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May 31, 2013

Chart of the Week - Bitcoin Market Capitalization

For this week's Chart of the Week, we swing our attention back to what's happening in the world of Bitcoin.

Bitcoin has been a media star over the last few months - with lots of writers and editors focusing on this unusual - and potentially disruptive - digital currency. This chart (from blockchain.info) shows the total market capitalization in the Bitcoin world - the product of the number of Bitcoins that have been minted times their value. This value fluctuates daily as it would for any other commodity or currency. It appears to have settled in - for the moment - at $1.5 billion in value being represented by these bits stored in the Bitcoin block chain.

Editor's note: Have you bought Bitcoins? If so, tell me about it by sending me an email: editor@paymentsnews.com

Bitcoin Market Capitalization 31May2013

Headline News - May 31, 2013

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Note: Headline News is compiled by Glenbrook Partners. Throughout the day, as we spot interesting developments, this post is updated. Find something interesting to share? Tell us about it: gotnews@paymentsnews.com!

May 30, 2013

FIs Should Prepare for Crowded and Fragmented Multi-Wallet Future in Mobile

Mobey forum logo 140pxIn a new white paper titled "Structures and Approaches: The Changing Face of the Mobile Wallet", the Mobey Forum says that "banks and financial institutions launching mobile wallets in the immediate future should expect to enter a hotly contested market, crowded with own-brand solutions that are limited to the delivery of proprietary services only."

The paper outlines the current range of mobile wallet structures coming to market and outlines some of the key considerations that financial institutions should take into account when evaluating which approach is the most appropriate for them. The paper contends that the majority of financial institutions will, in the short term, attempt to develop their own proprietary wallets in a partner-independent manner. Only when a secure element (SE) is required, or when core functionalities become too difficult for financial institutions to achieve alone, are they likely to open their solutions and seek to cooperate with other stakeholders.

Headline News - May 30, 2013

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Note: Headline News is compiled by Glenbrook Partners. Throughout the day, as we spot interesting developments, this post is updated. Find something interesting to share? Tell us about it: gotnews@paymentsnews.com!

May 29, 2013

Headline News - May 29, 2013

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Note: Headline News is compiled by Glenbrook Partners. Throughout the day, as we spot interesting developments, this post is updated. Find something interesting to share? Tell us about it: gotnews@paymentsnews.com!

May 28, 2013

Visa: With 3.5 Million Visa Chip Cards Issued Since 2011, EMV Continues to Gain Momentum

Visa logo 60pxhIn a Visa Viewpoints blog post today, Visa announced that U.S. Visa card "issuers have put what averages out to over 5,000 new chip-enabled cards in the hands of U.S. cardholders every day. As of March 31, the total number of Visa chip cards in market was at 3.5 million and growing."

The article's author, Stephanie Ericksen, continues:

We’re very pleased with the progress the U.S. has made over the past two years.

With each new card, the U.S. payments ecosystem gets one step closer to achieving the improved security that EMV technology affords to consumers, merchants and issuers. That’s because when a chip is inserted into the payment terminal, the chip generates a code that is unique to that transaction. This code renders stolen payment information useless at the point of sale, reducing its value to criminals and shrinking counterfeit fraud.

The opportunity that chip presents goes beyond security, and will enable new and emerging forms of electronic payment, such as NFC-based mobile payments.

Visa announced its EMV migration roadmap for the US market in August 2011.

NRF Files Brief Asking for Rejection of Settlement re: Credit Card Interchange Fees

NRF logo 140In a press release, the National Retail Federation and number of retailers have announced that they have "asked a federal judge to reject a proposed settlement of an antitrust lawsuit over credit card swipe fees that drive up prices for consumers by $30 billion a year, calling the proposal a “surrender” that does nothing to address the “evil” of price fixing by Visa, MasterCard and their banks."
“This is an empty settlement,” NRF Senior Vice President and General Counsel Mallory Duncan said. “It fails to address the price fixing that harms merchants and their customers, it takes away retailers’ legal rights to ever try again, and it offers virtually nothing in return. It should be tossed out of court as the failure that it is.”
The NRF and the retailers who supported the brief say they have opted out of money offered under the settlement because of accompanying restrictions on future legal action. A copy of the brief filed with the court can be downloaded here.

Chase Names Mike Passilla CEO of Merchant Services

Chase logo 140pxJPMorgan Chase has announced that Mike Passilla has been named chief executive officer of Merchant Services, a newly created role that will oversee Chase’s growing payments and merchant services business including Chase Paymentech, Chase’s merchant offers business, as well as Chase Merchant Services, Chase’s recently-announced merchant payments initiative. Passilla joins Chase from Elavon where he most recently served as president and CEO.

