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Main / Payments Weblog

This weekend, since our contract with Verizon expired, we switched our cell phone plan to AT&T (because my husband made me get an iPhone). Also on the plan are two other family members who just wanted simple phones (I swear, that’s all I wanted too!). So AT&T added them onto our “family plan” and said those two phones would be about $10 a piece after I mailed in the rebate information. Great. So that means I’ll be getting back about $50 or $60 from AT&T, right?

A trend among consumers in recent years has been to pay their taxes with a credit card. I know this is old news in a way, but whenever I see something about topic, I can't help but shake my head and wonder why!

It looks like credit card issuing banks are starting to take a leadership position when it comes to the whole "green" craze in which we now find ourselves. Sure, we've heard news about banks building green data centers and others that are constructing new offices that are Earth friendly. Now, we're seeing credit cards getting creative with their rewards programs by promoting green initiatives rather than the typical airline miles.

Everyone in banking seems to want a piece of China. And why wouldn't they? The Asian nation isn't only an economic powerhouse, but contains a quarter of the world's population. Just think of the customer acquisition opportunities. However, if you're a non-Chinese provider of financial services, the barriers to your entering this market are many.

OK, I think we all know the writing is on the wall for checks. But just for the heck of it, I decided to attend a session at Retail Delivery called Why Is It Still Called a Checking Account? Dove Consulting managing vice president David Dove discussed with attendees the continuing decline in check volume and the rise in electronic payments, along with how branding can make a difference in banks' account acquisition and retention efforts.

Here’s a bit of news that ties in very nicely with an article I wrote for the upcoming November issue. HSBC has launched a decoupled debit card program where it issues debits cards for merchants so that consumers can earn rewards.

Canada's official full-scale trial of chip and PIN debit transactions begins this month in Ontario. According to Canadian debit card payments association Interac, the new cards will provide consumers with a safer alternative to the old magnetic stripe card, which is the norm in the U.S.

Well, it looks like toy maker Hasbro got the memo about moving to electronic payments. The company now offers an electronic banking version of the classic board game Monopoly. I saw a commercial for the souped up game only recently and couldn't resist writing about it.

By Maria Bruno-Britz, Bank Systems & Technology

Standards and information have increasingly become the focus of the commercial payments world. Corporates desire a more uniform way of interacting with their banks. Further, as commercial payments become more commoditized, banks need to do much more than simply process payments. They need to provide rich information to accompany those transmissions. All parties know what needs to be done. The trick is actually getting there.

Kenneth Lewis, chairman and CEO of Bank of America, spoke of the role of confidence in financial services, especially in the face of volatile markets during the opening plenary at this year's Sibos conference.

By Maria Bruno-Britz, Bank Systems & Technology

There's always talk in the payments world about the need for greater harmonization and standardization in the ways that payments are processed. That's no less true at this year's Sibos. However, in spite of the calls to action that we hear from the industry, the world still operates along very nationalistic lines. I had a chance to sit with TowerGroup's Ted Iacobuzio, managing director and practice leader for payments, while at the show to discuss such issues.

Funny coincidence. I was sitting at my desk speaking with a co-worker who was upset that her rent check didn’t yet clear. She thought she had given herself enough time but sure enough, the check is just sitting somewhere and hasn’t appeared on her (online) bank statement. At that point, she said she just didn’t understand why she couldn’t pay her landlord electronically. I heartily agreed with her.

By Maria Bruno-Britz, Bank Systems & Technology

As if they didn’t have enough on their plate in Europe, it turns out that certain entities will not be ready to launch payments instruments related to the single euro payments area (SEPA) initiative—chiefly public administrations and corporates. This was the key finding of the third annual World Payments Report, issued by Capgemini, ABN AMRO, and the European Financial Management & Marketing Association (EFMA).

First, how about if I define the players:

David is ACI Worldwide at $348 million per year in revenue.

Goliath is IBM at $91 billion per year.

The sub-Goliaths are CheckFree at $973 million and Metavante at $1.5 billion.

A recent study by Phoenix Payments Research confirms what the industry has begun to realize—-that debit cards engender more loyalty among bank customers versus credit cards.

By Maria Bruno-Britz, Bank Systems & Technology

Is it just me or are wallets shrinking? I mean literally, not figuratively.

I don’t know what the situation is with men’s wallets, but I went on a foray recently to purchase a new wallet for myself. I must have tried 10 different wallets and each was just as mis-sized as the other. They were all leather of varying degrees of quality. However, I found the problem plagued wallets across the price spectrum.

Deal with Postilion enables CNB to issue and process prepaid cards for other banks, retailers.
By Maria Bruno-Britz, Bank Systems & TTechnology

By Maria Bruno-Britz, Bank Systems & Technology

After getting hammered by consumers and legislators alike over last year’s data breaches and the apparent cavalier attitude some merchants took toward securing card data, merchants are starting to get the hint. According to Visa (San Francisco) 96 percent of large businesses that accept Visa for payment are not storing sensitive account data, such as PINs and security codes.

