Guy Kawasaki Speaks About Paying For Followers – 2010 CES AMEX Open Forum
Posted on 12 January 2010 by
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WASHINGTON – Merchants triumphed over bankers in a battle for billions Wednesday as the Senate voted to let the Federal Reserve curb the fees that stores pay financial institutions when a customer swipes a debit card. It was murkier, however, whether the nation’s consumers were winners or losers.
As a result of the roll call, the Fed will be allowed to issue final rules on July 21 trimming the average 44 cents that banks charge for each debit card transaction. That fee, typically 1 to 2 percent of each purchase, produces $16 billion in annual revenue for banks and credit card companies, the Fed estimates.
The central bank has proposed capping the so-called interchange fee at 12 cents, though the final plan could change slightly.
Victorious merchants said the lowered fees should let them drop prices, banks said they could be forced to boost charges for things like checking accounts to make up for lost earnings and each side challenged the other’s claims. Consumer groups were not a united front, either: While the consumer group U.S. PIRG said consumers would benefit, the Consumer Federation of America took no formal stance but said it was concerned about what both industries might do.
Travis B. Plunkett, the consumer federation’s legislative director, said the amount of savings that stores pass on to consumers would depend on how competitive their markets are. He said he also worried that the Fed’s current proposal might be too restrictive, which might tempt banks to “use that as an excuse to increase charges on customers they value the least, low- to moderate-income customers.”
In Wednesday’s vote, senators trying to thwart the Fed’s rules needed 60 votes to prevail but fell six votes short, 54-45. That delivered a victory for Sen. Richard Durbin, D-Ill., the Senate’s No. 2 Democrat, who muscled the provision into last year’s financial overhaul law requiring the Fed’s action.
Durbin’s support on Wednesday represented an erosion from last year, when the Senate included Durbin’s provision in the overhaul bill on a 64-33 vote. Much of the drop was explained by a dozen senators — including nine Democrats — who switched from backing Durbin in 2010 to voting to delay the Fed action on Wednesday.
Of the 12, just four are seeking re-election next year: Sens. Kirsten Gillibrand, D-N.Y.; Ben Nelson, D-Neb.; Debbie Stabenow, D-Mich.; and Roger Wicker, R-Miss.
Thirty-five Republicans joined 19 Democrats in backing the unsuccessful effort to block the Fed. Thirty-two Democrats, 12 Republicans and an independent voted to let the central bank move ahead, while Sen. Joseph Lieberman, I-Conn., did not vote.
Wednesday’s roll call shot down a proposal by Sens. Jon Tester, D-Mont., and Bob Corker, R-Tenn., that would have delayed the Fed rule for a year. In the meantime, the Fed and three other agencies would have studied whether the Fed’s current proposal is fair and rewritten it if at least two agencies decided it wasn’t.
Edmund Mierzwinski, consumer program director for US PIRG, which represents state public interest research groups, said some banks might curtail the rewards programs that many attach to their debit cards, such as awarding cash back or airline miles. But he said checking account fees would not rise.
“There will be competition,” Mierzwinski said. “Banks will be forced to come up with innovative ways to lower costs in their card networks.”
Camden R. Fine, president of the Independent Community Bankers of America, challenged that, saying the Senate vote would mean that “consumers of lower socio-economic status will get hammered” because bank fees would rise.
“Where do people think banks get the money to subsidize these products” like free checking accounts, he said. He also challenged assertions that stores would pass the savings from lower fees to customers.
“Does anybody not smoking dope believe merchants will pass some big windfall to consumers?” he said, adding later, “I mean, what are they going to cut prices by, a penny?”
Merchants, however, argue that they will be forced to lower prices to reflect the curbed debit card fees.
“The retail industry is the most competitive business environment going today,” said Brian Dodge, spokesman for the Retail Industry Leaders Association, which represents many large merchants like Target and Home Depot. “There is no doubt competition would drive any interchange savings out of the system, which would be reflected by lower prices.”
