Industry Update
NEWS
Affluent Turn Cautious in Spending
The Affluent Market Tracking Study #8 by The American Affluence Research Center (AARC) reveals changes in spending plans of the wealthiest 10% of Americans. These 11 million households represent half of all consumer income and spending. Their projected $57 billion in expenditures for holiday gifts (25% of the estimated total holiday gift market) is 1.6% below 2004 spending levels. Twenty-one percent of respondents expect to spend less for holiday gifts this year while 11% expect to spend more. View highlights of the survey at www.affluenceresearch.org.
EBPP and Low-value Payments Studied
A new report from Aite Group, "Bill Payments: A Biller Survey," provides an overview of the electronic bill presentment and payment (EBPP) level of adoption, billers' goals, results and technology trends.
The survey reveals that billers tend to be satisfied with EBPP's current level of adoption. However, a gap exists between the goals billers have set and their current level of success, particularly in terms of paper and postage savings, call center deflection and customer satisfaction and retention. The survey also confirms that the credit and debit card share of biller direct payments is on the rise.
Aite Group also recently examined low-value (less than $10) payments and found that of the 138 billion cash transactions U.S. consumers make annually, 50% are less than $10. The report, "Low-Value Payments: Looking For the Code Cracker," found that 95% of all transactions below $10 are made in cash.
The study predicted that in the near future, the introduction of contactless bankcards will likely boost issuers' efforts to cannibalize cash; however, unless merchant acceptance costs are reduced, the high cost of bankcard processing will limit the issuers' ability to be successful.
Cash or Checks Top Teens' Wish List
The recent "Money Matters Holiday Survey" conducted by Boys & Girls Clubs of America surveyed 700 teen members nationwide. The survey revealed that 38% of teens prefer to receive cash or a check as a holiday gift.
Other in-demand gifts include cell phones or portable electronics (15%), clothing (12%) and a car (9%). As far as purchasing gifts, 27% of teens surveyed plan to spend up to $50 on holiday gifts this year. Nearly 25% plan to spend between $51 and $100, and 21% intend to spend more than $100.
Half of Online Households Pay a Bill Online
According to a survey conducted by CheckFree Analytic Research Services, 56% of U.S. online households are paying at least one bill online, up from 52% in June 2004. Currently, 87% of users who pay their bills from a single "consolidated" Web site, such as a bank, credit union or Internet portal, say they receive the service for free. The survey determined that the reasons people choose to pay bills at a consolidated site are convenience, speed and control.
Holiday Spending Down Slightly, Conference Board Predicts
U.S. households are expected to spend an average of $466 on gifts during the holiday season, down moderately from last year's estimate of $476, The Conference Board reported. Slightly more than 32% of all households will spend $500 or more on holiday gifts, with 37% spending $200 - $500, and the remaining 30% planning to spend less than $200. About 34% of all consumers will buy holiday gifts on the Internet, up from 33% a year ago.
Department of Homeland Security Studies Identify Theft
The Department of Homeland Security Science and Technology Directorate commissioned an online identity theft and phishing countermeasures report. The report, "Online Identity Theft: Technology, Chokepoints and Countermeasures," defines online threats and assesses technology solutions and best practices as countermeasures.
Download a free copy of the identity theft report at www.antiphishing.org/Phishing-dhs-report.pdf.
PIN Debit Cheaper Than Signature Debit
PIN-based POS transactions cost financial institutions on average 50% less than signature debit transactions, according to the "2005 POS Debit Issuer Cost Study" from First Annapolis Consulting.
The average cost-per-transaction for signature debit is $0.22 while PIN debit is $0.116. Back-office and operating expenses account for 90% of costs for both. The study also found the average fraud losses were more than four times greater for signature debit than for PIN debit and that the average ticket amount for signature debit is $38.34 compared with $40.32 for PIN debit.
Survey Shows Gift Cards Popular With Canadians
Givex Corp. released its annual "National Gift Card Survey" results. SES Research, on behalf of Givex, randomly surveyed 1,003 Canadians and found that 77% cited convenience and flexibility as the number one advantage of giving or receiving a gift card, up 6% over last year.
Furthermore, 73% said they spend more or the same value than what is on their gift card, while only 9% said they spend less. Sixty-three percent said they would reload their cards for convenience, discounts or free products.
ANNOUNCEMENTS
Experian Honored
Experian products were named by Collection Advisor magazine as two of the Top 100 Collection Technology Products for 2005. The company received recognition for Scorex PLUS, Experian-Scorex's credit scoring model, in the Scoring category and MetroNet, Experian's consumer and commercial locater tool, in the Skip Tracing category.
