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Yahoo
9 hours ago
- Business
- Yahoo
Coinstar to offer Mastercard card
This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. Dive Brief: Consumers who use Coinstar machines at grocery stores and other venues to convert their pocket change into another form of payment will soon be able to put the money on prepaid debit cards. That service will be available to the general public later this year, CEO Kevin McColly said in an interview last week. Coinstar is partnering with the network Mastercard to offer the cards, which will be issued as a virtual card, or customers can choose to have a physical card sent to them, McColly said. The company is testing the service in the market now with a limited group, he said. Pricing for the cards isn't set yet, the CEO said, explaining they may be offered for free, or there could be a fee. There is value to the company in offering it for free, and then allowing consumers to reuse it and gaining 'customer stickiness,' he said. Dive Insight: Coinstar operates 25,000 coin exchange kiosks at stores and other locations in eight countries in the U.S. and Europe, with some 50 million transactions annually. About 18,500 of those machines are in the United States. The new Mastercard debit card will add another option for consumers in terms of how they can convert their coins into other payment forms. 'We actually just soft launched it for friends and family a couple weeks ago, and our planned national rollout is sometime in very early Q4,' McColly said in an interview last Tuesday. The CEO explained how the soon-to-be-offered card will work: 'You can literally just go to the Coinstar machine, have a digital wallet on your phone, load it right there at the kiosk, and it's instantly available for you to go spend as a Mastercard debit card,' he said. The company generally charges a 12% fee if customers convert their coins to cash, via a receipt they take to cashiers at stores, but it also offers other ways to convert the coins without a fee. For instance, a customer can currently transfer the value to a Starbucks, Home Depot or other store gift card at the kiosk without paying a fee. For customers that may choose to load the value directly to their bank account, the financial institution may make the service available free-of-charge, or require a fee. A customer can also convert the money to bitcoin and load it onto a digital wallet. While McColly would not provide financial details, he said the company is profitable. The Bellevue, Washington-based company is owned by the private equity firm Apollo Global Management. Coinstar hasn't generally engaged in a lot of marketing in the past, and has instead relied mainly on its green machines at grocery stores to build brand awareness, McColly said. But for the launch of a new service, such as the Mastercard debit card, marketing will be a 'critical component,' he said. Mastercard didn't immediately have a comment on the new debit card relationship with Coinstar. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
9 hours ago
- Business
- Yahoo
Fiserv sued over Clover migration
This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. Dive Brief: Investors sued the payments processing giant Fiserv in federal court, alleging it forced merchants to migrate to Clover, its small business-focused point-of-sale service, and lied to investors about slowing growth of Clover sales as merchants rebelled against its cost. Moving businesses from an older system onto Clover concealed a slowdown in new merchant business for the point-of-sale system, according to the lawsuit filed Thursday by the City of Hollywood Police Officers' Retirement System. The Milwaukee-based payment processor disputes the allegations, a spokesperson said in an emailed statement Monday. 'Fiserv disagrees with the claims and will vigorously defend itself in the lawsuit,' the statement said. Dive Insight: 'This case is about how Fiserv misled investors by artificially inflating its growth numbers through compelled migration of legacy customers using Payeezy, the company's older point of sale platform, to Clover, its expensive and feature-heavy POS platform,' said the complaint filed in the U.S. District Court for Southern New York. The lawsuit seeks class action status, offering to represent anyone who bought or owned Fiserv stock between July 24, 2024 and July 22, 2025. Fiserv in the past has identified the Clover unit as a key driver of future growth. The company began phasing out Payeezy in 2023 and 'forcibly migrated' as many as 200,000 merchants that had been using the older system to Clover beginning in late 2023 and continuing through the first half of 2024, the complaint says. Fiserv executives then made misleading statements on the growth of Clover, the lawsuit alleges. For example, last summer then Fiserv CEO Frank Bisigiano told investors that Clover's growth was fueled by new merchants signing up for the platform, according to the complaint. Company executives also did not disclose that merchants were leaving Clover for POS competitors, such as Block's Square and Toast, the complaint says. Fiserv reported lower-than-expected earnings growth for the second quarter. Company executives, including CEO Mike Lyons, attributed the slowdown to delayed initiatives and economic uncertainty. The company's stock tumbled on the news that the processor fell short of analyst expectations. Along with Fiserv, company officials Bisignano, Lyons, and Chief Financial Officer Bob Hau are named as defendants in the lawsuit. 