To Buy Or Not... Dubai (with Credit Cards)

A wry, contented smile forms on my face as I have been empowered to write about a subject matter that screams with an intensely sardonic and sarcastic "bite" to it! I do indeed, enjoy moments like these. This one here has to do with "deer ole" Visa.

Allow me to "illustrate" further...

There's an interesting article in Gulf News regarding Visa, Interchange Rates and Gas Stations. I've have taken the time to blog several times on how Visa and MasterCard are basically stickin' it to gas station owners.

Now, ironically, of all places, gas station owners in the United Arab Emirates , are telling Visa that their Interchange Rate hikes are too high and they are cutting them off...thus "stickin' it right back" at them. The irony is that Dubai, who tells Visa to take a hike...after Visa hikes the rates...this is too much. What a poetically just world we live in, is it not?

So, I'll pose the questions that begged be asked: "What is the fallout for Visa?" Is Dubai the little boy that told the Emperor he wore no clothers? Is it just the very beginning of a potential major revolt by merchants and retailers which could cross over into additonal retail spaces?

Or does Dubai's petrol stations overestimate how much power they have over Visa?

Appears to be a dilemma similar to that which faced my dog out in the yard this summer. (Click the Deer/Schnauzer Picture on the right)

It's a face-off, a standoff and I for one is interested to see who'll win. This is Ali vs. Frazier. Frazier (Visa) thinks he'll win this fight on the merit of being awarded more basis points, but that's also the basis behind the point that Dubai is making. This fight has the dubious (or is it Dubai's) distinction of taking place in "Ali's" (Dubai's) backyard. I think Visa is playing with fire and this has the very real potential to blow up in their face.

This development is going to be an interesting one to watch. I've developed a picture in my head on who has dominion. Is it Visa or the petrol stations? Well Round 1 of the Main Event takes place this Saturday, October 20th when Visa takes away the "plastic card terminals."

I'm going to go with the UAE because it's their backyard and they have an alternative payment system. Oh, and isn't the customer always right?

Why doesn't Visa understand that the merchants are their customers too? Visa likes to hype that passing a surcharge onto the retailer's customers is an unfair business practice, but if practice makes perfect, then Visa is the closest thing to being hyperfect. Prior to debit cards, Visa charged the very same consumers they are trying to protect, loan shark annual credit percentages, especially during the 1980's. Hypocritical behavior like this has landed them in hot water with anti-trust suits in the past.

So I'll keep an eye on out on this one and let you know the end result. Irregardless of what happens, it certainly bodes well for alternative payments systems like Pay By Touch. As it plays out it will provide a backgrounder for a real life story with real life action and a real life ending.

It's "Why PBT is Ripe for Gas Stations". If you haven't yet, or would like to refresh your memory, take a gander at: "How Pay By Touch Can Put a Tiger in it's Tank" (August).

It explains how ridiculous Visa is being with their Interchange Rates on gas station owners, and how they've brought this on themselves with the anti-virtues of greed and lack of compassion. Visa and their interchange rates are fast becoming the enemy.

Here's the story from Gulf News.

I would've entitled it: Will Visa Regret Smokin' Dubai?

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Ban on credit cards in Dubai...is it a bad sign for Visa?

Starting Saturday all Emarat, Enoc and Eppco stations will not accept credit cards for payment. Only self-branded store credit or smart cards will be accepted as well as cash.

Plastic card terminals to be removed

A Visa spokesperson told Gulf News card acceptance terminals will be removed from all Eppco, Enoc and Emarat petrol stations from October 20 while outstanding issues are resolved.

"Parties involved in negotiations regarding the issue of surcharging have not reached an agreement in the short term. Discussions will continue with all parties working towards a suitable outcome," the firm said.

The company said "millions of merchants throughout the world accept international payment cards and do not surcharge because it is good for their business." "Banks, consumers and retailers all benefit from the safety and convenience of payment cards and the cost of the payment system should be shared by all parties. (Editor's Note: Are you kidding me? Visa Needs a new PR Spokesperson. The only one benefiting from the higher gas prices is Visa, (ok...and maybe, just a little bit, the United Arab Emirates)

"Surcharging passes the retailers' costs to the consumer," the spokesperson said, adding that by charging for the use of card payment, merchants are "subsidising an inefficient system at the expense of a more efficient one." According to industry sources, banks and petrol stations are in discussions about Emarat and Enoc's decision to ban credit cards at their outlets while a Ministry of Economy officials has said no laws have been broken.

