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July 29, 2010

Credit Card Data Portability

data_portability.pngDataPortability.org, the largest data portability group on the U.S., has recently embraced credit card data portability as one of its key initiative areas.
The Credit Card Data Portability Standard is supported by an opt-in community of electronic payment processing providers (service providers) that agree to provide credit card data and associated transaction information (sensitive data) to an existing merchant upon request in a PCI Compliant manner.

Guardian Analytics Launches Industry Roundtable Series

GuardianAnalytics_logo-150px.pngGuardian Analytics recently announced the formation of an industry roundtable created to drive information sharing among financial institutions, law enforcement and industry experts. At their first industry roundtable participants shared "trends in threats and fraud attacks against the online and mobile channels and discussed trends in the online and mobile channels, the need to balance security with customer convenience, and the use of customer data as they key to defending against new and emerging cyber attacks."

Internet Crooks Craft Creative Counterfeiting Scam

Check fraud seems so old fashioned these days. But as this story points out, "these hackers got the account information in an unusual way: They broke into three websites that specialize in a little-known type of business — archiving check images online."

July 28, 2010

Visa Reports Fiscal Third Quarter 2010 Financial Results

visa_logo-140px.jpgVisa has announced financial results for its fiscal third quarter 2010 ended June 30, 2010 with GAAP net operating revenue in the fiscal third quarter of 2010 of $2.0 billion, an increase of 23% over the prior year. According to Visa, revenue was "driven by strong contributions across all revenue categories, in particular data processing and international transaction revenues."

Some highlights:

  • Payments volume growth, on a constant dollar basis for the three months ended March 31, 2009 on which fiscal third quarter service revenue is recognized, was a positive 13% over the prior year at $745 billion.
  • Payments volume growth, on a constant dollar basis, for the three months ended June 30, 2010, was a positive 14% over the prior year at $803 billion.
  • Cross border volume growth, on a constant dollar basis, was a positive 17% for the three months ended June 30, 2010.
  • Total processed transactions, which represent transactions processed by VisaNet, for the three months ended June 30, 2010 totaled 11.7 billion, were a positive 14% increase over the prior year.
A conference call replay, presentation and more detailed operational performance data are available online. READ MORE »

Cybercrime Fact or Fiction

Charles Jester has an interesting article in SC Magazine entitled "Cybercrime Fact or Fiction, Part 1: Banking Trojans and FinCEN Reporting" looking at the wide discrepancies in how payments fraud is reported. As Jester dryly points out "most statistics on cybercrime range from under $300 million lost per year to over $48 billion lost per year."

Amazon-Facebook Alliance to Make Shopping More Social

The New York Times has a short write up on the new Amazon-Facebook Alliance. When users link their Amazon and Facebook accounts, "They... see which of their Facebook friends have upcoming birthdays, and receive gift suggestions based on the music, books and movies those friends have said they like on Facebook and on their Amazon wish lists."

July 27, 2010

Open Identity Exchange and Kantara Initiative to Collaborate

OIX_logo-140px.pngOpen Identity Exchange (OIX) and Kantara Initiative recently announced that they will begin collaborating on digital trust framework development to build and promote adoption of a robust online trust ecosystem. Digital trust frameworks enable trust in transactions such as logins, registrations, and online eCommerce by allowing digital identity credentials produced by one site to be accepted at other sites.

OIX executive members include AT&T, CA, Equifax, Google, PayPal, VeriSign, and Verizon. READ MORE »

July 26, 2010

Boston Fed Policy Paper: Who Gains and Who Loses from Credit Card Payments? Theory and Calibations

The Federal Reserve Bank of Boston has published a Public Policy Discussion Paper entitled "Who Gains and Who Loses from Credit Card Payments? Theory and Calibrations". From the abstract:
Merchant fees and reward programs generate an implicit monetary transfer to credit card users from non-card (or “cash”) users because merchants generally do not set differential prices for card users to recoup the costs of fees and rewards. On average, each cash-using household pays $151 to card-using households and each card-using household receives $1,482 from cash users every year. Because credit card spending and rewards are positively correlated with household income, the payment instrument transfer also induces a regressive transfer from low-income to high-income households in general.
The paper is authored by Scott Schuh, Oz Shy, and Joanna Stavins.

