Make Your Picks for Payments Visionaries

Who are the visionaries leading payments into the future? We want to profile the five executives you believe are forging new paths in payments in the fall 2014 issue of Pay Magazine. Make your picks by June 13. Voting is unlimited and open to any visitor.

Voting has ended. Stay tuned to our Fall issue of Pay Magazine for profiles of the top 5 vote-getters.

MasterCard Ups Cardholder Security with Expanded Fraud Policies (May 29, 2014)

MasterCard is beefing up its cardholder security efforts, adding identity theft resolution assistance to all of its credit, debit, prepaid and small business cards issued in the U.S. The program assists cardholders in canceling lost or stolen cards and alerting credit reporting agencies, as well as detecting whether stolen personal or financial data has popped up online. MasterCard also is extending its zero liability policy in the U.S. to cover all MasterCard-branded PIN-based and ATM transactions; the policy previously applied only to signature debit and credit transactions. The identity theft coverage extension begins in July, while the zero liability extension takes effect in October.

“The changes that we’re making in cardholder protection, combined with our efforts to move the U.S. payments industry to EMV chip technology, will help deliver safer shopping experiences to consumers,” said Chris McWilton, president, North American markets, MasterCard. The network has been among the leading drivers of the switch to EMV-based payment cards, setting a liability shift date of October 2015, after which the liability for fraudulent transactions will fall upon the transactional party with the lowest level of available security features.

But with the EMV liability shift more than a year away—and EMV ubiquity likely even further out—cardholders can only benefit from additional layers of security, a point driven home by the recent high-profile data breaches at major retailers.

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Square’s Move into Small Business Advances Could Boost Balance Sheet (May 29, 2014)

After revolutionizing payment card acceptance for small merchants, Square now is seeking to make waves in the cash advance arena. The company’s newly announced Square Capital program offers next-day cash advances to merchants that use its card reader to process payments—many of which would have a difficult time obtaining a loan from a bank. Advance amounts are based on the processing volume and transaction history of a particular merchant—data Square has on hand. The merchant repays the advance, plus a flat service fee, by giving Square a percentage of future sales (on top of Square’s usual 2.75 percent processing fee). The percentage-based repayment arrangement means merchants pay back more when business is good and less when sales are slow.

Square has been quietly piloting the program since last year and already has provided “tens of millions of dollars” to thousands of small businesses, said Square Product Engineering Lead Gokul Rajaram in an interview with Mashable. Rajaram went on to note that Square Capital—along with Square Market and the recently unveiled Square Order service—all are part of “a holistic suite of services” the company is building to serve small businesses.

The program also could help bolster Square’s sagging bottom line. An email obtained by the Website re/code shows Square offering a $7,300 cash advance to a merchant for a fee of $1,022—or 14 percent of the advance value. That’s considerably more than Square’s 2.75 percent transaction processing fee, which is largely eaten up by fees to payment networks and other intermediaries. In 2013, despite revenues of $550 million, the company posted a net loss of $100 million and, as IPO and acquisition rumors continue to swirl around Square, the company could be looking to shore up its balance sheet.

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UnionPay Spending Millions to Promote Online, Mobile Payments (May 29, 2014)

Five months after UnionPay’s partnership with Rev Worldwide to expand its prepaid market opportunities globally, payment network UnionPay is spending a sizable chunk of change to promote card and mobile app usage for online purchases to cardholders within China.

UnionPay said this week it will spend 200 million yuan (US$32 million) to better compete with third-party payment services that have been increasing their market share in e-commerce. Approximately 250 certified third-party payment service providers in China processed more than 1 trillion yuan in online transactions in 2013, according to reports. UnionPay promotions include discounts during certain holidays when cardholders pay using their UnionPay cards or pay with its smartphone app. Cardholders also can download and use coupons, and join other promotional programs.

“Our goal is to appeal to more cardholders, so they are willing to complete transactions via UnionPay and enjoy more services and products of the UnionPay card,” said Shi Wenchao, president of China UnionPay.

Last January, UnionPay partnered with Austin, Texas-based prepaid processor Rȇv Worldwide to focus on international expansion. Paybefore Award-winning Rev serves as a registered non-bank third-party service provider for UnionPay International, the subsidiary of China UnionPay.

UnionPay is among the largest payment card brands in the world, with more than 3.5 billion cards issued. While the majority of those cards are in China, the company has undertaken an aggressive global expansion strategy in recent years, with its cards now accepted in more than 140 countries and regions.

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On the Wire: Swipely, Digicash Get Funding; Moolah Integrates Spindle; and Consumers are Using Ingo Money (May 29, 2014)

A snapshot of payments-related press releases is available to you throughout the week. Click below for more details on the following headlines: