GZS Posts a Slight Profit While Making an Extensive Investment

GZS Gesellschaft für Zahlungssysteme mbH reports it was able to close its 2003 accounts slightly in the black at EUR 0.2 million. Last year, GZS successfully completed the most extensive investment
program in its history, with the resultant processing platforms
providing its customers with much greater flexibility for designing
their card businesses. GZS’s card-processing offering now covers a
broadened spectrum of services ranging from traditional card business
support with extensive integration into banks’ and saving banks’ retail
businesses to the design of sophisticated, non-standard product portfolios. Transaction counts rose in all business areas, resulting in a net increase of 4.3% compared with 2003. The smallest gain was in
issuing processing, with a rise of 2.8 million from 134 million to 136.8
million. At the other end of the scale was cross-border debit
processing, chalking up a gain of 18.3% (51.7 million transactions). Acquiring-processing transactions rose 7.6% (115.5 million) and terminal/network operations, 5.1%. Network operations, however, recorded an absolute growth of 30 million transactions. The total volume of 616 million transactions is unmistakable evidence of the importance which debit business has come to enjoy in Germany.

PAYMENT GAP

This year will be a watershed for Brits as spending on plastic cards will squeak by cash as the the most popular method of payment. Payment volume on credit and debit cards is expected to hit
£269 billion, compared to £268 billion for cash payments, with the gap widening to £179 billion by 2013. According to the APACS’ “The Way We Pay” study, the displacement of cash comes after a year in which the number of plastic cards in use grew by 13 million to 160.6 million, accounting for £243.9 billion of spending. Debit cards accounted for two-thirds of plastic card transactions and more than half of expenditure on plastic in 2003. APACS says plastic card use will be helped by the increasing use of “Chip and PIN,” which will see signatures replaced by PIN authorization of plastic card transactions. The country has invested £1.1 billion in “Chip and PIN” and as a result plastic card fraud has fallen for the first time in eight years.

Alacris Joins the Smart Card Alliance

Alacris has joined the Smart Card Alliance. The Alacris “idNexus 2.0” for Microsoft “Windows Server 2003” simplifies digital certificate and smart card deployment in the enterprise environment. It delivers enterprise class management functionality that maximizes customers’ investment in Microsoft Technologies including Windows 2003 Certificate Services, Active Directory, Internet Information Services and smart card life-cycle support. “idNexus” for Microsoft provides full interoperability and digital life-cycle management support for a growing
number of leading smart card technology providers including Axalto and
Gemplus.

Opt Out Regulations Up for Public Comment

Five federal financial institutions supervisory agencies last week issued proposed regulations that would give consumers the chance to “opt out” before a financial institution uses information provided by an affiliated company to market its products and services to the consumer. The proposal generally would prohibit an institution from using certain information about a consumer it receives from an affiliate to make a solicitation to the consumer unless the consumer has been given notice and an opportunity to opt out of the solicitation. An institution that has a pre-existing business relationship with the consumer would not be subject to this marketing limitation. The proposal is being issued by the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, and Office of Thrift Supervision.

Gemplus’GemAuthenticate Combines with iBIZ’CommerSafe

Gemplus and iBIZ Software announced the launch of their innovative authentication solution for 3-D Secure technology. With the joint solution, based on iBIZ’ “CommerSafe ACS” and Gemplus’
“GemAuthenticate,” instead of using passwords, cardholders are now authenticated in the same way as they do payments at the POS: simply by entering their smart banking card into a reader and their personal PIN code. The companies said that up to 80% of helpdesk calls today are due to password management issues, as these are easily forgotten or stolen. This unique offer can be deployed to all bank’s customers as it is fully compliant with all EMV smart banking cards and payment schemes such as VISA, MasterCard, American Express and JCB.

Heartland’s Chief Executive Named Top Entrepreneur

NJ-based Heartland Payment Systems’ chairman, CEO and founder, was named “Ernst & Young New Jersey Entrepreneur Of The Year” in the category of Financial Services Carr was selected by an independent panel of judges comprised of local community and business leaders from among 31 finalists nominated in eight different industry categories representing 27 companies in 25 towns across New Jersey, such as retail and biotech firms. The Entrepreneur Of The Year awards program was created and is produced by professional services firm Ernst & Young LLP.

