2008-08-28T13:52:36Z tag:weblogs.jupiterresearch.com,2008:/analysts/ekountz//47 Movable Type Copyright (c) 2008, Ed Kountz 2008-08-28T13:52:36Z 2008-08-28T13:51:16Z tag:weblogs.jupiterresearch.com,2008:/analysts/ekountz//47.10161 2008-08-28T13:51:16Z

Judge Barbara Jones, the Federal judge overseeing Discover’s antitrust lawsuit against MasterCard and Visa, reduced the scope of Discover’s suit in a ruling that generated responses from both MasterCard and Visa over the last few days. Judge Jones, responding to a summary judgement motion filed by MasterCard, ruled no evidence...

Ed Kountz Judge Barbara Jones, the Federal judge overseeing Discover’s antitrust lawsuit against MasterCard and Visa, reduced the scope of Discover’s suit in a ruling that generated responses from both MasterCard and Visa over the last few days. Judge Jones, responding to a summary judgement motion filed by MasterCard, ruled no evidence of an inter-association conspiracy existed between Visa and MasterCard, and also dismissed certain debit-related claims, concentrating on the operation of MasterCard’s Competitive Programs Policy, which Discover had previously filed. MasterCard’s statement said that it was “pleased” that Judge Jones had narrowed the scope of Discover’s suit, a decision it indicated “recognizes the intense competition between MasterCard and Visa.” However, MasterCard further indicated that it was “disappointed” by the Court’s decision to grant “aspects of Discover’s summary judgement motion seeking to apply collateral estoppel in its claims against MasterCard, but pleased it rejected Discover’s attempt to obtain broader findings.” Collateral estoppel refers to the application of findings obtained from one lawsuit to a different suit. Visa’s statement on the decision noted that “Discover cannot challenge the legality of the agreements Visa (has) with its debit issuance partners,” and indicated the suit would be unlikely to have a “significant impact” on Visa’s ongoing operations. Both organizations have noted that Discover must still prove the remaining points of its case at trial. The Discover suit is one of several that have been winding their way through the courts system in relation to the business models, or other business elements, of the two major cards brands in recent years. 2008-08-22T12:35:16Z 2008-08-22T12:29:48Z tag:weblogs.jupiterresearch.com,2008:/analysts/ekountz//47.10145 2008-08-22T12:29:48Z

First Data believes that contactless stickers—its so-called-GO-Tags—will be a game-changer in the race to mobile proximity payments. Go-Tags are flexible RF antennae, linked to a prepaid account, designed to be affixed to consumers’ cellphones. If successful, the tags will help to jump-start mobile proximity payments, and FDC has just rolled...

Ed Kountz First Data believes that contactless stickers—its so-called-GO-Tags—will be a game-changer in the race to mobile proximity payments. Go-Tags are flexible RF antennae, linked to a prepaid account, designed to be affixed to consumers’ cellphones. If successful, the tags will help to jump-start mobile proximity payments, and FDC has just rolled out a new study suggesting that consumer interest in the concept is high. LINK At least regarding the interest piece--specifically, whether interest and understanding are high enough to support critical mass in the near future--I disagree that we're there yet. As spelled out in recent research, JupiterResearch believes it will still take several years for m-prox to take off, esp. in the U.S. Further, we believe that because payment stickers enable payments…but don’t directly link into the ecosystem of downloadable marketing offers and other POS discover that would be capable with NFC phones, that the addressable market will be slower to take off than FDC expects. Still, it’s a step worth watching. Consumer marketing and education around the value proposition will be essential, and we believe will encourage consumer behavior over the next few years, rather than something more rapid. Particularly given that interest around the mobile ecosystem continues to percolate. Chase and Visa recently announced a consumer marketing pilot in the Phoenix area in which Chase credit and debit customers can have targeted, personal offers from more than 50 participating merchants sent to their mobile devices. And on a separate note, Visa has announced it is working with PNC Bank, SunTrust Bank, U.S. Bank, Wachovia, and Wells Fargo in the United States, and Royal Bank of Canada, TD Bank Financial Group, and Vancity to launch a 2000 consumer pilot testing the delivery of real-time notification alerts on Visa accounts. The alerts will be delivered via email and/ or SMS. Real-time account alerts provide additional control to tech-savvy account holders, and will be an important element of the mobile ecosystem as payments demand develops. NFC phones remain a rarity…and little known by US consumers…but opportunities to use mobile to deepen the relationship with consumers do already exist. More on this in upcoming Jupiter research, and in research from our new corporate comrades at Forrester. It's good to be a part of an expanded corporate team, and look for exciting announcements and updates on the acquisition as the year progresses. 2008-08-22T02:03:00Z 2008-08-22T02:00:22Z tag:weblogs.jupiterresearch.com,2008:/analysts/ekountz//47.10144 2008-08-22T02:00:22Z

