VASCO and ActivCard Settle Patent Dispute

Belgium-based VASCO Data Security International and the French firm ActivCard have come to terms over a patent infringement dispute, according to today’s issue of CardFlash International (cardflashinternational.com). ActivCard sued VASCO for infringing on two ActivCard patents, and that the design of VASCO’s “Digipass” products violated ActivCard’s trade dress. The agreement reached this week dismisses the lawsuit, grants VASCO a worldwide license under the patents, and avoids further disputes between the parties as to the current VASCO product line.

Wal-Mart Fires a Shot Across the Bow of Off-Line Debit Cards

After extracting a 30%+ discount in off-line debit card interchange in a recent lawsuit settlement, the world’s largest retailer has set out to get a bigger discount for itself by playing the nation’s two largest credit card networks against each other. As a result, Wal-Mart announced yesterday it is booting MasterCard debit cards out of its store effective February 1st, but will continue to accept VISA debit cards. Wal-Mart says MasterCard’s fees are too high, even though MasterCard debit cards account for less than 1% of Wal-Mart transactions. Wal-Mart insists it will pass the savings on to consumers via lower prices. However, VISA said yesterday that there will not be a definitive or conclusive arrangement for continued VISA debit card acceptance at Wal-Mart until Judge John Gleason issues an order granting final approval of the settlement of the Wal-Mart/retailers’ litigation. VISA says it believes the vast majority of merchants will continue to accept the “VISA Check Card” because of the significant value that it provides to them. MasterCard said it regretted not being able to reach an agreement with Wal-Mart, but said it must manage the MasterCard system in a way that balances the needs of all participants in the system. MasterCard said in the long run, its decision will maintain the strength of America’s highly competitive payment system. MasterCard holds slightly more than a 20% share of U.S. off-line debit card market. According to CardData (www.carddata.com), VISA racked up $118 billion in third quarter gross dollar volume for its off-line debit cards while MasterCard posted $30.4 billion.

VASCO and ActivCard Settle Lawsuit Over Patent Infringement

VASCO Data Security International and ActivCard have come to terms over a patent infringement dispute. ActivCard sued VASCO for infringing on two ActivCard patents, and that the design of VASCO’s “Digipass” products violated ActivCard’s trade dress. The agreement reached this week dismisses the lawsuit, grants VASCO a worldwide license under the patents and avoids further disputes between the parties as to the current VASCO product line.

Consumers Face New Confusion and Fees Using Debit Cards

While Wal-Mart’s decision to deny consumers use of their MasterCard debit cards next year provided fodder for the news media, it clearly demonstrates how consumers will be affected by the retailers’ debit card lawsuit for years to come. Forcing consumers to remember their PINs, whip out their checkbook, or dig in their wallets for cash at the check-out because they have the wrong debit card, will create nothing but confusion in the marketplace, unraveling an established and highly efficient payments system in the USA. On top of the acceptance confusion issue, consumers will also face more fees from banks for the way they use their debit cards. As reported in yesterday’s CardFlash, more banks are phasing in per transaction fees for PIN POS debit card transactions as some banks now penalize consumers for not making at least one off-line POS debit card transaction each month. MasterCard said yesterday that Wal-Mart is putting its hand into its customers’ wallets, and telling them which form of payment they must use. MasterCard says there are more than 50 million Americans who hold MasterCard signature debit cards and use them because they receive rewards from their bank, or perhaps because they are uncomfortable entering their PIN into a terminal in a public place. MasterCard says it is surprising in today’s environment for any merchant to make a conscious decision that will result in dissatisfied customers and lost sales.

Park-by-Phone Solution Launched at CSU

Denver-based Clancy Systems International has launched a parking payment solution called “Park-by-Phone” at California State University at Fresno. This new program will allow drivers to pay for parking in lots and meters owned by participating agencies with a mere phone call. Their parking will fees will be instantly validated and there will no longer be a need to search for correct coins, cash, cards, or other means of payment.

