DepositGuard is a payment technology platform for property rental payments that securely collects, holds and administers the deposits and pre-paid rents for vacation and residential property transactions, benefitting both renters and homeowners (including landlords, property managers and rental agents).

Unlike other payment methods, a merchant account is not required to accept Visa/MasterCard payments and there are no fees for homeowners to use DepositGuard.

DepositGuard is a neutral third-party account where the rental funds are parked for safekeeping. Both the renter and landlord have full visibility into the account and must be in agreement before the account can be created, changed, closed and any money released.

DepositGaurd gives renters more control over the payment process by securing their investments. By example, according to data from a DepositGuard study, 78% of consumers polled indicate they would rent vacation properties more often (or for the first time) if better payment security was offered. Clearly a renters' confidence in how their money is handled is a key factor in a vacation rental decision.

For vacation homeowners, putting renters at ease while satisfying their payment requirements provides for greater reach and customer satisfaction. DepositGuard simplifies the rental business with an automated and easy-to-use system for managing, tracking, and accounting for rental payments and deposits.

For more information, visit our friends at www.depositguard.com.

The UK has reversed its Vote to Abolish Check Clearing. In a testament to the power of the payment properties of checks, the UK Payments Council has decided to keep checks and cancel its 2018 target end date. Instead the UK Payments Council has decided to focus on payment innovations, reassuring customers that the check is staying.

The biggest innovation coming soon to the paper check is the digital check. Keeping all the benefits of its paper form except the piece of paper, we expect the digital check will usher in big changes in the payments industry.

Last year Visa completed its acquisition of CyberSource (Authorize.net) for approximately $2 billion in cash to expand its online payment, fraud and security capabilities. Since then Visa launched online shopping tool, Rightcliq; acquired PlaySpan Inc. (a payments platform to handle transactions for digital goods in online games, digital media and social networks); and signed strategic agreements to deliver P2P payments with CashEdge and Fiserv enabling U.S. Visa account holders to pay each other for the first time.

Now Visa is making a strategic investment in Square, a mobile payments start. Square's card readers plug into the iPhone jack for swiping cards and have been criticized for lacking encryption security. Perhaps with Visa's involvement they will address this issue given on the same day, Visa announced establishing security guidelines for mobile acceptance solutions calling on vendors to follow best practices to limit exposure of account data by encrypting all account data including at the card-reader level and in transmission between the acceptance device and the processor. In any case, one thing seem certain, Visa’s involvement clearing will elevate Square’s credentials.

In a recent post Google Takes a Bite of the Apple a comparison is made between the payment system subscription pricing model of Apple iTunes at a 30% fee and Google’s announcement of its One Pass at a 10% fee on the Android platform. The difference in the fee structure is attributed to the built in user base - Apple has 160 million existing iTunes users ready to go on its platform which the start up Google platform can not offer.

Facebook also charges a 30% fee for using Facebook Credits (with 500+ million users). So in this alternative payment space it appears that 30% is the top end regardless of number of users. Of course to buy Facebook Credits people would use PayPal. Wouldn’t it be better to simply use PayPal and skip Facebook Credits? Users would skip a currency conversion step and publishers/developers would get a lower rate. PayPal's published micropayments pricing of 5% + $0.05 applies to transactions less than $12 (by the way somewhere on the internet I read that PayPal claims over 100 million accounts). For easy math, let’s take a look at the various subscription pricing models on a $10 transaction: at 30% = $3; at 10% = $1; at 5% + $0.05 = 55¢.

And this leads me to wonder. According to Visa, they have approximately 665 million credit and debit cards in circulation in the US. The Visa small ticket debit Interchange is 1.55% + $0.04. On the same $10, that’s only 20¢. Add dues, assessments, processing network fees and merchant service costs and let’s calculate the all-in costs at 32¢. Visa has the most users and lower acceptance costs (and this is before Durbin’s government Interchange regulation).

