Wednesday 23 March 2011
Cash card cost catastrophic for shop owners
Cash card transactions in Poland cost shop-owners and businesses more than in any other country in the EU.
Polish traders forfeit 1.5 percent of the value of each purchase, significantly higher than the Union average of 1 percent.
Although such payments are invisible to the customer, many businesses have endeavoured to combat the problem, by introducing a threshold price. Hence countless businesses insist that customers pay over 10 zloty for the privilege of using a card.
The interchange fee goes to the banks and the payment organizations, principally Visa and Mastercard.
According to data provided by the NBP, Poles shell out 80 billion zloty yearly via cards, which means that the banks get a hefty 1.2 billion zloty.
Unsurprisingly, Polish traders are not best pleased with the fact that 1.5 percent of each transaction is lost. In Bulgaria, the rate for visa is just 0.4 percent.
In 2006, a case was brought against Visa for fixing by the Office of Competition and Protection (UOKiK). However, an official trial date has yet to be settled, leaving Polish traders to continue carrying the costs. (nh)
Source: Dziennik Gazeta Prawna, TVP
URL: http://www.thenews.pl/business/artykul151815_cash-card-cost-catastrophic-for-shop-owners.html
Polish traders forfeit 1.5 percent of the value of each purchase, significantly higher than the Union average of 1 percent.
Although such payments are invisible to the customer, many businesses have endeavoured to combat the problem, by introducing a threshold price. Hence countless businesses insist that customers pay over 10 zloty for the privilege of using a card.
The interchange fee goes to the banks and the payment organizations, principally Visa and Mastercard.
According to data provided by the NBP, Poles shell out 80 billion zloty yearly via cards, which means that the banks get a hefty 1.2 billion zloty.
Unsurprisingly, Polish traders are not best pleased with the fact that 1.5 percent of each transaction is lost. In Bulgaria, the rate for visa is just 0.4 percent.
In 2006, a case was brought against Visa for fixing by the Office of Competition and Protection (UOKiK). However, an official trial date has yet to be settled, leaving Polish traders to continue carrying the costs. (nh)
Source: Dziennik Gazeta Prawna, TVP
URL: http://www.thenews.pl/business/artykul151815_cash-card-cost-catastrophic-for-shop-owners.html
Visa’s Two-Tiered Battle Plan To Fight Fed On Debit Fees
Visa is the largest global electronic payment solutions company in the world and has the largest network of credit and debit cards in circulation. The company makes money by providing transaction information and resources between the customer, merchant and their respective banks, collecting a fee based on the number and dollar value of transactions that it processes. Visa competes with other card networks like MasterCard, Discover and American Express.
Our price estimate for Visa stands at $85.03, which is about 19% above the market price.
In a recent House Financial Services Committee hearing regarding the proposed Durbin Amendment, members of Congress questioned the Federal Reserve Governor Sarah Bloom Raskin over the proposed rule and its impact on small banks and credit unions. The Fed proposed in December last year to limit the debit card swipe fee at 12 cents per transaction. The move was supported by merchants and retailers such as Wal-Mart and Target but was opposed by banks such as Bank of America and JPMorgan as it could cost them $12 billion in annual revenues. [1]
Our price estimate for Visa stands at $85.03, which is about 19% above the market price.
In a recent House Financial Services Committee hearing regarding the proposed Durbin Amendment, members of Congress questioned the Federal Reserve Governor Sarah Bloom Raskin over the proposed rule and its impact on small banks and credit unions. The Fed proposed in December last year to limit the debit card swipe fee at 12 cents per transaction. The move was supported by merchants and retailers such as Wal-Mart and Target but was opposed by banks such as Bank of America and JPMorgan as it could cost them $12 billion in annual revenues. [1]
The U.S. Senate and House are considering bills to put a hold on the Federal Reserve’s rule over debit card fees. The House bill will put a one year delay and a study on the composition of the interchange fees that will review the costs associated with the debit card transactions and the effect of Fed’s proposal on consumers, merchants and banks.
The assessment fee is charged by Visa to its customers (banks) based on the total payment volume of business generated for customers through Visa branded products. The assessment fee as a percent of gross dollar value of business generated from Visa card has been historically stable at 0.09% during the last five years from 2006 to 2010 but is expected to decline gradually if the Fed’s proposal to restrict debit card swipe fees is implemented.
Visa, in a response to the Fed’s proposal, has said that it will implement a two tier system to allow small and large banks to charge different processing fees. [2] While the effect of two tier system on assessment fee remains to be seen, a delay in Fed’s proposed fee limit would let Visa maintain its current level of fees in the hopes that the law will be amended to repealed. If the fees stayed as is, this would result in about 5% upside to our price estimate for Visa.
URL: http://blogs.forbes.com/greatspeculations/2011/03/22/visas-two-tiered-battle-plan-to-fight-fed-on-debit-fees/
As Phones Become Wallets, Many Have Hands Out
By TARA SIEGEL BERNARD and CLAIRE CAIN MILLER
The cellphone has been more than a cellphone for years, but soon it could take on an entirely new role — standing in for all of the credit and debit cards crammed into wallets.
Instead of swiping a plastic card at the checkout counter, consumers would merely wave their phones.
There’s just one hitch: While the technology is already being installed in millions of phones — and is used overseas — wide adoption of the so-called mobile wallets is being slowed by a major behind-the-scenes battle among corporate giants.
Mobile phone carriers, banks, credit card issuers, payment networks and technology companies are all vying to control these wallets. But first, they need to sort out what role each will play and how each will get paid.
The stakes are enormous because small, hidden fees that are generated every time consumers swipe their cards add up to tens of billions of dollars annually in the United States alone.
“It all comes down to who gets paid and who makes money,” said Drew Sievers, chief executive of mFoundry, which makes mobile payment software for merchants and banks. “You have banks competing with carriers competing with Apple and Google, and it’s pretty much a goat rodeo until someone sorts it out.”
In one camp are the long-established players. Payment networks like Visa and MasterCard, along with banks that actually issue credit cards to customers, want to stay at the center of any payment system and continue to collect their fees from merchants.
They are facing competition from companies they see as interlopers. These include PayPal and Google, which want to play a part in a new payment system, as well as Apple and the mobile carriers, which want to collect fees through their control of the phones themselves. In the middle — and perhaps playing a deciding role — are the retailers. They have to install terminals that accept mobile payments.
Consumer advocates, meanwhile, said they were concerned that a mobile system would bring higher fees and questioned whether consumers even want a new system.
“Is it possible to make a system that’s too easy to use, where you reduce so much friction from the transaction process that people aren’t necessarily aware of what they’re spending on something?” asked Jan Chipchase, executive creative director at the design firm who studies mobile payments.
Credit card and technology companies have talked about mobile wallets for well over a decade. But now, finally, the pieces are starting to fall into place.
“Now that we have this commitment by the handset manufacturers and telcos, I think things are looking far more promising than ever,” said Gwenn Bézard, research director at the Aite Group, a research and advisory firm focused on the financial services industry. “The question is, Are telcos and card networks and banks going to agree on anything?”
Visa and MasterCard now dominate the major tracks that shuttle credit card and debit payments between banks and retailers. Retailers must pay the banks issuing the cards a percentage of each transaction, and payment networks like Visa take a small cut. So for every $1 spent by a consumer, the retailer keeps about 97 cents, the card-issuing bank takes nearly 2 cents and the remaining penny goes to the merchant’s bank handling the transaction and the payment network.
With mobile payments, it is still unclear how all the players will get paid or if any of the costs will trickle through to consumers, perhaps through new fees. Mobile carriers may demand that the card issuers pay them something akin to rent, or reach some other agreement, to store important payment credentials on a secure piece of the chip inside the phone. There are several technologies that allow phones to communicate wirelessly with other technologies, though the front-runner for payments is one called near-field communication, or N.F.C.
“I think watching the industry evolve will determine where we need to go,” said Peter Ho, product manager for Wells Fargo’s card services and consumer lending, adding that the banking industry’s past conversations with mobile carriers had not been fruitful because they could not agree on financial terms.
The mobile carriers’ frustration with the banks, some analysts said, was the impetus behind a joint venture by Verizon, AT&T, T-Mobile and Discover to create their own mobile wallet. The venture, known as Isis, is expected to introduce its system next year. Barclaycard, already a major player in Britain, will be the first issuer of the group’s in-phone credit card and sees it as an opportunity to expand in the United States. Referring to the carriers’ 200 million customers, Amer Sajed, chief executive for Barclaycard US, said, “It’s phenomenal for us to be able to leverage such a large customer base, right as the customer is getting or updating their mobile device.”
The banks and credit card issuers, meanwhile, have found a way to temporarily avoid working with the cellphone carriers.
Bank of America, Wells Fargo, U.S. Bancorp and JPMorgan Chase, working with Visa, are all in various stages of testing wallets that would provide access to some of their own credit or debit cards. Because their model is powered by a chip that consumers insert into a slot in certain phones, it does not require the cooperation of the mobile operators.
Visa said some of its bank partners might introduce mobile payments in the second half of this year. But that variation may become outmoded as more phones with embedded chips become available. Visa said it was also working with other providers to ensure that its network would work in all wallets.
(As to the issue of security, several banks and payment networks said that mobile wallets would require a pass code and could be disabled remotely if a phone was stolen. Consumers would not be responsible for transactions they did not make.)
Apple and Google already have payment systems — Apple’s iTunes has 200 million accounts tied to credit cards, while Google Checkout has been less popular. Both could be turned into mobile wallets, allowing users to pay for offline purchases with their Apple or Google accounts. But they would need access to the cellphone chips and the merchants’ terminals. Apple could make its own cellphone chips to make this all happen, but Google could not because it makes only Android cellphone software, not the phones themselves.
Getting retailers on board is important to the widespread adoption of the mobile payments because many merchants will have to replace their card terminals.
While one analyst estimated, conservatively, that only 5.9 percent of merchants will accept mobile payments by 2015, Mr. Bézard of Aite Group said that many of the large retailers — including McDonald’s, Home Depot and CVS — already had the terminals and thus could take part whenever the payment network was figured out. And, he said, 80 percent of consumer transactions occur at the top 200 merchants.
Mobile payments have taken off more readily in other countries, using a variety of technologies. In Africa, where many people do not have credit cards, mobile phones have often replaced cash. And in Japan, people have been swiping phones at convenience stores and bus stations for several years.
“Other global markets may have a single dominant mobile carrier, or a small number of banks, or a strong central bank,” said Beth Robertson, director of payments research at Javelin Strategy and Research. “And this has made it easier for them to reconcile a model.”
URL: http://www.nytimes.com/2011/03/24/technology/24wallet.html
Instead of swiping a plastic card at the checkout counter, consumers would merely wave their phones.
There’s just one hitch: While the technology is already being installed in millions of phones — and is used overseas — wide adoption of the so-called mobile wallets is being slowed by a major behind-the-scenes battle among corporate giants.
Mobile phone carriers, banks, credit card issuers, payment networks and technology companies are all vying to control these wallets. But first, they need to sort out what role each will play and how each will get paid.
The stakes are enormous because small, hidden fees that are generated every time consumers swipe their cards add up to tens of billions of dollars annually in the United States alone.
“It all comes down to who gets paid and who makes money,” said Drew Sievers, chief executive of mFoundry, which makes mobile payment software for merchants and banks. “You have banks competing with carriers competing with Apple and Google, and it’s pretty much a goat rodeo until someone sorts it out.”
In one camp are the long-established players. Payment networks like Visa and MasterCard, along with banks that actually issue credit cards to customers, want to stay at the center of any payment system and continue to collect their fees from merchants.
They are facing competition from companies they see as interlopers. These include PayPal and Google, which want to play a part in a new payment system, as well as Apple and the mobile carriers, which want to collect fees through their control of the phones themselves. In the middle — and perhaps playing a deciding role — are the retailers. They have to install terminals that accept mobile payments.
Consumer advocates, meanwhile, said they were concerned that a mobile system would bring higher fees and questioned whether consumers even want a new system.
“Is it possible to make a system that’s too easy to use, where you reduce so much friction from the transaction process that people aren’t necessarily aware of what they’re spending on something?” asked Jan Chipchase, executive creative director at the design firm who studies mobile payments.
Credit card and technology companies have talked about mobile wallets for well over a decade. But now, finally, the pieces are starting to fall into place.
