Friday, September 30, 2011

ABI Research: MNOs Need Partnerships and NFC Handsets or Will Miss Out on $100 Billion Mobile Payments Opportunity

NEW YORK--(BUSINESS WIRE)--Despite the analysis from other analyst companies that resign NFC payments to a hype-driven phenomenon, ABI Research predicts that these payments will soon become not only a reality, but also a mass market-adopted behavior in the United States and Western Europe in 2016.
“especially when you consider it will have existed for less than four years in 2016.”
“Despite the lack of definitive announcements to date, MNOs and OEMs will flood some markets with NFC payment-ready smartphones in 2012 and 2013. That, along with momentum from Google Wallet and several other MNO-led initiatives, like Cityzi in France, ISIS in the US, and the yet unnamed MNO JV in the UK, builds the installed base of NFC mobile payment users to more than 16% of mobile subscribers in the U.S. and Western Europe by late 2014,” says Mark Beccue, senior analyst, mobile money.
Total dollars spent worldwide using NFC will surpass $100 billion in 2016, a relatively small amount compared to the tens of trillions of overall annual consumer spending. “$100 billion is a healthy amount for an emerging payment initiative,” says Beccue, “especially when you consider it will have existed for less than four years in 2016.”
Business models, not technology, continue to bog down the near-term progress of NFC mobile payments, but perhaps those days are coming to a close. “With these new business models, the opportunities are too good to pass up. MNOs, OEMs, and Google are tinkering with multiple business and partnership models and will most likely use a combination of one or more. This approach will help move the business forward,” says Beccue.
ABI Research’s new report, “NFC Mobile Payments,” ( forecasts the installed base of NFC handsets, active NFC mobile payment users, and NFC mobile payments by region and selected countries. The report also presents details of evolving consumer behavior and use cases for NFC mobile payments.
The report is part of ABI Research’s Mobile Money ( research service.
ABI Research provides in depth analysis and quantitative forecasting of trends in global connectivity and other emerging technologies. From offices in North America, Europe, and Asia, ABI Research’s worldwide team of experts advises thousands of decision makers through 40+ research and advisory services. Est. 1990. For more information, visit or call +1.516.624.2500.


ABI Research
Christine Gallen, +1-516-624-2542

BofA $5 Monthly Debit Fee = First of Many Backfires Expected from the Regulatory Vehicle known as the Durbin Amendment.

The $5 monthly debit fee will most likely backfire on Bank of America as well.  It rivals the purchase of Countrywide for lack of forethought and demonstrates how out of touch BofA has become.  

This news will be well received by our nation's credit unions as I expect BofA will lose millions of customers over this ill-advised decision. 

Another potential big winner is Ally Bank who has been afforded the "opportunity" to put together a kick-butt commercial that will fit right in with their current approach to their customer centric theme. 

Why did she pay a penny and it costs me $5.01?
Durbin blasts Bank of America's new debit fee‎ The Hill (blog)

Bank of America blames new $5 debit fee on Durbin measure

By Peter Schroeder 09/29/11 03:54 PM ET

The bank, the largest in the nation by assets, blamed its decision on the so-called Durbin Amendment, a provision of the Dodd-Frank financial reform law put into place by Democrats in 2010 that set limits on the fees banks could charge retailers for swiping their debit cards. Bank of America announced Thursday it will charge its debit card users a $5 monthly fee beginning in early 2012, provoking fury from a senior Democrat. Bank of America said the economics of debit cards has been altered by the fee limit, which will take effect Oct. 1. Banks say the fees go to pay indirect costs of providing debit cards, such as fraud and overdraft protection.

