U.S. Interchange Revenue Rises 18% in 2008

Interchange fee revenue for the U.S. general purpose credit card market
rose an estimated 18% in 2008 and 56% over the past five years. Since
2004 credit card volume has increased about 45% to nearly $2.3 trillion.
According to R.K. Hammer, estimated interchange revenue for 2008 is $39
billion, compared to $33 billion in 2007 and $31 billion in 2006. About
57% of the $169.0 billion in total revenue for U.S. credit card
issuers in 2008 is produced by interchange. Over the past three years
U.S. merchants have declared war on the card networks demanding lower
interchange and labeling interchange as a “hidden tax.” However, past
surveys from Javelin Strategy & Research found that 36% of merchants
indicated cash, and a nearly identical 35% indicated credit card as the
method of payment that has best helped them drive revenue or meet other
business goals. Only 4% cited PIN debit cards and 1% cited store-issued
or private label cards. Another Javelin study found that 56% of
Americans believe merchants would do nothing and that prices would
remain the same if card fees were lowered. In fact, only 19% of
Americans believe that merchants would actually lower prices overall.
(CF Library 5/9/07; 5/21/07)

INTERCHANGE REVENUE
2004: $25.4 billion
2005: $28.2 billion
2006: $31.3 billion
2007: $33.0 billion
2008: $39.1 billion
Source: CardData.com & R.K. Hammer

Details

New Alternative Payment System to Launch

Alternative payment provider Cred-Ex is launching its new payment
solution with identity theft protection. Cred-Ex will grant
instantaneous credit to consumers online on its
website or at its participating merchants’ shopping cart screens.
Merchants will feature the Cred-Ex icon next to Visa, MasterCard,
American Express and Discover. Security-conscious consumers that don’t
want to use their credit cards online will be able to make online
purchases with Cred-Ex. Cred-Ex’s
platform does not require consumers to input harmful personal data such
as their credit card, bank account or Social Security numbers. As a
result, Cred-Ex does not store consumers’ sensitive data on its servers.
This will protect the consumer’s identity. Cred-Ex typically approves a
new application in 5 to 10 seconds. Cred-Ex’s patent also applies to
its new m-Commerce solution. Consumers who have a Cred-Ex account will
be able to use their cell phones to make purchases at the point-of-sale
at participating merchants’ brick and mortar locations and has
satisfactorily concluded testing its m-commerce solution.

Details

Merchant Warehouse and pcAmerica Integrate

Merchant Warehouse and POS provider pcAmerica have partnered to offer
the integration of Merchant Warehouse’s “MerchantWARE”
solution with pcAmerica’s “Cash Register Express and Restaurant Express”
POS systems. The “MerchantWARE” solution contains two core components,
a secure card reader that instantly encrypts card data at the
point-of-swipe to ensure sensitive data is never exposed while
transmitted throughout private and public networks and the “MerchantWARE
Payment Gateway”, which enables merchants to process
credit cards, debit, and EBT cards, manage their account over a secure
Internet connection and store transaction information at the
MerchantWARE host. Additionally, the software provides extensive
reporting features with the capability to re-charge, refund or adjust
previously processed cards, all without decrypting confidential
cardholder data.

Details

U.S. NSF/ODP Fee Income Tops $37B Annually

New research reveals that the average U.S. household now has more than
12 overdraft transactions per year and pays $368 annually in fees.
GA-based bank consultancy Bretton Woods found that bank and credit union
income from NSF and overdraft program fees exceed $37 billion and that
the NSF/ODP fee income by state ranges from nearly $73 million in Alaska
to $4.07 billion in California. Woods noted that on average,
Californians paid $366 per household in NSF/ODP fees in 2008 or 0.6% of
their median household income on NSF/ODP fees. Also, active households
(defined as the 20.2 million households with bank or credit union
accounts who write the majority of NSF items) pay $1,472 in annual NSF
fees. Bank and credit union data used in Bretton Woods’ modeling
determined 1.28 billion separate check and electronic NSF items.

Details

Contactless Expands Among On-The-Go Shops

Contactless acceptance, a natural fit with hurried travelers, will be
spreading to more airports, train stations, interstate thruways and
major hotels. Faber, Coe & Gregg has inked a deal to deploy the “ViVOpay
4500m” integrated contactless and magnetic-stripe payment reader at all
of its food & retail store locations on the east coast.
The new ViVOtech unit also accepts NFC mobile phone payments.
Faber operates newsstands, and café shops such as Hugo Boss, Cubavera,
Diamond Fire, Taxco, L’Occitane, Faber News Now, Dunkin Donuts, Java
Moon, Cuban Coffee, Seattle’s Best Coffee, Wetzels Pretzels, Pizzeria
Uno Express, and Sandella’s Flatbread Café. ViVOtech has shipped over
450,000 contactless terminals to more than 33 countries worldwide.

