Interchange has Hearing...But Is Visa/MC even Listening?

In one ear and out the other?

It will be interesting to see what develops out of yesterday's hearing. On the one side the merchants are livid about the fees they pay, on the other side, people don't want the government to step in and essentially "price fix" an industry as that lays a bad precedent.

So what to do? Well, if you're an Internet Retailer, the solution is simple! You can lower your Interchange by 100 Basis Points by switching to HomeATM's patented Web PIN Debit platform. No Government Price Fixing Involved!!!

Oh, and did I mention PIN Debit is about 10 times more secure, has no chargebacks and it's consumers preferred method of payment? I did. Here are some of the press releases regarding this issue from the National Retail Federation, the National Association of Convenience Stores and others...

Merchants Welcome Judiciary Committee Hearing on Interchange Fees

In a press release, the Merchants Payments Coalition says that "merchants welcome encouragement from Democrats and Republicans alike in support of HR 5546, the Credit Card Fair Fee Act, bi-partisan legislation that would end credit card industry price fixing, which is the subject of a hearing today by the House Judiciary Committee Antitrust Task Force."

NACS Comments on Interchange Fees at Yesterday's Hearing

The National Association of Convenience Stores has issued a press release on today's House Judiciary Committee hearing on interchange fees. Tom Robinson, president of San Jose, California-based Robinson Oil Corporation testified today at the hearing...

NRF Says Interchange Fees Cost Families Over $400 This Year

The National Retail Federation in a press release urged the House Judiciary Committee to support antitrust legislation that would require Visa and MasterCard to negotiate with merchants over credit card processing fees. The NRF said "a hidden fee charged by the two card giants is projected to cost the average U.S. family more than $400 this year."

MasterCard Comments at Today's Interchange Fee Hearing

In a press release, MasterCard commented that "merchants do not need price control legislation or an antitrust exemption to lower costs for payment card acceptance, as they already have real opportunities to negotiate fees." Joshua Peirez, Chief Payment System Integrity Officer at MasterCard Worldwide, gave his testimony at the hearing..

House Judiciary Committee Interchange Hearing Testimony

The testimony of several of the witnesses at today's heading on interchange fees by the US House Judiciary Committee is now available online in PDF format. Included is testimony from: Thomas L. Robinson (Vice President of Regulations, National Association of Convenience Stores), Joshua R. Floum (General Counsel and Corporate Sec., Visa Inc.), Steve Cannon (Chairman, Constantine Cannon, LLP), Joshua Peirez (Chief Payment System Integrity Officer, MasterCard Worldwide), John Blum (Vice President of Operations, Chartway FCU), and Edward Mierzwinski (Consumer Program Director U.S. PIRG).

Electronic Payments Coalition Comments on Interchange Hearing

In a press release, the Electronic Payments Coalition commented on today's hearing before the House Judiciary Committee Antitrust Task Force on H.R. 5546: "The Electronic Payments Coalition is pleased that the House Judiciary Committee Antitrust Task Force is holding a hearing today to take a closer look at H.R. 5546, the "Credit Card Fair Fee Act." Members of the Task Force will be given an opportunity to learn quite explicitly that this ill-conceived legislation is nothing short of price controls -- action that would result in less competition, fewer consumer choices, and reduced access to affordable credit and debit options."

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Posted by John B. Frank Friday, May 16, 2008 0 comments

UK Payments Data Q1 from APACS



APACS has published its latest quarterly Statistical Release icon_PDF_small.gif covering the first quarter of 2008.

"In the first quarter of 2008 there were 1.8 billion plastic card purchases made in the UK totalling £91.1 billion. The number of purchases was 8.9% higher than in the first quarter of 2007, and spending was 8.9% higher. Debit cards accounted for 72.8% of all plastic card purchases compared with 71.1% in the first quarter of 2007."

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Posted by John B. Frank 0 comments

Introducing Pariter Solutions...Country's Largest ACH Processor

To give you an idea how quickly the landscape of the payments industry can change, the biggest ACH Processor in the nation didn't exist until just now.

