Consumer Sentiment at Highest Level Since February 2011
1/27/12 Fox Business
Americans were more optimistic about potential improvements in the job market in January, pushing consumer confidence to its highest level in nearly a year, a survey released on Friday showed. The Thomson Reuters/University of Michigan's final reading on the overall index on consumer sentiment rose to 75.0 from 69.9 the month before. It was the highest level since February 2011. That was better than the preliminary January reading of 74.0 and topped the median forecast of 74.1.
U.S. Growth Quickens, But Speed Bumps Ahead
The U.S. economy grew at its fastest pace in 1-1/2 years in the fourth quarter of 2011, but a strong rebuilding of stocks by businesses and a slower pace of business spending hinted at softer growth early this year. U.S. gross domestic product expanded at a 2.8 percent annual rate, the Commerce Department said on Friday, a sharp acceleration from the 1.8 percent clip of the prior three months and the quickest pace since the second quarter of 2010.
As PayPal’s Home Depot In-Store Trial Expands, Can Users’ Sloppy Security Habits Change?
PayPal’s expansion of its in-store payments trial at Home Depot marks a huge jump in the trial’s scope—and risk. On January 19, PayPal opened up the trial to include 51 stores (up from the initial 5) and said all PayPal users could now sign up for the system. That should give both PayPal and Home Depot much more useful information on who will use the system, and how. But PayPal’s approach—which essentially reverses 50 years of payment-card advances by eliminating any physical authentication device—still presents a big challenge when it comes to security.
PayPal to Expand In-Store Buying to 2,000 Locations by March
EBay Inc.’s PayPal e-commerce payment business plans to let shoppers pay with its service in more than 2,000 Home Depot Inc. stores by March, part of an effort to win away customers from credit-card companies. The company began a trial with shoppers this week in 51 of Home Depot’s home-improvement stores, primarily in the San Francisco area, said Anuj Nayar, a spokesman for PayPal. It intends to extend the offer to all national locations, or about 2,200, he said.
Consumers' Credit Card Debt Eases
1/26/12 Omaha World Herald
For an economist, an increase in credit card debt can be a positive development, indicating more consumer confidence and spending that will help the economy grow. Consumers already may be using their credit cards more, even though their balances are down. The Strawhecker Group of Omaha, which tracks card transactions, said credit card spending totaled $358 billion in the third quarter of last year, up from $289 billion in the first quarter of 2009. Consumer spending overall totaled $10.8 trillion in the third quarter last year, up steadily from $9.8 trillion in the first quarter of 2009.
Does Square Have A Doppelganger In The UK? Meet mPowa
1/24/12 Paid Content
Square, the high-profile mobile payments company started by Twitter’s Jack Dorsey, has yet to launch outside the U.S. But in the meantime, another, similar-looking competitor has sprung up in the UK: mPowa. The new service, due to launch in mid-February, this week opened its doors for pre-registration for “small businesses, traveling salespeople and other hard-working Brits”, to received free, square-shaped dongles that plug into mobile devices to let merchants scan people’s credit/debit cards.
Consumers Believe Durbin Amendment Helped, not Hurt, Banks: Survey Says
The furor over debit card fees left many consumers with the impression that regulation of debit card interchange flowing from the Durbin amendment actually helped, not hurt, bank debit card issuers, according to a recent study. The study, “Evolution in Consumer Payments Behavior,” published by Javelin Strategy and Research found that 70% of consumers survey reported they thought the interchange regulation would benefit banks while only 30% thought the new rules would benefit merchants.
ISOs See Upside To Incursions Into Industry
ISOs are preaching specialization as they brace for a shakeup caused by giant consumer-facing companies angling for positions in the payments industry. Finding a niche makes sense to ISOs coping with the uncertainty of search engine giant Google Inc. and mobile joint venture Isis making plans to introduce e-wallets. Those wallets seem certain to take transactions and the resulting residual payments away from legacy acquiring channels. Meanwhile, PayPal Inc. is plotting to expand its service to brick-and-mortar retailers, further reducing ISOs’ transactions and residuals.