Merchants represent an important client base for Chase, and we want to bring together our full suite of leading services for merchants under one organization,” said Gordon Smith, CEO of Chase Consumer & Community Banking.

"Chase has been at the forefront of innovation in the payments industry, and I’m confident Mike’s vision and experience will help us continue to be a leader in this important area.”

Additionally, Dan Charron was named president of Chase Paymentech and will report to Passilla.

Earlier this year, JPMorgan Chase announced the creation of Chase Merchant Services, a new payments proposition that will allow Chase to bring advantageous solutions for merchants and differentiated experiences to cardholders. Ray Fischer, president of Chase Merchant Services, also will report to Passilla.

Headline News - May 28, 2013

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Note: Headline News is compiled by Glenbrook Partners. Throughout the day, as we spot interesting developments, this post is updated.

May 24, 2013

Mobile Payments In Brazil: The Bill from Ipanema

PaymentsViews logo 140pxOver on PaymentsViews.com, Glenbrook's Elizabeth McQuerry writes about her recent visit to Brazil in her post "The Bill from Ipanema: A Foundation for Brazilian Mobile Payments".

I’m just back from a trip to Brazil and while I was there, the government introduced long-awaited legislation on mobile payments. This is an important task as Brazil now has 265 million mobile subscribers – more than 1 per inhabitant. Needless to say, the machinations of politics kicked off immediately and there will undoubtedly be many amendments before the bills passes through Congress. Nevertheless, the core legislation presented by the government is worth noting.
If you're interested in mobile payments, be sure to check out Elizabeth's post!

Headline News - May 24, 2013

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Note: Headline News is compiled by Glenbrook Partners. Throughout the day, as we spot interesting developments, this post is updated.

May 23, 2013

Fed Publishes Report on the Impact of Regulation II on Small Debit Card Issuers

FedThe Federal Reserve has published a report titled "Impact of Regulation II on Small Debit Card Issuers" that looks at the impact of certain provisions of Regulation II - the regulation that resulted from the so-called Durbin amendment to the Dodd-Frank Act regulating debit card interchange and network routing.

The report concludes that the exemption provided to small depository institutions (those with consolidated assets of less than $10 billion) from interchange fee standards applied to large issuers is working as intended.

With respect to debit card interchange, the Fed found the following:

  • Small depository institutions with consolidated assets of less than $10 billion, which are exempt from the interchange fee standard in Regulation II, received fee revenue of 43 cents per transaction in 2012. This amount is roughly the same as the average per-transaction fee received by exempt issuers before Regulation II took effect. In addition, most small issuers that responded to a survey about the effect of the network exclusivity provisions of the rule indicated that significant compliance costs were not incurred.

  • Data collected from payment card networks reveal that all of the networks provided a higher average interchange fee to exempt issuers than non-exempt issuers in 2012. The average interchange fee per signature debit transaction for exempt issuers was slightly more than double that for non-exempt issuers. The average interchange fee per PIN debit transaction for exempt issuers was 1.3 times greater than that for non-exempt issuers. Exempt issuers received $7.4 billion in total debit card interchange revenue in 2012, compared with approximately $5.3 billion in debit card interchange revenue in 2009.

With respect to the network routing/exclusivity provisions of Regulation II, the Fed found the following:

  • Data collected from small issuers reveal that about 16 percent of respondents had to incur costs to comply with the network exclusivity provisions of Regulation II, which require issuers to enable two unaffiliated debit card networks on each debit card. Those issuers that incurred compliance costs reported an average initial cost of 72 cents per card and average projected ongoing annual costs of $1.19 per card to come into compliance. Only three of the small issuers that responded to the survey indicated that their cardholders complained of having their debit cards discriminated against by merchants, although it is not clear that any complaints were directly due to the fact that the cards were exempt from the interchange fee standard.

Visa Inc. Names Ryan McInerney President, Announces Other Changes

Visa logo 60pxhVisa Inc. has named Ryan McInerney as President of Visa Inc. where he will be responsible for Visa's global client organization, product management and a new solutions group.

I have worked closely with Ryan for many years and know him to have extensive payments knowledge, be a tremendous leader and a great executive capable of motivating and managing large groups of people. I am confident he will be a great fit and asset to the organization," said Charlie Scharf, CEO of Visa Inc.

"As Visa seeks to find new ways to partner with and add value to our clients, I believe Ryan's client focus and deep understanding of the industry will be invaluable."

McInerney joins Visa from JP Morgan Chase where he was the CEO of Consumer Banking.

