Payments News from Glenbrook Partners
Glenbrook   Book   Education   Views   Archives   Store   Advertise   About         SUBSCRIBE:

« December 1, 2013 - December 7, 2013 | Main | December 15, 2013 - December 21, 2013 »

December 13, 2013

Judge Gleeson Approves Interchange Fee Settlement with Visa, MasterCard

In a Memorandum and Order filed today, US District Court Judge John Gleeson has approved the interchange fee settlement involving a class of approximately 12 million merchants that alleged defendants Visa U.S.A. Inc. and MasterCard International Incorporated, as well as issuing and acquiring banks conspired to fix interchange fees in violation of Section 1 of the Sherman Act.

Gleeson writes:

Specifically, although the settlement either obtains or locks in place an array of rules changes, at its heart is an important step forward: a rules change that will permit merchants to surcharge credit cards at both the brand level (i.e., Visa or MasterCard) and at the product level (i.e., different kinds of cards, such as consumer cards, commercial cards, premium cards, etc.), subject to acceptance cost and limits imposed by other networks’ cards.

For the first time, merchants will be empowered to expose hidden bank fees to their customers, educate them about those fees, and use that information to influence their customers’ choices of payment methods. In short, the settlement gives merchants an opportunity at the point of sale to stimulate the sort of network price competition that can exert the downward pressure on interchange fees they seek.

Gleeson goes on to note: "The goal is to incentivize the networks to compete for the merchants’ credit card volume through lower fees of all kinds, including interchange fees, and to allow merchants to recoup their costs when their efforts to steer customers to lower-cost means of payment do not succeed."

In a paragraph positioning this case with earlier litigation, industry evolution and US DOJ involvement, he writes: "The first Visa/MasterCard multi-district litigation broke the tie between credit and debit cards. The Durbin Amendment removed discounting restrictions at the network level. The consent decree in the government’s case removed product-level discount restrictions. The IPOs wrested control of Visa and MasterCard from the banks. This proposed settlement adds another crucial reform – the lifting of restrictions on network- and product-level surcharging."

In making his final ruling in the case, Gleeson overruled what he called "virulent objections" from what he described as "a small number of objectors" to the settlement.

Here's the full text of Gleeson's Memorandum and Order:

IN RE PAYMENT CARD INTERCHANGE FEE AND MERCHANT DISCOUNT ANTITRUST LITIGATION

MasterCard Introduces New Standards for Payroll Cards

MasterCard logo 140pxMasterCard has announced new standards it says are designed to help employees take full advantage of the benefits of having their paycheck electronically deposited onto payroll cards.

The new standards require employers and payroll card providers to offer cardholders greater insight on these programs through educational resources and increased transparency of any fees. Additionally, the standards ensure that employees have a fee-free way to access their pay and check available balances.

Payroll cards serve as one way to bring the traditionally underserved into the financial mainstream,” said Ron Hynes, group executive, Global Prepaid Solutions, MasterCard.

“These standards will help ensure that employees not only understand the choices available, but allow them to take advantage of benefits like direct deposit, online shopping and bill payment that have not been traditionally available to them.”

All new MasterCard payroll card programs will need to meet these standards as of July 1, 2014. Existing programs will have until October 1, 2014 to make any necessary adjustments.

Headline News from PaymentsNews.com - December 13, 2013

In addition to tracking the daily news of the payments world here on PaymentsNews.com, we can also provide you and your organization with monthly and quarterly market scans - contact me to learn more about this unique service customized to your special needs. For example, how are you thinking about the implications of Bitcoin and other virtual currencies on your business?

On Twitter:

On the Web:

On the Wires:

Updates from Glenbrook:

Note: Headline News is compiled by Glenbrook Partners. Throughout the day, as we spot interesting developments, this post is updated. Do you have news to share? Tell us here: gotnews@paymentsnews.com!

December 12, 2013

Wells Fargo Announces Agreement with Isis for Mobile Wallets

Wells fargo logo 140pxWells Fargo and Isis have announced the first phase of an agreement that allows Wells Fargo Visa consumer credit card holders to load their cards into the Isis Mobile Wallet®. This companies say that the launch enables cardholders to securely pay, redeem coupons and present loyalty credentials, all with the tap of their phone.

“We are committed to helping our customers succeed financially. Helping them make payments when, where and how they want is part of that promise,” said Peter Ho, manager of digital payments for Wells Fargo’s Consumer Financial Services group.

“Our customers lead mobile lives and their ability to pay for things should reflect that fact. During this pilot phase with Isis, we will test and learn with customers who want to be on the leading edge of this technology.”

Customers with one of the more than 50 Isis Ready® smartphones available from AT&T, T-Mobile or Verizon Wireless can receive an enhanced SIM card from their wireless carrier and download the Isis Mobile Wallet for free from Google Play. Customers who visit their carrier’s retail store to activate the Isis Mobile Wallet will receive hands-on support and education from store associates. Cardholders can use the Isis Mobile Wallet at any of the hundreds of thousands of merchant locations nationwide that accept contactless payments. Customers can explore local merchants at www.paywithisis.com/where.html.

First Data Corporation will serve as Wells Fargo’s Trusted Service Manager to deliver card information safely and securely onto the mobile device.

Coinbase Closes $25 Million Financing Led by Andreessen Horowitz

Coinbase logo 140pxCoinbase has announced that it has closed a series B funding round totaling $25M, led by Andreessen Horowitz, with participation from existing investors Union Square Ventures and Ribbit Capital.
Coinbase is the only company that touches the three most important points of the Bitcoin ecosystem: consumers, merchants, and developers. We are averaging 10,000 new customer sign-ups a day, and are now working with over 16,000 merchants including OkCupid, Khan Academy, and Reddit, who use Coinbase to accept bitcoin.
Andreessen Horowitz’s Chris Dixon will join the company's board of directors, along with Union Square Ventures’ Fred Wilson.

Headline News from PaymentsNews.com - December 12, 2013

On Twitter:

On the web:

  • Coinbase - Chris Dixon - "The press tends to portray Bitcoin as either a speculative bubble or a scheme for supporting criminal activity. In Silicon Valley, by contrast, Bitcoin is generally viewed as a profound technological breakthrough."
  • Fidelity now allows clients to put bitcoins in IRAs - MarketWatch - "Fidelity has partnered with SecondMarket’s Bitcoin Investment Trust to allow its clients to save for their retirement by putting the virtual currency in self-directed IRAs."
  • Mobile Payments Specialist Loop Raises $10 Million in Series A - NetBanker - "But the company's technology breakthrough: the ability to project a short-term magnetic field that impersonates the action of swiping a mag stripe through a card reader, appears likely to deliver on the contactless promise of NFC without the hardware adoption headaches of NFC."
  • The Future of SWIFT: a meeting with Gottfried Leibbrandt - Financial Services Club Blog - "In a stimulating but short presentation, he began by discussing the key elements of change in the SWIFT model, one of which is the ability to pretty much process anything for virtually nothing."
  • EAC partners adopt seamless pay system - The East African - "Kenya, Tanzania and Uganda central banks have interconnected their payment systems offering traders and bank customers an alternative method of sending and receiving money."
  • Bitcoin Law: Compliance and Avoidance Strategies - CoinDesk - "In this multi-part series, I will give a basic primer on the state of US law as it applies to digital currency entrepreneurs."
  • Bitcoin Foundation Officially Launches International Chapters - CoinDesk - "The Bitcoin Foundation has officially rolled out its internationalization programme, signing national affiliates in Canada and Australia..."

