Tuesday, April 26, 2011

Will Durbin Amendment Cripple Contactless, Hurt NFC?

If this picture offends, then at least the Feds
are successful at one thing...instituting "Political Correctness"
Besides the obvious fact that the Federal Government doesn't know what they are doing when it comes to running this country, (maybe "ruining" but not running) let alone trying to regulate the payments industry, there are now rumblings that the Durbin Amendment could hurt, no make that "ciripple" crucial developments in the contactless and NFC industry.  I have a suggestion.  Why not try and figure out how to run the Post Office in order to effectively compete with UPS and Fed Ex before they start messing with something they don't even understand?  Then again, I'm guilty of that as well, since I'm messing with Durbin while failing to understand why on earth he is involved in the first place. Digital Transactions has the scoop:  

A Little-Noted Durbin Provision Could Cripple Contactless, Hurt NFC, Experts Say

Apr. 26, 2011
Could a little-noted provision in the Durbin Amendment strangle the nascent U.S. contactless-payments market in its crib? It’s a very real possibility, says a pair of researchers, and the consequences could deal a blow to the prospects for mobile payments that depend on a promising technology called near-field communication (NFC).  “I see this as having a chilling effect on NFC,” says Andy Schmidt, research director for global payments at Needham, Mass.-based researcher TowerGroup. “It could short-circuit the value proposition behind millions of dollars of investment [in NFC].”

White Paper: Empower Your Customers And Your Associates With The Power Of Contactless Near Field Communications (NFC)

Source: Motorola

The Near Field Communications (NFC) contactless transaction and payment revolution is here. Businesses and government agencies alike can benefit from the true touch-and-go transaction simplicity that this 13.56 MHz RFID technology enables. How can you take advantage of this next generation of convenient, efficient and secure payment technology? With the Motorola MC75A HF mobile computer. This lightweight yet rugged handheld device makes it easy to deploy a world of new HF mobile applications that benefit customers as well as workers.
In the fraction of a second, workers can use the MC75A HF to securely process a ticket or transit card for a commuter bus, train or concert — or read NFC-enabled cards, tickets, tokens or tags on passports, employee badges and other business assets.
The NFC-based business processes improve service levels, while rapid and automatic transaction and payment processing keeps lines and wait times down. And many processes inside enterprises and government agencies can be performed faster and more accurately, improving employee productivity and eliminating costly errors that could compromise workplace and citizen security and safety.

Download the Whitepaper
To access this content, Register or Sign In.
Enhanced by Zemanta

MSNBC: What Does NFC Mean for Mobile Payments?

You can use your phone to buy train tickets or candy from vending machine

By Sebastian Anthony

For the last few years, cell phone innovation has been all about long-range speed. 3G brought us mobile Internet and video calling, and the creeping emergence of 4G will eventually result in download and upload speeds that are faster than cable and DSL. The truth is, while both 3G and 4G are great, they're only really useful for surfing. Browsing the Web from your smartphone is just the tip of the omnipresent mobile computing iceberg.

Near field communication

Image: Nexus S phone
Google's Nexus S phone can act as both an NFC reader and target.
Apple, Nokia and RIM, which makes BlackBerrys,
are expected to come out with NFC-enabled phones this year.
Near field communication (NFC) is a wireless technology that allows for very short range communication between just two devices. The general idea of NFC is that you have a target, which is usually an inanimate object of some kind, like a library book or credit card, and a reader, which reads data from the target. Targets don't require power — they don't need batteries — which is why they can be embedded in inanimate objects. The target, believe it or not, gets its power from a nearby reader; it extracts power from the wireless signal, "turns on," and then sends data back to the reader.

In essence, NFC is all about scanning objects with a reader. It's very similar to scanning barcodes, but infinitely more flexible and secure.

NFC with smartphones

Over the last few years, near field communication (NFC) has been spreading like wildfire in almost every domain — every domain except consumer electronics. You might have a credit card with an NFC chip, and new passports also contain NFC technology. Now, however, with the arrival of the Nexus S smartphone, which can act as both an NFC reader and target, things are about to get rather exciting indeed.

Now, while the imminent onslaught of other phones and tablets with NFC capabilities is likely, it's worth noting that the Nexus S is the only currently available smartphone in the United States and Europe with NFC capabilities. The iPhone 5, which is expected out later this year, is rumored to contain NFC technology, and both Nokia and BlackBerry will bring out NFC-enabled phones before the end of 2011.

