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Aug 19th, 2011 Edition #266 New to NewsFilter? Click here to subscribe. In this Issue In Other News This Day in History 1909 First race is held at the Indianapolis Motor Speedway On this day in 1909, the first race is held at the Indianapolis Motor Speedway, now the home of the world's most famous motor racing competition, the Indianapolis 500. Built on 328 acres of farmland five miles northwest of Indianapolis, Indiana, the speedway was started by local businessmen as a testing facility for Indiana's growing automobile industry. The idea was that occasional races at the track would pit cars from different manufacturers against each other. After seeing what these cars could do, spectators would presumably head down to the showroom of their choice to get a closer look. The rectangular two-and-a-half-mile track linked four turns, each exactly 440 yards from start to finish, by two long and two short straight sections. Click here to read more.
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Despite Recent Economic Turmoil, TSG Metrics Study Displays Payments Industry Resiliency 
8/19/11 PaymentsPulse The cloud hanging over the U.S. economy (and symbiotically the world economy) since the end of the recession has not cleared much. A driving factor behind the stagnant cycle that could be at play is described by some economists as a “feedback loop” — when one piece of bad economic data has a way of making everything else worse. For example, a national unemployment report showing limited job growth is released and makes headlines across the country. Despite employment being a lagging indicator, consumer confidence continues to drop, and retail sales suffer. As retail sales suffer markets react negatively. Stock market volatility drives economic uncertainty leading corporations to sit on their cash and not invest in new employees. More negative economic data is released and the cycle starts again. Click here for a report preview. Click here to order now. Free for ETA Members Inspector General Says IRS Must Improve Implementation of Merchant Card Reporting Requirements 8/18/11 ETA Without improvements, plans by the Internal Revenue Service (IRS) to implement the merchant card reporting requirements of the Housing and Economic Recovery Act of 2008 could create a burden for taxpayers and problems for the IRS, a new report publicly released today has found. The report, “Plans for the Implementation of Merchant Card Reporting Could Result in Burden for Taxpayers and Problems for the Internal Revenue Service,” was conducted by the Treasury Inspector General for Tax Administration (TIGTA). With Durbin Forcing New Network Links, a Software Vendor Sees Opportunity 8/18/11 Digital Transactions Looking to capitalize on opportunities fostered by recently created debit card regulation, Lexcel Solutions Inc. on Thursday announced an update to its network-testing software that is aimed at streamlining debit card issuers’ selection of new networks as mandated by the Federal Reserve. The Fed’s June 29 final rule implementing the Durbin Amendment to the Dodd-Frank Act of 2010 requires all debit card issuers to have connections to at least two unaffiliated networks. Jobs, Inflation Data Disappoint 8/18/11 The Street An increase in jobless claims and higher-than-expected inflation numbers indicate that the U.S. economy has a long road to recovery ahead. American consumers paid more for goods and services in July, according to the Bureau of Labor. The government's consumer price index increased 0.5% in July while the core reading, which excludes food and energy costs, increased by 0.2%. TSG Mini-Report: Merchant Acquiring Banks
8/19/11 PaymentsPulse TSG recently conducted a study to better understand how regional financial institutions view the strategic value of merchant services to their commercial banking strategy and how they provide merchant services to these customers.
Click here to read TSG's findings Google Building Muscle In Mobile Payments, Announces Acquisition of Motorola
8/16/11 ISO & Agent Google Inc.’s Aug. 15 announcement of an agreement to acquire Motorola Mobility Holdings strengthens Google’s position in mobile payments, one observer says. The big issue for mobile payments has been the computer chip in a phone that would store encrypted payment card credentials–the physical hardware that allows someone to own the mobile wallet, notes Nick Holland, senior analyst with Yankee Group. “By having ownership of [the Motorola unit], which makes 10% of smartphones in the U.S., Google has the potential to put its own secure element in all those devices.” J.D. Power and Associates Reports: Customer Satisfaction with Credit Cards Increases for a Second Year 8/18/11 PR Newswire After a considerable decline in 2009, credit card customer satisfaction has increased for a second year, according to the J.D. Power and Associates 2011 U.S. Credit Card Satisfaction Study(SM) released today. The study, now in its fifth year, measures customer satisfaction with credit cards by examining six key factors: interaction; credit card terms; billing and payment process; rewards; benefits and services; and problem resolution. Overall credit card satisfaction averages 731 on a 1,000-point scale in 2011, up from 714 in 2010 and 705 in 2009. McAfee Survey Reveals That Confidence in Online Retailers Has Fallen Since 2009 8/18/11 iStockAnalyst According to a study of consumer sentiment toward online shopping and security released today by McAfee, (NASDAQ:INTC) and conducted by Harris Interactive®, only about a third of online consumers believe that most websites are safe for shopping, an 11 percent decrease since McAfee conducted the survey in 2009. The majority of online consumers, 84 percent, continue to have some level of concern when providing personal information online. Will Next-Gen Smart Money Kill Cash?
