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VISA EARNINGS CALL RECAP. Visa reported earnings yesterday showing strong results in the final quarter of the year. Visa is the largest payment network in the world and has a huge amount power over most aspects of the legacy payments system.
Here are the key points from the call:
- Transactions and payment volume grow: Global payment volume grew to $1.1 trillion in the final quarter of 2013, an 8.3% inflation-adjusted increase over the same period in 2012. The number of global transactions grew to 19.5 million in the fourth quarter of 2013 from 17.7 million in 2012.
- Visa not budging on EMV: Visa reaffirmed its October 2015 deadline for merchants and card issuing banks to migrate to the EMV or "chip card" standard. Fraud liability will shift to merchants and issuers who do not adopt the standard.
- Visa is paying attention to Bitcoin: "It's early days in terms of what Bitcoin is and what it will be. We're certainly paying attention to it ... There is certainly some interesting things about Bitcoin and other things like it, but there is also a great deal of complexity. People talk about things like frictionless ...When you actually dig through it, it's really not the case; it's far more complex than that. We feel very comfortable with the business that we have here," said CEO Charles W. Scharf.
- What V.me is: "People like to ask, is it a wallet? Is it this? Is it that? It's really not that complicated ... V.me is just an easy way to check out using [your] user name and password and not having to enter your account number, the expiration date, shipping address, and all that other kind of stuff," said Scharf. From Scharf's comments, it sounds like the product, which launched in 2012, is in the same category as "Login and Pay with Amazon" and "Pay with PayPal" buttons on e-commerce sites. The company reports that it has over 300 merchants signed up for the service, and 80 are currently live on the platform. (Visa)
PAYPAL PITCHES APPLE ON PAYMENTS. While it's little more than rumor at this point, Re/code reports that three payments industry executives have confirmed that PayPal has been pitching Apple on a payments partnership. It's not clear exactly how the deal would work if Apple were to agree, but one possibility is that PayPal would effectively white-label some of its services in order for Apple to move into payments. We've already reported what a force Apple would be if it decided to get into payments and it's not clear what, if any advantage it would gain through partnering with PayPal. (Re/code)
INTUIT-OWNED MINT BRINGS MONEY MANAGEMENT TO BITCOIN. Silicon Valley-based Mint, a personal finance management platform, has partnered with Bitcoin wallet Coinbase to allow users to see their Bitcoin holdings on the same platform as their other finances like their 401Ks and bank accounts. It's not a huge step forward for Bitcoin, but it does show that it's becoming more of a household name. (Venture Beat)
HEARTLAND PAYMENTS SYSTEMS FILES A LAWSUIT. Payments processor Heartland Payments Systems is filing a lawsuit against another processor, Mercury Payments Systems. In a transaction, card networks charge an interchange fee and payments processors add a mark-up charge to this interchange fee when they charge merchants for their processing services. Heartland alleges that Mercury payments is billing some of its mark-up fee as an interchange fee so that the cost of its services looks lower than it actually is. (Heartland Payments Systems)
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PAYMENTS TECHNOLOGY PROVIDER ADDS DIRECT-TO-DEBIT PAYMENTS FOR BUSINESS. Georgia-based Acculynk provides software for securing digital payments. The company has a peer-to-peer payments platform, Payzur, which now provides businesses with a way to make payments directly to the debit or prepaid cards of individuals or businesses. The advantage of the service is that businesses and individuals no longer need to wait days for payments to clear. (PYMNTS)
CLINKLE GETS HACKED. Payments startup Clinkle, which we reported on in a recent Payments Insider, has been hacked, according to TechCrunch. The hack was apparently carried out using a private API which was used to reveal the names, phone numbers, Clinkle IDs, and images of people using the app. While the hack is somewhat concerning, Clinkle hasn't officially launched yet and responded saying that the feature was for testing purposes and would be turned-off when the app launched. (TechCrunch)
A LOOK AT MOBILE PAYMENTS IN LATIN AMERICA. New legislation brought into effect in a number of Latin American countries will shape the future of digital payments in the region.
Legislation in Peru requires that mobile payments be interoperable. In other words, the country is building one set of rails so that mobile payments can be made to anyone, regardless of the platform they're on or the institution they are using to make or receive payments. The banks that control the ACH rails are building the new mobile payments rails. Peru has also created a new category of company called "Electronic Money Issuing Firm," which is defined as a business that changes physical money into digital money. These companies will have access to the new mobile payment rails. The idea is to increase financial inclusion by making it easier for mobile payments companies to be successful. These companies often provide bank-like services to the unbanked.
Brazil requires all payments to ride on the same rails. Like Peru, Brazil wants all the payments rails to work equally for all types of payments institutions and providers, but Brazil's plan is to create interoperability for all types of payment, not just mobile. In addition, non-banks can now qualify as financial institutions which will give new mobile payments companies access to the rails. Fees for payments are now under the supervision of Brazil's central bank which may help to keep them low.
Mexico and Costa Rica want to connect mobile phone numbers with bank accounts. In Mexico, banks will be required to associate a customer's bank account with that person's phone number when requested. The customer's phone number can then be used as an account number to which funds can be delivered. Costa Rica is going to roll out a similar scheme in the second quarter of 2014 as well. These new strategies are meant to increase the use of mobile phones as financial management and payment devices. (Payments Views)
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