Wednesday, January 12, 2011

Debit Card Limit Opponents Haven't Quit the Fight

Washington Post - 42 minutes ago

Washington Post Staff Writer
Wednesday, January 12, 2011; 5:54 PM

Banks and credit-card lobbyists lost big last year when Congress approved new restrictions on billions of dollars in debit-card fees charged to retailers.  
Now with more GOP allies in Congress, they hope to try again. 

Under proposed rules issued by the Federal Reserve last month, the so-called interchange fee, or "swipe fee," on debit cards issued by major banks would be capped at 12 cents, which is about 70 percent lower than the average fee on such transactions last year. The Fed was required to address the issue as part of the Wall Street reform legislation passed by Congress.  The proposed cap has been hailed by consumer groups and major retailers as a necessary curb on the interchange fees, which are set by card processors such as Visa and MasterCard and paid to banks by retailers.  But the lower fees are strongly opposed by banks and credit-card firms, which argue that they will be forced to make up for the lost revenue by charging consumers in other ways. The American Bankers Association and other business groups are lobbying lawmakers and regulators to reconsider the policy. "We oppose price fixing just in principle, and that's what this is," said ABA executive vice president Floyd Stoner. "Congress does address things and go back and look at things in a lot of arenas. We believe it can happen here."

Aite Forecasts Cash Usage in the United States

The Less-Cash Society: Forecasting Cash Usage in the United States

Consumers’ Use Of Cash Will Decline By A Total Of 17%, Or 4% Per Year, Between 2010 And 2015, Dropping To Slightly More Than US$1 Trillion.

Boston, January 12, 2011 – A new report from Aite Group sizes and forecasts U.S. consumers’ use of cash. It draws upon two surveys conducted by Aite Group (one of 4,696 U.S. consumers, conducted in August 2010, and one of 1,039 U.S. consumers, conducted in October 2010) to size the use of cash as a payment method in person-to-person (P2P), bill-pay, and retail transactions in the United States.
Cash use, which has been declining in U.S. payments transactions, will continue to do so through 2015. But it is far from vanishing. While 30% of consumers use cash less often than they did two years ago, 20% use it more often. Gen Y is the only generation more likely to use cash more often today than it did two years ago. Consumers’ use of cash will decline by a total of 17%, or 4% per year, between 2010 and 2015, dropping to slightly more than US$1 trillion.
“Despite forecasts of a cashless society, the United States is nowhere near the realization of this vision,” says Ron Shevlin, senior analyst with Aite Group and author of this report. “In fact, if the use of cash were to decline by 17% every five years—our forecast for 2015—the use of cash in the United States wouldn’t fall below US$1 billion before the year 2205, roughly 200 years from now.”
This 21-page Impact Note contains 15 figures and two tables. Clients of Aite Group's Retail Banking service can download the report by clicking on the icon to the right. 

Related Aite Group Research:

To purchase this report or
for additional information,
please contact:
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Mercator Advisory Group New Release: Top 50 Debit Card Issuers: Loyalty and Rewards Programs 2010 - Year in Review

