Member Access Pacific

As Plastic Reigns, the Treasury Slows Its Printing Presses

Tue, 27 Sep 2011 19:22:17 GMT

The number of dollar bills rolling off the great government presses fell to a modern low last year. Production of $5 bills also dropped to the lowest level in 30 years. And for the first time, the Treasury Department did not print any $10 bills. The meaning seems clear: Cash is in decline. In 1970, at the dawn of plastic payment, the value of United States currency in domestic circulation equaled about 5 percent of the nation’s economic activity. Last year, the value of currency in domestic circulation equaled about 2.5 percent.

It might be easy to look down the slope of this trend and predict the end of paper currency. However, production of paper currency is declining much more quickly than actual currency use because the bills are lasting longer. Thanks to technological advances, the average dollar bill now circulates for 40 months, up from 18 months two decades ago, according to the Federal Reserve.

The futurists who have long predicted the end of paper money also underestimated the rise of the $100 bill as one of America’s most popular exports. For two decades, since the fall of the Soviet Union, demand has exploded for the $100 bill, which is hoarded like gold in unstable places. Last year Treasury printed more $100 bills than dollar bills for the first time. There are now more than seven billion pictures of Benjamin Franklin in circulation — and the Federal Reserve’s best guess is that two-thirds are held by foreigners.

This is very profitable for the United States. Currency is printed by the Treasury and issued by the Federal Reserve. The central bank pays the Treasury for the cost of production — about 10 cents a note — then exchanges the notes at face value for securities that pay interest. The more money it issues, the more interest it earns. And each year the Fed returns to the Treasury a windfall called a seigniorage payment, which last year exceeded $20 billion.

To meet foreign demand, the Fed has licensed banks to operate currency distribution warehouses in London, Frankfurt, Singapore and other financial centers. In March, largely because of the boom in $100 notes, the value of all American notes in circulation topped $1 trillion for the first time.

Can credit unions capitalize if banks shift to prepaid?

Wed, 31 Aug 2011 21:45:20 GMT

A recent report by Aite Group claims that shifting consumers from debit cards use to prepaid cards is a ‘smart’ way to help banks recoup lost revenue from reduced debit interchange fees.

“Big banks are anticipating a significant loss in debit interchange,” states Ron Shevlin, senior analyst at Aite and author of the report. “Their responses to this have been a little like chickens running around with their heads cut off.” Eliminating free checking, adding new ATM fees and killing reward programs have all surfaced as ways to make up for the expected revenue losses caused by Durbin.

But that’s not the smartest way to go. Shevlin recommends that banks increase their prepaid market focus, rather than opt for negative strategies that will lead to “unwanted customer behavior” like an increase in checks and cash usage. The shift to prepaid cards, he explains, is feasible because there’s already a population of “heavy” prepaid card users and because prepaid cards are not exclusive to the unbanked, like many financial players believe. In fact, Aite Group believes that banks can recoup somewhere from 20% to more than 50% of anticipated lost debit card interchange revenue by marketing prepaid cards to their customers, particularly by focusing the product to their “heavy” transactors.

To achieve success, banks will need to educate and incentivize their consumers to use prepaid cards, much like they did in the debit space. This is where credit unions can step in and capitalize on a “new market” for prepaids. Traditionally, prepaids have been targeted to narrow segments, such as the unbanked and millennials. With large FIs - and even Walmart - putting big dollars into marketing prepaid cards, demand from credit union members will grow even as cardholders continue to hold on to checking and debit.

Credit unions benefit most by having a prepaid solution in place that is both robust and flexible. This means offering members both a gift and a reloadable solution. For more information about MAP Prepaid solutions, contact Herb Tajalle at 866-598-0698, ext 1616 or herb.tajalle@mapacific.com.

