Nova recently changed their name to Elavon to create a unified global name. Nova has a better than most reputation in the processing industry, and it seems like changing a company name from Nova to Elavon is a brand suicide.
Anyone processing with Nova should expect to see their statements reflect the new name if it hasn't been changed already. Other than the name change there should be no difference in service from Elavon.
Add comment April 28th, 2008
Discover just signed an agreement with Citi to acquire Diner Club for $165M. Diners club is all but extinct, but this merger may bring some hope into Diners Club's future. Since Discover is now settled along with Visa and MasterCard it's possible that we will see the ability to accept Diners Club cards pushed to all businesses that currently process credit cards.
Press Release: Discover Financial Services to Acquire Diners Club International Network
Add comment April 9th, 2008
Digital Transactions magazine has an outstanding article regarding current PCI standards. I highly recommend reading it to any business that processes credit cards and businesses that are involved with any step of a credit card transaction.
Download the March 2008 issue and check out the article "Once is not enough".
1 comment March 24th, 2008
Despite uncertainty and a poor market, Visa's IPO went through yesterday raising about $18B, making it the largest IPO in US history, second largest in world history. The stock market got an additional boost yesterday as the Federal Reserve lowered interest rates again.
Trading starts today and Visa's stock was projecting several dollars above the $42 IPO price before the market was open. But, it immediately jumped above $60 when the market opened.
Add comment March 19th, 2008
Visa's IPO which was predicted to be going off tomorrow (Tuesday, March 18th), may be pushed back because of the Bear Stearns casualty.
According to The Disciplined Investor "Unless the lead underwriters - JP Morgan and Goldman Sachs - are completely deranged and masochistic, Tuesday is not going to be the best day to attempt to bring history’s largest IPO to market."
Banks, especially JP Morgan have a lot riding on the success of this IPO, so it would be reasonable to assume that they will indeed push it back to a day that will be much less volatile than tomorrow is predicted to be.
Add comment March 17th, 2008
Paypal issued a news release today stating that buyers no longer need to sign up for a paypal account in order to purchase from a Paypal accepting seller.
From a usability perspective this makes perfect sense, and has been one of the biggest hurdles for Paypal to overcome as a 3rd part processor.
However, I can foresee some major customer issues in regards to seller protection.
Right now, Paypal effectively removes traditional buyer and seller protection for credit card transactions by resolving disputes within the Paypalsystem instead of through the credit card chargeback system. This works explicitly because both the buyer and the seller are registered users of Paypal. Paypal has control over the entire transaction process, and has absolute power over both user's accounts. Sellers currently have some piece of mind that their buyers have gone through a registration and verification process, albeit very limited. When the buyer is no longer required to maintain a Paypal account, a huge avenue for fraud opens up. The seller remains bound to Paypal's dispute process, but the buyer is not. In this case the card issuing bank would take full control over the dispute, and unlike a traditional merchant account, the seller does not have a relationship with Visa or MasterCard. Paypal will become a liaison between the card issuing bank and the seller in the event of a chargeback, wherein the problem lies. Anyone who has tried to work with Paypal during an account hold or a dispute knows that yelling at a wall is more effective than trying to communicate with Paypal. Judging by Paypal's already horrible customer service reputation, they are potentially adding an enormous workload on their plate in the form of chargeback handling. This could very well be a disaster in the making.
This is obviously an attempt to compete with more traditional Payment Gateways that have seamless API integration with websites (Authorize.net, Paypal's Verisign, etc.). While this has the potential to improve Paypal conversions, I would be hesitant in enabling this feature in a Paypal account until more is disclosed about how non-account holder chargebacks will be handled.
4 comments February 29th, 2008
Visa has an upcoming IPO planned for this year. They still haven't released a formal date but it looks like it is going to be mid to late march as predicted.
This IPO may have a far greater affect on the US economy than anyone originally imagined. Because of the current credit and mortgage crisis, banks don't have a good financial outlook for the coming year, or any year in the near future. Fraudulent mortgages and foreclosures are going to continue taking their toll on the banking systems, and the huge rate of inflation isn't going to help any. Visa's IPO could really change all of this.
Visa is composed and run by member banks with a board of directors consisting of members from JP Morgan Chase, BOFA, Wachovia, US Bancorp, Wells Fargo, Providian, First National of Nebraska, Texas First Bank, NationalCity, and SunTrust. While Visa itself remains non-profit, the banks that issue Visa cards and run Visa are certainly for-profit companies. When Visa goes public, the member banks are going to get a lot of pre-IPO stock. If we base Visa's potential success from MasterCard's IPO last year, Visa's stock value could go up by four times, soon after their initial offering. Even though the economy isn't in the same shape as it was last year, Visa is a far stronger company than MasterCard was, and there is little doubt to Visa's strength even in a poor market. Visa is more than double the size of MasterCard by transaction volume, and this IPO should prove to be the second largest in world history, largest in US history.
If Visa's stock sells for the median predicted price of about $40 per share, the primary member banks are going to get some major relief. The pre-IPO value that member banks are expected to receive is: JPMorgan Chase about $1.1B, BOFA $545M, National City $380M, Citigroup US Bancorp and Wells Fargo about $240M each. This should immediately go up after the IPO, and like MasterCard could be four times higher in a few months.
This huge increase in capital for these banks will have a cascading effect on their own stock, which should dramatically increase. Banks are having a hard time maintaining their current value and Visa could create a surge of investment that could turn things around. There's probably not anything that's going to turn around the mortgage and credit crunch, but a $17 - $50 billion bump in bank stock should really help investors regain some trust.
Related Posts:
Where Visa is headed…
Visa is going public
1 comment February 27th, 2008
Ingenico made an offer to purchase Hypercom corporation.
Ingenico and Hypercom are two of the largest credit card terminal manufacturers after Verifone. Verifone made a purchase of the Lipman corporation about a year and a half ago, which set their market share far ahead of any competitor.
The combination of Ingenico and Hypercom would create a company with an annual revenue of around 800M. Verifone is currently at about 2B so there is still a sizable gap, but this could create some real competition for Verifone.
Ingenico is less popular in the US than in other countries, but they make some very interesting products, and was one of the first to offer a reliable pay at the table solution. Hypercom is the number two terminal manufacturer in the US. Hypercom would be an excellent medium for Ingenico to grow their US presence.
I think that this would be a very smart acquisition for both Hypecom and Ingenico.
3 comments February 11th, 2008
About a week ago Verifone stock took a huge dive due to a overestimate of profit margins. Verifone stock fell 45% in a single day when they announced that profit had been overstated by 80% for 2007.
Companies do make mistakes, and occasionally large ones like this. However, in this particular case the CEO sold his own Verifone stock the day before the crash making millions while every other shareholder lost half their Verifone stock.
There is now a class action lawsuit against Verifone for violating the Securities Exchange Act of 1934.
1 comment December 18th, 2007
For the first time in history, debit card usage has passed credit card usage. A study by the Federal Reserve, shows that debit card usage is now 27% of non-cash transactions while credit is now 23%. There was no change in credit card usage from 2003 - 2006 while debit card usage went up 70% (from 19% to 27%) over the course of three years. At the same time the use of paper checks went down 72% and ACH bank drafting went up by 69%.
Nothing surprising but paper checks are definitely on their way out and are being replaced by electronic drafting and debit cards. It's about time!
For more Federal Reserve Reports:
http://www.federalreserve.gov/paymentsystems/paymentsresearch.htm
Add comment December 13th, 2007
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