Abdullah Al Saleh, an undersecretary at the Ministry of Economy, said the issue has nothing to do with consumer protection as there is no legal provision to force companies to accept credit cards.

"I do not see a conflict with the Consumer Protection Law. It is their [companies] policy how they want to sell their services," he said. Residents have said the ban on credit card use at petrol stations was an additional bother they do not need and is bound to create longer waiting times at the pumps as people will be unprepared.

Rima Hassan, 21, a student from Lebanon said she has trouble keeping up with her Salik payments so topping up a pre-paid card for petrol will be a hassle.

"In the beginning it will be a problem before people get used to it. People depend on cards as it is not often that you have cash on you," said Hassan. Dubai resident Golda Arthurs, 39, from India said the new system will not help consumers at all.

"It's ironic because they develop parking meters you have to pay with a card and then they make you pay for petrol with cash. Using a credit card generally facilitates everything you do but banning it is going to make life a bit more difficult," said Arthurs.

According to a bank official the increase in fees levied for accepting credit card payment has only risen 0.2 per cent. "The fees increased about a year ago for petrol stations from 1.35 per cent to 1.4 per cent for each transaction and petrol stations were fine with it for a year.

It was recently increased again by 0.2 per cent to 1.65 per cent," said a banking source. "Petrol stations are not supposed to charge customers because it is not part of the agreement between banks and petrol stations. Now all concerned parties are in talks," he said.

Editor's Note: I know I'm not from Dubai, but let's see if I can translate what this banking source said. I think he said, and I'm translating loosely, that "the fees were increased a year ago by 5 basis points, and nobody complained, so we thought we'd quadruple them this time around, and raise them 20 basis points. After all there's nothing they can do, especially charge their customers more, only we can, because it's not part of their agreement. Apparently, the agreement does not preclude the petrol stations from ceasing to accept their cards.

People, VISA made their mark with CREDIT cards, guess what... most EVERYONE uses DEBIT cards now. Last time I checked, well, they were CHECK cards, paid from a checking account. Visa lost their lawsuit to Discover, because they shut them out of the Bank's, thus the issuing marketplace for for DEBIT cards. Visa has their antitrust lawsuit to the retailers, led by WalMart. They don't have a strong litigational track record. I'm extremely disgruntled with Visa's logic that a more secure biometric transaction, like the one's processed by Pay By Touch, is classified as a "card not present" transaction. I believe Visa is making really bad decisions, one's that have monopolistic stench, which will come back and bite them in the ass.

The reason e-commerce has such an alluring appeal for PIN DEBIT, is because Visa is charging CREDIT CARD NOT PRESENT/MOTO type rates...and making a killing. But I'll save that for a future ATM Direct/TrueMe post.

Visa's first non-litigation standoff is a MATCH up against "petrol" companies, i.e. they're playing with fire. Play with matches and you're going to get burned.

Back to the story....

Spokespersons for some of the major banks in Dubai were unavailable for comment yesterday whilst some banks remained closed.

Officials from petrol companies were also unavailable.

Editor's Note: Nobody's talking, and Visa is removing the POS machines. Let me guess, it must've been that brilliant Visa PR person who made that decision.

Happy Days are "not" here again as basically the United Arab Emirate's are telling Visa to "Sit on It".

Based on the picture I'm seeing (look to the left) it certainly seems to me that a City in Dubai could turn into a major pain in the ass for Visa.

Touche'...Can you say "full circle"? Experience dictates that "deer" ole' Visa, was warned: "This is my backyard!"

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Gommendy Out, Servia to Race for PBT in Austrailia

PKV Racing's #22 Pay By Touch Racing Car Has Best Chance to Win a Champ Car Race This Year.

The race will be shown live on ESPN2 Saturday, October 20th at 10:30 Central Standard Time and a repeat broadcast will be on Sunday on ESPN2 at 5:00 pm Central Standard Time.