News this week that eBay is making several changes – notably for readers of this blog, that the service will discontinue acceptance of paper payment methods for auction purchases. Beginning late October 2008, acceptance of checks, money orders and cashiers checks will be discontinued on eBay.com. At that time, buyers...

Ed Kountz News this week that eBay is making several changes – notably for readers of this blog, that the service will discontinue acceptance of paper payment methods for auction purchases. Beginning late October 2008, acceptance of checks, money orders and cashiers checks will be discontinued on eBay.com. At that time, buyers will need to conduct auction purchases…and sellers to accept payments using…direct credit or debit card payments via a merchant credit card account, PayPal, ProPay, or a payment on pick-up of the item in question. The change will not occur, according to eBay’s announcement on the topic, to “vehicles categories in Motors, capital equipment categories in Business & Industrial, Mature Audiences and Real Estate.” LINK The reasons stated by eBay executives during a pre-briefing on the change earlier in the week center on consistency and security. Certainly, the interruption of flow that occurs to an eBay transaction when paying with paper is clear, and clearly applies to a small subsegment of eBay purchasers. Not surprisingly, those transactions are also more likely to trigger “item not received” disputes, and to see negative feedback on those transactions. Five or seven years ago, such a move would have been risky…in an emerging market category, and at a time when paper was more broadly used, such a move could have impeded growth. But JupiterResearch survey data validates that paper is in decline for physical purchases, as consumers use cards more often for sub-$15 transactions and carry less cash overall. These factors, along with the establishment of other commonly used online payment options and the growth of the market, make it likely that this decision will see a few irate blog entries, but not much more than that, and is part of the longer-term trend towards streamlining, away from paper. Beyond this announcement, eBay also announced additional changes, including a significant lowering – by more than 70 percent – of the cost to list an item in eBay’s Buy It Now™ fixed price format, effective Sept. 16 2008. The firm has also rebalanced, for most categories, the final value fees assessed on transactions, and will be offering Power Sellers an additional holiday season in the form of free shipping. LINK 2008-08-14T22:36:02Z 2008-08-14T22:30:51Z tag:weblogs.jupiterresearch.com,2008:/analysts/ekountz//47.10136 2008-08-14T22:30:51Z

Like social networking and the buzz phrase 'Web 2.0', Twitter has been H-O-T recently. Since it was reported in April that a U.S. student Twittered his way out of an Egyptian jail, it’s been impossible to chuck a wireless mouse without hitting at least one reference to the cutting-edge micro-blogging...

