On the web:

• BofA, Wells Fargo, JPMorgan Sued by ATM User Over Fees - Bloomberg
• USPS Eyes Prepaid Card Market - MyBankTracker.com
• Whole Foods Stores Stop Accepting Checks - Raleigh Durham News & Observer

On the wires:

• Durbin to Wells Fargo: Your Numbers Don't Add Up
• Bethpage Federal Credit Union Announces “No Fee” Free Checking Guarantee
• Western Union and Societe Generale International Retail Banking extend Global Money Transfer Agreement
• Chase Strengthens Partnership with United’s MileagePlus to Offer Ultimate Rewards Cardmembers Expanded Travel Flexibility
• New Report from Mercator on Online Bill Management

Over on our sister blog, Payments Views, Glenbrook's Carol Coye Benson interviews Mike Kennedy, chairman of the clearXchange board, and shares her thoughts on the new banking industry joint venture in a post entitled "It's About Time: clearXchange and Bank P2P".

This has been a big week for news in the payments industry – with the Google Wallet making a big, loud splash. It’s nice to see banks using the power of their collaborative action to demonstrate that innovation can come from the bank side of the payments world as well.

Bank of America, JPMorgan Chase, and Wells Fargo have announced that they have formed a new P2P payments joint venture.

Customers of the three banks will be able to move funds directly from their existing checking accounts using an e-mail address or mobile number – instead of providing checking account and routing numbers. The clearXchange service will roll out nationally, and there are plans over time to expand it to include other financial institutions and endpoints to create a money movement capability across the industry.

JP Morgan Chase has reported financial results for the third quarter 2010. For its Card Services unit, net income was $735 million, compared with a net loss of $700 million in the prior year. The improved results were driven by a lower provision for credit losses, partially offset by lower net revenue. Sales volume was $79.6 billion, an increase of $4.9 billion, or 7%. Excluding the Washington Mutual portfolio, sales volume was $76.8 billion, an increase of $5.6 billion, or 8%.

Merchant processing volume was $117.0 billion on 5.2 billion total transactions processed.

JP Morgan Chase has reported financial results for the second quarter 2010. For its Card Services unit, net income was $343mm, compared with a net loss of $672mm in the prior year. Credit costs of $2.2B include a reduction of $1.5B to the allowance for loan losses, reflecting a lower level of net charge-offs and lower estimated losses. End-of-period outstandings (excluding the WaMu portfolio) of $127.4B down 14% YoY and 4% QoQ. Sales volume (excluding the WaMu portfolio) of $75.4B was up 8% YoY and 13% QoQ.

Merchant processing volume was $117.1 billion on 5.0 billion total transactions processed.

JPMorgan Chase has announced that Jack Stephenson is joining the firm as Director of Mobile, E-Commerce and Payments. According to Chase, Stephenson, most recently Senior Vice President of Strategy, Partnerships, Analytics and New Ventures at PayPal, "will lead the continuing evolution and implementation of a company-wide strategy for mobile devices and internet payments." READ MORE »

Chase has announced rolling out two new free mobile banking features: "customers now can receive a text message the moment their checking account balance falls below a pre-selected amount – and then instantly transfer funds by sending a text-message reply as short as four keystrokes." Chase says it is currently sending out 725,000 low-balance alerts each week. READ MORE »

JP Morgan Chase has reported financial results for the first quarter 2010. For its Card Services unit, Chase report a net loss of $303MM compared with a net loss of $547MM in 1Q09. The net charge-off rate (excluding the WaMu portfolio) increased to 10.54% in 1Q10 vs. 6.86% in 1Q09 and 8.64% in 4Q09 and nnd-of-period loan outstandings (excluding the WaMu portfolio) were $132.1 billion, down 12% YoY and 8% QoQ. Card sales volume (excluding the WaMu portfolio) was up 7% YoY to $66.9 billion.

Chase Paymentech merchant processing volume was $108 billion on 4.7 billion total transactions processed.

"By all measures, 2009 was a terrible year for our credit card business" - so begins Jamie Dimon's discussion of JP Morgan Chase's Card Services business unit - as Dimon writes in his annual letter to shareholders. The unit lost $2.2 billion in 2009 with an additional impact coming this year resulting from the recent CARD Act changes that have recently taken effect. Dimon notes that "in the future, we will no longer be offering credit cards to approximately 15% of the customers to whom we currently offer them" - due to the changes imposed by the law.

JP Morgan Chase has reported financial results for the fourth quarter of 2009. Its Card Services unit reported a net loss of $306 million, compared with a net loss of $371 million in the prior year. End-of-period managed loans were $163.4 billion, a decrease of $26.9 billion, or 14%, from the prior year and a decrease of $1.8 billion, or 1%, from the prior quarter. Charge volume was $86.9 billion, a decrease of $9.1 billion, or 9% over 4Q08 but up 5% from the third quarter 2009.