8/16/11 Humans Invent If you had to put money on how we’ll pay for things in twenty years’ time, what would you bet on? A global online e-currency used for everything from gaming to groceries? Perhaps pre-paid contactless cards, or take a punt on cash to stand the test of time? Then again you could have a flutter on Twitter taking over and micropayments becoming widespread? The truth is, nobody really knows for sure – although the experts seem to think the smart money is on smartphones. Would You Pay to Use Your Debit Card? 8/18/11 Time Banks have been scrambling to find ways to boost their revenue after the government stepped in to quash overdraft abuses and cap interchange fees. Free checking accounts have already become harder to come by as banks have upped their minimum balance requirements or required direct deposit. They’ve added or increased fees for everything from talking to a teller to using an out-of-network ATM. Right now, it’s too early to tell if these programs will be implemented nationwide, or if other banks will jump on the bandwagon. Wells Fargo to Test $3 a Month Debit Card Fee 8/16/11 CNNMoney Yet another of the nation's top banks is flirting with the idea of charging a monthly fee to customers who use debit cards. Wells Fargo said Tuesday it will start charging a $3 monthly fee for debit card usage to customers in Georgia, New Mexico, Nevada and Oregon beginning Oct. 14. "We regularly review our pricing and take into account the needs of our customers, industry trends, the market competition, and our cost of doing business," a Wells Fargo spokeswoman said. RBS Cuts Some Customers' ATM Access 8/17/11 BBC News Royal Bank of Scotland (RBS) is to stop nearly a tenth of its account holders using cash machines owned by rivals. This will affect nearly a million people with basic bank accounts that do not offer overdrafts or cheque books. They will only be able to withdraw money from RBS, NatWest, Tesco or Morrisons cash machines, or at Post Office branches over the counter. RBS blamed its decision on its inability to recover the cost of its customers using other banks' ATMs. BofA Gets Out of International Credit Card Business: Why? 8/18/11 Credit.com This week, Bank of America announced it would be dropping its international credit card operations to focus on its core business: American credit cards. The bank’s strategy is clear, says CEO Brian Moynihan. “We have been transforming the company to deliver the franchise to our core customer groups, and building a fortress balance sheet behind that,” he’s quoted in the bank’s official statement. Amex Takes to the Streets with Serve Mobile Payment System 8/18/11 VentureBeat At a recent rock festival in San Francisco’s Golden Gate Park, I ran into some American Express representatives promoting Serve, its new mobile payments product. Continue reading for a video made about the product and its rock-show promotion tent. At the festival, Serve was being served with a heaping side of skeeball and beer, not to mention rock band performances, in the American Express “Barcade.” Mutual Bank to Issue Credit Cards 8/13/11 Omaha Mutual of Omaha Bank will begin issuing MasterCard credit cards to individuals and businesses in November. A partnership announced this week with Des Moines-based TMG Financial Services will allow the bank to issue credit cards on a national scale for the first time, said Matt Minchow, the bank's executive vice president for national products. Mutual of Omaha Bank is a subsidiary of Mutual of Omaha, the Omaha-based insurance and financial services company. Buffett Doubles MasterCard Stake 8/17/11 Finextra Warren Buffett's Berkshire Hathaway has nearly doubled its stake in MasterCard over the last three months and also significantly boosted its Wells Fargo holdings. Buffett first picked up 216,000 shares in MasterCard in the previous quarter and has built up his position to 405,000, valued at around $122 million. Berkshire Hathaway also added 9.7 million shares in Wells Fargo. Cardtronics Buys Access to Money 8/16/11 GreenSheet Under the terms of the agreement, Cardtronics will acquire all of the outstanding shares of Access to Money for a cash payment of $0.285 per share and retire all of Access to Money's outstanding indebtedness. The total cost to be paid at closing will be approximately $21.2 million. The companies expect an early fourth quarter completion date for the transaction. Access to Money provides ATM services to merchants and financial institutions, currently operating approximately 10,350 ATMs. iZettle