MoneyGram Signs State Savings Bank of the Russian Federation

MoneyGram_logo-140px.pngMoneyGram announced it has added the Savings Bank of the Russian Federation (Sberbank) to its network. Sberbank is the oldest and largest bank in Russia and Eastern Europe and is expected to be MoneyGram’s largest agent in the region. The bank will introduce MoneyGram services initially in more than 7,000 locations.
Russia is the third largest send market in the world after the U.S. and Saudi Arabia. Countries that receive the most in remittances originating in Russia are: Uzbekistan, Tajikistan and Ukraine. Russia is also in the top 20 receive countries in remittances.
In related news, Western Union announced it will offer the Western Union® goCASH service across 6,500 Family Dollar store locations.

Survey Results: U.S. Market Contactless Terminal Penetration

Contactless_icon_140px.pngLast week, Glenbrook's Carol Coye Benson asked the Payments Views community about its perception of contactless POS reader deployment in the US.

The results are in and you can see them here.

New Opportunities on PaymentsJobs.com

Several new positions for payments professionals have recently been posted to Glenbrook's PaymentsJobs.com job board: PaymentsJobs_logo-140px.jpgIs your company hiring? Are you in the market for qualified payments professionals? You can reach the best candidates here! Post your job openings for payments professionals on PaymentsJobs.com!

Headline News - July 26, 2010

Headline News is brought to you by Glenbrook Partners:

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

July 22, 2010

American Express Announces Second Quarter 2010 Financial Results

Amex_logo-140px.jpgAmerican Express has reported financial results for the second quarter 2010. Net income was $1 billion, up significantly from $367 million a year ago. Worldwide average spending per proprietary basic cards-in-force of $3,288 increased 21% during the quarter or 20% on a constant currency basis. "Cardmember spending rose 16% and improved credit indicators continued the year-long trend that began last spring," said Kenneth I. Chenault, chairman and chief executive officer.

Pew Report Finds Credit Cards More Transparent, Yet Problems Remain

Most of the practices deemed "unfair" or "deceptive" by the Federal Reserve have disappeared from new credit card offers since federal passage of the Credit CARD Act last year, according to a new report by the Pew Health Group's Safe Credit Cards Project. "Yet new trends have emerged that could cost cardholders significantly."
The report finds that issuers have eliminated practices such as "hair trigger" penalty rate increases (disproportionate charges for minor account violations), unfair payment allocation, and raising interest rates on existing balances. However, Pew's research also highlights a sharp rise in cash advance fees, continued widespread use of other penalty interest rates and an emerging trend of credit card companies failing to disclose penalty interest rates in their online terms and conditions.
Full details, including previous research, can be found at http://www.pewtrusts.org/creditcards.

Mobile Banking Steadily Gaining Acceptance Among U.S. Consumers

mobile_phone_140px.pngMobile banking and the use of mobile devices for financial transactions and payments are increasingly gaining acceptance among U.S. consumers, according to results of a survey conducted by KPMG.
The results of KPMG's fourth annual Global Consumers and Convergence survey show that 19 percent of U.S. consumers have conducted banking transactions on a mobile device, compared to only 9 percent when KPMG last completed this survey 18 months ago. More than 5,600 people in 22 countries worldwide participated in the survey.
READ MORE »

U.S. Bank Introduces ScoreBoard, an Online Payment Management Tool for Small Business

USBank_logo-140px.pngU.S. Bank has announced a new payment management tool, called ScoreBoard, that helps small businesses make smarter decisions about the financial operations of their business.
“ScoreBoard is unique because it gives our small business customers the ability to monitor their own spending and insight into how their sales trends compare to similar merchants in their business category,” said Pam Joseph, U.S. Bancorp Payment Services vice chair. “For our customers who have a U.S. Bank credit card and merchant account, the tool provides a comprehensive view of their business trends.”
READ MORE »

July 21, 2010

A Look at PayPal's 2Q2010 Financial Results

PayPal_logo-140px.jpgPayPal's parent eBay announced financial results for the second quarter 2010 today.

eBay's Payments segment (including PayPal and BillMeLater) revenue was $817.0 million for the quarter, an increase of 22% year over year. Net total payment volume (TPV) for the quarter was $21.3 billion, an increase of 28% year over year, but flat from the previous quarter. In term of revenue mix, Merchant Services (the off-eBay business) represented 61% of TPV, up from 59% in the prior quarter.

