Credit

The launch of mobile-banking services and payments in Canada was the next logical step for Monitise Americas LLC, according to CEO Lisa Stanton. "The credit-union market is very engaged in consideration of mobile banking here in the States, so we're excited to launch initially with a focus on credit unions in Canada," Stanton tells CardLine. Monitise Tuesday announced an agreement with Everlink Payment Service Inc., a Canadian provider of electronic-transaction and payment services, to distribute a suite of mobile-banking services to financial institutions, including 375 credit unions (CardLine, 6/3). Monitise has similar deals with five U.S. financial institutions to distribute the services through the NYCE electronic funds transfer network. Stanton says the suite gives mid-sized banks and credit unions the "opportunity to remain competitive and, maybe in some cases, leapfrog the big guys in terms of their product offerings, convenience and so on." With the mobile-banking and payments space changing daily, Stanton says there is urgency to expand the capabilities of mobile banking. "We focus on the traditional things, like viewing account balances and recent transactions, with the promise to introduce things to consumers that they can't do today anywhere else," Stanton says. Bill payment and person-to-person mobile payments are a start, and those services will be offered in the future, Stanton says. Monitise views mobile banking as an entrance to mobile payments, and Stanton says the company is committed to contactless Near Field Communication technology. "If done right with a financial-services focused provider, it will add revenue opportunities for banks and credit unions," she says.

Democratic Illinois Senator Dick Durban today introduced legislation to allow large and small businesses to negotiate directly with credit card companies to reduce the interchange fees that are charged on every credit card transaction.

A cobranded card agreement between a military retailer and JPMorgan Chase & Co. has raised the ire of banks and credit unions that say the deal infringes on their exclusive contracts to provide financial services on bases.

BOSTON — To expand in the business-to-business payments market, credit card issuers may have to abandon the interchange structure, an analyst has predicted.

Coop Danmark, a grocery and retail chain in Denmark, will allow customers to pay for purchases with international card brands, providing more competition for the Dankort national debit brand and cash, a spokesperson for PBS A/S, the chain's processor and acquirer, tells CardLine Global. PBS says the move represents the first time a large grocery chain in Denmark has accepted international card brands. Consumers with cards carrying such brands as American Express, MasterCard and Visa now can use those cards for purchases at Kvickly Xtra, Kvickly, SuperBrugsen, Brugsen, Dagli', LokalBrugsen and Irma stores. Consumers using cards issued in Denmark pay no fees, though merchants can charge fees for cards issued outside Denmark, PBS says. "We expect that other merchants, especially supermarkets, will soon accept international payment cards as well," the spokesperson says. Last year, the spokesperson says, consumers made at least 21 million transactions with Danish-issued cards that carry international brands. That compares with at least 737 million transactions made with Dankort debit cards. "As more international payment cards are issued and more foreigners visit Denmark, we believe that it will affect the acceptance of international payment cards in a positive direction," the spokesperson says.

China UnionPay reportedly has started discussions about expanding its payment network into Taiwan. Expansion could start as early as July with stores and hotels accepting UnionPay-branded cards, according to the China Knowledge newspaper. The expansion also would enable UnionPay cardholders to withdraw money from ATMs in Taiwan. UnionPay would not comment. "I am unable to confirm the deal, as we don't have an official stand on this issue yet," a UnionPay spokesperson tells CardLine Global. Taiwan represents a huge market for UnionPay, Hua Zhang, a banking analyst with the China office of United States-based Celent LLC, tells CardLine Global. "Taiwan is the sixth-largest trade partner of Mainland China, and around 1.1 million visitors from the country will visit Taiwan this year," Zhang says.

While the U.S. economy is weak, American Express Co. leaders are closely monitoring U.S. billings growth and the credit market overall.

The Discover U.S. Spending Monitor rose 1.4 points in May to 86.8 as consumers braced for higher spending in the wake of record gas and food prices. The card issuer released its report Wednesday.

The Mortgage Bankers Association's Market Composite Index for the week ended May 30 was 502.3, down 15.3% on a seasonally adjusted basis from 593.3 one week earlier. The results were adjusted to account for the Memorial Day holiday.

