Groupon and LivingSocial have yet to report the number of merchants that are willing to participate in more than one daily deal offering, and they don’t provide data on the incremental sales lifts that merchants get from these programs. Daily deal companies cannot last unless they provide evidence that the programs work for merchants through lifted sales or increased margins. Unless they do, daily deal providers are likely just a new wave of dot-coms about to go dot-bust.

Get the real scoop from the retailer perspective in Aite Group’s upcoming report, Merchant Loyalty Programs: Deal or No Deal?

I believed these sentences when I wrote them, and I still do. At the same time, I was skeptical that many banks would actually pursue this idea. In the acquiring world, this is a high-risk target population; further, banks, by nature, have a tendency to be risk-averse, and the recent global financial crisis has done nothing to increase their appetite for risk-taking. For this very reason, I also wrote, “technology providers should be working to integrate a single technology solution into this market, incorporating real-time underwriting, boarding, activation tools and downstream risk-management capabilities, payment gateway and customer-facing reporting tools, together with mobile device hardware and software solutions, to create a full “quasi-merchant in a box” product solution targeted toward acquirers seeking to target this segment.”

The thought here was that if tech providers could put the solution in a box for banks, perhaps they could convince banks to pursue this opportunity. By leveraging their distribution channels and core competencies while reducing their exposure to risk, banks could take part in this growth opportunity.

Well, it seems that VeriFone is doing just that. With the announcement of its SAIL solution, the company is not only bringing to market a solution for small merchants, competing directly with Square, Intuit, and PayPal Here, but is also opening its solution to outside participants that can leverage any part of the technology (including risk infrastructure) to build out their own solution using SAIL’s open payment platform. The company will additionally launch a channel partner program that will allow partners to sell while VeriFone manages the relationships and associated risk.  It seems that this will provide banks and ISOs — or anyone else with distribution reach into the self-employed and small-to-midsize merchant segments — with the opportunity to participate in this growth market.

So here is my question to you: If you are a current participant in the payment chain, do you see this differently? Is this a case of VeriFone beginning to compete with traditional partners? Is this a silver-plated opportunity for their partners, or is it something in between? I’d love to hear your thoughts in the comments below, via Twitter (@Rickoglesby), or via email (roglesby@aitegroup.com). Thanks!

Yesterday, the Argentine Congress passed a bill that will put majority control of YPF (YPFD.B), Argentina’s biggest oil company, back into the coffers of the country’s federal government. The problem with this is that Spain’s flagship energy company, Repsol (REP.MC), owns 51% of YPF, and that Argentina’s action essentially amounts to the legalized theft of their shares — at least in the view of Repsol, which values the heist at around US$10 billion. Argentina will eventually provide some compensation for the seized shares when this is settled in court, but it will be too little, too late.

Argentina’s president, Cristina Kirchner, drove this campaign on the premise that her country faces the prospect of a bloated oil import bill in the near future and that YPF’s owners haven’t done enough to shore up domestic production. The architects of the argument claim that Repsol underinvested in Argentine assets while paying attractive dividends to their shareholders; Repsol counters that Argentina’s confusing maze of subsidies, price caps, and taxes discouraged production. The seizure of YPF is thus overwhelmingly popular across Argentina’s political party lines, passing in the country’s senate with 90% approval and in the lower house with 207 out of 257 votes.

Whatever your opinion on whether Kirchner’s government should or should not have stolen an oil company — “expropriation” just doesn’t seem to capture it well enough — you have to give the Argentines some respect for taking care of their own and taking what they need, albeit somewhat shamelessly. The reasoning behind this decision is conceptually the same as the reasoning behind their infamous and spectacular sovereign debt default a decade ago — the country needs it, and Argentines put Argentines first. Instead of continuing to suffer under austerity while their infrastructure was being ripped apart, Argentina finally did what many countries in similar situations today can’t/won’t do: defaulted and took a thrashing, but used the money to invest in economic recovery. Now, instead of going into the winter with a potentially unmanageable heating bill, they’ve simply taken over an oil company.

