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Frank McNamara … made an
against Visa regarding this settlement offer. These
retailers believe the proposed compensation arrangement with the restaurant to
is inadequate and forces them to sign broad leave his signed business card, and
litigation releases that could shield Visa from
further antitrust violations. the restaurant would bill him once
• After a decade of supporting the obsolete mag a month. A year later, he had 10,000
stripe card, Visa is now supporting a migration to upscale consumers signed up for the
chip cards. This will require the 11 million credit
card terminals in the United States to be replaced. program, as well as 28 restaurants
It will also necessitate an enormous mailing of and two hotels.
new cards to consumers, probably unprecedented
in the history of the Post Office. Some estimates are
that this process could take five years to complete. billing, which would have a lower cost structure
Merchants do not want to pay for new terminals, than Visa. Google is willing to subsidize merchant
and they do not want to pay for Payment Card interchange to collect transaction data.
Industry Data Security Standard compliance.
• The risk of fraud in card-not-present transactions • Apple has 600 million payment instructions on file
already. The iPhone has a fingerprint ID capability
has never been adequately addressed in the to enable one-touch checkout. Don't think Apple isn't
current credit card model. The recent breaches interested in creating a proprietary payment system
(Target, et. al.) have not only terrified merchants, that doesn't ride the Visa rails.
they have also shaken consumer confidence in the
safety of card payments. • Amazon has 250 million users today. What merchant
• Gallup Inc. has been tracking credit card is not going to want to support an Amazon payment
application? Don't assume Amazon will take an
penetration since 2001. A current Gallup study agnostic view of payments. Yes, it will have to support
shows that almost a third of Americans do not existing payment preferences its users have on file,
have a credit card. Fewer people own three or but that doesn't mean it cannot change consumer
more cards. The inescapable conclusion is that preferences.
Americans are relying less on credit cards. You
won't hear this from Visa. • PayPal Inc. contributes $5 billion in annual revenue for
parent eBay Inc. PayPal is an acquirer and processor.
The situation now It can use the automated clearing house system
instead of the Visa rails, thus potentially significantly
I'll try to summarize the current situation: disrupting Visa's volume. PayPal's in-store payments
• Merchants want a cheaper alternative to the Visa use the Discover network, like a debit card without the
model. They cannot afford to pay 2 or 2.5 percent to card.
Visa to settle a high-dollar transaction – that's their
margin. Finally, another innovator, Leo Laporte, is helping to make
• Merchants want a way to control and manage small television obsolete. It will be someday. Streaming devices
data for the consumer: loyalty programs, receipts, bring on-demand formats to consumers, which makes
watching television redundant. Some shows are released
warranties and transaction histories. on Netflix first. And here in Sonoma County, Leo's
• The smartphone will become the payment initiator. It technology program is broadcast weekly to an audience
offers real advantages: identification, authentication, of 6 million people through the Internet, as well as to over
and a recognition infrastructure. With a proximity/ 170 cities on radio through Premiere Radio Networks.
vicinity interface, the store knows consumers and can
send offers and solutions to them when they enter. Since online traffic can be tracked, Leo knows that one third
Host card emulation and Bluetooth with near field of his audience is outside the United States. Technology
communication (NFC) can enable consumers to "tap coverage in the mainstream media is weak. Leo envisions
to pay." Tokenization can dovetail with NFC. a 24/7 technology news network broadcast from locations
• Cash is not going away. It is a preferred payment around the world. Innovation marches on.
method in many first world countries for a variety of
reasons. Brandes Elitch, Director of Partner Acquisition for CrossCheck Inc., has
• Bitcoin is a speculative commodity. been a cash management practitioner for several Fortune 500 com-
• Checks are not going away. This year, over 20 billion panies, sold cash management services for major banks and served
checks will be written in the United States. as a consultant to bankcard acquirers. A Certified Cash Manager
and Accredited ACH Professional, Brandes has a Master's in Business
• Apple Inc. and Google Inc. will dominate the in- Administration from New York University and a Juris Doctor from Santa
app payment space. Google could implement carrier Clara University. He can be reached at brandese@cross-check.com.
