Peter Lucas

A decade ago, credit card issuers considered collection attorneys to be a last resort in attempting to recover bad debt. The perception was that while they were effective, attorneys were an expensive, one-dimensional recovery option. Their job was to simply to use litigation to wring money out of hard-core debtors who had rebuffed the overtures of even the most persistent collections agent.

In their search for value-added products they can sell to merchants, processors and acquirers insist they have found a winner in gift cards. Large merchants agree, but small and mid-sized merchants are still a tough sell. How can the market grow?

The Internet is paving the way for merchants to install high-speed point-of-sale technology at a better price point than a virtual private network or leased line. What are the implications for customer service, marketing and loyalty programs?

Consumers may still be packing store cards in their wallets, but retailers' appetite for managing their own card programs is fading fast. The trend became crystal clear in late March when Sears, Roebuck and Co. put its $30.8 billion portfolio up for sale (Card Watch, page 10).

As the company that introduced the cash rebate and no annual fee, Discover Financial Services has established a pedigree for unconventional thinking. In 2002, the Riverwoods, Ill.-based card unit of Morgan Stanley again demonstrated it is not afraid to shake up the status quo, having introduced its Discover 2Go Card and an overhaul its famed Cashback Bonus.

Online payments provider PayPal is quickly leveraging its ties to new parent eBay as it expands into business-to-business sales. But is eBay trying to dissuade customers from using credit cards?

Credit cards dominate Web payments in the U.S., but variations on account-to-account transfers are popular elsewhere in the world. Will American financial institutions import any of these systems?

During the heady days of the dot-com boom, merchant-acquiring banks signed up Internet retailers en masse in an attempt to grab share in a new market that some researchers projected would hit $100 billion in sales by 2001. Thoughts of huge transaction volumes and revenues to be earned from the sale of additional bank services to Internet merchants, such as cash management and payroll, were dancing through the heads of many executives in the acquiring divisions of full-service banks.

Since bursting onto the payments scene in the late 1990s, electronic check payments at the point of sale have mushroomed. Merchants handled more than 200 million e-checks during 2002's first half, more than 300% above the same period in 2001, according to Herndon, Va.-based Nacha-The Electronic Payments Association.