Consumers Say They’ll Switch Banks Over Debit Fees, Study Finds
About 30 percent of U.S. consumers said they’d leave their banks over fees for using their debit cards, according to a survey by the Research Intelligence Group. About 43 percent said they’d switch to paying with cash or credit cards if their bank implemented charges, while 13 percent said they’d pay the fee if it was “reasonable,” according to the survey released yesterday by the Fort Washington, Pennsylvania-based consulting and market-strategy firm.
Durbin to Wells Fargo: Your Numbers Don't Add Up
Days after Wells Fargo announced its third quarter profits were up 21%, US Senator Dick Durbin (D-IL) has sent a letter asking the banking giant to explain the need for a new fee for its customers to access their own money using their debit card. The new fee, currently being tested in five states, is similar to the fee Bank of America announced last month to wide criticism from its customers. “It is certainly surprising that your bank would pursue this fee strategy in light of the consumer reaction that has been prompted by Bank of America’s recent imposition of a monthly debit fee on its customers. If you were hoping that your new fee would go unnoticed, it has not,” Durbin wrote John Stumpf, CEO of Wells Fargo.
Heartland Payment Systems Releases First Actual State-Specific Durbin Impact Statistics
10/18/11 The Street
Heartland Payment Systems, one of the nation’s largest payments processors, has released the first state-specific data about the legislation’s actual effects on business owners in various states across the country. The data collected between October 1, 2011 and October 16, 2011 across Heartland’s portfolio of 250,000 merchant locations shows for every $100,000 of Visa ® and MasterCard ® signature debit and credit card volume processed, the average savings per merchant across all states is $260.24.
Some ISOs Are Turning To Outsourcing For IRS Reporting
The acquiring industry is outsourcing some of the work involved with a new requirement to report merchants’ transactions to the Internal Revenue Service, a task some have characterized as worse than a bad dream. “This is a nightmare,” Greg Cohen, president of U.S. operations at Toronto-based Moneris Solutions, said of the requirement earlier this month during a panel discussion at the Western States Acquirers Association 8th Annual Conference. “There is a lot to do here.”
PayPal Seeks to Cut Out Card Companies with New Plastic
Although it looks like a familiar payment card, its magnetic stripe stores encrypted data that lets consumers access a variety of accounts through PayPal. The card will not carry the customer's name or an account number but only the PayPal logo. The PayPal card is an extension of wallet functions PayPal has had for a decade or more, experts say. For example, PayPal has had a MasterCard Inc.-branded credit and debit card for years.
Lawsuit Says 3 Major Banks, Visa, MasterCard Collude to Fix ATM Fees Consumers Pay
10/19/11 The Washington Post
A third lawsuit over ATM fees accuses three major banks and two payment processors of conspiring to fix fees at the expense of consumers. The latest lawsuit, filed by a New Jersey man, seeks class-action status and alleges that Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. took part with Visa Inc. and MasterCard Inc. in a “conspiracy to fix the prices” consumers pay when they use an ATM that’s not in their bank’s network.
What the Profit Tumble at the Big Banks Means for the Economy
When Goldman Sachs can't make money you know times are tough in the banking business. In mid-September I wrote a feature story for TIME magazine about how our nation's banks, despite the bailout, were far from fixed, and how that was dragging down the economy. This week's earnings reports from the big banks are new evidence of how true that is. Goldman had its second quarterly loss since going public. Profits at J.P. Morgan fell 4% but that was only because of a paper gain that added $2 billion to the bank's bottom line.
Beige Book Says Economic Recovery Still Slow. What Now?
10/20/11 US News
Overall, says the report, "economic activity continued to expand in September, although many Districts described the pace of growth as 'modest' or 'slight.'" Broadly speaking, the report indicates that one area of improvement is consumer spending, which was up slightly in September, helped by increases in auto sales in most districts. Likewise, manufacturing and transportation also saw increased activity. Meanwhile, real estate and construction remained weak nationwide, with flat or declining house prices nationwide, and the finance industry continues to flag.
PayPal Forecasts $3.5 Billion in ’11 Mobile Traffic While NFC Simmers
10/19/11 Digital Transactions
Mobile-payments leader PayPal Inc. is widening its lead while other payments players scramble to get payment systems based on NFC technology up and running. PayPal now expects to process $3.5 billion in mobile payments this year, up from its earlier prediction of $3 billion, according to a disclosure on Monday by John Donahoe, chief executive of PayPal parent company eBay Inc. While PayPal has dipped its toes in the NFC waters, most of its mobile volume does not rely on the technology.
Google Partners With New Jersey Transit for Mobile Payments
Google Inc., which last month introduced a service that lets people use their smartphones to pay for goods at retailers, said it's partnering with New Jersey Transit to use the system on railways and buses. Google Wallet uses so-called near-field communication technology that lets users tap a smartphone on a sensor which accesses credit-card information. It's already available at retailers including The Container Store, Foot Locker and Macy's, Google has said.
'Magic' of Wallet NFC is Spreading Across US, Google Says
The ability to pay for goods and services with a mobile phone is having a “magical” effect on consumers, Google said today as it signed up more top brands willing to conduct m-commerce transactions in their stores. In recent weeks, Google got the ball rolling on its near field communications (NFC) platform, Wallet, which it operates in collaboration with the Sprint mobile network and Citi MasterCard. Visa, Discover and American Express will join the app in the future, according to Google.
