Debit Card Growth/Preference is Global

Last Wednesday I blogged about how Debit Dominates China's Bank Card Market accounting for a whopping 93.4 percent of the market total! This week, APACS announced that in the U.K. debit cards continue to be consumers first choice in 2007 accounting for 72% of of plastic card transactions in the U.K. market.

Yesterday, I talked about Canada's shift to Chip and PIN, and a couple of weeks ago, I mentioned that even Malta is jumping on the Chip and PIN bandwagon. Thus, it is becoming empirically evident that debit card growth will continue at breakneck spead, not only here in the U.S., but everywhere across the globe. That's good news for HomeATM and "every organization" involved in our quest to bring PIN Debit to the Internet.

APACS has announced that £354 billion was spent on plastic cards in the UK in 2007 - a 10 percent increase over 2006 - and that spending of debit cards accounted for 62 per cent of total plastic card spend and 72 percent of total plastic card transactions. Debit cards were used to make 4.9 billion purchases in the UK while credit and charge cards were used to make 1.9 billion purchases. Credit card credit outstanding in the UK fell by £1.1 billion during 2007.APACS has announced that £354 billion was spent on plastic cards in the UK in 2007 - a 10 percent increase over 2006 - and that spending of debit cards accounted for 62 per cent of total plastic card spend and 72 percent of total plastic card transactions. Debit cards were used to make 4.9 billion purchases in the UK while credit and charge cards were used to make 1.9 billion purchases. Credit card credit outstanding in the UK fell by £1.1 billion during 2007.

Here's APAC's Press Release:

In the U.K. Debit cards continued to be consumers’ first choice during 2007
2007 plastic card data show:· £354 billion spent on plastic cards in the UK in 2007.
Debit card spend accounted for 62 per cent of total plastic card spend

APACS’ latest publication The Way We Pay 2008: UK Plastic Cards shows that in 2007, for the 7th year running, debit cards continued to dominate consumer card spending, accounting for 62 per cent of the total plastic card spending during the year. UK plastic card payments to UK merchants, retailers and service providers totalled £354 billion in 2007 – over three times the amount of ten years ago (£103 billion in 1997) and a 10 per cent increase on the 2006 figure (£321billion).

Sandra Quinn, director of communications at APACS, said: “Over the past 3 years we’ve seen a pattern emerge: debit cards have increasingly become consumers’ first choice over other options, such as cash, cheques and credit cards. And whilst these figures are for last year, surprisingly despite lots of speculation, all the early indications from our figures so far for this year show that there has been no sudden spike in credit card spending. In fact, credit card spending up until the end of May increased by only 1.2% – below the rate of inflation, and the average value of a credit card purchase in a supermarket has actually fallen by £1 to £34.33(4).

"Interestingly the report also shows that last year debit cards even gained ground in areas where credit cards have traditionally had a firm hold – particularly on the internet. We would, however, continue to remind customers that because of the additional consumer protection benefits credit cards provide, you may find a credit card to be a more sensible choice online.” The £354 billion spent on plastic cards during 2007 equated to 31% of total consumer spending in the UK, with the remaining £771 billion made up of cash, automated payments and cheques.

Debit cards were used to make 4.9 billion purchases in the UK, and by 2017 it is projected that there will be around nine billion debit card payments. Over the last decade debit card spending has increased five fold from £45 billion in 1997. This upward trend is expected to continue, by 2010 personal spending by debit card is expected to overtake personal spending by cash, and by 2017 it’s expected to reach £469 billion.

During 2007 credit and charge cards were used to make 1.9 billion purchases in the UK to a value of £133 billion – an increase of 6% per cent on 2006 figures. This rise in credit card spending did not lead to any increase in borrowing as the amount of credit card credit outstanding fell by £1.1 billion during 2007

For information on how to order a copy of The Way We Pay 2008: UK Plastic Cards and details of other APACS publications available to purchase, please visit www.apacs.org.uk/publications.html

Related articles from the HomeATM PIN Debit Blog

• Canada Going the Way of Chip and PIN


• Revisting Gartner's Report on Consumers PIN Debit Preference...


• Study: Use of Debit, ATM Cards on the Rise


• Interchange PAIN Can Be "A"lleviated with PIN-terchange


• Speculation on Microsoft Internet Payment Platform


• Debit Card Use Continues to Grow


• It's PIN...It's Smart...It's Embedded into the Future


• Latest Malta-Pull...PIN Replacing Signature Debit
Other Related Articles:


• Overseas Credit Card Fraud Doubles


• Virtual currency threatens stability of Chinese currency

Canada Going the Way of Chip and PIN

To combat fraud and encourage more consumers to shop online with more confidence, Visa, MasterCard and Canadian banks are upgrading more than 60 million credit and debit cards by adding a 13-millimetre square chip. While the magnetic stripe on the back of the card will remain, the real power of the card rests with the chip, a self-contained processor programmed with account information and an "encrypted key" which, with a PIN, secures the transaction.

It's considered to be virtually unhackable, state-of-the-art security. Instead of signing for a transaction, card holders enter a four to six digit PIN, which the card and your issuing bank confirm electronically. These so-called smart cards account for 70 per cent of cards issued in Europe where they have slashed fraud rates by up to 80 per cent.

No plan is in place for the 300 million plus American Visa and MasterCard holders to get the upgrade yet, says Oliver Manahan vice president advanced payments MasterCard Canada, and that could be an issue for the U.S. "We know fraud is like a balloon, you squeeze in one place and it bulges in another," says Mr. Manahan, noting putting more security features on cards physically not only drives frauds to other jurisdictions but also to other mediums — such as online — so a concerted approach is usually preferred.

Since Canadians are the highest per-capita users of credit cards and the second highest per capita users of debit cards, the rollout was an easy decision, says Mike Bradley Visa Canada head of regional products.

The chip is the latest to have an impact on how Canadians shop and manage their accounts — and a step closer to a cashless society. The most recent was the introduction a tap-and-go technology that allows contactless payments for items up to $25 on a debit basis — such as coffee, magazines and snacks. Currently deployed on credit cards, the radio frequency identification (RFID) tag, which triggers the transaction, is also being embedded in cellphones.

