After a nine-month pilot program in Austin, Texas, and Salt Lake City, near field communication (NFC) -based mobile payment venture Isis reported it is ready to go national. On July 30, 2013, the joint venture created by AT&T Mobility, T-Mobile US Inc. and Verizon Wireless said the nationwide rollout would take place later in 2013 following a successful pilot. Isis provided statistics from the pilot, which launched in October 2012, that suggest both merchants and consumers are ready for mobile contactless NFC payments.

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In its first report on the prepaid card industry, Consumers Union, publisher of Consumer Reports, said fees on prepaid cards are dropping, but that fee transparency is still lacking. In its evaluation of 26 prepaid cards, the consumer watchdog found that fee information is still hard for consumers to find. Additionally, some schemes with feature-rich cards fail to provide clear explanations of how to use the features and what fees may be charged for them.

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On July 24, 2013, the European Unions' governing body issued proposed revisions to its Payments Services Directive characterized as promoting a more cohesive and consumer friendly payments market. But Visa Europe and MasterCard Worldwide said the European Commission's proposal would harm consumers and merchants in the long run. Among the changes the EC wants to make to its Payment Services Directive (PSD2) is to cap interchange fees the card brands charge merchants for accepting electronic payments, which is expected to result in the elimination of the practice of merchants surcharging consumers when they use bankcards. "When interchange fees are capped for consumer cards, retailers' costs for card transactions will be substantially reduced and surcharging will no longer be justified," the EC said.

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Based on its analysis of the Europay/MasterCard/Visa (EMV) migration that occurred in the United Kingdom and European Union countries several years ago, Auriemma Consulting Group has advice to share with the payments industry as it transitions to the EMV chip card standard in the United States. The consultancy, with offices in New York and London, counsels all stakeholders in the migration – including issuers, acquirers and merchants – that greater coordination and cooperation is needed to spur the transition into high gear. Auriemma said the U.S. migration to EMV is proceeding sluggishly because, among its shortcomings, the movement lacks unity, with too many stakeholders going in different directions.

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The emergence of new technologies in the mobile device and electronic payments realms suggest it is only a matter of time before the two converge into a single market. But when traditional payment products transition into mobile payment apps, and transactions are initiated not by plastic cards but by quick response codes, new difficulties arise. Judging by recent developments in the payments industry, current problems include data security weaknesses and slow adoption rates by consumers and merchants alike.

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North American Bancard recently launched a program to compete head-to-head with other cloud-based POS contenders. The NAB Phone Swipe Free Tablet Placement Program offers the total package – iPad, POS stand, card reader and software – free of charge to merchants, who pay a 1.69 percent flat fee per card swipe and $12.95 monthly support fee. In contrast, Square Inc. charges 2.75 percent per transaction, merchants pay for all hardware beyond its free dongle and support is available only online.

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On July 16, 2013, Richard Cordray was confirmed by the U.S. Senate as Director of the Consumer Financial Protection Bureau, the agency that oversees the financial services sector, including the prepaid card industry. Cordray's election to the five-year post at the fledgling agency comes amid more evidence that his initial appointment to the post may have been unconstitutional. Additionally, a recently filed federal lawsuit alleges the CFPB overstepped its information gathering powers.

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Legislation that would require U.S. e-commerce retailers and others to collect sales tax is working its way through Congress. The Marketplace Fairness Act, which passed the Senate in May 2013, requires retailers that have gross annual revenues of over $1 million, and sell products and services in states where they don't have physical presences, to collect and remit state and local sales taxes in those states. The act therefore targets "remote sellers," such as e-commerce and MO/TO businesses that engage in interstate commerce.

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On July 11, 2013, sixteen U.S. senators sent a letter to the Consumer Financial Protection Bureau and the Department of Labor that urges an investigation be made into the business practices of payroll card providers. In the wake of media coverage critical of the fee structures for paycards, the legislators voiced concerns that providers charge high fees that drain minimum wage level workers of their pay and that those practices may violate consumer regulations.

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Recent retail statistical data suggests that a slow economic recovery was bolstered by modest gains across most industry sectors. In mid-July 2013, the U.S. Department of Commerce and U.S. Census Bureau released June spending data indicating total sales in retail and food services rose 0.4 percent. According to First Data Corp.'s SpendTrend analysis, which tracks POS transaction data at approximately 4 million merchant locations nationwide, same-store dollar volume in June was up 7.1 percent year-over-year, indicating consumers spent more last month than they did in June 2012

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Financial services product comparison site CardHub.com issued annual research into the prepaid card industry that concludes card usage fees are down overall, but up in some categories. In its 2013 review, the Evolution Finance Inc.-owned site compared its findings to 2012 and found that fees on cards used primarily as alternative checking accounts had decreased by 46 percent, while cards employed principally as a check cashing alternative increased by 9 percent.