J.P. Morgan has issued a report titled “Payments Fraud: How It Happens And What You Can Do To Protect Your Organization” in which the company shares best practices for battling check, automated clearing house (ACH), and credit card fraud, as well as tips on protecting treasury operations from advanced phishing techniques. The report also explores the key areas of fraud vulnerability and proliferation, and reviews fraud protection products and services available today. READ MORE »

Lieff Cabraser Heimann & Bernstein, LLP today announced the filing of a series of nationwide class action lawsuits against Bank of America, Wachovia, U.S. Bank, JPMorgan Chase and Citibank in the United States District Court for the Southern District of Florida in Miami for abusive overdraft fees. READ MORE »

Recently, US travelers to Europe have encountered problems having their magnetic stripe-based credit cards accepted at some merchants where Chip and PIN have been implemented. See, for example, "The End of Cards as We Knew Them?" by Glenbrook's Jacqueline Chilton.

Earlier today, JP Morgan announced several commercial card initiatives regarding expansion into Europe, the Middle East, and Africa. Included in that press release was mention of a new card that the bank will be issuing next year: J.P. Morgan’s International Dollar Card (USD) which the bank calls "a cross-border dollar solution complete with Chip and PIN security, and the ability to support clients’ needs in the Middle East, Africa, and Central and Eastern Europe, including Russia."

J.P. Morgan has announced that it has "significantly advanced its commercial card expansion initiative in Europe, the Middle East and Africa to provide corporate clients with higher degree of visibility and flexibility on spending and expenses in today’s challenging economic environment. As part of its continued investment in its global Treasury Services business, J.P. Morgan has introduced several new commercial card product offerings and service enhancements in the region, while a number of new product offerings are due to launch early next year." READ MORE »

JP Morgan Chase has reported financial results for the third quarter of 2009 - reporting net income of $3.6 billion, compared with net income of $527 million in the third quarter of 2008.

Chase Card Services reported a net loss of $700 million, a decline of $992 million from the third quarter of 2008. End-of-period managed loans were $165.2 billion, a decrease of $21.3 billion, or 11%, from the prior year and $6.3 billion, or 4%, from the prior quarter. Card charge volume was $82.6 billion, a decrease of $11.3 billion, or 12%, from the prior year. Merchant processing volume at Chase Paymentech was $103.5 billion, on 4.5 billion total transactions processed.

In an article titled "Chase and Bank of America Revise Fee Policies", Ron Lieber writes for the New York Times about announcements from Bank of America and Chase regarding changes both banks are planning to their overdraft fee policies.

In a press release, Bank of America announced changes to be implemented October 19 including not charging overdraft fees when a customer's account is overdrawn by a total amount less than $10 for one day, not charging overdraft fees on more than four items per day and making it easier to opt out of overdrafts altogether. Next June, the bank plans additional changes including providing customers a choice with respect to opting in or out of overdraft capability.

According to Lieber's reporting, Chase is planning changes in the first quarter including not charging a fee when the overdraft is for less than $5 and not sorting items in descending amounts prior to posting - a technique that maximizes the overdraft fees charged and has drawn criticism from consumer groups. Chase also plans to allow its customers to opt out of overdraft coverage.

J.P. Morgan has announced the launch of Total Settlement, an electronic payment solution that helps businesses simplify the payment of supplier invoices and lay the foundation for complete order-to-pay automation. According to the bank, "Total Settlement consolidates Automated Clearing House (ACH), commercial card, wire, and standard paper check payments in a single file, eliminating the extra effort in accounts payable involved with processing multiple payment types. A self-service web portal for suppliers provides valuable payment status information, remittance details and allows suppliers to maintain their own contact and payment-related information." READ MORE »

JPMorgan Chase this morning reported second-quarter 2009 net income of $2.7 billion, an increase of 36% compared with net income of $2.0 billion in the second quarter of 2008.

In its credit card business, JP Morgan Chase reported that charge volume declined over 16% year over year to $78.3 billion. End of quarter outstandings declined 4% year over year to $148.4 billion. The managed net charge-off rate for the quarter was 10.03%, up from 4.98% in the prior year and 7.72% in the prior quarter. The 30-day managed delinquency rate was 5.86%, up from 3.46% in the prior year and down from 6.16% in the prior quarter, reflecting normal seasonal patterning. The managed net charge-off rate for the quarter was 10.03%, up from 4.98% in the prior year and 7.72% in the prior quarter. The 30-day managed delinquency rate was 5.86%, up from 3.46% in the prior year and down from 6.16% in the prior quarter, reflecting normal seasonal patterning.

In terms of outlook for its credit card business, JPM said it expected losses on the Chase portion of its card portfolio could approach 10% next quarter while it expects losses on the WaMu portion of its card portfolio to approach 24% by the end of 2009. The bank said it expects continued pressure on charge volume and outstandings.

A presentation on the quarterly results is available online.

J.P. Morgan’s Treasury Services business has announced it is offering ISO 20022 payment initiation and reporting capabilities. ISO 20022 is the core message standard for SEPA and represents the next generation of SWIFT message formatting. J.P. Morgan says it is one of the first to adopt this new messaging standard format that allows clients to integrate core treasury, payable and receivable applications with banking and other financial partners. READ MORE »

JPMorgan Chase & Co. this morning reported first-quarter 2009 net income of $2.1 billion, compared with net income of $2.4 billion in the first quarter of 2008. Earnings per share were $0.40, compared with $0.67 in the first quarter of 2008.