President Bush yesterday signed into law a bill prohibiting class-action lawsuits against merchants that once put payment card expiration dates on customer receipts. The U.S. House and Senate approved the legislation last month (CardLine, 5/15 and 5/21). The Credit and Debit Card Receipt Clarification Act of 2007 does not exempt merchants that fail to truncate credit or debit card numbers on receipts. Moreover, merchants that print expiration dates on receipts after June 3 also are not exempt, according to Bart Murphy, a partner at Ice Miller LLP, an Indianapolis-based law firm that represents several merchants facing lawsuits for including expiration dates on receipts. Penalties in those cases range from $100 to $1,000 per violation. The Fair and Accurate Credit Transactions Act, itself an amendment to the Fair Credit Reporting Act, prohibits businesses from printing expiration dates and requires them to truncate credit and debit card numbers so electronic receipts show no more than five digits. The act represents a "get-out-of-jail-free card" for merchants facing lawsuits filed before June 3, Murphy says. Merchants still are prohibited from printing expiration dates on receipts following June 3. The act does not remove the threat of a lawsuit if they do, Murphy explains. The new law also does not remove the legal liability for merchants that failed to truncate card numbers on receipts. The act means pending lawsuits related only to printing expiration dates on receipts before June 3 likely will be dismissed, Murphy says. This law is a "fix" to prevent plaintiff class-action attorneys from cashing in on technical violations of the act, known as FACTA, Murphy previously told CardLine. About a year ago, some law firms filed a series of lawsuits in which they alleged violations of the act and sought class-action status in Illinois and Chicago.

Teaching merchant-level sales agents about interchange takes a continuous process, not a one-shot event, experts say. "There is no fast or easy way to learn or teach interchange," Tyler Hurley, senior sales executive for Group ISO, an Irvine, Calif.-based independent sales organization, tells CardLine sister publication ISO&Agent Weekly. "When we work with our agents, it is not just an introductory, one-time training [course]. It is a consistent learning experience for our agents." When merchant-level sales agents understand the complexities of interchange, they are ready to pass that knowledge on to their merchant clients. However, many merchants do not care to learn about interchange, which is not a bad thing, experts say. "We're happy to educate them but, because of time and interest, they don't necessarily want to know," says Jim Hilber, western regional manager for International CyberTrans, an ISO based in Albuquerque, N.M. Merchants generally do not fully understand their processing and interchange rates, but if they are getting what they expect out of them, then they feel "it is a good deal," he says.

Starbucks Coffee Co. yesterday began offering free wireless Internet access in its stores to customers who load at least $5 onto a Starbucks prepaid gift card and register it on the Starbucks Web site, Alisa Martinez, a company spokesperson, tells CardLine. Seattle-based Starbucks also is offering a free beverage to customers who register their cards through July 14. Providing free wireless Internet access and a free beverage to customers who register their gift cards represent the latest perks Starbucks started offering this year as part of a "Tranformation Agenda" to build customer loyalty, Martinez tells CardLine. Earlier this year, Starbucks began giving registered cardholders complimentary flavor syrups and milk alternatives in their drinks, complimentary tall beverages when they buy a pound of whole-bean coffee, and free refills of brewed coffee on the same visit (CardLine, 3/25). Customers must use their Starbucks card to get the benefits, according to the company. Starbucks plans to add other rewards to the cards, Martinez says.

MasterCard Worldwide is banking heavily on growth in emerging markets in Asia and Latin America to achieve average annual net-income growth of 20% to 30%, Walt M. Macnee, MasterCard president, global markets, told analysts during a conference last week. China and India present the biggest opportunities for MasterCard in Asia because mass urbanization in both countries is giving rise to second- and third-tier cities with populations of 1 million to 3 million residents, he said. The shift to cities is fueling middle-class growth and boosting discretionary spending, especially among women. "Women in Asia are becoming the key financial decision-makers in households, and they also appear to have more discretionary spending power than ever before," Macnee said. A growing sector of affluent Asian women also is driving new credit card products, such as the Lady's Solitaire World MasterCard launched in March by Singapore's largest issuer, United Overseas Bank Limited, he noted. The card pays triple points on purchases of luxury merchandise and also grants cardholders access to concierge-level services, events and fashion shows. Latin America presents another growth opportunity for MasterCard, as an increasingly youthful population shifts from almost exclusive reliance on cash to electronic payments, particularly debit cards. In Venezuela the government is using MasterCard prepaid debit cards to replace cash in a widely used public meal-voucher program. "By 2010, there will be more people in Latin America under the age of 35 than in the U.S. and Europe combined, and it's that younger segment that will be our engine of growth in Latin America," Macnee said.

L.L. Bean informed customers via its Web site that it is discontinuing its co-branded Visa card with Bank of America Corp.