“Now that we have this commitment by the handset manufacturers and telcos, I think things are looking far more promising than ever,” said Gwenn Bézard, research director at the Aite Group, a research and advisory firm focused on the financial services industry. “The question is, Are telcos and card networks and banks going to agree on anything?”
Visa and MasterCard now dominate the major tracks that shuttle credit card and debit payments between banks and retailers. Retailers must pay the banks issuing the cards a percentage of each transaction, and payment networks like Visa take a small cut. So for every $1 spent by a consumer, the retailer keeps about 97 cents, the card-issuing bank takes nearly 2 cents and the remaining penny goes to the merchant’s bank handling the transaction and the payment network.
With mobile payments, it is still unclear how all the players will get paid or if any of the costs will trickle through to consumers, perhaps through new fees. Mobile carriers may demand that the card issuers pay them something akin to rent, or reach some other agreement, to store important payment credentials on a secure piece of the chip inside the phone. There are several technologies that allow phones to communicate wirelessly with other technologies, though the front-runner for payments is one called near-field communication, or N.F.C.
“I think watching the industry evolve will determine where we need to go,” said Peter Ho, product manager for Wells Fargo’s card services and consumer lending, adding that the banking industry’s past conversations with mobile carriers had not been fruitful because they could not agree on financial terms.
The mobile carriers’ frustration with the banks, some analysts said, was the impetus behind a joint venture by Verizon, AT&T, T-Mobile and Discover to create their own mobile wallet. The venture, known as Isis, is expected to introduce its system next year. Barclaycard, already a major player in Britain, will be the first issuer of the group’s in-phone credit card and sees it as an opportunity to expand in the United States. Referring to the carriers’ 200 million customers, Amer Sajed, chief executive for Barclaycard US, said, “It’s phenomenal for us to be able to leverage such a large customer base, right as the customer is getting or updating their mobile device.”
The banks and credit card issuers, meanwhile, have found a way to temporarily avoid working with the cellphone carriers.
Bank of America, Wells Fargo, U.S. Bancorp and JPMorgan Chase, working with Visa, are all in various stages of testing wallets that would provide access to some of their own credit or debit cards. Because their model is powered by a chip that consumers insert into a slot in certain phones, it does not require the cooperation of the mobile operators.
Visa said some of its bank partners might introduce mobile payments in the second half of this year. But that variation may become outmoded as more phones with embedded chips become available. Visa said it was also working with other providers to ensure that its network would work in all wallets.
(As to the issue of security, several banks and payment networks said that mobile wallets would require a pass code and could be disabled remotely if a phone was stolen. Consumers would not be responsible for transactions they did not make.)
Apple and Google already have payment systems — Apple’s iTunes has 200 million accounts tied to credit cards, while Google Checkout has been less popular. Both could be turned into mobile wallets, allowing users to pay for offline purchases with their Apple or Google accounts. But they would need access to the cellphone chips and the merchants’ terminals. Apple could make its own cellphone chips to make this all happen, but Google could not because it makes only Android cellphone software, not the phones themselves.
Getting retailers on board is important to the widespread adoption of the mobile payments because many merchants will have to replace their card terminals.
While one analyst estimated, conservatively, that only 5.9 percent of merchants will accept mobile payments by 2015, Mr. Bézard of Aite Group said that many of the large retailers — including McDonald’s, Home Depot and CVS — already had the terminals and thus could take part whenever the payment network was figured out. And, he said, 80 percent of consumer transactions occur at the top 200 merchants.
Mobile payments have taken off more readily in other countries, using a variety of technologies. In Africa, where many people do not have credit cards, mobile phones have often replaced cash. And in Japan, people have been swiping phones at convenience stores and bus stations for several years.
“Other global markets may have a single dominant mobile carrier, or a small number of banks, or a strong central bank,” said Beth Robertson, director of payments research at Javelin Strategy and Research. “And this has made it easier for them to reconcile a model.”
URL: http://www.nytimes.com/2011/03/24/technology/24wallet.html
Tuesday 22 March 2011
Travelers fume over credit card currency conversion fees
Travelers face extra fees just about everywhere they turn, at the airport, at the hotel, and when they charge expenses abroad.
Corporate trekkers are particularly irked by the foreign currency conversion fees that many credit card companies and banks tack on for purchases abroad, generally adding another 3% to the final cost.
Now, some banks and financial companies are lowering or waiving the fees for top-tier customers to bolster loyalty and ensure their cards are grabbed first on an international trip. But more need to jump on the bandwagon, some frequent fliers say.
"I just opened up my (American Express) statement and found about $84 in currency transaction fees in the statement," says Mike Nicholes, a technology consultant in Portland, Ore., who just returned from a business trip to seven countries in southern Europe. "I think they are usurious. The money exchangers will take their 'pound of flesh' out of every transaction, coming and going.' "
The pesky fees add up. For most accounts, Visa and Mastercard typically charge banks 1% of the charged amount, and then the banks typically add another 1.5% to 2%.
As a result, road warriors who travel frequently to foreign destinations say a bank's policy on foreign exchange fees can determine which cards they use. Capitol One, for instance, stands out among many corporate trekkers because it does not charge the extra percentage.
"It's been a long-standing policy," says Sukhi Sahni, Capital One's spokesperson. "Not only do we not charge a fee of our own, but we don't pass on the 1% Visa or Mastercard charges."
Other banks and companies have lifted the fees on select cards.
•American Express said in December that it's getting rid of the fees for U.S. consumers and small business members who use their Platinum or Centurion cards to buy overseas, effective by the end of this month.
•Simmons First and TD Bank don't charge foreign exchange fees for debit cards though they still charge 2% and 3% for credit cards respectively, according to Bankrate.com.
•Chase Card services does not charge the fees for four cards issued in conjunction with various partners, including the Priority Club Select Visa Card launched in July with IHG (InterContinental Hotels Group), the British Airways Visa Signature Card, and the Continental Airlines Presidential Plus Card.
"They are saving 3% by using these cards," says Gail Hurdis, spokeswoman for Chase Card Services. "With the research that was conducted prior to launching these cards, we heard that this was an important feature and one that would be valuable to customers and prospects who travel overseas."
'Fees aren't getting better'
Not everyone can take advantage of such premier cards. Many are reserved for wealthy members. American Express' Platinum card, for instance, has a $450 annual membership fee.
Other consumers are tied to their airline or hotel-affiliated rewards cards, while corporate road warriors often are mandated to use the card issued by their employers.
Sid Methner, director of payment and risk management of Teligence, says he is charged the 3% fee on a card affiliated with Marriott, where he has a membership. "I want to maintain (it)," he says. "That leaves no other option."
Despite consumer protests, class-action lawsuits and increased competition, banks aren't showing signs of giving up their steady stream of revenue. Some card users and analysts say banks are getting even more creative in collecting them.
"For most consumers, foreign conversion fees aren't getting better," says Greg McBride, senior financial analyst for Bankrate.com. "If anything, they're becoming more prevalent. In particular, we're seeing currency conversion being applied to any transactions taking place in foreign soil regardless of currency. In some instances, they're being charged for transactions in the U.S. with a foreign entity."
Josh Keough, a frequent international business traveler, found out firsthand that he didn't have to be overseas to get hit with the foreign currency transaction fees.
The Detroit-area resident says that when he bought Skype credits online, American Express charged him 75 cents for every $25 purchase because Skype is headquartered in Luxembourg,. "That was when things started to get absurd," Keough says.
The fees can also be a nuisance when filling out corporate expense reports, some travelers say.
"These transaction fees are a pain," says George Chen, a management consultant from Chicago. "These charges show up as separate line items multiple days later."
Chad Griffith, a lawyer in Tokyo, now keeps a Capital One for traveling overseas after being hit with a fee by Citi for a dollar-based transaction with a foreign merchant. "There should be a law that requires notice in advance that you will be charged the fee," he says.
Getting around fees
Other travelers have found ways to get around the fees.
Kathryn Alice, vice president of theportablelifestyle.com, says she books travel through U.S.-based companies for "the mere reason of avoiding the outrageous foreign transaction fees."
Geoffrey Ashton of San Francisco who travels frequently asked his bank to raise the maximum limit on daily withdrawals from the ATM to $500 a day so he can avoid using his credit cards for shorter overseas trips.
But Joseph Cooke, an entrepreneur, says it takes too much time and effort to figure out less expensive options. "As a one man show, my time spent researching cards to save even 4% fees for credit card purchases overseas would not be all that productive," he says. His last trip to the Britain racked up card purchases of $2,100, and he estimates his fees totaled around $80.
Merrill Davidoff, an attorney with Berger & Montague represented consumers suing who sued several large banks, including Citibank, Bank of America, and Providian, for colluding to set the exchange fees and failing to disclose them properly.
In 2006, the banks settled for $336 million, but the payouts to roughly 30 million people who are eligible for a refund are on hold pending appeals, Davidoff says.
With banks consolidating following the financial crisis, there's not much incentive for financial institutions to get rid of the fees, he says.
"It's a tragedy that (the) banking crisis really aborted a lot of competition," he says. "It's greed and avarice. They can get away with it.
URL: http://travel.usatoday.com/news/story/2011/03/Travelers-fume-over-credit-card-currency-conversion-fees/45149186/1
Contactless mobile payments coming, everyone wants a cut
Smartphones that can be waved in front of a merchant terminal to buy everything from groceries to gas aren’t widely available yet, but that’s not stopping phone companies, credit card giants, banks, loyalty programs and even Google from fighting for a piece of the action.
The global value of mobile payments reached an estimated $170 billion last year, according to Juniper Research, and could grow to $630 billion by 2014 as new phones are designed to bypass the Internet to directly charge or debit an account.
Just as the online shopping boom saw the rise of companies like PayPal, the advent of mobile proximity payments will could see telecommunications companies take a front seat in the payments industry for the first time.
In the U.S. telecom rivals AT&T and Verizon have reportedly teamed up to find ways to replace traditional plastic credit cards with smartphones.
In Canada, Rogers Communications has been working toward mobile proximity payments for five years, primarily through the GSM Association’s “Pay by Mobile” initiative.
The group has been working on getting globally accepted payment methods such as Visa, MasterCard and American Express to work on GSM smartphones via Near Field Communications (NFC) technology.
NFC phones send out short-wave radio messages, similar to contactless credit and debit cards.
Rogers plans to distribute contactless payment chips in NFC phones, said Rogers Wireless vice-president, new business planning, David Robinson.
The wireless provider will basically become the middleman in the mobile payments sphere, acting somewhere between the issuing bank and payment processor.
Robinson said mobile contactless payments will no doubt be an all-new revenue stream for Rogers.
“It’s not going to be a huge business for us, but it will be a meaningful business. I think that’s all I can say.”
Derek Colfer, business leader for global mobile product innovation at Visa Canada said there are other ways to equip NFC phones with contactless payment information.
The data can be stored on a micro SD card that can be inserted into the phone or manufacturers can embed the chips into the device itself.
Which method of equipping NFC phones will emerge as the most common?
“That’s the million-dollar question,” Cofler said.
Rogers has issued a bill of NFC requirements through the GSM Association to handset manufactures.
“Now (NFC) handsets are starting to show up on the near-term roadmaps,” Robinson said, adding that Rogers is already considering bringing some onboard. He would not name the handset makers up for consideration.
Google’s Nexus S phones enable contactless payments and upcoming RIM BlackBerrys are expected to do the same.
By 2015, Rogers expects virtually every Canadian with a smartphone will be able to pay with proximity devices at many large retailers.
Interac, an association working on behalf of Canada’s big banks, is already in the contactless payment business with its Flash debit cards.
“We believe that consumers are going to gravitate from a card based product, in some situations, to a mobile phone based product,” said Allen Wright, Interac’s vice-president of products. He sees its flash product as a stepping-stone to mobile payments.
“We think it’s very important for our future.”
“What we are waiting for frankly is for the mobile phone industry to sort of catch up,” he said.
URL:http://money.canoe.ca/money/business/canada/archives/2011/03/20110322-174208.html
The global value of mobile payments reached an estimated $170 billion last year, according to Juniper Research, and could grow to $630 billion by 2014 as new phones are designed to bypass the Internet to directly charge or debit an account.
REUTERS/Shannon Stapleton
In the U.S. telecom rivals AT&T and Verizon have reportedly teamed up to find ways to replace traditional plastic credit cards with smartphones.