Report analyzes the programs of the largest debit issuers in the country

As interchange fee regulations become clear, one of the main areas of consumer debit card benefits – the rewards program – is almost certainly heading towards a mid-term correction. The industry has already seen one major issuer, JPMorgan Chase, signal their intention to sunset certain debit card rewards programs and we anticipate there will be more to follow.
From this market perspective, Mercator Advisory Group is issuing their annual Top 50 Debit Card Issuers Loyalty and Rewards Program, 2010 Year in Review report. This 25-page report defines and analyzes the programs of the largest debit issuers in the country. In addition, Mercator examines the impact of current regulations, such as the Dodd-Frank/Durbin Amendment and presents some near-term opinions on the types of changes these rewards programs will most likely see in 2011.
“Looking at this 2010 version of our Annual Top 50 Debit Issuers Rewards Programs Review, one might not think that the debit issuing industry is going through a major business transition. It is truly a testament to the importance of rewards programs, at least in the mind of many consumers that issuers continue to enhance and invest in these strategies even in the face of material economic changes,” Patricia Hewitt, Director of Mercator Advisory Group’s Debit Advisory Service comments. “The American consumer has been long accustomed to being rewarded for doing business with a company and that includes financial institutions. In 2011, some consumers will continue to be rewarded and for others, those benefits may disappear, or perhaps shift to other forms.”
Highlights of This Report Include:
A detailed matrix of the top 50 debit card issuers’ rewards and loyalty programs (including characteristics and qualifications for participation).
Commentary on notable changes in programs from 2009 to 2010.
A discussion of debit reward program trends.
Changes that may take place within the debit rewards industry as a result of recent legislation and decreases interchange fee income.
A glossary of reward terms.
This Report Contains 25 Pages and Five Exhibits.
Companies Mentioned in This Report Include:
Visa, MasterCard, Bank of America, Citibank, Wells Fargo, JPMorgan Chase, SunTrust, Fifth Third, M&T Bank, Comerica, Zions Bank, and Harris Bank.
Members of Mercator Advisory Group have access to this report as well as the upcoming research for the year ahead, presentations, analyst access and other membership benefits.
Please visit us online at
For more information and media inquiries, please call Mercator Advisory Group's main line: (781) 419-1700, send E-mail to info(at)mercatoradvisorygroup(dot)com.
Follow us on Twitter @
About Mercator Advisory Group
Mercator Advisory Group is the leading, independent research and advisory services firm exclusively focused on the payments and banking industries. We deliver pragmatic and timely research and advice designed to help our clients uncover the most lucrative opportunities to maximize revenue growth and contain costs. Our clients range from the world's largest payment issuers, acquirers, processors, merchants and associations to leading technology providers and investors.

EMV in U.S.A? Mercator Takes a Look

EMV in the USA: Waiting on Debit, a Mandate,
or Just the Opportune Moment

Boston, MA
 - Payment card security shortcomings still make headlines because card data breaches continue to plague the industry. EMV (a.k.a.  Europay, MasterCard and VISA) is the smartcard-based technology the payment card networks have chosen as the best defense at the payment perimeter, the POS terminal. EMV has been deployed in most markets except the world's largest card market: the USA. This new report from Mercator examines the questions "why not" and "when" for EMV.

Revealed in Mercator Advisory Group's EMV in the USA: Waiting on Debit, a Mandate, or Just the Opportune Moment report is the relatively modest cost of EMV issuance to US passport holders. While the UN Federal Credit Union is the first financial institution to issue EMV cards, Mercator forecasts at least one major US card issuer to provide a fee-based EMV card to its high net worth, traveling clients.

"EMV technology has the lead position in securing the payments perimeter today. It's a standard that can be deployed in contact, contactless and mobile form factors. But the constraints of cost, uncertainty over ongoing debit regulation and the impact of evolving NFC mobile payments, as well as historical card network reticence means any EMV announcement will be delayed and muted when it arrives," George Peabody, director of Mercator's Emerging Technologies Advisory Service comments. "We forecast another quarter or two before the starting gun fires. And even then, it will be incentives based rather than an immediate mandate."

The report focuses on the costs, constraints, and opportunities for card issuers, merchants and the card networks themselves as they all face the EMV question. It discusses the potential role of federal regulation on the timing of a US EMV rollout. The report includes recommendations for card networks, issuers and merchants planning their POS replacement strategies.

Highlights of the Report Include:
The Federal Reserve's debit rule making injects significant uncertainty into the timing of an EMV roll-out by the card networks. Mercator forecasts an EMV "go ahead" in the first half of 2011 with merchant incentives to accelerate EMV-capable terminal deployment.