ServerSide Group is offering smaller issuers a less-expensive version of its card-customization service, the London-based company, whose U.S. headquarters is in New York, announced Monday. The entry-level version of ServerSide's AllAboutMe online card-design service works much like the original, says Vadim Kagan, ServerSide manager of product development. Cardholders using the scaled-back service through their issuers still can choose from several stock images, or they can upload their own digital images for their gift, credit, debit or other payment cards, Kagan tells CardLine Global. Cardholders access the design features through a ServerSide Web site that appears as a frame within issuers' Web sites. Issuers using the entry-level AllAboutMe service will forego more-advanced features, such as enabling cardholders to layer additional images or text over the original images they choose for their cards. But issuers will pay up to 75% less for the entry-level service than for the full-featured version, Kagan says. He declines to disclose exact prices of the standard service, which varies according to features and volume. Some issuers prefer the full-featured service, which ServerSide customizes according to their needs, but most smaller issuers do not need the extra options, Kagan says. "Most issuers want to make the experience as easy as possible for their cardholders," he says. ServerSide claims that 74 issuers in 21 countries have used its card-customization service.

The combined fraud rate for charge, credit and debit cards in Australia last year equaled 27.9 Australian cents (27 U.S. cents or 17 euros cents) per AU$1,000 spent, up 16.7% from 23.9 Australian cents the previous year, according to the Australian Payments Clearing Association. The overall fraud rate for checks and payment cards remained steady at 6.2 Australian cents per AU$1,000, down slightly from 6.3 Australian cents in 2006, says the group, which has about 80 members, including issuers. But increasing fraud on card transactions conducted by phone or on the Internet helped increase the rate for payment cards. "Australia's increase in [card-not-present and cross-border] fraud appears consistent with trends reported in the UK and the Asia-Pacific region over the last few years," Chris Hamilton, the group's chief executive, says in a statement. Fraud rates for charge and credit cards increased to 44.5 cents per AU$1,000, up 20.6% from 36.9 cents for 2006, the group says. Fraud rates for debit cards dropped to 7.1 Australian cents per AU$1,000, down 7.8% from 7.7 cents in 2006.

First Data Corp. will offer a card-acceptance package for Austrian merchants, the United States-based processor says in a statement. 'FirstPos' enables First Data to become a direct vendor of payment devices in addition to processing cards. "Merchants remain independent and can keep their terminal and service contracts even if they change their acquiring partner," Karin Skarek, First Data managing director in Austria, says in a statement. The service includes terminals that already comply with future European Union regulations, the acceptance of different cards and a monthly flat fee that includes technical services, the statement says. First Data processes 430 million card payments per year in Austria, according to the company.

Vietnamese police reportedly plan to charge Nguyen Hoang Yen, a Ho Chi Minh-based employee of a travel-services firm, with credit card fraud. Yen allegedly stole customer credit card details to buy tickets from Pacific Airlines. Yen then resold the tickets. Fraud losses reportedly stand at about US$16,000 (10,300 euros). Police in Vietnam offered no comment to CardLine Global, but authorities reportedly are searching for three Nigerians alleged to have helped Yen commit fraud.

CreditCardCompare, an Australia-based Web site that enables consumers to review card offers, says it has introduced a debt-calculator service for cardholders. The service enables consumers to enter the debt amount and repayment schedule to estimate how long it will take them to pay off card debt. "Credit card debt is a growing issue," Steven Anderson, head of Research with Sydney-based financial-research company InfoChoice Ltd., tells CardLine Global. "We do not believe that it is out of control, but banking statistics are showing that [card] debt that is not paid off at the end of the month is growing, albeit growing at a slower rate than was previously the case."

When Canadian shoppers come to the United States, they spend significantly more on their average debit card transaction than their U.S. counterparts spend while shopping at home. That information comes from a report on cross-border PIN-debit transactions between December 2007 and March 2008 from NYCE Payments Network LLC and Acxsys Corp. Canadians spent an average of more than $68 per cross-border debit transaction, 45% more than the average U.S. debit cardholders spent while shopping at home in the U.S. during the same four-month period. NYCE, a Secaucus, N.J.-based PIN-debit network, and Acxsys, which designed Canada's Interac debit service, three years ago formed an alliance called the Cross-Border service. The service enables Canadians to pay with their debit cards at U.S. retailers that accept NYCE-branded cards. NYCE attributes increases in Canadian buying to holiday shopping and Canadians vacationing in the southern U.S. states to escape Canada's winter. However, two states that border Canada–Washington and New York–accounted for most of Canadians' U.S. debit card transactions, according to the announcement.