Ed Kountz Like social networking and the buzz phrase 'Web 2.0', Twitter has been H-O-T recently. Since it was reported in April that a U.S. student Twittered his way out of an Egyptian jail, it’s been impossible to chuck a wireless mouse without hitting at least one reference to the cutting-edge micro-blogging site. That story is referenced (under the once-in-a-lifetime headline “Student Twitters Way out of Egyptian Jail) HERE Now, social finance site and web-based finance management service Wesabe … itself the recipient of a good amount of attention in recent months … has rolled out the ability to update a Wesabe account via Twitter. Wesabe…whose blog-friendly online community combines social networking with a community-based approach to better money management...in essence now allows users to text the details of a transaction to Wesabe via Twitter. See the Wesabe blog entry HERE Never mind that recent JupiterResearch data indicates that use of social media is still on the bleeding edge when it comes to researching financial products. Just 1 percent of all online users report using a social networking site to research financial products, and Twitter itself has just a couple of million users. But among 18-24 year olds, social networking sites are seeing somewhat higher usage for financial product research, and the buzz around social finance clearly shows that younger adults are listening. See my report; Online Financial Research: Targeting and Influencing Young Affluents, July 17 2008 HERE Twittering expenses to Wesabe is hardly going to be an earth-shattering innovation over the medium-term, but is representative of the changes that Web 2.0, and mobile, are bringing to financial services and relationship management. And of course, it also gives me a reason to mention both hot names in one cool entry. 2008-08-08T14:55:07Z 2008-08-08T14:48:48Z tag:weblogs.jupiterresearch.com,2008:/analysts/ekountz//47.10123 2008-08-08T14:48:48Z

US consumers who received one of the 105 million-plus economic stimulus checks mailed through mid-July apparently aren’t using those funds to pay down debt. The Federal Reserve’s latest G.19 report, released this week, indicates that revolving credit (mainly credit card debt) increased at an annualized 6.8 percent rate during the...

Ed Kountz US consumers who received one of the 105 million-plus economic stimulus checks mailed through mid-July apparently aren’t using those funds to pay down debt. The Federal Reserve’s latest G.19 report, released this week, indicates that revolving credit (mainly credit card debt) increased at an annualized 6.8 percent rate during the month of June. While that rate is slightly lower than the 7.6 percent rate the Fed reported for May 2008, it is still at the higher end of revolving debt increases in recent years—and about double the rates seen for revolving debt in 2003 (2.9 percent), 2004 (3.8 percent) or 2005 (3.1 percent). In dollar terms, the Fed estimates that the total outstanding in revolving credit comes to $968 billion. LINK It’s clear that, rather than a single driver, several factors have come together to influence the trend. First, consumers stung by the credit crunch…no longer able to use their houses as ATMs…may be turning to credit cards to make up some of the difference. I blogged on the reported impact of this at several of the leading issuers HERE So too the rise in prices for basic goods, making payment methods that free consumers up from the limitations of cash-in-hand seem more attractive. It’s unclear that this is impacting debit—which given ties to the DDA acts something like cash in hand, and for which average transaction volumes tend to be lower—but we will be watching the issue thru the rest of 2008. 2008-07-30T17:41:21Z 2008-07-30T17:35:22Z tag:weblogs.jupiterresearch.com,2008:/analysts/ekountz//47.10095 2008-07-30T17:35:22Z

Recent updates from the ever-changing space of alternative online payments: BillMeLater announced this week a partnership likely to gain it additional traction within a core business area--air travel. The deal partners BillMeLater with Universal Air Travel Plan (UATP), the airline-owned corporate travel payments network. The partnership allows airlines to integrate...