Eye on Prepaid: NetSpend Nets 7-Eleven for Distribution; Green Dot Buys a Processor
1/25/12 Digital Transactions
Prepaid card program manager NetSpend Holdings Inc. beefed up its retail distribution channels through a new agreement announced on Wednesday with leading convenience-store chain 7-Eleven Inc. The news came just a day after NetSpend rival Green Dot Corp. revealed that it bought assets from eCommLink Inc. that will advance its do-it-yourself strategy. “This is our single largest retail distribution to date,” NetSpend tells Digital Transactions News.
In Prepaid, Tech, Not Gouging, Drives Fees
Prepaid card companies have had great success at attracting the underbanked, but their prices remain high compared to banks' — and they might have no choice but to keep them high. The reason is that most prepaid card companies are marketers which, unlike banks, do not own the technology needed to produce their product cheaply. Prepaid companies must outsource virtually every aspect of their business, from card distribution to card production and customer service.
Deals as Debit Rewards? Bank of America Brings Back Debit Card Rewards With a Twist
If you think your bank’s CEO lies awake at night thinking of ways to take away your customer perks, here’s a surprise: debit rewards are coming back. Sort of. Bank of America is testing a pilot of a new merchant-funded reward program called BankAmeriDeals, in which rewards come in the form of special Groupon-like discounts on purchases from major retailers. The customer’s “rewards” show up as bank statement credits at the end of every month.
Mobile Wallet's Missing Ingredient: a Reason to Use It
As a reporter covering payments and a tech nerd, I was curious about the product, Amex’s version of the digital wallet. But as a consumer, I’ve had no incentive to use it – or any of the other newfangled mobile payments options we write about every day. When it comes time to pay at the register, I’m still reaching for my leather wallet, which I bought for $5 on a New York City street corner, not my iPhone. It all comes down to economics. I can earn reward points by paying with my regular American Express credit card. Right now, none of the mobile wallets give consumers such incentives.
Google’s Head of Consumer Payments, Vikas Gupta, Resigns
Google’s head of consumer payments Vikas Gupta has resigned, AllThingsD has confirmed. Gupta joined the company 18 months ago after Google acquired Jambool, a virtual goods payment platform where he was a founder and CEO. More recently, he’d been one of the leaders on the payments team, overseeing Google Wallet and reporting to Osama Bedier, Google’s VP of Payments. Gupta’s departure is the second management move made in the Google Wallet ranks over the past week.
Little Lenders Benefit From Debit-Card Rule
1/23/12 The Wall Street Journal
It isn't every day an 11-branch bank in Iowa gets a financial leg up on J.P. Morgan Chase & Co., Wells Fargo & Co. and Citigroup Inc. West Bank Inc. in West Des Moines is likely to collect more money than the nation's biggest banks each time a customer uses a debit card. The reason: About 7,300 of the 7,436 U.S. banks are untouched by the Durbin amendment, part of the Dodd-Frank financial overhaul. The amendment, roughly cut in half how much large banks like Bank of America Corp. can charge merchants for debit-card transactions.
Oklahoma Won’t Issue Paper Tax Refunds Checks, Only Debit Cards
Instead, the Tax Commission will issue refunds on debit cards if the taxpayer chooses not to have a refund deposited directly into a checking or savings account, said Paula Ross, a spokeswoman for the commission. “Taxpayers can use the convenience of a debit card for making purchases, paying bills or recipients will have access to cash by using a teller for cash withdrawal at any MasterCard member bank or credit union within Oklahoma without incurring a fee,” Ross said.
TSYS Reports EPS Growth of 29% for the Fourth Quarter and 14% for the Full Year
TSYS today reported results for the fourth quarter and full year with basic earnings per share from continuing operations at $0.31 for the quarter, an increase of 29.4%, and $1.15 for the full year, an increase of 14.4% over 2010. Total revenues for the quarter were $472.2 million, an increase of 7.3%, and $1,809.0 million for the year, an increase of 5.3%. Revenues before reimbursable items were $407.7 million and $1,540.7 million, an increase of 9.1% and 6.8%, respectively, for the quarter and the year.