The EMV business case for individual issuers cannot overcome competing priorities and current practices around fraud losses.
In Canada, EMV terminalization has been a breakout strategy for contactless. Given mobile NFC's rise in the US, a similar effect could be anticipated in the US market.
EMV payment card issuing costs in the USA run between $2.4B and $2.8B depending upon smartcard interface configuration, contact only or contact + contactless.
Merchants are advised to "spend the $10" for EMV capable terminals now in anticipation of an eventual EMV roll-out.

One of the 5 exhibits from the report:
This report contains 24 pages and 6 tables, and 5 exhibits.
Members of Mercator Advisory Group have access to this report as well as the upcoming research for the year ahead, presentations, analyst access and other membership benefits.

Please visit us online at

For more information and media inquiries, please call Mercator Advisory Group's main line: (781) 419-1700, send E-mail to
Follow us on Twitter @

About Mercator Advisory Group 
Mercator Advisory Group is the leading, independent research and advisory services firm exclusively focused on the payments and banking industries. We deliver pragmatic and timely research and advice designed to help our clients uncover the most lucrative opportunities to maximize revenue growth and contain costs. Our clients range from the world's largest payment issuers, acquirers, processors, merchants and associations to leading technology providers and investors.
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Obopay President Promoted to New CEO

Redwood City, Calif., and Mumbai, India, Jan. 11, 2011 -- Obopay, Inc., a leading mobile banking and payment provider, today announced the promotion of its President, Deepak Chandnani to CEO of Obopay, Inc. Founder and CEO, Carol Realini will assume the new role of Executive Chairman. In his new role, Chandnani will focus on the company's significant growth in size and geographic scope, while Realini will continue her focus on corporate strategy as well as furthering Obopay's corporate vision, evangelizing the need for mobile money and building its widespread adoption throughout the world.

Chandnani will be based out of Obopay's corporate office in Mumbai, India, while Realini will be based out of Obopay's corporate office in Redwood City, CA. Having Obopay's two most senior executives based in different corporate headquarters reflects the true global nature of Obopay's business.

"Over the last two years, Obopay has shaped and led the way for the mobile banking and payments space globally," said Realini, speaking on Chandnani's promotion. "Our revenue has doubled over last year and we expect it to do the same in 2011. Deepak has clearly demonstrated that he can scale the company as we continue our growth around the world. This promotion recognizes Deepak's immense contribution as well as fulfills a need for an expanded and experienced management team as we move forward."

"Naturally, I am very pleased with our growth this year," Chandnani commented. "But the mobile payments industry is not anywhere near its potential. At Obopay, we have laid the ground work through partnerships with market making global brands; an unparalleled understanding of local regulatory processes; and products that are meeting the demands in India, Africa and the U.S. Now, I am looking forward to leveraging these advantages into dramatic returns for the company."

"Carol and I have a strong partnership that complements each other's capabilities," Chandnani added. "This has resulted in the company's success as a pioneer serving the cause of financial inclusion as well as the goal of enhanced financial services across diverse global markets."

Chandnani, who was appointed President in May of last year, doubled the company's year-over-year revenue through growth in business across US, parts of Africa and India. While sustaining the focus of the Company in its home market, the United States, Deepak has spearheaded Obopay's expansion into North and East Africa as well as positioned the Company for expansion into parts of Europe. He has been instrumental in launching of the Obopay service in India. Under his leadership, the Obopay team has continued forging partnerships and growing these across the globe. Notable amongst these are Nokia, Union Bank of India, Yes Bank, Societe General, Essar, MasterCard, FIS Global and the STAR network. The Obopay team has in the last two years, built a world-class payment platform for mobile payments that is supported by best-in-class processes that has received acceptance from customers and regulators around the world.

Realini has become a significant thought leader and recognized international expert in mobile money since she founded Obopay over five years ago. Her promotion of mobile money across developed and developing markets has been recognized by leading organizations and she has presented to world business and political leaders at events including those hosted by the U.S. State Department, the World Economic Forum and the Gates Foundation among others. Her visibility and outreach will continue to build significant strategic relationships between Obopay, senior financial leaders, telecommunications executives and government officials.

