Why the iPhone 5 means the end of the swipe and cards
26 Sep, 2012 02:12
BRETT KING - BANK 2.0
It took almost two decades for credit card payments (followed by debit cards) to become globally ubiquitous, so it might be reasonable to think that a paradigm shift at the POS will take years to become mainstream. Why would you spend money deploying expensive NFC-enabled (Near Field Communication) POS terminals unless consumers were going to use them, right? Is this why Apple chose to snub NFC technology in its latest iPhone?
In normal circumstances, if there were no competition, this would make good business sense. The problem for the banks and networks is that they think the "card" is defensible -- that this product has enough inertia for consumers to not be bothered by the fact that they can't yet pay with their phone at every POS terminal. In the U.S., this inertia has not only meant a slow roll out for NFC, but has also seen U.S. merchants slip seven to eight years behind their EU counterparts. In the EU, already 75 percent of cards support the EMV standard, and more than 90 percent of terminals, whereas in the U.S. only 30 percent of merchants support EMV. So we hear frequent stories of U.S. travelers in Europe unable to pay for the simplest of purchases or transactions with long-outdated card tech. Worse for the U.S. card industry is that the industry is paying 3c of every transaction in preventable fraud right now due to outdated signature...continued
NerdWallet.com offers an online tool to help compare checking account fees.
Comparing checking account fees isn’t easy to do, as you know if you’ve ever tried to shop for a new account. Account disclosure formats vary, despite recent attempts at simplifying the way in which banks present information about fees, minimum balance requirements and other details to consumers.
The Web site NerdWallet has taken a stab at making it a bit easier, with a new tool that helps you sort through the options. The site’s founder, Tim Chen, said in an e-mail that his deposits guru took information from more than 120 banks and credit unions to create the tool. The site plans to use a “crowd sourcing” model to help expand and update it...continued
While annual payouts to finance industry employees in New York are forecast to drop only 14 percent during the bonus season, profits plunged in 2011, falling 51 percent, according to a report issued on Wednesday by the state comptroller, Thomas P. DiNapoli. By comparison, profits plunged, falling 51 percent...continued
New payment methods and alternative currencies are transforming how we think about money. By the author of The End of Money.
By DAVID WOLMAN
There are no atheists in the modern economy. You may not have God or Buddha in your life, but you very much have faith—in money. I don't mean that you worship money in the greed-is-good sense. No, you have faith in its value. Your trust in it depends on everyone else's, which means that our faith in money's value is really about trust in each other—a belief in shared purpose, or at least a shared hallucination...continued...
News about the Bureau of Consumer Financial Protection. Commentary and archival information about Consumer Financial Protection Bureau from The New York Times.
The Bureau of Consumer Financial Protection was created in July 2010 as part of the Dodd-Frank financial reform legislation backed by President Barack Obama. The bureau’s goals include watching for major violations of mortgage disclosure laws and other infractions at the firms that could cause consumers to unwittingly sign up for risky loans. It also scrutinizes whether credit card forms issued by big banks are misleading.
The bureau is designed to consolidate employees and responsibilities from a host of other regulatory bodies, including the Federal Reserve, the Federal Trade Commission, the Federal Deposit Insurance Corporation and even the Department of Housing and Urban Development.
The bureau quickly became the focus of bitter fighting between the Obama administration on one side and Republicans and banking lobbyists on the other.
The work of setting up the bureau fell to Elizabeth Warren, the Harvard law professor and bankruptcy expert who was one of its chief proponents. In September 2010, Mr. Obama chose to appoint Ms. Warren as a special assistant to the president, not the bureau director, in part to avoid a contentious confirmation process. Financial institutions had criticized Ms. Warren as overly aggressive in pursuing regulations...
Philipp M. Hildebrand has been under fire for personal currency trades he and his wife made last year.
By JACK EWING Published: January 9, 2012
FRANKFURT — The head of the Swiss central bank, who has been under fire for personal currency trades he and his wife made last year, will resign effective immediately, the bank said Monday.
The resignation of Philipp M. Hildebrand came as a surprise. Just last week, he offered a detailed defense of his conduct and appeared to have the support of the council that oversees the Swiss National Bank.
An internationally known advocate of stricter bank regulation, Mr. Hildebrand faced accusations that he or his wife bought and sold large amounts of dollars last year at the same time that the S.N.B. was intervening in currency markets.
The bank said Mr. Hildebrand, a 48-year-old former manager at a New York hedge fund, would make a statement about his resignation later Monday in Zurich.
Suze Orman, who offers guidance on personal finance through her books and CNBC show, is bringing out her own prepaid debit card, promising low fees and access to credit reports.
By RON LIEBER Published: January 9, 2012
For more than a decade, Suze Orman has exhorted her viewers on CNBC to spend less than they earn, flashed her blazing smile from the covers of best-selling books and endorsed the occasional auto loan provider and brokerage firm.
Never before, however, has she built a financial product from scratch and urged her considerable number of fans to use it frequently. That changes with the introduction on Monday of her Approved card, which works a lot like a bank debit card but does not come with a checking account. It is a prepaid debit card, and companies that offer similar cards have drawn criticism for sky-high fees and poor disclosure.
The hip-hop mogul Russell Simmons, American Express and the Kardashian sisters are among those who have piled in with their own cards, and they are nearly ubiquitous at drugstores and other retailers. The target customers are most often people who have little credit history — or credit so bad that banks will not come near them.
In charging into the housing debate, the Fed runs the risk of politicizing itself, while also sending mixed signals to banks still trying to find their postcrisis feet.
Wall Street Journal
By DAVID REILLY
For an institution that jealously guards its independence, the Federal Reserve is wading into treacherous political waters.
