Two related announcements out of Canada work to reduce currency in circulation. Last week the Canadian government announced the demise of the penny. The cost to produce a penny has surpassed its value. The coins in circulation will still be considered legal tender and hold their value, but the mint will cease production and in [...]
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I’ve spent part of my weekend contemplating the public relations hubbub that broke out late last week around Bank of America’s announcement that it would assess a $5 monthly fee on certain of its checking account holders who choose to use their debit cards for point-of-sale purchases. It’s a polarizing issue. At one level, I [...]
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After months of speculation and hand-wringing, last Friday we finally got a relatively complete reading on how the Federal Reserve will likely implement the prescribed regulation of debit interchange and debit network competition. My partner, Carol Benson, has also shared a summary of how various payment domains and players might be affected in the near [...]
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At Glenbrook, we think (and teach!) about the payments industry by domains (the purpose of the payment) and players (users and providers). Our quick take on the impact of yesterday’s proposed rules on each is below. One general assumption I’ve made here is that the gap between debit interchange from big banks, and from smaller [...]
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Last June, in an article titled “The End of Interchange“, I wrote about the then yet to be passed Durbin amendment – and how it might affect debit interchange fees. Earlier today, we got the first glimpse. The point of my earlier article was focused on the “sleeper” – as I described it – in [...]
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This week I’ve been in Amsterdam for Sibos – the annual international banking conference sponsored by SWIFT. (For those of you who aren’t familiar with SWIFT it is a consortium of worldwide banks that runs a global secure network connecting banks in over 200 countries. Interbank messages to support payments and brokerage trades all travel [...]
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There, did I get your attention? … Tonight’s headlines say it even more clearly – see this Wall St. Journal story titled “Merchants Win Debit-Card Fee Battle“. Or, see this post on PaymentsNews.com about the Durbin compromise announced earlier today. Seriously, it seems to me that there’s a bit of a sleeper buried in all [...]
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I’ve been amazed by what I’ve been reading of late from the “analyst” firms commenting on the Durbin Amendment. A lot of what I’ve seen makes me wonder whether these folks should turn in their analyst licenses and simply register as paid lobbyists for their big bank clientele. (The Durbin amendment, for those not in [...]
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The dramatic vote on the Durbin amendment is causing panic, again, among retail bankers – who were last shocked by the Fed’s overdraft ruling. I wrote about that in November (Watch Out! Big Changes in Retail Bank Pricing Are Coming). I think the underlying problem that banks are dealing with is that too much of [...]
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A few weeks ago, Glenbrook issued a challenge to Payments Views readers: “What Are the Best Ways for Banks to Replace Lost Overdraft Fee Income?“ Given how significant the financial hit will be (JPMorgan Chase estimates a 2010 impact of $500 million after-tax), we thought we’d at least get some good ideas. Well, we got [...]
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Bank income from debit card overdraft fees is variously estimated as $25 billion to $38 billion annually. The recently announced Federal Reserve Bank regulations requiring opt-in procedures will result in a gigantic hit to retail bank P&Ls, as we wrote about recently. JPMorgan Chase, for example, in a recent investor presentation, estimated the impact of [...]
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Consistent with the current government focus on enhancing consumer protection, the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act of 2009) brings sea changes to the credit card industry. Forward-looking financial services institutions are viewing these shifts not as a reactive compliance and operational exercise, but more broadly in anticipation of [...]
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In just 30 days, on September 18th, the new International ACH format – IAT – and accompanying NACHA rule changes go into effect. This is the most significant change to the ACH network in decades, affecting corporate payment initiators, financial institutions of all sizes, financial software companies, and payment service providers. The new rules have [...]
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Many of us in the United States who follow the continuing evolution of the ACH network have been interested in the United Kingdom’s “Faster Payments” initiative. FP just hit the one-year-since-launch milestone. I spoke with David McFarlane, Company Manager, CHAPS Clearing Company about FP. I was surprised by much of what he said: FP is [...]
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In case you’ve been wondering where things stand with government bailout funds the WSJ has an interactive graphic. You can sort by program (Automotive Industry Financing Program, etc.), by recipient company, by date, by amount, etc. (hat tip to Barry Ritholtz)
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