Consumers Key to Preventing Card Fraud

Wed, 28 Dec 2005 07:00:00 GMT

Payment card issuers’ fraud prevention measures are lagging behind those for fraud resolution and detection, according to Javelin Research’s Seventh Annual Issuer Safety Scorecard. Most of the leading U.S. card issuers have received poor grades for consumer education and fraud prevention for the last three years, says Javelin’s Phil Blank. Javelin found that institutions are not collaborating with security vendors to deal with mounting anxieties about card-not-present fraud, nor are they deploying multifactor or second-layer authentication that relies on the mobile channel. The research implies that only the customer can combat card-not-present fraud, underscoring the need for card issuers to involve consumers in second-layer transaction approval. “The mobile channel could be used to send alerts to customers about card transactions,” Blank says. He says fraud would decline if issuers implemented policies for consumers to review and respond to mobile prompts as second layers for transaction authentication.

Consumers receive mixed messages on payment choice

Thu, 26 Jan 2012 18:43:08 GMT

Recent debit card regulations have transformed market incentives for payments, creating a confusing environment for consumers, according to a recent study from Javelin Strategy & Research.

A new Javelin study finds that 73 percent of consumers are satisfied with the debit card option. However, debit card issuers are facing a combined $12.2 billion loss due to new regulations. As a result, many FIs are now steering consumers toward more profitable credit cards.

On the other hand, many merchants who benefit from Durbin-driven reductions in interchange fees are encouraging debit card use, while small-ticket merchants who have seen costs for debit acceptance rise significantly are encouraging the use of cash or other payment options besides debit cards. As a result, consumers are facing an onslaught of conflicting messages about which payment option to use.

Other key findings from the Javelin report, Evolution in Consumer Payments Behavior:

Cash is the most regularly used payment option: 79 percent of consumers report that they had made a cash purchase within the past seven days.
90 percent of consumers claim they would require a discount of 3 percent or more to switch to another payment option.
72 percent of underbanked consumers indicate that they most frequently use cash for any type of purchase. Just 6 percent of these consumers use prepaid cards most frequently.

Identity Fraud Decreases But Costs Consumers More

Sat, 12 Nov 2011 01:04:54 GMT

In 2010, identity theft and fraud claimed fewer victims than in any other period since Javelin began conducting surveys in 2003. Driving that decrease was the reduced rate of existing account fraud, although incidents of all types of fraud dropped from 2009. Meanwhile, consumer costs, the average out‐of‐pocket dollar amount victims pay, increased, reversing a downward trend in recent years. This increase can be attributed to new account fraud, which showed longer periods of misuse and detection and therefore more dollar losses associated with it than any other type of fraud. The Javelin 2011 Identity Fraud Survey Report provides a detailed, comprehensive analysis of identity fraud in the United States to help consumers and businesses better understand the effectiveness of methods used for its prevention, detection and resolution. A nationally representative sample of 5,004 U.S. adults, including 470 fraud victims, was surveyed via a 50‐question phone interview, providing insight into this crime and the affects on its victims. This report, supported by the Better Business Bureau, is issued as a longitudinal update to the Javelin 2005, 2006, 2007, 2008, 2009 and 2010 Identity Fraud Survey reports and the Federal Trade Commission’s (FTC’s) 2003 report.

MAP Sponsors Washington GAC & Oregon Legislative Leadership Summit

Fri, 27 Jan 2012 02:35:52 GMT

Member Access Pacific is pleased to continue its long tradition of sponsoring legislative advocacy for credit unions in Oregon and Washington. Again, MAP will sponsor the Washington state Government Affairs Conference (WGAC) in Olympia, WA.

The WGAC offers a crash course in legislative advocacy, followed by the immediate opportunity to put that knowledge to use in face-to-face meetings with legislators.

This year is the first for MAP to sponsor the Oregon Legislative Leadership Summit, an event aimed at bringing together credit union leaders and their elected officials in Salem, OR. The Leadership Summer begins with a group lunch and briefing, followed by visits with Oregon legislators, who will be invited to join participants at a culminating reception at the state capitol.

According to Mark Minickiello, vice president of legislative affairs for the NWCUA, coordinated advocacy efforts like the WGAC are critical to the well-being and growth of the credit union movement.

