Is the U.S. Finally Getting Smart About Payment Technology?

Below you will find an infographic from ComputerScienceDegreeHub.com that maps out the evolution of credit cards - from the highly unsecure magnetic stripe cards that are still used by most Americans today, to the EMV smart cards that are more secure and have been successfully implemented in other markets around the globe. When will the US make the switch? Is the cost of the conversion too high? - If so, where do we go from here?

Source: ComputerScienceDegreeHub.com

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Cashless Food Trucks

Have you ever wished that whenever you get something to eat at a stand or a truck on the side of the road, you wouldn't need cash to pay for your purchase? Wouldn’t you love to just use your debit or credit cards to pay for that two-dollar frank or fifteen-dollar lobster roll? 

Well, gourmet food trucks are now allowing the use of debit and credit cards. They are now equipped with tablets and smartphones for credit card payments and email receipts to paying customers. 

Red Hook Lobster Pound truck (Photo: mediageek)

Global transaction will increase from $241 billion in 2011 to $1 trillion in 2015. Gourmet trucks used to be a cash only operation but with the prices and the times changing, it was only a matter of time for the use of credit cards. 

Gourmet trucks are using Square and with that attachment, the business can then accept the payment. The other fact that works with the usage of credit cards is that the business can adjust the state taxes accordingly. 

Red Hook Lobster Pound Truck is one of the trucks that are utilizing this aspect of card transactions. This allows the trucks to travel through each state and adjust the taxes. 

But one of the problems with accepting electronic payments is the wireless connection. The hope for trucks to combat the connectivity disadvantage is that carriers continue to improve 4G LTE networks. Even though NFC seems to have a bright future in the way people receive payments, there are downsides to it. A merchant must acquire NFC readers and consumers have to buy NFC-enabled phones. 

The efficiency of mobile payments is still improving but there is something there. Businesses can integrate their mobile-payment transactions with QuickBooks, which unifies bookkeeping. Of all the innovations that are moving from cash to plastic cards, who would've thought the last item that would be on the list would be a food truck?

The food truck concept is already a great convenience for someone who does not want to pay a whole lot of money (unless you want lobster rolls) and keep on going. But now that some truck owners are going to use modern devices so that you can now use your cards it is even better. 

About the Author

Adam Wells studies English at Pace University.

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How Consumers Really Feel about Mobile Payments

According to a recent post at AdAge on a study by Ogilvy & Mather, it seems the verdict is still out on new mobile payments technology and consumers trust familiar credit card companies more but how soon will that change? The rate at which new technology is becoming mainstream is increasingly rapidly.

Read the full post here and study here.

Valerie M. Russo is a Senior Social Media Strategist at IIR USA with a technology, anthropology, marketing and publishing business acumen. She is a published poet and also maintains a literary blog. She may be reached at vrusso@iirusa.com. Follow her@Literanista. You can meet her in person at Prepaid Expo USA 2012.

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New Jersey Senator looks to regulate prepaid cards

According to NJ.com, the Senate President Richard Codey is calling to regulate prepaid cards to operate with more transparency. While Obama has now imposed certain regulations on credit and gift cards, no new rulings have been made for debit cards.

The Senator looks at the fees associated with prepaid cards attacking the wrong demographic of people, "They turn to these prepaid debit cards as a means to get by," he said. "Instead, they end up sitting around helplessly as they watch their hard-earned money get eaten up by hidden fees."

Read the full article here.

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More rebates coming in the form of prepaid cards

According to CreditCards.com, 53% more of rebates are being placed on prepaid cards than in 2008. Many customers are not satisfied with this new rebate distribution method, as it doesn't allow them to deposit it, they are encouraged to spend it. For the many reasons companies are turning to prepaid sales cards include increased sales in stores.

While there are many perks for using prepaid cards to distribute rebate money, have you found a backlash from your customers if you've switched the way you give rebates? While giving a prepaid card does encourage a recipient to spend the money, is the reaction the same when a rebate is worth $10 as opposed to $100? Share your reactions with us.

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VirtualWorks Settles for $52,000 with the FTC

According to this post on creditcards.com, VirtualWorks, A California-based credit card company has settled with the FTC for a sum of $52,000 for tricking customers into buying prepaid cards. Joshua Finer, the owner of VirtualWorks misrepresented his product to consumers by having them apply for a payday loan in which was disguised as "free", but then charged consumers a $54.95 prepaid card enrollment fee.

What are some other examples of deceptive marketing prepaid card schemes like this one that you've come across in through your endeavors?

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Hybrid cards may be the future

At CreditCards.com, they talk about the growing popularity of hybrid prepaid/credit cards. These cards allow the user to both build credit and yet avoid the problems that can come with prepaid cards. The card comes with a normal way to deposit money like other prepaid cards, but also has a line of credit or advanced payroll loans. For more information, read the full article here.

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Prepaid Cards Help Reduce Costs when Spending Abroad

This article on MoneyHighStreet.com gives a warning to consumers who will be using debit and cards out of the country this Easter break. The article highlights how debit cards carry transaction fees and even foreign exchange conversion fees, which can be pricey.

An alternative to this is using prepaid currency cards. Compared to debit and credit cards, it can help you save on overseas transaction fees. Some cards that are offered now include: Caxton FX, FairFX, Travelex, Lloyds TSB, Indigo Traveller and ICE Traveller.

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Prepaid cards gaining in popularity

In an article at CreditCards.com, they address that many consumers are switching from credit cards to prepaid debit cards for budgeting purposes. Growth is expected as well, as the article predicts that $7.1 billion will be loaded onto prepaid cards in 2009.