Ed Kountz Recent updates from the ever-changing space of alternative online payments: BillMeLater announced this week a partnership likely to gain it additional traction within a core business area--air travel. The deal partners BillMeLater with Universal Air Travel Plan (UATP), the airline-owned corporate travel payments network. The partnership allows airlines to integrate to BillMeLater via their existing connections with UATP, and extends BillMeLater acceptance to the call center, for customers buying tickets via phone. The deal comes as airlines are seeking to gain competitive advantage with customers, supporting payments convenience and lowering distribution costs while coping with high fuel costs and a sluggish travel market. UATP is accepted by more than 240 airlines, and offers products including the UATP card for corporate subscribers, as well as in-house authorization, processing and risk management services, and an in-house settlement and clearing system for UATP charges for carriers who are not part of IATA or ATA. For its part, Amazon.com has expanded its offerings in the payments space for merchants seeking to outsource some or some Internet transaction processing. Two approaches exist in innovating online payments. The first involves deploying other brands (such as BillMeLater or PayPal) on one’s e-commerce site (say, ToysRUs). The other involves leveraging an existing online brand more deeply into payments (Google’s strategy, and now Amazon’s). Amazon launched Amazon Flexible Payments in limited form in 2007, and have now rolled this in with two other products--Amazon Simple Pay, and Checkout by Amazon. Checkout by Amazon allows customers to pay using their existing Amazon log-on, completing a purchase incorporating Amazon’s 1-Click checkout process, in addition to a variety of merchant-related management tools. Simple Pay is a streamlined version of the system, guiding purchasers to the Amazon Payments website to conduct the transaction. Both have the same fee structure—for transactions $10 and over, merchants pay 2.9% of the amount of the transaction plus a 30 cent fee. Under $10, merchants pay 5% and 5 cents per transaction. The online payments space is already crowded, and some merchants (including those who see Amazon as a direct competitor) are going to be cagey about incorporating a payments solution from the online retail giant. Yet for other merchants, particularly small-to-mid-sized ones, that size could also be viewed as a potential positive…giving them access to a payments service integrated with the #1 online retailer’s existing customer base. Upcoming JupiterResearch will benchmark acceptance of existing and emerging payment options at Top 50 US merchants, a space that has grown increasingly crowded over the past two years. Our data shows that BillMeLater is tied with PayPal in terms of Top 50 U.S. merchant acceptance, and that both lead Google Checkout and eBillMe in acceptance terms by a sizeable margin. 2008-07-29T13:57:53Z 2008-07-29T13:45:33Z tag:weblogs.jupiterresearch.com,2008:/analysts/ekountz//47.10089 2008-07-29T13:45:33Z

Retail analyst Patti Freeman Evans and I have both blogged on the impact of the credit crunch on retail (both overall and the online variety, which as regular readers know has held up fairly well in comparison to retail overall in recent months). Most recently, HERE But the slowing economy...

Ed Kountz Retail analyst Patti Freeman Evans and I have both blogged on the impact of the credit crunch on retail (both overall and the online variety, which as regular readers know has held up fairly well in comparison to retail overall in recent months). Most recently, HERE But the slowing economy keeps coming up, and given recent connections to creditworthy borrowers is worth a few words. AmEx CEO Ken Chenault’s statements on the economy’s impact were noted in this space on June 26th 2008. Earlier this month, he addressed the impact at more length, noting that the “much weaker” business environment was impacting AmEx’s business even among high net worth / high credit score consumers. "Consumer spending slowed during the latter part of the quarter and credit indicators deteriorated beyond our expectations," Chenault said. "The scope of the economic fallout was evident even among our longer term, superprime cardmembers." He has also noted that California and Florida cardholders, whose fortunes were tied most directly to the severity of the housing collapse in those states, were leading in terms of delinquencies. ``We are seeing very affluent people who have had historically very, very strong spending history with us cutting back,'' Chenault said. JP Morgan Chase CEO Jamie Dimon has noted similar trends--most recently in the transcript of the bank’s mid-July conf call: “Our expectation is for the economic environment to continue to be weak–and to likely get weaker–and for the capital markets to remain under stress.” “We remain conscious that since substantial risk still remains on our balance sheet, these factors will likely affect our business for the remainder of the year or longer.” Like Chenault, Dimon also noted that his bank’s more creditworthy customers are failing to pay (in this case, mortgages) in greater numbers—between Q1 and Q2 2008, the bank’s chargeoff rate for prime mortgages rose from .48% to .91% With Merrill Lynch today announcing a write-down of $5.7 billion (offset, the broker claims, by efforts to raise $8.5 billion in new capital), it’s clear that the optimism evinced in many circles of the financial services space about the brevity of the credit crunch earlier this year was premature. Yes, online retail remains a bright spot…and this will benefit the leading retailers and those with heavy payments preference/ usage in the e-retail space. But the behavior of the nation's most creditworthy borrowers, and the impact of this behavior on leading FIs, should temper that optimism with the realization that retaining confidence among the creditworthy will be an important pillar in maintaining that shine thru the rest of 2008. 2008-07-24T14:29:53Z 2008-07-24T14:20:48Z tag:weblogs.jupiterresearch.com,2008:/analysts/ekountz//47.10072 2008-07-24T14:20:48Z

