Visa Rolls Out New Fee Program
Visa Chief Executive Joseph Saunders, in a conference call with analysts, said the payment processor would introduce a network participation fee in the United States for all of its debit, credit and prepaid card services.As part of the new policy, Visa also will lower the variable rate charged for transactions. Visa's shift away from per-transaction fees is a large departure for the San Francisco-based company. It is being done in advance of new fee caps that take effect later this year as part of the 2010 Dodd-Frank financial reform law.
Heartland Ready to Deliver 'Durbin Dollars' to Merchants
7/28/11 American Banker
The Princeton, N.J., card payments processor on Thursday reiterated its plan to pass along reductions in debit card interchange fees mandated by the Durbin amendment to the Dodd-Frank Act. The company calls this its Durbin Dollars initiative. "We are the company that is going to send every single dollar that was mandated in the Durbin legislation to the place it was intended, to our merchants' bank accounts," Bob Carr, Heartland's chairman and chief executive, said during an earnings conference call.
Banks Brace for U.S. Default Fallout
7/29/11 National Mortgage News
Let's skip ahead to Aug. 3. The debt ceiling hasn't moved an inch and the United States no longer enjoys a coveted triple-A credit rating. Now what? Such a downgrade could deliver a massive economic hit, affecting the quality of banks' assets – including residential MBS -- and the value of their swollen investment portfolios, economists and other observers say. The timing couldn't be worse, as asset quality has been steadily improving. But a major macroeconomic change could rattle all of that.
Vast Majority Of Business Owners Do Not Believe Tax Increases Should Be Part Of The Federal Government’s Plan To Reduce The Deficit
7/27/11 Daily Markets
Newtek Business Services, announced today the findings of its SB Authority Market Sentiment Survey, a monthly window into the concerns of independent business owners. Based on a poll of approximately 1,100 respondents, one of the key findings from July’s survey was 64 percent of small business owners do not believe tax increases should be part of the Federal Governments plan to reduce the deficit.
Five Facts About the Debt
Five under-appreciated points about the federal budget and debt ceiling: 1. Whenever I need to get my bearings in the debate over the debt, the deficit, or the debt ceiling, I go to the web site of the White House Office of Management and Budget and download historical table 1.3. The story it tells, in very round numbers, is as simple as 2, 3, 4. The federal government spent about $2 trillion in 2000, at the end of the Clinton administration. It spent about $3 trillion in 2008, at the end of the Bush administration. And it is going to spend about $4 trillion in 2011, three years into the Obama administration.
US Economy Grows 1.3% in Q2
The U.S. economy grew less than forecast in the second quarter, after almost stalling at the start of the year, as consumers retrenched. Gross domestic product climbed at a 1.3 percent annual rate following a 0.4 percent gain in the prior quarter that was less than earlier estimated, Commerce Department figures showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 1.8 percent increase. Household purchases, about 70 percent of the economy, rose 0.1%.
Instant View: Jobless Claims Fall Below 400,000
New U.S. claims for unemployment benefits fell more than expected last week, dropping below the key 400,000 level for the first time since early April, according to a government report on Thursday that pointed to some labor market improvement. "When you look at last week and this week, it does suggest we are making a gradual progress toward healing many of the labor market problems that we have.
Will Dodd-Frank Drive the Financial Industry Overseas?
7/25/11 Bank Investment Consultant
In the battle over Dodd-Frank implementation, large U.S. banks may do well to remember the story of the boy who cried wolf. For years, banks and Wall Street have argued that over-regulation will drive the financial services industry overseas, a claim that has rung hollow as such a scenario has so far failed to materialize. But many observers are now saying the regulatory reform law, by adding significant requirements on domestic banks not faced by European and other international financial firms, may finally be a tipping point.
Debit Fees to Pinch Consumers
Even small banks, which are technically exempt from new rules, will be forced to pass on higher fees charged to them by the financial institutions that run the debit network, according to officials. Todd Wanner, CFO at First Volunteer Bank in Chattanooga, said most banks are looking at monthly debit card charges ranging from $3 to $5. “We’ll go from making about $400,000 a year [1 percent of revenue] to losing about $800,000 per year,” Wanner said. “I’d have to charge customers about $3.25 [per month] to bring me back to break even.”