Introducing Pariter Solutions...
our nation's biggest ACH Processor...

Wells Fargo and Bank of America said Thursday they are forming a joint venture to operate a single, combined automated clearinghouse (ACH) platform for both companies and their clients. Financial terms were not disclosed.

The joint venture, Pariter Solutions LLC, will be the country's largest processor of ACH payments, the banking giants said.

Through joint venture, the two companies will combine their strengths in advanced processing technology and high payment volumes to create a single, more efficient platform. It will also facilitate greater investment in innovation to deliver added value to clients through increased speed, broader product capability and capacity for higher volumes of cross-border payments.

An ACH payment is a mechanism for electronic funds transfers such as direct deposit, direct payment, business-to-business payments, e-checks, e-commerce payments and tax payments. Annual electronic payment volume doubles every five years, according to NACHA, the Electronic Payments Association. In 2007, nearly 14 billion ACH payments were made.

Payment processing operations are expected to begin in late 2009. The company will have offices in San Francisco and Charlotte.

Ownership of Pariter Solutions will initially reside with Wells Fargo and BofA. Stephanie Sturgis-Griffin, a senior vice president at Wells Fargo, will be chief executive of Pariter Solutions, and Walter Taylor, a senior vice president at Bank of America, will be chief operating officer.

The company's board will consist of the CEO and one executive representative from Wells Fargo and one from Bank of America. Shares of Wells Fargo rose a penny to $28.91, wile Bank of America shares fell 45 cents $36.35.

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Posted by John B. Frank Thursday, May 15, 2008 0 comments

UK's Payment Council Unveils National Payments Plan


The UK's Payments Council has unveiled the first national plan for UK payments - calling it "a strategic framework for payments innovation and change over the next decade."

The National Payments Plan icon_PDF_small.gif was developed after extensive consultation with the payments industry and users and includes statements of principle, specific actions and a number of focused reviews of key issues. The document covers current payment methods such as plastic cards, cash and cheques and also reviews the next wave of innovation in payments, fraud and security, and consumer education about payments.

The Payments Council have published the first national plan for UK payments, providing a strategic framework for payments innovation and change over the next decade. The National Payments Plan - Setting the strategic vision for UK payments also summarises the results of the public consultation which closed on 4th February 2008.

From their website:

Why a National Payments Plan?

In payments, unlike many other sectors, there may need to be co-operation between participants if users are to have full benefit of new developments. The Plan outlines those areas where collaboration can deliver such an outcome.

The Plan will be periodically revised and updated, and is intended to provide a framework for the development of payments in the UK over the next five to ten years. Co-operative action can be needed:
  • to introduce common standards so that business is made easier to transact;
  • to create a network between participants which maximises the reach of payment services; and
  • to address market inefficiencies.

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Posted by John B. Frank Wednesday, May 14, 2008 0 comments

HomeATM Headline Payments News





This list was compiled by Glenbrooks Payments News. Clicking on any of the links will redirect you to Payments News website.


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Posted by John B. Frank 0 comments

Disruption in the Payments World





New Celent report focuses on disruptive influences to payments arena.

The consumer payments world is in transition. The current euphoric era for many issuers will be disrupted and quite possibly eliminated over the next three years, according to a new report, Disruption in the Payments World from Celent, a Boston-based financial research and consulting firm.

Key findings of the report include:
  • Pressures on interchange are mounting, and it's becoming increasingly questionable whether or not issuers will be able to reap the profits of a higher rate.

  • Alternative payment options that pose a real threat to issuers and credit are emerging. While the barriers to entry have always held strong, there are rifts that could give way to new initiatives. Nontraditional players like Wal-Mart or Google could eat into market share, and the growth of a new network that rivals MasterCard or Visa is almost certain.

  • A new spin on debit cards, decoupled debit, has the potential to shake things up among the issuing community, giving credit providers the chance to capture greater wallet share but threatening profit margins for debit issuers.

  • The evidence is mounting against the issuing business, and lawsuits will continue to add pressure to act. Celent believes that free rewards programs will be the first real casualty as issuers are forced to re-evaluate their card portfolios and justify high-cost programs.