With Indian mobile phone subscriptions growing at about 8 million a month, mobile banking services have been available from Indian institutions (and the Indian operations of some non-Indian banks, including Citi) for several years. To help standardize and coordinate development, India’s central bank (the Reserve Bank of India, or RBI)...

Ed Kountz With Indian mobile phone subscriptions growing at about 8 million a month, mobile banking services have been available from Indian institutions (and the Indian operations of some non-Indian banks, including Citi) for several years. To help standardize and coordinate development, India’s central bank (the Reserve Bank of India, or RBI) has taken a leading role in helping qualify how such services should work within India, and in June 2008 published an extensive set of draft guidelines outlining its recommendations. LINK Final guidelines are forthcoming ... but growth in India's mobile banking and payments market has apparently outstripped the RBI’s ability to keep up, and given RBI reason to urge caution. An RBI notice released July 22, located HERE noted that, for banks which have seized the initiative and already rolled out mobile banking, “RBI has no objection for use of mobile channel to provide basic services such as mobile alerts for credit or debit entry, balance enquiry etc. which are in the nature of providing information, due care needs to be taken for permitting the channel for customers to initiate payment instructions.” It recommends that banks keep on hold their mobile payment services till issuance of the final Guidelines, and dissociate themselves from any mobile based money transfer service which has not received explicit approval of RBI. 2008-07-23T12:51:26Z 2008-07-23T12:49:50Z tag:weblogs.jupiterresearch.com,2008:/analysts/ekountz//47.10065 2008-07-23T12:49:50Z

The public comment stream on rule changes regarding bank and credit card practices, proposed by the Federal Reserve in May 2008, is live here. LINK Thus far, the Board has received a total of some 19,000 comments on the Fed’s proposed rules. Among other changes, those proposals would prevent rate...

Ed Kountz The public comment stream on rule changes regarding bank and credit card practices, proposed by the Federal Reserve in May 2008, is live here. LINK Thus far, the Board has received a total of some 19,000 comments on the Fed’s proposed rules. Among other changes, those proposals would prevent rate increases on pre-existing credit card balances, except under limited circumstances, allow consumers to apply payments in excess of the minimum to high-rate balances first, eliminate two-cycle billing (in which interest charges are calculated based on balances across the current and preceding cycle), and set a minimum-mailing requirement, giving consumers at least 21 days in possession of a bill until a balance is due. JupiterResearch tracks a wide variety of consumer attitudes regarding their cards, other payment products and their issuers. Sometimes the data is inconclusive. However, when we asked consumers to what extent they agreed with the statement: “I would like my credit card issuer to better explain its fees and fee policies,” 27 percent of online users agreed, and 19 percent strongly agreed. By contrast, just 14 percent of online users disagreed or strongly disagreed. Not surprisingly, in that light, a good portion of the comments available via that link are in favor of the proposed rule changes. The proposed rules are now open to public comment, but only until Aug. 4. 2008-07-17T20:02:09Z 2008-07-17T16:14:51Z tag:weblogs.jupiterresearch.com,2008:/analysts/ekountz//47.10052 2008-07-17T16:14:51Z

If politics make strange bedfellows, the latest flare-up regarding card interchange fees is leading to an all-out bedroom free-for-all. The House Judiciary Committee yesterday advanced, by a 19 to 16 vote, interchange fee legislation that would carve out an exemption to antitrust laws, enabling merchants to band together and engage...

