First Data yesterday confirmed plans to acquire FundsXpress, a provider of online banking and bill payment services for consumers and small businesses. FundsXpress has more than 500 financial institution customers, consisting primarily of community financial institutions. FundsXpressÃ¢Â products include retail and commercial Internet banking, cash management, automated lending, and dynamic Web sites. First Data says the deal will result in a broad and robust suite of products for secure electronic commerce and Internet Banking transactions. FundsXpress was advised on the transaction by the investment banking firm of Lane, Berry & Co.
Macon-Atlanta State Bank has signed an agreement with First Data to provide “STAR Network” access for its debit cardholders and as its primary ATM network. Additionally, the bank is adopting First Data’s fraud prevention and “Card Value Validation” services for its PIN-secured debit transactions. Macon-Atlanta State Bank was one of the first financial institutions in Missouri to offer debit cards to its customers. The STAR Network connects Macon-Atlanta State Bank’s cardholders with account access at approximately 2 million ATM and retail locations. There are approximately 158 million cards carrying the STAR logo.
Retail Expansion Network has introduced “PaidByCash”, a new coast-to-coast cash network that allows online retailers and shoppers to complete a cash transaction over the Internet. “PaidByCash provides a zip code mapping program that directs customers to any one of 60,000 locations in the PaidByCash network, usually a nearby grocery or convenience store. The consumer pays cash at these locations and then verifies their payment on the “PaidByCash” website. The consumer is then instantly issued a Virtual MasterCard that is used to pay the online merchant. Any Internet retailer that currently accepts debit MasterCard can add the PaidByCash logo to their checkout process and immediately begin accepting cash from their customers.
First Data has renewed its agreement to provide signature debit processing for cardholders of SC-based First Federal and also names the “STAR Network” as First Federal’s primary debit network in the USA. The STAR Network serves more than 5,700 financial institutions across the United States and provides cardholders with account access at approximately 2 million ATM and retail locations. There are more than 140 million cards carrying the STAR logo. First Data Corp.’s STAR Network is a coast-to-coast electronic payments network and an expert in secure, real-time electronic transactions. First Data Corp. (NYSE: FDC) is a leading provider of electronic commerce and payment solutions for businesses worldwide.
ME-based Wright Express has signed a 10-year renewal agreement to provide private label fleet card services for Imperial Oil of Canada. The Imperial Oil fleet card programs, which includes Tiger Pro, Tiger Pro Plus, and Esso Business Card, provide small and large commercial and government fleet customers with customizable fleet reports, and convenient Imperial Oil Fleet Online account management, through the added convenience of Imperial Oil’s national network of approximately 2,000 Esso fueling locations throughout Canada. Imperial Oil is one of Canada’s largest corporations and a leading member of the country’s petroleum industry. Wright Express is a leading provider of payment processing and information management services to the U.S. commercial and government vehicle fleet industry.
WA-based Coinstar has launched a new service that will enable bank and credit union customers to electronically transfer coins into personal accounts. The new Coinstar “Direct Coin Deposit” service is expected to be available to banks and credit unions in the first half of next year. Customers simply pour their loose change into the Coinstar kiosk, swipe their bank-issued debit card, and enter their PIN number to have the value of the change deposited into their account. A voucher will be dispensed verifying the amount of the transaction. The process is completely self-service and no teller interaction is required. Banks and credit unions offering the service will determine if a fee will be charged to the customer for the transaction. The new service incorporates Coinstar’s new “Madison” coin-counting kiosk specifically designed for retail financial institution branches.
Bank of the West and First Hawaiian Bank, subsidiaries of BancWest Corporation, have renewed and expanded their relationship with First Data. First Data Debit Services will begin providing PIN and ATM driving services for Bank of the West’s 1.2 million cardholders. FDDS will continue to provide signature debit processing and network access for Bank of the West. First Hawaiian renewed its network agreement with First Data and will begin to utilize First Data Debit Services for PIN processing and ATM terminal driving services for its 750,000 U.S. cardholders. Both Bank of the West and First Hawaiian Bank have chosen First Data’s “STAR Network” as their primary EFT network.