The introduction of the chip into debit and credit cards aims to loosen Canadians' attitudes to credit cards and drive us to use them more online and perhaps get duplicates for family members. MasterCard, for example, is testing the smart card's ability to determine who and how a card is used by offering a combination of prevention and alert features. "If you kids are at college, for example, you could set a limit so your daughter couldn't buy pizza for the dorm at 3 a.m.," said Mike Manchisi, MasterCard group executive for strategic account management. "You'd also get an SMS text message on your mobile alerting you if she went over the limit." The parent, as the account "administrator," could decline or approve the transaction and the idea is still in the prototype stage, say Manchisi.

Card makers and banks are also targeting online commerce.

A study by eMarketing for Yahoo! and MSN found that while 77 per cent of Canadian spent an average of $454 online over a six-month period in 2007, those who do not shop online cited concerns about credit card fraud as one of their top three reasons.

Even those who do shop online want better security," says Bradley.

Mr. Manahan says to further cut fraud around what the industry calls "card not present" transactions, British consumers are also being introduced to a $7 reader that plugs into a computer and can be "swiped" during an online transaction. "It then generates a one-time-only PIN or password, which validates the transaction," he says. "The advantage is, if it's a fraudulent site, they may have got the card number but they don't have another seable PIN."

While it'll be some time before the reader makes its way across the Atlantic, the chip card technology is currently undergoing trials in Kitchener-Waterloo. The first of the credit and debit cards will likely be issued some time later this year as customers' existing cards expire, says Mr. Manahan. The transition will likely take up to three years since retailers also have to upgrade their point-of-sale terminals — an issue within itself. Retailers generally welcome the cards because of their better security features, says Peter Woolford, vice-president policy development & research of the Retail Council of Canada, but there are concerns since there are more than 620,000 locations, many with multiple check out counters. "The new readers are about twice as expensive as the current ones," says Woolford. "For small retailers who lease the equipment it's no big deal but for the big retailers who buy it's a sizeable investment. Also the larger retailers have to change over all their system software." Some retailers are grumbling, he says, because if they don't have chip readers in place by Oct. 2010 they'll be financially responsible for any fraud. Conversely, ATMs and retailers have until 2012 and 2015 to be complaint for chip debit cards.

BY THE NUMBERS
620,000: Locations in Canada where credit cards are accepted
600: Institutions issuing Visa and MasterCard products
1970: Year magnetic stripe was introduced on credit cards.
$1.4 trillion: Value of transactions globally on 817 million MasterCard issued credit cards in 2006.
61.1 million: Number of Visa and MasterCards in Canada 2006.
258,581: Number of cards used fraudulently in 2006 resulting in a write off of $185.5 million
$215 billion: Dollar value of transactions by Visa and MasterCard in Canada in 2006.

Sources: Canadian Bankers Association, MasterCard

Bill Gates Last Day...A Look Back at the Beginning

Back in 1984, (not the George Orwelian one)right out of college I took a job selling PC's, although back then they were pretty much just word processors. A single disk drive, capable of running 640k diskettes would set you back about $4000. IBM was the King and MS-DOS was the new operating system of choice. My "Office" had "Windows", but not a computers.

My father had taken a job a year earlier with a company that bought Heathkit. It was a division of Zenith Electronics, and they called it Zenith Data Systems (ZDS) . ZDS was one of the original manufacturers of what was then known as "PC Clones." It was a tough industry to crack because IBM simply stated that if corporate America didn't buy IBM PC's they wouldn't be responsible for anything that went wrong with IBM Main Frames, System 36's etc.

My father quickly rose through the ranks and became President of Zenith Data Systems. Rather than fall victim to IBM's edict (and stronghold on the market) under my father's leadership, Zenith went the route of pitching their PC clones to the Federal Government. (What better way to sidestep IBM's stronghold than to go to an organization IBM couldn't control?) (Pictured below, on the right, is a Z-161 Portable Computer. Only 22 pounds I think it was, for the guy on the go!)

Anyway, ZDS won several significant and lucrative contracts with the Department of Defense (including the Army, Navy & Air Force,) the IRS, the Post Office, and landed both the CIA and the FBI with their high security "Tempest" program. Had they not been a "division" of Zenith Electronics, ZDS would have, (instead of Ron Canion's Compaq) become known as the fastest company to go from $0 to $1 Billion in annual sales.

Based on these large contracts (1 was for $242 million with the Air Force for their Z-100 line) Microsoft was brought in and became a strategic partner.

Throughout his tenure as President of ZDS, my father met with Bill Gates frequently. Microsoft and Zenith Data Systems worked very closely together for many years and my dad fondly recalls the experiences to this day. I remember several stories he shared regarding both Bill Gates and Bill's close friend, Steve Ballmer. My father tells me he formed great business relationships with both, but worked more closely, and therefore evenutally formed a closer bond with Steve Ballmer, Microsoft's current CEO.

Mr. Ballmer remains, while today is Bill Gates last day. Having said that, I thought I'd pay tribute to Bill Gates final day at Microsoft with the aforementioed story in this, the HomeATM Blog.

Here's the latest article I found with a "Bill Gates" Microsoft Google news search, the picture is from 1985, a period closer toward the time I first became familiar with the man, who today steps down...

Friday 27th June 2008 will go down in history as the day Bill Gates officially left behind his Microsoft day job.

As Bill wiped away the tears at the Redmond HQ, here's a look back at some magic Microsoft moments and mistakes...Can it really be 33 years ago that a 17 year old Bill Gates co-founded Microsoft with his friend Paul Allen? Can it really be true that, having literally changed the face of computing and becoming the world's richest man for many consecutive years, Gates has finally stepped down from the day to day business of running the company? The answer, of course, is yes on both counts.

Speaking before employees at the Microsoft headquarters within the magnificent campus in Redmond, Seattle, Gates is reported to have wiped away the tears as he spoke with great emotion about his feelings for the company."There won't be a day in my life when I won't be thinking about Microsoft, the great things that we're doing and wanting to help" Gates said.Naturally he got a standing ovation.

Equally naturally, the ever emotional and exuberant Steve Ballmer gave one of his famously animated speeches. The Microsoft CEO applauded 'Bill the leader' and admitted that "there's no way to say thanks to Bill."Of course, the truth is that Bill has billions of thanks in the bank. Indeed, he is standing down so as to be able to concentrate on his charitable work and in what could be a remake of Brewster's Millions he will do his very best to give away most of his fortune before he dies.What's more, Gates remains the majority individual shareholder at Microsoft as well as Chairman of the board. He has not exactly got on his horse and disappeared into the sunset here. In fact, he will be spending a day a week working with Craig Mundie and Ray Ozzie at Microsoft.