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Prepaid Cash Cards are on the Rise while Credit Cards Decline

The NY Times recently wrote a piece discussing the rising popularity of prepaid cash cards. In the article James Flanigan highlights how the cards, which have the MasterCard, Visa, or Discover logos, have become more like “portable checking accounts” where consumers can load up on deposits made at retail outlets instead of banks.

He also mentions that companies like Green Dot Corporation, NetSpend, and nFinanSe Inc. are highly involved in the distribution and management of the accounts, handling customer service and providing computer servers and software. The number of “unbanked” and “underbanked” is growing at record pace throughout this economic crisis, and so it is no wonder where there is a sudden decline in credit cards. Do you think that this trend will continue for quite some time?

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Walmart cutting prices on MoneyCard

Walmart will be cutting the price of its prepaid MoneyCard to $3, down from $9. They're looking to appeal to customers who aren't comfortable with using credit cards in the current economic situation, and are looking to build brand loyalty among its shoppers. Since introducing the card in 2007, they've sold over 2 million and $2 billion has been loaded onto the prepaid cards.

Source: Reuters

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Prepaid card for Teens

At Credit-Deal.com, they recently highlighted the Wired prepaid Visa card. A great card for teens 18 and over, this card allows both the parent and the user control over the money in the account without the user going into debt.

Click here to find out more.

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2009 could be a big year for prepaid cards

At CreditCards.com, they predict nine things that could happen in the industry in 2009. With the current credit crisis, they predict that prepaid cards could step in and fill the gap for consumers. It is a way for the consumers with poor credit histories to maintain a card. They also predict that banks will become very creative in this new economic environment.

...the possibility of short-term credit card products, which would potentially carry terms for just one year. After that set time is up, banks would then review terms associated with the card in order to price them again based on the individual cardholder's payment behavior.

For more predictions about credit this year, read here.

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The Future of Cards in Romania

At Wall Street of Romania, they look at the growing market that involves prepaid, debit and credit cards. While prepaid cards are not yet popular in this country, they will soon be a viable option for Romanians looking for an option with a payment card. They've only recently begun to utilize debit cards. For an in depth look at the payment card market in Romania, read here.

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New German system allows for instant credit cards

First Data with PLUS Finanz Service has started a new program where customers can apply and instantly receive a credit card. This new program, which is available in Germany, has four participating electronic retailers who can use self-service terminals to enter their application data, their credit is assessed immediately and a credit limit is assigned to each card. Cards are then embossed and presented to consumers on site. There are plans to extend this program to 80 hypermarket locations who will also have the opportunity to co-brand the card. Read more here.

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Economics of payment cards: A status report

I recently came across the report "Economics of payment cards: A status report," written by Wilko Bolt and Sujit Chakravorti. The use of payment cards, which includes debit, credit and prepaid cars, has increased from 43% of payments to 56% of payments from 1999 to 2005. Europe has seen the same trend, as use of cards for payment has increased 140% from 1987 to 2004. Its a great look at how payments are being collected and how stores have adjusted to accommodate their users.

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New Prepaid Card For Teens Aimed at Social Gaming

This article in hubcanada.com reports that Mint Technology Corp and Yep! Mobile have entered in agreement to provide prepaid cards to youth that are interested in social gaming through the Facebook platform.

Social gaming usually requires fees, and so youth need access to their parents’ credit cards. This is a way for kids to become financially independent of their parents and a way for Mint to grow as well. Chris Hogg, president and CEO of Mint Inc. mentions:

“We are excited at this new opportunity to provide teens with a prepaid card in today's online/virtual world. Management believes that a prepaid card will develop as a practical solution to pay for online gaming.”

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Credit Card Fair Act of 2008

The ePaymentsnews Network reports that MasterCard urged the Judiciary Committee’s members to consider the organizations that have expressed concerns regarding the Credit Card Fair Act of 2008, which is set in place to ensure competitive market-based rates and terms for merchants’ access to electronic payment systems.

The major concern is that the bill will increase interest rates for credit cardholders, harm local businesses and threaten community-based banks. Several other organizations and companies are against the legislation, here are some of them: Department of Justice and the Federal Trade Commission, the Pentagon Federal Credit Union, Black Chamber of Commerce and Southern Christian Leadership Conference, and Nordstrom.

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Australian Card Fees Soar

The ePaymentsnews Network reports that a recent study conducted by MWE Consulting in Australia shows that credit card fees have increased nearly 170 percent in the past five years.

In some cases annual fees for reward cards, the most popular form of credit among Australians, have grown by 40 percent over the last five years. The study suggests that this increase in rates is most likely caused by the switch from standard cards which have an average annual fee of USD 29 to no-frill low-rate cards which have an average annual fee of about 48 USD. Merchant fees also saw an increase, moving from 21 percent of total business bank fees in 1997 to 26 percent in 2007.

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Tsys and PartnersFirst Come to an Agreement for a Credit Card Processing Deal

The ePaymentnews Network reports that Tsys will partner up with the US-based Torrey Pines Bank division PartnersFirst Affinity Services for consumer credit card portfolio processing. PartnersFirst will use Tsys’s instant application, letter production, and online credit card services just to name a few.

Tsys recently gave two great workshops (“Creating Successful Prepaid Programs for a Diverse Audience in Europe” and “Managing the Demand For Prepaid Products in Latin America”) at the Prepaid Card Expo Event this March. Tsys seems to be on the move, make sure to check back regularly for other updates within the prepaid card industry.

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