T-Systems GEI GmbH has certified Diebold’s new “EPP4.0” encrypted PIN pad for ATMs as meeting ZKA specifications. Diebold is one of only a few manufacturers to have its product tested by the German testing organization. “EPP4.0s” are used on all of Diebold’s new “Opteva” family of ATMs, as well as its earlier “ix Series” machines and “9x” series machines. Encrypted PIN pads are secure devices that protect a consumer’s PIN once it is entered at an ATM. EPPs are not new but have received more attention recently due to increased consumer awareness of ATM security.
Despite predictions of retail sales growth in the range of 3% to 6%, Canadians racked up nearly 9% more in December retail sales compared to 2002. Based on more than 125 million debit and credit card
transactions from more than 110,000 retail merchant locations spanning 162 retail categories, consumers spent $2.19 billion more at retail locations in December 2003 than they did the previous December.
Card volume in discount stores rose 14% in December while department stores fell 8%. Pet stores posted the strongest year-over-year gain of 25%. Family clothing stores were up 9%, but children’s and infants’ clothing stores were down 6%. Performance in other categories showed: stationery stores up 13%; book stores up 12%; grocery stores up 12%; music stores up 7%; apparel (all apparel segments) up 4%; and, gift, card and novelty stores up 1%. The data were gathered by Moneris Solutions Corporation, the country’s largest processor of debit and credit card transactions.
Westpac has introduced the Euronet “Internet Banking” system in three of its Pacific banking sites, including Fiji, Papua New Guinea and Vanuatu. Westpac Pacific Banking operates across eight Pacific locations and has implemented other self-service offerings from Euronet including ATM, debit card, POS, merchant, telephone banking and bill pay software solutions.The collaboration has been an extended joint project, which has resulted in the redevelopment of the Euronet “Internet Banking” system using the experience and knowledge of Westpac Banking Corporation and IBM Global Services. Westpac Pacific Banking plans to expand the Internet banking service to the Solomon Islands.
PULSE EFT reported that total transaction volume in 2003 was up 26.5%. ATM transactions grew 17% over 2002. PIN debit transactions at the point of sale increased 26%. Signature debit transactions jumped nearly 40% last year. PULSE notes that it added 380 new members during the year in 41 different states, without benefit of merger or acquisition. PULSE currently serves more than 4,300 bank, credit union and savings institution members across the country. The network links an estimated 90 million cardholders with more than 200,000 ATMs and 3.2 million POS terminals at retail locations nationwide.
Upromise and Rewards Network (f/k/a iDine Rewards Network), have rolled-out the “Upromise Hotels by Rewards Network” program, offering credit card users between 3% and 8% off rooms at more than 6,900 participating hotel locations nationwide. Members must have at least one credit card registered with Upromise and search for a hotel room through Upromise.com. Upromise is a service that helps families save for college. Members can automatically earn money for college while making everyday purchases at more than 18,000 grocery and drug stores, 200 online shopping sites, and 9,000 restaurants nationwide, as well as tens of thousands of retail locations. Rewards Network headquartered in Chicago, Illinois, provides loyalty and rewards programs for restaurants and hotels via its registered credit card platform.
Stockholm-based Netgiro Systems and Houston-based Paymetric have signed a strategic alliance. Under the terms of the deal, Paymetric will make Netgiro’s capabilities available through a payment cartridge in its “XiPay Server” architecture, and Netgiro and Paymetric will jointly market the combined solution. The integration will give merchants selling in multiple markets the ability to leverage their “SAP R/3” systems investment and gain increased efficiency and control of the payment acceptance process in dozens of countries, all through a single software and processing infrastructure. With a single and secure interface to Netgiro’s global payment transaction platform, “G-access,” Netgiro’s clients gain access to a unique range of payment methods, currencies and to more than 150 banks and financial institutions in more than 56 countries worldwide. Paymetric has more than 80 enterprise customers including Johnson & Johnson, Colgate-Palmolive, Minolta, Pennzoil-Quaker State and Whirlpool. The company’s flagship product, XiPay, provides real-time payment card and electronic check processing, fraud detection, browser-based graphical reporting tools, support for a full range of payment origination points, processors, and certified interfaces to many existing business systems.
The CEO of eBay, Meg Whitman, will keynote the upcoming “PAYMENTS 2004” conference produced by NACHA. More than 120 educational sessions and workshops will be offered at PAYMENTS 2004, featuring speakers from financial institutions, companies, government agencies, consulting and research firms, and service providers. New this year are two educational “tracks” focused on the business interests of payment system stakeholders. NACHA is the leading organization in developing electronic solutions to improve the payments system. NACHA represents more than 12,000 financial institutions through direct memberships and a network of regional payments associations, and 650 organizations through its industry councils.
Two top issuers are coming together to form the largest general purpose credit card issuer and the third largest signature debit card issuer in the USA. J. P. Morgan Chase and Bank One announced plans yesterday afternoon to merge, creating a $125 billion credit card portfolio and $20 billion debit card portfolio. The combined portfolios will serve 95 million credit cardholders and nearly 9 million debit cardholders. The merger will unseat Citibank as the nation’s largest credit card issuer. At the end of the third quarter, Citibank had about $117 billion in North American credit card outstandings. Citibank has an estimated $103 billion in U.S. credit card outstandings. During the fourth quarter Citibank purchased the Sears credit card portfolio which included approximately $13 billion in MasterCard receivables. Even with the Sears acquisition, Citibank will fall behind the Chase/Bank One portfolio. Bank One currently ranks as the nation’s #3 credit card issuer and Chase ranks as #5. In debit cards the combined portfolio will fall just behind Bank of America and Wells Fargo. The Chase/Bank One portfolio will produce more than $2 billion in credit card profits annually. Over the past twelve months, Bank One has generated $1.13 billion in credit card profits. Both credit card portfolios have been lackluster until recently. Chase reported in third quarter that its outstandings were flat year-over-year, but overall performance metrics were improving. Chase also added 300,000 credit card accounts during the third quarter. Bank One’s third quarter card profits were down 4% over the previous year, but up 2% over the previous quarter. Bank One has been rebuilding its card portfolio over the past two years after its First USA unit tumbled. During 2003, Bank One launched several major co-branded credit cards in partnerships with Disney, Starbucks and Avon.
TOP CREDIT CARD ISSUERS
(as of 9/30/03)
ISSUER RECV CARDS
1. Citibank* $117.4b 105.9mm
2. MBNA $ 81.8b 73.4mm
3. Bank One $ 74.2b 53.0mm
4. Capital One $ 52.5b 48.3mm
5. JPM/Chase $ 50.3b 41.9mm
6. Discover $ 50.0b 50.0mm
7. Amer Exp $ 35.9b 36.2mm
8. Bank of Amer $ 33.6b 25.7mm
9. Household $ 17.6b 30.1mm
10. Providian $ 17.0b 9.7mm
*Citibank includes other non-US North American accounts
Source: CardData (www.carddata.com)
TOP DEBIT CARD ISSUERS
(as of 9/30/03)
ISSUER VOL CARDS
1. Bank of America $43b 18.0mm
2. Wells Fargo $26b 15.0mm
3. Wachovia $16b 5.0mm
4. Bank One $13b 5.0mm
5. U.S. Bancorp $12b 5.0mm
Source: CardData (www.carddata.com)
A sampling of credit unions reporting fourth quarter results so far, show weak performance during 2003. The five mid-sized credit union portfolios, representing more than $500 million in card loans, produced an aggregate decline of 5.7% last year. Golden 1 Credit Union declined 23% to $121 million. Randolph Books credit union increased a mere 4.4%, according to CardData ([www.carddata.com]).
Issuer Outstandings Y/Y Change
America First CU $138,844,928 -1.7%
Golden 1 CU $121,011,380 -22.9%
Delta Employees CU $104,918,000 +1.9%
Randolph Brooks FCU $ 95,239,420 +4.4%
Travis FCU $ 79,073,426 -0.1%
TOTAL: $539,187,154 -5.7%
Source: CardData (www.carddata.com)
Continental Airlines has teamed with AirPlus International to expand UATP travel payment options to corporate businesses. This new product combines the strengths of AirPlus’ full line of corporate travel tools and Continental’s highly effective sales and marketing team, which has produced impressive growth of the Continental UATP program in just more than three years as an Issuer. The original Continental UATP account and all the features that have made it a top selling corporate travel payment product will still be available to corporate customers. UATP is the world’s first corporate charge product. UATP accounts are actively issued by 14 member airlines and accepted as a form of payment for corporate business travel by more than 200 airlines worldwide.
Saks has signed a three-year contract extension for credit card processing services from Fifth Third Bank Processing Solutions. Saks is operating 378 stores in 39 states with nearly $6 billion in annual revenue. Fifth Third Bank Processing Solutions processes 8.2 billion ATM and POS transactions per year for more than 197,000 retail locations and financial institutions worldwide, including The Kroger Co., AutoZone, Abercrombie & Fitch, Nordstrom, Inc. and The Finish Line. Fifth Third Bancorp is a diversified financial services company headquartered in Cincinnati, Ohio.
Louisville-based National Processing reported that net income for the fourth quarter was up 5% to $14.8 million. The Company reported revenue for the fourth quarter of $135.5 million, a 15% increase over one-year ago. Merchant Card Services processed 1.2 billion transactions for the quarter, an increase of 16%. Merchant Card Services dollar volume processed was $51.7 billion for the quarter, a 14% gain. For the full year 2003, Merchant Card Services processed $177.2 billion and 4.3 billion transactions, an 11% and 5% gain, respectively. NPC notes the dollar volume processed has trailed transaction growth primarily as a result of the Company’s initiative to exit merchant processing for airlines, which have a large average ticket per transaction. The Company projects 2004 revenue to be in the range of $490 million to $520 million. For complete details on National Processing’s 4Q/03 performance visit CardData ([www.carddata.com]).