Oh...If you're interested, I recommend taking a look at this self-depracating and very humorous YouTube video highlighting Bill Gates last days at Microsoft.

Bill Gates' Last Days - CES 2008 (HQ/Sound Fixed)

Interchange PAIN Can Be "A"lleviated with PIN-terchange

NACS Takes on the "PAIN" of Interchange...

Editor's Note: Online Retailers can alleviate what the NACS refers to as "That PAIN" by simply eliminating the "A" in PAIN... converting the PAIN to "PIN" as PIN-terchange costs 50% less and is up to 10 times more secure!

In a press release, the National Association of Convenience Stores (NACS) says that "the nation’s 115,000-plus convenience stores will communicate their outrage over devastating credit card fees via pumptoppers that will educate consumers and Congress about the problem." NACS will be making "pumptoppers" available free of charge to retailers "communicating the industry’s fight against sky-high interchange rates."

NACS is urging retailers to put these pumptoppers in their promotional signage plans from August 1 to September 6, when Congress is in recess and members will be in their home districts.

Convenience stores sell an estimated 80 percent of the country’s gasoline, and the majority of stores (56 percent) are owned by one-store operators, as opposed to the less than 2 percent that are owned and operated by major oil companies. These stores are increasingly squeezed by low margins and escalating credit card fees; most are losing money when customers pay by credit card.

In 2007, credit card fees cost convenience stores $7.6 billion, more than double the convenience store industry’s profits of $3.4 billion. It has been much worse in 2008 as credit card fees have topped 10 cents per gallon, while the markup on a gallon of gas has averaged only 11 cents for the year so far. After factoring in all operating expenses, retailers lose money on every gallon of gas they sell when a consumer uses a credit card. Both the House (H.R. 5546) and Senate (S. 3086) have introduced bipartisan legislation, the Credit Card Fair Fee Act, to examine credit card fees, specifically the interchange rate, which is the largest component of the credit card fees that retailers pay every time they accept plastic.

Credit card interchange fees are a fixed fee and a percentage of each transaction that Visa and MasterCard and their member banks collect from retailers every time a credit or debit card is used. These fees average 1.8 percent in the United States, which has the highest interchange rate of any industrialized country. The U.S. interchange rate is approximately three times the rate in Europe and four times the rate in Australia.

“The credit card fees that retailers pay are outrageous,” said NACS President and CEO Hank Armour. “Congress needs to see the pain that credit card fees are causing in their home districts,” said Armour. “In Washington, the credit card companies have used their outrageous profits at the pump to fund a massive lobbying effort to prevent fixing the broken system. It is impossible to match their virtually unlimited resources, so we need to take the message straight to where this pain is occurring – at the gas pump,” said Armour.

The pumptoppers that NACS has developed have two messages: “Tell Congress you want to know how much this fill-up cost you in credit card fees” and “That pain you are experiencing in part is caused by secret credit card fees.” Both ads encourage motorists to go to the Web site www.unfaircreditcardfees.com to send a message to their elected leaders. The artwork is available in a variety of sizes and can be downloaded at
http://www.nacsonline.com/pumptoppers.

For retailers who are unable to print the pumptoppers themselves, NACS has arranged a significant discount for retailers who want to order them from signage company GSP at http://www.popmanager.com/ccfees.html.

“The Credit Card Fair Fee Act, a bipartisan effort, would provide an opportunity for merchants to negotiate reasonable terms with the credit card companies and their member banks,” said Armour. “Right now there is no market for interchange fees. The fees are fixed by the banks, hidden from the public and forced on merchants in a take-it-or-leave-it offer. The Credit Card Fair Fee Act would create a market for interchange fees by allowing merchants and the card associations to negotiate on equal footing.”

“It is essential that Congress takes action on this legislation. Without Congressional action, they will increasingly see second- and third-generation family businesses in their districts that will have to close their doors as their livelihood gets siphoned off by the credit card companies,” stressed Armour.

Related: Visa Answers

There ARE Some Things Money CAN Buy.

I've got a "New Campaign Idea" for MasterCard... Here goes:

Screw with Wal Mart: $1.0 Billion
Screw with American Express: $1.8 Billion

Screw with Discover: $3.0 Billion?

IPO to cover damages: Priceless!

"Under the terms of the agreement, MasterCard will pay American Express up to $1.8 billion. This follows an earlier agreement with Visa to settle similar claims for up to $2.25 billion. Subject to certain performance criteria, American Express would receive more than $4 billion for agreeing to drop its claims against the two credit card networks. The combined antitrust settlement is the largest in U.S. history."

From the Wall Street Journal:

American Express Co. has reached a $1.8 billion settlement with MasterCard Inc. over the card issuer's lawsuit with the payment processor over allegations MasterCard, Visa Inc. and some member banks prohibited financial firms from issuing credit cards through American Express.

Meanwhile, American Express Chairman and Chief Executive Ken Chenault said credit indicators have weakened "beyond our expectations" amid continued weakening in U.S. business conditions. He added it is "too early to assess the impact," but that the antitrust settlement should "help to lessen the impact of this weakening economic cycle."

Beginning in the third quarter, MasterCard will make 12 quarterly payments of $150 million, contingent upon the performance of American Express' U.S. Global Network Services Business. MasterCard will take a $1 billion charge in the second quarter.

"We are pleased to have reached a settlement with terms that will enable us to keep our strong balance sheet intact," said MasterCard President and Chief Executive Robert W. Selander. He added that "eliminating the uncertainty" of a prolonged court case is in the best interest of shareholders.

In 2004, American Express sued Visa, MasterCard and eight of their member banks for imposing rules that had prohibited financial institutions from issuing credit cards through American Express. The lawsuit was filed shortly after the U.S. Supreme Court let stand a lower-court ruling that forced Visa and MasterCard to allow their member banks to issue credit cards on rival networks.
Visa agreed to a $2.25 billion settlement in November. Coupled with the MasterCard payments, American Express will receive $880 million annually for the next three years.

# # #

If you’re reading with a sense of deja vu, that’s because Visa and MasterCard have spent lots of time in court defending themselves from antitrust allegations. Let’s review:

In 1996, merchants filed a class-action lawsuit against Visa and MasterCard alleging they were attempting to monopolize the debit card market. On the eve of trial in 2003, the parties agreed to a boffo $3.4 billion settlement, called the largest in an antitrust case. The lead counsel in that case was Lloyd Constantine of Constantine & Partners.

