Walmart (NYSE: WMT) and Xerox (NYSE: XRX) are pointing fingers at each other after Xerox’s Electronic Benefits Transfer (EBT) system failed at stores in 17 states last weekend.
A technical glitch – a Xerox backup generator failed – temporarily lifted the spending limit or EBT balance for food stamp recipients. As a result, at two Walmart stores in Louisiana, some EBT recipients were able to snag 8 carts of groceries or more. They literally cleared the shelves at the two locations.
While eBay-owned PayPal’s (Nasdaq: EBAY) new mobile payment solution is getting a lot of media attention, Isis believes its Android-based mobile wallet will be THE m-payment system of the future. But how long will it take?
Even though Isis has the backing of AT&T, T-Mobile and Verizon, its system is not supported by Apple. Plus, its technology is still in trials in Austin and Salt Lake City. Meanwhile, PayPal’s new mobile payment solution, which allows users of its mobile app to scan a QR code or enter a PIN number at the point-of-sale to make purchases, will be rolled out to U.S. retailers this year.
E-tailing giant Amazon (Nasdaq: AMZN) always seems to find a way to do business more efficiently and at a cost below its competitors. This week, its rivals were reportedly upset after details of Amazon’s unique warehouse arrangement with Procter & Gamble (NYSE: PG) and other major suppliers were revealed in The Wall Street Journal.
With its Vendor Flex program, Amazon has expanded its presence in the warehouses of Procter & Gamble and other major household goods suppliers such as Kimberly Clark (NYSE: KMB). Amazon personnel have literally set up shop in seven of P&G’s global distribution centers. So, when Amazon receives orders for P&G products, P&G workers gather the orders and hand them directly to Amazon employees imbedded in the warehouses. Then, Amazon ships product to its customers directly from the warehouses.
In yet another advance beyond traditional magnetic-stripe card readers, Loop developed the “Loop Fob” and “Loop ChargeCase” that allows mobile devices and terminals to communicate without a conventional wireless or Near Field Communication (NFC) signal.
Here’s how it works: the Loop Fob and Loop ChargeCase send a magnetic transmission to a payment terminal's mag-stripe reader via Magnetic Secure Transmission (MST). Loop then turns the mag stripe reader into a receiver, without requiring changes to the terminal's hardware or software.
Walgreens is smartly differentiating itself from its drug chain competitors – and encouraging shoppers to boost spending in its stores – by offering a new prepaid card. Partnering with MasterCard on its new Balance Financial Prepaid MasterCard, the prepaid card is tied into the massive drug retailer’s loyalty program.
At Walgreens’ 250 initial stores offering the prepaid card, cardholders have the ability to deposit payroll, tax refunds and government benefit checks directly to the prepaid account. In addition, cardholoders can withdraw up to $100 in cash from their card account from a Walgreens cashier.
While the big three credit card processors unveiled a grandiose plan for global standards to streamline mobile payments last week, actual implementation – and acceptance by consumers – of such a system is fraught with potential problems.
In an attempt to streamline mobile transactions and decrease fraud, Visa, MasterCard and American Express said they would develop standards to replace traditional account numbers with a digital payment “token” for online and mobile transactions. In addition to boosting security, the tokens would eliminate the need for merchants to store consumers’ sensitive payment data, the card firms say.
For the first time, a major online payments processor is entering the brick-and-mortar realm. While Google had wanted to be the first provider to allow in-store mobile payments via Google Wallet, that did not work out.
Instead, PayPal’s new payment solution allows users of its mobile app to scan a QR code or type a PIN number at the point of sale to authenticate purchases. Currently, most PayPal transactions at brick-and-mortar retailers now are conducted through stored credit card and PayPal account information.
While Amazon launched its new merchant payment system this week with much fanfare, the ability to streamline shopper payments is not exactly new for the giant online retailer. It seems that most retail and financial executives were simply unaware of the platform until now.
"Login and Pay with Amazon" is designed to let merchants accept payments from online shoppers without requiring them to create a dedicated account. The goal of the service is to replace "guest checkouts" with the ability for merchants to recognize repeat customers.
From the ”duh” files: consumers are sharing photos of their debit cards on Facebook, and their credit card CVV numbers on Twitter. Plus, nearly 10 percent of consumers have shared their Social Security number on a social media platform. So says Ellen Richey, chief enterprise risk officer for Visa Inc., who is very concerned about how the new social media atmosphere creates global security risks. The payment industry must accept consumers’ lax practices as the “new normal" and boost its defenses, Richey said during her October 2 keynote address at Visa's Global Security Summit in Washington, D.C. The industry’s proposed new “token” standards need to “become business as usual" to combat potential fraud, Richey says.
Apparently, the “Internet of Everything”, could have returned $99 billion to retailers this year. Representing the connectivity of an increasing number of people, processes and things, Cisco Systems estimates that retailers will gain $81 billion from the “Internet of Everything” in 2013.
However, Cisco found that this connectivity could have returned an extra $99 billion to retailers this year by providing more connections across their operations. Despite the gloomy news, Cisco pointed out the positive ways that retailers are upping their connections to people, processes and things, including: tapping into previously unused or “dark” data assets in store, building consumer trust and getting them to share information, gaining more visibility into inventory, driving higher levels of stock availability and maximizing staff productivity.
First, Staples removed Amazon lockers from its retail stores. Now, Staples looks to make another move to maintain its dominance as the world’s second largest internet retailer. This week, the largest office-supply chain in the U.S. announced the acquisition of the e-commerce startup, Runa.
San Mateo, Calif.-based Runa brings along its PerfectOfferTM automated system, which provides real-timepersonalized offers to customers. Also included is PerfectShippingTM, which will provide real-time estimates for delivery charges as well as free-shipping offers. Runa will rebrand as part of the absorption and become the newest Staples Lab, joining existing locations in Seattle and Cambridge.
When Sears Holding Corp. shifted all of its workload off of mainframes and onto the cloud-based, open-source data Hadoop platform, it understandably saved the traditional retailer $2 million annually. “45 percent of the capabilities on a mainframe are never used and, when you switch, you can save 60 percent to 80 percent of your mainframe costs,” Aashish Chandra, DVP of Sears Holdings and general manager of Metascale, Sears’ big data division, told RISNews.
This seems like a no-brainer: a new economic study found that reducing debit card swipe fees significantly reduces retail prices and creates jobs. Debit card swipe fee reforms last year lowered consumer prices by $5.8 billion, which led to a boost in spending, according to the Merchants Payment Coalition study. Notably, U.S. debit card reforms also saved merchants $2.6 billion and created 37,000 new jobs.
Consumers’ security will be better protected as Visa, MasterCard and American Express proposed new global standards to replace traditional account numbers with a digital payment “token” for online and mobile transactions. In addition to boosting security, the tokens would eliminate the need for merchants to store consumers’ sensitive payment data.
Visa, MasterCard Slash Interchange In France, But That Just Means They're Looking For Money Somewhere Else
Visa (NYSE:V) and MasterCard (NYSE:MA) are slashing interchange—in France. Reports published on Monday (Sept. 23) said that starting on Nov. 1, both big card brands have cut deals with French regulators to cut their payment-card interchange rates roughly in half. The new rate is a maximum of 0.28 percent of the amount of the transaction. That's a 44 percent cut from Visa's current French average and a 49 percent drop for MasterCard. The new cap is just for transactions within France, but all this is happening ahead of an EU plan to cap all card interchange in the Eurozone for both cross-border and same-country transactions.
Maybe it seems like this doesn't have much to do with the Visa/MasterCard interchange battles in Brooklyn (still no decision on the interchange settlement) and Washington, D.C. (debit-fee cap on hold at 21 cents for now). The reality: It has everything to do with the U.S. fee fights. Regulators and judges are slowly carving away at Visa and MasterCard's fee structures, and that includes regularizing them so cross-border transactions won't carry a nasty surprise. In practice, that means a (very slow) race to the bottom for interchange fees.
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Almost a month after unconfirmed reports surfaced that UK grocery giant Tesco was working on its own 7-inch tablet, that tablet has arrived—and it's not looking like nearly as dumb an idea as it seemed to most people at first. Tesco has wisely leveraged its loyalty program and hasn't cheaped out on the hardware, and also hasn't wasted effort trying to turn it into another Kindle—the tablet, dubbed Hudl, has the user interface of a generic Android tablet. This may yet be a really clever way for Tesco to extend its CRM tentacles a lot further into its customers' lives.
That, of course, is the real purpose of the Hudl. This isn't the consumer electronics equivalent of a can of Tesco-brand beans. It's more like a can of beans that phones home and continuously reports on everything in the cupboard. That's the big difference between actually controlling the tablet and simply pushing out iOS and Android apps for its loyalty program, streaming video service and the rest. The question is how effectively Tesco can leverage that capability. And before drawing any conclusions, remember: This is the chain that was smart enough to buy loyalty guru Dunnhumby.
Why did Google give up on in-store payments with Google Wallet? Well, that's what finally made it possible to get Wallet on iOS and on Android phones from mobile operators Verizon, AT&T and T-Mobile, which it finally managed to do last week. The NFC-based ability to mimic a contactless payment card had to go? It's gone, at least for those phones—the vast majority of smartphones, remember. That was essential for Google to turn a profit on this lose-money-on-every-transaction project. In the end, it was inevitable: To get rid of that bottleneck, in-store NFC payments had to go.
But beyond business expediency, there's something more structural going on here: The only reason big retailers have a use for alternative payments is to get rid of Visa and MasterCard's interchange. That's it. Big chains already have a very functional in-store payments system. It just happens to be very expensive. Google Wallet didn't actually have a way to cut that expense, so big chains had no use for it. And once Google finally realized that, Google no longer had a use for big retailers.
As if anyone needed a reminder not to be overawed by technology hype: Apple's (NASDAQ:AAPL) highly touted fingerprint authentication system on the iPhone 5s took less than three days to crack. (We...