Part-Time Nanny Credited with Ending Debit Card Fee; Led Petition Against BofA
11/03/11 Washington Post
Recent college graduate Molly Katchpole has $2,200 to her name, holds down two part-time jobs — one of them as a nanny — and describes her financial situation as paycheck-to-paycheck. So when Bank of America announced that it would begin charging debit card users a $5 monthly fee, Katchpole got mad and started an online petition. More than 300,000 people signed it.
Starbucks and PayPal Report Surge in Mobile Payments
Starbucks says it has now processed more than 20 million mobile payment transactions since it rolled out its pay-by-mobile application nationwide in January. The company, which has moved beyond the iPhone to offer mobile payments on Android and BlackBerry devices in 9000 stores nationwide, says it is experiencing sequential month-on-month increases in customer adoption and volume. "At the end of September there was almost 1 million smartphones with at least one registered Starbucks Card associated with it."
‘Good Faith’ ISOs Should Not View IRS Extension As Free Pass, Expert Says
An Internal Revenue Service announcement that it will not penalize ISOs showing a “good faith” effort to supply the IRS with newly required merchant-transaction data for the 2011 tax year does not represent a total reprieve from the new regulations, a tax-compliance service provider says. "By incorporating the “good faith” measure, the IRS is providing additional guidance regarding its 1099-K reporting requirements and, in effect, is telling ISOs they understand mistakes could occur in trying to clean up merchant tax identities,"
Debit-Fee Retreat Complete
11/02/11 The Wall Street Journal
The banking industry's brief experiment with charging customers to use their debit cards appears to be over. The about-face concluded on Tuesday when Bank of America Corp. dropped plans to charge customers $5 a month for using their debit cards to make purchases. Bank of America was the last major bank to back away from the fees, representing a swift retreat in an industry that is at times known for its lumbering decision-making.
Bank Debit Fees Could Have Hit $875M a Month
Banks could have made up to $875 million a month off of their now-dead debit card fees, according to an analysis from Market Rates Insight. The projections are based off of each of the 175 million U.S. adults with bank accounts paying a monthly $5 fee, the amount Bank of America had planned on charging its customers before becoming the last major bank to ditch its debit card fee on Tuesday. But Market Rates Insight says the fees -- as well as the consumer backlash they incurred -- could have easily been avoided if banks had simply lowered their deposit rates by just 0.01%.
With Debit Card Fees D.O.A., Expect More Checking Fees
Higher account maintenance fees are inevitable, because basic, relatively low-balance checking accounts are simply not profitable on their own. Despite the widely circulated allegation that banks are raking in money from regular consumer accounts, industry groups, analysts, and available data suggest that such accounts are money losers without overdraft fees or extremely high-margin interchange charges. This problem is worse for the major banks, which have higher overhead.
Poll Shows BofA Retail Clients ’Least Satisfied’
Bank of America Corp. retail customers are the least satisfied among clients of the biggest U.S. lenders and the most likely to defect to competitors, according to a Harris Interactive poll. Nine percent of people with Bank of America accounts were “not at all likely” to continue to use the Charlotte, North Carolina-based lender, the survey, scheduled to be released today, shows. That is triple the rate of JPMorgan Chase & Co. (JPM) customers and 50 percent more than Wells Fargo & Co. (WFC)
Senators Want Banks to Simplify Checking Account Fee Disclosures
11/02/11 Los Angeles Times
Emboldened by Bank of America's decision to abandon a proposed $5 monthly debit card fee, two senators on Thursday asked regulators to require banks to provide customers with a simple, one-page form listing all their checking account fees. The goal is to give consumers a standardized, easy-to-understand disclosure form to make it easier to compare fees charged by banks. "When consumers are informed and can make choices, that's when the free market is at its best and strongest," said Sen. Dick Durbin.
Durbin Calls on Banks to Release Earnings from Fees
10/31/11 The Hill
A top Senate Democrat is calling on the nation's largest banks to disclose how much they make in fees, especially those earned from consumers credit card usage. Sen. Dick Durbin (D-Ill.), who has taken heat in recent weeks over his successful campaign to lower swipe fees that are merchants are charged, said Monday he was pleased and even surprised to see banks reversing their decision to charge a monthly fee for using debit cards.
Bank Transfer Day Continues Despite Bank Shift, Consultants Say
“My belief is that credit unions need to continue to promote their value regardless of how big or small Bank Transfer Day ends up being,” maintained Bill Handel, vice president-research/development at Raddon Financial Group in Chicago who added, “the difference between the mega-banks and community-based financial institutions was significant even prior to the imposition of debit card fees and so the imposition of these fees was a means by which this difference could be driven home.”
Report Shows 80,000 Jobs Added in U.S. in October, Unemployment Drops to 9%
11/04/11 The New York Times
The United States economy created a modest number of jobs in October, the Labor Department reported Friday. Employers added 80,000 payroll positions on net, slightly less than what economists had expected. Friday’s report also showed that job growth in September and August was significantly stronger than the Labor Department initially believed it was, giving economists hope that October employment growth may have been better than this first estimate suggests, too.
Lingering Anxiety Curbs Chain Store Gains
Sales at major U.S. retailers rose in October but not as much as Wall Street analysts had thought, showing that consumers are still anxious about the state of the economy as they begin their holiday shopping. Overall, the 23 major U.S.-based retailers that report monthly results posted a composite 3.4 percent gain in sales at stores open at least a year, according to Thomson Reuters data. That missed the 4.5 percent increase that Wall Street was expecting. but was more than the 1.6 percent gain in Oct 2010.
Shocks Force Fed to Reconsider the Future
11/03/11 The Wall Street Journal
Forecasting after a financial crisis and in a period of noneconomic shocks is extremely difficult. In his Wednesday press conference, Fed Chairman Ben Bernanke was asked why the Fed’s central tendency forecasts have gotten more downbeat over the course of 2011. Back in January, the Fed was cautiously optimistic about growth, forecasting real gross domestic product could grow close to or above 4% in 2012 and 2013. Now, the Fed’s forecast sees a U.S. economy barely performing at its potential for at least another year. Real GDP is projected to grow less than 3% in 2012.
Midwest Mergers and Acquisitions Index Up in 3rd Quarter
11/02/11 Sacramento Bee
The number of Midwest companies that participated in an acquisition or merger over the past six months increased in the third quarter of 2011. That's a good sign that the local economy is on the mend. But all the news was not as good. While the volume of these types of deals was up, the size of the deals involved was the lowest in over two years. For Midwest businesses, this is still good news overall. The increase in deals reflects that the valuation gap has closed. Valuations appear to be healthy, yet palpable for both buyers and sellers.
Intuit: Mobile Payment 'Swipes' Will Go Away, But NFC Probably Not The Solution
Now that Square has figured out a way to enable hands-free payments through an iPhone application, plugging a plastic swiper/reader/dongle into a cellphone or tablet to read credit cards seems somewhat retro. Square’s Wednesday announcement throws into question competitor Intuit’s approach. For nearly two years, the California-based financial solutions provider has offered a plastic swiper for entrepreneurs and small businesses to accept mobile payments.
The End of the Credit Card?
It’s an app called Card Case, and it’s made by Square, the brilliant payments company founded by Twitter inventor Jack Dorsey. Because Card Case runs on your phone, it may sound at first like the same clunky, phone-and-pay-pad systems being peddled by other firms. But Card Case doesn’t let you pay with your phone; it lets you pay with your name. With this app, you go into a store, choose what you want to buy, and then tell the cashier your name. That’s it—you’ve just paid.
PayPal: Innovating to Turn the Future of Shopping into a Reality
11/02/11 PayPal Blog
"I’m here in New York for the official opening of our Shopping Showcase. Take a look at our space in TriBeCa—it brings to life how we’re working with retailers to define the future of commerce. PayPal has always been about connecting retailers with their customers by helping them integrate a faster, more targeted and more flexible shopping experience across channels. Here at our Shopping Showcase, retailers can see first-hand how we’re doing just that."
E-wallet vs. Traditional Wallet: Electronics Trump the Leather
11/02/11 Network World
Will the day come when you will routinely leave the house every day without your leather or faux-leather wallet? You bet, at least for many folks. Electronic wallets or e-wallets for mobile payments will likely grow from a number of phenomena. Let's start with the smartphones that will enable the movement. It is not a stretch to say that many people already cannot imagine going out of the house without their smartphone in the morning.
MasterCard Beats Estimates on Double-Digit Growth
11/02/11 Yahoo! Finance
MasterCard Inc reported higher third quarter profit on Wednesday which easily beat Wall Street estimates, on double-digit increases in volumes. Shares rose 7.6 percent in premarket trading on the news. The Purchase, New York-based card processing company reported net income of $716 million, or $5.63 per share, up from $519 million, or $3.94 per share, a year before. Revenue rose more than 27 percent to $1.8 billion. It was the company's biggest earnings beat in the last two years.
“Selective” Incentives Will Help Steer Debit Volume to MasterCard, Banga Says
11/02/11 Digital Transactions
MasterCard Inc.’s chief executive on Wednesday said the network would continue to be “strategic” and “surgical” and “selective” as it seeks new transaction volume in the newly regulated U.S. debit card market. Big processor First Data Corp., meanwhile, reported the biggest increase in transaction volume by issuers in its Star PIN-debit network in at least seven quarters. MasterCard president and chief executive Ajay Banga said his company is offering select merchants and merchant acquirers incentives to direct debit card transactions MasterCard’s way.
First Data Reports Third Quarter 2011 Financial Results
11/02/11 First Data
First Data Corporation today reported its financial results for the third quarter ended Sept. 30, 2011. Consolidated revenue for the third quarter increased $99 million to $2.7 billion, up 4% compared to $2.6 billion a year ago. Revenue growth was primarily attributable to increases in debit network fees and favorable impacts of changes in foreign currency. Adjusted revenue, which excludes certain items including reimbursables, increased $37 million, or 2%, year-over-year to $1.7 billion.