First Data Opens Singapore Office
First Data Corp. officially launched its regional office in Singapore. Grant Lines, Senior Vice President, South Asia Business Development, First Data International, will be responsible for the daily operations of the new office and with business development for the region.
Hypercom Moves Up in FinTech 100 Rankings
Hypercom Corp. climbed to the #33 spot on the FinTech 100 annual ranking of the top technology providers to the worldwide financial services industry, marking a six-point gain over last year's finish.
Ingenico Gains Association Approvals
Ingenico received approvals for its contactless payment expansion module from MasterCard International's PayPass and Visa's MSD contact-less payment.
Litle Inducted Into DMA Hall of Fame
Thomas J. Litle IV, Chairman of Litle & Co., has been inducted into the Direct Marketing Association Hall of Fame. During the late 1970s and early 1980s, Litle created computerized order processing systems and developed systems to facilitate customer service for the credit card industry.
From 1982 to 1995, Litle built what became the industry's largest credit card payment processors for the non-face-to-face retail industry: DMGT Corp. and the original Litle & Co. (both are now part of Chase Paymentech Solutions LLC).
These two companies processed more than 65% of all non-face-to-face direct marketing and Internet transactions in the nation, representing more than $100 billion in non-face-to-face sales and an additional $400 billion in other sales.
Payment Data Systems Inc. to Sell Domain Name
Payment Data Systems Inc. (PDS) signed a Letter of Intent to sell the domain and trademark of Bills.com to Alivio Holdings LLC for $964,500. PDS will retain all assets of Bills.com exclusive of the Bills.com domain and Bills.com trademark.
Freedom Financial Network LLC, a wholly owned affiliate of Alivio, will pay PDS a recurring fee for each subscriber they acquire and guarantee $72,000 in minimum subscriber fees to PDS. PDS will rename subsidiary Bills.com Inc. to Billx.com Inc. or a similar name.
PARTNERSHIPS
Bancpost and AmEx Launch Cards in Romania
Bancpost and American Express Co. (AmEx) announced the launch of the first AmEx credit cards issued in Romania. Bancpost is one of the first banks that introduced credit cards to the market and currently holds more than 22% of the local card market.
Central Jersey Bank and NationalCard Sign Agreement
NationalCard Processing Systems signed a credit card processing agreement with Central Jersey Bank N.A. The agreement calls for NationalCard to provide direct sales and marketing support for Central Jersey Bank N.A.'s ongoing effort to introduce credit card processing to all existing and prospective demand deposit accounts of the bank, and provide cash advance capabilities to all branches.
Certegy to Offer PassMark System
Certegy Inc. will integrate PassMark Security's Two-Factor Two-Way Authentication system with its Internet Banking, Cash Management and Bill Pay system. The new solution will allow Certegy's e-banking customer base to offer their customers protection from online fraud and identity theft. Certegy will begin offering the PassMark system as an add-on to the current version of its e-banking system in the first quarter of 2006.
NYC Renews Official Payments Contract
The City of New York Department of Finance renewed its contract with Official Payments Corp. to provide credit and debit card payment processing through August 2007. The renewal enables New York City residents to continue to make their property tax payments with an AmEx, Discover, MasterCard or Visa debit or credit card, 24 hours a day, seven days a week, via the city's Web site.
CO-OP Network and 7-Eleven Inc. Unite
CO-OP Network and 7-Eleven Inc. reached an agreement to provide ATM access for Network members in 7-Eleven stores across the nation. Approximately 5,300 7-Eleven stores in 30 states will offer surcharge-free ATM access to 24 million credit union cardholders carrying the Network logo.
Wal-Mart Accepts Debitman Cards
Debitman, the electronic payment network for retailer-issued debit cards, announced that Wal-Mart Stores Inc. is now accepting Debitman cards at checkout in all Wal-Mart and Sam's Club locations across the United States.
Purpose Solutions to Launch Credit Card
Purpose Solutions LLC will launch a new credit card program on the Discover Network. Purpose Solutions will issue the card, which is expected to be available in December, through the First Bank of Delaware. Purpose Solutions is a subsidiary of CompuCredit Corp., the 17th-largest general-purpose credit card issuer in the United States.
College Chooses EduCard
Dixie State College of Utah selected IntelleCard software from EduCard LLC to issue co-branded Visa debit cards, create reports and load financial disbursements to students, faculty and employees. To issue and load financial disbursements to Visa debit cards, IntelleCard interfaces with Dixie State College of Utah's operating system.
