A friend writes: "I recently received a letter from Citibank telling me they're replacing my existing Citi Diamond Preferred Rewards card with a CitiBusiness card? Among other things, they're reissuing my card with a new account number. What's this all about?"

We can only speculate about the reasons behind Citi's replacement - and our speculation is that this reissuance is all about card interchange economics. Cards classified as business cards have historically had higher interchange fees associated with them - paid to the issuer by merchants - primarily because to get issuance the card associations had to make the cards economically viable for issuers who wouldn't typically be receiving any significant revolving interest income from such cards. In today's rewards-oriented environment, higher interchange fees to the issuer are the power behind the funding of rewards programs for cardholders. So, who loses? Merchants lose -- because of the higher fees they'll be paying on those new business card transactions.

We recently received the a question about PayPal's revenues and the fees it charges to sellers:

I do have a question for you regarding Paypal's revenues. In your summary of PayPal's 2005 financial results, PayPal's revenues were reported as representing "3.67% percent of gross payment volume, up 10 basis points from 3.57% last year." It seems like that number is high.

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We received the following Ask Glenbrook question earlier today:

I had a question about recent moves by many card issuers to actively promote debit cards in response to the growing consumer (and merchant) preference for debit card payments. It seems that increasingly the more profitable credit card payments volume will get supplanted by less profitable debit card processing business. How are the acquirers reacting to this?

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We received the following Ask Glenbrook question earlier today:

"I am wondering what is the best source to explain how credit card transactions work -- i.e. the various steps, the various parties involved, timing of the steps, costs etc. Thank you"

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Here's another Ask Glenbrook question:

Where can I find official ecommerce sales volumes?

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Earlier today, we posted an item on the beta launch of a new text-based mobile payment service called TextPayMe.

Glenbrook's Russ Jones has taken a quick look at this new service and provides some initial comments on what he sees.   » Continue Reading

Following up on our Ask Glenbrook post yesterday about US Postal Money Order volumes, Dave Birch from Consult Hyperion emailed the following about the experience with money orders in the UK:

Postal order sales rose 6% last year (to £338 million) with increasing use in the 15-24 age range. This is attributed to the Internet and, specifically, on-line auctions (Stokes, P. "Internet shoppers security fears trigger a postal order comeback" in "The Daily Telegraph": p.13, 29th Dec. 2004).

Given the comment about online auctions, one wonders about PayPal's relative effectiveness for auction payments in the UK market.

Here's a quick "Ask Glenbrook" question we received:

"What were the volumes of US Postal Money Orders sent last year?"

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Glenbrook has announced its Winter 2006 executive payments workshop schedule.   » Continue Reading

We received the following question earlier today:

Q. I read a great article published by you in 2002 on credit cards and direct mail. Do you have any idea or guesses on direct mail volume for the following credit card issuers: Providian, Citibank and Discover? If not, do you know any good secondary or primary sources?

A. See the Mail Monitor service offered by Synovate.

Mail Monitor® is the credit card industry ‘standard’ for monitoring direct mail volume and response rates in the US and Canada. It provides real-world perspective on developing trends, defines the market’s competitive framework, and analyses the performance of credit card direct mail acquisition programmes.

Glenbrook has announced a new series of executive payments workshops.

Following a successful initial workshop series this spring, technology executives, venture investors, and product and business development managers from financial services companies all told us to "keep 'em coming", said Carol Coye Benson of Glenbrook.

The new series includes workshops on the U.S. payments landscape, on authentication in financial services, and on consumer payments in China.

Glenbrook's summer and fall series workshops will be held on both the East and the West Coasts and are now open for registration.

Here's a recent Ask Glenbrook question we received:

Q. How can you pay for AOL on your phone bill?

A. AOL does offer its customers the option to pay for their monthly subscriptions on their phone bills if they do not have credit cards, debit cards, or checking accounts available to pay them directly. Due to the additional processing cost involved, AOL charges an additional $5.00 per month for this service, which they obtain through a processor called PaymentOne.

See the following Ask Glenbrook question we recently received:

I have a small business in the U.S. and outsource a bit of work to China, and I'm looking for a good way to send payment to them. Can you suggest a reliable, cost effective way to do this?

Perhaps Citigroup's Worldlink service is one way to do that? A quick inquiry revealed:

China FX is highly regulated, so beneficiaries must bring in paperwork to their banks to obtain funds, so delivery of actual funds can be delayed.

Do you have a recommendation for this small businessman looking for a convenient and reasonably priced US to China payment solution? If so, please post a comment!

Here's a question we recently received:

Are the only electronic cash payment methods available today account based methods, e.g. PayPal?

Or are there available any forms of true electronic cash which have to be issued by a third party, e.g. the technique developed by DigiCash's ECash?

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Citibank has launched its Thank You Rewards program -- last year for its credit card customers and earlier this year for its retail banking debit card customers.

Basically, by using a Citi debit or credit card, you can earn ThankYou Points that can then be redeemed for rewards - although the specifics of what you earn varies depending upon the particular Citi card that you're using to make a purchase and the value of the points varies depending upon which specific reward you redeem them for.

We recently had an Ask Glenbrook question about the relative value of debit and credit product participation in the Thank You Rewards programs. Based upon some quick research done on the Citibank web sites, here's what we learned.   » Continue Reading