'Plaintiff and Class members would not have purchased Fiserv stock at the prices they paid, or at all, if they had been aware that the market prices had been artificially and falsely inflated by Defendants' misleading statements,' the lawsuit says. Lyons became CEO in May after Bisigiano left the company to lead the Social Security Administration. Recommended Reading Fiserv has ambitious goals for Clover. Can it meet them? Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
- Yahoo
How to build a B2B payments behemoth
This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. Bottomline Technologies sells business payments and digital banking services to banks, which in turn use them to offer corporate customers non-branded technology for online banking and cash-management services. Bottomline says about one million companies use its platforms to make $16 trillion in annual payments, with customers including 90% of the Fortune 100 businesses. It also contends it's the world's third-largest Swift service bureau owing to a large cross-border payments business in Europe. In May, Bottomline introduced embedded access for banks to offer a proprietary payment network, Paymode, as part of their digital banking platforms. This network for large companies contains about 600,000 vendors for which Bottomline has verified the identity and bank account details of each. That information allows for any company to pay these vendors, regardless of the bank they use, and prevents fraud, CEO Craig Saks said, calling the 'closed loop environment' Bottomline's 'most interesting business.' Bottomline has 2,500 employees and dual headquarters in Portsmouth, New Hampshire and Theale, England, with its operations focused on North America, the United Kingdom and Europe. Saks, a former ACI Worldwide senior executive, joined Bottomline as chief executive officer in May 2022, when private equity firm Thoma Bravo closed on its $2.6 billion cash purchase of the company and took it private. Saks spoke with Payments Dive on July 23. Editor's note: This interview has been edited for clarity and brevity. There is a massive opportunity. The U.S. business payments volume in aggregate, is tens and tens and tens of trillions of dollars. No one has got a material share of that. We're pretty big and we still think we've got so much headroom to go. We are still growing incredibly fast, because there's this huge white space in the addressable market. The U.S. does need at least one or two large-scale business payment networks to emerge. It doesn't have a large scale, de facto standard for a business payment network like it has in the card brands or in the big merchant acquirers. There just isn't anyone who's got to that breakthrough scale. And I think that is necessary in the U.S., and it's inevitable. There are a lot of reasons why payment networks emerge at different speeds around the world. One is the level of regulatory push. The U.S. doesn't have a history or culture of decree: This is the new business-payment standard, and thou shalt all do it. Europe and the rest of the world tends to do that. The other thing that slows these things down a little bit in the U.S. is just the pure scale and complexity. Building payment networks takes a lot longer when there are thousands of banks than if there are dozens of banks. It takes a lot longer with millions of businesses. It obviously takes a lot longer when there are lots of states with different state regulations and so on. And so I think the scale and complexity of the U.S. just makes it take a little bit longer to gel together. I'd say it's inevitable for a few reasons. First of all, the efficiency that a scaled payment network brings to an economy is undeniable. When I look at where we play best, it's in the upper part of the mid-market enterprise and above, and typically in the larger bank ecosystem. And it's also not dependent on cards. It's dependent on any type of electronic payment. In that realm, relatively few (companies) play, and there are relatively few that have advanced as far as we have, but absolutely some of the names you threw out there. Fiserv and FIS, or the big card associations or some of the big ERP (enterprise resource planning) players, they all expressed interest at serving that community with different strategies...I think the U.S. is big enough for a small handful. I get asked this question a lot, and it's obviously speculative in terms of who would find us attractive and who wouldn't. Our company is fairly sizable and very rapidly growing and a very profitable company. And so it would absolutely need to be bought by a larger player. This is going to be a fairly significant acquisition for someone. I think the ideal player would be someone who is interested in an industrywide network and in network dynamics. They could be anyone who's got a payment network or a network of customers within the banking or commercial corporate space. I