Survey: Resistance to Debit Fees
Even a small fee on debit cards will lead consumers to abandon them in favor of other payment methods, including cash, checks and even credit cards, according to a recent survey. Debit card issuers with more than $10 million in assets have been discussing adding fees or otherwise limiting debit card use in the wake of regulations that promise to significantly reduce debit card interchange.
TransUnion: Consumers Made $72 Billion More in Credit Card Payments Than Purchases
A new TransUnion analysis found that consumers made an estimated $72 billion more in payments on their credit cards than purchases between the first quarters of 2009 and 2010. This is in contrast to the belief that charge-offs (where creditors write off debt that they deem is uncollectable as a loss) were the primary driver of lower credit card balances. "Many people in the financial services industry believe charge-offs have been the leading factor in declining credit card debt since the start of the recession."
An Economic Analysis of the 2010 Proposed Settlement between the Department of Justice and Credit Card Networks
7/28/11 Federal Reserve Bank of Boston
In 2010, the DOJ filed a lawsuit against the credit card networks American Express, MasterCard, and Visa for alleged antitrust violations. We evaluate the extent to which the recently proposed settlement between the DOJ and Visa and MasterCard (henceforth, "Proposed Settlement") is likely to achieve its central objective: "…to allow Merchants to attempt to influence the General Purpose Card or Form of Payment Customers select by providing choices and information in a competitive market."
Chicago Fed Letter - Exploring the New Face of Retail Payments
7/27/11 Chicago Federal Reserve
At this year’s conference, retailers, consumer advocates, bankers, academics, and technology experts discussed how consumers have changed their payments behavior while facing a weak economy with high unemployment. Consumers’ new payments behavior may lead to opportunities for traditional payment providers—like large financial institutions and card networks—as well as new nonbank ones—like technology firms and retailers.
Is the Final Durbin Amendement Rule an Impetus for EMV in the United States
7/26/11 Portals and Rails
On June 29, the Federal Reserve Board released its much-anticipated final rule, Regulation II, to the Durbin Amendment. The Board's final rule significantly differs from its interim rule on this amendment, resulting in ample commentary from the payments industry, financial institutions, and the merchant community. However, there has been little commentary provided about the potential impact the final rule may have on encouraging the migration of debit cards away from mag stripe to the EMV standard.
"Card-Present" Transactions From Across the Web? Not Exactly
New ideas for keeping E-Commerce payments secure are coming thick and fast—and some of their purveyors are playing just a little fast and loose with the benefit buzzwords. Case in point: On Tuesday (July 26), Jumio announced a service called Netswipe, which lets E-Commerce customers hold payment cards up to their PC’s webcam for processing. The Netswipe software takes over the webcam to scan the card using secure streaming video, decide if the card is real or fake and then extract the card number.
One Billion Payment Cards with Contactless Capabilities Expected to Ship in 2016
7/26/11 News Blaze
An estimated one billion payment cards with contactless capabilities will be shipped globally in 2016, up from just 170 million in 2010. This includes EMV dual interface cards and the non-EMV pure contactless push in the US. Smart card shipments, which include not only contactless payment cards, but also EMV and non-EMV payment cards, will reach one billion during 2011. ABI Research forecasts that smart card shipments will overtake mag-stripe card shipments by 2015.
Payment Executives Believe Mobile Could Become Mainstream In 3 Years
7/25/11 US Banker
Varying opinions exist on how quickly mobile payments will grow in the U.S., but payments executives generally believe the technology could become a mainstream option for purchasing goods and services within 36 months, new survey data suggest. Consulting group Speer & Associates Inc. conducted the survey of 43 executives in June and found 90% of respondents believed mobile payments will become a mainstream choice for consumers by 2014. Only 5% of respondents believed mobile phones never will become a conventional method to conduct transactions.
Hackers Ask PayPal Users to Close Accounts
Hacking group Anonymous is asking PayPal users to "immediately close their accounts and consider an alternative," as a way of protesting the arrests of 14 people tied to a denial-of-service attack on PayPal's website last December. That attack, which brought down the site, was said to be retribution against PayPal for dropping WikiLeaks' donation account. According to Anonymous, the protest is working: As of Wednesday morning PT, the group claimed "at least" 35,000 PayPal accounts have been closed.
