Welcome to our new Payments Insider newsletter, a morning email with the top news and analysis on the digital payments industry, produced by BI Intelligence.
ISIS AND WELLS FARGO LAUNCH A NEW PROMOTION. Isis is a joint mobile wallet venture between AT&T, T-Mobile and Verizon. One of the big problems facing companies that launch mobile wallets is getting users to adopt them. Wells Fargo is now offering its customers a $US20 dollar credit for the first time they use the Isis wallet at a point of sale and 20% refunds in credits, up to $US100 dollars, on all subsequent Isis transactions. They are offering a big incentive so it will be interesting to see if consumers take the bait and begin to use Isis for point-of-sale transactions. (Business Wire via Isis)
Carriers have their own Isis in the UK: Weve, which launched last year, is a mobile wallet joint venture between Vodafone, EE and O2. The carriers’ strategy of banding together to offer a mobile wallet makes sense because it makes the space easier for consumers to navigate — “one wallet to rule them all.” But consumers are only half of the story. Banks also need new technology to in order to integrate mobile payments into their existing payments offerings and systems, which could end up being very expensive. MasterCard is moving to overcome this problem by building the technology solution for banks and giving it to those banks that want to adopt Weve. Credit card networks serve as the rails of the legacy payments system and this new move by MasterCard indicates that it wants to play the same role for mobile payments as well. (Financial Times)
THE PAYMENT PROCESSORS REPORT RESULTS: Yesterday four major payments processors reported earnings. We’ll go through the highlights one-by-one to give an idea of what the legacy processing heavyweights are up to.
- Revenue grew just 1% in the fourth quarter to $US2.8 billion compared with the same quarter in 2012. While transaction volume grew, the company cited downward pressure on fees and lost business as the reason for the stagnant growth in revenue.
- First Data is planning to move into Brazilian merchant acquiring in partnership with a private Brazilian bank.
- In October, First Data announced the acquisition of mobile marketing platform Perka. The company specialises in delivering location-based deals from small businesses to consumers’ smartphones. Read our latest location-based marketing report here.
- First data also launched its new point-of-sale system called Clover Station. (First Data)
Heartland Payment Systems
- Revenue grew to $US530 million in the fourth quarter, up 6% from the same period in 2012.
- Transaction volume grew in a key segment. Small- to medium-sized business transaction volume grew to $US18.3 billion in the fourth quarter, an increase of 4% over the same period in 2012.
- Heartland’s CEO spoke about Leaf, the mobile point-of-sale provider that Heartland invested in. “We are in a very limited marketplace, basically, countertop payment restaurants. But we — it’s going to be second half of 2014, probably in the fall of 2014, before we are really going to be able to generate big numbers.” says Robert O. Carr, executive chairman and CEO. (Heartland Payment Systems)
- FIS’s fourth quarter revenue grew to $US1.6 billion, up 5% from the same period in 2012.
- FIS’s Payments Solutions business, which includes its North American payment processing services, generated $US618 million in the fourth quarter, a 3% increase when compared to the same quarter in 2012.
- FIS’s International Solutions business, which plays the same role as the Payments Solutions business internationally, generated $US357 million in revenue in the fourth quarter, an 11% increase from the same period in 2012. (FIS)
- Revenue grew to $US1.19 billion in the fourth quarter, an increase of 10% over the same quarter in 2012.
- Revenue from processing and services grew to $US1 billion in the fourth quarter, up 10.5% from the same period in 2012. (Fiserv)
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BITCOIN FIXES A FUNDAMENTAL GAP IN THE INTERNET. While the idea of Bitcoin as a brand new democratized currency that could challenge the authority of central banks may cause libertarian hearts to palpitate, the true value of Bitcoin is that it allows people to make fast cheap payments, says John Gapper in the Financial Times. This is exactly the argument we layout in detail in our latest payments report. (Financial Times)
ONE IN FIVE ONLINE BRITS WANTS TO GO CASHLESS. The number increases to 30% for Brits living in London, according to new research from Mintel. The study also found that 17% of 25 to 34-year-olds report having used Bitcoin at least once. (Mintel)
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