Affirming that was Dennis Lane, who has owned a 7-Eleven store in Quincy, Mass., for 37 years. He said he pays $7,000 to $10,000 annually in credit card swipe fees.
“Whenever I can reduce my cost of doing business, any responsible retailer reduces costs to the consumer,” he said. He also said those savings could allow him to hire summer workers.
On the other hand, the head of a credit union in Mountain Home, Idaho, said slashing debit cards fees would have a huge cost for his business.
Curt Perry, president of Pioneer Federal Credit Union, says cutting the fee to 12 cents per swipe would cost him $780,000 a year. The new fee system would not take into account such expenses as covering fraud, which he said cost him $170,000 last year, leaving him considering options like charging a fees for debit cards or checking accounts.
“We’d have to pass that on, we’d need to generate that revenue from somewhere,” he said.
___
AP reporter Laurie Kellman contributed to this report.
Visa and Mastercard Interchange Reimbursement Fees are update and published on their respectivewebsites twice a year in April and in October. Visa and MasterCard Interchange Reimbursement Fees are the wholesale rates that are charged to your service provider and ultimately passed onto you as the merchant. There are now about 400 different categories with associated rates and transactions fees between Visa and Mastercard. The rate that Visa and MasterCard charge is based on the type of card your customer uses to pay you and also how you are processing the transaction (swipe vs. keyed vs. ecommerce (MOTO). These rates published by Visa and MasterCard are the same for all service providers, whether you work with your bank or a direct Independent Service Organization (ISO).
Here are the links to the Interchange Reimbursement Fees published by Visa/MasterCard:
http://usa.visa.com/merchants/operations/interchange_rates.html
http://www.mastercard.com/us/merchant/support/interchange_rates.html
VIEW FULL PRESS RELEASE:
American Express Announces ServeSM, the Next Generation Digital Payment Platform
Serve Offers Person-to-Person, Online, Mobile, and Traditional Card Capabilities in a Single Account
NEW YORK–(BUSINESS WIRE)–American Express (NYSE: AXP) today unveiled ServeSM, a digital payment and commerce platform that gives consumers a new way to spend, send and receive money with services that go beyond the existing global payment networks.
With Serve, consumers can make purchases and person-to-person (P2P) payments online (serve.com), via mobile phones, and at millions of merchants who accept American Express cards. Serve unifies multiple payment options into a single account that can be funded from a bank account, debit, credit or charge card, or by receiving money from another Serve account.
Serve is an easy-to-use, digital alternative aimed at consumers who currently rely on cash, check and debit card. Serve accounts can be accessed via Serve Apple iOS and Android applications, at Serve.com and through Facebook. Through Serve, American Express aims to expand into new segments of the market that do not rely on traditional charge and credit cards to manage their day-to-day finances.
“Serve is a new type of payment platform that isn’t tied to a single card or mobile operating system. It’s a flexible, easy to use platform, which from day one brings tremendous assets to the alternative payments space and gives consumers an option to shop on-line and off-line at millions of merchants who accept American Express,” said Dan Schulman, Group President, Enterprise Growth, American Express.
“We intend to quickly evolve the Serve platform by adding new features and functionality as we learn from consumer and merchant experiences. To encourage a broad cross-section of people to experience the benefits and convenience of Serve, we are working with a range of partners to integrate Serve as a payment method and deliver customized offers, and we will waive most consumer fees for the next six months,” said Mr. Schulman.
How it works
Consumers set up an online account at Serve.com or through a smartphone app. Funds can be added from bank accounts, debit cards, credit and charge cards, or other Serve accounts. Customers can use those accounts to send and receive money to friends, pay bills and make purchases online. Serve bridges online and offline commerce – each customer will be issued a Serve reloadable prepaid card linked to their Serve account that can be used at any merchant or ATM that accepts American Express cards.