Infineon to Offer Ten Year Chip Card Controllers

Munich-based Infineon Technologies plans to offer new chip card controllers for improved security of electronic identity cards and passports. Infineon’s “SLE66CLX640P” security controller is designed for tomorrow’s chip card-format electronic ID cards, while the controller
is intended for integration into electronic passports. Until now, chip
cards have been designed for a maximum useful lifetime of five years,
whereas electronic ID cards and passports are generally valid for ten
years. Infineon’s chips are the only products in the world capable of
supporting both of the contactless interface formats that dominate the
marketplace, ISO/IEC 14443 Type A and Type B, which differ in the data
transmission protocols they employ.

Tidel Technologies Settles Shareholder Lawsuits

Houston-based Tidel Technologies has settled a consolidated shareholder lawsuit for $3 million and two million shares. In the agreement, Tidel and the officers and directors named in the lawsuits continue to deny any and all allegations of wrongdoing, and they will receive a full release of all claims asserted in the litigation. Tidel Technologies, Inc. is a manufacturer of automated teller machines and cash security equipment designed for specialty retail marketers.

MC APMEA EXEC

MasterCard International has named Natalie Lockwood to vice president, Marketing, Asia Pacific, Middle East and Africa. Over the past six years Sydney-based Lockwood has served as MasterCard’s Marketing Director for Australia and New Zealand, instrumental in translating global strategies locally and developing local advertising,
promotions, public relations and sponsorship activity. She successfully launched the popular ‘Priceless’ advertising campaign in the Australia/New Zealand region and has coordinated its
continual rollout. Lockwood was previously
Marketing Manager of the Card Products Division at Citibank Limited

Zinek AB Launches its Mobile Banking System

Uppsala-based Zinek AB has launched its “Mobile Banking” system.
Zinek’s systems are powered by the robust “Mobile Message Engine”
server, which has the scalability and extendibility to fit all the physical demands and characteristics financial institutions can possible throw at it. The feature rich server enables banks to quickly launch services like: account balance requests, recent transaction inquiry,
internal account transfer, stock exchange information requests, alerts and automatic help desk, while many more customized banking services can be seamlessly launched on top of the extendable plug in architecture.
Currently Zinek sells the “Mobile Banking” system / “Mobile Message Engine” server product to service providers, systems integrators, ISP’s and large enterprises, enabling them to launch secure and multiple interactive mobile messaging services into their networks.

BoCOM Signs Diebold to Manage 5,000 ATMs

Bank of Communications has awarded its first contract for managed ATM services to Diebold. According to the agreement, Diebold’s comprehensive managed services, including content distribution, event monitoring, transaction processing data collection based on Web technology, and more, will help BoCOM more efficiently manage its ATM network of more than 5,000 terminals across more than 2,000 business outlets. The project is the first nationwide large-scale managed services deal in the self-service industry within the China market.
In October 2003, BoCOM initiated its nationwide “ATMnet Managed Services” project.

Interest Costs and Operating Expenses Rise

Rising interest costs and operating expenses are continuing to eat into profitability. The after-tax, return-on-assets for credit card issuers dipped to 1.53% in May, sharply lower than the previous two years. However, the current ROA remains slightly above the May 2001 level of 1.49%, driven by lower funding costs over the past three years. The net interest margin declined to 6.69% in May, compared to 8.33% one-year ago, according to CardData ([www.carddata.com][1]). Meanwhile, operating expense has climbed to 5.10%, compared to 4.74% for May 2003, but down slightly from the prior month. For complete monthly and quarterly portfolio performance metrics visit CardData ([www.carddata.com][2]).

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[1]: http://www.carddata.com
[2]: http://www.carddata.com
[3]: http://www.cardweb.com/images/c/charts3/may_aprmetrics.jpg