  • In the long run, the card industry will be forced to return to a fee-based system that aligns the cost to the beneficiary. This will likely persuade consumers to seek their free lunch elsewhere, and the door to other payment methods will be opened even more.

  • Credit-only or credit-centric issuers are expected to diversify their payments mix (a necessity during this economic time and consumer trend to debit) and focus on building their debit payment options by way of decoupled debit programs.

    For more information, please find the press release below or at: http://www.celent.com/PressReleases/20080507/Disruption.asp

    HomeATM Blog readers can access the full report at:
    www.celent.com/reports/PaymentDisruption/PaymentDisruption.pdf .

Source: Company press release.

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Posted by John B. Frank Friday, May 9, 2008 0 comments

High Rankings Execs Get Whaled On...

Editors Note: Whaling is the term used when "phishing" attacks are aimed at the "big fish." (i.e. senior ranking executives) Once harpooned, they unwittingly download and install software which allows remote control of the computer. Keystrokes, financial data, screen scrapes (creating a .jpeg picture or screen capturing) passwords, etc. can then all be captured.

I find it interesting that the success rate of these types of attacks is higher than when attacking the general public. In this case, phony subpoenas were used as the lure. The story mentions that unlike the phony, spelling mistake laden emails that gave "phishing" its name, this new trend involves the use of more professionally crafted and believable storyline/designs. However, one would think that high level executives would have "caught" at least one of two blatant "giveaways," Sending, and thus receiving a subpoena via email would be one, the other was the email itself directing them to a non-government site. Common sense is an important commodity, never underestimate its power.

On the subject of common sense. If a floating PIN Pad was designed to prevent "keylogging", what aspect of the design would prevent "screen scraping? Seems to me that if a hacker had remote control of the computer, they would have remote control of the "Prt Sc" button and be able to print the screen everytime you moused over the floating PIN Pad and clicked it.

Here's the article:

SAN FRANCISCO (AFP) - US federal court officials have warned that hackers are emailing phony subpoenas embedded with malicious software to high-ranking executives to steal valuable corporate information.

Thousands of powerful US executives have received the bogus emails that contain links which, if clicked on, install software letting hackers take control of computers and swipe passwords or other sensitive data. Internet security insiders refer to the attacks as "whaling" because they use social-engineering trickery involved in "phishing" but target individual "big phish" instead of casting nets in a sea of Internet users.

"The success rate was incredibly high," Websense Security Labs manager Stephan Chenette told AFP. "Most likely due to the nature of the content and the real data, the emails had their exact names and legal language in there that made it seem like a serious subpoena."

The emails are crafted with the seal of the US federal court in San Diego, California, and are addressed to executives using their names, addresses and other individual details.

Clicking on a link to see a "subpoena" displays a realistic looking document and stealthily installs malicious computer code in the reader's computer. "When the recipient tries to view the document, they unwittingly download and install software that secretly records keystrokes and sends the data to a remote computer over the Internet," court officials said in their warning.

"This enables criminals to capture passwords and other personal or financial information and starts software that allows the computer to be controlled remotely."

Subpoenas in the United States are usually served in person to assure judges that the orders from courts have been properly received by those named. US investigators believe the hackers are not familiar with the court system because the website executives are directed to use a "uscourts.com" domain name while actual court online addresses typically end in ".gov." Aspects of writing in the messages appear British, according to police.

Among the targets have been executives at banking giant CitiBank, Time Warner-owned America OnLine and Internet auction house eBay, according to the courts. There is a trend toward more convincing, targeted "whaling" attacks, according to Chenette, who says to be wary of supposed court or tax department emails.

Trick emails with giveaway spelling errors of the kind that gave "phishing" its name are giving way to well-crafted, believable messages honed using confidential information about targets. "The future of spam is to become more evasive and successful," Chenette said. "It is always a cat and mouse game ... a very real game."

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Posted by John B. Frank Tuesday, May 6, 2008 0 comments

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