“Every year, our state legislature passes laws that will have an effect on credit unions,” Minickiello said. “It’s important to be a part of that process to ensure credit unions are fairly represented. Our annual state GAC affords us the opportunity to educate a lot of legislators about pending legislation that would have an effect on credit unions—all at the same time.”

The three-day WGAC agenda begins with a “Pizza and Politics” dinner on Wednesday, Feb. 1, in which Minickiello will give a briefing on the most important current legislative issues. Thursday’s intense schedule includes further updates, briefings and trainings from the NWCUA legislative affairs team, with visits with legislators occupying the afternoon. The event is capped by the Anchor Awards Breakfast on Friday morning.

But more important than any one agenda item is what the WGAC represents as a whole: an opportunity to show the size and strength of the credit union movement in the Northwest while laying the groundwork for future advocacy.

“Legislative hill visits are of prime importance during the state GAC,” he said. “When we can send 100 people to the Capitol to meet with their legislators simultaneously on one afternoon, we meet our goal of educating a large number of legislators. But it also makes a statement. Credit unions are paying attention, and credit unions get involved. It makes us part of the political fabric at the Capitol. So when representatives from our Association meet with a legislator or testify on a bill, that legislator knows who we are there representing.”

The 2011 WGAC focused on prize-linked savings legislation, which successfully passed later in the year, and on setting the stage for a public funds bill, which continues to be a focal point in 2012.

“Our main piece of legislation this year would allow public entities to deposit funds at any credit union in our state up to the level of federal insurance,” Minickiello said. “Currently, only state-chartered credit unions are approved depositaries for up to $100,000. This year’s state GAC would be a success if, when our legislation comes up for discussion in the caucus room or on the House or Senate floor, legislators already know about the issue and have just heard from credit union people in their district who want them to vote ‘yes.’”

While the events of last fall have already resulted in unprecedented attention and coverage for credit unions around the nation, Minickiello stressed that now is the time to capitalize on that heightened awareness and leverage the growing power of the credit union movement.

“Most legislators will clear their calendar if possible to meet with constituents coming to visit them in Olympia,” Minickiello said. “Especially credit union people! They know how important their credit unions are to their communities and their constituents, and if they don’t, a hill visit is the perfect time to let them know. They want to know how businesses and employers in their district feel about legislation that they may be asked to vote on.

“And we have seen an invigorated interest in credit unions since the Occupy movement began and since Bank Transfer Day. Lots of legislators are asking what they can do to help credit unions. We tell them, pass our public funds bill!”

The idea of jumping into the political arena and of sitting down with state legislators can be an intimidating one, and learning the intricacies of legislative advocacy can sound like a daunting task. But Minickiello explained that the WGAC is the ideal time for credit union leaders to make their voices heard, whether they are seasoned veterans or making their first trip to the Capitol.

NRF Sues Fed Over Swipe Fee Regulations

Wed, 23 Nov 2011 17:42:28 GMT

The National Retail Federation, the Food Marketing Institute, the National Association of Convenience Stores and two retailers filed a lawsuit in federal court today saying the Federal Reserve failed to follow key requirements of a 2010 law when it adopted a flawed cap on debit card swipe fees that took effect this fall. NRF and the other groups say the failure has allowed big banks to continue charging unjustifiably high swipe fees and has discouraged price competition among credit card networks.

“The Federal Reserve was required by law to come up with swipe fees that were ‘reasonable’ and ‘proportional’ but what we got were neither,” NRF Senior Vice President and CEO General Counsel Mallory Duncan said. “Instead, the Fed allowed themselves to be influenced by the very banks they are supposed to regulate and raised the originally proposed cap to include expenses the law said were not allowed. In doing so, they literally gave away half the savings that could have been seen by merchants and their customers. We want them to go back and follow the law this time.”

“Rather than following the law, it’s almost as if the banks and the Fed were working hand-in-glove to block the genuine competition and common-sense price reductions Congress directed,” Duncan said. “The Fed’s regulations have blunted the competition that would have made greater savings possible.”