First Data Expands Wal-Mart and Sam's Relationship
TeleCheck Services Inc. expanded its check services relationship with Wal-Mart and Sam's Club stores. The expansion encompasses four check service areas. First, Wal-Mart is increasing its use of the TeleCheck Electronic Check Acceptance (ECA) service by introducing it into additional markets.
Additionally, for riskier transactions, TeleCheck is providing Wal-Mart its adaptive decisioning tools. TeleCheck is also now the primary provider of check collection services for both stores.
Finally, TeleCheck will host all shared negative database files for Wal-Mart. TeleCheck will provide returned check data to Wal-Mart, and Wal-Mart's returned check data will continue to feed TeleCheck's database.
Norwegian Gamer to Install Hypercom Devices
Hypercom received an order to provide the Optimum P1100 PIN entry payment devices to Norsk Tipping AS, the leading gaming company in Norway. In connection with the initial $1 million order, the state-owned gaming firm will install the P1100 at hundreds of national lottery and betting sites throughout the country to enable consumers to use gambling smart cards within electronic games.
PaySpot Partners With E-Chex
PaySpot Inc. announced a partnership with E-Chex. The partnership enables PaySpot to offer check verification, check conversion and check guarantee to its retailers.
Q Comm Partners With American Cash Exchange
Q Comm International Inc. announced a partnership with American Cash Exchange Inc., a creator of the Poni PIN Card, a United States-to-Mexico money remittance card sold in peso values. Under the terms of the agreement, Q Comm International will process sales of the Poni PIN Card in relevant geographic areas throughout the United States.
Valero and VeriFone Team Up
Valero Energy Corp. and VeriFone implemented an AMBER (America's Missing: Broadcast Emergency Response) Alert distribution system. The system will disseminate critical information about missing children and their suspected abductors through VeriFone's integrated POS systems directly to Valero's more than 1,000 retail stores throughout the United States.
ACQUISITIONS
First Data Completes Acquisition
First Data completed the acquisition of Austrian Payment Systems Services GmbH (APSS). APSS provides Austria's banking industry with debit and credit card issuing and acquiring processing, and card network operations, terminals and ATM processing.
Valutec Card Solutions Acquires Mellennia
Gift card, loyalty and stored value services provider Valutec Card Solutions Inc. acquired Mellennia. Mellennia provides off-the-shelf and customized stored-value solutions to merchants in the retail, financial, healthcare and government markets. The terms of the transaction were not disclosed.
Metavante Completes LINK2GOV Acquisition
Metavante Corp. completed its acquisition of LINK2GOV Corp. The company will become a Metavante subsidiary and continue to operate under the LINK2GOV name.
APPOINTMENTS
First Horizon Announces Key Executives
First Horizon National Corp. announced several key executive changes. The company appointed Jerry Baker Chief Operating Officer. He will be responsible for all of First Horizon's business lines and operations. Charles Burkett has been appointed President of Tennessee and National Banking. He will be responsible for First Horizon's national bank expansion and Tennessee banking.
Sarah Meyerrose has been appointed Executive Vice President of Operations and Technology with responsibility for all business line support functions including technology, operations and servicing, corporate real estate and procurement, call centers, and employee services.
Deluxe Names Interim CEO, Chairman
Ronald E. Eilers has been named Interim Chief Executive Officer of Deluxe Corp. The board of directors separated the positions of CEO and Chairman. Stephen P. Nachtsheim has been elected non-executive Chairman of the Board. Nachtsheim has served as a Director of the company since 1995 and as Lead Independent Director since 2003.
Pelosi to Direct Global Compliance Initiatives
Samantha Pelosi joined Ruesch International Inc. as Director, Corporate Compliance. In addition to directing Ruesch's overall compliance program, Pelosi will serve as the company's liaison to the regulatory community. Prior to joining Ruesch, Pelosi served as Senior Counsel at the Financial Crimes Enforcement Network, Department of the Treasury.
Cash Now Appoints New CEO and President
Cash Now Corp. appointed a new CEO and President, Kevin S. Price. Price comes to Cash Now with a background in investment banking. Cash Now will continue to offer licensing of its technology and developed vendor relationships; however, in moving forward, it will place more emphasis on the sale of loans rather then the sale of the technology.
CO-OP Network Names Vice President of Marketing
CO-OP Network selected Samantha Smyth as Vice President, Marketing. With nearly a decade of integrated marketing experience, including eight years in conjunction with the credit union industry,
Smyth will direct CO-OP Network's strategic marketing for all products and lines of business, including EFT, shared branching and risk management.
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