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Industry Update


Study finds PIN and signature debit on the rise

First Data Corp. released the results of its STAR Consumer Payments Usage Study. The study found that consumers using both PIN and signature debit at the POS conduct an average of nearly 23 transactions per month. Those using solely signature debit conduct 14 transactions a month, and those using only PIN conduct 10.

Over the past five years, average POS debit activity has grown from fewer than eight transactions a month to over 11. Preference of PIN debit over signature debit was 45% to 33%. Security was consumers' leading reason for choosing PIN debit. Additionally, 57% of PIN debit users reported that having the choice to receive cash back resulted in more card usage.

FDIC places moratorium on ILCs

The board of directors of the Federal Deposit Insurance Corp. approved a moratorium on applications for deposit insurance by industrial loan companies (ILCs). It also applies to notices of change in bank control for existing ILCs. The moratorium will provide time to assess developments in the industry, determine if any emerging safety or policy issues exist, and evaluate whether statutory, regulatory or policy changes need to be made.

Discover examines customer service opinions

A recent survey by Discover Card found that 40% of consumers are "extremely satisfied" by the overall telephone customer service provided by banks and financial services companies. Sixty-five percent of respondents reported that reaching knowledgeable customer service representatives is "extremely important." Forty-eight percent find wait times longer than two minutes to be unreasonable.

Loyalty member demographics revealed

A recent study by Maritz Loyalty Marketing found that rewards program members are more likely to have spent a greater amount of money in the past six months than shoppers without rewards cards. According to the study, loyalty program members are more likely to be female, young, living with children under the age of 18 or from the Northeast.

Reports explore growth of credit cards, EFT networks

Mercator Advisory Group's new report, "Declining Credit Card Growth: A Glass Half Full" explores declining growth rates in credit card outstandings and payment volume. The study found that credit card issuers remain profitable, but card receivables and volume growth are slowing.

Mercator also issued "Extending The PIN: Evaluating The Growth of EFT Networks Into New Markets." This report evaluates the consumer preference for debit instruments. It also examines three new markets for card Associations: online transactions, recurring bill-pay environments and contactless/signatureless environments.


CFSI releases highlights

The Center for Financial Services Innovation released "Highlights From The Inaugural Underbanked Financial Services Forum." The document discusses key themes of the forum, as well as information from a post-conference attendee survey. It is available at

CO-OP opens office

CO-OP Financial Services opened an office in Salt Lake City. Chris Kruger is the National Relationship Manager overseeing the office. Kruger joins CO-OP from Ventus Networks. Previously he was a Systems Manager for Diebold Inc.

FastLane opens headquarters

FastLane Secure Payments opened its new corporate headquarters in Boulder, Colo. The building has more than 40,000 square feet and can accommodate 140 employees. The property includes an additional 16,000 square feet for future development.

Hypercom adopts stock repurchase plan; announces earnings

Hypercom Corp. announced a new share repurchase trading plan to facilitate the repurchase of up to $10 million of its shares of common stock. The company has repurchased 21,734 shares of its common stock during the first half of 2006 for a total of $178,732.

Hypercom's revenue for the second quarter of 2006 was $66.1 million, a 10% increase from the same quarter of 2005. The growth was attributable to sales and services expansion in Brazil, increased product sales in Mexico and growth in Central European markets.

MasterCard reports financial results; introduces item-level authorization

MasterCard Inc. reported that net revenue for the six months ended June 30, 2006, was $1.6 billion, a 10.8% increase over the same period in 2005. For the quarter, the company reported net income of $101 million, excluding special items, and a net loss of $310 million, including special items.

In other company news, MasterCard Worldwide will introduce a service designed to increase the use of flexible spending accounts and other medical reimbursement plans by enabling third-party administrators to substantiate purchases in real time using item-level data collected at the POS.

MedCom engages attorneys

MedCom USA Inc. hired the law firm Orum & Roth LLC to begin negotiations concerning the licensing of the patented technology of electronic activation of phone, gift and affinity cards. New View Technologies, which MedCom acquired, reportedly developed the patent and assigned it to MedCom.

NCHA experiences growth

The National Clearing House (NCHA) reported record image volumes of more than 88 million items totaling $56.5 billion for the second quarter 2006, more than doubling the organization's first quarter numbers. NCHA's June 2006 image exchange volumes were 12.5 times higher than June 2005 volumes.