Mobile payments

Just for a moment, think about how many purchases you make in a single day, either with cash or card. Train tickets. Car parking tickets. Breakfast. Coffee. Lunch. Candy from a vending machine. Dinner. Imagine if you had the option of never using a credit card ever again — imagine if you could do away with cash and the banal counting of change.

Well, that's what NFC technology can offer. Your smartphone can become your credit card; your smartphone can replace your cash. Instead of sliding in your card and keying in your PIN, you can simply hold your phone near a reader. With NFC readers in every shop, ticket machine, and vending machine, you would never carry money ever again — you would simply carry your smartphone.

There's more!

It gets better. Not only can NFC-enabled smartphones replace money, but they can also replace almost every piece of paper. Think about it — you buy your train ticket with your smartphone, but instead of printing a ticket, your phone becomes the ticket; simply swipe your phone over the NFC reader when you get to the turnstile! The same goes for any other significant piece of paper: concert or airline tickets, police tickets, doctor's prescriptions, school reports... In theory, every single one can be replaced with smartphones and NFC.

Become an early adopter

If you want to try out near field communication payments, your options are rather limited. In the United States, Google is working with MasterCard and Citigroup to bring NFC payments to New York and San Francisco, but that's about it. Starbucks, with a stroke of retro genius, recently rolled out mobile payments — but using barcodes, rather than NFC.

In the United Kingdom, Orange, Barclaycard, and MasterCard are planning a wide-scale deployment of NFC payment systems for the second half of 2011.

Still, don't be disheartened: Take a look at a list of every NFC-related trial currently being conducted. NFC has caught the attention of smartphone makers, mobile carriers, banks, and credit card companies. It's not a question of if NFC payments will replace cards and coins — it's simply a matter of when.

Pulse Releases 2011 Debit Issuer Study and Durbin Amendment Looks Like Signature Debit Killer

There is a possibility that we will push PIN over signature, since there is no income differential and PIN costs less in terms of fraud and back-office processing,” said a regulated issuer.
“The study results support broad industry consensus that the proposed interchange cap will likely affect even exempt issuers. However, the impact small issuers say they are expecting is greater than many anticipated,” said Steve Sievert, senior vice president of PULSE, which has commissioned the industry benchmark Debit Issuer Study for the past six years.
One exempt issuer in the 2011 Debit Issuer Study responded, “We see no impact in 2011, but over time (in 2012-2013), we expect interchange income will decrease due to marketplace pressures lowering the interchange rate.” Another exempt issuer commented that, “Even if a network were to offer a two-tier pricing schedule, the shift in market conditions would eventually require the interchange rate for exempt institutions to be reduced.”
In addition, issuers believe the Federal Reserve’s proposed network exclusivity provisions are unnecessary given the interchange cap. Almost all issuers prefer the alternative that would require two unaffiliated networks on each debit card, given that many are already compliant with the requirement. Issuers also stated that the alternative requiring two network choices for each method of authorization – two for PIN and two for signature – would create major operational challenges without providing any value to consumers.
Impact on Demand Deposit Accounts
Given the anticipated decline in interchange revenue, issuers expect the Durbin Amendment to significantly impact their demand deposit account (DDA) business. Financial institutions believe the economics of the DDA require a fundamental re-evaluation – even more so with recent changes to Regulation E regarding debit-initiated overdrafts – and several issuers are considering elimination of certain programs and services, as well as charging consumers additional fees to recoup lost revenue.
Among surveyed issuers, 54 percent of regulated institutions and 27 percent of exempt issuers report they are evaluating additional fees or reducing benefits. Exempt issuers report they are considering reducing rates on high-yield checking accounts, eliminating ATM fee rebates and charging account holders for the service of having a checking account.
One product many issuers are assessing is debit rewards. Both regulated and exempt issuers expect to eliminate or significantly reduce benefits provided by their current rewards programs.
“We are planning to reduce the earn rate, raise the annual fee and eliminate the first year annual fee waiver,” said one regulated issuer.
Additionally, many issuers indicate they will encourage increased use of PIN debit instead of signature debit, contrary to what many have done in the past. Following implementation of the proposed rules, with interchange rates for PIN and signature debit transactions likely being the same for regulated issuers, PIN transactions will have a better bottom-line contribution for issuers.
“There is a possibility that we will push PIN over signature, since there is no income differential and PIN costs less in terms of fraud and back-office processing,” said a regulated issuer.
Issuer Outlook
The expectations of issuers surveyed suggest the impact of the Durbin Amendment will be far-reaching, regardless of the interchange exemption granted to issuers with less than $10 billion in assets. Consumers will no doubt feel the effects of this new legislation, but it is unclear if they will ever realize the positive impact projected by the authors of the legislation.
“There is unanimous agreement among financial institutions we surveyed that the Durbin Amendment will adversely impact consumers,” said Tony Hayes, the Oliver Wyman partner who served as project lead on the study. “To recoup lost revenue, issuers will charge higher fees for banking services, reduce debit card benefits – such as rewards and zero liability protection –and introduce restrictions on how debit cards can be used.”
About the Study
The 2011 Debit Issuer Study is the sixth installment in the study series. Additional findings from the study will be released in May. The study provides an objective fact base on debit card issuer performance and financial institutions’ outlook for the debit card business. Fifty financial institutions – including large banks, credit unions and community banks – participated in the 2011 study, conducted by Oliver Wyman. Collectively, the participants issue 50 million debit cards and operate 36,000 ATMs. The sample is representative of the U.S. debit market in terms of institution type, location and debit network participation.
PULSE, a Discover Financial Services (NYSE: DFS) company, is a leading debit/ATM network, serving more than 4,400 banks, credit unions and savings institutions across the United States. The network links cardholders with ATMs and POS terminals at retail locations nationwide. Through its global ATM network, PULSE provides worldwide cash access for Diners Club and Discover cardholders through hundreds of thousands of ATM locations. The company also is a source of electronic payments research and is committed to providing its participants with education on emerging products, services and trends in the payments industry. For more information, visit www.pulsenetwork.com.