Unlike traditional debit card accounts, Serve offers users the ability to easily create, manage, and specify sub-accounts for their friends, family members or colleagues. Sub-accounts are linked to the master account and allow users to set spending profiles for everything from children’s allowances to dog walker fees.
The Serve platform evolved from technology obtained through the acquisition of Revolution Money in early 2010.
Serve is available immediately to anyone in the U.S. and is expected to launch into other international markets over the coming year. American Express will continue to evolve the features and functionality of Serve based on market feedback. To gain consumer and merchant insights about Serve and to help shape upcoming releases, a marketing pilot will also be conducted in Eugene, Oregon.
Partnerships
While payments are the foundation of the Serve platform, American Express is also announcing a number of partners who will use the platform to deliver relevant offers that drive spend and build loyalty. Three of the first partners are Ticketmaster®, Concur® and Flipswap.
“A cornerstone of the long-term vision for Serve is developing partnerships with commerce, gaming, entertainment, and social networking organizations,” said Mr. Schulman. Partnerships, with players such as Ticketmaster, Concur and Flipswap will introduce Serve to new customers and help build scale. These companies have loyal communities of customers, and we are thrilled to partner with them as we grow and expand Serve’s reach.”
Ticketmaster will offer Serve as a platform for customers to make and collect payments toward ticket purchases from other customers. Concur will utilize Serve as an expense management and reimbursement method for transactions processed via Concur’s small business expense reporting service, Concur Breeze. Flipswap will utilize Serve to issue refunds more quickly to consumers who sell or trade in their old mobile and cell phones for reuse or recycling.
Details around these and a number of additional partnerships will be announced over the coming months.
Giving Back Widget
Serve is also partnering with five major charities – Autism Speaks, Best Friends Animal Society, Malaria No More, Save The Children and Stand Up For Kids – to enable each organization to raise funds via a donations widget. Widgets can be downloaded on Serve.com and at facebook.com/paywithserve, and shared on other Web sites, including Facebook, to encourage donations. Serve will match all contributions via the widget up to $100,000 for each charity.
In the coming months, Serve will offer selling widgets that give customers the ability to sell items through their own social networks.
Highly Competitive Fees Waived for Launch
Serve consumer fees will be highly competitive. There are only two fees for consumers and we are waiving the fee to put money into the Serve account for the next six (6) months. The two fees are:
* Putting money into a Serve account: 2.9% + 30c/per load, discounted to 0% for cash, debit and ACH.
* ATM cash withdrawal (after first one each month free): $2.00
Unlike some other products in the market, Serve has no fees to open an account, no monthly fees, no fees for P2P transactions, no fees to set up sub-accounts (up to four accounts) and no fees to use the widgets.
Merchants who accept American Express cards will pay a prepaid discount rate for transactions made both in stores and online with a Serve prepaid card.
Investor Conference Call – Live Audio Webcast
A conference call with members of the investment community will be held today March 28, 2011, at 11:00 am EDT. The call will be hosted by Dan Schulman, Group President, Enterprise Growth, American Express.
Live audio of the conference call will be accessible to the general public at http://ir.americanexpress.com. A replay of the conference call will also be available at the same Web site address.
About Serve
Serve, by American Express, is a next generation payment platform designed to deliver emerging payments and services to address the changing ways consumers interact and exchange money — with one another — as well as merchants. Learn more at www.serve.com and connect with us on www.facebook.com/paywithserve and www.twitter.com/serve.
About American Express
American Express is a global services company, providing customers with access to products, insights and experiences that enrich lives and build business success. Learn more at www.americanexpress.com and connect with us on www.facebook.com/americanexpress, www.twitter.com/americanexpress and www.youtube.com/americanexpress.
