Mobile Wallet – Expert Expects Over 200 Mobile Wallets

More than 200 variations of mobile wallets currently vie for consumer attention in the  mobile walletU.S., and in another nine months some say that number may double.

That means issuers, merchants and consumers will be awash in choices and the “wallet in the cloud” will likely become a more common concept, George Peabody, director of emerging technologies for Mercator Advisory Services, suggested during a session on cloud-computer based payment systems at the annual Card Forum and Expo here.

Cloud-based mobile wallets offer certain advantages for storing transaction data and minimizing steps for merchants and consumers, experts say.

While many emerging mobile wallet ventures could ultimately end up as “road kill,” statistics show consumers indeed favor mobile shopping experiences, Peabody noted.

Some 42% of consumers Mercator surveyed recently said they mostly shop online, while only 12% indicated they shop mostly at brick-and-mortar locations, Peabody noted.

The declining excitement about in-store shopping has merchants scared to death, Peabody suggested. As such, they are very interested in exploring new ways to connect with consumers for sales and marketing, including through mobile platforms.

Much of the interaction between merchants and consumers with coupons, shopping lists, product-pricing comparisons and store locations could take place through cloud-based wallets, Peabody contended.

Early entrants in development of mobile wallets such as Square, Inc., PayPal Inc. and Google Inc. have grabbed a great deal of attention so far.

But Google actually has no aspirations to be a payment company, Frank Young, manager of Commerce Business Development at Google Inc., told seminar attendees.

“We want to leverage the power of mobile technology to drive consumers to merchant sites with relevant offers,” Young said. “We are not in it for the interchange, but more interested in driving more business to our advertisers.”

In effect, that summarizes where mobile wallet developers are likely to steer their ships.

While the cloud-based Google Wallet obviously will need a payment function, the overall concept behind the service is to “breathe life” into the shopping experience by enhancing marketing capabilities and other services for merchants and consumers, Young noted.

Uncertainty still surrounds questions such as how consumers may benefit from a cloud-based service versus using Near Field Communication capability on their payment cards or mobile devices, Peabody noted.

When payment credentials are stored in the cloud it allows the consumer to complete a transaction in the most seamless way possible, Young suggested. “Our research at Google concluded that 97% of consumers who start an online transaction don’t finish it,” Young said. “By having the transaction going through the cloud, we are striving toward minimal clicks by the consumer.”

For issuers, payments networks and merchants, a cloud-based wallet provides the opportunity to create a network that removes the “hot spots” where payment card credentials are stored, Young suggested.

“Card credentials don’t need to be stored [in places outside of the bank],” he added. “Soon, with tokenization or reference numbers in the cloud, those card credentials would never have to leave the bank.”


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Visa Reports Double-Digit Payment Volume Growth

Visa CEO discusses more than DOJ probe

I n a May 2012 conference call, Visa Inc. Chief Executive Officer Joseph Saunders revealed the card company’s debit card business is under investigation by the   U.S. Department of Justice. He also discussed the company’s second fiscal quarter 2012 profits, growth strategies, and new products and solutions. The quarter ended March 31.

“On March 13 … the U.S. Department of Justice Antitrust Division issued a civil investigative demand requesting additional information about PIN-authenticated Visa Debit and elements of our new debit strategies, including the fixed acquirer fee,” Saunders disclosed.

He said Visa met with the DOJ in March to turn over the materials requested in the civil investigative demand. “In a business as complex as ours, the department’s request is not unexpected,” he said. “Visa has received four other requests for information from the department since 2007, each of which took from 9 to 24 months to complete. All have been resolved.” He added that Visa is “continuing to provide materials and cooperate with the department.”

Regarding the company’s “strategies to compete for routing decisions, our incentive program for merchants is on track,” Saunders said. “We’ve taken a tailored and surgical approach to win strategic volume and offered competitive incentives to merchants.”

DOJ spokesperson Gina Talamona said the department has no comment on the investigation.

FANF fee explained

Visa instituted the Fixed Acquirer Network Fee (FANF) in February 2012 – after the Durbin Amendment to the Dodd Frank Wall Street Reform and Consumer Protection Act of 2010 cut debit card transaction fees in half. Saunders said the FANF would “offer merchants greater incentive to route transactions over our network” while lowering transaction costs. He told investors the DOJ began its investigation before the FANF went into effect April 1, 2012.