Symbol Technologies ranked #1

VSR Magazine recognized Symbol Technologies Inc. as the market leader in handheld and mobile POS devices in a recent survey of value-added resellers. Symbol took first place in four of the five customer satisfaction categories.

Transmodus adds functionality

Transmodus added new functionalities that include the acceptance of partial payments against outstanding collection debts. New functionality also includes the ability for clients to record a police report or bankruptcy notice and update an address.


AirLink launches ISO handset program

AirLink Mobile rolled out a new handset program developed exclusively for ISOs of PaySpot Inc. SLiNK, the newest mobile virtual network operator program, targets the prepaid wireless market.

Apriva selects InfoGard

Apriva contracted with InfoGard for MasterCard POS Terminal Security program certification. APRIVA is one of the first companies to submit its POS application for MasterCard certification.

BankServ and Commerce Bank offer remote deposit capture

BankServ and Commerce Bank of New Jersey teamed to offer remote deposit image capture services to Commerce's business customers. Commerce private-labeled BankServ's DepositNow! Check 21 and accounts receivable conversion (ARC) technology, branding it "RapidDeposit."

City Holding Co., Elan partner

City Holding Co. entered into a definitive agreement with Elan Financial Services, a wholly owned subsidiary of U.S. Bancorp, to provide credit card services to the company's retail customers. As part of the deal, the company will sell its credit card portfolio to Elan.

CrossCheck partners with FPN; announces VeriFone certification

CrossCheck Inc. will provide check services to Franchise Payments Network clients. FPN will add CrossCheck's Standard Guarantee, ChecksByNet, Check Conversion Plus and Business Office Conversion Plus to its payment service offerings.

CrossCheck also developed and certified check conversion and standard guarantee applications on VeriFone's Omni 3700 family and Vx 570 solutions. The applications support authorizations through CrossCheck's standard and check conversion services.

Discover certifies ViVOtech

Discover Network certified several ViVOtech readers for use with Discover Network's contactless payment application. These ViVOtech technologies are the first readers approved for use with Discover's contactless payment platform.

EProcessingNetwork to support WAY Systems

Merchants can now process credit and PIN-debit transactions through eProcessingNetwork by using WAY Systems' mobile transaction terminals: the MTT 1510 or MTT 1571.

Freestar Bank becomes Moneris customer

Moneris Solutions will provide credit card processing services to Freestar Bank. Freestar signed a three-year agreement with Moneris and will participate in Moneris' referral bank program.

Hypercom earns certification

Hypercom's 32-bit Optimum T4100 received Class A certification from Fifth Third Processing Solutions.

IRN and GETI offer loyalty solutions

IRN Payment Systems chose Global eTelecom Inc.'s gift and loyalty solutions. Integrating GETI's technology into IRN Payment Systems' programs enables merchants to accept and process gift and loyalty cards electronically.

Nexus, Ingenico form alliance

Nexus Software Inc. formed an alliance with Ingenico UK that enables Ingenico to offer an interface into its hardware that is compliant with "eXtensions for Financial Service" (XFS). In turn, Nexus will offer customer support for Ingenico hardware.

NitroSell stores support YESpay

NitroSell Ltd. now integrates with the YESpay payment platform. NitroSell Commerce makes it possible for retailers to operate Web stores that use the same payment processing systems they are already using in-store.

RBS Lynk certifies SLIM CD

SLIM CD software is now certified on the RBS Lynk system. The certification allows retail, restaurant, hotel, direct marketing and e-commerce merchants to use the SLIM CD software with RBS Lynk services. The certification covers all SLIM CD user and developer products.

Secure Check endorsed by hospitals

Louisiana Hospital Association endorsed Secure Check RCK as the preferred vendor for electronic nonsufficient funds (NSF) check recovery. Secure Check RCK will assist members with the recovery of NSF checks written by patients at no charge to member facilities.

TriCipher receives IdenTrust certification

The TriCipher Armored Credential System (TACS) renewed its certification as IdenTrust compliant. IdenTrust will also expand the range of TACS capabilities it hosts on the IdenTrust platform.