Steve Sievert, 832-214-0111
Tara Hanney, 713-513-9561

Enhanced by Zemanta

Senator Franken Summons Apple and Google to Hearing on Mobile Privacy

Al Franken, Senator from MinnesotaImage via Wikipedia

Apple, Google summoned to Senate hearing on mobile device privacy
(from Arstechnica on 4-26-2011)
Senator Al Franken (D-MN) has called upon Apple and Google to participate in a hearing with the Judiciary Subcommittee on Privacy, Technology and the Law in order to discuss consumer privacy. The hearing will take place on May 10 at 10am EDT in Washington, where witnesses from the US Department of Justice, Federal Trade Commission, Center for Democracy and Technology, and others will talk about what the latest mobile technology means for privacy and the law.... read more»

Apple Sued Over User Location Data Storage on IPhones, IPads
(from Bloomberg at 26-4-2011)
Apple Inc. (AAPL) was sued for alleged privacy invasion and computer fraud by two customers who claim the company is secretly recording and storing the location and movement of iPhone and iPad users, according to a federal complaint filed today in Tampa, Florida.... read more»
Related articles
Enhanced by Zemanta

MasterCard Hits New 52 Week High, Up 19.2% YTD

  From "The Street"
NEW YORK (TheStreet) -- MasterCard Incorporated (NYSE:MA) hit a new 52-week high Tuesday as it is currently trading at $274.18, above its previous 52-week high of $274 with 43,018 shares traded as of 9:51 a.m. ET. Average volume has been 899,500 shares over the past 30 days.  MasterCard has a market cap of $33.8 billion and is part of the services sector and diversified services industry. Shares are up 19.2% year to date as of the close of trading on Monday.  <>

Enhanced by Zemanta

Juniper Research: 500 Million to Use Mobiles as Travel Tickets on Metros, Subways and Buses