Visa Europe Cements Alliance with Monitise
Monitise plc , the technology company delivering mobile banking, payments and commerce networks worldwide, is further strengthening its alliance with Visa Europe, which is investing £24.7 million in Monitise at an issue price of 35p per share for 70.5 million new Monitise shares. As part of the subscription for Monitise shares, Visa Europe President and Chief Executive Peter Ayliffe, will join Monitise's Board of Directors.
New Visa PCI Compliance Stats: Level 1s Up, Level 3s Down Slightly, Level 2s Down Sharply
Level 3 merchants, whose compliance Visa only started making public this summer, have seen their relatively weak compliance numbers drop further, according to new figures the card brand released Monday (Oct. 31). Level 2 chains saw an even stronger drop, while Level 1s continued their improvement trend. Level 1 chains process more than six million Visa transactions a year, Level 2s process from one to six million and Level 4s process fewer than one million such transactions, while Level 3s handle 20,000 to one million online Visa transactions a year.
VeriFone Buys Global Bay to Win Mobile Retail Market
VeriFone, which makes many of the point of sale terminals consumers use, has expanded its presence to mobile devices with its PayWare card swipe sleeve and app, which competes with Square. Now, it’s looking to double down on its retail mobile strategy by buying Global Bay Mobile, which provides a suite of mobile software for smartphones, tablets and other devices that enable salespeople to engage customers away from the point of sale terminal. The terms of the transaction, which closed Tuesday, have not been released.
NetSpend Quietly Partners with PayPal on Prepaid
11/01/11 American Banker
The prepaid card marketer NetSpend Corp. is teaming up with PayPal Inc. in a deal that has so far been the subject of little fanfare by either company. NetSpend disclosed the five-year agreement to manage and process PayPal-branded prepaid cards in a one-paragraph 8-K filing with the Securities and Exchange Commission dated Oct. 28. Though few details are known, analysts expressed optimism about the deal's potential to attract new business to NetSpend.
Discover U.S. Spending MonitorSM Consumer Confidence Rebounds Slightly in October
Consumer confidence slightly rebounded in October as more consumers felt the economy and their personal finances were improving, while fewer felt the economy and their finances were getting worse 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 a 2-point rise to 79.0 percent.
Green Dot, Walmart and GE Capital Expand Walmart MoneyCard Prepaid Card Product Line
Green Dot Corporation together with GE Capital Retail Bank and Walmart has expanded the Walmart MoneyCard prepaid card product line sold at Walmart stores nationwide. The Walmart MoneyCard is issued by GE Capital Retail Bank. The new products will be part of a rebrand of the entire product line, which is scheduled to roll out nationwide during the fourth quarter of 2011, said Green Dot.
FIS Adds Discover Network to Card Processing Capabilities
FIS, the world’s largest provider of banking and payments technology, today announced an agreement with Discover Financial Services to process cards that are accepted over the Discover® Network. A leader in card processing, FIS offers fully integrated transaction processing solutions, providing a single point of authorization, transaction posting, settlement, reporting and access for all services.
Fiserv Integrates ACCEL/Exchange and Prepaid Solutions to Deliver Next-Generation Prepaid Services
Fiserv, Inc., a leading global provider of financial services technology solutions, announced today that it has integrated its ACCEL/Exchange® payments network with Prepaid Solutions from Fiserv, enabling financial institutions across the country to more effectively deliver prepaid products to their customers, and target new segments. "The seamless integration of Prepaid Solutions and ACCEL/Exchange makes it easier than ever for financial institutions to quickly provide prepaid programs to address needs."
Braintree Continues Rapid Growth -- Now Processing $10 Million Daily
The volume of credit card transactions processed by Braintree soared to over $10 million per day, 300 percent of the volume from the same period a year ago, the company announced. Braintree is an online payments provider that powers commerce for many of the fastest-growing and most discerning online businesses in the world. The company is now processing approximately $4 billion on an annualized basis, according to Bill Ready, Braintree's CEO.
SafetyPay and PlaySpan Partner to Offer International e-Shoppers Secure Payment Option
11/03/11 The Miami Herald
SafetyPay, a secure payment provider serving online shoppers, merchants and banks worldwide, today announced a partnership with California-based PlaySpan, a Visa company, and leader in monetization solutions, online games, social networks and online videos. Under terms of the agreement, PlaySpan’s UltimatePay Merchants will now be able to offer SafetyPay as an online payment option for their digital goods.
Payment Alliance International a Fast 50 Company
Payment Alliance International (PAI), a leader in electronic payment processing solutions and the Electronic Transactions Association’s (ETA) 2011 “ISO of the Year,” has been named a Fast 50 Company by Business First of Louisville for the third consecutive year. John J. Leehy, III, president and chief executive officer of Payment Alliance International, attributes the company’s success to the dedication and energy of the company’s employees and the loyalty of its many customers.
Smoking-Gun Edict Shows Gov't Behind Housing Meltdown
10/31/11 Investor's Business Day
President Obama says the Occupy Wall Street protests show a "broad-based frustration" among Americans with the financial sector, which continues to kick against regulatory reforms three years after the financial crisis. "You're seeing some of the same folks who acted irresponsibly trying to fight efforts to crack down on the abusive practices that got us into this in the first place," he complained earlier this month. But what if government encouraged, even invented, those "abusive practices"