Ed Kountz If politics make strange bedfellows, the latest flare-up regarding card interchange fees is leading to an all-out bedroom free-for-all. The House Judiciary Committee yesterday advanced, by a 19 to 16 vote, interchange fee legislation that would carve out an exemption to antitrust laws, enabling merchants to band together and engage in collective bargaining with the card networks and issuing community to push for lower processing costs. It was a contentious day in Washington … The American Banker report on the vote concentrated on what it called an “unusually chaotic” vote, taking place amidst confusion after four hours of intense debate, with supporters and opponents not lining up neatly along party lines, and asserting that they did not have enough time to study late-breaking changes. The Merchant Payments Coalition (MPC), an alliance of nearly 100 supermarkets, drug stores, c-stores, online merchants and others, called the passage "a landmark decision" and a step towards reining in Visa and MasterCard’s "stranglehold." The National Retail Federation called it “a sensible solution to an escalating problem.” However, MasterCard noted in a statement released after the vote that the divided vote reflected “the deeply flawed nature of this bill,” which merchants hope will reduce their costs for accepting credit card transactions. Also expressing opposition to the bill is a wide-cast coalition including retailer Nordstrom, the Dept. of Justice and Federal Trade Commission, the Black Chamber of Commerce, and the Southern Christian Leadership Conference, who in a letter to Georgia Congressman Hank Johnson said that the bill would “raise interest rates for credit card holders, harm local businesses and threaten community-based banks,” particularly in low- and middle-income communities, by giving greater collective bargaining power to large merchants. An amendment that would have required merchants to pass through to consumers 100% of the benefit of any negotiated savings on interchange fees was defeated. As passed, those savings would go to consumers, or to employees of merchants or financial institutions, a somewhat-broader wording that was one of the day’s sticking points. A three-judge electronic payments arbitration panel, which the Department of Justice had come out against as likely to “harm competition,” was eliminated from the bill. As blogged on previously, it's unlikely that the bill will pass the Senate before the end of the current session. Said Dan Mica, President/ CEO of the Credit Union National Association (CUNA), "With such little time left for congressional action, and with other key measures waiting their turn, the bipartisan opposition – split 50-50 – to the bill makes it difficult to imagine such controversial legislation can precede much, if at all, further in the House for this Congress." That said, battle has been joined. Expect the issue to make a return once the next Congress is seated. 2008-07-15T13:12:42Z 2008-07-15T13:10:25Z tag:weblogs.jupiterresearch.com,2008:/analysts/ekountz//47.10046 2008-07-15T13:10:25Z

American Express this week introduced Text MyAmEx, an SMS-based card balance-retrieval system it is marketing via email to customers with the tag line “You Ask. We Answer.” The service is straightforward and simple, but is worth noting because it’s the kind of application Jupiter analysts believe will be essential in...

Ed Kountz American Express this week introduced Text MyAmEx, an SMS-based card balance-retrieval system it is marketing via email to customers with the tag line “You Ask. We Answer.” The service is straightforward and simple, but is worth noting because it’s the kind of application Jupiter analysts believe will be essential in helping bridge the gap between personal SMS and mobile marketing…a key step in the eventual establishment of mobile devices for consumer payments. Simply put, getting consumers to make the habit shift to mobile devices requires getting them accustomed to using...and preferrably relying on...interim apps that help bridge the gap between personal and payments activity on a mobile device. And getting the word out on such services…particularly to those consumers who are most active with SMS…is important, early on, to seize the opportunity. Users need to enroll for the service (LINK), and can access balances with a text to 692639. Additional information regarding AmEx’s other mobile services is at www.americanexpress.com/mobile 2008-07-11T13:46:55Z 2008-07-10T14:11:46Z tag:weblogs.jupiterresearch.com,2008:/analysts/ekountz//47.10034 2008-07-10T14:11:46Z

In what’s become a regular chorus in recent weeks, Fed Reserve Chairman Ben Bernanke has suggested a formal receivership process for investment banks, and has posed the Fed as the logical choice to regulate systemic risk in the industry. The move, coming on the heels of similar calls from Treasury...

