MasterCard Interchange Increase Could Boost RebatesMasterCard International last month sent a memo to bank issuers notifying them of an increase in interchange rates—the percentage of the merchant fee that is paid to card issuers and often feeds into rebates for commercial card clients. MasterCard corporate card issuers confirmed the increase, which Steve Abrams, MasterCard senior vice president of corporate payment solutions, said would take hold April 1. The move mirrors a similar rate increase enacted last April in light of American Express opening its network to U.S.-based bankcard issuers. Sources suspect the move to once again increase interchange is in response to the willingness of such bank issuers at MBNA and Citibank to align with Amex. Commercial card issuers said the rate of interchange directly feeds into the size of corporate card rebates and, in an era of heightened competition, could be advantageous to corporate clients readying for corporate card bids
(BTN, March 15, 2004). Largely nonexistent for corporate card programs 15 years ago, rebates on average have risen since their inception, buyers and payment vendors said. This move could start a new cycle of increases for MasterCard clients. Visa U.S.A., which last year followed MasterCard's rate increase, as of press time had yet to adjust its interchange rates.
As Phishing Grows, Companies Join To Combat FraudPhishing—an e-mail scam whereby hackers lure cardholders to fraudulent Web sites and extract account information—continues to grow considerably month over month. The latest data released in February by the Anti-Phishing Working Group—an association of financial institutions, online retailers, Internet service providers, and law enforcement officials focused on eliminating this form of fraud
(BTN, Oct. 4, 2004)—shows that in January there were 12,845 new phishing e-mail messages. "This is a substantial increase of 42 percent over the unique reports for December, and represents an average monthly growth rate of 30 percent since July," the anti-fraud group stated in its most recent report. As fraudsters continue to grow ever more diligent and savvy, financial institutions and other companies hit by the fraud have moved forward with techniques and initiatives to combat phishing. Visa International has joined Microsoft, eBay, PayPal and WholeSecurity to launch the Phish Report Network, through which companies can report and help block phishing Web sites. "Visa is focused not just on shutting down phishing sites, but preventing phishing e-mails from ever reaching consumers worldwide," said Tim Lee, vice president of global e-commerce at Visa. "Visa can play a key role in stopping this crime before it happens."
UATP Volume Growth Confirms Travel RecoveryUniversal Air Travel Plan last month said its corporate travel charge volume in 2004 grew 10 percent from 2003 levels, underscoring a rebound in corporate air travel and the continued emergence of alternative forms of airline payment. The company said the numbers reflect a two-year growth trend as business travel volumes hit $7.7 billion in sales in 2004. "UATP's 2004 volume is another indicator that business travel is continuing its recovery from post-9/11 declines and that companies want to lower the cost of credit card transactions as part of their business strategy," said UATP president and CEO Ralph Kaiser. UATP expects sales this year to grow to $8 billion. Meanwhile, Continental Airlines, which has been in the vanguard of airlines looking to reduce the cost of charge card payments, moved Ed Lihou to serve as Continental's national sales manager for its UATP program. "Ed's knowledge of the UATP product will enable Continental to continue to grow its program," Kaiser said.
JPMorgan Chase To Continue Issuing Visa, MasterCardFollowing last year's merger with Visa-issuing Bank One, dual issuer JPMorgan Chase last month confirmed it would continue to issue commercial cards through both the Visa U.S.A. and MasterCard International card networks. "Visa and MasterCard have been great partners for many years, and both will continue to play key roles in helping our company grow and serve more customers," said William Campbell, chairman of Chase Card Services in a statement. "While realizing the company's economies of scale, this decision gives our customers and partners the flexibility to choose the products they prefer from the two most popular payment brands." JPMorgan Chase and Bank One on July 1, 2004, merged under the JPMorgan Chase name. The company in a statement said, "Chase will be the brand name for both credit and debit cards. Commercial cards will be issued under both the Chase and JPMorgan brands. Bank One cards and branches will begin converting to the Chase brand beginning in first half of 2005."