Bank Of America: That $5 Debit Card Fee Everyone Hated Caused A 20% Spike In Account Closures
1/23/12 Business Insider
Yesterday on Bank of America's earnings conference call, CEO Brian Moynihan quantified the impact of the eventually pulled fee: "We saw an elevated level of account closings in the quarter, elevated from last year fourth quarter, but frankly, by, I'd say, 20% versus last year fourth quarter '10 to '11. But from '09, it's actually still down in the fourth quarter of '11 versus fourth quarter of '09 by 20-odd percent. So you saw that, so there's no question, and that's why we pulled it back. And once we pulled it back, you saw that mitigate, and that will carry us in the first quarter."
Women's Network in Electronic Transactions (W.Net) Achieves 2011 Banner Year
W.Net not only achieved, but surpassed its goals for 2011. Under the helm of former President, Kim Fitzsimmons, CEO of Cynergy Data, the organization achieved record numbers for membership, sponsorship and event participation in 2011 resulting in a strong list of accomplishments. “I am so greatly appreciative of all the hard work we were able to accomplish under the leadership of Kim Fitzsimmons”, says Marla Knutson, 2012 President of W.net and President, TransFirst. “She set the bar high and laid a solid foundation for 2012 which I intend to incorporate into our 2012 roadmap."
Discover Says CFPB Probe May Have ‘Adverse Impact’ on Net Income
Discover Financial Services, the sixth-biggest U.S. credit-card issuer by customer spending, said a federal probe into the lender’s marketing practices may hurt net income. The Consumer Financial Protection Bureau and the Federal Deposit Insurance Corp. have told Discover they plan to take a joint enforcement action over the company’s marketing of fee- based products, including payment protection, the Riverwoods, Illinois-based firm said yesterday in an annual filing.
CyberSource Study: 2011 Online Merchants Made Most Progress Against Fraud in 13 Years
CyberSource, a Visa company, announced results of its 13th annual survey of eCommerce fraud. The overall picture: merchants are making gains against fraud but the battle continues. The fraud rate by order dropped from 0.9% in 2010 to 0.6% in 2011--the lowest in the 13 year history of the survey. But the cost of combatting fraud continues to grow. Dollar losses were up, manual review continued to climb and merchants reiterated concerns that fraud is becoming more difficult to detect.
First Data and SunTrust Extend Successful Merchant Processing Relationship
1/26/12 First Data
First Data Corporation, a global leader in electronic commerce and payment processing, and SunTrust Banks, Inc., one of the nation’s largest banking organizations, today announced a long-term renewal of their merchant services partnership, SunTrust Merchant Services, LLC. The joint venture currently serves more than 67,000 merchant locations and processes more than $29 billion in card volume every year.
Mopay Makes a Match with Online Dating Sites
1/25/12 Mobile Payments Today
Giving out your number has taken on a whole new meaning in the dating world. Direct carrier biller mopay announced the launch of new payment service tailored for online matchmaking sites that lets users of online dating services pay for those services using their mobile numbers. The services are then billed directly to the user's mobile phone bill. The company said it is already working with several international dating sites to implement the service.
Why Mobile Payments Still Haven't Revolutionized Retail
Yes, a few physical retailers are trying out new POS technology — Office Depot, for example, just announced it has teamed up with PayPal to experiment with letting customers pay using their phone number. But this kind of toe-dipping leaves us quite far away from widespread adoption. Is that because the technology just isn’t available yet? No, the basic technology is no longer a barrier. NFC technology has developed significantly and Internet security is advanced enough to enable secure payments.
Bernanke has "Finger onTrigger" for New Bond Buys
The Federal Reserve has moved closer to embarking on a new round of its controversial money-pumping after the central bank and its chairman Ben Bernanke highlighted a grim outlook for the U.S. economy. Bernanke on Wednesday opened the door a bit wider for the Fed to return to buying securities in the months ahead to buttress a weak recovery and keep inflation from slipping too far below its newly adopted 2-percent target.
States Ask Zappos for Breach Details
1/26/12 Bank Info Security
Connecticut Attorney General George Jepsen and eight other state attorneys general are demanding that Internet retailer Zappos provide details on the company's recent data breach that affected 24 million individuals. "Although this incident has received substantial public attention, we ask that you provide us further information so we may evaluate the adequacy of the efforts Zappos has made to protect consumers' sensitive information from improper access, as well as its actions in response to this breach."