The regulations, which took effect October 1, have also led to an increase in swipe fees for some small-ticket purchases, the lawsuit says. The suit was brought by NRF on behalf of both NRF and its National Council of Chain Restaurants division, which filed comments with the Fed earlier this year warning of the potential impact on small purchases. In addition to FMI and NACS, other plaintiffs include NRF member Boscov’s Department Store, based in Reading, Pa., and NACS member Miller Oil Co., a convenience store/gas station chain based in Norfolk, Va.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 required the Federal Reserve to set guidelines that would result in debit card swipe fees that are “reasonable” and “proportional” to banks’ costs in processing debit card transactions. Financial institutions with less than $10 billion in assets were exempt.

The Fed said in December 2010 that it had determined that it costs banks an average 4 cents to process a debit transaction, and proposed that the fees be capped at no more than 12 cents per transaction – triple banks’ actual cost. After intense lobbying by banks and the card industry, however, final regulations adopted in July 2011 set the cap at more than five times the actual cost – 21 cents plus 0.05 percent of the transaction and, in most cases, an additional 1 cent for fraud prevention.

While the Dodd-Frank law said the Fed could consider the incremental costs of acquiring, clearing and settling each transaction and specifically prohibited any other expenses from being used to inflate those costs, the lawsuit alleges that the Fed – under pressure from the banks and card industry – included costs that were barred by the law. Doing so has deprived merchants and their customers of the full extent of the swipe fee relief to which they were entitled.

The approximate 21-cent cap would lower swipe fees for most purchases, which averaged 44 cents but could range as high as several dollars under the previous formula of 1-2 percent of the transaction amount. This fall, however, both Visa and MasterCard announced that they would charge the maximum amount even on small-ticket transactions the card industry previously processed profitably for as little as 6 to 8 cents. The move would severely impact many members of NRF’s National Council of Chain Restaurants division, whose transactions often amount to only a few dollars.

“Congress passed this law to cap swipe fees but the banks have turned a ceiling into a floor and raised fees dramatically higher for quick-service restaurants across the nation,” NCCR Executive Director Rob Green said. “This clearly was not the intent of Congress.”

The plaintiffs also said that the Fed’s final rules discourage competition among debit card networks. In order to establish a competitive market between networks such as NYCE, Pulse and Plus as well as the Visa and MasterCard networks, the law required that merchants be given a choice of two networks on every transaction. Under the Fed’s final regulations, however, banks can limit their cards such that merchants may never have a choice of networks. The lack of competition will allow the dominant networks to continue increasing their fees.

The lawsuit was filed in U.S. District Court in Washington, D.C.

New Deal for Card-Accepting Vending Machines

Sat, 12 Nov 2011 01:11:52 GMT

Vending machine payment-services provider USA Technologies Inc. has struck a one-year interchange deal with Visa Inc. that allows machine owners to accept debit cards without higher costs. New interchange pricing that took effect Oct. 1 had threatened to raise card-acceptance costs for USA Technologies’ clients by more than 200%. The Malvern, Pa.,-based company, which services 129,000 unattended locations that accept cashless payments, has not reached a similar deal with MasterCard Inc. but continues to accept that network’s debit cards.

“The interchange reimbursement fees made available to the company by the network [Visa] pursuant to the agreement will allow the company to continue to accept the network’s debit products over the one-year term without adversely impacting the company’s historical gross profit from license and transaction-fee revenues,” says an Oct. 18 regulatory filing from USA Technologies. The company didn’t announce the deal until Friday.

Both Visa and MasterCard on Oct. 1 replaced their identical small-ticket debit interchange rates (those applicable to transactions under $15) of 1.55% of the sale plus 4 cents with a single rate for each network of 21 cents plus 0.05% of the sale. That’s the new cap the Federal Reserve Board set for debit cards from issuers with more than $10 billion in assets, with another 1 cent pending for fraud-control expenses. USA Technologies didn’t disclose pricing details in the filing or Friday's news release, but the release underlines the term “no increase,” implying 1.55% plus 4 cents remains in effect.