Aspires to be the Square of Europe 8/18/11 iZettle iZettle announces its iZettle App for iPad, iPhone and iPod touch is now available on the Swedish App Store. iZettle is a mobile payment app providing users with the ability to take credit and debit card payments anytime, anywhere. “Cash is a hassle,” said Jacob de Geer, iZettle CEO and co-founder. “Whether you’re a merchant with a storefront, a plumber working in someone’s home, selling produce at the farmers market or settling the bar bill between friends. Telefónica Germany, Telekom and Vodafone Plan “Mpass” Mobile Payment Company 8/16/11 Mobile Payment Magazine Telefónica Germany, Telekom and Vodafone are pushing ahead with their joint activities in mobile payments. The three telecommunications providers intend to register their payment service mpass as a separate company, and have signed a letter of understanding to this effect. The new company is due to begin operating as early as this year. iPayment Reports Second Quarter Results, Announces Reloaction of Corporate Headquarters 8/15/11 iPayment iPayment also announced that it plans to relocate its headquarters to New York City at the start of 2012. Mark Monaco, the Company’s Chief Financial Officer said, “Our decision to relocate to New York was primarily driven by the opportunity for us to be very close to a large portion of our sales organizations, a significant number of our investors and other key constituents. We expect this process, which is already underway, to be fully complete by January 2012.” Cartera, Barclays Join Forces to Compete with Daily Deals Sites 8/17/11 Nasdaq Cartera Commerce Inc. struck a deal with Barclaycard US, the U.S. payments business of Barclays PLC (BCS, BARC.LN), to link rewards for shopping at participating merchants directly to the bank's credit cards. Shoppers can go online or into a physical store, use their Barclaycards to make purchases, and get rewarded immediately, rather than having to make a purchase, print out a coupon and wait for rewards, according to Cartera Chief Executive Tom Beecher. Ingenico Welcomes the Migration and Adoption of EMV in the United States 8/16/11 MarketWatch Ingenico, the leading worldwide provider of payment devices and services, reacted positively to the recent announcement by VISA Inc. to accelerate the migration to EMV contact and contactless chip technology in the United States. Boasting the largest installed base of EMV-enabled terminals (over 15 million) globally, Ingenico sees the arrival of the smart card technology as the next logical step in preparing the U.S. payments ecosystem to benefit. Citi and Best Buy Launch Mobile Rewards App 8/18/11 TechCrunch Citi and Best Buy have teamed up to launch a mobile rewards application for iPhone and Android devices. The “Citi ThankYou Rewards” app ties together Best Buy’s inventory systems with Citi’s “ThankYou” Rewards program, a service which allows Citi customers to earn points by using their Citi credit card or performing other banking-related activities. TransUnion: National Credit Card Delinquencies Hit New Record Low 8/16/11 TransUnion The national credit card delinquency rate (the rate of borrowers 90 or more days past due) decreased for the sixth consecutive quarter, dropping to 0.6% at the end of the second quarter in 2011. This is the lowest mark observed in 17 years. Credit card debt per borrower increased $20 in the quarter to $4,699, though it remains near record-low levels. Stealing ATM PINs with Thermal Cameras 8/17/11 Naked Security Inspired by previous research on safecracking by Michał Zalewski, they thought it would be easier for a criminal to snoop on ATM PINs using a thermal (infrared) camera to detect residual heat from keypresses rather than current techniques using traditional video cameras. Thermal imaging provides several advantages. Unlike with traditional cameras, visually masking the PIN pad does not defeat the attack, and the ability to automate PIN harvesting using computer software further simplifies the task. Tricking Giftcards Into Acting as Credit Cards Costs Wal-Mart $225,000 - Almost 8/17/11 StorefrontBacktalk A gang of Wal-Mart thieves has come up with a novel way to use stolen payment-card data: Skim the mag-stripe data from credit cards in California, copy the stolen tracks onto Citibank giftcards in New York and use the giftcards to buy hundreds of thousands of dollars in merchandise—but only at checkouts staffed by members of the gang, so the fraud won’t be immediately spotted. |
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