In Canada, Rogers Communications has been working toward mobile proximity payments for five years, primarily through the GSM Association’s “Pay by Mobile” initiative.
The group has been working on getting globally accepted payment methods such as Visa, MasterCard and American Express to work on GSM smartphones via Near Field Communications (NFC) technology.
NFC phones send out short-wave radio messages, similar to contactless credit and debit cards.
Rogers plans to distribute contactless payment chips in NFC phones, said Rogers Wireless vice-president, new business planning, David Robinson.
The wireless provider will basically become the middleman in the mobile payments sphere, acting somewhere between the issuing bank and payment processor.
Robinson said mobile contactless payments will no doubt be an all-new revenue stream for Rogers.
“It’s not going to be a huge business for us, but it will be a meaningful business. I think that’s all I can say.”
Derek Colfer, business leader for global mobile product innovation at Visa Canada said there are other ways to equip NFC phones with contactless payment information.
The data can be stored on a micro SD card that can be inserted into the phone or manufacturers can embed the chips into the device itself.
Which method of equipping NFC phones will emerge as the most common?
“That’s the million-dollar question,” Cofler said.
Rogers has issued a bill of NFC requirements through the GSM Association to handset manufactures.
“Now (NFC) handsets are starting to show up on the near-term roadmaps,” Robinson said, adding that Rogers is already considering bringing some onboard. He would not name the handset makers up for consideration.
Google’s Nexus S phones enable contactless payments and upcoming RIM BlackBerrys are expected to do the same.
By 2015, Rogers expects virtually every Canadian with a smartphone will be able to pay with proximity devices at many large retailers.
Interac, an association working on behalf of Canada’s big banks, is already in the contactless payment business with its Flash debit cards.
“We believe that consumers are going to gravitate from a card based product, in some situations, to a mobile phone based product,” said Allen Wright, Interac’s vice-president of products. He sees its flash product as a stepping-stone to mobile payments.
“We think it’s very important for our future.”
“What we are waiting for frankly is for the mobile phone industry to sort of catch up,” he said.
URL:http://money.canoe.ca/money/business/canada/archives/2011/03/20110322-174208.html
Finally, India card Rupay to replace Visa, MasterCard
MUMBAI: After almost two years of planning, the National Payments Corporation has at last finalised the proposed unique India Card which once commercially launched would be an domestic alternative to the global real-time payment processing firms like Visa and MasterCard.
"We have finalised name of the proposed card as Rupay at our board meeting here today. We have also finalised the logo for the same," a senior official of the RBI-set up National Payments Corporation of India (NPCI), told PTI this evening. The official sought not to be named.
The official further said the leading financial consultancy firm Ernst & Young(E&Y) will develop and roll out the entire architecture, including the design and software for the Rupay card rollout.
A senior E&Y official confirmed the development to this agency. He further said, the NPCI will initially launch a domestic ATM/debit cards to begin with and then would hit the credit card market later on.
In 2009, the RBI had asked the Indian Banks Association to launch a not-for-profit company and design a rival card, then tentatively called India Card, that meets the requirements of the domestic banks.
And finally, RBI plan is materialising and Rupay will be like the Union Pay of China, which is the domestic real-time payment processing firm for Chinese banks, and was planned to be launched last year.
URL: http://articles.timesofindia.indiatimes.com/2011-03-21/india-business/29170858_1_debit-cards-credit-card-market-npci
"We have finalised name of the proposed card as Rupay at our board meeting here today. We have also finalised the logo for the same," a senior official of the RBI-set up National Payments Corporation of India (NPCI), told PTI this evening. The official sought not to be named.
The official further said the leading financial consultancy firm Ernst & Young(E&Y) will develop and roll out the entire architecture, including the design and software for the Rupay card rollout.
A senior E&Y official confirmed the development to this agency. He further said, the NPCI will initially launch a domestic ATM/debit cards to begin with and then would hit the credit card market later on.
In 2009, the RBI had asked the Indian Banks Association to launch a not-for-profit company and design a rival card, then tentatively called India Card, that meets the requirements of the domestic banks.
And finally, RBI plan is materialising and Rupay will be like the Union Pay of China, which is the domestic real-time payment processing firm for Chinese banks, and was planned to be launched last year.
URL: http://articles.timesofindia.indiatimes.com/2011-03-21/india-business/29170858_1_debit-cards-credit-card-market-npci
Saturday 19 March 2011
Bulletproof your finances while traveling
Bill Boyer
If an American Express Card is so wonderful, why do you also need a Visa? Unfortunately, once you get out of the United States, very few places accept American Express. This is where the more universally accepted, but less helpful in the event of an emergency, Visa comes in handy. Visit the Visa website to compare the rewards offered and choose the one you like best. If you want to be really safe, consider getting a Mastercard as well. While Mastercard is not as universal as Visa, it is accepted in some parts of the world where Visa isn't.
In addition to credit cards, you also need an ATM card when traveling abroad to get cash out once you have arrived at your destination. This may be the same card as your credit card if it can be used as both. It is risky to carry a lot of cash, so it is best to get cash as you go in the local currency. In addition, paying with cash in another country can save you in terms of conversion rates. Stores sometimes come up with their own conversion rates if you decide to pay via credit card, making it cost-effective to pay in the local currency.
Next, make a copy of the front and back of each credit and ATM card that you bring. If you happen to lose any of your cards, you will need to call each of the companies to report a stolen card. Also, as mentioned above, the hotline numbers on the back of your cards can be extremely helpful, but only if you know the number. This is even more important if you do not anticipate having internet access.
Lastly, you need is a small amount of cash. Only bring enough to hold you over until the next time you can access an ATM (perhaps $100) to limit your risk of theft.
Before you leave on your trip, call each of your credit card companies to let them know when you will be out of the country. Otherwise, they might see an expense from Madagascar and immediately shut off your card because they assume that it has been stolen.
None of the tactics suggested above cost any money (except the actual trip). However, most people simply travel with cash and one credit card because they are ignorant of the benefits of using a combination of credit and ATM cards. Build yourself a rock-solid personal finance system by traveling safely so that you can put your money to good use.
URL: http://media.www.cwruobserver.com/media/storage/paper1370/news/2011/03/18/News/Bulletproof.Your.Finances.While.Traveling-3986236-page2.shtml
Balance Transfer Credit Card Offered by Barclay
There is a new balance transfer credit card from Barclay. It currently offers 25% off on handling fees which is considered as one of the lowest offering. This will give an opportunity for the cardholder to settle any outstanding obligations and debts during the initial use of the credit card. The amount that will be saved can then be used to compensate for this need. One should just make sure to have more than one balance transfer to avail of this promo since this is a requirement by the company.
Application period starts now until May 3. In order to have eligibility for the offer, balance transfers should also be made within 60 days from the receipt of the card.
This offer on balance transfer credit card both applies to the new Barclaycard Platinum and also the Barclaycard Platinum Purchase Card. The only difference is that the latter has zero percent interest for 12 months which is shorter than what the new Barclaycard offers.
Barclaycard emphasizes its help to consumers, retailers and businesses giving them a flexible option to clear and have access to credits that are short term. Its global presence makes it one of the leading provider of financial solutions. They currently have 11.2 million UK customers and a further 10.5 million internationally.
URL: http://www.dailyrosetta.com/balance-transfer-credit-card-offered-by-barclay/10829.html
Application period starts now until May 3. In order to have eligibility for the offer, balance transfers should also be made within 60 days from the receipt of the card.
This offer on balance transfer credit card both applies to the new Barclaycard Platinum and also the Barclaycard Platinum Purchase Card. The only difference is that the latter has zero percent interest for 12 months which is shorter than what the new Barclaycard offers.
Barclaycard emphasizes its help to consumers, retailers and businesses giving them a flexible option to clear and have access to credits that are short term. Its global presence makes it one of the leading provider of financial solutions. They currently have 11.2 million UK customers and a further 10.5 million internationally.
URL: http://www.dailyrosetta.com/balance-transfer-credit-card-offered-by-barclay/10829.html
Credit card issuers target the big spenders
By: GRANT ROBERTSON
Canada is seeing a boom in premium credit cards as issuers battle for an exclusive brand of customer likely to keep on spending despite the country’s record consumer debt levels.
With the average Canadian household carrying more debt than ever, credit card issuers are moving upmarket in an effort to increasingly court customers with more financial flexibility. At the same time, companies are also rolling out more mid-range rewards cards as a way to entice consumers who have grown cautious in the recession to start using their plastic again.
With the average Canadian household carrying more debt than ever, credit card issuers are moving upmarket in an effort to increasingly court customers with more financial flexibility. At the same time, companies are also rolling out more mid-range rewards cards as a way to entice consumers who have grown cautious in the recession to start using their plastic again.
URL: http://www.theglobeandmail.com/globe-investor/credit-card-issuers-target-the-big-spenders/article1946691/page2/
Wednesday 16 March 2011
Credit card giants set to push up costs
by Alina Lobzina
Russia’s proposed Universal Payment System has triggered fears that Visa, MasterCard and other foreign plastic might be barred from the country.
While presidential aide Arkady Dvorkovich was quick to quell rumours of a deeply unpopular visa-free regime, there are on-going negotiations about the future of payment cards.
Experts agree that card holders shouldn’t worry about the coming need to swap for a Russian equivalent, but they also warn that commitment to international brands is likely to become more expensive.
New rules, new costs
Suggested changes to the terms and conditions for credit cards would require companies to increase their operation costs, which is likely to hike prices for ordinary users, believes Ivan Kachkovski, a banking analyst at Metropol.
According to amendments, no payment data should be transferred abroad, which will require companies to open Russia-based processing centres.
“This will automatically lead to additional expenses,” Kachkovski told the Moscow News.
“And its very likely that the costs will be paid by people,” he concluded.
Fears of cards being banned would make more sense if the national payment system was already up and running and could replace international competitors immediately, Kachkovski said.
Market leaders
Currently Visa and MasterCard hold 85-90 per cent of the Russian electronic payments market, experts say, Kommersant reported.
And even if Russia remains principally a cash-based economy – especially outside of the big cities – neither of the global giants plans to leave.
“Russia is an important country for our company, and we are ready to assist in forming the most advantageous opportunities for further market development,” head of MasterCard in Russia Ilya Ryabov said.
And Visa representatives said the company has the infrastructure all around the world.
Medvedev’s mega card
The creation of the Universal Payment Card, has been backed by country’s top officials, including President Medvedev.
The bill “On the national payment system” has been approved after the first reading, and is currently being prepared for its second trip through parliament.
The Duma’s committee for financial markets should have collected proposals from banks by Sunday, RBC reported.
However, not everyone likes the idea: protestors, including Orthodox clergy, have objected to harvesting of personal information and its storage in electronic databases.
URL: http://themoscownews.com/business/20110316/188496496.html?referfrommn
Russia’s proposed Universal Payment System has triggered fears that Visa, MasterCard and other foreign plastic might be barred from the country.
While presidential aide Arkady Dvorkovich was quick to quell rumours of a deeply unpopular visa-free regime, there are on-going negotiations about the future of payment cards.
Experts agree that card holders shouldn’t worry about the coming need to swap for a Russian equivalent, but they also warn that commitment to international brands is likely to become more expensive.
New rules, new costs
Suggested changes to the terms and conditions for credit cards would require companies to increase their operation costs, which is likely to hike prices for ordinary users, believes Ivan Kachkovski, a banking analyst at Metropol.
According to amendments, no payment data should be transferred abroad, which will require companies to open Russia-based processing centres.
“This will automatically lead to additional expenses,” Kachkovski told the Moscow News.
“And its very likely that the costs will be paid by people,” he concluded.
Fears of cards being banned would make more sense if the national payment system was already up and running and could replace international competitors immediately, Kachkovski said.
Market leaders
Currently Visa and MasterCard hold 85-90 per cent of the Russian electronic payments market, experts say, Kommersant reported.
And even if Russia remains principally a cash-based economy – especially outside of the big cities – neither of the global giants plans to leave.
“Russia is an important country for our company, and we are ready to assist in forming the most advantageous opportunities for further market development,” head of MasterCard in Russia Ilya Ryabov said.
And Visa representatives said the company has the infrastructure all around the world.
Medvedev’s mega card
The creation of the Universal Payment Card, has been backed by country’s top officials, including President Medvedev.