Unfortunately, these Machiavellian tendencies also scare the daylights out of foreign investors, which brings me to my point: Events like these remind us that, no matter how attractive the marketplace and despite years of economic and capital market growth, the problem that continues to plague the emerging market world is the perception of stability in the eyes of investors. Understandably concerned that the ensuing capital flight would turn into a regional blight, other LatAm nations immediately disassociated themselves from Argentinean antics. Beyond the countries’ collective eye roll, Colombia and Mexico each expressed to the press their assurances that they greatly disapprove and will never themselves orchestrate such a stunt.

In a larger context, this should not have a significant impact on the countries that have kept their hands clean. Argentina, on the other hand, will have some explaining to do for quite awhile, which is disappointing considering the efforts they are making to consolidate and modernize their capital markets structure. But the real scare to investors is the precedent, and the scare to the region is guilt by association (not helped by Bolivia’s ensuing announcement that they intend to nationalize a Spanish-owned power company… Spain’s going to be gun-shy for a long time).

I maintain hope that Argentina’s fierce survival instincts will translate into long-term economic health and capital markets growth such as the country started to experience during their post-default recovery. But for now, Mexican president Felipe Calderon has said it most simply: “Nobody in their right mind invests in a country that expropriates investments.”

I booked a flight to Italy with my American Express card, which provides trip interruption insurance. When I got to the airport the day I was scheduled to leave, I learned that my flight had been delayed by 11 hours. In front of me was a long line of other disgruntled passengers waiting to speak with airline agents. I immediately called American Express to find out what could be done. To my amazement, with one phone call a customer service representative was able to get my flights changed, reroute me through a different city, and place me on a new flight that was scheduled to arrive at my destination at the same time as the original flight. All of this was done with no expense to me. I just had to walk over to the new airline for the rerouted flight, check in, and pick up my boarding pass.

All I can say is thank you, American Express! Now I have no problem paying the annual membership fee and will gladly be a cardholder for life. Maybe it is time that credit card companies once again start promoting the benefits of these programs.

The DTC (no, not that one) is a firm advocate of data standards and has pledged to support the handily acronymized Digital Accountability and Transparency Act (DATA Act), which is (like it implies) aimed at increasing public access to federal data. This includes spending data, regulatory filings, and legislative information, all of which it is campaigning to be made available in machine-readable formats. The DATA Act, which was proposed last year, recommends consistent use of government-wide identifier codes and markup languages, such as XBRL, to make the data easily searchable.

As for who makes up the group, it is largely formed of a range of vendors and research outfits (14 firms in total), including players in the data warehousing and adjacent technology space such as Teradata, Microsoft, and Marklogic. It also features a board of advisors that have worked in the realm of government advisory — hence their interest in the standards space.

It will be interesting to see whether the work of the new lobbying group has any material impact on the LEI progress going forward. Regardless of any successes it may have in the future, though, its creation is further proof of the rising interest in the data standards space in the post-crisis environment.

It is said that a rising tide lifts all boats. The U.S. insurance industry stands to benefit as much, and perhaps even more, than its counterparts in the financial services industry as the resulting demand for a wide variety of commercial insurance products emerges.

While the JOBS Act is basically designed to reduce regulatory barriers for small businesses seeking to raise capital and reinvigorate startups in general, it could actually serve to redefine the American business landscape. The law allows startups and small businesses to raise up to US$1 million annually through a number of small-dollar donations using Web-based “crowd-funding” platforms. Counterintuitively, small business is actually the main employment engine of America. Although young, high-growth businesses make up less than 1% of all companies, they generate a disproportionately high number — estimated to be up to 10% — of all new jobs.

To be sure, the full impact of the JOBS Act will not be immediate, as implementation efforts, including SEC rule-making and provisions for adequate investor protection, still remain. But the impending changes and opportunities are clear and the starting gun has sounded.

The JOBS Act will fuel insurance industry growth through demand for a broad range of commercial insurance products from directors and officers liability insurance (driven by successful small businesses needing to attract outside directors) to property insurance to workers compensation coverage for growing payrolls reflecting increases in both new hires and wages. Coupled with simultaneous improvement in consumer confidence and spending, which will boost personal lines insurance growth, the overall property & casualty insurance industry growth could well exceed 4% in 2012 — the best rate since 2003.