Ed Kountz In what’s become a regular chorus in recent weeks, Fed Reserve Chairman Ben Bernanke has suggested a formal receivership process for investment banks, and has posed the Fed as the logical choice to regulate systemic risk in the industry. The move, coming on the heels of similar calls from Treasury Secretary Henry Paulson and FDIC chair Sheila Bair, is significant because it would, if enacted, give the Fed and the SEC greater authority over the workings of the capital markets and additional regulatory powers. Aside from the eventual impact of such changes,it's already clear that such moves would introduce significant regulatory change into the space--without, at least at present, a clear path to how that change would be managed or function. Expect a reiteration of these points later Thursday, when Bernanke and Treasury Secretary Paulson are slated to give testimony on investment bank oversight to the House Financial Services Committee. Bernanke noted that “Fed/ SEC cooperation is taking place within the existing statutory framework, with the objective of addressing the near-term situation. In the longer term, legislation may be needed to provide a more robust framework for the prodential supervision of investment banks and other large securities dealers.” The SEC and the Fed have already worked out a memorandum of understanding (MOU), in which the two agreed to share information and analyses regarding the financial strength of primary dealers, and to “work jointly with the firms to support their continued efforts to strengthen their balance sheets, their liquidity, and their risk-management practices,” according to the transcript of Bernanke’s speech. LINK Yet while Bernanke’s calls come on the heels of similar ones by both Paulson and Bair, several issues remain unresolved. First is clarity around how such a process would work, and what roles would go to what players. In addition, not all relevant agencies have bought into all elements of the concept—the Office of Thrift Supervision, for example, has said that it does not believe it necessary for Congress to legislate a framework for investment bank receivership. And beyond the day-to-day issues facing the Fed within the credit crisis, it’s unclear how the Fed expects a receivership process for investment dealers would work, or what should happen if a firm is deemed to be on the brink. But perhaps most importantly, beyond the cost and other burdens that a process would entail, time is elapsing in the current legislative session, making it likely that any real action would not come until the start of the next session in 2009. Still, given the number of times the issues’ been raised, expect the issue to received renewed attention once a new Congress and administration are in place. 2008-07-10T13:05:28Z 2008-07-10T13:00:21Z tag:weblogs.jupiterresearch.com,2008:/analysts/ekountz//47.10031 2008-07-10T13:00:21Z

Google this week introduced an interesting email security enhancement, which is worth a second look, as financial services firms seek online security elements that go beyond those introduced in response to FFIEC guidelines in 2006. Since the FFIEC announced that the long-standard UID/ PW combination would no longer be...

Ed Kountz Google this week introduced an interesting email security enhancement, which is worth a second look, as financial services firms seek online security elements that go beyond those introduced in response to FFIEC guidelines in 2006. Since the FFIEC announced that the long-standard UID/ PW combination would no longer be enough to secure sensitive banking transactions in October 2005, leading banks have adopted a variety of options to increase login security. These vary greatly...from the continuing use of SiteKey (and now one-time codes delivered to mobile devices, for opt-in customers) at BofA, to the User ID, PassWord, Virtual Keyboard/ Second Password option in use at HSBC. But what's been lacking...and what the Google tool cleverly addresses, is essentially a higher level of security control. The tool allows Gmail users to view when activity last occurred within their Gmail account, and to see if an account is still open in one location when a consumer is in another. LINK The tool allows consumers greater control over a higher dimension of online security, enabling remote monitoring (and monitoring from multiple PCs), as well as greater session control. While a small feature, it is worth the review of FS firms, and others seeking to offer consumers greater remote control and auditability of recent activity. While a significant portion of online consumers report feeling safe accessing their bank account online—as distinct from other online activities, where regular readers know that concerns about data security remain highly prevalent—JR data also show that many consumers say they are not wedded to existing log-in processes, and would make (reasonable) changes if the result is increased online security. Upcoming JR research will consider this issue at more length. 2008-07-03T16:23:39Z 2008-07-03T16:21:48Z tag:weblogs.jupiterresearch.com,2008:/analysts/ekountz//47.10008 2008-07-03T16:21:48Z

