New Payments News Weblog

We’re starting up a new weblog devoted to news and opinion related to payments. It’s still under construction — but far enough along for me to suggest that you check it out.

LIke this weblog, Payments News is also based on TypePad — the weblogging tool I’ve been using for my personal weblog here for the last several months.

Cards in China

Craig Karmin reported in today’s Wall St. Journal on the Chinese government’s emphasis on card payment systems.

Success also could depend on prodding Chinese banks to issue cards. So far, they have been slow to embrace credit, but looming competition may provide the spark. Beginning in 2007, foreign banks will be allowed to offer cards in which bills are calculated in the Chinese currency. Already, Citigroup Inc. has taken a 5% stake in China’s Shanghai Pudong Development Bank and, subject to regulatory approval, can increase its stake to 24.9%.

China hopes to learn from Korea — where card abuse followed similar initiatives.

POS Terminals from India

The Business Standard reports that Visa International introduced the first indigenously developed low-cost point-of-sale (POS) terminal in India. The terminals has been developed by Hyderabad-based Linkwell Telesystems with technical support from Visa.

“This is an innovative product which can change the dynamics of the payment card industry. While the card numbers are growing there needs to be a place where the consumers can use it,” said Visa International’s country manager (South Asia) Santanu Mukherjee.

He added, “The cost of POS imported into India has been an entry barrier for small and medium sized merchants. The reduction of costs will also increase the penetration in Tier II towns where there is a large number of potential merchants with low threshold volumes.”

Internet Retailers

InternetRetailer.com is out with its annual list of the top 50 online retailers. The article has lots of great insights and includes listings of some of the component services, including payment processors, used by many of these online merchants. Most of these retailers are household names — but, some aren’t — like TShirtKing.com.

Wal-Mart to stop accepting MasterCard Signature Debit Cards

In a move that reinforces the increasing power of major merchants in the world on payments, Wal-Mart has announced that it will stop accepting MasterCard signature debit cards at its stores beginning in February 2004.

“As a result of the merchants’ lawsuit settlement, MasterCard can no longer require acceptance of its signature debit card as a condition of accepting its credit card,” said Mike Cook, Wal-Mart’s vice president and assistant treasurer. “The fees charged by MasterCard for its signature debit are simply too high, which led us to eliminate this payment option rather than pass these costs on to our customers.”

The reality is that almost all signature debit cards issued (both MasterCard and Visa) include another network mark on the back of the card suitable for use in a PIN-entry environment. Over the last few years, some merchants have been subtlely suggesting to consumers — when they use such a card — that they enter a PIN and complete the transaction as a PIN-debit transaction at lower cost to the merchant vs. signing the transaction receipt and the merchant paying a higher fee. Wal-Mart’s move removes the subtlety completely — for MasterCard debit cards — which will only be accepted with PIN.

The Wall. St. Journal also covered this story in this morning’s edition — and included the following comment:

Mr. Cook said Wal-Mart has struck a deal to accept Visa signature debit-card transactions at a lower fee than Visa currently charges. But the new fees won’t go into effect until the New York federal judge presiding over the litigation gives final approval to the settlement.

Smart Card Alliance: Smart cards can protect privacy

The Smart Card Alliance has released a new white paper, Privacy and Secure Identification Systems: The Role of Smart Cards as a Privacy-Enabling Technology.

“Smart cards provide a powerful tool for protecting an individual’s privacy,” said Robert Donelson, senior property manager of the Bureau of Land Management at the Department of Interior (DOI). “For those who have access to private information, smart cards ensure only legitimate users can access information, and they can only access the information they need to do a specific task. Other information that may be in the system can be kept confidential. Of course, privacy must be protected throughout the system, not just at the card level.”