The FANF is a cost retailers pay to be a part of the Visa network. It applies to acceptance of all Visa products. Fees are charged to acquirers or processors based on a complicated formula that takes into account, among other things, merchant size and location.

According to the Merchants Payments Coalition, a national organization of retailers dedicated to credit card fee reform representing approximately 2.7 million stores, many retailers are complaining they unfairly end up paying both a brick-and-mortar FANF and a card not present FANF. Visa said the fixed acquirer fee lowers merchant transaction costs “in aggregate.”

Debit volume growth

The Durbin Amendment hit Visa hard but “is playing out as we expected,” Saunders said, adding that the company’s aggregate debit volume grew only 2 percent in the company’s second fiscal quarter 2012 (which ended March 31, 2012) and “has continued to decline in April.”

Saunders also noted that Visa’s Interlink PIN-based POS network bore “the brunt of the regulatory impact” and experienced a decline in every month of the quarter. “Interlink volume has experienced notable deterioration,” he stated. However, he added that the network accounted for less than 10 percent of Visa’s U.S. debit revenue. He also stated he believes Interlink will be more competitive in the fourth quarter 2012 when the impact from new regulations and new debit strategies will be evident.

The profit picture

Saunders said Visa posted net operating revenues of $2.6 billion in its second fiscal quarter – a 15 percent increase over the previous year. “These revenue gains were driven by double-digit payment volume growth globally, continued out-performance of credit spend worldwide and a strong cross-border activity,” he stated.

Visa’s credit card volumes grew 14 percent; debit payment volumes were up 7 percent during the same quarter; cross-border volume was up 16 percent globally; transactions grew 8 percent; and payment volumes increased 6 percent for all Visa products.

Saunders said Visa payment volume has grown every quarter for the last nine quarters in Latin America, with the second fiscal quarter 2012 realizing a 25 percent growth rate. He noted that growth was particularly strong in Brazil where the company has “just reached an agreement with a large Brazilian bank that has traditionally maintained the majority of its business with one of our largest competitors

“With this new agreement, we estimate that 50 percent of that client’s card portfolio will be Visa branded in the next few years.” He also expects more than 90 percent of Visa transactions in Brazil soon will be routed over Visa’s own VisaNet, up from 63 percent today.

In addition, Saunders discussed a new agreement with mobile phone network Vodafone Group PLC to preload Visa mobile prepaid accounts onto the Vodafone virtual wallet now under development. He also referred to agreements to promote deployment of near field communication through its payWave technology, the importance of the company’s investment in security and development of beta testing for Visa’s digital wallet




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Visa raises ‘no signature required’ limit

SAN FRANCISCO, May 7, 2012 — /PRNewswire/ — Visa Inc. (NYSE: V) today announced plans to raise its Visa Easy Payment Service “no signature required” limit Visa small ticket without a signaturefrom $25 to $50 for two key U.S. merchant categories. Starting in October 2012, discount stores and grocery stores/supermarkets in the U.S. can accept Visa cards for transactions up to $50 without requiring a cardholder signature or PIN, or providing a customer receipt unless requested by the cardholder.[1] This change is designed to increase speed at the point-of-sale, cardholder convenience and operational efficiencies for a large number of merchants.

Previously known as the No Signature Required program in the U.S., Visa Easy Payment Service allows merchants to eliminate cardholder verification and receipts on qualifying smaller value transactions. This helps make the payment process easier and more convenient for both merchants and cardholders. The program has been available to the majority of merchant categories in the U.S. since July 2010, for purchases up to $25.

As the $50 limit is introduced, Visa will review merchant, cardholder and card issuer feedback and may expand this higher transaction limit to additional merchant categories in the near future. Approximately 80 percent of face-to-face Visa consumer transactions in the U.S. are under $50.[2]

“Visa is committed to delivering solutions to help our merchant and financial institution partners better serve their customers, reduce costs and grow their businesses,” said William M. Sheedy, Group President, Americas, Visa Inc. “Visa Easy Payment Service has been extremely popular with merchants and cardholders in busy retail environments. As a result, merchants have asked us to expand the program to purchases up to $50, so that they can more efficiently support consumers’ growing preference to use cards instead of cash or checks for everyday purchases.”