The bill “On the national payment system” has been approved after the first reading, and is currently being prepared for its second trip through parliament.
The Duma’s committee for financial markets should have collected proposals from banks by Sunday, RBC reported.
However, not everyone likes the idea: protestors, including Orthodox clergy, have objected to harvesting of personal information and its storage in electronic databases.
URL: http://themoscownews.com/business/20110316/188496496.html?referfrommn
Visa to Offer P2P Payments through Fiserv and CashEdge
Deal could help banks and Visa maintain a role in the emerging mobile payment market.
As we have noted on more than one occasion, the U.S. mobile payment market is a wide-open playing field. Many players, including Visa, MasterCard, banks, PayPal and mobile carriers, would like to establish supremacy in the emerging work of enabling consumers to make payments with their mobile devices.
Visa, which feels the pressure perhaps more than most, has been testing contactless mobile payments in New York City and Los Angeles and yesterday announced a four-week internal trial of mobile payments with Australia and New Zealand Banking Group. Today the card giant announced a deal with Fiserv and CashEdge to extend their person-to-person payment offerings to Visa cardholders. This gives Visa a mobile payment foot in the door at the 500 banks and credit unions that use Fiserv's ZashPay and the 170 banks that use Cashedge's Popmoney and adds two mobile payment options to its card network. It should help increase volumes and fee income for the card network as mobile payments pass over it. For CashEdge and Fiserv, the deal extends their payment offerings to Visa's one billion cardholders. The new, integrated person-to-person payment mechanisms should be ready this summer.
Fiserv's ZashPay currently enables payments to be sent directly to any U.S. bank account in a day or so; real-time payments will be available later in 2011. Initially the ZashPay-Visa service will focus on payment delivery to eligible Visa credit and debit account holders, with plans to expand to prepaid and international account holders in the future. The service will be available to both consumers and small businesses using ZashPay.
Visa will work with CashEdge to enable the integration of CashEdge's P2P email/mobile payments service, Popmoney, with Visa credit, debit and prepaid cards. Customers of banks that offer Popmoney will be able to send person-to-person email and mobile payments using a recipient's email address or mobile phone number. Recipients will be able to direct these funds to be transferred to any Visa-branded credit, debit or prepaid card.
Like ZashPay, Popmoney facilitates person-to-person payments between bank accounts; the Visa deal will allow customers to send money domestically or internationally to recipients who may lack a traditional bank account, or to those who simply prefer to receive the funds directly to an eligible Visa prepaid, debit or credit account. Use cases include parents sending money directly from their online bank account to their kids in college, using only an email address or mobile number, and kids directly downloading that cash onto their Visa card; sending a cash gift to a relative in another state; or paying someone back for a split bill.
URL: http://www.banktech.com/payments-cards/229301072
MasterCard & Visa Race To Bring microSD Mobile Payments To Oz
By Matthew Lentini
MasterCard claims mobile touch-and-go payments through microSD cards is the future of mobile phones in Australia.
URL: http://smarthouse.com.au/Phones/Mobile/Q2J4K6J2
MasterCard claims mobile touch-and-go payments through microSD cards is the future of mobile phones in Australia.
The company made the call following Visa's announcement earlier this week of a 50-employee trial with ANZ of iPhone cases embedded with Near Field Communications (NFC) chips to test contactless payments like in PayPass and PayWave cards.
The microSD card system, currently used in overseas markets like south-east Asia, embeds an aerial behind the case of a mobile phone, with the SD card running banking software on the phone that would be used to select bank accounts on the phone.
David Masters, VP of Corporate Affairs at MasterCard, says that new contactless payment systems on mobiles will reach Australia "really soon," but this vague bracket is any figure under a two year margin.
Meanwhile Visa's four week trial is using a microSD card embedded in a phone case with software in the form of an app being installed to make the case function as a mobile payment system.
MasterCard has criticised Visa's trial as ‘late' compared to its own trials in 2007, though the chips being tested by both companies use the same technology and neither company has a mobile solution on the Australian market yet.
The company has been working with Westpac and Commonwealth Bank on upcoming payments systems, though have not been able to reveal anything officially yet.
Masters also added that "a long term solution is needed" and that consumers would not be willing to pay the nominal fee for Visa's iPhone case option.
The technology used in upcoming NFC releases works in the same way as PayPass and Paywave cards, though the hurdle is in software rather than hardware.
Banks would need to update their current software for transactions through microSD card mobile payments to make the technology work for real-world transactions. While many phones are being released with NFC chips in-built, the chips cannot be harnessed without bank software allowing its use.
The microSD card system, currently used in overseas markets like south-east Asia, embeds an aerial behind the case of a mobile phone, with the SD card running banking software on the phone that would be used to select bank accounts on the phone.
David Masters, VP of Corporate Affairs at MasterCard, says that new contactless payment systems on mobiles will reach Australia "really soon," but this vague bracket is any figure under a two year margin.
Meanwhile Visa's four week trial is using a microSD card embedded in a phone case with software in the form of an app being installed to make the case function as a mobile payment system.
MasterCard has criticised Visa's trial as ‘late' compared to its own trials in 2007, though the chips being tested by both companies use the same technology and neither company has a mobile solution on the Australian market yet.
The company has been working with Westpac and Commonwealth Bank on upcoming payments systems, though have not been able to reveal anything officially yet.
Masters also added that "a long term solution is needed" and that consumers would not be willing to pay the nominal fee for Visa's iPhone case option.
The technology used in upcoming NFC releases works in the same way as PayPass and Paywave cards, though the hurdle is in software rather than hardware.
Banks would need to update their current software for transactions through microSD card mobile payments to make the technology work for real-world transactions. While many phones are being released with NFC chips in-built, the chips cannot be harnessed without bank software allowing its use.
URL: http://smarthouse.com.au/Phones/Mobile/Q2J4K6J2
Tuesday 15 March 2011
Give them credit
By Philippe Bergevin
Visa and MasterCard, the two biggest credit cards companies operating in Canada, are currently targets of serious allegations. The Commissioner of Competition alleged in a recent referral to the Competition Tribunal that these companies, through rules they impose on merchants, have limited competition in the marketplace, resulting in increased costs to businesses and, ultimately, consumers.
These allegations have been vigorously disputed by the two targeted companies. Further, some of the economic arguments underpinning the legal case are, in my view, flawed and the solutions prescribed by the commissioner are unlikely to foster, and may even harm, competition and consumer choice.
The allegations refer to rules that are imposed by Visa and MasterCard, which are often incorporated into agreements between merchants and their payment processors — companies that provide terminals to merchants, among other services. One is the so-called no-surcharge rule that prevents merchants from charging consumers directly for paying with a Visa or MasterCard. Merchants, of course, pass on credit card fees to their customers in the form of higher prices — as with any costs associated with their business — but they can’t do so specifically for customers who use credit cards.
The commissioner contends that the no-surcharge rule has reduced competition among different credit card networks like Visa and MasterCard. A close look at the credit card market suggests a more nuanced assessment.
Card payment systems are two-sided markets, meaning that they compete for two types of customers: cardholders and merchants. Cardholders tend to be sensitive to prices, because they can often turn to a lower-cost payment method, such as cash. Merchants in a sense are more captive; they tend to be willing to accept a more expensive payment method, if their customers choose it, for fear of losing business.
Visa and MasterCard try to set relative credit card fees billed to merchants and cardholders so as to maximize the number and size of transactions on their systems; that’s how they make money. They take a small cut — usually a few cents — of every message that is sent among members of their payment system, for example from a merchant to the cardholder’s bank.
The no-surcharge rule is part of a strategy adopted by payment networks to ensure that merchants, not the cardholders, pay an important part of the direct costs of the system. Merchant card fees are to a large extent retained by the banks that issue the credit cards — a fee known as interchange. In turn, the fees are used by banks to support their credit card services, which, through competition, lead to higher benefits — such as travel rewards — and lower costs for cardholders.
In short, every payment network that operates on a for-profit-basis — like Visa and MasterCard — tries to adopt a pricing strategy that maximizes activity on its network — the basis of efficiency and competition. So it is difficult to see how altering Visa’s and MasterCard’s pricing strategy could enhance competition and bring about lower prices overall, for both merchants and cardholders.
There are valid public policy objectives that could be pursued in banning no-surcharge rules. One of them is fairness among cardholders and other customers, notably cash-paying customers. The idea is that since merchants tend to pass card fees on to all customers in the form of higher-priced goods and services, customers who use payment methods associated with fewer benefits, such as cash, nonetheless share the costs of payment methods associated with higher benefits, like credit cards.
But this sort of inequity is common at the retail level. For example, consumers who go to the mall by public transit subsidize, through their purchases, the parking spaces of car drivers. This is at heart a political question, an issue distant from competition policy. Furthermore, the Finance Minister decided, in imposing a voluntary code of conduct that most market participants adopted as of August last year, not to ban the practice.
The other important allegation, which takes aims at so-called honour-all-cards rules, is perhaps more serious and may have more traction for the Commissioner of Competition. In short, Visa and MasterCard require merchants who accept their cards to accept all of their cards.
Until recently, all their credit cards carried the same fee structure for a given merchant, so these rules were never really an issue. A few years ago, however, these same credit card companies started issuing more “premium cards” that provide higher benefits — for example, more travel points — to cardholders, but which impose higher fees on merchants. The strategy was to tap into the lucrative market of high-spending cardholders.
The proliferation of cards carrying higher fees is a genuine problem for merchants. For one thing, it brings uncertainty to the way merchants do business. It is harder for merchants to pass on, through higher-priced goods and services, higher fees to customers if the costs associated with Visa and MasterCard are not stable and vary from card to card. Further, it is harder to decline Visa or MasterCard services with this take all or nothing approach.
It is unclear whether this practice contravenes Canadian competition laws — that will be for the Competition Tribunal to determine. The code of conduct has attempted to address this issue by limiting the growth of premium cards. Further arrangements could be made by industry participants to smooth out price variations for merchants and enhance the predictability of their cost structures.
Overall, requiring Visa and MasterCard to change these rules is unlikely to enhance competition and consumer choice in the credit card market, or the payments market more broadly. Further, the commissioner missed an opportunity to foster more competition by declining last year a bid from Interac — the main payment network for debit card transactions in Canada — to compete on a for-profit basis. It’s not too late for the commissioner to change course.
The government — and by extension the commissioner — should encourage competition and consumer choice, not limit them. The government’s role should be to uphold transparency and disclosure standards to ensure market participants make informed decisions in a competitive market, to the ultimate benefit of merchants and consumers.
Financial Post
Philippe Bergevin is a policy analyst at the C.D. Howe Institute and author of Change is in the Cards: Competition in the Canadian Debit Card Market, at www.cdhowe.org.
URL: http://opinion.financialpost.com/2011/03/15/give-them-credit/
Visa and MasterCard, the two biggest credit cards companies operating in Canada, are currently targets of serious allegations. The Commissioner of Competition alleged in a recent referral to the Competition Tribunal that these companies, through rules they impose on merchants, have limited competition in the marketplace, resulting in increased costs to businesses and, ultimately, consumers.
These allegations have been vigorously disputed by the two targeted companies. Further, some of the economic arguments underpinning the legal case are, in my view, flawed and the solutions prescribed by the commissioner are unlikely to foster, and may even harm, competition and consumer choice.
The allegations refer to rules that are imposed by Visa and MasterCard, which are often incorporated into agreements between merchants and their payment processors — companies that provide terminals to merchants, among other services. One is the so-called no-surcharge rule that prevents merchants from charging consumers directly for paying with a Visa or MasterCard. Merchants, of course, pass on credit card fees to their customers in the form of higher prices — as with any costs associated with their business — but they can’t do so specifically for customers who use credit cards.
The commissioner contends that the no-surcharge rule has reduced competition among different credit card networks like Visa and MasterCard. A close look at the credit card market suggests a more nuanced assessment.
Card payment systems are two-sided markets, meaning that they compete for two types of customers: cardholders and merchants. Cardholders tend to be sensitive to prices, because they can often turn to a lower-cost payment method, such as cash. Merchants in a sense are more captive; they tend to be willing to accept a more expensive payment method, if their customers choose it, for fear of losing business.
Visa and MasterCard try to set relative credit card fees billed to merchants and cardholders so as to maximize the number and size of transactions on their systems; that’s how they make money. They take a small cut — usually a few cents — of every message that is sent among members of their payment system, for example from a merchant to the cardholder’s bank.