Tristan Gommendy doubtful for the trip to Surfers Paradise, so PKV has moved to field a known quantity in the #22 Pay By Touch Panoz for the tricky street circuit.

“Unfortunately, Tristan had an unresolved business situation that will prevent him from competing this weekend in Australia,” PKV general manager Mark Johnson revealed, “He is continuing to try and resolve the situation, and we have high hopes that he will return to the team for the Mexico City race.

“Fortunately for us, Oriol was available this weekend and, given his proven talent, familiarity with the team - in particular the fact that he will be working with the same engineer he had last year - and strong recent record at Surfers Paradise, we feel bringing him on board will give PKV Racing the best opportunity to have a successful weekend."

Oriol Servia currently sits sixth in the championship with 204 points, just five points out of fifth place, and Johnson is delighted to be able to help a driver who gave so much to the team as Katherine Legge's team-mate in 2006.

"We are pleased because this provides Oriol, one of the top drivers in the Champ Carseries, an opportunity to continue to battle for a top-three spot in the championship standings,” Johnson said.

Servia admits that the 2.795-mile Surfers Paradise circuit is his 'favourite track in the Champ Car series' and the Catalan has been particularly impressive in Australia in the last two years, claiming pole in 2005 and leading the race last year.

“I am very excited to have the opportunity to continue my fight for a place among the leaders in the standings,” he said, “I want to thank Mr Kalkhoven, Jimmy Vasser and Mark Johnson for giving me this opportunity. "The good thing is that I know a lot of the PKV Racing crew members and will be working with my engineer from last year, Yves Touron, so we are already very familiar with each other. I have been fighting for wins on the street circuits all year and I am sure it won't be any different in Surfers.

Hopefully, I can get the win there for the team and myself.” Servia will partner PKV regular Neel Jani in Australia as the Champ Carseries resumes after a seven-week break following the European double-header at Zolder and Assen.

			October 21 - Australia
			ESPN Classic | Sat, Oct 20 11:30 pm ET | Race-Live ESPN2 | Sun, Oct 21 6:00 pm ET | Race-Repeat

Pay By Touch Installing at 18 Scotts

Marilyn Surfus realized last weekend that she’d forgotten her checkbook at home. But the slip didn’t stop her from buying groceries. She simply placed her finger on the scanner pad in the checkout lane at Scott’s Food & Pharmacy. The device compared hundreds of pre-selected points on her fingerprint for comparison with her data already on file. And the sale was approved.

Scott’s is piloting the Pay by Touch system at four of its Fort Wayne stores: the Dupont, Coventry, Georgetown and Stellhorn locations. Rick Zahm, Scott’s vice president of merchandising and operations, said the first units were installed last week. Company officials plan to install the devices in the chain’s 14 remaining northeast Indiana stores in about two weeks.

Krista Thomas, Pay by Touch spokeswoman, said Scott’s is the first company in northeast Indiana to adopt the high-tech payment system. Touch payments are accepted in 2,400 retail outlets in 44 states; 3.3 million people have enrolled in the system, Thomas said.

The technology allows consumers to enroll at a bright green kiosk near the front office. That process – which involves presenting a driver’s license, a voided check and making that initial finger scan – is all done electronically and takes about three or four minutes.

Afterward, the customer can simply touch the scanner at a checkout to have a purchase covered with money withdrawn from the customer’s checking account. The technology also allows for payments with debit and credit cards but, so far, Scott’s has opted to offer only Automatic Clearing House withdrawals from checking accounts. Such transactions have lower fees for merchants than debit purchases. Either way, the money is taken from the customer’s checking account.

After a person has enrolled in the system, he can use it to pay for purchases at any retailer that offers the option. Thomas said participating businesses include gas stations, convenience stores, banks and check-cashing companies.

Scott’s processed about 40 Pay by Touch transactions last weekend, including the one by Surfus, the company’s supervisor of bookkeeping and customer service. She previously enrolled in the system while visiting another grocery in Chicago. Scott’s has concentrated on signing up employees so that they can become familiar with the system and more easily explain it to curious customers.