Separately, JP Morgan Chase has announced the appointment of Barry Sommers to replace McInerney as CEO of Consumer Banking.

Visa also announced Elizabeth Buse will lead a new Global Solutions organization managing the next generation of products and services in areas including mobile, information products and processing. She also will be responsible for CyberSource, Merchant Sales, and Merchant Solutions. Formerly, Buse led Visa's business in the Asia Pacific, Central Europe, Middle East and Africa region.

Visa also announced Bill Sheedy will lead corporate strategy, mergers and acquisitions, government relations. Mr. Sheedy previously managed Visa's business in North America, Central America, South America and the Caribbean.

Headline News - May 23, 2013

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Note: Headline News is compiled by Glenbrook Partners. Throughout the day, as we spot interesting developments, this post is updated.

May 22, 2013

Direct Payment via ACH is the Leading Consumer Bill Payment Method in US

NACHA logo 140pxAccording to a study of 1,000 billers released by NACHA, Direct Payment via ACH is the leading method consumers in the US currently use to pay their bills.

The study found that the great majority of billers – more than three-quarters of those that offer electronic payment options – offer Direct Payment via ACH with almost 50% of consumer bills paid through this method. Of the rest, 42% percent of consumer bills are still paid through the mail, and 11 percent are paid with credit/debit cards.

The findings also show that billers prefer receiving ACH payments over cards 48 percent to 21 percent. Specifically, billers prefer recurring ACH payments, citing this option as the most favorable payment method.

Consumers, on the other hand, prefer one-time ACH payments for bill pay. Of the 47 percent of consumer bills paid via Direct Payment, 25 percent are one-time ACH payments, 11 percent are recurring ACH payments, and another 11 percent are ACH payments originated by biller service providers.

Direct Payment via ACH provides the control, security, and simplicity that consumers are looking for when paying their bills,” said Janet O. Estep, NACHA president and CEO.

“Additionally, for billers, Direct Payment via ACH transactions provide costs savings, improve operating efficiencies, and make a positive impact on the environment. There are still many checks being mailed today, so there is a significant opportunity to increase Direct Payment adoption, and during May – Direct Deposit and Direct Payment via ACH Month – we direct both billers and consumers to the available resources and proven practices expanding Direct Payment usage.”

NACHA says that financial institutions have an important role for expanding Direct Payment. Billers in the study report positive results from cross pollination efforts, where billers and banks combine marketing efforts.

Chase Eliminates Foreign Transaction Fees on United MileagePlus Explorer Cards

Chase logo 140pxChase Card Services has announced that "effective June 1, all purchases made with the United MileagePlus® Explorer Card outside of the U.S. will no longer be subject to foreign transaction fees."

United MileagePlus Explorer cardmembers travel to a variety of destinations around the world,” said David Gold, general manager, Chase Card Services. “The MileagePlus Explorer Card offers a host of benefits designed to make traveling the globe much more enjoyable. With the enhancement of no foreign transaction fees, we can now provide cardmembers tangible savings when traveling outside the U.S.”
Chase says that one of its cardmembers spending $3,000 while traveling outside of the U.S. would save $90 as a result of this change.

Headline News - May 22, 2013

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Note: Headline News is compiled by Glenbrook Partners. Throughout the day, as we spot interesting developments, this post is updated.

May 21, 2013

PayPal Finds More than 80% of Consumers Want to be Wallet-free

PayPal logo 140x60pxPayPal has published the results from a global consumer study that it says "paints a dim future for the wallet. A vast majority (83%) of respondents across five countries indicated they wished they didn’t have to carry a wallet."

It’s not about replacing cash or your credit card with a new payment method, it’s about using technology to solve real shopping pain points,” said David Marcus, PayPal President.

“PayPal is at the forefront of developing products that make life easier, help shoppers be more efficient, and untether consumers from their wallets forever.”

The beach topped the survey in every country as the place most people wish they could go without a wallet.

Wallet 600px

Headline News - May 21, 2013

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Note: Headline News is compiled by Glenbrook Partners. Throughout the day, as we spot interesting developments, this post is updated.

May 20, 2013

Join Us for Glenbrook Summer Camp in Half Moon Bay!

GP Logo Horizontal 140pxGlenbrook is opening a special session of our popular Glenbrook Payments Boot Camp this summer on Tuesday and Wednesday, August 6th and 7th. This is the Glenbrook workshop that has welcomed over 6,000 attendees in the past five years. It provides an intensive, two-day “deep dive” into payments systems in the U.S. – and a unique cross-payments system view.

