue of the Federal Reserve Bank of Boston's Communities & Banking quarterly.

The Evolution of the Check as a Means of Payment

The Federal Reserve Bank of Atlanta has published a paper by Stephen Quinn and William Roberds titled "The Evolution of the Check as a Means of Payment: A Historical Survey" icon_PDF_small.gif

The authors discuss some persistent historical themes surrounding checks: checks' ease of use, which provides advantages over other payment methods but creates risk to businesses and banks; checks' sophistication, which evolved through centuries of legal precedent and operational experimentation; and checks' high costs relative to other forms of payment.

Checks' traditional dominance of the U.S. payment system, the authors conclude, resulted from historical happenstances. These events gave the check relative advantages that are only now being overcome by electronic payment technologies.

US Bank Reports 4Q2008 Financial Results

US Bank has reported financial results for the fourth quarter of 2008. Among the details, US Bank reported that debit card transaction dollar volume was essentially unchanged in the fourth quarter as compared to the same quarter in 2007 and was actually down sequentially from the second and third quarter of 2008.

For credit cards, the bank reported a decline in credit card purchase volume in the fourth quarter of about 3.5% from both the prior year. Fourth quarter credit card purchase volume was also lower that in both the second and third quarter of 2008. In the bank's merchant acquiring business (Elavon), the number of transactions processed increased about 3.5% over the prior year while the purchase volume declined about 6%.

ThreatMetrix Moves HQ to US from Australia

ThreatMetrix, a on-demand fraud detection company, has announced that it has relocated to the US from Australia where the firm had been based since its inception in 2005. "A pioneer in device identification technology, which is quickly becoming the de facto standard in online fraud detection, ThreatMetrix will operate from Los Altos, California, in the heart of Silicon Valley. The company will continue to maintain research-and-development operations in Australia." READ MORE »

Gemalto Launches New Consumer Information Website

Gemalto has introduced a new consumer website that helps "consumers fully enjoy their digital lifestyle and protect their personal financial information as they buy, surf, communicate and travel.
The site www.JustAskGemalto.com is a place where people can go for expert advice on topics such as Internet security, online payment, password management, credit card fraud, cell phone usage, identity theft and more. Until now, no one site has gathered all these different topics in one place. As the use of our digital information spreads, we as individuals have a role in safeguarding it more than ever.
READ MORE »

Sybase Acquires Mobile Payments Provider paybox

Picture 1.pngSybase has announced that it has acquired paybox solutions AG, a global leader in mobile payment solutions. "With this acquisition Sybase continues to bolster its Unwired Enterprise strategy by extending its leading mobile infrastructure to mobile payments." READ MORE »

More on the Heartland Payment Systems Card Data Breach

Eric Dash and Brad Stone report for the New York Times on the payment card data breach announced yesterday by Heartland Payment Systems. The compromise may have occurred as early as last May but wasn't detected until late last fall.
The Heartland breach also showed that in spite of the adoption of more stringent standards and tougher oversight by banks and credit card companies, consumers are still vulnerable."
You can follow the discussion about the Heartland card data breach among Twitter users and on our Other Blogs page.

Headline News - January 21, 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.

January 20, 2009

Heartland Payment Systems Announces Major Card Data Breach

Heartland Payment Systems has announced it has learned it was the victim of a security breach within its processing system in 2008. Heartland says it "believes the intrusion is contained." The company has created a website for "to provide information about this incident and advises cardholders to examine their monthly statements closely and report any suspicious activity to their card issuers."

Brian Krebs reports for the Washington Post that the breach "may have led to the compromise of more than 100 million credit and debit card transactions."

The data stolen includes the digital information encoded onto the magnetic stripe built into the backs of credit and debit cards. Armed with this data, thieves can fashion counterfeit credit cards by imprinting the same stolen information onto fabricated cards.

Visa Europe Expects Deal with EU

In an article titled "Visa Europe expects deal with EU on card fees soon", Huw Jones reports for Reuters about comments from Visa EU management indicating that they expect "to reach a deal with European Union competition authorities on its much disputed transaction fees this year."

January 19, 2009

Canadian Payments Forecast

Technology Strategies International has released a report titled "Canadian Payments Forecast - 2009" forecasting that the Canadian debit and credit card market will be hit by the decline in personal expenditure on consumer goods and services as a result of the economic downturn, but over the long term both forms of payment will command a greater share of all consumer expenditures. According to the report, "credit card payments will account for 38% of personal consumer expenditure by 2013, approximately double the share predicted for debit card payments." READ MORE »

Payment Card Technology in the USA in 2017?

Steve Klebe writes:
Steve KlebeI predict that when President-elect Obama is replaced by the next president in 2017 that will still be the case [we'll still be using mag stripe cards], albeit waning by that time. What do you think? Will we finally be issuing Chip Cards? Will it be RFID? Will it all be replaced by our mobile phones acting as payment cards or devices?

UK Announces Second Bank Rescue Plan

David Stringer reports for the AP on actions announced today by UK Prime Minister Gordon Brown where the UK government announced it "would offer to insure banks against default on toxic loans in exchange for legally binding commitments to make credit more freely available to British businesses and home buyers who are struggling in an economic downturn."

See also David Jolly's report in the New York Times.

Headline News - January 19, 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.

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