With an average ticket of $1.67, USA Technologies could have seen its interchange expense rise by 235%, from 6.6 cents to 22.1 cents, had 22 cents plus 0.05% been applied. Some 82% of purchases on the company’s network in fiscal 2011 were small-ticket debit card transactions, with 75% of those on Visa debit cards.

“As a leading provider of cashless payments systems to the small-ticket, unattended markets like vending, USAT moved swiftly and successfully, working with its card-processing partners, to develop a solution to overcome the potential negative impact to our industry arising from recent increased debit card interchange fees,” Michael Lawlor, senior vice president of sales, said in the release. Lawlor was not available for an interview Friday afternoon.The USA Technologies release notes that in addition to Visa debit and prepaid cards, machines in its network will continue to accept Visa, MasterCard, American Express, and Discover credit cards but makes no mention of MasterCard debit cards. In a statement to Digital Transactions News, however, a company spokesperson said, “We currently continue to accept MasterCard debit cards and we hope to continue to accept them in the future.”

This is the second deal for Visa and a provider of card services for vending machines. Apriva Inc. a major processor of payment transactions from vending machines, told machine owners that it is working to assure their card-acceptance costs will remain stable despite the uncertain status of a program it has with Visa Inc. that gives them an interchange break if they install hardware to accept contactless cards. The program could expire at the end of the year, just three months after the Durbin Amendment’s debit card price controls took effect.

Online Banking Becomes Most Popular Channel

Wed, 05 Oct 2011 00:00:45 GMT

The latest annual American Bankers Association survey of consumer banking preferences shows online banking continues to grow as the popularity of ATMs decline. The August survey of more than 2,000 online consumers found that 62% of respondents named the online channel, meaning laptops or personal computers, as their preferred banking method versus only 36% in the 2010 survey. From 2007 through 2009, Internet banking scored in the low to mid-20s in popularity. Consumers now prefer online banking to all other channels combined. While online banking has long been popular with tech-oriented younger Americans, older consumers are beginning to embrace the channel in a big way. Some 57% of respondents aged 55 and up said online was their preferred banking method against only 20% who stated that preference last year. The popularity of visiting branches fell a bit, from 25% of respondents naming the branch as their preferred banking channel in 2010 to 20% this year. Six percent of respondents said the mail is their preferred way of banking versus 8% in 2010. Only 3% of respondents preferred the telephone, down from 6% last year. Perhaps the biggest surprise in the results is the plunge in ATMs’ popularity: only 8% of consumers in 2011 prefer the ATM channel versus 15% last year.

Sporting Events Have Lasting Economic Effects

Wed, 05 Oct 2011 00:03:38 GMT

A recent report by Visa shows the economic effects of mega-sporting events and the impact they have on tourism spending in the event host countries. The report analyzes Visa cardholder spending patterns of three recent mega-events: 2010 FIFA World Cup South Africa, the Vancouver 2010 Olympic Winter Games and the Beijing 2008 Olympics Games. According to the report, events of this scale create significant increases in expenditure and give host countries a chance to shine on the global stage. For each of the three events analyzed, there was healthy growth in Visa payment card expenditure during the event compared to the year prior:
    82 percent for the 2010 FIFA World Cup South Africa
    93 percent for the Vancouver 2010 Olympic Winter Games
    15 percent for the Beijing 2008 Olympic Games
These three events have been catalysts of economic recovery for the host country and nations surrounding it in terms of international tourism spending.

Study Finds eCommerce Providers Battling Fraud More Effectively

Wed, 25 Jan 2012 20:19:33 GMT

Online merchants made significant progress fighting fraud in 2011, according to CyberSource, a payment management company. CyberSource, a Visa subsidiary, today announced results of its 13th annual survey of e-commerce fraud.

According to the survey, the percentage of online orders that turned out to be fraudulent dropped from .9 percent in 2010 to .6 percent in 2011 -- the lowest in the 13-year history of the survey.

