April 17th, 2014 by Elma Jane
Issuers participating in the MasterCard Rewards Platform can pursue greater engagement and value in their programs through a partnership MasterCard is announcing today with Points International Ltd. The companies say they struck the deal to take advantage of the popularity of travel and related experiences. Under the agreement, participating issuers can let their cardholders to exchange and trade earned airline miles, hotel points and loyalty currencies.
Travel happens to be one of the most popular redemption options for points on most programs today. So this is really about enabling consumers to get even more choice with regard to getting some redemption options.
Issuers individually will roll out the program later this year based on their own schedules. Any of the hundreds of banks that use the MasterCard Rewards Platform are eligible to participate. Participation is voluntary.
Enhanced flexibility in cardholder reward redemptions was a key driver behind the initiative, what this partnership allows to do is enable all customers that have points that they’ve gained from spending on their credit cards or debit cards to then exchange those points into a miles program or a hotel program that they tend to always have a lot of other points accumulated already.
Variable Exchange Rates
Cardholders will be provided with a conversation ratio applicable to the pair of rewards being exchanged. Ratios will differ by redemption transaction. Consumers also may choose to transfer small buckets of rewards points into one program and the rest in other programs. They can do transfers multiple times and across multiple rewards providers.
Posted in Best Practices for Merchants, Credit card Processing, Gift & Loyalty Card Processing, Travel Agency Agents Tagged with: airline, airline miles, banks, cardholder, credit cards, debit cards, hotel, loyalty, MasterCard, platform, programs, reward, rewards, transaction, transfers, travel, travel related
April 15th, 2014 by Elma Jane
Amsterdam, Netherlands-based Cardis has been piloting its technology in Europe with Raiffeisen Bank in Austria and Sberbank in Russia. They are now focused on the U.S., as this is the fastest growing mobile payments market in the world, where there’s a huge opportunity. Integration of technology with a large U.S. processor and with a major U.S. retail brand, which will be launching a mobile site and mobile app using Cardis solution.
Cardis International is planning an April launch in the U.S. for its technology, which enables merchants to accept low-value contactless or mobile payments without incurring high processing charges. Cardis is able to bring down the processing cost of low-value payments, the company said, by aggregating multiple transactions into a single payment.
The problem
Contactless card and NFC-based mobile payments are typically for low amounts, and yet still use a card processing infrastructure that was designed 40 years ago when the average credit card transaction was $100.
Traditional card processing systems require each transaction to be individually processed through the payment system, including authorization, clearing and settlement. The resulting variable costs of processing each transaction are independent of the transaction amount and too high for low-value payments, particularly in low-margin industries such as quick-service restaurants. QSR restaurants often have a 3 percent profit margin, yet, for low-value contactless payments, the processing cost could be as high as 6-7 percent of the transaction value.
Mobile and contactless cards offer consumers a convenient form factor. But they don’t solve the problem that low-value card payments are very expensive for merchants.
As an ever-increasing percentage of transactions have become cashless, card processing fees have become a significant cost. Costs that are based on the number of transactions, rather than their value. With average per person expenditures of $5 or under, feels each swipe fee much more than a business where customers spend $50 or more. But not accepting credit/debit cards for low-value transactions isn’t an option as many of customers don’t carry cash anymore.
Aggregation
Cardis’ solution is to act as an aggregator of low-value payments, sending a single batched transaction through to a processor instead of multiple low-value transactions. As there is no per transaction processing of individual low-value purchases, the cost-per-transaction is significantly reduced.
Cardis provides its technology as a software plug-in to payment service providers for contact-based and contactless card payments, mobile wallet transactions and NFC payments.
There are two models. For card payments, it will aggregate multiple purchases by an individual cardholder at a single merchant on a post-paid basis up to a specific amount, for example $20. To guarantee payment to the merchant, since the aggregated transaction is processed at a later date, it will pre-authorize an amount, for example $15, the first time the customer makes a purchase at that merchant.
Alternatively, merchants can opt for Cardis’ prepaid system. This involves the consumer setting up a prepaid account hosted by Cardis’ sponsoring bank that is topped up via ACH (automated clearing house) transfers. Using the Cardis prepaid account on a smartphone provides the digital equivalent to cash.
With its post-paid solution, merchants will save 30-50 percent per transaction compared to conventional card processing fees, while its prepaid solution saves merchants 80 percent per transaction. With the post-paid solution, it will only aggregate a customer’s purchases at a single specific merchant. But, as the prepaid solution aggregates the customer’s purchases across multiple merchants, this enables to offer a much lower processing fee to the merchant.
Cardis provides an audit trail enabling consumers to track individual transactions that are aggregated using its technology. Consumers don’t lose any of their card protection rights and guarantees by agreeing to let a merchant aggregate their payments through Cardis. They can always charge back any disputed transactions.