think it's unlikely that any one of the big (bank) participants in the network would want to buy it, because that would then turn you from being a 'member of the club' to a competitor in the club. And I think that that would actually probably not work for the other banks. It's not to say that it's impossible, and it's not to say that some wouldn't think about it, but I do think that it's more likely that it will be a third party that serves the banking industry and has the opportunity to bring more scale and more amplification to the industry level value proposition, because of the network dynamic that we have. Do I think that stablecoin could make inroads into Swift volumes or other cross border volumes? Absolutely, it's a better widget. And the reason I say it's a better widget is it's still just dollars at the end of the day, if it's backed by dollars, right? So it's got certain technological and security advantages and all the other good things about a modern technology. What people often forget is that payment types and methods are not just about the rail. It's about 10 million other things that happen in the institutions on each side and in all of their customers, and around security rules and protocols and around trust. Nothing's going to just walk in and say, 'I'm going to replace the trust for the Swift correspondent banking network.' And 'I'm going to just replace all the understanding of the 10,000 ways people have tried to steal money from Swift in the last five decades,' instantly. I've always seen that the evolution of payment types is actually a very long and drawn out journey. So do I think that it could end up being a dominant payment type? Absolutely. Do I think it'll take as long to get rid of everything else as it's taken us to get rid of checks? Most likely. Correction: This story has been updated to correct the current number of vendors within Bottomline's payment network. Recommended Reading Same-day ACH payments soar Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 days ago
- Business
- Yahoo
How much will killing the penny cost?
This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. Dive Brief: American consumers will pay $6 million more annually for goods and services as merchants round up prices to account for the fading availability of the U.S. penny after it's no longer minted next year, the Federal Reserve Bank of Richmond estimated in a report this month. 'As pennies phase out, businesses are likely to round cash transactions to the nearest 5 cents, resulting in a 'rounding tax,'" the Fed bank's report said. The additional collective cost to Americans is still less than the $85.3 million the federal government lost last year on production of some three billion new pennies, according to the report. Dive Insight: The penny bearing President Abraham Lincoln's profile has been in circulation since 1909, and the coin in any form has been passing from hand to hand since 1793, according to the United States Mint. While the one cent coin was initially made from copper, the latest versions are mainly zinc with a copper coating. In February, President Donald Trump, who had been in the White House for less than a month, called on the U.S. Treasury to stop making pennies, citing the cost inefficiency. A single penny costs 3.69 cents to make, according to the Richmond Fed report. A Treasury Department official confirmed in late May that the U.S. Mint had placed its final order for the blanks that become pennies. The blanks are expected to run out early next year, leading to the end of production, but the penny will remain in circulation as legal tender. The decision comes as countries around the world, including the U.S., increasingly turn to electronic payments and digital alternatives. Just last Friday, Trump signed a bill that provides a federal regulatory framework for stablecoins, a digital asset that is typically pegged to a fiat currency, such as the U.S. dollar. Cash, including coins, remains an important form of payment for some U.S. households, particularly those that are unbanked and underbanked. In a 2022 survey regarding cash, 93% of respondents said they have no plans to stop using cash, according to a 2023 Federal Reserve Financial Services report. Still, a lot of the coins are stuck between couch cushions or laying on sidewalks. And the Fed services arm estimates that $10 billion to $14 billion is sitting in those ubiquitous coin jars that consumers throw their loose pennies, nickels, dimes and quarters into when they empty their pockets. Slowly coins are making their way back to the bank. Coinstar, the company that allows consumers to count and cash in their coins at its kiosk, said in a release Tuesday that it has 15 million consumers signed up to transfer coins to accounts at its kiosks. The share of U.S. transactions made with cash continues to decline, with only 14% handled by that method in an October 2023 consumer survey, according to research on cash use by the Atlanta Federal Reserve Bank. With the extinction of the penny, the nickel will become more important in transactions. If the nickel were ever to be discontinued, the rounding by merchants would have a much more significant impact, lumping an additional $56 million cost annually onto consumers, the Richmond Fed report predicted. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 days ago