InterCept Suspends Guidance While Talks Underway

Atlanta-based InterCept announced yesterday it will not provide earnings guidance for next year while it considers a proposal to take the Company private. Last month, InterCept announced that a special committee of its board of directors had been formed in response to a possible offer for the company by its CEO. The firm has also engaged Morgan Keegan and Raymond James as financial advisors, and Alston & Bird, as outside legal counsel, to assist its special committee. InterCept reported third quarter revenues of $64.1 million, a 3.4% decrease compared with 3Q/02. Net Income for the quarter totaled $18,000, compared with net income of $2.8 million, for the three months ended September 30, 2002. (CF Library 11/12/03; 11/14/03)

Half of Americans Go Online to Holiday Shop

A new report found that more than one-half of Americans are planning to log on to compare prices, browse, purchase or send electronic cards, compared to 46% last year. The American Express Retail Index on Internet shopping also shows that 31% of holiday shoppers will purchase gifts on the Internet versus 18% in 2002. Holiday Internet users, who plan to buy for more people than their offline counterparts (15 vs. 13 recipients), will spend $1082 on average for gifts this year. On average, they will spend about a quarter of their overall holiday shopping budget online. Men will spend more of their budget online than women (27% compared to 24%). This year, more online shoppers will use the Internet to compare prices (62%, up from 56% of Internet users last year). A majority of Internet gift-purchasers (78%) say deep discounts will motivate them, followed by special storewide sales (69%) and free delivery or gift-wrapping (53%).

HSBC Bank Brasil Installs Fair Isaac’s Falcon Fraud Manager for Debit Cards

The “Falcon” has landed on debit cards in Brazil. HSBC Bank Brasil S.A.-Banco Multiplo is deploying Fair Isaac’s “Falcon Fraud Manager for Debit Cards” to cut losses related to debit card transactions. This represents the first installation of the debit card fraud management system in Brazil. HSBC Bank Brasil has 3.9 million customers. Brazil accounts for the majority of general-purpose cards issued in Latin America, generating more than half of the region’s purchase transactions in 2002. HSBC Bank Brasil also has 5,000 ATMs nationwide. Fair Isaac says that 20 of the top 25 financial institutions worldwide use its fraud detection solutions.

Consumers Still Have Online Fraud Concerns

A new survey shows that Americans will conduct 25% of their holiday shopping online this year even though more than 50% have increased concerns about online fraud. The survey, conducted via Opinion Place, for Chicago-based SPSS, says the number of consumers shopping online this year is up 6% from 2002. However, the research revealed that 52% are at least somewhat more concerned about using their credit card online this year than last. Identity theft is considered to be the greatest concern for 54% of consumers, with credit card theft second at 26%. While 84% feel their passwords are at least somewhat secure, only 44% of respondents never change their passwords. The longer a consumer has been shopping online, the more likely they are to change their passwords. SPSS says that Internet merchants lost nearly $500 million due to fraudulent orders during the 2002 holiday shopping season.

SouthTrust Bank and NetBank Opt for a NCR/Corillian Solution

SouthTrust Bank and NetBank have upgraded their Internet banking services using a solution provided jointly by NCR and Corillian. The solution combines enhanced features and functionality developed and integrated by NCR on the industry-leading Corillian Voyager Internet banking platform, which is hosted and managed by NCR in its eCommerce operations centers. Corillian is the top provider of online banking solutions to leading financial institutions. Empowered with Corillian solutions, some of the world’s most visionary financial institutions provide their customers with the tools to manage their finances more effectively. NCR Corporation is a leading global technology company helping businesses build stronger relationships with their customers.

AMDS Posts Strong Residual Revenue Growth in November

Memphis-based American Merchant Data Services says that residual revenue rose 81% during November. This increase was due in part to strong pre-holiday sales from Prepaid Master Cards, Gift and Loyalty Cards, Check Verifications and the continued growth of new merchant accounts. According to Retail Card Forum, “American Express estimates that retail gift card outstanding balances alone are currently $1 Billion and project they will grow to $15 Billion in the next 2-1/2 years.” American Merchant Data Service is a “value added” independent sales organization engaged in the commercial electronic processing industry.

Sainsbury’s Set to Offer Euronet’s e-pay Top-Up Service at 750 Locations

Sainsbury’s supermarket stores has inked an agreement to use Euronet Worldwide’s electronic top-up services. Euronet’s “e-pay” service enables consumers to purchase additional prepaid minutes for their mobile phone accounts at participating retailers. When the Sainsbury’s rollout is completed, “e-pay” will add more than 10,500 points of sale across 750 locations, including 220 petrol stations, to its retail network for top-up services. “e-pay” now provides this service to all five major UK retailers. “e-pay” currently supports top-up purchases for mobile service providers at more than 73,000 POS terminals in approximately 27,000 retail locations.