Zahm, the Scott’s vice president, describes the system as the wave of the future – but one that will be quickly embraced in the present by customers who like to get in and out of stores quickly. “We can tell it’s going to be successful, based on signups,” Zahm said.

He declined to give exact numbers for competitive reasons. He also declined to put a dollar amount on installing the technology. Zahm said, however, that Pay by Touch shared the cost with the company.

Lindsay Hancock, spokeswoman for The Fresh Market, said the Greensboro, N.C.-based chain hasn’t adopted the technology and isn’t considering it, as far as she knows. Some consumers have been reluctant to embrace the high-tech process. Thomas, of San Francisco-based Pay by Touch, acknowledged that some people are hesitant to register because they don’t want their fingers scanned. But soon, even they realize how safe the transaction is compared to writing checks or using debit cards.

“There’s usually an initial concern about security and privacy,” she said. “And we respond that we have the most robust security that can exist.” (see Contactless Cards Provide Contacts and Numbers) to read about real flaws in privacy)

The company works with IBM and doesn’t store any of the data at retail locations. In fact, the cashier doesn’t even see the customer’s checking account number, adding a layer of security, Thomas said.

Pay by Touch has talked to participants and found that older adult women appreciate not having to carry their purses, which could be lost or stolen, Thomas said.

Chicagoan is 3 Millionth PBT Enrollee

Pay By Touch Provides Three Million Americans With Today's Most Convenient and Secure Payment Option
Last Update: 10:01 AM ET Sep 27, 2006 SAN FRANCISCO, Sept 27, 2006 /PRNewswire via COMTEX/ --

Mary Rodriguez was celebrated as Pay By Touch's three millionth member, after signing up at a Jewel-Osco grocery store located in Chicago, Ill., at Wrigley Field on Sept. 26, 2006. (PRNewsFoto/Pay By Touch)

Pay By Touch(TM), the leader in integrated biometric authentication, personalized marketing and payment solutions has achieved a major milestone with the enrollment of three million members.

The Pay By Touch biometric payment system is quickly gaining traction with consumers who find it more secure, faster and easier to use than traditional payment systems.

Major retailers nationwide, including Jewel-Osco in Chicago, have implemented Pay By Touch in their stores to improve customer service, speed up the checkout line and reduce risks associated with fraud.

Chicagoan Mary Rodriguez is being celebrated as Pay By Touch's three millionth member, after signing up at a Jewel-Osco grocery store located on Narragansett Ave. in Chicago.

To commemorate the milestone, Pay By Touch will deposit $1,000 in Rodriguez' new Pay By Touch digital wallet, which can be accessed with the touch of a finger at more than 200 stores in the Chicagoland area, including all Jewel-Osco and Cub Foods locations, as well as a new Sunflower Market in Lincoln Park.

To broaden the celebration, Pay By Touch has declared Wednesday, Sept. 27, 2006, 'Mary R. Day' at the Narragansett Avenue Jewel-Osco store. Pay By Touch will deposit $5.00 into the digital wallets of all new enrollees who sign up for its biometric payment service in the Narragansett Avenue store that day.

"I was excited to try the Pay By Touch system because I was really curious about how it works, and my kids think the whole idea is 'cool,' said Rodriguez, a mother of three and teacher in the Chicago Public Schools. "When I learned that it was actually safer than using my debit card, and saw how much easier it was than digging through my purse, I knew it was for me."

"We are extremely pleased to welcome Mary as a Pay By Touch member. With the touch of a finger, she joined the three million consumers that are already enjoying the convenience and security of biometric payment," said John Rogers, Pay By Touch's founder, chairman and CEO. "Chicagoans are busy, hardworking people who understand that Pay By Touch makes life easier."

The Pay By Touch system uses a simple finger scan to authorize an electronic withdrawal from a customer's existing checking account. Each fingerprint is unique, which helps prevent fraud or identity theft, and since there is nothing to carry, there is nothing to be lost or stolen.

A one time enrollment in the secure program takes only a few minutes to complete online or in person at participating stores. Members can link both their checking accounts and their merchant loyalty membership cards to the Pay By Touch system. Once enrolled, Pay By Touch members are able to use the Pay By Touch system at any participating store.