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May 24, 2013

Mobile Payments In Brazil: The Bill from Ipanema

PaymentsViews logo 140pxOver on, 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.


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