Cautionary Note Regarding Forward-looking Statements
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties. The forward-looking statements contain words such as “believe,” “expect,” “anticipate,” “optimistic,” “intend,” “plan,” “aim,” “will,” “may,” “should,” “could,” “would,” “likely,” and similar expressions. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update or revise any forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements, include, but are not limited to, the following:
* the willingness of consumers to use the Serve product, and in particular consumers that do not traditionally rely on charge and credit cards to manage their day-to-day finances, which will depend in part on their willingness to try the Serve product instead of competing payment products and their satisfaction with the operability, fee structure and other features of the Serve product;
* the ability of the Company to add new features and functionality and ease of use to the Serve platform on an accelerated basis that reflect the needs and desires of consumers, merchants and other participants in the payments space, which will depend in part on the Company’s ability to retrieve and effectively assess information from users and other parties on a real-time basis and then make the right judgments in how to build-out the existing Serve platform;
* the success of the Company in developing relationships with partners, both in and outside the U.S., who will effectively integrate Serve as a payment method for their customers, which will be critical in facilitating the Company’s ability to expand the scope and number of Serve users; and
* technology trends that will impact the environment within which Serve operates and influence how the Serve product will have to evolve to remain compatible and competitive.
A further description of these uncertainties and other risks can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, under Item 1A. Risk Factors and Cautionary Note Regarding Forward Looking Statements, and the Company’s other reports filed with the SEC.
Click here to see Terms of Agreement for Serve electronic payments platform
Saving money on your credit card processing is not all about the rates you negotiate with your service provider. You can also save money by being a well informed merchant and taking control of your credit card transactions. How you handle your transactions and understanding the different levels of risks associated with each type of transaction can make the difference. Here are three simple tips to help you save money by effectively managing the way you accept payments.
1. ALWAYS USE YOUR PINPAD. If you don’t have one, get one! And when your customer hands you a debit/check card to make a payment, simply put the PIN pad into their hands! Companies like Target know this very well and don’t offer their customers the option to choose if you want to pay as debit or credit. You need to do the same. Just remember this, a pin-based debit transaction has the lowest risk of consumer fraud and that will translate into a lower cost for you.
2. SWIPE AS MUCH AS POSSIBLE. You will always pay less. If you are currently keying-in all of your transactions manually (card not present), think about how you can possibly change the way you are accepting payments. Is there any way that you can swipe your customer cards instead?
A great example: A lot of on site service providers who see all of their customers face-to-face, like plumbers and electricians for example will about half a percent by using a wireless terminal to swipe customer cards on location. It may not sound like a huge savings but if your business is processing $40k/month and you’re able to realistically save 0.25%- 0.50% by swiping, you will save $100-200/month. Is a $1200-$2400 annual savings worth thinking about?
3. MAKE SURE YOU ARE PCI COMPLIANT. Part of being a well informed merchant has to do with monitoring your merchant statement on a regular basis. If it’s been a while since you’ve reviewed your last merchant statement, you might notice a new “PCI Non-Compliance” fee that may cost you up to $30/month. Call your service provider and find out what you need to do to become compliant to the payment card industry standards. It may be as simple as completing a self assessment questionnaire. Make the call!
[UPDATED MARCH 29, 2011]
There are actually 38 iPhone credit card processing apps on the App store today. How do you decide which one to use? Well that depends on a couple of things. The majority of the iPhone credit card processing apps (the free ones) on the app store work exclusively with their own merchant services company (or one they are partnered with). So if you have an existing merchant account with a provider you know and trust, most of these apps are not for you.
If you don’t have an existing merchant account with a direct Visa/MasterCard processor, you can check out the free applications but at your own risk. These companies all have different rates, contracts and monthly minimum requirements. My suggestion to you is to choose an iPhone credit card processing app that has the flexibility to sync with any merchant services provider. If you ever become unhappy and decide to switch service providers, you can still use the same application without any additional costs or hassle to learn a new user interface.