MasterCard's settlement with AmEx is only Part 1. As I posted in this blog a couple weeks back, Lloyd Constantine is heading up Discover's antitrust lawsuit and seeking $6 Billion in damages. (Visa said at the time the amount was ``dramatically overstated'' and MasterCard called the suit "baseless.'' Maybe MasterCard might want to look up the word "baseless" in a dictionary. They might also consider the savings derived from representing themselves in court since their attorneys aren't getting any better results. Here's a better idea... admit wrongdoing and just pay up. Then consider ceasing and desisting with these types of business practices. After all, Visa and MasterCard have demonstrated this behavior for many years now and their track record in court is dismal.

In 1998, the DOJ brought a successful antitrust lawsuit against Visa and MasterCard arguing that the companies colluded to fend off competiton. In 2004, the Supreme Court let stand a Second Circuit ruling that ruling that Visa and MasterCard violated antitrust laws when they barred banks that issued their cards from also issuing AmEx and Discover cards.

In 2004, on the heels of the Supreme Court’s ruling, AmEx filed this lawsuit against Visa, MasterCard and eight of their member banks for imposing rules that had prohibited financial institutions from issuing AmEx cards. Even though the DOJ’s lawsuit had forced Visa and MasterCard to drop their exclusionary rules, Boies explained to the WSJ yesterday that a private company that is hurt by an antitrust violation can sue for “historical damages plus future damages from the historical acts.”

As part of this settlement, AmEx dropped the member banks from the lawsuit but not Mastercard. “The size of this settlement, along with earlier court rulings, underscores the seriousness of the damage done by the illegal boycott,” said Ken Chenault, AmEx’s CEO. “We plan to move forward with the litigation to hold MasterCard accountable for the illegal actions that blocked banks from working with us for many years.” Yeah, to the tune of $1.8 Billion.

The question nobody's asked is "How much did Visa and MasterCard profit over and above the settlements by engaging in this type of corporate rogueness? They have been found guilty time after time against "major players" (Wal*Mart, AmEX, Discover, etc) in the industry. These major players are the ones laced with deep pockets, one's who can withstand the enormously expensive and time consuming process involved with taking these big boys on. Smaller players such as Pay By Touch, a company of which I was a founding member, aren't as fortunate.

Case in point...Visa and MasterCard "defined" a "more secure" biometric transaction as a "less secure" Card Not Present (CNP) transaction. In reality, a biometric transaction is inherently more secure than a "card present (CP) transaction, let alone a CNP transaction. There's not an analyst alive who would disagree. But Visa and MasterCard did. The end-result of Visa/MC defining biometrics as a CNP transaction was severe in terms of preventing retailer participation. After all, why would a retailer switch to biometrics in order to pay a higher fee than they were currently paying? That's why retailers like SuperValu only allowed biometrics to be ACH based. And it cost PBT (and me) big. There tactics were successful with Pay By Touch because of V/MC's stronghold in the payments industry.

A second case in point...Why did PIN Debit took so long to take hold in the bricks and mortar space when it's more secure and preferred by customers? The answer is simple. Visa and MasterCard (and the banks) make more money on signature debit. Who cares that it's less secure? Who cares that it's preferrred by consumers? That's why rewards programs are mostly attached to signature debit and why some banks charge consumers to use PIN Debit. It's nuts.

So don't expect this to end when Discover wins it's $6 Billion from these guys. Pay By Touch is gone, but companies like HomeATM aren't going to stand by idly IF Visa/MC try and starve them out, as they did Pay By Touch.

Debit Cards Dominate China's Bank Card Market

As the U.S. grapples with soaring gas prices, many pundits have put the blame for the rise on the shoulders of the frenetically expanding economies in China and India. There's just too much demand and the market can't keep up, they say.

Want proof of just how fast that Chinese economy is growing? Try this: The total number of credit cards in China nearly doubled in the past year, according to the People's Bank of China, which is the nation's central bank.

A recent report at ShanghaiDaily.com (article included below) laid out the details: "China had more than 104.73 million credit cards in circulation at the end of March, up 92.9 percent since a year ago."The report goes on to say that "China's total bank cards, including debit and credit cards, topped 1.58 billion by March 31, up 29.1 percent over the year." As those numbers indicate, debit cards are far and away the most popular choice of plastic. They make up 93 percent of the card market. Still, a near doubling of the number of credit cards in the world's most populous country is an event that is sure to draw attention, especially as companies from around the world race to do business in China.

This growth coincides with a spending boom in India, the world's second-most populous country. The WashingtonPost.com has a fascinating article about buying habits of the 20- and 30-somethings in India. The article says younger Indians are charging items like flat-screen TVs, iPods and sunglasses in ever-growing numbers. The big problem in India: huge interest rates. According to the Washington Post, "In India, even the lowest credit card interest rates hover around 20 percent, and the average lending rate is 34 percent, which includes a 12 percent service tax on the interest." Holy Cow! (as the late great Harry Caray would say!)

That's two to three times the average lending rate for cards in the U.S., according to CreditCards.com's latest rate report. Add on the Indian government's "service tax" on the interest, and those rates for consumers in India become downright outrageous. The prevailing thought seems to be that this Asian growth isn’t going to stop anytime soon. Can it continue at the breakneck pace that we’re seeing now? Noper...growth like this never lasts forever, especially when it may be creating a generation of folks buried in debt with 34 percent APRs. It certainly bears watching, though, as Americans deal with their own credit card burden.

Here's the article from the ShanghaiDaily.com...

Number of China's credit card holders doubles in quarter
Created: 2008-6-25 - Author:Zhang Fengming

THE number of Chinese credit cards almost doubled in the first quarter, the central bank said yesterday. China had more than 104.73 million credit cards in circulation at the end of March, up 92.9 percent since a year ago, the People's Bank of China said yesterday on its Website.

China's total bank cards, including debit and credit cards, topped 1.58 billion by March 31, up 29.1 percent over the year, the central bank said. Debit cards still dominate China's bank card market, accounting for 93.4 percent of the market total.

Bank card-based transactions accounted for 25.6 percent of the country's total retail sales, up from last year's 21.9 percent. Transaction value on bank cards rose 58 percent year on year to 824.6 billion yuan (US$119.5 billion).By the end of March, 203 institutions, including 168 domestic banks, had joined UnionPay, the sole trans-bank transfer system in China. China is adding point-of-sale card terminals at shops and restaurants to ease payments by bank cards, especially in the run-up to the Olympics when a large number of foreign tourists is expected.