The no-surcharge rule is part of a strategy adopted by payment networks to ensure that merchants, not the cardholders, pay an important part of the direct costs of the system. Merchant card fees are to a large extent retained by the banks that issue the credit cards — a fee known as interchange. In turn, the fees are used by banks to support their credit card services, which, through competition, lead to higher benefits — such as travel rewards — and lower costs for cardholders.
In short, every payment network that operates on a for-profit-basis — like Visa and MasterCard — tries to adopt a pricing strategy that maximizes activity on its network — the basis of efficiency and competition. So it is difficult to see how altering Visa’s and MasterCard’s pricing strategy could enhance competition and bring about lower prices overall, for both merchants and cardholders.
There are valid public policy objectives that could be pursued in banning no-surcharge rules. One of them is fairness among cardholders and other customers, notably cash-paying customers. The idea is that since merchants tend to pass card fees on to all customers in the form of higher-priced goods and services, customers who use payment methods associated with fewer benefits, such as cash, nonetheless share the costs of payment methods associated with higher benefits, like credit cards.
But this sort of inequity is common at the retail level. For example, consumers who go to the mall by public transit subsidize, through their purchases, the parking spaces of car drivers. This is at heart a political question, an issue distant from competition policy. Furthermore, the Finance Minister decided, in imposing a voluntary code of conduct that most market participants adopted as of August last year, not to ban the practice.
The other important allegation, which takes aims at so-called honour-all-cards rules, is perhaps more serious and may have more traction for the Commissioner of Competition. In short, Visa and MasterCard require merchants who accept their cards to accept all of their cards.
Until recently, all their credit cards carried the same fee structure for a given merchant, so these rules were never really an issue. A few years ago, however, these same credit card companies started issuing more “premium cards” that provide higher benefits — for example, more travel points — to cardholders, but which impose higher fees on merchants. The strategy was to tap into the lucrative market of high-spending cardholders.
The proliferation of cards carrying higher fees is a genuine problem for merchants. For one thing, it brings uncertainty to the way merchants do business. It is harder for merchants to pass on, through higher-priced goods and services, higher fees to customers if the costs associated with Visa and MasterCard are not stable and vary from card to card. Further, it is harder to decline Visa or MasterCard services with this take all or nothing approach.
It is unclear whether this practice contravenes Canadian competition laws — that will be for the Competition Tribunal to determine. The code of conduct has attempted to address this issue by limiting the growth of premium cards. Further arrangements could be made by industry participants to smooth out price variations for merchants and enhance the predictability of their cost structures.
Overall, requiring Visa and MasterCard to change these rules is unlikely to enhance competition and consumer choice in the credit card market, or the payments market more broadly. Further, the commissioner missed an opportunity to foster more competition by declining last year a bid from Interac — the main payment network for debit card transactions in Canada — to compete on a for-profit basis. It’s not too late for the commissioner to change course.
The government — and by extension the commissioner — should encourage competition and consumer choice, not limit them. The government’s role should be to uphold transparency and disclosure standards to ensure market participants make informed decisions in a competitive market, to the ultimate benefit of merchants and consumers.
Financial Post
Philippe Bergevin is a policy analyst at the C.D. Howe Institute and author of Change is in the Cards: Competition in the Canadian Debit Card Market, at www.cdhowe.org.
URL: http://opinion.financialpost.com/2011/03/15/give-them-credit/
Visa Mobile Payments Three Years Late Says MasterCard
By Matthew Lentini
Visa yesterday began trialling a contactless payment system for mobile handsets in Australia, but MasterCard says it’s three years behind the game.
MasterCard Worldwide's Vice President of Strategy and Corporate Affairs, David Masters said that the 50-employee trial of the technology looks like a "proof-of-concept" of the kind MasterCard launched back in 2007.
Visa is working with ANZ for the four week trial that links a contactless payment device, similar to MasterCard's PayPass, into an iPhone case that would theoretically be sold to consumers for a sub-$50 price. The iPhone case, running on DeviceFidelity's technology, was first announced in mid-2010.
MasterCard has used contactless payment technologies with the Commonwealth Bank and Westpac and has already been working on bringing smartphones into the process.
"Contactless works, consumers want it. It's about commercialising the mobile side of that," said Masters.
Masters added that consumers would not be willing to pay for a chip-embedded case, but instead want full integration with their devices (of which both credit card companies offer overseas). He previously hinted to SmartHouse that partnered companies are approaching making announcements on NFC technology releases in Australia, though with nothing official set yet.
Both Visa and MasterCard currently offer mobile payment ‘touch and go' systems using Near Field Communications (NFC) technology overseas. NFC is a technology similar in some ways to Bluetooth that allows an embedded chip in a device to communicate with other NFC chips that are close to it, thus creating a tap-and-go procedure.
Countries like Japan have been using NFC extensively for years, though the technology is only slowly picking up in Europe, slower still in Australia.
Many smartphones, ranging from Google to Samsung varieties, are now shipping with NFC technology built in.
Mobile commerce provider, Sybase, noted that while companies like MasterCard and Visa have the retail-side infrastructure set up, NFC requires a more co-ordinated market on all sides which Australia does not currently have.
Vice President of Sybase's mCommerce division, Matt Talbot said that currently "the big issue is replacing all the current handsets in the market."
Countries like Japan have been using NFC extensively for years, though the technology is only slowly picking up in Europe, slower still in Australia.
Many smartphones, ranging from Google to Samsung varieties, are now shipping with NFC technology built in.
Mobile commerce provider, Sybase, noted that while companies like MasterCard and Visa have the retail-side infrastructure set up, NFC requires a more co-ordinated market on all sides which Australia does not currently have.
Vice President of Sybase's mCommerce division, Matt Talbot said that currently "the big issue is replacing all the current handsets in the market."
URL: http://www.channelnews.com.au/Hardware/Mobile_Phones/G4P4U8N7?page=1
JAPAN MARKETS-Stocks rebound on short covering, still vulnerable
By Antoni Slodkowski
TOKYO, March 16 (Reuters) - Japan's Nikkei average rallied 4.4 percent on Wednesday after the worst two-day selloff since the 1987 crash, with some investors scooping up shares even as many fretted that a further deterioration in nuclear crisis could undermine the market.
Gains were mostly driven by hedge funds covering short positions taken in futures during the previous day's plunge, as well as some light buying by some household investors after the two-day plunge of more than 16 percent, traders said.
"The rebound is pretty strong as investors realised they may have panicked a bit too much yesterday," said Fujio Ando, senior managing director at Chibagin Asset Management.
Overall Japanese investors were still skittish after the sharp slide and reluctant to step in, fearing more bad news on the stricken nuclear reactor north of Tokyo could send shares into another tailspin.
"The market doesn't care about any fundamentals today. All eyes are on the nuclear plant and the Nikkei will move according to the news about the plant," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities. "The market is still extremely volatile." JGB futures slid a half a point and 20-year yields jumped to a one-year high as bond dealers fretted that a long-term bond auction later in the day may have trouble finding buyers. Japanese insurers were selling bonds on Tuesday to cover losses in their stock portfolios.
The yen dropped across the board, with the dollar pushing up to 81.00 yen but still not far from a record low of 79.75 hit against the Japanese currency in 1995.
Market players were also still keeping an eye out for Japanese companies and insurers selling their hefty foreign asset holdings and repatriating funds to cover costs from the nuclear crisis, quake and tsunami, a factor that could drive the yen higher.
So far traders have not seen much fund repatriation, and some cited Japanese life insurers buying the higher-yielding Australian dollar. The Australian dollar jumped nearly 1 percent against the yen.
The Bank of Japan was seen checking rates on currencies with banks in Tokyo, traders said, a warning it could intervene against any further yen strength that would deal another blow to the economy.
"It kind of makes you feel that they are ready to intervene if the dollar falls below 80 yen," said a trader at a Japanese bank.
Japan's finance minister told a meeting with a ruling party lawmaker that he was watching the currency market closely.
The situation at the Fukushima Daiichi nuclear plant 240 km (150 miles) north of Tokyo was still tense. A fire broke out on Wednesday at the plant and sent low levels of radiation wafting into Tokyo, prompting some people to flee the capital.
Some traders say Japanese banks have sold foreign assets to load up on cash in case of big customer withdrawals, while others said the efforts by the Bank of Japan to supply cheap funds reduces the need for repatriation.
Most traders felt it would take Japanese insurers weeks to assess their cash needs before deciding to sell any foreign assets.
The Nikkei was up 4.4 percent at 8,981.14 after having plunged 10.6 percent on Tuesday, still down 12.4 percent from Friday's close. Osaka Nikkei futures were up 3.1 percent at 8,910 but pulled back from an intraday high of 9,070.
The broader TOPIX rose 5.1 percent to 805.90 .
Hedge funds were cited as aggressive sellers of Nikkei futures on Tuesday as the market panicked over reports of leaking radiation from the stricken Fukushima nuclear reactor and higher radiation readings near Tokyo, traders said.
Domestic fund managers have largely stuck to the sidelines, suggesting that they man need to sell into any rebound, traders said. Other fund managers struck a brave face about the crisis and prospects for Japan's biggest companies.
"Many Japanese companies are between 50 and 100 years old and they have been through many shocks and crises, but in their DNA they have ability to pick up the pieces and rebuild. They are competitive in the true meaning of this word. That's why our stance is to invest in such firms, despite of what has happened," said Tetsuro Ii, CEO of Commons Asset Management.
"We want to buy, but we need to have more information about the level of damage at different companies, so we will be gathering this information and invest very carefully," Ii said.
The two-day selloff wiped $626 billion in market capitalisation of the Tokyo Stock Exchange's first section of major shares.
While investors felt the market had tumbled too far unless the crisis takes a much more serious turn for the worse, few were willing to step in just yet.
The Nikkei's 14-day relative strength index, a common technical indicator of whether a market is overbought or oversold, struck a very oversold level of 17 on Tuesday before rising to 27.4 on Wednesday. A reading below 30 suggests a market is oversold.
Laurence Balanco, a technical analyst at CLSA, said that the Nikkei's RSI had only fallen below 17 on eight occasions since 1970, and the market's average return after one week of doing so was 6.22 percent.
Bonds lost more ground. Ten-year JGB futures were down 0.68 point to 139.60 , while the 20-year yield climbed 5 basis points to 2.130 percent and struck a one-year high of 2.150 percent.
Japan's Ministry of Finance will sell 1.1 trillion yen ($13.4 billion) of 20-year bonds later in the day.
Worries that Japan will have to issue more debt to pay for the cost of reconstruction have hit long-term Japanese bond yields and the spreads of Japanese sovereign credit default swaps.
URL: http://www.reuters.com/article/2011/03/16/japan-quake-markets-idUSL3E7EG02720110316
Sunday 13 March 2011
MasterCard plans display cards for U.S. consumers
MasterCard has plans to help banks issue consumer credit cards in the U.S. with an embedded LCD display, reports MSNBC. The display card will provide real-time information such as current balance, recent transactions, and even special messages from banks or coupon codes from merchants.
The new screen-enabled card also brings additional features focused on enhancing security during online transactions. The card will generate a dynamic, one-time card verification value code for every online or telephone purchase. Criminals who steal these CVV codes in databases of old purchases will find the data can no longer be used for online crimes.
The display is able to endure the everyday abuse that comes with sitting on cards in wallets, stated Cyril Lalo, CEO of NagraID Security, which created the cards. He added that they are also able to withstand the occasional trip through the rinse cycle of your washing machine.
Similar cards are already in use by Asian and European banks. U.S. trails are expected to begin by April and become widely available by the end of the year.
URL: http://www.secureidnews.com/2011/03/10/mastercard-plans-display-cards-for-u-s-consumers#top
The new screen-enabled card also brings additional features focused on enhancing security during online transactions. The card will generate a dynamic, one-time card verification value code for every online or telephone purchase. Criminals who steal these CVV codes in databases of old purchases will find the data can no longer be used for online crimes.
The display is able to endure the everyday abuse that comes with sitting on cards in wallets, stated Cyril Lalo, CEO of NagraID Security, which created the cards. He added that they are also able to withstand the occasional trip through the rinse cycle of your washing machine.