Prior to joining Obopay, Chandnani was the CEO of Wire and Wireless in India and before that served as the Managing Director for NCR in India. Earlier assignments included roles with Yahoo, where he established Yahoo's first office in India, and at Citibank, where he played key roles as Marketing Director for India and Business Head of the innovative Citibank Suvidha liability business in India, HLL, and included an entrepreneurial stint that provided Chandnani with key insights into the challenges and opportunities of small, emerging growth companies.

An Economics honors graduate from St Stephens College, Delhi, Chandnani holds an MBA from the Indian Institute of Management, Ahmedabad (IIM- A).

About Obopay

Founded in 2005, Obopay, Inc ( offers mobile money services that transform any mobile phone into a convenient and easy way to send and receive money, get paid or pay small businesses, top-up accounts, buy via mobile and pay bills. Obopay's mobile money services address the needs of consumers and businesses around the world by providing a service that delivers value, empowers lives and improves opportunity for merchants. Obopay believes the power is in the network and has established partnerships that include Nokia, MasterCard, AT&T, Verizon, Essar, Union Bank of India, Yes Bank in India, Blackberry and Societe Generale. The company's offering enables partner-branded mobile money services that financial services and mobile partners can implement quickly at low deployment cost. Obopay has corporate headquarters in Redwood City, CA and in Mumbai, India.

Source: Company press release.
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First Data and NRF Release Results from Small Business Data Security Study

Smaller Retailers Knowledgeable About Data Security and Fraud Prevention Strategies but Unclear on Potential Liabilities in Event of Breach or Noncompliance

NRF 100th Annual Convention & Expo
NEW YORK--(BUSINESS WIRE)--The National Retail Federation, the world’s largest retail trade organization, and First Data Corporation, a global leader in electronic commerce and payment processing, today released results from a research study of data security and fraud prevention strategies practiced at small to mid-sized retailers. Most of the retailers surveyed had annual sales of less than $100,000. The analysis was revealed during the NRF Big Show 2011.
“The finding we found most intriguing was the confusion around the potential liabilities in the event of a data breach. We’re confident that continued education in the payments industry will raise awareness of the importance of annual self-assessments and the right mix of data security and fraud prevention tools.”
An overwhelming majority of respondents (86%) stated they care about keeping their customer card information secure and feel payment card data security is important to their business. But almost two-thirds (64%) believe that their business is not vulnerable to credit/debit card data theft and 60% are unaware of the costs they could incur in the event of a breach.
PCI Awareness and Liability
While two-thirds (66%) of respondents to the survey claimed awareness of the Payment Card Industry Data Security Standard (PCI DSS), only 49% of respondents had completed a self-assessment at the time of the survey. Among those who had heard of PCI DSS; however, 42% did not know that merchants are obligated to conduct the self-assessment annually and 41% had not heard of the recent change in regulations.
The survey also showed there appears to be some confusion among retailers regarding the liability costs in the event of a data security breach. More than 60% of these smaller merchants did not realize that credit card companies are authorized to fine their business a per-card fee for every card that has to be canceled if it is determined that they are the source of a data breach. According to the 2009 U.S. Cost of a Data Breach Study by the Ponemon Institute, the average cost for merchants coping with a data breach in 2009 rose to $6.7 million with the cost per customer record breached estimated at $204.
Data Security and Fraud Prevention Strategies
Most of the specific data security and fraud prevention practices cited in the survey were familiar to the majority of respondents with several of the strategies already integrated into their business operations.
Restricting physical access to cardholder data and using anti-virus software were the two most frequently reported protection methods (76%). Other practices toward the top of the list were restricting access to cardholder data by business need to know (67%); developing and maintaining secure systems and applications (64%); and maintaining a policy that addresses information security (63%). Of those who electronically-store cardholder data, 68% also take steps to protect that data and 53% use encryption technology.
Experience with Fraud and Security Incidents
More than 4% of respondents reported having been a victim of any one type of fraud listed in the survey. Although the percentage appears low, it equates to a potential one million small businesses being impacted. The latest Federal data estimates there are approximately 24.6 million small businesses currently operating in the United States.
Physical theft or tampering with terminals and computer viruses, including malware, were the top two fraud and security incidents experienced by respondents at 37% and 22%, respectively. Employee misuse or theft of card data accounted for another 17% of incidents.
“Our survey results illustrate that smaller retailers take protection of their customers’ sensitive payment card data very seriously and continue to add more layers of security to their business operations,” said Mark Herrington, senior vice president of Global Product Management and Innovation, First Data. “The finding we found most intriguing was the confusion around the potential liabilities in the event of a data breach. We’re confident that continued education in the payments industry will raise awareness of the importance of annual self-assessments and the right mix of data security and fraud prevention tools.”
Data from the Small Business Data Security Study was fielded online from Oct. 26 through Nov. 19, 2010. The majority of survey respondents (89%) represented less than $500,000 in payment card sales annually through both card-not-present (CNP) and in-person transactions. A total of 651 small and mid-sized merchants completed the survey.
About National Retail Federation
As the world's largest retail trade association and the voice of retail worldwide, the National Retail Federation's global membership includes retailers of all sizes, formats and channels of distribution as well as chain restaurants and industry partners from the U.S. and more than 45 countries abroad. In the U.S., NRF represents the breadth and diversity of an industry with more than 1.6 million American companies that employ nearly 25 million workers and generated 2009 sales of $2.3 trillion.
About First Data
Around the world, every second of every day, First Data makes payment transactions secure, fast and easy for merchants, financial institutions and their customers. First Data leverages its vast product portfolio and expertise to drive customer revenue and profitability. Whether the choice of payment is by debit or credit card, gift card, check or mobile phone, online or at the checkout counter, First Data takes every opportunity to go beyond the transaction.


