Blog - Payment Industry Insights

By Dan Butcher - MobileCommerceDaily.com - March 9, 2010

Contactless mobile payments mean a faster checkout resulting in more revenue from increased throughput, better customer service and the loyalty of customers who prefer contactless to make purchases.

According to First Data, an electronic commerce and payment processing company, as contactless gains momentum, more consumers will enjoy the speed and convenience of them, and will remember which stores provide this option. A a study by Javelin Strategy and Research found that 37 percent of card users interested in contactless would switch issuers to get it.

Mobile Commerce Daily’s Dan Butcher interviewed Dom Morea, division manager for mobile solutions at First Data, Atlanta. Here is what he had to say:

What is the current state of contactless mobile payments, and what is its potential impact on commerce going forward?
We believe that mobile commerce has a very bright future as consumers are moving quickly to a mobile lifestyle and are adopting technology and applications at a fast past.

In the United States market, we think that contactless sticker and microSD implementations will accelerate consumer adoption and market development efforts in 2010.

Pre-NFC mobile applications that further enable consumers to wirelessly manage their payment accounts, whether credit, debit or prepaid, as well as conduct loyalty and coupon redemption via SMS and bar codes, for example, will allow merchants to really gain experience as they develop their mobile marketing strategies.
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By Jacob Goldstein - March 4, 2010 - NPR.org

The Fed yesterday proposed a few new rules on credit card fees and interest rates.

The rules would limit fees for late payments and for exceeding a card's credit limit. Basically, the fee couldn't be higher than the value of the violation. For example, the fee for failing to make a minimum payment of $20 couldn't be more than $20.

Card issuers would also be banned from charging "inactivity fees" for customers who don't use their cards to make new purchases, and from charging multiple fees for a single violation.

And the rules would require issuers that have increased interest rates since the beginning of 2009 to "evaluate whether the reasons for the increase have changed and, if appropriate, to reduce the rate." (more)

March 03, 2010 - By Craig Torres and Yalman Onaran - BusinessWeek.com

March 3 (Bloomberg) -- For consumer advocates, housing a new agency to protect Americans from financial-product abuse within the Federal Reserve would be a defeat after lobbying for an independent body. For banks, it would represent a victory.

Barney Frank, Chairman of the House Financial Services Committee, called a Senate plan to house the proposed Consumer Financial Protection Agency at the Fed “a joke.” Shielding consumers from harmful financial products is “the most conspicuous failure by the Fed,” Frank said in an interview yesterday.

Banks say placing the agency with the Fed alleviates their concern that an independent entity would ignore the health of the financial system. Consumer advocates say it’s a mistake because the Fed didn’t succeed in curbing abuses during the subprime lending boom that contributed to the worst financial crisis since the Great Depression.

“We have all sorts of individual agencies that protect Americans, and none of them is subservient to the regulator that is in charge of looking out for the industry,” said Lauren Saunders, managing attorney at the National Consumer Law Center in Washington. “This agency has to be independent so that it can fix the problems the banking regulators failed to fix.” (more)

By Niles Howard • Bankrate.com

Highlights

• PayPal, MasterCard, Amazon and others have introduced mobile payment services.


• Banks aren't charging a fee for mobile payments -- yet.


• Amazon Payments also allows you to buy merchandise via cell phone.

Your daughter calls from college to say she needs $200 for textbooks -- in the next 15 minutes, if you please. You need to reimburse a friend for movie tickets and don't want the hassle of mailing a check. You owe your golfing buddy on a friendly wager, but there's no ATM nearby.

No worry. If you have a cell phone -- and who doesn't these days? -- just peck out a few numbers and the money will be delivered in seconds. Welcome to mobile payment, a person-to-person money transfer system.

PayPal, MasterCard, Amazon and several other companies have introduced new mobile payment services. And more are sure to follow as consumers discover the potential of the technology, says Beth Robertson, director of payments research at Javelin Strategy and Research, who recently authored a report assessing the future of account-to-account transfers.