Banks are also installing more automatic teller machines to extend their networks.About 804,500 merchants accept bank cards while there are 137,600 ATMs on the mainland. Encouraging the use of bank cards help cut money laundering and make it easier to track merchants' business transactions and tax payments.

Global banking executives see China's credit-card business as promising, although no quick profits are expected within three years, an industry survey said earlier. Bank of East Asia issued its yuan-backed debit cards in May, the first overseas bank to issue yuan-denominated bank cards in China. Banks including HSBC and Standard Chartered are awaiting regulatory approval for their own cards.

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Blogging More Than a Marketing Tactic

"It seems like every company has a blog section of its own, and is also interested in what the blogosphere is saying about it," said Paul Verna, senior analyst at eMarketer.

Word-of-mouth is still a powerful marketing tactic, and since influential bloggers are so effective at spreading the word about their likes and dislikes, blogger demographics continue to matter. So, excluding major businesses and splogs, who blogs now?

Although most researchers have noted a young skew to the blog audience, a BIGresearch study found that the average age of adult bloggers is actually 37.6. (see chart on left)

A Deloitte & Touche study of blog usage by age found a direct relationship: the younger the user, the more likely he or she was to read or keep a blog on a weekly basis. For example, 55% of millennials (ages 13 to 24) surveyed read a blog, and the percentages declined for every age cohort in the study until reaching just 16% for matures (ages 61 to 75).

Similarly, 35% of millennials kept a blog, whereas only 1% of matures did. The age groups in between—Generation X (ages 25 to 41) and baby boomers (ages 42 to 60)—fell between those two extremes.

With regard to the ethnicity of US adult bloggers, BIGresearch found that 69.7% were white, 20% were Hispanic, 12.2% were African-American and 3.7% were Asian. These percentages were essentially in line with the US Census Bureau's most recent estimates of the demographic breakdown of the US population, allowing for differences in methodologies, mixed-race respondents and overlap between Hispanics and individuals of other ethnicities.

Once a haven for techies, there are now blogs for everything from celebrity gossip to political commentary to the most mundane personal minutiae. By 2012, more than 145 million people—or 67% of the US Internet population—will be reading blogs at least once per month.

The number of people creating blogs in the US will also grow, reaching 34.7 million people by 2012—16% of the Internet population. By contrast, there were some 22.6 million US bloggers in 2007, a number that correlates to 12% of Internet users.

Buoyed by these massive levels of consumer engagement, US blog advertising will reach $746 million in 2012, up from $283 million in 2007.

Payment Card Reporting = Bad Idea?

Payment-Card Reporting Nonsense...Another expensively bad idea from congressional Democrats.
By Phil Kerpen

Last week the House Ways and Means Committee marked up the so-called Alternative Minimum Tax Relief Act of 2008. As expected, the Democrats are proposing several permanent tax hikes in exchange for a provision to protect the middle class from the unintended consequences of the AMT. What wasn’t expected was the addition of a nasty new regulation.

The bill now includes a $30.98 billion capital-gains tax increase on the carried interest of general partners in investment partnerships and a $13.57 billion income-tax hike for oil companies. Basis reporting, which would require financial firms to report capital-gains basis information to the IRS, was thankfully not included in the bill.

However, payment-card reporting was. This is real bad news.

Payment-card reporting would require banks and other providers of merchant account services to report credit- and debit-card payments to the IRS. All credit-card sales essentially would be pre-audited, with detailed sales information given to the government.

The idea is to stop tax cheats, although the effectiveness of such a system is far from clear. Meanwhile, this new regulatory burden will cost credit-card networks, banks, and other payment systems in terms of time, money, and personnel. These costs will necessarily be passed on to businesses and retailers in the form of higher credit-card fees, and to consumers in the form of higher prices.

With tens of millions of payment-card transactions taking place each day, the amount of information reported to the IRS in this new scheme will dwarf anything that exists today. The collection, transmission, and storage of such a massive amount of personal data also raises serious concerns about privacy and security, particularly for the many smaller businesses that use Social Security numbers as tax ID numbers.

The Center for Democracy and Technology has explained that payment-card reporting will undo the standard practice of deleting personal information once it has served its purpose. Considering the rising incidence of online identity theft, this is a particularly bad idea.

Making matters worse, payment-card processors will be deputized by the IRS not only to collect personal data, but to collect money, too.

Under backup withholding provisions of the bill, if a processor is unable to verify a merchant’s taxpayer ID number, the processor will be required to withhold 28 percent of that merchant’s gross transactions. Any smaller merchant caught in this net will suffer a cash-flow nightmare.Ironically, this big-government scheme is certain to elevate spending — the cost of building and maintaining a database of such vast scope would be considerable — with no guarantee that tax cheats will be caught and tax revenues will be recovered.

Companies that cheat on their taxes by underreporting income typically fail to report cash transactions, not the credit-card transactions that are clearly documented and would be available during an audit.And how will analyzing credit-card transactions allow the IRS to successfully identify companies for the purposes of auditing? The IRS has not demonstrated this.

Most likely, this program will result in unjustified and unnecessary audits.Payment-card reporting is another expensive bad idea from House Democrats. American taxpayers can only hope this extortion attempt fails, and that Congress passes AMT relief in a clean bill with no tax and regulatory hikes.

— Phil Kerpen is policy director for Americans for Prosperity.

Revisting Gartner's Report on Consumers Preference for PIN Based Transactions

Banks and credit card issuers have put significant efforts into marketing contactless and signature-based debit card payments, but they have failed to win over U.S. consumers, according to a survey by Gartner. This is important news for online and brick-and-mortar businesses. Consumers prefer alternative payment types -- such as a debit card and PIN -- that earn banks less revenue, but which consumers believe are more secure.

“Despite significant marketing campaigns by banks and card issuers to steer consumers towards using debit cards with a signature -- ostensibly so that the banks can earn more interchange revenue -- consumers prefer entering their personal identification number (PIN) to pay for groceries with their debit card over all types of signature-based card payments, whether credit or debit,” said Avivah Litan, vice president and distinguished analyst at Gartner.

The findings are based on Gartner survey of 4,500 online U.S. adults conducted in August of 2007.