First Data
Elizabeth Grice, 303-967-8526
Kathy Grannis, 202-783-7971
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Free Credit Card Swiper for iPhone 4 Hardware for New Merchants, Shipping Now

App Ninjas, developer of Swipe Credit Card Terminal for iPhone, is now giving away the Apple-approved Credit Card Swiper for iPhone 4 and iPod touch hardware free to all new users.
App Ninjas, developer of Swipe Credit Card Terminal for iPhone, is now giving away the Apple-approved Credit Card Swiper for iPhone 4 and iPod touch hardware free to all new users.
The hardware accessory provides processing support for credit card transactions to the Swipe mobile app. Swipe allows small businesses, non-profits, and mobile businesses to swipe a credit card and receive their payment within 48 hours.
“Providing iPhone 4 and iPod touch users with a swipe accessory allows any mobile merchant to quickly process transactions, saving them money and time,” said John Waldron, CEO of App Ninjas. “Swipe’s features help manage credit card transactions with virtual terminal access, online reporting, real-time authorizations, and premium customer support, including access to a customer support rep assigned to their account, from the moment they download Swipe.”
The hardware attaches to the bottom of the iPhone through the dock connector, turning the iPhone in a secure credit card terminal.
Swipe offers users no setup or activation fee, no monthly minimums and competitive processing rates. Low transaction fees make Swipe more affordable for small businesses than conventional mobile terminals. The Swipe app also works without the hardware for keyed-entry transactions.
The Swipe app is available on the App Store and through App Ninjas’ network of value-added white-label partners. Swipe’s white-label solution enables Independent Sales Organizations (ISOs), banks, and other merchant-focused companies to offer their customers a complete credit card processing solution for iPhone, iPod touch, and iPad, including same day start-up and access to App Ninjas’ PA-DSS certified iPhone solution. Additionally, the Swipe app can be customized to integrate with a partner’s existing payment gateway.
About App Ninjas
App Ninjas is the developer of Swipe Credit Card Terminal for iPhone. Swipe transforms a merchant’s iPhone, iPod touch, or iPad into a safe and secure credit card terminal, allowing merchants to accept credit card payments with ease at any time. Swipe is available for purchase on the App Store. For more information, see
John Waldron
CEO, App Ninjas
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ROAM Data Vastly Expands Supported Devices for ROAMpay Swipe to Various Android Phones and Tablets