April 26, 2011 03:57 ET

500 Million People Worldwide to Use Their Mobiles as Metro and Bus Tickets by 2015, Says New Juniper Report

HAMPSHIRE, UNITED KINGDOM--(Marketwire - Apr 26, 2011) - Half a billion people worldwide will use their mobile devices as travel tickets on metros, subways and buses by 2015, according to new forecasts from Juniper Research. This is over five times the number generated last year but crucially Juniper is expecting usage to spread widely from the current concentration in Japan and several European countries. Outside Japan, systems in operation typically use SMS or bar codes.
NFC Creates Momentum 
Whilst SMS ticketing has been in operation for several years in large cities in Scandinavia and Central & Eastern Europe such as Stockholm and Prague, Juniper believes that recent momentum in Near Field Communications (NFC) will only add to market growth. As metro authorities begin the transition to open contactless payment systems, NFC ticket usage is forecast to grow significantly beginning in 2013.
Convenience & Choice Drive AdoptionAccording to Mobile Ticketing for Transport Markets report author Howard Wilcox: "Whether by expansion of SMS and bar code delivery or by NFC, at Juniper we see convenience and choice for users as key advantages of mobile ticketing. It will be 2013 before large numbers of NFC enabled devices are in peoples' pockets and our new report forecasts the impact on transaction volumes."
Furthermore, mobile ticketing also has potential across train and air travel, the latter driven by mobile delivered bar coded boarding passes.
Markets Sizing & ForecastsJuniper's new report contains comprehensive and detailed five year forecasting for all the key market parameters including users, transactions and values for airline, rail and metro/bus ticketing. Additionally the report highlights the conclusions from Juniper's analysis of 23 vendors addressing the market, which culminates in a new Transport Mobile Ticketing vendor strategy positioning matrix.
Further key findings from the report include:
  • Western Europe and the Far East & China will be the leading transport mobile ticketing regions by volume in 2015.
  • Poor user experience is an implementation risk -- such as bar code reading issues.
Whitepaper and further details of the study 'Mobile Ticketing for Transport Markets: Airlines, Rail, Metro & Bus 2011-2015' can be downloaded from www.juniperresearch.com. Alternatively please contact John Levett atjohn.levett@juniperresearch.com, telephone +44(0)1256 830001.
Juniper Research provides research and analytical services to the global hi-tech communications sector, providing consultancy, analyst reports and industry commentary.

Enhanced by Zemanta

Verizon Wireless and USA Technologies Partner to Deliver Machine to Machine Solutions for Vending

Image representing nPhase as depicted in Crunc...Image via CrunchBase

Verizon Wireless and USA Technologies Partner to Deliver Industry-Leading Cashless Payment Services, M2M Solutions for Vending and Automated Retail Industries

PHILADELPHIA--(BUSINESS WIRE)--Verizon Wireless and USA Technologies, Inc. (NASDAQ: USAT) today announced a collaboration that the companies believe will accelerate the adoption of small-ticket, wireless, cashless payment services and machine-to-machine applications via USA Technologies’ ePort Connect Service. The USA Technologies solution will now include the Verizon Wireless network for connectivity that enables wireless point-of-sale payments at vending machines via credit and debit cards.
“USA Technologies is a proven leader in the cashless payment technology space so it made perfect sense that they align themselves with a wireless service provider with unmatched reliability to help power that technology”
With more than 100,000 M2M (machine-to-machine) connections to their ePort Connect service, USA Technologies is a leading provider of small-ticket, wireless, non-cash transaction services to businesses and industries including kiosks, hospitality, digital imaging and the $43 billion vending machine industry.
Additionally, USA Technologies expects to benefit from Verizon Wireless’ Machine to Machine Management Center portal managed through nPhase, a Verizon Wireless - Qualcomm joint venture and pioneer in helping businesses ease deployment and management of M2M applications.
“Our association with Verizon Wireless aligns us with a powerful leading global brand in the wireless communications industry,” Stephen P. Herbert, President and COO, USA Technologies said. “In addition to providing our customers with the reputable service that Verizon has built its brand on, we believe that the sales agreement will enable us to increase our sales reach by having our ePort Connect cashless payments service now included in the Verizon sales toolkit. This represents an important milestone for USA Technologies as consumers continue to adapt to using credit or debit cards for small-ticket, wireless point-of-sale transactions.”
According to an industry census published by Vending Times, a trade publication that follows the vending industry, vending machines in the U.S. generated almost $43 billion in revenue in 2009.
“USA Technologies is a proven leader in the cashless payment technology space so it made perfect sense that they align themselves with a wireless service provider with unmatched reliability to help power that technology,” said Mario Turco, Regional President for Verizon Wireless in Philadelphia. “We look forward to working with them to offer a cost-effective, turnkey solution to B2B customers looking to improve efficiencies and grow sales by leveraging M2M applications that capitalize on the rapidly expanding market for non-cash payment services.”
Verizon offers wireless and wireline products and services that provide enterprise and government customers in a variety of industries with the networking capabilities they require to keep their organizations running at top speeds today and in the future. For more information about Verizon products and services for business, visit www.verizonwireless.com/business.
About Verizon Wireless
Verizon Wireless operates the nation’s fastest, most advanced 4G network and largest, most reliable 3G network. The company serves 104 million total wireless connections, including more than 88 million retail customers. Headquartered in Basking Ridge, N.J., with 85,000 employees nationwide, Verizon Wireless is a joint venture of Verizon Communications (NYSE, NASDAQ: VZ) and Vodafone (LSE, NASDAQ: VOD). For more information, visit www.verizonwireless.com. To preview and request broadcast-quality video footage and high-resolution stills of Verizon Wireless operations, log on to the Verizon Wireless Multimedia Library at www.verizonwireless.com/multimedia.
About USA Technologies:
USA Technologies is a leader in wireless, small-ticket cashless transactions, associated financial/network services and energy management. USA Technologies provides networked credit card and other non-cash systems in the vending, commercial laundry, hospitality and digital imaging industries. The Company has been granted 79 patents and has agreements with Visa, Compass and others. Visit our website at www.usatech.com.