It's not often that I open up my email in-box and my first thought is, "Wow" –- but that was my reaction this morning when I saw the announcement that Fiserv is buying CheckFree in an all-cash transaction valued at approximately $4.4 billion. These big deals always come as something of a surprise, even when there's been speculation about the status or future of the players.

ABN AMRO’s Boden says that corporate awareness of SEPA on the rise and the implications are broader than expected.

By Maria Bruno-Britz, Bank Systems & Technology

I knew it wouldn’t take long.

A few weeks ago, I posted about an initiative by New York City and Visa to install credit card readers with contactless capabilities in all NYC cabs. Knowing how averse cabbies tend to be toward their fares paying by card, I was a little skeptical as to the success of this plan.

By Maria Bruno-Britz

Last month, the Federal Reserve announced plans to revamp its check processing infrastructure to better reflect the move from paper to electronic check processing. The Fed entered into an agreement with Unisys in which the vendor will enhance the check processing infrastructure by way of the Federal Reserve Bank of Cleveland. I actually discuss this deal in greater detail in the July issue of Bank Systems & Technology.

Chase and Congress take steps to combat abusive credit card practices. But is it too late for some consumers?

By Nancy Feig

By Maria Bruno-Britz

Visa recently announced that it plans to install its swipeless credit card technology in New York City cabs. Visa payWave readers will be situated in the back of the taxis to allow passengers to pay with the wave of a card, and even include a tip.

By Maria Bruno-Britz

Standards has long been a topic of discussion in payments circles. The ability to provide clients with standard formats for payment reporting, submission, etc. could do wonders for customer relationships, say experts, in that the bank can offer its commercial clients a slew of value added services around a more straight-forward, integrated view of their payments. Then why is the world still operating with proprietary payments formats?

By Maria Bruno-Britz

If you’re in the payments side of the business at a bank, you can’t go anywhere without hearing the word “convergence”. In recent years, the push to bring together all the IT systems within the bank has intensified so that financial institutions have a more unified view of their business and customers. Beyond this is the drive to bring together the payments systems in the organization. Banks are siloed enough, and the issue is even more apparent in the payments organization where there are usually separate systems for each kind of payment: checks, ACH, wire, credit cards, debit cards, etc. Eliminating these silos alone is a mammoth task, but one that banks will need to undertake to remain competitive going forward.

By Maria Bruno-Britz

The London branch of Mizuho Corporate Bank is the first in the world to go live on FIN with the SWIFTNet Phase 2 solution. This is the next generation messaging platform introduced by Brussels-based SWIFT.

By Maria Bruno-Britz

Epson (Long Beach, Calif.), a supplier of value-added banking solutions, and RDM (Waterloo, Ontario), a provider of specialized software and hardware products for electronic payment processing, unveiled a new check scanning solution called CaptureOne. The companies are touting the products as a reliable desktop scanner for back office capture (BOC), remote deposit capture (RDC) and branch capture applications. Epson, known for its image scanners, teamed with RDM, known for its MICR accuracy, in creating the scanner.

CaptureOne offers a 100-sheet document feeder in two versions, with scan rate options of 30 or 60 documents per minute. Other features include clear electronic endorsements for 100 percent legibility, a double check detector that virtually eliminates double check feeding and a built-in franker that prints a static message on checks to prevent double processing.

CaptureOne will be available third quarter, 2007.

New TowerGroup Research Examines Fast-Evolving Space of 'B2Bank' Integration

Digital Check Corporationn announced Digital on Demand services at the NACHA Payments conference. The expanded services are provided in support of Digital Check’s network of solution providers and through Digital Check’s network of fulfillment partners. The new services allow financial institutions to more easily bundle software, scanner hardware and fulfillment services when deploying distributed check capture solutions to their branches and remote deposit capture customers.

LendingTools.com announced today at NACHA Payments 2007 the availability of ExtraNet FP ACH Risk Management. The new product is delivered as an integrated module of the company's successful ExtraNet Financial Portal in use by more than 2,000 community financial institutions for internal and corporate cash management services.

Fundtech Ltd., a provider of end-to-end corporate banking software and services, announced that it has signed eight new customers for its CASHplus cash management solution. Recent research from market consulting firm Celent, positioned Fundtech's CASHplus as a leading solution in its 'Evaluating the Vendors in Online Corporate Cash Management' report (December 2006). Fundtech's newest CASHplus clients include: RBC Centura ($23 billion in assets; Raleigh, N.C.), Rabobank, N.A. ($5 billion in assets; El Centro, Calif.), and Doral Bank ($9.2 billion in assets; Catano, Puerto Rico).

Unisys Corporation announced a new Open Payments Platform to help banks transform their payment operations and more easily deliver new products in an ever-changing industry.