But wait, $10 is probably on the high end. So let’s do the same math using a $1 transaction: At 30% = $0.30; at 10% = $0.10; at 5% + $0.05 = 0.10. And a Visa debit transaction all-in at approximately $0.15. So we can begin to imagine on different size transactions how all these payment platforms compare (although consumers and merchants don’t really have a choice when using one of these proprietary platforms from Apple or Facebook). Which leads me to question one of the post’s conclusions that the “consumer has other options.”

Back to Google and the question of how they can establish One Pass billing relationships and grow their account base. As the post points out, Google offers a lower fee to incent the merchant (to attract content users may want) and they can tie in Google Checkout users.

On the Google blog, What would you do if you were CEO of Google?, many suggested improvements to Google Checkout. And recently we've read about Android activating 300,000 new users a day. And while the Gingerbread Android OS (with a standard API for interaction with Near Field Communications hardware) may not initially include mobile payments, it represents a huge opportunity and it’s hard to imagine Google will ignore this as it seeks to diversify its revenue sources.

Therefore, I think Google will continue to open and extend their entire Google payment platform. One way Google can to do this and incentivize the customer at the same time would be to partner with an innovative company like Global Standard Financial to build what the Fed says is a “new kind of check – one never having any paper form – (which) will transform the payments industry”. This new payment rail could support all Google’s initiatives from P2P, social, gaming, micro payments, eCommerce, mobile and retail POS payments (swipe or tap your phone to “write” a paperless check).

I envision a better ACH. One that lets me pay anyone from any personal or business checking account I choose without having to give up my sensitive account information or authorization to withdraw funds. It would be very secure and I would control both the access and the timing of when I choose to make a payment. And it would be convenient. It would work with my existing bank so I wouldn't have to deal with the hassle of moving funds in and out of a 3rd party "holding account" like PayPal.

My mobile device would become my digital checkbook and registry. At my business I would write digitally originated checks straight from my accounting, CRM or ERP system. For proof of payment and for my own record keeping I would get the cancelled check image returned with my bank statement.

Anyone who can cash a check today would be able to accept my payment.  Minus Interchange, merchants would favor it and reward me over other debit and payment options. This new low cost payment rail would support developer initiatives in P2P, social, gaming, micro and ecommerce too.

As 2011 predictions go, I say… don't write off the check. Keeping it green, the paperless check, having all the properties of its papered forefather, will emerge to retain its dominant role in our payment system.

In full disclosure, I'm not the only one to make such a prediction. The Fed, in a November 2009 white paper, said a "new kind of check - one never having any paper form - will transform the payments industry." You can read more on the evolution of the paperless check and the Fed white paper at http://gsf-inc.com/news.htm, then enjoy as the paperless check emerges in 2011.

Cheers!

The shift from paper base to digital currency has been quietly transformative.   A panel of financial experts discuss digital currency, trends, innovation and regulatory policies to consider and avoid.  

To start, digital money trends show favorable growth.  Between 2003 and 2008, card-based transactions grew by 13% worldwide.  And government use is part of this growth.  For example, the U.S. federal government is using purchasing cards for procurement to save $1.7 billion a year according to a GAO study.  Beyond cards, consumers have embraced new technologies that facilitate convenient and secure electronic payments across a wide range of platforms.

While banks are regulated, what about a host of non-bank participants who provide alternative payment services from ecommerce, person-to-person, micro transactions or prepaid?  Should they be regulated to address consumer protections, data security, money laundering, anti-terrorism and other illegal activity and if so, how?

Finding the right regulatory structures necessary to support continued payment innovation is important.  As an example of what to do - emulate Check 21.  Check 21 law was established in 2003 and went from zero to nearly 100% adoption in five years.  This success is pointed to as a regulatory model to follow where the legal framework is established but no specific solution is mandated; where baseline consumer protection is set but not the process of exchange, letting the market freely adjust to changes in technology and innovation.  The government’s role is to protect fair competition but must resist the urge to intervene with price controls.   In Australia where regulators artificially suppressed Interchange pricing, consumers didn’t get lower cost or added benefits from retailers and incurred lower rewards and more fees when making certain payment choices. 