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Square Inc. and Apple Inc. teamed up again for a new POS product partnership. On July 9, 2013, Square released the Square Stand, a POS device designed to enable brick-and-mortar businesses to use an iPad as a free-standing, over-the-counter, card-swipe sales system. Apple agreed to showcase and sell the product in Apple Stores across the United States. It is one of two companies designated as primary consumer retail outlets; the other is Best Buy Inc. The device can also be purchased through Square at https://squareup.com/stand.

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A June 2013 class-action lawsuit filed against McDonald's Corp. and one of its franchisees in Pennsylvania has resulted in a wider inquiry into the $34 billion payroll card sector. With the New York Attorney General's office launching an investigation into the payroll card practices of major employers, such as Wal-Mart Stores Inc., Walgreen Co. and The Home Depot Inc., the portrait of a complex, even confusing landscape for payroll cards emerges. The lawsuit said that in May 2013, McDonald's employee Natalie Gunshannon was given a Visa Inc.-branded paycard issued by the retail bank of JPMorgan Chase & Co. According to the suit, and Gunshannon's own personal account, she was not given an option to have her pay direct deposited to a bank account or issued via paper check.

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Reuters reported that mobile payments provider Square Inc. terminated its mobile gift card program less than a year after it was introduced. Square did not issue a statement about the cancellation of the program, but a Square spokesman told the media outlet that the gift cards "were a fun way to send gifts from local businesses to anyone over the holiday season."

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Global authentication services provider Authentify Inc. just launched an online security application designed to replace username and password as a form of authentication. By deploying the Authentify xFA Service and application, enterprises can offer to their employees and customers a solution that converts mobile devices into secure authenticators.

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To address the rising theft risk associated with prepaid cards, Hofheim, Germany-based packaging specialist Deufol SA launched new "tamper alert" packaging. Deufol said the packaging alerts both the consumer and the retailer if a package containing a prepaid card has been opened or tampered with, yet it allows the card to be displayed in a visually attractive way.

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Are checks finally becoming an obsolete form of payment? Data collected during a recent small business study commissioned by online payment company WePay Inc. suggests the nation may be much closer to a sunset of the paper check era. The study, conducted by hired research professionals from Ipsos and Harris Interactive Inc., involved over 1,000 small business owners and 2,000 consumers. It focused on gauging today's use of paper checks between consumers and small businesses in order to "ensure that small businesses never lose a customer again because their payment options are limited," stated WePay's Chief Executive Officer, Bill Clerico.

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On June 20, 2013, the United States Supreme Court ruled in favor of the American Express Co. concerning contractual obligations of retailers when they sign up to accept AmEx-branded cards at the POS. In a five-to-three decision, the Court ruled that retailers must abide by contract terms that specify they cannot sue AmEx on a class-action basis, but that each retailer must seek arbitration over disputes with AmEx individually.

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In the early morning of Aug. 18, 2012, Philadelphia Police Officer Moses Walker, Jr., was shot and killed in an attempted robbery just after he clocked out from work. The Deliverance Evangelistic Church in North Philadelphia, the church that the 40-year-old Walker attended, held a gun buyback event last Saturday where Philly residents each received a $100 ShopRite gift card for turning in firearms.

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A survey of card processing financial institutions (FIs) by The Members Group found that 62 percent believe they need to develop an EMV strategy to reduce fraud losses, meet the liability-shift deadlines set by card networks, or to meet the needs of cardholders who travel abroad.

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On July 1, 2013, card processor Total System Services Inc. (TSYS) finalized its $1.4 billion acquisition of NetSpend Holdings Inc., the second largest prepaid card company in the United States. NetSpend became TSYS' fourth subsidiary, with NetSpend's Chief Executive Officer Dan Henry tapped to continue in that position. Both TSYS and NetSpend executives characterized the acquisition as transformational for both companies.

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A First Data Corp. global study of consumer payment preferences concluded that, regardless of nationality or geography or other differences between people, consumers expect the same things when it comes to mobile payments. According to First Data, consumers worldwide desire an easy experience, a personalized experience and an experience they can share with others. That these needs are satisfied by mobile devices promises to be yet another opportunity for ISOs.

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