Customers Blast Bank of America's $5 Debit Card Usage Fee
International Business Times - Manikandan Raman - 1 hour agoBank of America (NYSE: ... a $5 monthly fee for debit card usage as Dodd-Frank Act's Durbin amendment ...I

NRF Responds to Bank of America Debit Card Announcement

WASHINGTON--(BUSINESS WIRE)--The National Retail Federation today issued the following statement from Senior Vice President and General Counsel Mallory Duncan in response to Bank of America’s announcement that it will impose a $5 monthly fee on debit card users:
“Every time Congress takes a step to protect consumers, the banks use it as an excuse to raise fees. We’ve seen it when Congress limited late fees and overdraft fees and now we’re seeing it with swipe fees. Just as merchants and consumers are about to get some relief, they’re doing it again. That doesn’t mean Congress shouldn’t pass consumer protection laws. It speaks more to the nature of the card industry than to whether swipe fee reform should have been passed.”
As the world’s largest retail trade association and the voice of retail worldwide, NRF’s global membership includes retailers of all sizes, formats and channels of distribution as well as chain restaurants and industry partners from the United States and more than 45 countries abroad. In the United States, NRF represents an industry that includes more than 3.6 million establishments and which directly and indirectly accounts for 42 million jobs – one in four U.S. jobs. The total U.S. GDP impact of retail is $2.5 trillion annually, and retail is a daily barometer of the health of the nation’s economy.

Expert Predictions from Isis and American Express on NFC adoption

Expert Predictions from Isis and American Express on NFC adoption
“The widespread adoption of NFC-enabled mobile commerce requires two key principles: Convening the ecosystem and developing the infrastructure”

Douglas Kilgour, Senior Business Development Executive, Isis

With such a pivotal role in the successful rollout of NFC, the opinions of Isis are crucial to anyone involved in the NFC space. The aim of Isis is to align all key stakeholders – payment networks, banks, carriers, merchants and consumers – essential for the widespread adoption of NFC.

NFC Insight was lucky enough to be able to quiz Douglas Kilgour, Senior Business Development Executive at Isis to find out how he views this path ahead. Plus, David Messenger, EVP at American Express also added his thoughts to the discussion.

We spoke about how industry collaborations are pushing NFC Payments forward, as well as the hurdles that still need to be crossed.

You can download the full interview now by entering your details on the right hand side

By downloading this interview you’ll discover:
  • What still needs to happen for NFC Payments to take off in the USA and how infrastructure is a fundamental to success
  • How industry collaborations are taking NFC payments to the next level
  • The impact of smartphone penetration on NFC and the lack of NFC enabled devices
  • The role and goals of Isis in facilitating mass market NFC adoption
But that’s not all…
As a bonus, I’ll also send you another interview with a top executive; Troy Bernard, Director of Chip Payment Technology at Discover.
In this bonus interview Bernard explains how offers, loyalty and other value-added services will create a compelling value proposition for retailers to adopt mobile payments.
By reading this interview you’ll get expert opinions on:
  • What needs to happen in order for retailers to adopt this technology?
  • An analysis of consumer reactions to existing payment products
  • Exploring the issues of security, fraud, processing error and merchant dispute
Yes! Please send me the exclusive interview with top executives on NFC Payments.Simply fill in your details below, hit submit and you’ll get sent it immediately.
You'll get an interview with Isis and American Express on "Meaningful NFC Collaborations"
Plus, you'll also get a bonus interview with Discover on "Offering Merchants a Propelling Value Proposition"
First Name*
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Please re-enter your email address*