Similar cards are already in use by Asian and European banks. U.S. trails are expected to begin by April and become widely available by the end of the year.
URL: http://www.secureidnews.com/2011/03/10/mastercard-plans-display-cards-for-u-s-consumers#top
Keeping your wallet mobile
PERSONAL FINANCE: DO YOU TRUST yourself with your credit card or are you inclined to lose the run of yourself and your limit at the drop of a hat? When asked this question recently, almost a third of us said they no, hardly much of a surprise when you look at the personal debt mountain left behind following the boom.
Our credit card debt is a fraction under €2.9 billion and while we seem to have tempered the splurge and are now putting more cash into our cards than we are spending on them, it will be a very long time before we can leave the mountain behind.
Pre-paid money cards, embossed with the Mastercard and Visa legends, are likely to become more commonplace over the next year and they might help us exercise some self control.
You can’t run up huge bills or inadvertently eat into your overdraft as you might with a credit or debit card and you’re not charged any interest. When you have the money, you can spend it, when you don’t you can’t. It is that simple. Online payment company 3V Transaction Services have long championed the virtual credit card but while the 3V is fine for buying off the internet, it has always lacked a tangible piece of plastic which people can produce in a restaurant or use at an ATM so has struggled to make much of an impression.
O2, on the other hand, is likely to make a much bigger impression. It has rolled out its prepaid money card and with one million customers already used to topping-up pay-as-you-go mobiles – not to mention a big advertising budget – it will almost certainly be able to position its card front and centre.
At the launch last month, the company’s chief executive Stephen Shurrock claimed the new money card would “appeal to customers who no longer want or don’t have a credit card – either because they don’t feel they will manage it well, or because they are not eligible for one.”
Unlike a debit card, he said, “a customer can’t unknowingly access an overdraft facility or spend money that they don’t have,” and he expressed the hope that it would bring “transparency, awareness and control to a customer’s spending habits which we know are the first steps towards gaining control over spend.”
The O2 survey indicated that the vast majority of Irish people – 85 per cent – were trying to be more careful with their spending since the recession. Incidentally, who, we’d like to know, are the 15 per cent who are not? The survey reported that 75 per cent said they would like to be in more control of what money they have and how they are spending it, while 70 per cent said they found it hard to keep track of change when they break a €20 note.
The company said that 82 per cent of those polled said a prepay money card would help them avoid getting into debt while 30 per cent of respondents who did not have a credit card said they did not trust themselves with one and 32 per cent believed credit cards were too expensive.
The reason why O2 is getting so involved in personal finance is not because it cares all that much about how we spend our money today (as long as we spend some of it on its mobile offerings, it’s happy enough) but how we spend our money tomorrow, when the cash cow that is mobile phone call charges dies.
Back in the good old days – for the mobile operators at any rate – consumers were fleeced with ridiculous charges for phonecalls, text messages and data services. With apps now allowing people make calls anywhere in the world for free and instant (and free) messaging replacing the text message, the companies that made hundreds of millions of euro off Irish consumers for more than a decade are worried.
The Holy Grail O2 is pursuing is the mobile wallet – a smart phone that can be used to make calls and pay for purchases. If it can position itself to the fore of the electronic wallet revolution that is thundering down the tracks then it has a chance of retaining a degree of relevance in 10 or 20 years time.
O2’s Spanish parent Telefonica, is even further ahead of the curve and has been trialling a technology called Near Field Communication (NFC) to allow people make purchases with their mobiles. Put very simply, the phones of the – near future will be in direct contact with people’s bank and credit card companies and when they hover over a device at a cash register, money will instantly leave a user’s account.
Telefonica carried out an extensive NFC trial in the Spanish resort of Sitges last year. Run in conjunction with Visa and La Caixa bank, the trial used Samsung smart phones. Some 1,500 consumers were give phones loaded with electronic Visa cards and allowed to make purchases at 500 shops which were given point-of-sale devices capable of handling payments. The trial saw increases in both transaction frequencies and amounts spent and was described as “highly successful among all the participants”. The phones and payment terminals are still in circulation and will be used on an on-going basis.
“The results obtained in Sitges reinforce the assumptions of the companies behind the project that mobile payment could be rolled out massively in Spain over the mid-term in the next three to five years,” the companies said.
Among the top-line figures emerging from the trial included the fact that 90 per cent of consumers issued with an NFC phone used it to make payments while 80 per cent of the merchants processed an NFC transaction. People mostly used their phones for micro-payments and 60 per cent of the purchases were less than €20. The most popular place the phone was used was in supermarkets at 57 per cent and restaurants at 14 per cent while the average age of people using phones to pay was 46.
It is not, however, anticipated that the technology will be rolled out this year or next and it is unlikely to be mainstream from at least three years and possibly a lot longer than that.
In the meantime O2’s money cards actually make sense – once you have money.
Pricewatch used the card last week and found it was accepted without a murmur in shops, restaurants and ATMs. The cards can be topped up via an internet bank account or in any O2 retail store or in over 1,500 Payzone outlets nationwide. Balances can be checked for free, via text message.
However, you still have to pay many of the fees associated with bookings when you use a Visa pre-paid card. Mastercard are also in the space and it has one key advantage over its main rival. It has a number of pre-paid cards in the market including the Expression card aimed at students and the Ruby card aimed at a wider audience.
When reserving seats on Ryanair flights online using the Ruby or Expression cards, consumers can avoid paying the €10 booking fee although the card does cost €12.95, which is substantially more than the O2 Money Card. Mind you if you make more than one Ryanair booking a year then it will save you money.
Pre-paid money cards are likely to become more commonplace in over the next year and they might help us exercise some self control.
URL: http://www.irishtimes.com/newspaper/pricewatch/2011/0314/1224292056367.html
Our credit card debt is a fraction under €2.9 billion and while we seem to have tempered the splurge and are now putting more cash into our cards than we are spending on them, it will be a very long time before we can leave the mountain behind.
Pre-paid money cards, embossed with the Mastercard and Visa legends, are likely to become more commonplace over the next year and they might help us exercise some self control.
You can’t run up huge bills or inadvertently eat into your overdraft as you might with a credit or debit card and you’re not charged any interest. When you have the money, you can spend it, when you don’t you can’t. It is that simple. Online payment company 3V Transaction Services have long championed the virtual credit card but while the 3V is fine for buying off the internet, it has always lacked a tangible piece of plastic which people can produce in a restaurant or use at an ATM so has struggled to make much of an impression.
O2, on the other hand, is likely to make a much bigger impression. It has rolled out its prepaid money card and with one million customers already used to topping-up pay-as-you-go mobiles – not to mention a big advertising budget – it will almost certainly be able to position its card front and centre.
At the launch last month, the company’s chief executive Stephen Shurrock claimed the new money card would “appeal to customers who no longer want or don’t have a credit card – either because they don’t feel they will manage it well, or because they are not eligible for one.”
Unlike a debit card, he said, “a customer can’t unknowingly access an overdraft facility or spend money that they don’t have,” and he expressed the hope that it would bring “transparency, awareness and control to a customer’s spending habits which we know are the first steps towards gaining control over spend.”
The O2 survey indicated that the vast majority of Irish people – 85 per cent – were trying to be more careful with their spending since the recession. Incidentally, who, we’d like to know, are the 15 per cent who are not? The survey reported that 75 per cent said they would like to be in more control of what money they have and how they are spending it, while 70 per cent said they found it hard to keep track of change when they break a €20 note.
The company said that 82 per cent of those polled said a prepay money card would help them avoid getting into debt while 30 per cent of respondents who did not have a credit card said they did not trust themselves with one and 32 per cent believed credit cards were too expensive.
The reason why O2 is getting so involved in personal finance is not because it cares all that much about how we spend our money today (as long as we spend some of it on its mobile offerings, it’s happy enough) but how we spend our money tomorrow, when the cash cow that is mobile phone call charges dies.
Back in the good old days – for the mobile operators at any rate – consumers were fleeced with ridiculous charges for phonecalls, text messages and data services. With apps now allowing people make calls anywhere in the world for free and instant (and free) messaging replacing the text message, the companies that made hundreds of millions of euro off Irish consumers for more than a decade are worried.
The Holy Grail O2 is pursuing is the mobile wallet – a smart phone that can be used to make calls and pay for purchases. If it can position itself to the fore of the electronic wallet revolution that is thundering down the tracks then it has a chance of retaining a degree of relevance in 10 or 20 years time.
O2’s Spanish parent Telefonica, is even further ahead of the curve and has been trialling a technology called Near Field Communication (NFC) to allow people make purchases with their mobiles. Put very simply, the phones of the – near future will be in direct contact with people’s bank and credit card companies and when they hover over a device at a cash register, money will instantly leave a user’s account.
Telefonica carried out an extensive NFC trial in the Spanish resort of Sitges last year. Run in conjunction with Visa and La Caixa bank, the trial used Samsung smart phones. Some 1,500 consumers were give phones loaded with electronic Visa cards and allowed to make purchases at 500 shops which were given point-of-sale devices capable of handling payments. The trial saw increases in both transaction frequencies and amounts spent and was described as “highly successful among all the participants”. The phones and payment terminals are still in circulation and will be used on an on-going basis.
“The results obtained in Sitges reinforce the assumptions of the companies behind the project that mobile payment could be rolled out massively in Spain over the mid-term in the next three to five years,” the companies said.
Among the top-line figures emerging from the trial included the fact that 90 per cent of consumers issued with an NFC phone used it to make payments while 80 per cent of the merchants processed an NFC transaction. People mostly used their phones for micro-payments and 60 per cent of the purchases were less than €20. The most popular place the phone was used was in supermarkets at 57 per cent and restaurants at 14 per cent while the average age of people using phones to pay was 46.
It is not, however, anticipated that the technology will be rolled out this year or next and it is unlikely to be mainstream from at least three years and possibly a lot longer than that.
In the meantime O2’s money cards actually make sense – once you have money.
Pricewatch used the card last week and found it was accepted without a murmur in shops, restaurants and ATMs. The cards can be topped up via an internet bank account or in any O2 retail store or in over 1,500 Payzone outlets nationwide. Balances can be checked for free, via text message.
However, you still have to pay many of the fees associated with bookings when you use a Visa pre-paid card. Mastercard are also in the space and it has one key advantage over its main rival. It has a number of pre-paid cards in the market including the Expression card aimed at students and the Ruby card aimed at a wider audience.
When reserving seats on Ryanair flights online using the Ruby or Expression cards, consumers can avoid paying the €10 booking fee although the card does cost €12.95, which is substantially more than the O2 Money Card. Mind you if you make more than one Ryanair booking a year then it will save you money.
Pre-paid money cards are likely to become more commonplace in over the next year and they might help us exercise some self control.
URL: http://www.irishtimes.com/newspaper/pricewatch/2011/0314/1224292056367.html
Tokyo stock market crashes after quake
The Tokyo Stock Exchange plunged in early trading on Monday as investors reacted to the consequences of a massive natural disaster that is still unfolding.
The benchmark Nikkei 225 index was down 444 points, or 4.3 per cent, at 9,814 about two hours after the market opened at 9 a.m. Monday local time (8 p.m. ET Sunday).
That was a recovery from the opening, when it dropped 556 points.
The Bank of Japan said Monday it would inject 7 trillion yen ($84 billion Cdn) into the money markets, "the largest amount ever," to ensure the financial system continued to operate normally.
Other Asian markets were off but just a fraction of the losses in Tokyo. The Hang Seng index in Hong Kong fell 0.7 per cent, while Singapore's Straits Times index was down 0.4 per cent.
The tsunami and earthquake that hit Japan on Friday about the time the market closed may have killed more than 10,000 people. It has caused a massive disruption to transportation in the northeastern part of the country, and led to severe damage to several nuclear plants.
The electricity shortage caused by the damage has forced leading Japanese car companies — Toyota, Honda and Nissan —to close for an indefinite period, and electricity companies are warning of rotating blackouts on Monday to conserve power.
However, the Tokyo exchange said Sunday that it would keep its normal hours on Monday.
On Monday morning, the Bank conducted a same-day funds-supplying operation totalling 7 trillion yen, and a future-day-start funds-supplying operation totalling 3 trillion yen. The Bank said it will do its utmost to continue ensuring stability in the financial markets and securing smooth settlement of funds, including providing liquidity.
On Friday, the Nikkei fell 200 points to about 10,254.