A JupiterResearch report slated for publication late this year will take a new look at the topic of Federated Identity services. Once the rage in online financial services, most banks eliminated their offerings in the early 2000s when consumer demand lagged expectations. Given the limitations of Web 1.0, this...

Ed Kountz A JupiterResearch report slated for publication late this year will take a new look at the topic of Federated Identity services. Once the rage in online financial services, most banks eliminated their offerings in the early 2000s when consumer demand lagged expectations. Given the limitations of Web 1.0, this was understandable…and until recently, Wells Fargo was the only major FI still offering federated identity solutions to a retail market. This week, however, it was reported that Citi will introduce a service enabling it to verify the digital identities of customers to third parties. While designed for commercial clients only at present, its’ clear that increasing utilization of the Internet for financial services (both retail and commercial) have brought into focus the Trust Gap that exists online. Even with advances in authentication on bank sites, “something the customer knows” remains the dominant way through which trusted access is verified. Other options—“something the customer has” (such as a smart card/ token) and “something the customer is” (a biometric identifier), are certainly seeing early, but generally less-well-established, adoption in the US. Citi’s Managed Identity Services, will use PKI encryption to help secure payment and other sensitive files while on clients’ computer system, andto enhance after-the-fact auditability of data so encrypted. While designed for corporate clients, recent JupiterResearch reports (including LINK ) have touched on this Trust Gap from the e-commerce consumer’s perspective. Way too early to address the multi-sided buildout requirements necessary to declare success, but worth noting from my perspective as a step back into the complex digital identity management space. We're closed on Friday for the 4th of July...have a happy and enjoyable Independence Day weekend. 2008-07-03T16:21:13Z 2008-07-03T16:15:23Z tag:weblogs.jupiterresearch.com,2008:/analysts/ekountz//47.10007 2008-07-03T16:15:23Z

Signs of continued difficulty among bank stocks. Russell Investments noted earlier this week that the combined market capitalization of bank and thrift stocks in its Russell 3,000 Index has declined to 17.4%, a drop from 22.4% a year ago. The current figure is the lowest percentage representation of bank stocks...

Ed Kountz Signs of continued difficulty among bank stocks. Russell Investments noted earlier this week that the combined market capitalization of bank and thrift stocks in its Russell 3,000 Index has declined to 17.4%, a drop from 22.4% a year ago. The current figure is the lowest percentage representation of bank stocks within the Index in 8 years. As of this writing, the market has clawed back some in the last day of a holiday-shortened week, bank stock activity early this week likely took that number down even more. After the last two weeks, a long weekend can't come soon enough. And if any additional perspective is needed, the average price of gas eight years ago stood at about $1.50 a gallon. Ah, the good old days. Also this week, BofA’s Strategic Investments Corp. completed a strategic investment in mobile banking and payments provider mFoundry, continuing attention and activity in the space. Other mFoundry investors include Motorola, PayPal and NCR, as well as VC backers Ignition Partners, Apax Partners and others. mFoundry customers include Citi and BB&T, and the firm also has a strategic partnership with ClairMail. As recently noted, overall customer interest in mobile payments remains modest in the U.S., but recent numbers show that consumers are warming to the real-time, always-available nature of mobile banking, services. And as an account-to-account transfer is very similar to a mobile payment, well…you get the rest. LINK