However, the cost of combatting fraud continues to grow, according to CyberSource. Dollar losses were up, manual review continued to climb, and merchants reiterated their concern that fraud is becoming more difficult to detect. Twenty-seven percent of respondents said they are engaged in mobile commerce, and initial indicators regarding combatting fraud in that channel are promising.

On average, merchants say 1 percent of online revenues were lost to fraud in 2011, a slight increase over last year's figure of .9 percent, according to the survey. That translates to an estimated 2011 merchant dollar loss of approximately $3.4 billion. This is the first time merchants have cited an increase in the fraud rate by revenue since 2004, said CyberSource. The decease in the amount of online fraud, accompanied by higher estimated revenue loss, means fraudsters are stealing more expensive items -- $250 on average as opposed to $150 on average for a valid order.

"The continued growth in e-commerce is a welcome development for merchants and the economy overall," said Andrew Naumann, CyberSource senior business leader, fraud management solutions, in a statement. "The bad news is that fraudsters took in a higher dollar volume, the first such increase we've seen since 2008. Our study shows merchants are working harder than ever to keep fraud in check, using more tools and reviewing more orders. Clearly the criminal element is growing more sophisticated."

Tabbedout Brings Mobile Payment to Seattle

Thu, 10 Nov 2011 18:58:07 GMT

Seattle residents no longer have to worry about leaving a credit card at a bar or waiting to close their tab. Tabbedout, the mobile payment solution that enables customers to pay their bar or restaurant tab with their phone, has launched service in nearly 30 locations throughout Seattle, with more locations coming soon. Seattle is the latest market in which this Austin, TX-based company has expanded service. Available for free on both iPhone and Android smartphones, the Tabbedout app was built by security experts who understand the value of a good time. Tabbedout allows users to store credit or debit card information directly on their phone, encrypted and under passphrase protection, instead of on host servers or in “the cloud.” Seattle consumers are safe from the threat of stolen identity due to lost or forgotten credit cards since they now can open and pay their tab directly from their phone, without handing their payment information to a server. In addition to security, Tabbedout users get the convenience of no longer having to wait in line while closing their tab. They can simply pay from their phone whenever they want, wherever they want Tabbedout allows customers to view a running tab of what they’ve ordered throughout the night, removing any buzz-kill surprises the next day. For a complete list of Tabbedout locations in Seattle or to download the app, visit tabbedout.com.

Visa Says New Chip Cards Won’t Need Off-Line PINs

Mon, 23 Jan 2012 17:54:58 GMT

Visa USA has made some recommendations for how to implement the shift from magnetic stripe payment cards to those which use a chip for authentication. And a Visa executive predicted the technology will have become a standard payment method by 2015.

The broadly written guidelines for implementing the technology are written for card issuers, chip card transaction acquirers, chip vendors, chip card vendors, chip terminal vendors and chip card personalization bureaus. Stephanie Ericksen, head of authentication product integration for Visa., explained they were aimed at both clearing up misconceptions about the technology and assisting in the first part of the brand's implementation plan.

The chief misconception that Visa appears primarily concerned with dispelling is that the new cards will carry both a chip and off-line personal identification number.

The difference between an online and off-line PIN is that an online PIN is not stored on the card. Once the cardholder enters the PIN at the point of sale terminal, the PIN is encrypted by the PIN pad and sent online to the host for validation, similar to how PIN debit transactions are authorized today.

In an off-line PIN situation, the PIN is stored securely on the chip card and during a transaction, when the cardholder enters the PIN, the POS terminal sends the PIN to the chip card for verification. The cardholder verification therefore takes place within the chip card.

“One thing that’s clear from the questions is that there’s a lot of confusion around the myth that EMV means chip-and-PIN. It doesn’t in many countries, including the U.S.,” Ericksen wrote in an online entry about the recommendations. “That’s because, in the U.S., we can rely on online processing where transactions are transmitted in real-time to the issuer for approval. With that in place, there’s no need for the off-line authentication that was the genesis of chip-and-PIN.”

The card brand announced it was prepared to start supporting the use of chips in payment cards in the U.S. in August 2011.

