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Transaction Trends Online |
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In the December 2009 Issue of Transaction Trends: 
- Sales Incentives That Work
- PCI’s Evolutionary Process
- Brave New World for Payments
- Special Series: Startup Stories, Part 2
- And much more...
Visit the Transaction Trends Web Site
Advertise in Transaction Trends Need to reach the most powerful audience in the acquiring industry? Download our media kit and get started right away! |
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ETA Glossary Online |
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The ETA Encyclopedia of Terminology for the Acquiring Industry is now online! Need a good definition for P2P? Need to know what a Merchant Descriptor is? Our online glossary has the information and its been vetted by industry experts, so you can depend ion it. Give it a try! |
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Featured Articles
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Consumer Debt Drops for Sixth Straight Month |
U.S. consumers are cutting back on borrowing like never before, according to the Federal Reserve.
With banks and card issuers cutting credit, and with unemployment rising, housing prices still falling, and generally poor economic news, consumers are hesitant to borrow. Credit card balances, auto loans and other forms of consumer credit fell by by $21.6 billion in July, the biggest decline on record.
That's equivalent to an annual decline of 10.4 percent, the Federal Reserve said. It's the sixth consecutive month the measure of consumer credit has contracted. In June, it fell by a revised 7.5 percent.
Both Visa and MasterCard say the proportion of debit transactions on their networks is growing. At Visa, the world's largest payment network, they've surpassed credit card purchases.
Revolving credit, comprising mostly credit card balances, fell eight percent in July. Meanwhile, non-revolving credit fell 11.7 percent.
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ETA Members Discuss Interchange System With GAO |
Representatives of ETA and several member companies participated in a 90-minute conference call on August 13 to explain the components and operation of the interchange system to representatives of the U.S. Government Accountability Office.
GAO is conducting research for two reports on the interchange system, one requested by the Senate Small Business and Entrepreneurship Committee, the other required by the CARD Act, signed into law in May, 2009.
During the call, ETA members explained the different layers of the electronic payments system and defined the types of third-party businesses engaged in processing electronic payments. They also drew distinctions between the interchange rate and the discount rate, emphasizing that interchange is but one component of what merchants pay for electronic payments services. ETA detailed the high level of competition in the discount market and that, in fact, a small retailer has a greater ability to negotiate a favorable price for transaction processing than for any other utility required to run a business.
ETA directed GAO to data on the numbers, types, and value of transactions processed in a year, as well as to information showing the essential role of merchant acquirers and independent sales organizations (ISOs) in the electronic payments system.
ETA representatives will continue to work with various government agencies to provide assistance and information about the businesses they represent. ETA will also continue to engage legislators and regulators to ensure that they receive a balanced and complete picture of the electronic payments system. |
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ETA Releases Policy Position on Data Security, Breach Notification |
ETA has released a policy position on data security and breach notification, in which the association srongly supports industry self-regulatory efforts for the protection of cardholder data, foremost of which is the Payment Card Industry Data Security Standards (PCIDSS). In the area of government regulation, ETA believes that a uniform national standard for data security and breach notification with respect to Personal Financial Information would best balance the rights of consumers to be notified of a breach when the security of their Personal Financial Information is truly at risk, while minimizing the compliance and legal risk to businesses.
Read the full position paper .
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First Data and BofA Form Joint Venture |
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The ink has barely dried on the agreement in which JP Morgan-Chase bought out First Data's share of Chase Paymentech, and First Data is back in the merchant processing joint venture business, this time with Bank of America. The new company will be known as Banc of America Merchant Services
The joint venture will offer a variety of advanced-payments capabilities to merchant clients, including handling prepaid cards, mobile services, loyalty programs, e-commerce and checks, and standard debit and credit card processing, the companies said. Thomas Bell, First Data's chief strategy officer and president of its financial services division, was tapped as CEO.
The new enterprise has been in the works for more than a year, according to Bell.
"For our clients, the most important transaction they have occurs the moment their customer pays them for what they do. This alliance provides stronger payments-acceptance capabilities as well as enhanced business-reporting tools and a better experience for their customers," Catherine P. Bessant, president of BofA's global product solutions group, said in a press release.
Read the official release. |
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Interchange Legislation Introduced |
House Judiciary Chairman John Conyers (D-MI) has re-introduced his interchange bill, the Credit Card Fair Fee Act (H.R. 2695). It attempts to “…amend the antitrust laws in order to ensure competitive market-based rates and terms for merchants' access to electronic payment systems in accepting credit or debit cards from consumers for payment for goods and services as well as to receive payment for such goods and services.” This year’s bill contains several variations from the version of the bill that passed the House Judiciary Committee in 2008. The major substantive difference is the elimination of the provision requiring pass-through of any savings on interchange to the consumer; last year’s bill did contain such language.
Recently, Senator Richard Durbin (D-IL) reintroduced his interchange bill, also named the Credit Card Fair Fee Act (S. 1212). Intended as a companion to the House bill, it is similar to its 2008 version with only minor changes. This bill mirrors the Conyers bill as introduced in 2008 and contains a three judge panel to mediate and/or facilitate interchange rate disputes.
As always, ETA advocates private sector governance of interchange and will oppose any government effort to regulate or establish price controls on interchange rates. We will continue to monitor the situation and keep you informed with timely updates.
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Cardholder Bill of Rights Clears House & Senate |
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Wednesday, the U.S. House of Representatives approved H.R. 627, the Credit Cardholders’ Bill of Rights, as it was adopted by the U.S. Senate on Tuesday. The bill now awaits President Obama's signature to become law. The bill is more stringent on issuers than the new credit card rules issued by the Federal Reserve in December. While the Fed rules were scheduled to take effect in July 2010, many rules in this bill will take effect nine months after enactment.
Thanks in part to the grassroots efforts of ETA members and the broader work of the Electronic Payments Coalition (EPC), there were no interchange amendments added to the bill. ETA members responded enthusiastically to the call to urge Senators to not include interchange in the credit card bill. It is also understood that the interchange debate is not finished and will rise again in Congress this year.
The legislation will, among other things, prohibit card companies from raising interest rates on existing balances unless the borrower is at least 60 days late paying a bill. If the cardholder pays on time for the following six months, the company would have to restore the original rate. On cards with more than one interest rate, issuers will have to apply payments first to the debts with the highest rates. Before increasing rates on future purchases, the card company would have to give cardholders 45 days' notice.
Card executives have said the changes would prevent them from properly distinguishing between risky and non-risky borrowers and force them to charge everyone higher rates and annual fees.
Four provisions of the bill will interest ETA members, they are: a government study of interchange, new gift card rules, stored value regulations, and creation of a Small Business Information Security Task Force. |
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