By Maria Bruno-Britz

Commerce Bank (Cherry Hill, N.J.; $4.3 billion in assets) has selected the CheckFree Account Reconciliation Package/Service Management System (ARP/SMS). In addition, Commerce Bank has upgraded to the CheckFree PEP+ Risk Compliance Package. CheckFree's PEP+, together with its suite of add-on modules, provides a complete solution for originating and receiving payments through the ACH. By leveraging PEP+, Commerce has the potential to improve operating effectiveness and risk management while decreasing costs to serve its customers.

By Maria Bruno-Britz

CheckFree announced that Whitney National Bank (New Orleans; $10.2 billion in assets) has selected the CheckFree PEP+ Platinum Package. The software and services deployment is designed to enable Whitney to rapidly and efficiently process ACH payments, streamline internal processes to mitigate risk and fraud exposure, increase revenue and ensure business continuity in the event of a future disaster.

By Maria Bruno-Britz

NACHA – The Electronic Payments Association (Herndon, Va.) released today at its PAYMENTS 2007 conference the NACHA Top 50 lists of the largest originating and receiving financial institutions of automated clearing house (ACH) payments for 2006.

By Maria Bruno-Britz

According to NACHA – The Electronic Payments Association (Herndon, Va.), nearly 16 billion automated clearing house (ACH) payments were made in 2006, a 14.5 percent increase over 2005.

U.S. debit card-issuing financial institutions experienced debit card transaction growth of 18 percent in 2006 and expect continued strong growth in 2007, according to a new study commissioned by PULSE EFT Association.

By Maria Bruno-Britz

Well, Americans might not get enough sleep, but at least we can take solace in the fact that we’re a productive country. JPMorgan Chase and gtnews decided to ask the world’s treasury executives and bankers what kept them awake at night. The findings provide an interesting window into the minds of banks’ treasury clients.

By Nancy Feig

Today, in the second meeting of Bank Systems & Technology's Payments Strategies Executive Roundtable series, several payments executives came together in New York to discuss remote deposit capture. The morning session, which was sponsored by Unisys, gave bankers the opportunity to speak freely about the issues associated with remote deposit capture since the passage of Check 21 three years ago.
One topic that was discussed in detail in this morning's session was thick clients vs. thin clients. Most banks with already established remote deposit capture programs are using thick clients with plans for thin client migration in the near future. However, that can be problematic, with some banks noting that the migration has taken longer than expected. Forced migration is one way to solve the problem, but banks really have to examine the functionality of the thin client for remote deposit capture. Banks coming in later in the game tend to have an advantage with this issue, namely that new customer on boarding for remote deposit capture is accelerated with a thin vs. thick client.
Another major issue discussed was the quality of images scanned using remote deposit capture. Unisys said that adequate training is imperative for high image quality and that training for the operators, who have high turnover rates, is necessary.
Fulfillment, service and support also seem to be areas in which banks face some challenges. Should the bank turn to a third-party for its remote deposit capture needs, such as scanner sales, repair and maintenance? Some banks that have not outsourced the fulfillment function are finding the logistics cumbersome and are looking to ways to wash their hands of the task.
The group was very vocal about several other issues, including paper storage, back office conversion (BOC) vs. accounts receivable entry (ARC), changes to float rules, footprint expansion, and finding the bottom-line benefits in RDC.
Because BS&T's roundtables are small, targeted and off-the record, participants are willing to share both their successes and failures with their peers in the industry. They present a rare opportunity for collaboration, commiseration, and even camaraderie, as opposed to traditional feelings of competition these executives often feel for each other. Several executives left the meeting saying that they could have talked for several more hours. But the discussion will have to be saved until the next Payments Roundtable early this summer.

By Maria Bruno-Britz, Bank Systems & Technology

Maybe the title of that should really read: Contactless Cards--Just a Step in the Evolutionary Ladder?
Countless emails have flooded my inbox containing news about banks that have implemented contactless card technology for its customers in some form or another. The technology in itself is quite simple: take a traditional-looking plastic card or even some kind of key fob device, wave it in front of a reader, and your payment is done.
But is that really a new payment device or just another way to use an old technology--cards? Some experts I've spoken with think the latter. In fact, some even felt this was just a transitional technology that will soon go by the wayside in favor of something even more radical--mobile phones. That is mobile phones as contactless payment devices. The mobile wallet concept has been bandied about for the last decade but hasn't really come to fruition, at least in the US. The story is a little different in countries like Japan. But many feel we're on the threshold in the evolution of electronic payments in this country and that mobile will be the next new device. People's wallets would become significantly thinner as their plastic cards disappear, replaced by their more convenient cell phones. They would simply wave their phones in front of readers at the point of sale and go their merry ways.
Of course, as with anything in payments, this evolution will take cooperation from many players before it occurs. Convincing retailers to shell out the cash to upgrade their payments infrastructure will be just one obstacle standing in the way of contactless mobile payments. But some day, I am assured, this will happen. And banks better be sure to make themselves the key players in the mobile payments game. According to one expert I spoke with, FIs should at least begin looking at this technology now before being left playing catch up.