Visa Inc. Posts Strong Fiscal Third Quarter 2011 Earnings Results and Authorizes New $1 Billion Share Repurchase Program
Visa Inc. today announced financial results for the Company’s fiscal third quarter 2011 ended June 30, 2011. GAAP net income for the quarter, inclusive of a non-cash, non-operating gain related to the Company’s revaluation of its Visa Europe put option, was $1.0 billion. On an adjusted basis, which excludes the revaluation of the Company’s Visa Europe put option, net income for the quarter was $883 million, an increase of 23% over the prior year, and diluted class A common stock earnings per share were $1.26, an increase of 29% over the prior year.
First Data Introduces Market-Leading Information and Analytics Product Suite
7/28/11 First Data
First Data Corporation, a global leader in electronic commerce and payment processing, today introduced a new suite of product offerings from its Information and Analytics Services (I&AS) division. I&AS delivers analytics and insights based in part on First Data’s proprietary SpendTrend® tools to merchants and other businesses that need superior fact-based insights on consumer spending and payments.
VITA Products Launches Innovative Contactless Payment Program
VITA Products, Inc., a company offering a first-of-its-kind identification and contactless payment platform, announced the launch of its payments and identification program using Visa’s payWave-enabled contactless payment chip. The program showcases the VITAband, the first in VITA Products Inc.’s line of wearable accessories that store emergency contact and medical information, while offering contactless payment functionality.
TSYS Reports Second Quarter 2011 Results
TSYS today reported results for the second quarter of 2011 with total revenues of $447.6 million, an increase of 3.9% over 2010. Excluding a 2010 termination fee, total revenues were up 6.2%. Basic earnings per share from continuing operations were $0.28, an increase of 10.1% over 2010, and increased 25.4% excluding the 2010 termination fee. “We continue to see the improvements that we expected in 2011 as evidenced by our year over year quarterly revenue growth with and without the termination fee.
Confrontation Between Visa and China UnionPay Intensified
The confrontation in overseas channel between Visa Inc. (V), an American-based payment company, and China UnionPay, the only domestic bank card organization in China, is intensifying. Just after China UnionPay announced to co-develop overseas internet payment business with MasterCard last month, Visa spoke emphatically in recent days to introduce cross-channel digital wallet business that will appear on the North American market on this autumn.
ACI Makes Offer for S1 Corporation
7/26/11 IBS Intelligence
Following news last month of a proposed merger between payments system vendors Fundtech and S1 Corporation (IBS, June 2011, Fundtech and S1 to merge), ACI Worldwide has muddied the waters by issuing a counter-offer to acquire S1. ‘We believe that our premium stock and cash proposal is both financially and strategically superior to your proposed transaction with Fundtech,’ states a letter sent by the board of ACI to the board of S1.
FrontStream, Frazer Team for Auto Industry Payment Solution
FrontStream Payments is pleased to announce completion of their strategic technology integration with Frazer Computing’s used car dealer management software. By integrating FrontStream’s robust payment gateway, traditional merchant processing services and the new ACH eCheck solution, Frazer can now offer their automotive dealer clientele an all-in-one business management solution.
Electronic Payment Exchange Enters Person-to-Person Payments Market
Electronic Payment Exchange (EPX), announced the Company's entrance into the person-to-person (P2P) payments market by completing Visa certification for processing Visa Personal Payment transactions. EPX's Visa Personal Payment certification enables EPX to facilitate person-to-person payments through Visa, where EPX serves as the payment processing link that connects a financial institution or its P2P platform provider with VisaNet.
Merchant Warehouse Expands Product Line With Encrypted Swiped, Keyed and All-in-One Payment Devices
Merchant Warehouse®, a premier provider of merchant accounts and credit card processing solutions, today announced the release of MerchantWARE ® 4.0, and the recently completed integration with ID TECH into the MerchantWARE ® suite of products. MerchantWARE 4.0 provides a streamlined integration process for point-of-sale (POS) developers and also includes complete support of ID TECH standard and enhanced versions of their SL Secure Line of products.
FinCEN Issues Prepaid Access Final Rule
The Financial Crimes Enforcement Network (FinCEN) today issued its final rule that amends Bank Secrecy Act Regulations – Definitions and Other Regulations Relating to Prepaid Access, amending the money services businesses (MSB) rules and establishing a more comprehensive regulatory approach for prepaid access. The rule puts in place suspicious activity reporting, and customer and transactional information collection requirements.