NACS Interactive Cartoon Depicts Cost of Interchange

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NACS Interactive Cartoon Depicts Cost of Credit Fees



The National Association of Convenience Stores has released an interactive cartoon designed to educate consumers about the problem of credit and debit card swipe fees with the hope of involving them in a solution. Called interchange fees by the banks that set the rates, swipe fees are 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. Fees average about 2 percent in the United States.



The cartoon provides information about these hidden credit card fees, informing consumers that $2 out of every $100 spent for products at convenience stores goes toward interchange fees. Users can then see the effect that swipes fees have on specific purchases, whether for fuel, milk, bread, snacks or the daily newspaper. When consumers select a product, the cartoon displays how much profit the retailer makes on the purchase and how much money goes to credit card companies in the form of interchange fees.



With the purchase of a 50-cent newspaper, for example, the retailer would lose 11 cents, while the interchange fee would be 13 cents, according to the cartoon. The interactive program helps illustrate the low, or even negative, margins that convenience retailers have on small purchases made with credit cards.



“The battle over credit and debit card swipe fees that has been raging on Capitol Hill for the past five years will be heating up again soon,” said Lyle Beckwith, NACS senior vice president of government relations. “The credit card industry makes $125 million a day on swipe fees, so it is obvious why they want to protect their ‘secret tax’ on consumers and retailers. This cartoon is an interactive tool that can help bring together retailers and consumers to tell Congress why swipe fee reform is so essential to Main Street retailers, as well as American consumers.”



In 2008, Americans paid more than $48 billion in credit card swipe fees, according to NACS.



The interactive cartoon is viewable here.

NACS Interactive Cartoon Depicts Cost of Interchange

Click to Enlarge

NACS Interactive Cartoon Depicts Cost of Credit Fees



The National Association of Convenience Stores has released an interactive cartoon designed to educate consumers about the problem of credit and debit card swipe fees with the hope of involving them in a solution. Called interchange fees by the banks that set the rates, swipe fees are 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. Fees average about 2 percent in the United States.



The cartoon provides information about these hidden credit card fees, informing consumers that $2 out of every $100 spent for products at convenience stores goes toward interchange fees. Users can then see the effect that swipes fees have on specific purchases, whether for fuel, milk, bread, snacks or the daily newspaper. When consumers select a product, the cartoon displays how much profit the retailer makes on the purchase and how much money goes to credit card companies in the form of interchange fees.



With the purchase of a 50-cent newspaper, for example, the retailer would lose 11 cents, while the interchange fee would be 13 cents, according to the cartoon. The interactive program helps illustrate the low, or even negative, margins that convenience retailers have on small purchases made with credit cards.



“The battle over credit and debit card swipe fees that has been raging on Capitol Hill for the past five years will be heating up again soon,” said Lyle Beckwith, NACS senior vice president of government relations. “The credit card industry makes $125 million a day on swipe fees, so it is obvious why they want to protect their ‘secret tax’ on consumers and retailers. This cartoon is an interactive tool that can help bring together retailers and consumers to tell Congress why swipe fee reform is so essential to Main Street retailers, as well as American consumers.”



In 2008, Americans paid more than $48 billion in credit card swipe fees, according to NACS.



The interactive cartoon is viewable here.

Apple is working on it’s own mobile P2P payment service for iPhone and iPad

UnwiredView.com

Apple has submitted a patent application for peer-to-peer financial transactions. Apple's patent application describes an iPhone app and service, that will allow iPhone owners to store all their credit card, bank/checking account and other info on the device, and to make quick personal and business transactions with a few taps. Mobile micropayments through your smartphone is emerging, and, most likely, soon to become pretty hot category. Nokia is looking  how to introduce mobile payments to developing world with it’s Money service. Meanwhile, startups like Square and established companies likeVeriFone are working on ways to bring personal mobile transactions to your iPhone, and, hopefully, any other smartphone you have in your pocket. Well, those companies planning to make a living from their personal mobile payment iPhone app/accessory/service, better start thinking about other mobile platforms soon. Because Apple is actively eyeing personal mobile payments, as a market they want to have for themselves. At least that’s what an Apple’s patent application called “Peer to peer financial transaction devices and methods”  indicates.

