Card payment networks - be afraid - very afraid.......

Amex's $300m acquisition of Revolution may add another variable.

Any new upstart competitor with a 'more attractive' offering (perhaps both online and real-world payments) would be very wise to get their capacity well tested to say 100k transactions per second increments first wouldn't they? If it is better it better be more robust to satisfy all that pent-up demand. At least that's what I'd be doing...

The solution for having full protection in all card networks, and fully avoid fraudulent use of data, is already there from some years ago, it's MagnePrint, a very strong and fully secure dinamic authentication of card, based on the characteristic of magnetic cards to have each an inherent particular magnetic "print" due to iron particles distribution in the stripe. What's missing?: to have real commitment from all participants (issuers, brands, merchants, networks....) to give full security to card networks deploying MagnePrint, what will impeach skimmed or counterfeit cards to make transactions.

It's time for it, as the risk of fraud has already started to severely damage the card business for all participants, and the cost of fraud in cards has reached levels the financial industry cannot longer afford.

If the market does'nt make the move on it's own, regulatory authorities will surely start to request it.

My difficulty with all of the "use your mobile on the internet" models is the speed of transaction at point of sale. A large UK supermarket chain has a simple formula - for every additional second on the transaction at the point of sale it costs them £1 million. This is why they were originally wary of chip and PIN but won over when they realised it was actually tquicker than a magstripe transaction where a signature was required.

Added to this is the fact that network signal can be very patchy inside some retailers because the building is a big metal box also known as a Faraday cage. This may require retailers to provide 'micro cells' in the store to guarantee coverage!

I didn't think MagnePrint was still going. Whilst it may add security to the transaction it is essentially a dead end technology as it is passive in the actual transaction. Only when you put an active component in the transaction process either a chip on the card or NFC communications with an active component (Mobile phone) can you add value to the transaction. Because the chip can play an active part in the transaction the cardholder not only benefits from increased security but also in the functions and facilities offered to the cardholder at the point of sale.