The 1995 earthquake that devastated Kobe cost $132 billion US, said Sheila Smith, an expert in Japan Studies at the Council on Foreign Relations, a U.S. think tank.
URL: http://www.cbc.ca/news/business/story/2011/03/13/asian-markets-mondya-tsunami.html
The benchmark Nikkei 225 index was down 444 points, or 4.3 per cent, at 9,814 about two hours after the market opened at 9 a.m. Monday local time (8 p.m. ET Sunday).
That was a recovery from the opening, when it dropped 556 points.
The Bank of Japan said Monday it would inject 7 trillion yen ($84 billion Cdn) into the money markets, "the largest amount ever," to ensure the financial system continued to operate normally.
Other Asian markets were off but just a fraction of the losses in Tokyo. The Hang Seng index in Hong Kong fell 0.7 per cent, while Singapore's Straits Times index was down 0.4 per cent.
The tsunami and earthquake that hit Japan on Friday about the time the market closed may have killed more than 10,000 people. It has caused a massive disruption to transportation in the northeastern part of the country, and led to severe damage to several nuclear plants.
The electricity shortage caused by the damage has forced leading Japanese car companies — Toyota, Honda and Nissan —to close for an indefinite period, and electricity companies are warning of rotating blackouts on Monday to conserve power.
However, the Tokyo exchange said Sunday that it would keep its normal hours on Monday.
On Monday morning, the Bank conducted a same-day funds-supplying operation totalling 7 trillion yen, and a future-day-start funds-supplying operation totalling 3 trillion yen. The Bank said it will do its utmost to continue ensuring stability in the financial markets and securing smooth settlement of funds, including providing liquidity.
On Friday, the Nikkei fell 200 points to about 10,254.
The 1995 earthquake that devastated Kobe cost $132 billion US, said Sheila Smith, an expert in Japan Studies at the Council on Foreign Relations, a U.S. think tank.
URL: http://www.cbc.ca/news/business/story/2011/03/13/asian-markets-mondya-tsunami.html
Saturday 12 March 2011
MasterCard joins Visa Europe in adopting Wireless Dynamics’ iPhone NFC device
By Sarah Clark
MasterCard has revealed that, like Visa Europe, it is working with Canadian firm Wireless Dynamics to bring its payments services to iPhone users.
In an article posted on the MasterCard blog, Mung-ki Woo, who recently joined MasterCard's from mobile network operator Orange as group executive for mobile, explains that:
In the blog post, Woo also explains his reasoning for making the switch from Orange to MasterCard:
Last month, Visa Europe announced that the first commercial deployment of its iPhone payments application, which lets customers make payments with their iPhone via the iCarte add-on, is set to go live in Turkey.
Visa, however, continues to work with DeviceFidelity to bring the company's In2Pay device to market, both as a microSD format add on and as a sleeve for iPhones. In December, In2Pay became the first NFC device to be certified by Visa for commercial deployments.
URL: http://www.nearfieldcommunicationsworld.com/2011/02/18/36077/mastercard-joins-visa-europe-in-adopting-wireless-dynamics-iphone-nfc-device/
MasterCard has revealed that, like Visa Europe, it is working with Canadian firm Wireless Dynamics to bring its payments services to iPhone users.
In an article posted on the MasterCard blog, Mung-ki Woo, who recently joined MasterCard's from mobile network operator Orange as group executive for mobile, explains that:
One thing I'm really pleased about is our collaboration with Wireless Dynamics. We're working together to introduce the world's first mobile Near Field Communications (NFC) MasterCard PayPass device for the iPhone.MasterCard is already testing Gemalto's N-Flex NFC device in Singapore, with DBS Bank, transportation card issuer EZ-Link and mobile network operator StarHub.
Essentially, we're putting our leading MasterCard PayPass technology inside Wireless Dynamics' 'iCarte' iPhone accessory so it can be used for secure contactless payment transactions. Because the iCarte is capable of NFC two-way communication and can interface with an iPhone's internal software, there are a host of opportunities for consumers wanting to take their phones to the next level. The iCarte can even read NFC smart posters, as well as download or upload electronic coupons, tickets or receipts.
This mobile payments solution will be initially piloted in Singapore with DBS Bank for MasterCard PayPass cardholders and with the FEVO Prepaid MasterCard PayPass card issued by EZ-Link Pte Ltd.
In the blog post, Woo also explains his reasoning for making the switch from Orange to MasterCard:
Mobile payments are going global and we're seeing what the phone can do and how it can change and enhance everyday life."This year is the year when we're all going to see tremendous momentum in this area," he added. "I truly believe MasterCard is the company to help make that a reality and I'm delighted to be leading that charge."
There's so much potential in the area of mobile payments. This is where the mobile phone truly becomes a device that can make purchases as well as a sophisticated tool for personal finance. Maybe so much so that it could one day even replace the traditional wallet.
I joined MasterCard just a few weeks ago, coming from France Telecom Orange Group. While I was there, I led the development of the 'Orange Money' mobile payment program. I came to MasterCard, though, because I know that at its core, MasterCard is a true payments company with a long, successful history of innovating and implementing new technologies all over the world.
Last month, Visa Europe announced that the first commercial deployment of its iPhone payments application, which lets customers make payments with their iPhone via the iCarte add-on, is set to go live in Turkey.
Visa, however, continues to work with DeviceFidelity to bring the company's In2Pay device to market, both as a microSD format add on and as a sleeve for iPhones. In December, In2Pay became the first NFC device to be certified by Visa for commercial deployments.
URL: http://www.nearfieldcommunicationsworld.com/2011/02/18/36077/mastercard-joins-visa-europe-in-adopting-wireless-dynamics-iphone-nfc-device/
What Is RFID Technology?
Undated -- Radio-frequency identification, or RFID, is a technology found in some credit cards that allows for contactless payments.
A small chip inside the card allows the information to be read from a card reader, allowing for fast and convenient shopping. A card just has to be close enough to a reader for the reader to get the information, and doesn't have to be swiped
The cards have different names depending on the company -MasterCard PayPass, Visa payWave, and American Express expresspay, to name a few.
"I do use it when the places have it, especially when there's five or six people in line and you're in a hurry and you're having to slide it and pin number and all that. You just hit the card and get your receipt and you're out the door," said Michael Conrad, who has an RFID-enabled card."I think that's just going to be the standard, or at least that's what the initial thought process was, that card companies were going to imbed these in these cards for the matter of convenience," said Craig Cotten, financial crimes detective with the Guilford County Sheriff's Office.
He said the technology is a potential problem, even though they haven't seen any issues with it here they're aware of.
"It's hard enough as it is now trying to back trace and finding a common denominator where credit cards are being compromised. This would just throw a whole other wrench in that process," said Cotten.
Security Expert Walt Augustinowicz hit the streets with an off-the-shelf card reader he bought online for less than $100 and a computer to show how he could obtain information from RFID cards through people's pockets.
"You have a SunTrust card in there and that's your account number and expiration date," he said to one person."You have a Chase card. Here's the expiration date and your number," he said to another.
Credit card companies said they do have measures in place to protect their contactless cards.
The following are some of the examples of security measures Visa provided:
- Visa payWave cards use advanced cryptographic security where every transaction includes a unique dynamic code, which changes with each transaction.
- Visa payWave cards do not transmit the cardholder's name during a transaction, providing greater privacy than even traditional card payments. Intercepting a Visa payWave transaction results in less sensitive information than when handing a card over to a clerk. Neither the cardholder name nor the three-digit security code on the back of the card are available when the card is read via a contactless reader.
-To protect against fraudulent eCommerce or telephone transactions, merchants use secondary security measures such as asking for the three-digit code imprinted on the back of the card, verifying the billing address associated with account, or an extra layer of password protection such as Verified by Visa. None of this information can be read electronically from the card.
A statement from American Express said expresspay will not reveal identifiable information such as name, address, or other types of information typically required for identity theft, or card account number. Expresspay uses encrypted and unique codes for each transaction. A spokesperson said their card won't reveal an account number on a card reader, but rather an alias number.
A statement from MasterCard said someone wouldn't be able to do anything with an account number and expiration date that might be captured from a card reader. They issued the following points:
- It is difficult to make an Internet or phone purchase, since the merchant should ask for CVC (card verification code) 2 data - the 3 digit code on the back, or zip code verification - to complete any purchase.
URL: http://www.digtriad.com/news/most_popular/article.aspx?storyid=163929&provider=top
- You can't create a phony mag stripe card without CVC1 data in the mag. stripe
- You can't create a phony PayPass card without the key that is used to create a dynamic CVC3, which is held securely in the PayPass chipURL: http://www.digtriad.com/news/most_popular/article.aspx?storyid=163929&provider=top
Citizens to debut credit card monitoring
A Royal Bank of Scotland subsidiary is offering small businesses a MasterCard service that allows companies to monitor credit card usage at the point of purchase.
Citizens Financial Group, which operates a single Citizens Bank branch in Fairfield County at RBS’ big Stamford facility, said it is the first financial institution in the country to offer the technology to businesses. It plans to make it available beginning in the second quarter.
In addition to monitoring purchases, companies can set spending controls using the technology, including dollar limits, where they can make purchases and product categories allowed or barred. The system allows also for the creation of limited-use, virtual card numbers so that a worker does not learn the actual account number.
Customers can monitor accounts using an online dashboard and can also receive alerts via text messages and email if account limits are breached.
RBS also has a large credit card operation in Bridgeport that employs more than 600 people. Steve Wooters, the head of Citizens’ U.S. commercial cards services, said the company has yet to finalize fee terms when the card is launched in the second quarter.
“This is something our small-business customers have been telling us they need,” Wooters said.
MasterCard Inc. already offers its inControl service to its largest corporate clients and in January announced it was a major factor in its securing a major credit card contract with SunTrust Banks Inc., which previously had issued credit cards administered by Visa.
The Purchase, N.Y.-based company also offers the technology to families as a way to corral any out-of-control spending tendencies by teens and college students carrying plastic; Wooters said Citizens may follow suit on that front for its own customers.
MasterCard cites a 2008 study by Dove Consulting that indicates small businesses use credit and debit cards for fewer than 10 percent of payments, largely due to a reluctance to let employees have cards for business purchases, preferring to instead issue checks or reimburse employees for charges they rack up on their own cards.
MasterCard said its own previous research suggests that fully half of small businesses would issue credit cards to employees if able to fully control purchases – it is about to find out how accurate a forecast that is.
“This inaugural implementation of MasterCard inControl for small-business cardholders will enable business owners to have greater control and visibility over their card spending than ever before,” Michael Fiore, group head of inControl at MasterCard, said in a statement. “The innovative tools and services offered through the MasterCard inControl platform not only empower our business cardholders to feel more confident and in control over their employees’ spending, but help our card issuers drive customer loyalty and differentiate themselves from the competition.”
URL: http://westfaironline.com/2011/11510-citizens-to-debut-credit-card-monitoring/
Citizens Financial Group, which operates a single Citizens Bank branch in Fairfield County at RBS’ big Stamford facility, said it is the first financial institution in the country to offer the technology to businesses. It plans to make it available beginning in the second quarter.
In addition to monitoring purchases, companies can set spending controls using the technology, including dollar limits, where they can make purchases and product categories allowed or barred. The system allows also for the creation of limited-use, virtual card numbers so that a worker does not learn the actual account number.
Customers can monitor accounts using an online dashboard and can also receive alerts via text messages and email if account limits are breached.
RBS also has a large credit card operation in Bridgeport that employs more than 600 people. Steve Wooters, the head of Citizens’ U.S. commercial cards services, said the company has yet to finalize fee terms when the card is launched in the second quarter.
“This is something our small-business customers have been telling us they need,” Wooters said.
MasterCard Inc. already offers its inControl service to its largest corporate clients and in January announced it was a major factor in its securing a major credit card contract with SunTrust Banks Inc., which previously had issued credit cards administered by Visa.
The Purchase, N.Y.-based company also offers the technology to families as a way to corral any out-of-control spending tendencies by teens and college students carrying plastic; Wooters said Citizens may follow suit on that front for its own customers.
MasterCard cites a 2008 study by Dove Consulting that indicates small businesses use credit and debit cards for fewer than 10 percent of payments, largely due to a reluctance to let employees have cards for business purchases, preferring to instead issue checks or reimburse employees for charges they rack up on their own cards.