Bank of America Announces $5 Monthly Debit Card Fee to Start in 2012

Consumers Union Offers Tips For Consumers As Banks Begin Charging New Fees
SAN FRANCISCOSept. 29, 2011 /PRNewswire-USNewswire/ -- Bank of America has reportedly decided to charge its customers a $5 monthly fee for debit card transactions starting in 2012.  Other big banks, including Wells Fargo and J.P. Morgan Chase are also testing debit card fees in certain markets.
But plenty of banks are still offering debt card services without a fee.  Consumers Union is offering tips to consumers on how they can avoid new fees and what to do if they decide to move their money to another bank.   
"It's important for consumers to know what fees their bank charges and to understand those fees up front so they can make an informed choice about what they are willing to pay," said Norma Garcia, manager of Consumers Union's financial services program.   "There are a lot of banks and credit unions that will be eager to attract new customers unhappy with all the new fees that some big banks are starting to charge.  Consumers can take some steps to limit fees.  But if they decide to move their money to another bank, they should keep a few things in mind to avoid financial headaches."
Consumers Union advised consumers to keep a close eye on their bank statement to be on the lookout for new fees.  New fees will show up first in the enclosures and then on bank statements.  If consumers are unhappy with a new fee, they should complain to their bank about it.  Consumers should ask their bank what other accounts it offers -one of them may fit with their pattern of transactions better. Some fees are "trial balloons." The bank may be testing to see if its customers will put up with a particular new fee.
Consumers should check with their bank to find out what steps they can take to avoid monthly fees. Some banks will eliminate monthly fees if consumers use direct deposit for their paycheck or maintain a minimum balance.  Consumers should avoid using non-network ATMs.  Every time a consumer uses an ATM that is not part of their bank's network, they get charged by the operator of the ATM and by their bank. That can mean a $5 charge just for withdrawing money from their accounts. 
For consumers who decide they want to move their money to another bank, Consumers Union outlined a number of steps consumers should take to move their money safely, including things to keep in mind as they re-route automatic payments and direct deposits and how to avoid losing any money in the process.  For more details, see:

NRF Says Swipe Fee Cut Will Save Merchants and Consumers Billions

WASHINGTON--(BUSINESS WIRE)--Merchants and their customers will save billions of dollars when new Federal Reserve regulations cutting debit card swipe fees roughly in half take effect this weekend, the National Retail Federation said today.
“Retailers across the nation are developing a wide range of innovative ways to pass these savings along to their customers with lower prices and better value”
“Retailers across the nation are developing a wide range of innovative ways to pass these savings along to their customers with lower prices and better value,” NRF Senior Vice President and General Counsel Mallory Duncan said. “Change won’t come overnight, but consumers will definitely benefit. Reducing these fees will put billions of dollars back into the Main Street economy, helping American families stretch their paychecks and ultimately preserving and creating local jobs to keep America on the road to recovery.”
Under Fed regulations made final this summer, the “swipe” fees the nation’s largest banks charge merchants to process debit card purchases will be capped at no more than 21 cents per transaction – plus 0.05 percent of the purchase price and, in most cases, an additional 1 cent for fraud prevention – beginning on Saturday. That compares with 1-2 percent of the transaction – about 44 cents on the average retail purchase but several dollars on bigger-ticket items – under current fees. Debit card swipe fees currently total about $20 billion annually, and analysts have estimated the cap will save merchants and their customers about $7 billion. Small and mid-size financial institutions with less than $10 billion in assets are exempt.
Members of the highly competitive retail industry have considered a wide range of ways to use the savings to increase value for their customers, such as overall lower prices, specific discounts for using debit cards, free or lower-cost delivery on appliances, free alterations on clothing, or hiring additional staff to improve customer service, to name just a few examples. Few have been able to announce specific programs, however, because banks have only belatedly begun to communicate details of their new pricing structure to retailers. Even though the regulations set caps, precise fee schedules will still be up to the card companies and processors.
While the cap will produce considerable savings for retailers and their customers on most purchases, some merchants are upset that fees could actually go up on small-ticket purchases. The cap amounts to 27 cents on a $100 transaction, or about one-sixth the $1.50 collected under the current fee schedule. But the cap comes to 22 cents on a $2 soda or cup of coffee, for example, that currently carries a fee of only 8 cents. The regulations would allow banks to charge less than the cap for small purchases, but recent news reports indicate that Visa and MasterCard banks plan to instead charge the maximum allowed.
“Even as these regulations are about to go into effect, banks are trying to turn what is supposed to be a ceiling on these fees into the floor for small transactions even though those fees were already grossly out of proportion to the amount of the purchase,” Duncan said. “Unfortunately, this is all too typical of what we’ve come to expect from the card companies and their banks.”
A number of banks have also threatened to raise other fees in retaliation for the swipe fee cap, but Duncan criticized their behavior.
“Every time Congress takes a step to protect consumers, the banks use it as an excuse to raise fees,” Duncan said. “We’ve seen it when Congress limited late fees and overdraft fees and now we’re seeing it with swipe fees. Just as merchants and consumers are about to get some relief, they’re doing it again. That doesn’t mean Congress shouldn’t pass consumer protection laws. It speaks more to the nature of the card industry than to whether swipe fee reform should have been passed.”
NRF has fought for debit and credit card swipe fee reform for more than five years, and worked with other merchant groups to convince Congress to include language in last year’s Wall Street reform bill requiring debit fees to be “reasonable and proportional” to banks’ actual costs of processing the transactions. This spring and summer, NRF conducted an intensive 60-day campaign that helped block a last-minute banking industry effort to have lawmakers repeal or delay the requirement.
As the world’s largest retail trade association and the voice of retail worldwide, NRF’s global membership includes retailers of all sizes, formats and channels of distribution as well as chain restaurants and industry partners from the United States and more than 45 countries abroad. In the United States, NRF represents an industry that includes more than 3.6 million establishments and which directly and indirectly accounts for 42 million jobs – one in four U.S. jobs. The total U.S. GDP impact of retail is $2.5 trillion annually, and retail is a daily barometer of the health of the nation’s economy.