Streamlined Dispute Resolution Process

Visa also announced changes to its dispute resolution process to reduce unnecessary chargebacks and merchant documentation requirements and promote faster, more efficient dispute resolution for all participants in its payments system.

Starting in April 2013, merchants will be protected from fraud chargebacks on transactions that have been electronically read (i.e., swiped or dipped in, or waved past, a card reader), helping to reduce merchant fraud management costs when appropriate acceptance procedures have been followed at the point of sale. In addition, Visa will eliminate the requirement for its card issuers to ask merchants for a copy of the receipt when a cardholder disputes a transaction, resulting in back office operational savings for everyone. There is no change to existing fraud liability associated with these changes.

The changes to Visa’s Easy Payment Service and dispute resolution process will help its merchant and financial institution partners to better serve their customers and grow their respective businesses.

About Visa Inc.

Visa is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable digital currency. Underpinning digital currency is one of the world’s most advanced processing networks–VisaNet–that is capable of handling more than 20,000 transaction messages a second, with fraud protection for consumers and guaranteed payment for merchants. Visa is not a bank, and does not issue cards, extend credit or set rates and fees for consumers. Visa’s innovations, however, enable its financial institution customers to offer consumers more choices: Pay now with debit, ahead of time with prepaid or later with credit products. For more information, visit




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Firearms Dealers & Ammo Dealers

Bullet and ammo makers are working around the clock, seven days a week, and still can’t keep up with the nation’s demand for ammunition.

The FBI’s National Instant Criminal Background Check System reported that 6.1 million background checks for gun sales were issued from January to May, an increase of 25.6 gun dealerspercent from the same period the year before.

Gun dealers are seeing record sales but so far, the administration nor Congress has not been markedly antigun. The President has said he respects Second Amendment rights, but favors “common sense” on gun laws. Still, worries about what could happen persist.

Some news around the web:

Gun Sales Spike as 100,000th Concealed Carry Permit Printed
The Department of Justice expected to process 125,000 applications after one year, but nearly reached that number just six months after the law was enacted.

When Legal Gun Sales Become Illegal

Memphis, Tn – Federal agents say firearms trafficking is a tricky crime that arms gangs and criminals with guns. They say it’s a big problem in the Mid-South.

Congressman pressures ATF for hassling gun stores

An Alaska Congressman has put the pressure on the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) for what he termed “hassling” gun stores in his state.

U.S. Congressman Don Young, R-Alaska, sent a letter to the ATF two days ago stating that he has heard from several gun store owners who are complaining that the agency is harassing them to turn over their bound books containing the records of gun and ammunition purchases, the customers’ names and addresses, and their official background checks.

Gun sales up, some manufacturers not taking orders

Technologies that more people want to get their hands on, creating a huge demand for tactical rifles and high-end handguns.

“Where I used to be able to get one of these custom made for a customer in a three to four month span of time, these are now a year to two year waiting period to get,” said Sportsman’s Finest firearms general manager August Crocker.

Some manufacturers are going as far as not taking orders.

“That is really a first for as long as I’ve been in the gun business,” Crocker said. “Key manufacturers, Ruger, a number of the others, have announced they are so saturated with back orders for this year, they’re not taking any further back orders.”

It’s not just tactical weapons that are hard to come by; even a Smith and Wesson will take about a year to come in. Dealers say it has everything to do with the fact that this is 2012.

Judge throws out ban on online ammo sales

Gun rights supporters won a major legal victory last week when a California judge struck down as unconstitutional a law that they say would have effectively banned online sales of handgun ammunition just days before it was to have taken effect.

Given the sheer size of the California market, the law would have had a major impact on national online ammunition sales, and some online ammo sites had already suspended sales to California.

While gun rights advocates cheered the decision, which came amid heightened focus on gun control issues in the wake of the Arizona shooting spree, supporters of the law say ammo sales are dangerously unregulated. And they say they have evidence that millions of rounds of ammunition are illegally sold to convicted felons every year.




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