“Banks promote signature-based debit payments because they earn more fee revenue from card-accepting merchants, on the premise that they are riskier and more prone to theft, so the banks need to earn higher fees to compensate,” Ms. Litan said. “Fraud rates on signature-based debit card payments are at least 10 times higher, and banks usually eat these costs if they are incurred in a card-present (or store) environment. Higher interchange fees paid by merchants to banks and card issuers for signature-based transactions must offset these costs or else banks wouldn’t promote the signature variety.”

When shopping at grocery stories, consumers prefer debit card payments that require entry of a PIN despite the fact that only debit and credit card payments with physically signed receipts typically earn them reward points. Consumers’ least-favorite payment type when shopping for groceries is contactless (wireless) payments, and there is similarly small interest in using mobile phones for making payments.

Consumer Preferences: Gartner: If Making a Purchase at a Grocery Store, Respondents Were Asked to Rank Payment Methods

Ranking: 1 = Most Preferred and 7 = Least Preferred

Paying with Cash: 2.88
Using debit card and entering a PIN on a cash register device: 3.64
Using credit card and signing a payment receipt: 3.70
Using debit card and signing a payment receipt: 4.00
Using regular payment card (credit or debit), but not having to sign a payment receipt or enter a PIN: 4.08
Paying with a personal paper check: 4.41
Using contactless payment card that you just wave or swipe in front of a terminal: 5.28
Source: Gartner

“Brick-and-mortar businesses who accept electronic consumer payments should promote use of PIN-based debit card payments by steering consumers to them through payment terminal programs and/or by offering store-based incentive programs,” Ms. Litan said. “Businesses pay less to banks for PIN-based payments and since consumers prefer them anyway, this is a win-win strategy for all parties except credit card issuers and banks.”

Consumers who have been affected by the data breaches publicized in recent years are more prone to change their online payment behavior than other online or offline activities, such as shopping and e-mail preferences. These consumers are more likely to call the online store and give them their payment account number over the phone.

“Online businesses should therefore enhance their ability to offer secure automated phone payments,” Ms. Litan said. “For example, businesses can use a transaction number generated during the online shopping season to tie a purchase to an automated phone-based payment. For this customer base, online merchants should also promote alternative payments, such as PayPal and Bill Me Later, where interest in using them increases as age decreases.”

About this study

Additional information is available in the Gartner report “Consumer Preferences for Secure Payments Create Opportunities for Non-Banks."

Barron's on Amazon Online Payments Plans

Is Amazon Planning To Go Head-to-Head With PayPal?
Posted by Eric Savitz

Amazon.com (AMZN) has been aggressively rolling out a variety of Web-based services, including on-demand computing power and data storage. Could the company’s next move be to go after eBay (EBAY) subsidiary PayPal’s dominant franchise on online payments?

Cantor Fitzgerald analyst Derek Brown asserts in a research note this afternoon that Amazon “may soon launch a PayPal-esque Payments service for use by consumers and merchants across the Web, potentially siphoning growth and/or profit from eBay’s crown jewel.” Brown says that Amazon could launch such a service as soon as late summer or early fall of this year.

“We believe an Amazon Payments solution for use across the Web holds real promise,” he writes. Brown contends that Amazon “long-ago demonstrated that it understands (perhaps better than any company) the needs/wants of online retailers.” And he also says the company understands - maybe better than any company - the needs and wants of online buyers. “Coupling this pool of knowledge with its massive customer base, powerful technology platform and unique skills sets, Amazon.com may be among the best-positioned Internet companies to attempt to challenge PayPal’s growing dominance.”

Brown says taking on PayPal successfully would be no sure thing, but adds that it seems “equally foolish” to simply disregard the idea as just another PayPal wannabe. He notes that the company already offers a site called Amazon Payments that allows users to send money to any U.S. mobile number of e-mail address using credit card info on file with Amazon.com to fund the transaction. He also notes that the company already also offer Amazon Flexible Payment Services, “a set of APIs that allows the movement of money between any two entities.”

Brown also notes that Amazon.com job listings show a number of openings in the area of external payments; he quotes one of the listings as saying “there is incredible opportunity to further leverage our payment services assets.”

Meanwhile, Brown also contends that eBay may be readying a further tweak to its business model, with an additional reduction in listing fees combined with a hike in back-end success fees. He says the result in the long run would likely be more listings. But that’s a mixed blessing: he says it would creation an “even greater strain” on the company’s searching and finding algorithms.

Concerned about both the potential competition from Amazon in payments, and the disruption from a shifting business model, Brown today repeated his Sell rating on eBay, with a price target of $25. Today, eBay is up 16 cents, or 0.6%, to $28.97 . Amazon is off $1.06, or 1.3%, to $81.91.

Online Consumer Payments Report Available

Research and Markets has released an Online Consumer Payments Report in which it claims to examine the Past, the Present and the Future of Online Payments. Here's an overview:

Online consumer payment volumes continue to grow rapidly as more consumers warm to the online experience and begin to purchase goods and services online with an increasing appetite. As a result, the online consumer payments market is becoming competitive, fast moving and volatile. Having said this, the opportunities provided by online commerce are vast and should not be overlooked.

Scope

The scope of the discussion in this report is restricted to B2C (business-to-consumer) online commerce globally. In the B2C online commerce both goods and service sectors are considered. Although the bulk of the data provided covers Europe and the US, where possible general consumer trends are considered on a global scale. Online payment mechanisms discussed in this briefing include credit and debit cards, prepaid cards, eWallets and P2P payments solutions.

Highlights

Credit cards are the preferred method of payment online among consumers globally. However, ultimately the credit card does not perform well in a card-not-present context - the need to create 3D Secure protocols highlights this. Therefore, the credit card is flawed as an online payment tool and issuers must innovate to defend their share of the market from non-card providers. Indeed, PayPal has grown strongly into a major online payment solution provider. In 2007, €34.3 billion of PayPal transactions were made; equivalent in size to the value of card transactions in Austria. (anyone else feel that's an odd analogy???)

Reasons to Purchase Report:

Besides having a spare €3077 Euros (for the hard copy) ...the Online Consumer Payments examines the past, present and future of the online consumer payment market. It highlights which payment solutions have been developed, indicating the key components of a ‘winning’ online payment solution. Use this report to understand key trends relating to consumers and merchants behaviour online and their attitudes towards the online environment.