- Business
- Yahoo
Flexbase adds perks on Visa card
This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. In the world of premium credit cards, banks and card issuers have poured on the amenities in an arms race of perks as they seek affluent big spenders. There's access to airport lounges, global concierge services, insurance protection on card purchases and an array of other attributes for the right — which is to say, wealthy — demographic. The wrinkle in this upscale card melange, however, is that there are plenty of rich people carrying the same high-end cards from American Express, JPMorgan Chase, Capital One Financial and other banks, many with the same kinds of perquisites. The cards and similarities of their perks are so ubiquitous as to become diluted for many affluent people. 'The challenge is that existing platforms are really designed for a mass-market consumer base,' Zaid Rahman, the chief executive of Flexbase Technologies, a personal finance and payments platform, said Thursday in an interview. He cited Amex's more than 40 million customers as one example of how cards confer travel and dining perks to the masses. Flexbase's business card is comparable to business cards from larger fintechs like Brex, Mercury and Ramp, that offer features such as high credit limits and expense controls. Flexbase is now adding travel, dining and other perks to its card to complement business functions. Rahman says that unlike the large enterprises those companies target, Flexbase's customers are generally solo entrepreneurs running small businesses and tend to merge their personal and professional spending. Given the proliferation of premium cards, this 'select group of individuals feel left out, and don't really have any sort of exclusivity in terms of the perks and benefits and access they're receiving,' he said. To address this privilege affliction, New York-based Flexbase has begun rolling out a new Visa-branded Infinite card with a variety of travel, dining and hotel amenities coupled with the business-specific attributes from its prior Mastercard-branded card. Flexbase focuses on affluent entrepreneurs that operate their own companies, usually with 10 to 100 employees. Rahman jokingly dubbed these businesspeople 'jumbo shrimp' because 'they're not big, but they're rich.' Moreover, they don't want to carry 'five different credit cards: 'This card is for this business. This card is that business. This card's just for me,'' Rahman said. 'You want to carry a single card and let the software figure out what to do with these transactions after the fact, because you own everything anyway, and from a tax perspective, you care about the tax optimization of these transactions.' Rahman said the company began talking about revising its credit card with these types of travel and dining rewards in response to customer demand. The new card was designed to give Flexbase customers 'what they actually want' on the personal side of their card spending, he said. Among other perks, that means a '24/7' Visa concierge to help secure reservations at tough-to-book restaurants, hotel upgrades and the 'automatic kind of perks when they're traveling or when they're going to an event,' Rahman said. The card uses OpenTable for priority reservation access at restaurants and Priority Pass, the UK-based airport lounge operator, for access at 1,300 airport lounges. Flexbase said it is the third company, and first fintech, to issue the Visa credit card, after Capital One Financial and UBS, the Swiss financial services firm. Visa has offered its Infinite card in Europe and Canada, but made it available in the U.S. only this year, a Flexbase spokesperson said. Visa did not reply to emails seeking comment. Flexbase launched in 2022 with its first card; the company said it reached $1 billion in annual transactions this year. Flexbase, which has 81 employees, said in March that it raised $25 million from six venture firms, following a $20 million capital raise in September 2023. Flexbase's average business owner issues 35 cards, many creating virtual cards they use to create and enforce expense policies, collect receipts and establish purchasing cards with specific merchants, Rahman said. On the business side, the card offers 60 days of interest-free financing on charges; cashback for early payments; and points redeemable for travel, gift cards, or statement credits, Flexbase said. 'The reality is, if you have three businesses that are cash flowing, and you're making a ton of money, your business accounts and your personal accounts, the boundary walls between them are very, very blurry,' Rahman said. One reason some entrepreneurs select Flexbase's platform is because it allocates different charges to different accounts, he said. 'Historically, the way financial institutions have thought about business and personal, they have thought about these things very differently,' Rahman said. 'So when you think about living a better lifestyle, they think of that as a personal thing, not a business thing.' Recommended Reading JPMorgan, Amex flash new cards Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