“All chip transactions should leverage the robust, real-time online infrastructure for authorization and authentication,” Visa wrote in the guidelines. “The U.S. has a zero floor limit; therefore, nearly 100% of all transactions are authorized online in real time. Also, many U.S. issuers use host-based fraud mitigation tools enabled by online, real-time authorization. The existing online infrastructure should be used to optimize chip transaction processing in the U.S,” the card brand wrote.

Visa added that it will also continue to support other ways of verifying cardholder identity for transactions, including signature, online PIN and no signature for low-value, low-risk transactions. Visa will not require a chip-and-PIN approach in the U.S. Instead, stakeholders will have the flexibility to choose which CVMs to support, the brand added.

Ericksen said that since it indicated it would support the new technology in the U.S., the card brand has been focusing on building the infrastructure to allow more terminals and merchants to accept the cards.

Ericksen described this process as being more akin to renovating a house than tearing one down and rebuilding it. She described the necessary changes as additions to different parts of the acceptance and processing technology to allow them to carry the additional data from the smart card transactions.

“Card processors are already transmitting a good deal of data,” Ericksen observed, explaining that phase one is a matter of making sure they have the additional slots needed for the smart card data.

She also explained that the costs for the technology has been largely falling as more retailers, acquirers and processors have adopted it, but she also said that the costs of point-of-sale terminals, which can handle both smart card payments and mobile payments, have remained higher.

When Visa announced that it would support the smart card technology, Ericksen noted that the greatest relief from the PCI card data security compliance would come to retailers that installed terminals that both read smart cards and mobile payments. The brand hoped that savings from easing PCI compliance would be enough to offset the additional costs of terminals that accepted both smart card and mobile payments.

Ericksen said that once the acceptance infrastructure was in place, the brand would rely on issuers to handle introducing the technology to consumers and she predicted it would not be too hard to do. A number of issuers, including some credit unions, have already begun making the smart cards available to cardholders who travel overseas, she noted, and the card brand has heard that friends and family members of those cardholders have also approached their institutions seeking the cards.

Visa found the most trusted brand in Mobile Payments

Wed, 05 Oct 2011 00:01:44 GMT

When we think “mobile payments,” a slew of tech brands fly to mind: Google’s new Wallet app, the upcoming iPhone’s rumored payment-enabling chips and Twitter co-founder Jack Dorsey’s highly-touted and well-funded Square, to name a few. But ask consumers who they trust to handle mobile payments, and the answer is pretty clear: the same brands they currently trust with payments today -- namely credit-card companies such as Visa, American Express and Mastercard, according to a study by Ogilvy & Mather.

Visa joins Isis

Wed, 05 Oct 2011 00:03:08 GMT

Isis, the national mobile commerce joint venture between AT&T Mobility, T-Mobile USA and Verizon Wireless, today announced that Visa, MasterCard, Discover and American Express will join Isis in making mobile commerce a reality for millions of U.S. consumers and merchants. Isis’ relationships with all four payment networks mean that with Isis-enabled phones and payment terminals in place, merchants and consumers will have ubiquity and freedom of choice when it comes to payment network acceptance.

Wal-Mart, McDonald's execs sour on new debit rules

Tue, 08 Nov 2011 19:09:37 GMT

Executives of Wal-Mart Stores Inc and McDonald's Corp say new U.S. rules limiting debit card processing fees will not cut their costs as much as they hoped, and could actually boost their expenses. Treasurers from the world's largest retailer and biggest restaurant chain said at a financial industry conference on Friday that debit card processing costs, or interchange fees, were not low enough despite the new limits to have a real impact on retailers.

The interchange fees that banks charge to merchants were capped on Oct. 1 as a result of the Durbin amendment, a provision of the 2010 Dodd-Frank financial reform law. Under the Durbin amendment, the Federal Reserve capped debit card processing fees at 21 to 24 cents per transaction, roughly half the previous industry average. Banks have said the new rule is a windfall for retailers, moving as much as $8 billion in revenues off lenders' books. But U.S. retailers that rely on a high volume of small dollar transactions could see an increase in their debit card processing costs, because prior debit costs for smaller purchases had lower fees. However, 7-Eleven gas stations and convenience stores will likely see a mixed impact from the capped fees. The world's largest convenience store chain's processing costs for gasoline purchases will likely drop, but costs will likely rise on purchases customers make inside their stores.

