Investing in Payment Innovations: Risks and Rewards

May 11, 2006 to May 12, 2006
Federal Reserve Bank of Chicago
230 South LaSalle Street
Chicago, IL 60604-1413
Third Floor Conference Center
Thursday, May 11 | Friday, May 12

Thursday, May 11
8:30 a.m.		Registration and Continental Breakfast
10:15 a.m.		Introduction and Welcome Michael H. Moskow, President and Chief Executive Officer, Federal Reserve Bank of Chicago
10:30 a.m.		Investing in Payment Innovations: A Federal Reserve Perspective Donald L. Kohn, Governor, Board of Governors of the Federal Reserve System Text of Speech
11:00 a.m.		Confronting Security Threats Reported security breaches have become a more prominent feature of the payments landscape in the last few years. This panel examined the state of payments security and the best practices for mitigating the attendant risks. Moderator William A. Barouski, Senior Vice President, Federal Reserve Bank of Chicago Presentation (PDF,413KB) Mikko H. Hyppönen, Chief Research Officer, F-Secure Corporation Presentation (PDF,1.24MB) Daniel J. Larkin, Chief, Internet Crime Complaint Center, Federal Bureau of Investigation Presentation (PDF,5.92MB) Rick Siebenaler, Principal, Deloitte and Touche USA, LLP Presentation (PDF,1.68MB) John Stewart, Vice President and Chief Security Officer, Cisco Systems, Inc. Presentation (PDF,682KB)
		What are the most important near-term security threats? How should firms develop effective strategies for mitigating them? Is the movement from proprietary to open systems making payment systems too vulnerable?
12:30 p.m.		Luncheon
2:00 p.m.		Emerging Technologies at the Point of Sale Alternative payment technologies such as radio frequency identification (RFID) and biometrics are a growing presence at the point of sale. This panel explored the different perspectives of end-users and payment providers regarding the successful adoption of these technologies. Moderator Tony Hayes, Vice President, Dove Consulting Group, Inc. Diane Offereins, Executive Vice President and Chief Technology Officer, Discover Financial Services, LLC Scott Rau, Senior Vice President, JPMorgan Chase & Co. Presentation (PDF,200KB) Gary Charboneau, Executive Vice President, Duane Reade, Inc. Presentation (PDF,150KB) Martha Smith, Assistant Treasurer, McDonald's Corporation
		What factors influence your choice of technologies to promote? How do you persuade your customers to adopt new payment instruments? Do you see the point-of-sale environment dominated by a single technology in the future?
3:30 p.m.		Break
4:00 p.m.		Prepaid Card Applications This panel explored the diverse applications of prepaid cards. Panelists discussed the reasons behind the recent growth in prepaid cards and what factors may have affected their growth. Moderator Gary Palmer, Chief Operating Officer, e-Funds Prepaid Solutions, Inc. Talbott Roche, Senior Vice President, Blackhawk Marketing, Inc. Terrence J. Cooney, Marketing Executive, HealthBenefit Corporation Presentation (PDF,5013KB) Jack Sipes, Cash Manager, American Red Cross Presentation (PDF,22KB) Andrew Crowe, Vice President, MasterCard International Presentation (PDF,1023KB)
		What end-user benefits do prepaid cards offer versus existing payment methods? What factors did you consider when deciding to offer prepaid cards? How does the legal and regulatory landscape affect the prepaid card marketplace?
5:30 p.m.		Day One Summary Richard D. Porter, Senior Policy Advisor and Vice President, Federal Reserve Bank of Chicago
5:45 p.m.		Reception
Friday, May 12
7:45 a.m.		Continental Breakfast
8:45 a.m.		Introduction Charles L. Evans, Senior Vice President and Director of Research, Federal Reserve Bank of Chicago
		Investing in Payment Innovations: An Industry Perspective Anil D. Aggarwal, Chief Executive Officer, Prepaid Media, Inc.
9:15 a.m.		Investment Strategies Recent technological advances offer the potential to improve access to payment channels and the underlying payment processes. This panel addressed criteria that investors use when choosing in which promising payment technologies to invest. Moderator David Hochstim, Senior Analyst, Equity Research, Bear, Stearns & Co. Presentation (PDF,174KB) W. Thomas Smith Jr., Founder and Managing Director, Total Technology Ventures Presentation (PDF,174KB) Eric Dunn, General Partner, Cardinal Venture Capital Presentation (PDF,1.64MB) Patrick C. Foy, President, Bank Servicing and ePayments Group, Fiserv, Inc. Presentation (PDF,160KB) Mark S. B. Tiggas, Senior Systems Architect, Enterprise Payment Strategies Architecture Group, Wells Fargo Bank & Co. Presentation (PDF,272KB)
		What are the key characteristics of a successful payment technology? At what point in the product cycle do you typically invest? What kind of payment investments offer the most value?
10:45 a.m.		Break
11:00 a.m.		Cross-Border Payments This panel explored the challenges that financial institutions and end users encounter when making cross border payments. Regulatory challenges and payment solutions were discussed. Moderator Daniela Russo, Deputy Director General, Payment System and Market Infrastructure, European Central Bank Presentation (PDF,87KB) Joan Rosás, Director of International Division, la Caixa Presentation (PDF,416KB) George Zinn, Vice President and Treasurer, Microsoft Corporation Eileen Dignen, Managing Director, Global Payments, Citigroup, Inc. Presentation (PDF,135KB) Emery Kobor, Policy Advisor, U.S. Department of the Treasury Presentation (PDF,1.36MB)
		What are the challenges and opportunities with international payment flows? What forces are shaping the cross-border payment infrastructure? Are regulatory compliance costs affecting the provision and pricing of cross-border payment services?
12:45 p.m.		Closing Remarks Sujit Chakravorti, Senior Economist, Federal Reserve Bank of Chicago
1:00 p.m.		Luncheon We would like to thank the speakers who graciously consented to post their presentations above. Last updated: May 31, 2006