MasterCard said its own previous research suggests that fully half of small businesses would issue credit cards to employees if able to fully control purchases – it is about to find out how accurate a forecast that is.
“This inaugural implementation of MasterCard inControl for small-business cardholders will enable business owners to have greater control and visibility over their card spending than ever before,” Michael Fiore, group head of inControl at MasterCard, said in a statement. “The innovative tools and services offered through the MasterCard inControl platform not only empower our business cardholders to feel more confident and in control over their employees’ spending, but help our card issuers drive customer loyalty and differentiate themselves from the competition.”
URL: http://westfaironline.com/2011/11510-citizens-to-debut-credit-card-monitoring/
Wednesday 9 March 2011
IBQ launches online security for credit cards
DOHA: IBQ recently announced the launch of its new online security service, the “IBQ Card Secure”, in association with Verified by Visa and MasterCard SecureCode online authentication systems. The IBQ Card Secure service is designed to offer customers further protection while shopping online with IBQ credit cards.
The IBQ Card Secure service is free of charge to all IBQ credit cardholders and registration to the service is available through a dedicated portal on the bank’s website. Once registered, customers will be able to verify all their online transactions using a password when shopping online at participating merchants.
To mark the launch of the new service, IBQ is also running a special promotion for its Visa credit cardholders, IBQ Visa Platinum and IBQ Visa Infinite, who register for the service before April 10, 2011. Visa credit cardholders will be eligible to purchase a range of iPads at exclusive prices. The promotion which is offered in association with Verified by Visa and the online store www.aido.com, provides free shipping and delivery to any address in Qatar in two working days.
Philip King, Head of Retail Banking at IBQ said: “It is no surprise that there is enormous interest in e-commerce as more traditional retailers are able to offer services online. In addition, the infrastructure required to facilitate online and mobile commerce are becoming a reality as high-speed broadband and mobile technologies become more and more integrated into society.”
“Online spending is increasing exponentially and it is only natural for us at IBQ to look at the best online shopping service experience for our customers. Our partnership with Verified by Visa and MasterCard SecureCode provides our customers with further safety and fraud protection when shopping online. IBQ cards currently offer the highest rewards in the market place making them the credit cards of choice in Qatar.” The Peninsula
URL: http://www.thepeninsulaqatar.com/qatar/145278-ibq-launches-online-security-for-credit-cards.html
The IBQ Card Secure service is free of charge to all IBQ credit cardholders and registration to the service is available through a dedicated portal on the bank’s website. Once registered, customers will be able to verify all their online transactions using a password when shopping online at participating merchants.
To mark the launch of the new service, IBQ is also running a special promotion for its Visa credit cardholders, IBQ Visa Platinum and IBQ Visa Infinite, who register for the service before April 10, 2011. Visa credit cardholders will be eligible to purchase a range of iPads at exclusive prices. The promotion which is offered in association with Verified by Visa and the online store www.aido.com, provides free shipping and delivery to any address in Qatar in two working days.
Philip King, Head of Retail Banking at IBQ said: “It is no surprise that there is enormous interest in e-commerce as more traditional retailers are able to offer services online. In addition, the infrastructure required to facilitate online and mobile commerce are becoming a reality as high-speed broadband and mobile technologies become more and more integrated into society.”
“Online spending is increasing exponentially and it is only natural for us at IBQ to look at the best online shopping service experience for our customers. Our partnership with Verified by Visa and MasterCard SecureCode provides our customers with further safety and fraud protection when shopping online. IBQ cards currently offer the highest rewards in the market place making them the credit cards of choice in Qatar.” The Peninsula
URL: http://www.thepeninsulaqatar.com/qatar/145278-ibq-launches-online-security-for-credit-cards.html
Visa, MasterCard no longer viable for utility and property tax payments
By: Karl Yu
As expected, City Hall will no longer be accepting Visa and MasterCard for utility bill and property tax payments.
Cheque, money order, online banking and debit cards are now the only accepted payment methods of payment for those types of bills.
According to Grand Forks’ Chief Financial Officer Cecile Arnott, however, the city will still be accepting credit cards for such items as campground fees.
In late-December the city announced that it would cease to accept the credit cards in early-2011 and said that it would represent a savings of $30,000.
“We’ve done a little bit of legwork and found that a lot of municipalities do not accept (credit cards) and it is going to be a hardship, perhaps, for some people but we will be offering alternatives,” Arnott said at the time.
“We feel that the $30,000 would be much better spent in an information system program, whereby we’re not doing the ups and downs that we do currently with the two systems.”
URL: http://www.bclocalnews.com/kootenay_rockies/grandforksgazette/news/117654273.html
As expected, City Hall will no longer be accepting Visa and MasterCard for utility bill and property tax payments.
Cheque, money order, online banking and debit cards are now the only accepted payment methods of payment for those types of bills.
According to Grand Forks’ Chief Financial Officer Cecile Arnott, however, the city will still be accepting credit cards for such items as campground fees.
In late-December the city announced that it would cease to accept the credit cards in early-2011 and said that it would represent a savings of $30,000.
“We’ve done a little bit of legwork and found that a lot of municipalities do not accept (credit cards) and it is going to be a hardship, perhaps, for some people but we will be offering alternatives,” Arnott said at the time.
“We feel that the $30,000 would be much better spent in an information system program, whereby we’re not doing the ups and downs that we do currently with the two systems.”
URL: http://www.bclocalnews.com/kootenay_rockies/grandforksgazette/news/117654273.html
Debit Fees Challenged. Reprieve for Visa, Mastercard and Banks?
By Avi Salzman
Senator Jon Tester (D-MT) plans to introduce a bill this week asking the Federal Reserve to delay implementation of new limits on debit card fees for two years, which could benefit banks and card processors like Visa (V) and MasterCard (MA).The limits, part of the Durbin amendment to the Dodd-Frank financial regulation bill, are meant to give merchants more clout. But the banking industry and the card processors have argued that the limits on fees would hinder their ability to recoup costs associated with debit cards and end up hurting consumers. Under rules proposed by the Fed last year, fees would drop to 12 cents per transaction from an average of 44 cents.
The Tester bill is a blessing and a curse, says MF Global research analyst Jaret Seiberg, because it may simply delay the inevitable. Opponents have been lobbying for Congress to force the Fed to raise the fees banks can charge, or otherwise soften the rules. But the opponents received another god piece of news: Comptroller of the Currency John Wash, a Treasury department official who oversees the banking system, said the rules threaten the “safety and soundness” of the banking system.
With opposition mounting, Visa and MasterCard, as well as banks that issue the cards, could benefit. Seiberg thinks that the legislative process is now working in favor of the rule’s opponents.
“Our view is that the most likely outcome is that the Federal Reserve sweetens the pot by adding additional costs to its calculation. We have previously discussed our view that the most likely targets are the issuer-paid network fee and a charge for fraud costs… In short, there is even more room for improvement here than it appeared even a few weeks ago. Whether the Fed uses this cover to act will be up the governors and Chairman Bernanke and whether they see making changes as politically preferable to keeping the proposal as is.”
URL: http://blogs.barrons.com/stockstowatchtoday/2011/03/09/debit-fees-challenged-reprieve-for-visa-mastercard-and-banks/
Monday 7 March 2011
MOVES-Bank of America, Barclays, RBC Capital
(Reuters) - The following financial services industry appointments were announced on Monday. To inform us of other job changes, email to moves@thomsonreuters.com.
BANK OF AMERICA CORP
The largest U.S. lender by assets on Monday said it named Stuart Hendel, the global head of the prime brokerage business at rival Swiss bank UBS AG , as head of its own global prime brokerage division.
NOMURA
The Japanese brokerage named Junko Nakagawa as its first female chief financial officer as it reshuffles its management to better compete globally.
GULF FINANCE HOUSE
The Bahrain-based company's Chief Executive Ted Pretty, who cut costs and rolled over debt but failed to kick start revenues, has left the cash-strapped firm, sources familiar with the matter said.
RBC CAPITAL MARKETS
The investment banking arm of Royal Bank of Canada named Christophe Duval-Kieffer as a managing director and global inflation-linked strategist. He joins from Standard Chartered Bank where he was head of quantitative strategies and developed markets' rates research.
MERRILL LYNCH WEALTH MANAGEMENT
The wealth management division of Bank of America Corp appointed John Flavin and Keith Ryan as financial advisors based in Dublin. Flavin joins from Bank of Ireland Private Banking where he was a senior manager advising Irish private clients. Before joining Merrill Lynch Wealth Management, Ryan worked at Covestone Asset Management as a director.
BARCLAYS CORPORATE
The corporate banking arm of Barclays Bank appointed Graham Buckland as head of London industry teams. He is moving from Barclays Capital, where he was most recently managing director, and deputy head of UK corporate finance.
AXA INVESTMENT MANAGERS
The asset management division of AXA Group appointed Matt Christensen as head of responsible investment, effective May 2. Prior to joining AXA IM, Christensen has acted as executive director of Eurosif, the leading European responsible investment think tank.
AVIVA INVESTORS
The asset management arm of Aviva Plc appointed Trevor Green to its UK equities desk. Green joins from Henderson Global Investors, where he was most recently co-manager of the Henderson Managed Distribution Fund.
BTIG
The financial services firm specializing in institutional trading and related brokerage services said it appointed Joseph Curro and Robert Hymans as global co-heads of event driven strategies.
MF GLOBAL HOLDINGS
The brokerage appointed Henri Steenkamp to the post of chief financial officer. It said Bradley Abelow, the firm's current global chief operating officer will assume the additional role of president.
MESIROW FINANCIAL CONSULTING LLC
The diversified financial services firm said Thomas Borgers has joined the firm as a managing director. (Compiled by Divya Sharma and NR Sethuraman in Bangalore)
URL: http://www.reuters.com/article/2011/03/07/financial-moves-idUSL3E7E70Y720110307?pageNumber=1
BANK OF AMERICA CORP
The largest U.S. lender by assets on Monday said it named Stuart Hendel, the global head of the prime brokerage business at rival Swiss bank UBS AG , as head of its own global prime brokerage division.
NOMURA
The Japanese brokerage named Junko Nakagawa as its first female chief financial officer as it reshuffles its management to better compete globally.
GULF FINANCE HOUSE
The Bahrain-based company's Chief Executive Ted Pretty, who cut costs and rolled over debt but failed to kick start revenues, has left the cash-strapped firm, sources familiar with the matter said.
RBC CAPITAL MARKETS
The investment banking arm of Royal Bank of Canada named Christophe Duval-Kieffer as a managing director and global inflation-linked strategist. He joins from Standard Chartered Bank where he was head of quantitative strategies and developed markets' rates research.
MERRILL LYNCH WEALTH MANAGEMENT
The wealth management division of Bank of America Corp appointed John Flavin and Keith Ryan as financial advisors based in Dublin. Flavin joins from Bank of Ireland Private Banking where he was a senior manager advising Irish private clients. Before joining Merrill Lynch Wealth Management, Ryan worked at Covestone Asset Management as a director.
BARCLAYS CORPORATE
The corporate banking arm of Barclays Bank appointed Graham Buckland as head of London industry teams. He is moving from Barclays Capital, where he was most recently managing director, and deputy head of UK corporate finance.
AXA INVESTMENT MANAGERS
The asset management division of AXA Group appointed Matt Christensen as head of responsible investment, effective May 2. Prior to joining AXA IM, Christensen has acted as executive director of Eurosif, the leading European responsible investment think tank.
AVIVA INVESTORS
The asset management arm of Aviva Plc appointed Trevor Green to its UK equities desk. Green joins from Henderson Global Investors, where he was most recently co-manager of the Henderson Managed Distribution Fund.
BTIG
The financial services firm specializing in institutional trading and related brokerage services said it appointed Joseph Curro and Robert Hymans as global co-heads of event driven strategies.
MF GLOBAL HOLDINGS
The brokerage appointed Henri Steenkamp to the post of chief financial officer. It said Bradley Abelow, the firm's current global chief operating officer will assume the additional role of president.
MESIROW FINANCIAL CONSULTING LLC
The diversified financial services firm said Thomas Borgers has joined the firm as a managing director. (Compiled by Divya Sharma and NR Sethuraman in Bangalore)
URL: http://www.reuters.com/article/2011/03/07/financial-moves-idUSL3E7E70Y720110307?pageNumber=1
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