With the economic rebound still mediocre at best, the Fed is charging into the housing debate. But in doing so, it runs the risk of politicizing itself, while also sending mixed signals to banks still trying to find their postcrisis feet.
The latest effort was a housing "white paper" sent this week to Congress, along with a series of comments from Fed officials about the importance of housing to the economic recovery. In this, the Fed may be laying the groundwork for further quantitative easing, this time purchasing mortgage securities. But its paper went beyond even the Fed's already unconventional policies. This included ideas that might require...continued...
Regions Financial is in advanced discussions to sell its Morgan Keegan & Co. brokerage unit to Raymond James Financial or Stifel Financial for between $900 million and $1 billion, according to people familiar with the situation.
BY ROBIN SIDEL AND ANUPREETA DAS
Regions Financial Corp. is in advanced discussions to sell its Morgan Keegan & Co. brokerage unit to Raymond James Financial Inc. or Stifel Financial Corp. for between $900 million and $1 billion, according to people familiar with the situation.
The talks have reached a critical stage and could result in a transaction as soon as next week. The price under discussion is considerably less than company executives had initially hoped for, and it isn't clear whether there is a clear favorite between the bidders.
An increasing number of the nation’s savings and loan associations are avoiding some federal oversight by becoming credit unions or switching to a state charter.
A small community bank in New Hampshire found a demand from its regulator last month just too much.
Monadnock Community Bank in Peterborough was ordered to do a thorough review of how it collected payments on its delinquent loans, said William Pierce, the chief executive. That meant diverting three of its 18 employees to comb through reams of mortgages....continued
Nationwide Building Society: Internet Bank transformation
This case study shows how user experience techniques can be applied into large, complex programmes - and create value all the way from developing a vision for user experience right through to launch.
The business challenge
Nationwide Building Society’s Internet Bank was launched in 1997, making it the UK’s oldest online banking service. After a decade in use the platform needed to be replaced; improved services from rival banks threatened long-term usage and satisfaction.
But how do you successfully replace a system which is a daily part of millions of people’s lives?...continued...
The Securities and Exchange Commission has begun a broad examination of the business practices of some of the country's most powerful private equity firms.
BY PETER LATTMAN
In recent years, the private equity industry has escaped much of the regulatory scrutiny that has been directed toward hedge funds and Wall Street banks. But that appears to be changing.
The Securities and Exchange Commission has begun a broad examination of the private equity industry, seeking information about the business practices of some of the country’s most powerful financial firms...CONTINUED...
The second biggest category of advertising online was one that played a fairly small role for news in legacy platforms, the financial industry. Ads for financial products or services accounted for 18% of all Web ads captured, more than triple that of the next biggest category, toiletries and cosmetics (5%). And on more than half of the sites, 12 out of 22, financial ads ranked first-above self-promotion...continued...
Some banks are more hedged than others against the possibility of a debt cascade in Europe. But greater disclosure requirements have so far made the credit-default swap arena only slightly less opaque.
BY PETER EAVIS
After a hurricane, homeowners check nervously to see if their insurance will cover all of the damage. With the European financial crisis still threatening a trail of defaults, United States banks are betting that their insurance is going to pay out.
Five large American banks, including JPMorgan Chase and Goldman Sachs, have more than $80 billion of exposure to Italy, Spain, Portugal, Ireland and Greece, the most economically stressed nations in the euro currency zone, according to a New York Times analysis of the banks’ financial disclosures. continued...
Both the SEC and Citi now stand accused of failing to disclose relevant information, whether it’s to customers in Citi’s case or, as with the SEC, to the public.
By Eleanor Bloxham, CEO of The Value Alliance and Corporate Governance Alliance FORTUNE -- Isn't it ironic that the government agency responsible for enforcing a whole host of disclosure rules seems hell-bent on hiding the details of its own actions from public view?
A victory for lack of full, forthright disclosure was won by the SEC on December 27 when a federal appeals court approved an SEC requested delay in court proceedings. The delay effectively preempted Citigroup (C) from making disclosures regarding an SEC complaint against the bank -- interestingly enough, for alleged disclosure failures.
The SEC's muzzling of Citi followed an appeal the regulator filed two weeks earlier in response to a trial ordered by the lower court. Federal Judge Jed Rakoff had ordered the trial on the grounds that the SEC failed to provide enough information to justify its proposed settlement with Citi. In a December 29 supplemental order, Rakoff described the SEC's lack of disclosure in the appeals process as "materially misleading." ...continued...
Home Depot customers can check out at those five stores by entering their phone numbers and PayPal PIN numbers, or by swiping their PayPal cards, at the point of sale, according to PayPal spokeswoman Amanda Pires.
"I can confirm that we are in a trial with Home Depot," she told American Banker on Friday afternoon. "We are in a limited trial program with our [point of sale] technologies."
A "small number" of PayPal employees are in the Home Depot stores to help walk customers through those transactions, she said. She would not identify which five Home Depot stores are involved in the trial.
PayPal, a unit of Ebay Inc., has been ramping up its efforts to compete with traditional payments companies, including Visa and MasterCard. In October they announced plans for a magnetic-stripe card, which allows consumers to use their PayPal accounts in physical stores instead of just online.
Wedbush Securities analyst Gil B. Luria first speculated about the Home Depot trial in a note to investors on Friday. He told American Banker that he learned of the tests by calling a Home Depot store in San Jose, close to PayPal's headquarters.
"They have been talking about doing a friends-and-family trial, and this is it," said Luria. "Once Home Depot is ready to roll it out, they will announce it and roll it out to all their stores."
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