Key Topics Covered:

Overview
Catalyst
Summary
Table of figures
Table of tables
Introduction
What is this report about?
Who is the target reader?
Scope of the report
Our definition of an online consumer payment
Trends in Online Consumer Payments
Key findings

For more information visit: http://allpaynews.com/node/4443 or...
http://www.researchandmarkets.com/research/d645a9/online_consumer_pa

Source: Datamonitor
Contacts:
Research and Markets: Laura Wood, Senior Manager
Fax (U.S.): 646-607-1907 Fax (outside U.S.): +353-1-481-1716
press@researchandmarkets.com

PULSE Releases ATM Safety Tips for Summer Travelers

Discover's Pulse EFT Network Provides Safety Tips
Press Release: Monday June 16, 2008

ATM Safety Tips to Follow as You Withdraw Cash for Your Next Summer Road Trip or Anytime Throughout the Year

HOUSTON--(BUSINESS WIRE)-- As part of its annual ATM & Debit Card Safety Awareness Month, this week the PULSE^® debit network releases ATM Safety Tips. Although debit is a secure and convenient form of payment, it is a good idea for consumers to take some basic precautions when using their debit cards. As many vacationers make their way out of town this summer, trips to ATMs to withdraw cash are inevitable. Whether withdrawing before you leave town or when you arrive at your destination, follow these step-by-step safety tips before conducting your transaction:

• Survey your surroundings:
  Pay attention to suspicious activity that may be occurring in your immediate area. If anything appears to be out of the ordinary, or if the ATM is obstructed from view or poorly lit, leave the area and try another location.
  
• Take someone with you:
  Whenever possible, it is a good idea to take another person with you when using an ATM, especially at night.
  
• Have your card ready:
  Minimize your time at the ATM by having your debit card out and ready to use. Do not let a stranger assist you in making a transaction, even if you have trouble or your card gets stuck. Never count your money while at the ATM.
  
• Safeguard your personal identification number:
  Block the view of others when using the ATM by shielding the key pad when entering your personal identification number (PIN).
  
• Look for possible fraudulent devices attached to the ATM:
  If the ATM appears to have any attachments or alterations to the card slot or key pad, do not use it. If possible, report the problem to the financial institution or ATM owner.
  
  A comprehensive list of ATM/debit card safety tips is available at:
  www.pulse-eft.com/public/group/consumer/atmdebitsafety.html.
  PULSE also offers a brochure containing fraud/identity theft prevention tips, which can be downloaded at:
  www.pulse-eft.com/public/group/consumer/atmdebitsafety/idtheft.html.
  

About PULSE

PULSE is one of the nation’s leading ATM/debit networks, currently serving more than 4,500 banks, credit unions and savings institutions across the country. PULSE is owned by Discover Financial Services (NYSE: DFS - News). The network links cardholders with more than 265,000 ATMs, as well as POS terminals at retail locations nationwide. The company is also a valued resource for industry research related to electronic payments and is committed to providing its participants with education on evolving products, services and trends in the payments industry. For more information, visit www.pulse-eft.com.

---

Source: PULSE

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Wow...Talk About Disruption in the Payments World

It's early here but I (still) got Georgia on my mind... This from Jeff Haynie's "Introspection" Blog...

There has been quite a bit of debate in the past few days about the 2008 GRA/TAG Business Launch Competition here in Atlanta. Scott Burkett was spot on in my opinion and was one of the first to publicaly call this insanity out. There were some tweets by some local entrepreneurs and Lance Weatherby attempted to quell the crowd with his peacemaking around trying to turn this into a positive and looking for suggestions about how to improve it.

A little background for those just trying to get up to speed on what’s happened.

The 2008 GRA/TAG Business Launch Competition is a cool annual event that is intended to help provide funding and value-added services in-kind to the lucky startup that is launching a business here in Georgia and looking for help. We had quite a number of companies apply, that was widdledwhittled down to a much smaller group and then to a final set of four companies. I’m an advisor to one company, Skyblox, which I think is worthy of the top 4 status and one of the cooler startups here in town. I’m biased and I freely admit that. But, that’s not really the point here.

Where this all breaks down is that the winner was a company called ATMDirect. I freely admit I know jack about these guys, except that the hidden secret that’s come out since the win is that they’re not really a startup per se. Maybe to the letter of the law, but certainly not the intention of it. You can technically say they’re just launching the business, but really they’re reinventing a company that has had literally millions and millions invested in it and its IP and taking some smart advantages of a bad bankruptcy situation. (And good for them).

Here’s the stated purpose of the event (from their press release):

The purpose of the GRA/TAG Business Launch Competition is to support economic development in Georgia by encouraging and supporting the creation and growth of new companies that will strengthen and expand Georgia’s strategic high tech clusters. To accomplish this, the competition has two specific goals:

• to motivate and support entrepreneurs in creating new high tech businesses in Georgia that will support and expand existing strategic clusters, and
• to create greater awareness within the investment community that Georgia is a great place to launch and grow high tech businesses.

(SIDE NOTE: I have issues with the purpose, especially the clusters concept, but that’s an opinion for another day).

OK, here’s the rules:

Entrepreneurs interested in launching a new Georgia company within targeted technologies and industries are invited to compete for a $100K cash prize and a suite of related professional services (including priority consideration for ATDC membership) that is valued at more than $200K. The competition offers entrants the opportunity to be mentored by a successful high tech entrepreneur.

Entrants must legally reside in the State of Georgia. All awards will be conditioned on the company launching and/or maintaining its operations in Georgia. If the winning company moves a majority of the business outside Georgia within 3 years, the winning company must repay TAG for the $100K cash prize plus 8% annual interest. TAG will make a final determination as to whether a company “moves a majority of the business outside of Georgia” and will have discretion to negotiate a variety of forms of repayment of the cash prize plus interest.

Entrants can be existing companies under certain circumstances. The competition is aimed at “new” businesses, however the time and effort required to launch a successful business in the targeted areas may require that an entrepreneur form a company and begin certain limited functions before any meaningful business operations occur. These functions could include prototype or Intellectual Property development and for these or similar reasons up to $500K in external funding may be allowed. Market trials may also be required and for this or a similar reason some limited revenue may be allowed. The judging process will take all these factors into consideration when making a recommendation to TAG’s President and the decision made by the TAG President is final.

OK, that’s where it gets a little fun. I think the rules are fair. And, it’s their money and their rules - Tino can do what he wants here.