We'll also be doing a reprise of our very successful workshop on Data in Payments on Thursday, August 8th (half day). In this workshop, we take a close look at what payments data exists, how it is transported and used – and what might happen in the future.

Morning Pier - Princeton Harbor - 2012Both sessions will be led by Glenbrook's Carol Coye Benson, Russ Jones, and Scott Loftesness. The workshops will be held in beautiful Half Moon Bay, California - right on the Pacific Ocean, but only 21 miles from San Francisco airport! Discounts are available for multiple attendees and some Glenbrook clients. Register now to reserve your seat - and let us know if you have any questions.

We're looking forward to seeing you later this summer in Half Moon Bay for one of these two Summer Camp sessions.

China UnionPay Joins EMVCo

EMVCo has announced that China UnionPay has joined as its latest member. According to the organization, "the addition of this global payment card system demonstrates the industry’s continued commitment globally to adopting and advancing the EMV standard for secure chip credit and debit payments."

Joe Cunningham, Current EMVCo Executive Committee Chair, commented:

EMVCo works to maintain, enhance and evolve EMV Specifications to continue offering secure and interoperable payments across the global payments industry. We are delighted to welcome UnionPay as a member and active contributor to this work. UnionPay’s addition as an equity member of EMVCo further reinforces the growth of the EMV standard globally. Its expertise at a technical, management and implementation level will support our ongoing goal to create a universally consistent and secure infrastructure that supports contact, contactless and mobile chip-based payments into the future.”
UnionPay now has an equal interest in the standards body - along with American Express, JCB, MasterCard and Visa.

Headline News - May 20, 2013

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Note: Headline News is compiled by Glenbrook Partners. Throughout the day, as we spot interesting developments, this post is updated.

May 17, 2013

Chart of the Week - Apple iTunes Accounts

Last week, we looked at the history of counterfeit card fraud in Canada on Interac cards.

This week's chart of the week shows the growth in Apple iTunes accounts (with payment cards on file) over the last five years. Over that period, the number of accounts grew by an order of magnitude - from 50 million to over 500 million (as reported by Apple in March).

Horace Dediu, an analyst who follows Apple closely, has done a deep dive into Apple's iTunes business - with some fascinating results including that iTunes users purchase content and services at the rate of about $40 per year - resulting in a $16 billion annual run rate for that business. He also notes that the revenue growth rate has averaged 29 per quarter for more than six years.

Apple iTunes Accounts

Headline News - May 17, 2013

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Note: Headline News is compiled by Glenbrook Partners. Throughout the day, as we spot interesting developments, this post is updated.

May 16, 2013

MasterCard Expands MasterPass Merchant Acceptance

MasterCard logo 140pxOver on MasterCard's Cashless Conversations blog, Ken Moy writes about the recent additions of BK Delivers, LivingSocial and Rakuten.com to the list of merchants now accepting MasterPass. He continues:
We see MasterPass as the future of digital payments — allowing you to shop and make a payment on your phone, tablet, PC or in a store with one simple experience. This future is a reality now with MasterPass live in Australia, Canada and the U.S."
MasterPass was announced by MasterCard last February.

Headline News - May 16, 2013

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Note: Headline News is compiled by Glenbrook Partners. Throughout the day, as we spot interesting developments, this post is updated.

May 15, 2013

Google Adds Send Money to Gmail based on Google Wallet

Google logo 140pxGoogle has announced it will be adding a send money feature to Gmail "over the coming months" which will utilize payment information stored in the user's Google Wallet account.

The implementation in the Gmail browser adds an "Attach money" icon to the Gmail toolbar which is used to add the money to the email as it is being composed.

Google said that "it's free to send money if your bank account is linked to Google Wallet or using your Google Wallet balance, and low fees apply to send money using your linked credit or debit card." Google said the new feature will eventually be available to all U.S. Gmail users over 18 years old.

Headline News - May 15, 2013

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Note: Headline News is compiled by Glenbrook Partners. Throughout the day, as we spot interesting developments, this post is updated.

May 14, 2013

Thinking Big: What Could Change Our Industry?

GP Logo Horizontal 140pxIn a new article on PaymentsViews.com, Glenbrook's Carol Coye Benson takes a step outside the box and shares some of her thoughts about "big actions that industry incumbents could take to strengthen their positions and the U.S. payments industry." Be sure to check out some of her thoughts - and share your comments!

Live Blogging Finovate Spring 2013 San Francisco

PaymentsViews logo 140pxGlenbrook's Erin McCune is attending the Finovate Spring 2013 conference being held today and tomorrow in San Francisco. She's live blogging from the conference on PaymentsViews.com and also actively tweeting her comments on Twitter.

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