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July 13, 2012

Merchants Reach $7.25B Interchange Settlement with Visa and MasterCard

MasterCard logo 140pxVisa logo 60pxh Visa and MasterCard have announced that they, and several major US issuers, have reached a $7.25 billion class-action settlement with US merchants. Visa's statement is here; MasterCard's statement is here. Specific terms of the agreement include:
  • Distribution to class merchants of an amount equal to 10 basis points of default interchange across all credit rate categories for a period of eight consecutive months, which otherwise would have been paid to issuers and which effectively reduces credit interchange for that period of time.

  • Modifications to card company rules to permit retailers to impose a surcharge on credit transactions subject to a cap and a level playing field with other general purpose card competitors. The rule changes on surcharging likely would be implemented in early 2013.

  • Agreement that card companies will meet with merchant buying groups that seek to negotiate interchange rates collectively (e.g., independent drug stores).

The card-issuing banks participating in the settlement include JPMorgan Chase, Bank of America, Citibank, Wells Fargo, Capital One among others.

National Association of Convenience Stores (NACS), one of the class plaintiffs in the lawsuit, announced that they have rejected the proposed settlement.

July 12, 2012

Punchcard and Wipit Partner to Provide Mobile Loyalty Solution

Punchcard logo 140x60pxPunchcard announced it is partnering with mobile payment provider Wipit so that business owners can create loyalty and rewards programs for consumers who use cash as their preferred method of payment.
Instead of “checking in,” Punchcard works at the “checkout” giving users rewards for frequenting their favorite businesses and replaces the stacks of individual loyalty cards people have been expected to carry in their wallet and have available at the time of purchase. Punchcard is easy to use: simply shop at any one of the 15 million local retail businesses where Punchcard works, take a photo of your receipt with the Punchcard app to verify your purchase and earn “punches” on a punch card for that business. Rack up the punches and earn free rewards or cash back for being a loyal customer of that business.

LevelUp Switches Business Model From Payments to Marketing

Levelup logo 140pxLevelUp, the mobile payments + loyalty startup, has announced it is switching its revenue source from payment processing fees to a 35% cut on the marketing spend required to drive the purchase.
"The process of moving money is now becoming a commodity, a de facto service. We're entering an era in which merchants should get -- and will eventually only pay for -- value above and beyond the transaction," said Seth Priebatsch, Chief Ninja of LevelUp. "LevelUp is skipping this 'race to the bottom' happening between the major payments companies and leading the way by providing real value beyond the transaction."

July 10, 2012

July 09, 2012

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