PayPal's revenue ("transaction revenue rate") increased slightly to 3.60%, along with a slightly higher transaction processing expense rate of 1.17% and a record-low transaction loss rate of 0.17%. Active accounts (defined as active in the last 12 months) reached 87.2 MM, up 16% year over year.

Bill Me Later's volume for the quarter was unchanged at 1% of the total Payments segment payment volume. Net chargeoffs in the BML portfolio were 8.56%, down from 9.49% in the prior quarter.

PlaySpan and VGMarket Publish Comprehensive Report on Digital Goods Spending

playspan_logo_140px.pngPlaySpan has announced their 2010 VGMarket study on virtual goods spending, which contains some new information on both first and third-party purchases. According to the company, the main takeaway from the report is that social networking games are driving digital goods growth and women 25 and older spend a disproportionate amount on digital goods than their male counterparts. READ MORE »

New Money Transfer Services

WesternUnion_logo-140px.jpgWestern Union has announced the launch of account-based money transfer (ABMT) services to two new Asia-Pacific markets, Korea and India. The new offering build on agreements with Western Union’s existing agents in the two countries: Industrial Bank of Korea (IBK) and the State Bank of India (SBI).

MoneyGram_logo-140px.pngIn related news, MoneyGram announced it has signed two national post offices to its growing international agent network -- the Kazakhstan Post and the Moldova Post

And in even more related news, Standard Chartered Bank, India's largest international bank, has announced the launch of its online remittance service, Transfer2Home, that enable customers to transfer money to India from USA, UK, UAE, Singapore, Hong Kong and Bahrain.

eBillme Online Spending Index Shows Signs of eCommerce Sales Growth

eBillme_logo-140px.jpgeBillme has announced its latest quarterly eBillme Online Spending Index finding that 17% of consumers plan to do their back to school shopping online this year, a five percent increase over last year.
According to the Q3 Index, consumers are planning to spend an average of $271.77 online, an 8% increase over Q2 and 20% over Q3 2009.
In addition, this quarter, consumers were surveyed about back-to-school spending. Shoppers plan to spend an average of $516.96 on back-to-school, both online and offline. 18-24 year-olds plan to do the most back-to-school shopping online this year with 30% expecting to buy from eCommerce sites, 13% above the overall average. READ MORE »

July 20, 2010

Financial Habits of Low-Income Families in Greater Los Angeles

According to a recent report by the Pew Health Group, "Half of low-income families in Greater Los Angeles turn to costly and unregulated alternative financial services (AFS) rather than banks to meet their monetary needs."
Roughly one-third (29%) of the unbanked conduct all financial transactions in cash. The project estimates that there are 300,000 people operating in the cash-economy in Los Angeles alone.
The report, Unbanked by Choice: A Look at How Low-Income Los Angeles Households Manage the Money They Earn, provides a comprehensive look at the financial behaviors and attitudes of 1,000 unbanked and 1,000 banked families residing in Greater Los Angeles. It reveals that both are loyal to their financial service provider and utilize a variety of services on a regular basis. READ MORE »

July 19, 2010

Your Views on Contactless POS Deployments in the USA?

Over on our sister PaymentsViews.com blog, Glenbrook's Carol Coye Benson is asking for community input regarding the perception of deployment of contactless POS readers at merchants in the US market. If you can spare a minute, please take Carol's quick survey - and optionally sign up to receive a copy of the results!

Citi Reports 2Q2010 Financial Results

Citi_logo-140px.jpgCitigroup has reported financial results for the second quarter 2010. In its North American Consumer Banking sector, Citi reported a 6% increase in Citi-branded card revenues. Average card loans decreased 5% to $79.2 billion, reflecting lower accounts and a decline in purchase sales.

Customer Profitability Still Down at Big Retail Banks

accenture_logo_140px.pngAccording to a recent Accenture survey, "A majority of executives at leading retail banks globally say average customer profitability has remained below pre-crisis levels, while their customers' price-sensitivity and inclination to "shop around" have increased."
Interviews with 46 senior banking executives in 14 countries -- including many of the world's largest institutions -- suggest that nearly half of the top retail banks globally (46 percent) have seen their average customer profitability decline by 5 percent to 15 percent since the financial crisis, while an additional 11 percent have seen even greater customer profitability declines.
READ MORE »

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