Read The Whole Story http://www.unwiredview.com/2010/04/08/apple-is-working-on-its-own-mobile-p2p-payment-servi ce-fo....

Apple is working on it’s own mobile P2P payment service for iPhone and iPad

UnwiredView.com

Apple has submitted a patent application for peer-to-peer financial transactions. Apple's patent application describes an iPhone app and service, that will allow iPhone owners to store all their credit card, bank/checking account and other info on the device, and to make quick personal and business transactions with a few taps. Mobile micropayments through your smartphone is emerging, and, most likely, soon to become pretty hot category. Nokia is looking  how to introduce mobile payments to developing world with it’s Money service. Meanwhile, startups like Square and established companies likeVeriFone are working on ways to bring personal mobile transactions to your iPhone, and, hopefully, any other smartphone you have in your pocket. Well, those companies planning to make a living from their personal mobile payment iPhone app/accessory/service, better start thinking about other mobile platforms soon. Because Apple is actively eyeing personal mobile payments, as a market they want to have for themselves. At least that’s what an Apple’s patent application called “Peer to peer financial transaction devices and methods”  indicates.

Read The Whole Story http://www.unwiredview.com/2010/04/08/apple-is-working-on-its-own-mobile-p2p-payment-servi ce-fo....

Auriemma Consulting Group Analyses Lessons Learnt from International Credit Card Regulation

LONDON--(BUSINESS WIRE)--On 15 March 2010, the Department for Business, Innovation & Skills (BIS) released the response to the consultation on credit and store cards. As part of the consultation process, BIS commissioned Auriemma Consulting Group (ACG) to research features of international credit card markets and how they are regulated, and to identify what lessons could be learned. A number of markets outside of the UK, particularly the US and Canada, have recently implemented regulatory proposals related to credit cards. The ACG study provided evidence on market structure and credit card usage in the international markets and included detailed data and analysis of current regulations and its impact on the payments industry and consumers. Key findings include:

1. Measuring the impact of the BIS regulation will be difficult since it is also coinciding with unprecedented economic changes.


2. Limiting issuers’ ability to change terms in a reactive fashion impacts their ability to manage risk.


3. Having an open dialogue between politicians, regulators and industry participants will ensure that the impact and goals of the regulation are understood by all parties, and that changes are made in a organised and effective fashion.


4. Regardless of the scope of the regulation, it is critical that the industry is provided with enough time to implement and appropriately test any necessary changes.


5. The consumer credit industry is creative and innovative. The industry will adapt to the regulation and will develop products, services and strategies that appropriately reflect the new market constraints.

These findings will have significant impact on the UK credit industry. The most impactful result is the limitations on the ability that credit issuers have to manage risk (i.e. change terms) reactively, particularly when a consumer demonstrates financial hardship. This fundamental change to the industry’s long-standing business practices will result in less credit being available to consumers and the credit that is available will be more expensive in terms of higher interest rates and fees. Other potential changes we predict are:

• It is expected that benefits and features associated with these products will reflect the new requirements for increased transparency and/or be re-purposed versions of old best practices. Some examples include the re-introduction of charge cards as a mainstream product, widespread annual fees on cards, no interest free periods and rewards being only offered to the most affluent and/or profitable cardholders.


• New credit industry regulation is likely to continue in reaction to the unintended consequences of the current regulation, though these are not expected to be introduced for 1-2 years.


• Some issuers, particularly those who are categorised as being small- or medium-sized lenders, may cease to issue credit and/or store cards, due to the high financial and human resources required to comply with the new rules.


• Financial education efforts, particularly those focused on improving consumer financial literacy, will become more prevalent and focused.


• As credit becomes more difficult to obtain, the migration of consumers to debit and prepaid will accelerate. It also seems likely that short-term lending products like payday loans will gain interest among the mainstream public.

All data included in this study was obtained by ACG using a combination of interviews, desktop research, consumer surveys (using ACG’s proprietary market research platform, Cardbeat®) and internal industry insight. The full version of the report is available to download at http://www.bis.gov.uk/creditconsultation/response).