On the wires:

Updates from Glenbrook:

  • Feedback: How are we doing for you? I'd love to hear from you - drop me a quick note: scott@glenbrook.com or leave me a voicemail: +1.650.469.3421. In addition to tracking the daily news of the payments world here on Payments News, we can provide you and your organization with custom monthly and quarterly market scans - contact me to learn more about this unique service.
  • Please forward press releases to: gotnews@paymentsnews.com.
  • Looking for consulting help from Glenbrook? Let us know your needs here - and we'll get right back to you!
  • Join our mailing list for updates about Glenbrook events. Follow us on Twitter: @paymentsnews and @paymentsviews

Note: Headline News is compiled by Glenbrook Partners. Throughout the day, as we spot interesting developments, this post is updated. Do you have news to share? Tell us here: gotnews@paymentsnews.com!

December 11, 2013

Headline News from PaymentsNews.com - December 11, 2013

On the web:

  • Evenly Joins Square - Square Engineering Blog - "Evenly’s app made it easy for anyone to send or collect payments from friends, anywhere, anytime."
  • PayPal Looks Ahead: Six Predictions for 2014 - PayPal Forward Blog (David Marcus) - "My job at PayPal gives me a unique opportunity to work with peers and strategize with partners across many industries about solving real problems and delivering exciting new experiences for consumers and retailers. That leads to a pretty privileged view into what’s coming next." PayPal Increases Mobile Investment as Smartphones Replace Cash - BusinessWeek - “It’s going to take years,” for mobile technology to become the main way to pay, Marcus said. “But we’re in it for the long run.”
  • Everything you need to know about the Volcker Rule - Guardian - "A rule to keep banks from gambling with their customers' money may finally be realised after years of resistance from Wall Street..."
  • First Mover Australians: Turning Mobile into Contactless Payments - MasterCard Blog - "To borrow a phrase from the CommBank blog, Australians can’t get enough of contactless payments. The country is the number one MasterCard PayPass market in the world..."
  • iBeacon Pioneers Estimote Raise $3.1M Seed Round - TechCrunch - “We are shipping thousands of beacons per week and more than 10,000 developers around the world are already experimenting with Estimote beacons in contextual computing applications.”
  • JPMorgan files patent for Bitcoin-style payment system - FT.com - "Like Bitcoin, JPMorgan’s proposed system would allow people to make anonymous, electronic payments over the internet..."
  • For Bitcoin, Square Peg Meets Round Hole Under the Law - New York Times - "The development of Bitcoin, the virtual currency that is not issued by any government, presents challenges for the authorities to use laws that were not designed for the digital world to combat illegal conduct."
  • Be Careful With Coin - New York Times - "Consider this as well: When you buy it, you are agreeing to terms of service that give you no protection."
  • A Medical Credit Card Has Surprising Costs - New York Times - "On Tuesday, the agency announced that it was ordering GE Capital Retail Bank and its CareCredit medical credit card unit to refund up to $34.1 million..."

On the wires:

Updates from Glenbrook:

Note: Headline News is compiled by Glenbrook Partners. Throughout the day, as we spot interesting developments, this post is updated. Do you have news to share? Tell us here: gotnews@paymentsnews.com!

December 10, 2013

The Impact of Debit Card Regulation on Checking Account Fees

Kansas city fed logo 140x60pxThe Federal Reserve Bank of Kansas City has published a new article by Richard J. Sullivan which explores the effect that reductions in debit card interchange fees have had on consumer access to free checking accounts. He finds that while some large banks are charging more, many smaller banks are charging less - and on net, consumer access to free checking has increased.

Headline News from PaymentsNews.com - December 10, 2013

On the web:

On the wires:

Updates from Glenbrook:

Note: Headline News is compiled by Glenbrook Partners. Throughout the day, as we spot interesting developments, this post is updated. Do you have news to share? Tell us here: gotnews@paymentsnews.com!

December 09, 2013

Headline News from PaymentsNews.com - December 9, 2013

On the web:

On the wires:

Updates from Glenbrook:

Note: Headline News is compiled by Glenbrook Partners. Throughout the day, as we spot interesting developments, this post is updated. Do you have news to share? Tell us here: gotnews@paymentsnews.com!

Sponsors

News View

Payments Consultants

Subscribe

Languages