A Note from the Editor of TSG’s NewsFilter
We often receive interesting and thought provoking feedback from our readers – we greatly appreciate your input (just reply to this email to send comments). Last week we saw more comments than usual, centered around our headline: NRF / Lawsuit / Really? / Ridiculous. Some readers had the perspective that the NRF’s lawsuit against the Fed was an appropriate and expected response given the Fed’s final ruling being different from their original recommendations AS WELL AS due to the compounded injury to retailers via the card brands’ changes to small-ticket interchange rates. TSG wants to provide some perspective on this topic.
New Research Shows Retailers Pocketing Savings from Durbin Amendment
12/08/11 The Sacramento Bee
Consumers are getting a lump of coal this year from giant retailers. According to new field research released today, at least 76 percent of retailers included in the research have not passed promised savings to consumers, despite already receiving $825 million in windfall profits from the Durbin amendment. Congress justified the Durbin amendment, which established price controls on the cost retailers pay to accept debit cards, in part because of proclamations by retailers that consumers would benefit in the form of lower prices.
Debit-Fee Cap Has Nasty Side Effect
12/08/11 The Wall Street Journal
Jason Scherr had a lot on his mind the day after he opened his fifth Think Coffee shop in Manhattan last week. The fan was blowing too hard, the classical music was playing a little too loudly—and he was trying to figure out how to get more customers to pay with cash. A new law that was supposed to reduce costs for merchants that accept debit cards has instead sent Mr. Scherr's monthly processing bills much higher and forced him to reassess the way he does business. "My choice is to raise prices, discount for cash or get an ATM."
What You Don’t Know Can Cost You!
Merchant acquirers are paying more than 10% less for authorization costs than they did in 2009
With processing costs one of the largest controllable expenses in a merchant portfolio, managing your third-party processing costs can be a major component in increasing margin for an acquirer. One of the best ways to monitor your processing expenses is to use The Strawhecker Group’s 2011 Merchant Processing Pricing Benchmark Study to compare your costs with those of your peers. Merchant acquirers are paying more than 10% less for authorization costs than they did in 2009, and back-end transaction processing services cost 20% less than they did in 2007.
Merchant-Funded Rewards Providers May Face Consolidation
Payment card-based merchant-funded incentives are saturating the market, leading observers to predict market consolidation among service providers. Madeline Aufseeser, a senior analyst for Aite Group, believes a combination of different acquisition possibilities might happen soon. A company such as Carlson Marketing Worldwide Inc., which specializes in loyalty programs, could purchase a merchant-funded rewards provider to enter the market, she tells ISO&Agent Weekly.
New Economies: Who's In Control?
12/08/11 Bank Info Security
New economies are changing the payments landscape, giving consumers more control over their buying experiences. As consumers take on more, through channels like Facebook and Twitter, how much will banks and service providers relinquish? "The belief is that we know what we like and we would like these people to adapt to us," says Kosta Peric, head of innovation for SWIFT, the Society for Worldwide Interbank Financial Telecommunication. "Do people like Google, Amazon and Netflix really know what we like?"
First Data Releases November 2011 SpendTrend®
12/09/11 First Data
First Data Corporation, today released its First Data SpendTrend® analysis for the full month of November 2011 compared to November 2010. SpendTrend tracks same-store consumer spending by credit, signature debit, PIN debit, EBT cards and checks at U.S. merchant locations. Overall year-over-year dollar volume growth was up 7.3% in November, down from October’s 9.4% growth. November 2011 had tough comparables as November 2010 was a particularly strong month, with dollar volume up 8.1%.
Mobile Melee Infographic
12/08/11 Fast Company
The fight is on to turn your smartphone into a waller. Who will win? Banks have millions of customers, existing merchant relationships, and--oh, yeah--dibs on most of our money, so they'll be a necessary back-end component of any near-term mobile wallet. But . . ."They're risk-averse, and they tend to be technology laggards," says Nick Holland, a mobile-tech analyst with the Yankee Group. "I can't see them innovating here."