About Auriemma Consulting Group

Since 1984, ACG has offered comprehensive management consulting, research, industry roundtable and benchmarking services to the financial services industry. ACG clients include credit card issuers and networks, commercial banks, mortgage lenders, merchants, and other industry participants. With offices in London and New York, ACG offers actionable solutions to help clients make important business decisions to maximise their efficiencies and revenues.

Contacts

Auriemma Consulting Group

Megan Bramlette or Matt Simester

+44(0)207-629-0075

megan.bramlette@acg.net

matt.simester@acg.net

Permalink: http://www.businesswire.com/news/home/20100326005341/en/Auriemma-Consulting-Group-Analyses-Lessons-Learnt-International

Auriemma Consulting Group Analyses Lessons Learnt from International Credit Card Regulation

LONDON--(BUSINESS WIRE)--On 15 March 2010, the Department for Business, Innovation & Skills (BIS) released the response to the consultation on credit and store cards. As part of the consultation process, BIS commissioned Auriemma Consulting Group (ACG) to research features of international credit card markets and how they are regulated, and to identify what lessons could be learned. A number of markets outside of the UK, particularly the US and Canada, have recently implemented regulatory proposals related to credit cards. The ACG study provided evidence on market structure and credit card usage in the international markets and included detailed data and analysis of current regulations and its impact on the payments industry and consumers. Key findings include:

1. Measuring the impact of the BIS regulation will be difficult since it is also coinciding with unprecedented economic changes.


2. Limiting issuers’ ability to change terms in a reactive fashion impacts their ability to manage risk.


3. Having an open dialogue between politicians, regulators and industry participants will ensure that the impact and goals of the regulation are understood by all parties, and that changes are made in a organised and effective fashion.


4. Regardless of the scope of the regulation, it is critical that the industry is provided with enough time to implement and appropriately test any necessary changes.


5. The consumer credit industry is creative and innovative. The industry will adapt to the regulation and will develop products, services and strategies that appropriately reflect the new market constraints.

These findings will have significant impact on the UK credit industry. The most impactful result is the limitations on the ability that credit issuers have to manage risk (i.e. change terms) reactively, particularly when a consumer demonstrates financial hardship. This fundamental change to the industry’s long-standing business practices will result in less credit being available to consumers and the credit that is available will be more expensive in terms of higher interest rates and fees. Other potential changes we predict are:

• It is expected that benefits and features associated with these products will reflect the new requirements for increased transparency and/or be re-purposed versions of old best practices. Some examples include the re-introduction of charge cards as a mainstream product, widespread annual fees on cards, no interest free periods and rewards being only offered to the most affluent and/or profitable cardholders.


• New credit industry regulation is likely to continue in reaction to the unintended consequences of the current regulation, though these are not expected to be introduced for 1-2 years.


• Some issuers, particularly those who are categorised as being small- or medium-sized lenders, may cease to issue credit and/or store cards, due to the high financial and human resources required to comply with the new rules.


• Financial education efforts, particularly those focused on improving consumer financial literacy, will become more prevalent and focused.


• As credit becomes more difficult to obtain, the migration of consumers to debit and prepaid will accelerate. It also seems likely that short-term lending products like payday loans will gain interest among the mainstream public.

All data included in this study was obtained by ACG using a combination of interviews, desktop research, consumer surveys (using ACG’s proprietary market research platform, Cardbeat®) and internal industry insight. The full version of the report is available to download at http://www.bis.gov.uk/creditconsultation/response).

About Auriemma Consulting Group

Since 1984, ACG has offered comprehensive management consulting, research, industry roundtable and benchmarking services to the financial services industry. ACG clients include credit card issuers and networks, commercial banks, mortgage lenders, merchants, and other industry participants. With offices in London and New York, ACG offers actionable solutions to help clients make important business decisions to maximise their efficiencies and revenues.

Contacts

Auriemma Consulting Group

Megan Bramlette or Matt Simester

+44(0)207-629-0075

megan.bramlette@acg.net

matt.simester@acg.net

Permalink: http://www.businesswire.com/news/home/20100326005341/en/Auriemma-Consulting-Group-Analyses-Lessons-Learnt-International