Cardis sees opportunities for digital content providers such as online music stores and games providers to use its aggregation technology. It can integrate solution with existing digital wallets.
Raiffeisen
In 2012, Austria’s Raiffeisen Bank launched a pilot of Cardis technology for NFC-based Visa V Pay debit card payments in partnership with Visa Europe. Raiffeisen’s MobileCard mobile payment product uses a secure element stored on an NFC-enabled MicroSD card inserted in a mobile phone. Although Cardis supports secure elements stored on SIM cards as well as on MicroSD cards and on the cloud, Raiffeisen opted for MicroSD cards, as this is an easier solution to implement.
Raiffeisen cardholders participating in the pilot use MobileCard on average three times a week, with an average transaction value of ($5.70). Merchants accepting MobileCard are seeing 40 percent to 70 percent lower merchant processing fees for an average transaction value of ($5.43) to ($13.60).
Spindle
In October 2013, Spindle, a U.S. mobile commerce company, signed an agreement with Multi-max, a manufacturer of vending machines for mid-size and small offices throughout North America, Europe and Asia. Spindle will integrate its MeNetwork mobile commerce technology into Multi-max’s line of K-Cup vending machines for rollout across the U.S.
The MeNetwork solution will incorporate all card-based payment acceptance services, as well as mobile marketing services. Spindle’s partner Cardis will provide low-value payment processing services for purchases at K-Cup vending machines.
Posted in Credit card Processing, Credit Card Security, Digital Wallet Privacy, e-commerce & m-commerce, Electronic Payments, Gift & Loyalty Card Processing, Internet Payment Gateway, Mobile Payments, Mobile Point of Sale, Near Field Communication, Payment Card Industry PCI Security, Smartphone, smartSD Cards, Visa MasterCard American Express Tagged with: accept, ach, aggregated, aggregation, aggregator, authorization, automated clearing house, average transaction, batched, card payments, card processing infrastructure, card processing systems, card-based payment acceptance, cardholders, clearing, contactless, contactless payments, cost-per-transaction, credit card transaction, debit card payments, Digital wallets, high processing charges, low-value payments, merchant aggregate, Merchant's, microSD, mobile app, mobile commerce, mobile payment, Mobile Payments, mobile site, mobile wallet transactions, nfc-based, payment service providers, pre-authorize, prepaid, processed, Processing, processing cost, processing fees, processor, settlement, smartphone, transactions, transfers
September 20th, 2013 by Elma Jane
U.S. Bank integrates to simplify mobile money transfers with Western Union
U.S. Bank has offered Western Union Money Transfer services since 2009, but now customers can do so via mobile. According to U.S. Bank, it is the first bank in the United States to integrate the Western Union Money Transfer services into its mobile app.
U.S. Bank is collaborating with Western Union to let U.S. Bank customers use the Western Union Money Transfer services via the U.S. Bank mobile application. “Adding Western Union enhances overall digital money movement strategy.”
“Primary goal is to make it easier for customers to send money on any device to anyone across the country or around the world.” Giving customers the most convenient banking experience by delivering and allowing customers to bank anywhere and anytime they want.
Money transfer
In order to qualify for the new service, customers must have been a customer of U.S. Bank for at least a year and have a registered mobile phone and eligible deposit account. Western Union Money Transfer services let consumers conveniently pay other consumers via mobile or desktop.
Eligible U.S. Bank mobile banking customers will now see the Western Union logo in the person-to-person money transfer options. Online banking customers will see Western Union as a funds transfer option.
U.S. Bank decided to offer the new service to make moving money as convenient as possible for its customers. Customers will be able to send money around the world from the comfort of their own home.
When consumers receive a payment through the Western Union services, they can be paid in cash and use it immediately.
Mobile banking
U.S. Bank has rolled out a number of mobile initiatives in the past few years.
In July, U.S. Bank integrated with the Square digital wallet, enabling users to fund payments made via the mobile application from their bank account.
Earlier this year, U.S. Bank even offered customers the ability to pay via NFC by providing a customized U.S. Bank Go Mobile iPhone case equipped with NFC technology.
The bank also rolled out mobile photo bill pay services last year to let customers pay their bills by simply snapping a picture of the document using the camera on a smartphone or tablet.
“As device ubiquity grows, as people become more comfortable using their phones for all their banking activities, a lot of new ways to leverage a phone’s capabilities to make banking easier for customers, customers expect their bank to offer a full rich set of money management and movement capabilities on their phones, tablets and laptops.”
Posted in Digital Wallet Privacy, Electronic Payments, Mobile Payments Tagged with: banking, mobile, money, nfc, payment, transfers, U.S. Bank, US Bank, western union