TSYS to Broadcast Third-Quarter 2011 Results

COLUMBUS, Ga.--(BUSINESS WIRE)--TSYS (NYSE: TSS) will issue its third-quarter earnings report on October 25, 2011, at approximately 4:00 p.m. EDT. A conference call to discuss these results, business trends and future projections will be held on October 25, 2011 at 5:00 p.m. EDT. Shareholders and other interested persons may listen to this conference call via simultaneous internet broadcast at by clicking on the link under "Webcasts" on the homepage. You must download Windows Media Player (free download available) before accessing the conference call or the replay. The conference call will be archived for 12 months and will be available starting 30 to 45 minutes after the call ends.
About TSYS
TSYS (NYSE: TSS) is reshaping a new era in digital commerce, connecting consumers, merchants, financial institutions, businesses and governments. Through unmatched customer service and industry insight, TSYS creates a better experience for buyers and sellers, supporting cross-border payments in more than 85 countries. Offering merchant payment-acceptance solutions as well as services in credit, debit, prepaid, mobile, chip, healthcare, installments, money transfer and more, TSYS makes it possible for those in the global marketplace to conduct safe and secure electronic transactions with trust and convenience.
TSYS’ headquarters are located in Columbus, Georgia, with local offices spread across the Americas, EMEA and Asia-Pacific. TSYS provides services to more than half of the top 20 international banks. For more information, please visit us at

Electronic Payments Coalition: Durbin Amendment's Harmful Consequences Continue

Senator Ignored Warnings from Consumer Advocates, Economists, Industry

WASHINGTONSept. 29, 2011 /PRNewswire/ -- Electronic Payments Coalition spokeswoman Trish Wexler issued the following statement today regarding Senator Dick Durbin's (D-IL) remarks on the unintended consequences of the "Durbin amendment" – a law that directed the Federal Reserve to institute government price controls on the debit card market, which will be implemented on October 1, 2011:
"It is astounding that Senator Durbin, who created today's chaos, is now trying to point the finger at everyone but himself for the widely predicted consumer harm.  Senator Durbin has spent years pushing the agenda of giant retailers, while flatly ignoring repeated warnings by consumer advocates, economists, and the financial services industry about precisely this type of consequence.  The truth is that Senator Durbin knew that banks and credit unions across the board would have to raise prices.  Instead of heeding our warnings and protecting consumers, he chose to put millions of dollars into the pockets of giant retailers."
About the Electronic Payments Coalition
The Electronic Payments Coalition (EPC) includes credit unions, banks, and payment card networks that move electronic payments quickly and securely between millions of merchants and millions of consumers across the globe. EPC's goal is to protect the value, innovation, convenience and competition in today's growing electronic payments system. EPC educates policymakers, consumers and the media on the system's role in economic growth, and the importance of protecting consumer choice and stability for the continued growth of global commerce.
SOURCE Electronic Payments Coalition