The next thing you’ll want to consider is whether or not you want the capability to “swipe” (vs. key-in) your transactions and if your processing volume will be high enough for it to be worth the initial investment of the hardware. When you “swipe” your transaction, you will generally pay about half a percent less than if you manually “key-in” your transactions. So if you’re processing $10,000 per month, you’ll pay about $50 more per month than if you were to swipe. The hardware you’ll need will cost you between $75 – $150 and some companies (like Verifone) will also charge about $10/mo and $0.10 per transaction in addition to whatever your merchant services provider is charging you. You can do the math to make your own decision.
The app that’s been getting the most attention is the Square, which was developed by the creator of Twitter. Production of this application and hardware combo has been indefinitely delayed because they are still “finalizing their underwriting paperwork” as stated in a letter from Jack Dorsey himself. Nobody is sure of what that really means. An article from AmericanBanker.com was published today stating that Square will be “willing to talk to merchant services sales agents and other distributors, but just not yet.”
This sounds like they are having trouble launching a PayPal style ewallet and considering to work with independent merchant service providers to make this work. If this is the case, The pricing of the Square and the services will change. I will let you know more about this when we hear some news from Square.
My top three countdown (not including the Square) is based on the flexibility, functionality and cost. Here you go!
Top 3 iPhone Credit Card Processing Apps:
#3: ProcessAway iPhone Application
This application is very easy to use and and can be set up in minutes to sync with any merchant service provider.
App Price: $29.99
Hardware Costs: n/a
Transaction Type Supported: Keyed-In
Key Features: 
-Digital Signature Capture attached to Email Receipts
-Automatic Reoccurring Billing Capabilities
-Customer/Order/Shipping Information Tracking
-Add Tip/Gratuity
-AVS (Address Verification Service)
-Records GPS Location of Sale
- Supported Bluetooth Printer to print physical receipts (Retail Price: $289.00)
Additional Costs:
There are no additional monthly charges or costs per transaction from ProcessAway. There may be additional costs incurred from your gateway provider depending on the company you are working with.
Here is a quick demo of the ProcessAway iPhone credit card processing app:
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#2: iPay POS iPhone Application (w/ swipe capability via iMag )
This application can be downloaded for free on the Apple App Store for you to sync up with any merchant service provider. Your first 10 transactions for free and then you will pay $0.10 per transaction moving forward or you can just pay $29.99 for unlimited transactions. This is a great option if you are looking to test out the user interface before the purchase. It also syncs with the iMag Card Reader to accept “swiped” transaction. iMag costs only $75 and does not have any additional service fees.
App Price: FREE
Hardware Costs: $78
Transaction Type Supported: Keyed-In, Swipe
Key Features:
-Supports iMag Card Reader for “swipe” capability
-Digital Signature Capture attached to Email Receipts
-Automatic Reoccurring Billing Capabilities
-Customer/Order/Shipping Information Tracking
-Tip/Tax
-AVS (Address Verification Service)
-Records GPS Location of Sale
- Supported Bluetooth Printer to print physical receipts (Retail Price: $289.00)
Additional Costs:
There are no additional monthly charges or costs per transaction from iPay POS. There may be additional costs incurred from your gateway provider depending on the company you are working with.
Here is a link to the hardware manufacturer:
http://www.idtechproducts.com/products/mobile-readers/105.html
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This application is clean, easy to use and super easy to set up. App Ninjas, the developers of this app have a business model to acquire new merchant accounts like all of the free apps you’ll find on the app store but they also allow third party merchant service providers to sync as well. The user interface is really nice and the digital signature quality is the best I’ve seen yet (see video). Considering the low cost, easy-to-use user interface, customizable email receipts and flexibility to sync to any service provider, Swipe takes the cake as my #1 recommended app to process credit cards on your iPhone.