ROAM Data continues to lead the field of Mobile POS solution providers, adding nearly two dozen new Android devices to their supported device catalog.

BOSTONJan. 11, 2011 /PRNewswire/ -- ROAM Data, the leader in providing mCommerce applications and services across hundreds of mobile devices, announced today its expanded Android support for its ROAMpay Swipe.  The ROAMpay Swipe has become the industry standard in low cost, secure, mobile credit card acceptance.  The update increases ROAMpay Swipe support to over 20 Android devices, joining the iPhone (3G, 3GS, 4), iPad, iPod Touch, and select BlackBerry devices in their supported device catalog.  Merchants using the ROAMpay Swipe, along with a compatible merchant account, can securely swipe a customer's card and qualify for card swiped rates. Unlike similar looking devices, the ROAMpay Swipe has built-in encryption, avoiding the serious risks of skimming, theft and fraud.
Android Device Models Supported Include:

HTC Hero
Samsung Epic 4G
LG Optimus S
Samsung Galaxy Tab
Motorola Defy
HTC Aria
HTC Nexus One
Motorola Droid
Motorola Droid X
Motorola Droid Pro
HTC Droid Incredible
Samsung Galaxy Tab
Samsung Fascinate
Samsung Continuum
HTC MyTouch 3G Slide
HTC MyTouch 3G
HTC Nexus One
LG Optimus T

Following closely on the heels of the ROAMpay Swipe for BlackBerry launch, the world's first secure low cost card reader for RIM's highly popular business smartphones, this update further solidifies ROAM Data as a leader in the field of mobile payments.  Several research and analytics firms, including ComScore and Nielson, have recently confirmed that Google's Android is the fastest growing major smartphone platform.  Despite hardware complexities and OS fragmentation, which Google has often been criticized for, ROAM has managed to standardize its applications and hardware using their patented ROAM Rails technology.  ROAM is compatible with more devices for its apps and peripherals than any other provider in the industry, enabling support for more end-users.
ROAM is a technology service provider and does not offer merchant accounts, it helps merchant service providers to deliver the best mobile commerce solutions possible.  ROAM currently has over 120 merchant service providers that resell the ROAMpay turnkey solution.  For more information about ROAMpay visit: and for more about the full range of ROAM's mCommerce solutions including ROAMbiz, ROAMbuy, ROAMstore, visit  
About ROAM Data
ROAM Data provides a patented device agnostic platform and service (we call Rails) to help merchants deliver valuable mCommerce apps to virtually any computing device - from iPhones, Androids and BlackBerry smartphones, to feature phones, tablets, PCs and POS devices. Apps on ROAM Rails can be turnkey or customized, with peripherals, without, for merchants or for consumers to use. These apps include: the award winning ROAMpay, which turns merchant cell phones into POS terminals; ROAMstore, which helps merchants create mobile storefronts for consumers to shop or buy; ROAMbiz, helps enterprises to extend existing eCommerce or retail systems to mobile users, more apps are coming.  Merchants can also build their own apps with ROAM IDE, or integrate secure one-step commerce into their existing smartphone apps with ROAMbuy API.   ROAM helps merchants deploy and maintain their apps across different devices for different users; all transactions go through ROAM's Level One PCI-DSS certified payment gateway. ROAM is setting the standard for scalable mCommerce application delivery on its rails.   Visit us
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