28
Frank McNamara … made an
against Visa regarding this settlement offer. These
retailers believe the proposed compensation arrangement with the restaurant to
is inadequate and forces them to sign broad leave his signed business card, and
litigation releases that could shield Visa from
further antitrust violations. the restaurant would bill him once
• After a decade of supporting the obsolete mag a month. A year later, he had 10,000
stripe card, Visa is now supporting a migration to upscale consumers signed up for the
chip cards. This will require the 11 million credit
card terminals in the United States to be replaced. program, as well as 28 restaurants
It will also necessitate an enormous mailing of and two hotels.
new cards to consumers, probably unprecedented
in the history of the Post Office. Some estimates are
that this process could take five years to complete. billing, which would have a lower cost structure
Merchants do not want to pay for new terminals, than Visa. Google is willing to subsidize merchant
and they do not want to pay for Payment Card interchange to collect transaction data.
Industry Data Security Standard compliance.
• The risk of fraud in card-not-present transactions • Apple has 600 million payment instructions on file
already. The iPhone has a fingerprint ID capability
has never been adequately addressed in the to enable one-touch checkout. Don't think Apple isn't
current credit card model. The recent breaches interested in creating a proprietary payment system
(Target, et. al.) have not only terrified merchants, that doesn't ride the Visa rails.
they have also shaken consumer confidence in the
safety of card payments. • Amazon has 250 million users today. What merchant
• Gallup Inc. has been tracking credit card is not going to want to support an Amazon payment
application? Don't assume Amazon will take an
penetration since 2001. A current Gallup study agnostic view of payments. Yes, it will have to support
shows that almost a third of Americans do not existing payment preferences its users have on file,
have a credit card. Fewer people own three or but that doesn't mean it cannot change consumer
more cards. The inescapable conclusion is that preferences.
Americans are relying less on credit cards. You
won't hear this from Visa. • PayPal Inc. contributes $5 billion in annual revenue for
parent eBay Inc. PayPal is an acquirer and processor.
The situation now It can use the automated clearing house system
instead of the Visa rails, thus potentially significantly
I'll try to summarize the current situation: disrupting Visa's volume. PayPal's in-store payments
• Merchants want a cheaper alternative to the Visa use the Discover network, like a debit card without the
model. They cannot afford to pay 2 or 2.5 percent to card.
Visa to settle a high-dollar transaction – that's their
margin. Finally, another innovator, Leo Laporte, is helping to make
• Merchants want a way to control and manage small television obsolete. It will be someday. Streaming devices
data for the consumer: loyalty programs, receipts, bring on-demand formats to consumers, which makes
watching television redundant. Some shows are released
warranties and transaction histories. on Netflix first. And here in Sonoma County, Leo's
• The smartphone will become the payment initiator. It technology program is broadcast weekly to an audience
offers real advantages: identification, authentication, of 6 million people through the Internet, as well as to over
and a recognition infrastructure. With a proximity/ 170 cities on radio through Premiere Radio Networks.
vicinity interface, the store knows consumers and can
send offers and solutions to them when they enter. Since online traffic can be tracked, Leo knows that one third
Host card emulation and Bluetooth with near field of his audience is outside the United States. Technology
communication (NFC) can enable consumers to "tap coverage in the mainstream media is weak. Leo envisions
to pay." Tokenization can dovetail with NFC. a 24/7 technology news network broadcast from locations
• Cash is not going away. It is a preferred payment around the world. Innovation marches on.
method in many first world countries for a variety of
reasons. Brandes Elitch, Director of Partner Acquisition for CrossCheck Inc., has
• Bitcoin is a speculative commodity. been a cash management practitioner for several Fortune 500 com-
• Checks are not going away. This year, over 20 billion panies, sold cash management services for major banks and served
checks will be written in the United States. as a consultant to bankcard acquirers. A Certified Cash Manager
and Accredited ACH Professional, Brandes has a Master's in Business
• Apple Inc. and Google Inc. will dominate the in- Administration from New York University and a Juris Doctor from Santa
app payment space. Google could implement carrier Clara University. He can be reached at brandese@cross-check.com.
28