App Price: $0.99
Hardware Costs: $75 (optional)
Transaction Type Supported: Keyed-In, Swipe (via iMag)
Key Features:
-Digital Signature Capture attached to Email Receipts
-Customizable Email Receipts
-Customer/Order/Shipping Information Tracking
-Add Tip/Gratuity
-AVS (Address Verification Service)
-Records GPS Location of Sale
Additional Costs:
There are no additional monthly charges or costs per transaction from Swipe. There may be additional costs incurred from your gateway provider depending on the company you are working with.
Here is a quick demo of the Swipe iPhone credit card processing app:
Here is a video demo with the iMag swipe hardware with the Swipe Application:
Please give me your feedback or comments below! I hope this was helpful for you!
There must be tens of thousand of people catching wind of the social media revolution on a daily basis and rightfully so. When you see headlines like “Facebook User Base Surpasses 500 million Users” you would probably feel crazy for not wanting to pay attention. So you sign up for a Twitter and Facebook account because you hear you can grow your business. Now what?
In learning and experimenting on how to building my business through my own personal brand, I’ve come across a great book called “Crush It” by Gary Vaynerchuk. Gary is best known as the host of WineLibrary.TV and growing his family liquor store into a $50M/yr business with his passion and use of social media. He has also been featured in Time Magazine, The Wall Street Journal, CNN, The New York Times and has even been seen on Late Night with Conan O’Brien because of his success.
His book “Crush It” was named one of the top books for business owners in 2009 by INC. Magazine and needless to say, I decided to find out what all the hype was about. I purchased his audiobook (highly recommended by the way) and started listening right away. This guy is on FIRE! It shines through in his voice and in the fact that he takes his audiobook off script every five minutes because he is soo pumped about what he is talking about. His passion and authenticity are the secrets to his success as a social marketeer and I believe it can be ours too.
Here is Gary’s video explaining why he wrote the book along with his action checklist below:
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THE “CRUSH IT” CHECKLIST TO BUILDING YOUR PERSONAL BRAND:
1. Identify your PASSION
2. Make sure you can think of at least 50 awesome different blog topics to ensure “stickiness”
3. Answer the following questions:
Am I sure my passion is what I think it is?
Can I talk about it better than anyone else? (Or at least the top 10)
4. Name your personal brand. Have a clear idea of what it is.
e.g. The no BS real estate agent, the connoisseur of cookware
5. Buy your username: .com, .tv
6. Choose your medium: Video, Audio, Written word.
7. Start a WordPress, Tumblr blog, or a Six Apart or Blogger Product.
8. HIRE A WEB DESIGNER
9. Include a facebook connect link, call to action buttons, share functions and a button that invites people to do business with you in a prominent place on your blog.
10. Create a facebook fan page
11. Sign up for a Ping.fm or Tubemogul Account and Select all the platforms that you want to distribute your content. Twitter and Facebook are a must. the rest are selected according to your needs and preferences.
12. Post your content
13. Create your community by leaving comments on other people blogs and forums and replying to comments on your own blog (use blogsearch.google.com)
14. use twitter search: www.search.twitter.com to find as many people as possible talking about your topic and communicate with them.
15. use blogsearch.google.com to find more blogs that are relevant to your subject matter.
16. Join as many active facebook fan pages and groups relating to your topic
17. Repeat steps 12-16 over, and over and over and over and over and over and over again.
18. Do it AGAIN.
19. And AGAIN!
20. When you feel your personal brand has gained sufficient attention and stickiness. Start reaching out to advertisers and begin monetizing.
21. ENJOY THE RIDE! – “The process is greater than the results. The process is greater the things you buy.”
Recent Videos
- Merchants beat bankers in Senate debit card vote
- UDATE: New 2011 Visa/MasterCard Interchange Rates Published
- American Express Rivals PayPal with ‘Serve’ Electronic Payment Platform
- 3 Simple Tips to Save Money on Your Merchant Services
- Top 3 iPhone Credit Card Processing Apps
- “CRUSH IT” Checklist: Build Your Personal Brand with Social Media
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