All payment systems are measured by four factors: security, integrity, efficiency and reliability.  With the growth in the variety of payment mechanisms, consumers making payment choices adjust market share to those payment systems who best meet this criteria.  This free market approach is better than having politicians pick winners and losers.  Regulations should provide the framework to impose security and protect integrity through standards but not set pricing or otherwise inhibit innovation.

Watch this C-Span video presentation of the American Enterprise Institute Discussion on Digital Money

Paper checks don’t remain as paper very long. In today’s digital age, they are quickly imaged so they can be electronically cleared and settled.

Converting paper to digital images became law in 2003 with the passage of the Check Clearing for the 21^st Century Act (Check21) and the initial implementation meant large companies and banks didn’t have to ship paper all around the country.

Today, more and more of the paper check imaging is being done by merchants and businesses that accept them. Community banks led the way in deploying remote-deposit check scanners as a way to offset the competitive advantage mega banks had with their branch network. By scanning and electronically depositing check images, community banks were able to attract business customers and businesses could choose a bank not just for the convenience of the physical branch to make paper check deposits.

Some businesses image checks one at a time at the point of sale while others use industrial check scanners that can image hundreds of checks a minute in the back office. Check imaging is now incorporated into ATM deposit functions and there are even apps available using your smart phone’s camera to snap a photo and deposit a check.

We’ve come a long way in seven years. But a big question remains. Why do we even have to write a “paper” check in the first place, why not just start with the image?

Is the industry ready for next evolution in check technology?

The inventor of the paperless check, Global Standard Financial, Inc, (GSF) thinks so. Clark Gilder, CEO of GSF points to a Fed policy paper published in November 2009 titled Digital Checks as Electronic Payment Orders (EPO) that agrees with him.

The Fed writes that “a digital check EPO could leverage the existing electronic check infrastructure and provide a convenient, low-cost payment option for both consumers and businesses, based on a payment method that they have found useful for many years.”

GSF announced that they had been awarded two US patents covering the fundamental processes necessary to securely create a paperless check (GSF describes these pure electronic payments as Digitally Originated Checks™ or "DOCs") ahead of the big banking show (http://www.bai.org/) this week.  To see the GSF patent, go to http://bit.ly/DOC_Patent.

As an alternative payment, keeping all the benefits of writing a check yet eliminating the need to start with a piece of paper has enormous implications for business models from peer-to-peer payments and gift giving to B2B invoices and payments to government and merchants.  And accepting paperless checks would costs much less than accepting a debit card today, something businesses and merchants should be enthusiastic about. In fact, instead of pushing Interchange legislation, they should push Congress to adopt revisions to the Check 21 law to secure paperless checks legal standing.

Of course, the security demands of both banks and check writers are a key consideration in any new payment method.  While the volume of paper checks is starting to decline, the growth in paper check fraud continues. Forgers can easily alter the dollar amount of a paper check and simple signatures are the standard authentication mechanism. Clearly sophisticated fraud technologies, electronic signatures and encryption can greatly enhance security. GSF employees these as well as providing additional security using digital rights management features and unique per check identification codes. In terms of security, these enhanced measures make paperless check fraud much more complex to perpetrate.

Over the years, the Federal Reserve has gone about the business of eliminating expensive paper processing after the check was written. Now it is the time to extend the benefits of digital checks all the way to the check writer. With the Fed and ECCHO (the check clearing trade association) endorsing the paperless check concept and the know how and technology available, its just a matter of time before we will all be carrying a check book again, except this time it will be digital and on our smart phone.

Beginning May 5, Google Checkout's fees will transition to a new tiered fee structure based upon a merchant's monthly sales processed through Checkout.   While this new fee schedule appears to be similar to PayPal, Google's transaction processing rate will vary each month based on your prior months sales volume.
 
The new pricing plan will also eliminate the credit for Google AdWords advertising, discontinuing the processing promotion that was part of the original fee structure for Google Checkout.
 
Fees apply the same for Visa, MasterCard, American Express, and Discover payments.  There are no monthly, setup, or gateway fees.  However, for cross-border transactions, there will be an additional 1% fee assessed per transaction.   To learn more about Google Checkout fees visit http://checkout.google.com/seller/fees.html. 
 
Read more on The Official Google Checkout Blog.