Mobile Payments War Escalates as Verizon Blocks Google Wallet on Galaxy Nexus
Verizon wants to own your mobile identity, which may be why the company has blocked the Google Wallet mobile payments app on the forthcoming Samsung Galaxy Nexus smartphone. Verizon is instead banking on the Isis mobile payments platform, which was jointly developed by Verizon, AT&T and T-Mobile. Isis was conceived as a nationwide “mobile commerce network” to replace physical wallets with the phones people already have in their pockets.
Financial Watchdog, CFPB, Unviels Prototype of Simpler Credit Card Contract
The new federal consumer financial watchdog agency is taking steps to take the confusion out of those long, hard-to-read credit card contracts. The Consumer Financial Protection Bureau unveiled a prototype of a credit card agreement it says is shorter (only two pages), clearer (written in relatively plain language) and consumer-friendly (with boxes and tables to make it easier to compare one credit card to another).
Drop in Jobless Claims a Sign Market is Mending
Fewer Americans than forecast filed applications for unemployment benefits last week, reflecting a drop in firings that may signal the job market is on the mend. Jobless claims fell by 23,000 to 381,000 in the week ended Dec. 3, the fewest since February, Labor Department figures showed today in Washington. Other data showed consumer sentiment has stabilized around levels usually associated with recessions, and wholesalers boosted inventories heading into the holidays.
Consumers Prefer PayPal Over Credit Cards for Online Shopping - KPMG
he report - which surveyed almost 10,000 adults from 31 countries - finds that consumers around the world are adopting new technologies at a rapid pace, a fact that is changing lifestyles and the commercial landscape around the globe. Across most categories of goods, the majority of respondents reported a preference to purchase items online rather than at a physical outlet. One of the chief beneficiaries of this shift in consumer spending patterns is PayPal.
Starbucks Apps Account for 26M Mobile Payments & $100M in Card Reloads
The Starbucks brand may be synonymous with pricey lattes, but the coffee conglomerate has pushed a number of mobile initiatives in 2011 to make its name also stand for digital innovation. New numbers released Monday suggest that the strategy is working. Starbucks has now processed more than 26 million mobile payments since January, Adam Brotman, vice president and general manager of digital ventures at Starbucks, told VentureBeat.
5 Key Players in the Mobile Payment Wars
12/06/11 The Street
Mobile payments -- destined to be a key component of the evolving "digital wallet" -- have the potential to transform the way consumers pay for items, and battle lines in the war for market share are already being drawn. The Wall Street Journal reported on Tuesday that Verizon Wireless, a joint venture of Verizon and Vodafone, has asked Google to not include its payment app, Google Wallet, on the Galaxy Nexus smartphone for security reasons.
Card Analysts Predict Credit Card Usage will Surge in 2012
12/05/11 Business Insider
After one of the most tumultous downturns in history, Americans might be returning to their pre-recession spending habits. According to First Data, a service that processes merchants' credit card transactions, senior vice president Silvio Tavares, told CNN Money that "credit is back in favor." Card purchases rose each quarter this year, from 8.2 percent in the first quarter to 9 percent in the second quarter and 10.6 in the third.
Credit Card Processors Pass Costs of IRS Rule to Merchants
12/03/11 VIN News
Some credit card processors are charging customers a new fee because of an Internal Revenue Service (IRS) reporting requirement, according to a credit card industry watchdog. Phil Hinke, president and founder of MerchantFeeSavers LLC, said in an email interview that credit card processors are trying various methods to assess merchants a fee to offset costs tied to a federal directive that forces processors to report income passing through credit cards to the Internal Revenue Service (IRS).
Discover U.S. Spending Monitor(SM)Consumer Confidence Jumps in November
Consumer confidence increased substantially in November as more consumers viewed both the economy and their personal finances as improving, according to the Discover U.S. Spending Monitor. The Monitor, a 4-year-old daily poll tracking economic confidence and spending intentions of nearly 8,200 consumers throughout the month, recorded more than a 7-point rise from the previous month to 86.3 percent. Nearly 19 percent of consumers felt economic conditions were getting better in November, a rise of more than 4 points from October.