An interesting comment on Lance’s post from John B. Frank:

ATMDirect was neither founded, NOR funded by Nandon Seth. It was founded nearly a decade ago by an individual named Robert Ziegler who raised a couple million dollars. Pay By Touch paid $30.5 Million Dollars for it and sank another couple million into it before their unfortunate demise. Nandon Seth "simply acquired" ATMDirect for $600k during the Pay By Touch bankruptcy. Thus to state that he “founded” and “funded” ATMDirect is simply a misnomer. Just thought I’d set the record straight. FYI: You can visit www.biometricpayments.blogspot.com or www.pindebit.blogspot.com and do an ATMDirect search to learn more about ATMDirect’s history as well as PIN Debit for the Web…

Even on the ATMDirect website it states: ATM Direct was purchased by Accullink, LLC of Atlanta, Georgia in March 2008. See our press release for more details. (Side note: i can’t find the press release they mention specifically from their website which is terrible).

This is from the about page: ATM Direct is a privately held alternative payments provider offering a suite of products that enable PIN debit payments over the Internet. The technology underlying our products are backed by a suite of intellectual property that includes 10 patent families. Our technology leverages a revolutionary encryption and authentication framework which is easy to implement and integrates seamlessly with existing payment processing protocols and systems.

OK, a “business launch” for a “new startup” doesn’t have 10 patent families. Ten fully prosecuted patents families would be worth at least a million or more dollars alone most likely.

Also, they seem to have violated clearly the investment criteria of less than $500K (at a minimum, not including their post purchase investment if any).

Comment from Malcolm
Time: June 9, 2008, 4:17 pm

I think the question here is a bit less of how “old” or “young” the company is. I think the other competitors wouldn’t complain about a stretch on $100K investment. The real question is, what motivated the judges to choose ATM Direct? “A good team that presents well”. By all other accounts in the transaction industry, their patents have been misrepresented and their solution doesn’t hold water.

I guess I’ll sell my failing cat waxing business to Arthur Blank and he can win next year.

Comment from Paul Freet
Time: June 9, 2008, 4:35 pm

First, I have no issue with the management team at ATM Direct and I sincerely wish them great success.

While I agree that “technically” they qualified as a new company, and the $600k was “technically” not an outside investment, I have also talked to a number of people in the Atlanta startup scene who are “technically” quite torqued off about this.

Comment from David Jones
Time: June 9, 2008, 7:52 pm

In all fairness TAG, ATDC and the GRA all have their own agendas and any entrepreneur in Atlanta that doesn’t understand that is doing themselves a disservice. These organizations are definitely not “one size fits all”. If your company is not a “fit” – and it’s likely you’re not - you have to learn what (if anything) you can glean from them and then go it on your own.

I think the biggest problem we as entrepreneurs can make is looking at TAG and ATDC as the center of the startup universe in Atlanta. They are significant and they do benefit some companies, but regardless of what many think, they are not the arbiter of success and their judgment on the viability of your venture should not always be taken to heart (except maybe for the cat wax dude…).

There is a vibrant startup community in Atlanta (and the surrounding area) and it’s just starting to get up on it’s wobbly legs. We’re busy people – this stuff isn’t easy you know – but we’re getting help with organizing and connecting, through the efforts of Scott (Startup Lounge, Capital Lounge, Pitchcamp), Sanjay Parekh (Startup Riot, Startup Drinks), David Ratajczak (YnR), Mike Schinkel (Atlanta Web Entrepreneurs), and a lot of others.

Regarding the Business Launch: Get real – yes, this is a promotional opportunity for the company that wins (for about a month or so), but it’s a bigger chest thumping exercise for the sponsors than anyone else. Is this really where you should devote your precious startup’s time? (I was told by one of the organizers that the semifinalists this year were sooooo much better that last year’s – I’m hoping they just forgot that I was a semifinalist last year… How much mileage did we get off of it? Not much. YMMV.)

Look, I’ve got nothing against ATM Direct – don’t know the guys, don’t understand what they do (they do seem to get good deals on blade servers…), but their backstory doesn’t paint a very pretty picture. The fact that their technology development is based in Dallas, TX and Bangalore as opposed to Atlanta seems to be squeaking by the rules a bit and I’m not sure how that plays into ATDC & TAG’s mission statements. Now I don’t know the founder’s financial situation (I assume after selling your company to American Express you’re probably not living off of ramen noodles any more), but nothing in the rules says you have to “need” the money to enter the competition. It’s a dog eat dog world guys and it’s rarely fair – suck it up and let’s beat them off the court.

Comment from Jeff Haynie
Time: June 9, 2008, 8:01 pm

I had the *same reaction* today when I heard of this company. Wow, i thought. Skyblox is a kick-ass startup pinching pennies and doing some really useful and valuable stuff. Of course, i’m helping skyblox so i’m biased big time.

Too bad, lots of other great companies out there in the competition that could have really used the money.

Comment from Sanjay Parekh
Time: June 9, 2008, 8:17 pm

Okay, so even though I’m currently on vacation I’ll chime in on this although I don’t have the bandwidth to do a blog post. I think the big issue here isn’t the $100k overage, but the fact that the technology has had WAY more than $500k spent on it in its various iterations - at least I assume so. Otherwise it would have never (I’d think) been bought once for $30m (regardless of if it was out of bankruptcy or not). Given that, even though it was later bought for $600k, the technology had much more *lifetime investment* in it than the $500k cap. That creates an uneven playing field for other companies that do adhere to this spending cap.

Beyond this, the company (or at least the technology) has been around for a long time in various forms. Not a startup by any stretch of any rules.

Finally, the management of the company already had a successful exit and have a large war chest to spend already. So is this money better invested in ATM Direct or elsewhere? I’d say elsewhere but then, I’m not GRA or TAG.

Comment from Sanjay Parekh
Time: June 9, 2008, 9:22 pm

Also, after reading David Jones’ comments above - I have to concur. It’s silly and we all know it’s silly. Go about your business and “win” a liquidity event since winning a launch competition isn’t (or shouldn’t be) your goal.

Comment from TerrenceT
Time: June 9, 2008, 9:27 pm

So since Delta Airlines stock has plummeted in value could I buy them for $600K and relaunch it as a new airline and win next years startup award?

Editor's Note: According to the logic used in the example above, if Microsoft would have bought Yahoo, Bill Gates would've been the "founder" of Yahoo! and Terrence T. has the potential to be the founder of Delta Airlines! On a side note, Did anyone else besides me notice that the CEO of Harbor Payments is on the Board of Directs of TAG? Why is that pertinent? Because the "founder" (sic) of ATMDirect is also the "founder" of Harbor Payments.