Yes, you can dump your bank

Fri, 13 Jan 2012 17:25:46 GMT

(MONEY Magazine) -- Does "ditch my bank" make your list of resolutions for 2012? Join the club. Americans' simmering resentment toward big banks seems to have finally bubbled over: In the month after Bank of America (BAC, Fortune 500) threatened a monthly fee on debit cards, 221,000 folks joined more consumer-friendly credit unions -- equal to about a third of the new members for the entire previous year.

In addition, customers of the 10 largest retail banks are so fed up with rising fees and dismal rates that the institutions stand to lose a combined $185 billion in deposits over the next year, says consulting firm cg42.

Simply switching banks, however, might result in a frustrating game of whack-a-mole; a different institution could adopt the same miserable practices a few months from now. On the other hand, stuffing your dough in the mattress isn't practical, let alone comfortable.

How about a third way? Today "you can conduct most of your banking with institutions that aren't banks," says Alex Matjanec of MyBankTracker.com.

While going bank-free isn't for everyone, the truly incensed might try these alternatives for managing cash, growing savings, even borrowing.

Best checking alternative: Brokerage cash account

Most major brokerages offer cash-management accounts that function exactly like bank checking: You can set up direct deposit, get an ATM/debit card, write checks, even pay bills online.

"Brokerages are competing with banks to build a relationship with you," says McLean, Va., financial planner Gordon Bernhardt. Since the firms hope you'll use money you store to buy investments, they don't nickel-and-dime the cash accounts.

In fact, the options at five of the six brokerages MONEY surveyed (e*Trade, Fidelity, Schwab, Scottrade, TD Ameritrade, and Vanguard) were virtually fee-free. No monthly charges or minimums; no fees for bill payments; gratis withdrawals from any ATM, including reimbursements for surcharges applied by banks. A brokerage account was typically required, so look first to the firm where you already keep investments.

Vanguard was the anomaly among those that MONEY looked at. It alone required a certain threshold of assets -- $500,000 for access, $1 million to avoid fees. And it's the only one that didn't offer FDIC insurance; the rest hold uninvested funds with a partner bank or their own bank entity.

Best savings alternative: SmartyPig.com

Savings motivation site SmartyPig.com offers 0.7% on balances up to $50,000, 0.5% for amounts over that -- pretty decent compared with the average bank savings yield of 0.14%. And while the site isn't itself a bank, it stores your cash with one, so your money is insured.

Of course, you can do a bit better, around 1%, at a handful of online banks, but SmartyPig serves up other benefits banks don't -- like helping you save.

Savings: Get more yield on your cash

Rather than offering traditional accounts, SmartyPig makes you create goals, such as "vacation," which you fund by direct deposit or transfers from a bank or brokerage.

You can track progress graphically, and share the info with others. (Or set one generic goal, like "emergency fund," to simply take advantage of the rates.)

Saving for a purchase? Once you've met your target, you can choose a retailer gift card worth up to 11% more than your balance.

Best borrowing alternative: A credit union

While credit unions offer similar services to banks, these not-for-profit cooperatives aren't beholden to shareholders or the bottom line.

"That unique structure typically translates into more favorable terms for borrowers," says Greg McBride of Bankrate.com.

Send The Help Desk your money questions

A five-year new-car loan averages 4.9% at banks, vs. 3.5% at credit unions, reports Informa Research Services.

For home-equity lines of credit, banks are offering 4.7%, credit unions 4.4%. Rates on fixed mortgages come up about equal, though you'll probably save a few hundred in fees and get more direct access to decision-makers at a credit union.

Search options at findacreditunion.com. And don't assume you won't qualify for one. Many have relaxed their membership policies, says Matjanec.