New NFC Spec Makes It Easier To Swap Contacts, Save Data To Phones

Photo from
Without getting overly technical (the full spec is available here, if interested), the new specification extends the NFC data exchange format (NDEF), ...

SNEP also sets a default “well-known service” for standardized NFC data storage, boosting interoperability even if devices aren't from the same ...

The SNEP specification was published following an approval ballot of NFC Forum voting members. The extension of the NFC Data Exchange Format (NDEF) to ...

Smart cards, mobile telephony and M2M at the heart of e-health services

CARTES & IDentification 2011
PARIS--(BUSINESS WIRE)--Smart security technologies (security and respect for private life) are crucial to improving the quality of care and patient comfort, but also in the fight against fraud and rising health costs.
“could be used over the next ten years to reduce fraud in health spending to the tune of around $370 billion.”
The current situation
Occupational health cards and mobile phones now play a role alongside stethoscopes in hospitals and medical practice. If use of health cards (1) still lags far behind that of credit cards and especially of mobile phone SIM/USIM cards, it is proving increasingly necessary in countries where the health system experiences major fraud and where the costs of conventional treatment of medical data are becoming difficult to manage. This is the case in all developed countries, and is already affecting some developing countries. According to the Smart Card Alliance, errors in patient identity have caused over 110,000 deaths in U.S. hospitals. Health services have reached a crucial turning point in their development, which some are comparing to the situation of the credit card 40 years ago! The smart card now appears to be the ideal solution for paperless processing of medical data while providing proven safeguards, which are imperative where the security and protection of personal data are concerned.
Smart security technologies
The Health Information Technology for Economic and Clinical Health (HITECH) Act, signed in the United States in February 2009, confirms this trend. It invites all stakeholders in the health ecosystem to work towards the creation of a network (Protected Health Infrastructure) for the collection and exchange of standardised medical data (Electronic Health Record) using "certified technology" capable of simultaneously ensuring the availability, sharing, security, accuracy and confidentiality of such data. Although not explicitly named, smart security technologies are at the forefront of this trend.
This legislative framework involves identity management techniques that have been widely tested in banking and various fields involving identity issues. These techniques must be able to handle the rights of all stakeholders (patients, doctors, nurses, specialists, pharmacists, etc.), keys and certificates, means of encryption and strong authentication (in some cases, biometric).
Health Card: identified interests
The AMA (American Medical Association) has already stressed the benefits offered by the use of a smart card that stores personal medical information (allergies, blood type, current treatment, etc.), especially in emergency situations – a reference to the situation created by Hurricane Katrina in the United States. For its part, the Secure ID Coalition, which also campaigns in the United States for the generalisation of personal health cards, says they "could be used over the next ten years to reduce fraud in health spending to the tune of around $370 billion."
Towards global deployment
Several health smart cards have already emerged in the United States. Last March, LifeNexus launched a health card which also serves as a personal credit card. A similar concept, this time in the form of a bracelet containing a contactless chip (MasterCard PayPass) was issued by the U.S. Bank in July (source). The bracelet contains a unique number (VITA number), providing access in emergencies to the bearer's personal medical data.
In Europe, Germany is preparing to launch a new generation of health cards next October (eGK Generation 1plus) designed in conjunction with insurance companies for online use. In France, the new CPS3 card for health professionals entered circulation earlier this year. This card is now in line with the European IAS ECC standard (Signature, Identification, Authentication) and is contactless, which should greatly improve its usability.
The "e-health" market boosted by mobility
These developments further confirm the cardinal role played by cards in identifying patients and health professionals but equally in allowing them to access online services, whose development is also being accelerated by the mobile Internet. According to In-Stat, the "cloud computing" market in the health field should exceed a billion dollars in 2013, clearly driven by the explosion of mobility (40% of the market in medical communications).
According to ABI Research, the market for connected portable medical equipment (various types of sensors equipped with wireless or contactless modules) is expected to grow very steadily over the next 5 years (100 million units per year). E-health and m-health will therefore grow together with new families of connected devices (autonomous M2M or communicating with classic smartphones via NFC or Bluetooth).
Qualcomm in China has launched a major project to fight against cardiovascular disease with the use of smartphones connected to micro-electro-cardiogram sensors. Data are collected at a centre where 30 specialists work round the clock to analyse the data in real time and intervene in support of local doctors where necessary.
The market for M2M modules alone is, according to Sierra Wireless, still modest (some $9 million), but it should multiply by 10 over the next three years. With Positive ID, Sierra has developed secure modules to provide support for diabetics through monitoring levels of glucose in the blood.
With Aerotel, Cinterion has developed a system capable of modulating in real-time the flow of air sent to people suffering from sleep apnoea. The company has also developed M2M modules with TZ Medical in order to remotely monitor problems of cardiac arrhythmia in real-time.
The first applications of NFC technology appeared some months ago in the U.S. with the launch by the company iMPack of a system "tracking" the quality of sleep, allowing a clock to transmit data collected during the night to the Nokia C7 NFC smartphone. It uses an embedded application to generate an initial result, which can then be transmitted to a physician.
For more information on developments in the field of e-health, visit CARTES & IDentification 2011!
(1) The principal countries using health cards for patients and/or health professionals are France (60 million cards), Germany (80 million), Taiwan (24 million) Belgium (11 million), Austria (11 million) and Algeria (7 million).
About CARTES & IDentification 2011
The leading international event in the digital security and payment solutions market, CARTES & IDentification will be held at the Parc des Expositions Paris-Nord Villepinte from 15 to 17 November, 2011. With 450 exhibitors and 140 presentations by international experts, the event will attract 20,000 visitors exploring the latest trends and innovations in the sector (mobile payment, contactless, biometrics, M2M).
Turkey, with its very dynamic market in the use of credit cards and contactless infrastructure, is country of the year in 2011. SESAMES trophies are awarded each year to the top 10 innovations in the industry and will be announced on the eve of the show.
For more information