Enhanced by Zemanta

Former EVP Global Prepaid at MasterCard Joins American Express

According to Bloomberg's Businessweek, American Express has hired Laura Kelly, former EVP of Global Prepaid Debit at MasterCard:
American Express has hired a former MasterCard executive to head up product development and identify new growth opportunities as the credit card issuer looks to expand its business and reach new demographics. Laura Kelly, former executive vice president of global prepaid debit cards at MasterCard, will join Amex on May 16. Kelly's background in prepaid cards is a plus for Amex. Although still a relatively young market, prepaid cards are growing rapidly. An estimated $37 billion was loaded onto prepaid cards last year, double the $18 billion in 2009, and more than four times the $9 billion total of 2008.  <>

Datacard Group Wins PayFORUM 2011 Innovation Award for its Datacard® CardWizard® Issuance Software

Software honored for its ability to personalize payment applications on microSD cards at the branch level
http://www.datacard.comMINNETONKA, Minn.--(BUSINESS WIRE)--Datacard Group, the world leader in secure ID and card personalization solutions, today announced it received the Special Technical Innovation Award at the PayFORUM Conference held March 23 and 24, 2011 in Paris, France for its Datacard® CardWizard® issuance software. In its fourth year, the PayFORUM Awards recognize innovation in the payment industry for companies serving the European market.
“Datacard continues to be committed to offer innovation and advancements in our product portfolio, and the ability to personalize a card and microSD device at the branch through our CardWizard software is truly unique and innovative.”
The CardWizard software was selected by a panel of industry experts because of its ability to personalize financial cardholder information onto microSD cards in mobile phones at the branch level. No over-the-air (OTA) personalization is required and, because CardWizard software provides instant activation capabilities, the personalized device can be immediately used for near field communications (NFC) contactless point-of-sale payments.
“We are honored that our CardWizard software was selected as the winner of this award,” said Russell St. John, senior vice president of global marketing for Datacard Group. “Datacard continues to be committed to offer innovation and advancements in our product portfolio, and the ability to personalize a card and microSD device at the branch through our CardWizard software is truly unique and innovative.”
Installed in thousands of bank and credit union branches, retail stores and service bureau locations around the world, CardWizard issuance software is part of the Datacard® Secure Issuance Anywhere™ infrastructure which includes scalable, flexible hardware, software, supplies, consultation and project management for any card issuance or personalization environment. The card programs can include instant issuance, PIN selection and PIN change, printing of embossed or unembossed cards, as well as personalization of mobile payments and NFC applications, and contact and contactless EMV®-compliant payment applications.
About Datacard Group
Datacard Group is building on a 40-year heritage of innovation and customer success. Our portfolio of solutions, backed by expert service and support, enable card and secure ID programs for financial, government and other markets worldwide. With an unmatched commitment to customer satisfaction, Datacard remains the industry’s leading brand of secure ID and card personalization solutions. www.datacard.com


Datacard Group
Melissa Prosen, 952-988-2907

At A Glance

Datacard Group
Source: via Business Wire
Updated 08/14/2009 by company

Enhanced by Zemanta

Disqus for ePayment News