A new study has found that ISOs account for almost half of all ATM placements in the U.S., but, they account for only 10% of the industry’s total ATM transaction volume. Financial institutions’ on-premise ATMs currently average 3,651 transactions per ATM per month, compared to 1,807 for their off-premise ATMs and 329 for ISO ATMs. According to the survey sponsored by CO-OP Financial Services, NYCE, PULSE, and STAR, and conducted by Dove Consulting, the ATM industry is becoming increasingly stratified. In 2004, deployment growth was outpacing transaction growth, resulting in declining per-ATM transaction levels and lower profitability. The research says the search for a new model has resulted not in one new model, but many new models, with deployers bifurcating along two dimensions: ATM access (proprietary vs. shared) and user experience (differentiated vs. undifferentiated). Based on transaction data provided by deployers and estimated segment shares, the study estimates that U.S. ATMs currently perform 8 billion transactions per year — representing $600 billion in dispensed cash.
Total U.S. ATM Transactions
Transactions/ Total Annual
Segment Total ATMs ATM/month Transactions
On-Premise 130,000 3,651 5.7 bn
Off-Premise 71,000 1,807 1.5 Bn
ISO 195,000 329 0.8 Bn
Total 396,000 8.0 Bn
Source: Dove Consulting’s ATM Deployer Study
Canadian Tire Financial Services reported that its net managed credit card receivables for the second quarter increased 11% year-over-year to $3.4 billion. The average credit card balance in the first quarter hit $1829, up 10% from one-year ago, largely driven by the rollout of the “Gas Advantage MasterCard” in Ontario and the increase in the personal loan portfolio. For the prior quarter, the average credit card balance came in at $1832. The average number of accounts with a balance during the quarter was 1.846 million. Financial Services’ pre-tax earnings of $44.5 million were up 3% from the second quarter of 2005. Canadian Tire’s MasterCard receivables represent approximately 92% of CTFS’ total managed portfolio. CTFS’ retail credit card and personal loan receivables make up the remaining portfolio. For complete details on Canadian Tire Financial Services’ second quarter performance, visit CardData (www.carddata.com).
A new study has found that the average total number of debit POS transactions made monthly has increased 2% in the last year, from 15 to 18 transactions per month. The annual “STAR Consumer Payments Usage Study” also found that consumers who use both PIN and signature debit at the POS conduct an average of nearly 23 transactions per month versus 14 for those who solely use signature and 10 for those using only PIN. Those who use both PIN and signature debit accounted for 75% of all debit POS transactions made. Although PIN and signature debit have demonstrated transaction growth, preference of PIN debit over signature debit was 45% to 33%. The First Data/STAR study reveals that consumers age 25-34 report the highest usage of PIN and signature debit at close to 16 total transactions per month overall.
PULSE EFT Association is celebrating this month its 25th anniversary. The network was founded by seven TX-based bank holding companies who linked together for ATMs. Almost 10 billion transactions later, the network provides basic ATM services, as well as a wide variety of ancillary payment products, to more than 4,200 financial institutions across the nation. PULSE links an estimated 90 million cardholders to nearly 250,000 ATMs and approximately 3.4 million POS debit terminals at retail locations in all 50 states. In 2005, PULSE was acquired by Discover Financial Services. PULSE Chairman Stan Paur has been a long-term leader of the Company.
Amtrak’s has introduced wireless electronic credit card processing terminals in all “Acela Express” cafe cars. Previously, attendants needed to hand write ticket and passenger information on paper forms for credit card acceptance. Amtrak says customers who use a credit card to pay for food and beverages in cafe cars typically spend an average of $12 per purchase. Amtrak notes that during the pilot, use of the new electronic devices improved efficiency as most transactions were completed in 15 to 20 seconds. Plans are under way to place terminals on all Northeast Corridor Regional trains between Washington, DC and Boston by the beginning of October and future plans call for expansion of wireless credit card processing terminals in all of the dining cars on Amtrak’s long distance trains from coast-to-coast within the next year.