"Mobile payments are just taking off in this country," she says. "Right now, it's almost impossible to project how popular they will become." (more)

By STEPHANIE ROSENBLOOM - February 26, 2010 - NYTimes.com

Shoppers will soon be able to stand outside the designer Norma Kamali’s boutique in Manhattan, point a phone at merchandise in the window and buy it — even late at night when the store is closed.

Ms. Kamali is at the forefront of a technological transformation coming to many of the nation’s retailers. They are determined to strengthen the link between their physical stores and the Web, and to use technology to make shopping easier for consumers and more lucrative for themselves.

The main way they plan to do it is by turning people’s mobile phones into information displays and ordering devices. Can’t find the flour at the grocery store? Grocers will offer phone applications that tell shoppers exactly where to go. Is the department store out of size 8 jeans? Retailers want to make it simple to punch a couple of buttons and have the desired size shipped home.

Some supermarkets intend to offer real-time coupons while people shop. For example, a promotion for milk may be sent to a shopper’s mobile phone the moment her cart rolls into the dairy aisle. Drugstores will offer loyalty programs on cellphones, not on plastic cards. And specialty chains will allow shoppers to breeze through the aisles compiling a wedding registry, just by pointing at merchandise. (more)

Criminals are increasingly turning to card skimming as a profitable way to steal cash. Would you know what to look for at your local ATM?

By Joan Goodchild, Senior Editor
February 25, 2010 — CSO

In Boston, law enforcement officials arrested three men in January accused of being part of an international crime effort to steal money from ATMs around Eastern Massachusetts.

In Florida, one man was arrested this month, and federal officials are seeking three others, in an ATM-skimming scheme that targeted several machines around the Tampa area and netted criminals thousands of stolen dollars.

Check out our slideshow of the Telltale Signs of ATM Skimming In Europe, the European ATM Security Team reported a 129 percent increase in card skimming incidents in 2008 over the previous year. A total of 10,302 cases were reported.

Stories about ATM skimming schemes have become common in news headlines lately. According to the Secret Service, the crime is responsible for about $350,000 of monetary losses each day in the United States and is considered to be the number one ATM-related crime. Trade group Global ATM Security Alliance estimates that skimming costs the U.S.-banking industry about $60 million a year.

What is skimming? According to the ATM Industry Association, card skimming, which can also occur on other types of point-of-sale devices, is defined as 'the unauthorized capture of magnetic stripe information by modifying the hardware or software of a payment device, or through the use of a separate card reader.' Crooks often also capture PIN data and then create dummy cards in order to drain a victim's account. The funds are often not taken until several months later, according to Terrie Ipson, an ATM security expert with Diebold (Read about how one ATM skimming scheme was foiled at last year's DefCon conference). (more)

By Max Fisher on February 24, 2010 - TheAtlanticWire.com

nutshell history of money might go something like: First we had barter, then hard currency, then checks and credit cards, then... Twitter? A handful of writers think that social media tools like Twitter could allow people to seamlessly, instantly, and cheaply transfer money. If it works, it would eliminate the need for some of banking's basic services.

•How It Will Happen Wired's Daniel Roth explores the "future of money," finding that social networking services like Twitter could provide many banking services. "What if people could transfer money over Twitter for next to nothing, simply by typing a username and a dollar amount?" Roth explains, "Moving money, once a function managed only by the biggest companies in the world, is now a feature available to any code jockey." Roth surveys companies like Twitpay, which lets Twitter users transfer money via Paypal, that are providing a cheap alternative to the formal system of banks and credit cards. "The banks and credit card companies have spent 50 years building a proprietary, locked-down system that handles roughly $2 trillion in credit card transactions and another $1.3 trillion in debit card transactions every year. Until recently, vendors had little choice but to participate in this system" but now that system could be replaced by Web-based systems like Twitpay or even an app on your iPhone. (more)