In its Card Services unit, the net loss was $547 million, a decline of $1.2 billion from the prior year. The decrease was driven by a higher provision for credit losses, partially offset by higher net revenue. End-of-period managed loans were $176.1 billion, an increase of $25.2 billion, or 17%, from the prior year and a decrease of $14.2 billion, or 7%, from the prior quarter. Charge volume was $76.0 billion, a decrease of $9.4 billion, or 11%, from the prior year. Merchant processing volume was $94.4 billion on 4.1 billion in total transactions processed.

J.P. Morgan's Treasury Services business has announced it has been ranked by NACHA - The Electronic Payments Association as the top financial institution in total automated clearing house (ACH) network transactions originated for 2008. According to the bank, it has "led the industry in ACH originations for a record 34 years in a row, since the inception of the network. J.P. Morgan originated more than 3.5 billion ACH transactions last year." READ MORE »

JP Morgan Chase is holding an Investor Day series of presentations today. The presentation slides are available online - including a presentation about Chase Card Services by Gordon Smith, Card Services CEO.

Among other things, Smith notes that home price depreciation was the biggest driver of credit losses in their credit card portfolio until mid-2008 when unemployment became a meaningful factor. He predicts that unemployment will be the primary driver of credit losses in 2009.

J.P. Morgan's Treasury Services business has announced that it has gone live with the first phase of enhancements to its international mass payments operating platform. According to the company, "the enhancements will deliver immediate benefits to clients using the bank's Global ACH service, including later cut-off times for receipt of payment instructions and intelligent routing which automatically selects the most expeditious route if a cut-off is missed." READ MORE »

J.P. Morgan has announced that it has "helped the Kentucky Cabinet for Health and Family Services (CHFS) deliver early food stamp benefits to Kentuckians recovering from the state’s recent devastating ice storm."

"CHFS’ Department for Community Based Services usually issues electronic monthly food benefits on a staggered schedule during the first ten days of each month. Due to the storm, nearly 252,000 food stamp recipients who typically receive funds between the third and tenth of the month were given early access to benefits on February 2nd. These benefits are delivered via J.P. Morgan-issued Electronic Benefits Transfer (EBT) cards."

Today marks the start of financial insitutions reporting their earnings for the fourth quarter - a quarter that pundits say may be the first is almost twenty years when the industry in aggregate didn't make any profits.

First up is JP Morgan Chase who reported fourth-quarter 2008 net income of $702 million, compared with net income of $3.0 billion in the fourth quarter of 2007. In its cards business (which now includes Washington Mutual's card business as well), the net loss was $371 million, a decline of $980 million from the prior year due primarily to increased provision for credit losses. Charge volume was up only 1% year over year. The net charge-off rate grew to 5.29%, up from 3.89% last year. More details are included in this presentation on the Chase website.

JP Morgan Chase & Co. has released Chase Mobile, a new iPhone/iPod Touch application available for downloading from the iTunes Apps Store. The application supports a branch and ATM locator, easy access to telephone customer service support, and other mobile banking features. See the Chase Mobile website for more information.

Chase Paymentech has announced the completion of its transition from a joint venture with First Data Corp to a wholly-owned unit of JPMorgan Chase. The assets of the joint venture owned by JPMorgan Chase have been integrated into the bank as a part of its card services division and will continue to operate under the name Chase Paymentech. READ MORE »

The Office of Thrift Supervision's press release tonight on the acquisition of Washington Mutual by JP Morgan Chase included the following: "An outflow of deposits began on September 15, 2008, totaling $16.7 billion. With insufficient liquidity to meet its obligations, WaMu was in an unsafe and unsound condition to transact business. The OTS closed the institution and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. The FDIC held the bidding process that resulted in the acquisition by JPMorgan Chase."

As part of its announcement, the OTS provided a Fact Sheet on Washington Mutual .

In a press release titled "JPMORGAN CHASE ACQUIRES THE DEPOSITS, ASSETS AND CERTAIN LIABILITIES OF WASHINGTON MUTUAL’S BANKING OPERATIONS", JP Morgan Chase announced tonight that "it has acquired all deposits, assets and certain liabilities of Washington Mutual’s banking operations from the Federal Deposit Insurance Corporation (FDIC), effective immediately."

Included in the transaction is the card services segment of Washington Mutual - according to the presentation prepared by JP Morgan Chase, it will become the #1 US credit card issuer with $181 billion in receivables.

The New York Times and the Wall St. Journal are reporting tonight that JP Morgan Chase is expected to announced this evening that it is acquiring "the bulk of Washington Mutual Inc.'s operations". JP Morgan Chase has scheduled a conference call for 9:15 PM EDT this evening.

If true, the combination would bring together the #2 US credit card issuer (JP Morgan Chase - by receivables) with the #6 issuer (Washington Mutual). Based upon year-end 2007 numbers, the combined company would have $177.7 billion in receivables vs. Bank of America, the current #1 US credit card issuer, with $158.1 billion in receivables. For more background on Washington Mutual's credit card business segment, see this Washington Mutual Card Services presentation from July 2008.