Thursday, September 29, 2011

Traditional POS Purchases To Plummet Due To Mobile, IHL Reports

StorefrontBacktalk: Written by Evan Schuman

Retailers will buy an average of 10 percent fewer traditional POS units, opting instead to use mobile checkout, according to an IHL Mobile study slated to be released next week. But that may be a misleadingly small change, because some sectors—such as specialty retailers—will see traditional POS purchases plunge by 20 percent in that same timeframe, which means “roughly 200,000 units going away. That’s more than NCR ships for an entire year worldwide,” said IHL President Greg Buzek.

Read more:

PYMNTS News Briefing 9/29

Regulation Roundup
Featured Commentary 
As the Oct. 1 implementation date for the Durbin Amendment nears, major banks, like U.S. Bancorp and Wells Fargo, plan to shelve their debit rewards programs entirely. But MPD Managing Director Margaret Weichert points out a few banks - both large and small - are using innovative reward programs to cement customer loyalty and consolidate transaction behavior with a single institution.
Featured Event

The 10th Annual Smart Card Alliance Government Conference will survey opportunities and challenges for government issuers, accreditation and testing authorities, procurement programs, and the industry to meet the government's market demands. The conference features comprehensive coverage of efforts toward strong authentication technology in government identity programs. 
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Today's Top Story

IBC Bank spoke with about choosing to eliminate 55 branches, in lieu of taking away free customer products and services, due to the Fed's new debit rules. "Government many times passes regulations that end up hurting the very people they were intended to help," says the bank. Read More

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