Amex: Retailers Optimistic so Far
Retailers are generally optimistic about their holiday performance so far, although shaky economic conditions could change things quickly, the chief executive officer of American Express Co said on Tuesday. Ken Chenault, in a speech at the Council on Foreign Relations in New York, said retailers were telling him the holiday had started better than they expected and that online sellers were feeling "very good" about their results. But Chenault said unemployment / economic uncertainty were still a problem.
Dwolla Looks to Make Its Mark with ‘Near Real-Time’ ACH Transactions
12/08/11 Digital Transactions
Payments startup Dwolla Corp. eliminated its transaction fee last week on all payments under $10, a bold move in itself, but it apparently has much bigger things in store. For one thing, the Des Moines, Iowa-based company is testing a system that co-founder Ben Milne says will make automated clearing house transactions safer and faster. For another, it has scheduled an announcement for Dec. 15 on a matter it is touting as a major development.
Cartera Commerce and Billeo Partner to Help Consumers Find and Redeem Card-Linked Offers As They Search and Shop The Web
Cartera Commerce, the leading provider of card-linked marketing solutions, and Billeo, Inc., creator of browser apps that help consumers save time and money while shopping or paying bills online, today announced a strategic partnership and a joint solution to help consumers find and redeem multi-channel card-linked offers - from both online and in-store retailers - as they search and shop the Web.
The Future of Mobile Payments
12/05/11 Portals and Rails
Although mobile payments have been much slower to develop in the United States than many industry observers had predicted, there have been a number of encouraging recent developments. Starbucks, for example, has processed more than 20 million mobile payments since launching its app, and the Chicago Transit Authority's new fare collection system will be able to accept mobile payments starting in 2013. Still, despite these small successes, the United States has not seen the mobile phone really take off as a vehicle for point-of-sale payments.
FTNI Announces Availability of the ETran Cash Processing Module
Financial Transmission Network Inc. (“FTNI”), a provider of the industry leading receivables management solution, today announced the availability of a Cash Processing module within its award winning ETran Receivables Management platform. ETran is well known for its ability to support Check21, ACH and credit card processing. This latest enhancement now allows merchants to reconcile all receipts, regardless of the payment type or the channel through which it arrived.
Consumer Bill Payment Habits Vary Month to Month, Mobile Payments Now an Established Method, Says Fiserv Billing Household Survey
New research from Fiserv, Inc. has revealed significant short-term and long-term shifts in the way consumers pay their bills. The 2011 Billing Household Survey showed that consumers use multiple payment channels on an ongoing basis, with nearly one out of every five online consumer households changing the way they pay bills each month. Mobile bill payments are on the rise, with more than six million Americans using smartphones to pay their bills in the past year.
Euronet Worldwide Acquires Romanian Firm Smart PayNetwork
Euronet Worldwide, a US-based electronic payments provider, acquires Smart PayNetwork (PayNet), a Romania-based provider of ATM outsourcing services. PayNet, which has 44 employees, operates 720 ATMs and 1,700 POS terminals, and processes 15 million card transactions annually. The PayNet acquisition is expected generate revenues of $3m in the initial year of ownership together with accretive cash earnings per share of approximately one cent per share, said Euronet.
The Unexpected Benefits of Tokenization
I am starting to see that one of the biggest benefits of tokenization might be the implementation process itself. That is, while using properly constructed tokens can reduce a merchant’s PCI scope, the process of planning, designing and implementing can produce significant benefits, too. One result from tokenization is restricting the further spread of cardholder data throughout the enterprise.
Small Businesses Turn to Square for Credit Transactions
12/06/11 USA Today
Cabbie David Mendoza reaches for his iPhone and plugs in a spiffy Square Reader to process a ride's fare. "When customers see it, they either say 'What is that cool device?' or 'Hey, that's Square,' " says Mendoza, 32, who used to struggle with a bulky payment device that was slow to pay him and hard to store records on. Within a week of using Square, Mendoza was sold on the device — as were his customers, many of whom would rather pay with a credit card instead of cash.