Category: Archive | Page 46

Washington State’s Disappearing New Money Transmitter Rules

On Monday (Dec. 14), the Washington state Department of Financial Institutions said that it was about to change the ways payment processors can get waivers from money transmission licensing requirements. The changes were to kick in Jan. 1. But by Wednesday (Dec. 16), the page with the announcement had vanished, instead displaying a “page not found” error. A search on the state DFI site still returns the page during a search. (Guys, if you’re going to hide a page, don’t forget to clear cache and remove it from site search results. Geez, do we have to tell you everything about hiding stuff from the public?) Fortunately, we copied the text of the page before it disappeared.

Giving processors a mechanism to not being considered a money transmitter is ostensibly a good thing. But like everything else that touches state and federal regulatory efforts, few good things ship without booby-traps. Deana Rich, president of Rich Consulting and also Partner/Director of Strategy for PaymentFacilitator.com, said the risk is not mostly with the state issuing the rules—Washington state in this case—but with other states and how they may choose to interpret that waiver request. “If you say to one state ‘I want to be exempt from your rules,’ other states might say, ‘Hmmmm. Why did you say this to Washington? I’m going to look at you much more carefully now,'” Rich said.

Payments Patent Potpourri: A Way For Visa To Ride The Payment Rails Faster

This is our weekly plunge into some of the more interesting patents awarded in the payments space.

Visa Needs To Ride The Rails Faster—And These Are Literally Rails. On Tuesday (Dec. 15), Visa was granted a patent that deals with how transactions can be approved quickly enough for the increasingly-popular mobile public transit payments.

RentMoola Deal Signals Major Upheaval In The Rental World

In the world of payment facilitators, it’s hard to envision a segment more in need of payments updates than apartment rentals—one of the last nature preserves for the American Check. A deal announced on Tuesday (Dec. 1) between RentMoola and MasterCard is a very optimistic sign.

The deal itself is simple, but the potential implications are anything but. The deal positions MasterCard as RentMoola’s preferred payment brand in the U.S. and Canada, which that tenants and condo owners get an unspecified preferred rate “as well as (again, unspecified) rewards with exclusive offers.” This arrangement will include MasterPass “in early 2016,” which presumably means any time before July. Replacing checks with payment cards is a step in the right direction, but where rental payments can really shake things up is when the process bypasses the landlord.

WeChat Cuts Global Money Transfer Deal With Western Union

In a deal that could make Tencent-owned social media platform WeChat into a serious payments player, WeChat announced Tuesday (Nov. 17) a deal with Western Union that allows WeChat’s U.S. users to send money cross-border to 200 countries and territories, all while riding Western Union’s rails.

With conflicting laws, industry regulations and security concerns, simplified global money transfers has been a top PF priority. “Consumers are able to fund the money transfer utilizing a debit card, credit card or bank account and easily direct the funds to a Western Union retail agent location around the world, and to a mobile wallet or bank account where available,” said a joint statement from WeChat and Western Union. “WeChat together with its sister product Weixin in China had over 650 million of monthly active user accounts at end of September 2015.”

Wall Street Loves Comparisons, Which Is Why Square Is Driving It Crazy

As PF extraordinaire Square begins its IPO perp walk (aka roadshow), it is seeing consumer media criticism (such as this piece from USA Today) that its numbers are not as strong as so-called contemporaries. The problem is Square’s business model and execution approach is truly different, so much so that there are hardly any comparably-sized companies that are apples-to-apples comparisons—and certainly none that are already publicly-held.This concern is oft-cited by startups who claim to have no competitors, but with Square, the differences are much more significant.

Rick Oglesby, a senior analyst with payments consulting firm Double Diamond Group and a longtime tracker of Square, said he was concerned about the influence exerted by comparisons like the ones USA Today made.”This article keeps talking about tech companies and, if that’s the benchmark, then it probably isn’t that pretty. But if the benchmark is payments companies, Square is very pretty,” Oglesby said. “This is not a Facebook or a Twitter, but relative to the competitors listed in the article—which aren’t really even competitors—I’ll take Square.”

Samsung Pay’s Encryption Perception Problem

It seems a funny thing has happened on the way to using Samsung Pay for some users, as the emerging mobile payments platform isn’t compatible with a phone’s encryption protocol. Simply stated: if the phone is switched into encrypted mode (as many who use their phones for work are required to do), users can’t add cards to their Samsung Pay wallet.

This isn’t going over well. Although it’s not yet clear if this encryption conniption is a glitch or intentional, either way it is sending a positively terrible message to users about Samsung Pay and security. Not requiring a user to activate phone encryption is one thing, but refusing new payment credentials if it’s already been activated is very different.

Apple Wants Into P2P Payments, Talking With Chase, CapOne, Wells Fargo, U.S. Bancorp

In an attempt to control as much consumer payments as possible, Apple is in negotiations with J.P. Morgan Chase, Capital One, Wells Fargo and U.S. Bancorp to launch a bank-account-based P2P payments service, according to a Wednesday report in The Wall Street Journal. If successful, it’s value would be huge to Apple, but not on a per-transaction fee basis. The goldmine would be the data, the equivalent of knowing every check, money transfer and payment card transaction made by millions of its customers.

Beyond the privacy implications of a consumer goods company having so much consumer personal data—on top of whatever health data is being gathered through Apple’s Health app—there are also security concerns. The more avenues of access that exist into a bank account, the more chances there are for a glitch to withdraw more than expected or for the ultra-sensitive bank account routing numbers to leak where a cyberthief could see it.

Home Depot Payment Card Fraud Via HR Records

In a big company, when it’s suspected that someone is misusing company data to steal money from other employees, the first call is supposed to be to human resources. But what if the fraud is being perpetrated by a couple of HR staffers? That’s what happened at Home Depot.

The two Home Depot HR people, Paulette Shorter and Lakisha Grimes, were sentenced to two years and one day in federal prison. According to the feds, the HR staffers used Home Depot personnel files to extract names, social security numbers and birthdates to apply online for Capital One payment cards. They used the names and data not only of Home Depot employees, but of job applicants, too.

Amazon Shuts Down Local Register, Having Never Really Loved It Anyway

For the world’s largest e-commerce company, Amazon certainly had a busy payments week this week, from opening a physical bookstore integrating online capabilities to pushing its Amazon button for third-party mobile apps. But it’s most PF noteworthy move this week was Amazon’s choice to give up on Local Register.

Local Register was a payments processing effort that focused on the exact kind of smaller merchant that has gravitated to Square. And Amazon’s initial promotional pricing was set lower than Square, on the rationale that price is everything for a small merchant. Apparently not.

MCX Finally Gets Its Interchange Break—After Chase Hands It To Them

When JPMorgan Chase on Monday (Oct. 26) promised new mobile capabilities for its online Chase Pay program next summer, it chose to take a decidedly retailer-oriented approach. With the lures of lower interchange fees plus all of the fraud cost protections of the EMV liability shift without having to accept EMV, Chase has given retailers concrete reasons to push Chase Pay over other payment methods.

The Chase announcement named MCX (and specifically members Walmart, Target, Best Buy and Shell) as premier partner. Interestingly, the interchange reduction effort that caused MCX to form years ago but had been all but abandoned by the group recently is the centerpiece of Chase’s 2016 plans. What MCX couldn’t get on their own was handed to them by Chase.