Robert McKinley, Senior Analyst/Editor Robert McKinley is an analyst of the payments industry on a daily basis for 32 years covering payment cards and payment systems from both the business side and the consumer side. McKinley is the retired founder and chief executive of RAM Research, CardWeb and CardTrak. In his prior position, McKinley has participated in more than 10,000 documented news media interviews, testified as an expert witness in two separate $billion+ U.S. anti-trust trials, testified before the U.S. Congress, assisted the GAO with paymentsIMG_2006 (1).jpeg reports, chaired numerous business conferences and provided C-Suite opinion to a multitude of Fortune 500 companies. In retirement, he has continued developing and funding digital media assets as well as contributing payments related analysis/content to a broad list of online publishers, including CardFlash, CardTrak and CardData. McKinley is also a national certified mentor with the non-profit SCORE organization with a focus on assisting Fintech startups.

RBS Fined for Regard to U.S. Sanctions

Federal Reserve Board on Wednesday issued a consent order to cease and desist and a civil money penalty assessment of $50 million against the Royal Bank of Scotland Group plc (RBS Group) and the Royal Bank of Scotland plc (RBS plc). The order and penalty address unsafe and unsound practices related to insufficient oversight by RBS Group and RBS plc of its U.S. dollar clearing practices and economic sanctions compliance programs. These practices involved transactions that included funds transmissions with entities and individuals subject to U.S. sanctions regulations regarding Burma, Cuba, and Iran. Under the cease and desist order, RBS Group and RBS plc must improve their programs for compliance with U.S. economic sanctions.

Credit Card GDV

Gross Dollar Volume (GDV) for U.S. Visa and MasterCard branded credit cards is rebounding after six painful years. In the third quarter GDV rose 9.2% year-on-year, compared to 5.8% one-year ago. The September 15, 2008 Lehman bankruptcy and subsequent credit crisis of 2008 and 2009 drove GDV down by more than 16% for two quarters. With the exception of the historically slow first quarter this year, bank credit card GDV has been heading upward, hitting 7.8% in the second quarter, according to CardData.

Wells Fargo Visa Joins Isis Mobile Wallet

Wells Fargo & Company and Isis®, the mobile commerce joint venture created by AT&T Mobility, T-Mobile USA, Inc. and Verizon Wireless, announced the first phase of an agreement that allows Wells Fargo Visa consumer credit card holders to load their cards into the Isis Mobile Wallet®. This launch enables cardholders to securely pay, redeem coupons and present loyalty credentials, all with the tap of their phone. Customers with one of the more than 50 Isis Ready® smartphones available from AT&T, T-Mobile or Verizon Wireless can receive an enhanced SIM card from their wireless carrier and download the Isis Mobile Wallet for free from Google Play.

MC Europe PDV

MasterCard’s credit/debit card purchase dollar volume (PDV) in Europe has been climbing back to levels not seen since 2008. In the third quarter MasterCard reported a 16.6% year-on-year rise, compared to 14.5% in 2012. Interestingly, MasterCard’s European gross dollar volume beat out the U.S. in Q3, $322 billion versus $316 billion. RAM Research estimates MasterCard’s European PDV will decline 40 basis points in the fourth quarter due to general economic statistics for the region.

CC Annual Forecast

TransUnion released its annual forecasts on two primary consumer credit variables — mortgage and credit card delinquency rates. Credit card delinquency rates (the ratio of bankcard borrowers 90 days or more delinquent on one or more of their credit cards) are expected to rise nearly 10% from 1.51% in Q4 2013 to 1.66% in Q4 2014. Even with that increase, the card delinquency rate would remain far below average historical levels. Between 2007 and 2012, the credit card delinquency rate has averaged 2.38% during the fourth quarter.

LifeLock Aquires Lemon Wallet

LifeLock, Inc. announced the acquisition of mobile wallet innovator Lemon for approximately $42.6 million in cash. In addition, in connection with the transaction, LifeLock has agreed to issue equity customary for a transaction of this size that will vest over the next three years. In conjunction with the acquisition, LifeLock also launched a new app that utilizes Lemon technology to help consumers manage and protect their digital identity. This transaction marks the next step in LifeLock’s evolution by adding a comprehensive mobile platform to the company’s integrated identity protection services for consumers.

Commonwealth Bank offers PayPass

Commonwealth Bank, in partnership with MasterCard and Samsung Electronics Australia, became the first bank globally to offer its customers MasterCard® PayPass™ payments capabilities via Near Field Communication (NFC) enabled Samsung GALAXY S4 devices. The world first collaboration1 delivers a next-generation shopping experience and simplifies the ways customers pay for everyday goods and services. The CommBank offering has been made possible by a convergence of hardware, software and mobile banking technologies, which leverage Mobile MasterCard PayPass technology and Samsung’s global NFC payment infrastructure which processes transactions using the CommBank app on Samsung GALAXY S42 (i9505 and i9507) smartphones sold in Australia.

3D Secure with EMV

TSYS announced the release of a white paper titled “EMV is Not Enough: Considerations for Implementing 3D Secure.” The paper considers the impending U.S. migration to Europay, MasterCard, and Visa (EMV) chip to combat fraud, but concludes that there are additional steps issuers must consider to mitigate fraud risk. This report concludes that there are clear lessons to be learned in the U.S. from the UK’s introduction of EMV ” and the resulting rise in card-not-present fraud.

Welch ATM Announces Appointment

Welch ATM is pleased to announce that Chad Ward has joined the company as Vice President of Operations. Mr. Ward comes to the Welch ATM team from Red Ridge Finance Group, a merchant bank headquartered in Chicago, where he was Chief Financial Officer. At RedRidge, Chad was responsible for the finance, accounting and investor relations functions as well as operational oversight of the company’s professional services divisions.

Open Market Flexibilty for ATM Routing

ATMIA has issued a position paper urging payment networks to work collaboratively with ATM deployers to retain open market flexibility in making routing choices. EMV migration is more complex in the United States where multiple networks exist and further confusion has resulted from court rulings on the Durbin Amendment. ATMIA retained Tremont Capital Group, Inc. ( to conduct a thorough analysis of routing choices.

Debit Network Alliance

Ten leading PIN debit networks in the United States have formed a new company, Debit Network Alliance, to provide a structure for the governance, deployment and implementation of the EMV debit standard. The goal of this collaborative effort is to help facilitate the adoption of an interoperable EMV standard for debit payments in the U.S. through a common governance structure that fosters regulatory compliance, equal access and ability to innovate for all debit networks, routing choice for merchants, and portability for issuers.

DSR Falling

The Debt Service Ratio (DSR) of American consumers has finally fallen into single digits for the first time since 1980. According to the Federal Reserve the DSR declined to 9.89% in the second quarter of this year. RAM Research predicts the DSR will decline to at least 9.79% in the fourth quarter. The household DSR is an estimate of the ratio of debt payments to disposable personal income. Debt payments consist of the estimated required payments on outstanding mortgage and consumer debt. The slowdown in credit card debt, the migration to more debit card use and very low mortgage rates, are major factors in the DSR decline. The Federal Reserve is expected to release the third quarter DSR within the next week.