New Technology Alone not Enough to Spur Mobile Payment: Analyst
10/20/11 International Business Times
Mobile payments should be more than just the technology and payment, says an analyst at Jefferies. "We recently attended a mobile payments conference and came away with three key conclusions: the industry now recognizes that simply replacing a card 'swipe' with a phone 'wave' is not a strong enough value proposition, the most likely way to drive consumer adoption of mobile is enhancement of the overall shopping/buying experience, mainstream adoption of mobile payments at the physical POS in the U.S. is likely 3 to 5 years away."
NFC Will Be Driven By Marketing and Loyalty, Not Payments
The discussion around near field communication (NFC) is often framed as if mobile payments have been driving the car while other uses of the technology — mobile marketing, person-to-person information sharing, virtual fingerprints — are merely along for the ride. But increasingly, the conversation is shifting. Far from being a passenger, mobile marketing, along with consumer loyalty, will be in the front seat as well and will be critical in helping to drive the growth and adoption of NFC.
How Mobile Payments Will Evolve In the Next Several Years
Mobile payments has become a mainstream tech topic in the last couple of years, mirroring the rise of smartphones and application stores. E-commerce is becoming m-commerce. The focus point of the buzz has been the evolution of near-field communications as related to smartphones. The thing is, nobody in the payments industry expects NFC to be a player in mobile payments for years, if ever. In that case, what does the mobile payments ecosystem look like in the short term?
BITS: Top Security Concerns for 2012
10/20/11 Bank Info Security
BITS, the technology policy division of The Financial Services Roundtable, says the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as emerging technologies like mobile and social media, will be top concerns for financial institutions as they head into 2012. "Dodd-Frank is going to bring a lot of change," Smocer says. "From a technology perspective, Dodd-Frank is going to require a lot of additional data gathering and ... systems implementations that have historically not been there."
American Express Reports Third Quarter EPS of $1.03 Up 14% from a Year Ago; Revenues Rise 9% to $7.6 Billion
American Express Company today reported third-quarter net income of $1.2 billion, up 13 percent from $1.1 billion a year ago. Diluted earnings per share was $1.03, up 14 percent from $0.90 a year ago. Consolidated total revenues net of interest expense were $7.6 billion, up 9 percent from $7.0 billion a year ago. The increase largely reflects continued strong growth in cardmember spending across all business segments and net interest income that was level with a year ago, following several quarters of declines.
TransFirst and CoCard Form Strategic Alliance
TransFirst®, a leading provider of secure transaction processing services and payment enabling technologies, is proud to announce the formation of a strategic alliance with COCARD, a cooperative of owner-operated independent sales organizations and merchant services providers. Under this arrangement, COCARD will offer its merchant customers TransFirst’s state-of-the-art payment processing products and services.
TSYS Purchases Portfolio from Vanguard Payment Systems
TSYS announced today that it has purchased the merchant portfolio of Vanguard Payment Systems, Inc. Based in Clearwater, Florida, Vanguard Payment Systems has provided payment acceptance solutions to a wide variety of businesses since 2005 including fine dining restaurants and high-end medical and dental vertical markets.
On the Call: Capital One CEO on Debit Card Fees
10/20/11 Yahoo! Finance
Question: Have you evaluated or had any thoughts of changing your debit card pricing and do you see this as an opportunity for Capital One to gain market share in banking? Answer: "Just because that part of our business is a smaller part of overall Capital One, the new regulations are not as needle-moving for us. It will on a gross basis reduce our revenue by about $70 million to $80 million, so it's not small potatoes."
USAA Reveals Plans for Virtual Wallet, P2P and Video
10/20/11 American Banker
Given that fluid nature of its customers' geographic locations, web and mobile access are attractive to the financial services company, as is basing its new product development heavily on customer feedback. Neff Hudson, USAA's assistant vice president of emerging channels, recently met with BTN to discuss the bank's future plans to expand its mobile banking, payments and other remote financial services.
W.Net to Host Conference on the 'NFC Frontier'
Mark your calendars! Plan to join W.net LINC New York for an evening of stimulating education and networking. W.net meetings provide a forum for professional women to inspire and empower one another through networking opportunities with established industry leaders and newcomers alike. Connect into the chain of success by registering today!
Cubic Receives Contactless EMV Bank Card Type Approval for Next-Generation Tri-Reader® 3
Cubic Transportation Systems, Inc., the transportation unit of Cubic Corporation, has received approval from the top four bank card brands for the Tri-Reader 3 to process their branded contactless EMV bank cards for use in public transit revenue management systems. Cubic has equipment and systems supporting seven of the top 10 largest public transit markets in the United States, United Kingdom and Australia as well as other major markets around the world.
Recent Changes to Debit Economic Model Substantial; Durbin Has Unintended Effect As Consumers Will Absorb Negative Impacts
TSG Metrics, a division of The Strawhecker Group (TSG), released details today on the economics of debit signature and PIN debit transactions for three purchase amounts ($100, $40, and $5) before and after new interchange fee regulations were implemented on October 1. This provision is a cap on the fees that the largest U.S. debit card issuing banks (those with more than $10 billion in assets) can collect when their customers use a debit card to make a purchase (bank interchange fees).
Interchange is only one component of the cost of the transaction as shown on the charts on the following analysis. Beyond the banks that issue cardholders debt cards, there are thousands of companies that make debit card transactions possible, from merchant acquiring companies who provide merchants the ability to accept debit cards, to various technology and transaction execution players in between. Consequently, these companies collect fees for the services they provide – these are in addition to the regulated interchange fees.
Click here for TSG's in-depth analysis.