Virgin Mobile, NetSpend launch debit card

Virgin Mobile USA and NetSpend launched the Virgin Mobile "Stash" prepaid Visa debit card issued by Inter National Bank. The card is linked to a Virgin Mobile phone, allowing users to earn free airtime.

PPI and Verrus partner

Payment Processing Inc. formed a partnership with Verrus, a mobile commerce provider, to offer integrated credit card payment processing for pay-by-cell-phone parking service.

Secure Payment Systems enhances offering

Secure Payment Systems certified its proprietary gift and loyalty card processing application for use on the PrimeTrex POS terminal manufactured by TechTrex Inc.

World Web Technologies and Shift4 partner

World Web Technologies Inc. and Shift4 formed a preferred partnership. By creating an interface to Shift4's $$$ ON THE NET payment solution, WebRezPro, a Web-based property management system, offers its users high-speed connections to any processor.


TransUnion to acquire Qsent

TransUnion signed a deal to acquire Qsent, a provider of contact and identity management services. Qsent's services support customer acquisition and retention, collections and recovery, and identity resolution applications. Financial terms of the deal were not disclosed.


Ficarra joins ETA committee

The Electronic Transactions Association (ETA) recently appointed Bob Ficarra, Vice President of Partner and ISO Relations of CrossCheck, to its Annual Meeting Program Planning Committee. Ficarra will help guide the development of program content and keynote speakers for ETA's annual meeting and general sessions throughout the year.

I2c hires Marketing Director

David Maynard is i2c inc.'s new Director of Marketing. Maynard joins i2c inc. from WellInvested, where he was Director of Sales and Marketing.

Beck to oversee New Edge Networks

Dan Moffat is stepping down as President of New Edge Networks. Linda Beck, Executive Vice President and General Manager of Business Solutions for EarthLink, will oversee operations at New Edge Networks until the company names a permanent successor.

TNS appoints Robles

Transaction Network Services appointed Edward Robles as Vice President and General Manager for Latin America. Prior to joining TNS, Robles served as an independent consultant in the financial services industry.

Ward new Innovative Card CEO

John A. Ward, III, Chairman of the Board for Innovative Card Technologies Inc., will assume the responsibilities of Chief Executive Officer. Ward is replacing founder Alan Finkelstein, who will remain President and Director. Most recently, Ward was Chairman and Interim CEO of Doral Financial Corp. Ward previously held executive positions with American Express Bank, The Chase Manhattan Bank and ChaseBankCard Services.

The 41st Parameter appoints Vice Presidents

Michael Yakel joined The 41st Parameter as Vice President of Professional Services, eCommerce. Yakel most recently served as Vice President of Emerging Products for Visa U.S.A. He also held senior management positions with American Express Co., First Union Corp. and First Interstate Bank.

David Britton is The 41st Parameter's new Vice President of Product Management. Britton previously held the position of Vice President of Professional Services, eCommerce.

US Merchant Systems announces leaders

Cihat Zeyt, former Chief Operating Officer of US Merchant Systems, is the company's new CEO. Zeyt also serves as a member of the board of directors. Larry Cohn, Co-Founder of US Merchant Systems, is the new Vice Chairman. Previous CEO and Co-Founder, Stuart Rosenbaum, continues on as Chairman.

Catuity names Zwirn

Catuity Inc. named industry veteran Rose Zwirn as Director of Stored Value Programs to oversee both branded and proprietary card programs. Zwirn's credentials include operational roles at Datamark Inc. and ExtraMeasures.


  • The unadjusted consumer price index for all urban consumers ticked up 0.3% in July, according to the Department of Labor. The index was 4.1% higher than the same period last year. The seasonally adjusted index for gasoline prices rose 5.3% in July. Restaurant fare was up 0.3%.

  • The Conference Board reported one-third of American families changed their vacation plans this year due to higher gasoline prices, according to a July survey of 5,000 households. Eight percent of those surveyed indicated they had cancelled vacations. Higher gas prices have affected the commutes of only 17% of workers.

  • Outstanding consumer revolving credit, which includes credit card debt, rose at an annual rate of 9.8% in June, to $820.7 billion, according to the Federal Reserve. Commercial bank interest rates on credit cards for the second quarter stood at 13.14%, down slightly from 13.30% the quarter before.
Article published in issue number 060802

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