It seems that the stock market’s recent strong performance may not have been just irrational exuberance after all.

Since the Ex-Im Bank does not contribute to U.S. debt, the Senate’s decision may well prove short-sighted. In fact, its failure to renew the charter could have significant negative consequences for the U.S. economy. More than 4,000 U.S. small businesses are exporters. They also tend to be job creators, and they certainly help balance trade for the United States, whose trade is weighted toward importing. Without the backing of a group like the Ex-Im Bank, many U.S. banks may not lend to small businesses for exporting.

The U.S. Congress has about 70 days to reverse this position and renew the charter; if it doesn’t, dire economic consequences are likely.

Much like previous efforts gone by in the area of data standardization, adoption of ISO 17442 beyond its use as a mere cross-reference point for regulatory reporting will be key if it is to make a difference to financial institutions’ risk teams and their day jobs or client account management or, well, anything else. Regulators and the data management community might be gung-ho about its potential, but when it really comes down to brass tacks, it will take a lot of time, effort, and investment for the standard to make any difference to financial institutions’ operations.

Read more about the regulatory- and industry-related challenges facing DTCC, Swift, ISO et al in the report — check it out here.

This is indicative of a couple of things:

• It underscores the fact that many of the cybercrime threats facing the financial value chain emanate from Russia and the former Soviet bloc with impunity because the perpatrators are not going after FIs in their own backyard.
• This information also provides a great potential deterrent to non-Russian websites hoping to dodge this and other bullets: Add some tags, in Russian, to your website.  They can be buried and don’t have to impact the user experience, but for a short time could get you one small step ahead of the bad guys.

Unless you live under a rock like Rick in one of GEICO’s offbeat commercials, it is hard not to have noticed that the biggest auto insurance companies have more than filled the advertising vacuum (created by the exit of tobacco companies and by retailers hard-hit by a lingering recession) with ad budgets larger than any in industry history.

But what may not be quite so obvious is the continued consolidation taking place in an already heavily concentrated P&C insurance industry. Although there are more than 2,000 P&C insurance companies doing business in the United States, a tiny and shrinking handful of them hold a dominant market share. The 10 largest P&C insurance companies now control 50% of the entire U.S. market, and in the largest segment — auto insurance — that share is held by just five companies. That percentage is up from 45% in 2000. In fact, the top 10 carriers’ share of the auto insurance market jumped to slightly more than 71% from 59% in 2000. For 2011, the top 15 auto insurers’ market share exceeded 75% for the first time in history. While a little of that growth came through acquisition, the majority of it came at the expense of the many smaller competitors. Indeed, three of the top 10 carriers — GEICO, USAA, and Progressive — showed impressive year-over-year growth of 8.2%, 7.0%, and 4.5%, respectively.

And some top-tier P&C insurance companies have also achieved strong growth in their banking operations, including USAA, whose USAA FSB crossed the US$50 billion threshold for total assets during Q3 2011 and ended the year with an asset size of more than US$52 billion, an increase of 16.7% from 2010.

While these well-above-market growth rates and continuing industry concentration may be impressive in such a challenging economy, they may also have more sinister implications for smaller carriers, for industry information technology and service vendors, and for consumers of insurance products — both individuals and businesses.

As these dominant carriers (and their investors) continue to push for additional significant market share growth, consolidation among top-tier carriers will become inevitable, and those transactions will be large. In the process, competition will suffer as it always does, along with consumer leverage, pricing, and service. Perhaps even more seriously, innovation will be de-emphasized, and vendors and investors will back off investments in new product and technology developments. That would further punish smaller carriers who, without the product development, IT budgets, and leverage of larger competitors, will be unable to compete effectively, leading to either insolvencies or distressed sales of those businesses to the survivors.

While this is not a scenario any of us should want to see, the parallels in other, already heavily consolidated U.S. industries, including banking, energy, and communications, may provide disconcerting evidence.