Details

YOU:NIQUE MASTERCARD

The first personalized picture credit card with a customized value
plan has been launched by Kuala Lumpur-based Alliance Bank. The new
“You:nique MasterCard” enables customers to choose the image that
appears on their card as well as choosing between rebates, rates or
rewards. The value plan choices include cash rebates of up to 2% on all
retail purchases, a low flat interest rate of 9% per annum or “Double
Timeless Bonus Points” on every Ringgit spent. All three options come
with a “Free-For-Life Option” offering a fee waiver for the first three
years, followed by an automatic annual fee waiver with a minimum of 12
swipes for any amount per subsequent year. The new card is part of
Alliance Bank’s current brand campaign of “Banking Made Personal.”

Details

December Consumer Spending Index Edges Up

An monthly index of consumer spending showed a slight uptick in December thanks to lower energy prices. The Deloitte Research “Leading Index of Consumer Spending” posted a 0.3% gain, up from a revised
decline of -0.05% in November. The “Index” is comprised of four components: tax burden, initial unemployment claims, real wages and real home prices. The tax burden is declining slightly while the job market continues to deteriorate. Initial claims are up more than 60% from a year ago real wages are up 3.1% from a year ago, their strongest year-over-year gain since April 1998. Real home prices were down 12% from a year ago but posted a strong 4% rebound for the month. Deloitte notes that consumers are a bit better positioned now that the threats from inflation are receding, although sentiment about the economy remains low.

Details

SINO & TAP

Sino Payments, Inc. has teamed up with Tap Group to provide IP credit/debit card
processing services to customers in China, HK, and elsewhere in Asia.
The initial joint client focus will be for large multinational retailers
with existing locations in China, HK, and other Asia Pacific cities.
Tap Group customers include such household names as AS Watsons Group (Hong Kong, China); Sogo Department Stores (Hong Kong),PCCW (Hong Kong,CTM (Macau)
Robinsons Department Stores (Philippines) Sino Payments proprietary IP transaction processing system was
designed to convert transaction processing systems from old type dial up
point of sale systems connected to sophisticated check out terminals to
a modern seamless IP transaction process, thereby reducing credit and
debit card transaction processing times by half at checkout.
TAP Group integrates Point-of-Sales/Point-of-Interaction (POS/POI) and retail CRM solutions,
TAP provides retailers with the capability to offer a consistent
shopping experience across all channels, all the time, enabling them to
easily and effectively manage the customer lifecycle on a one-to-one basis.

Details

Overall 2008 Cyber Holiday Sales Climb 4.5%

The final numbers show that holiday sales volume was up a modest 4.5% versus 2007 and that the transaction count was up a significant 16.5%. However, the average value per transaction was down an unanticipated 10.3%. Chase Paymentech’s “Cyber Holiday Pulse Index” also reveals that the peak shopping season sales were down 4.5%, but transaction volume was actually up 5.2% – this despite five fewer shopping days during this period versus 2007; the largest day for transactions was Tuesday, Dec. 16th, with 3.96 million transactions. This was only slightly higher than Wednesday, Dec. 17th, which saw 3.95 million transactions; and the largest day for sales was Tuesday, Dec. 2nd, with more than $218 million, topping Wed, Dec. 17th, which saw more than $217 million. The “Pulse Index” tracks the e-commerce activity for a sample of 25 of the top online merchants as measured by Internet Retailer.

Details

Tyfone’s u4ia SMC is Ready for Prime Time

Mobile financial service provider Tyfone, a global provider of mobile
has completed beta testing of “u4ia Secure Memory Card” technology for
highly secure contactless mobile payments and announced joint
system testing with its manufacturing partner NXP. The company recently completed beta testing with 21 global leaders in
the mobile contactless payments arena. “u4ia SMC” is a memory card based mobile contactless payments solution with integrated NFC chipset (secure element), controller and
integrated antenna. “u4ia SMC” currently works in hundreds of millions of phones worldwide and eliminates the requirement for carriers to invest in
multiple related technologies, including: SIM, Single Wire Protocol
and NFC handsets, which together diminish the return on investment
from NFC. The technology operates in any Secure Digital
memory card slot, in any form factor (micro, mini, regular) and is
rapidly gaining market acceptance as a single-strategy approach for both
GSM and CDMA phones. Tyfone is currently scheduling market trials around the world with
mobile operators, financial institutions, and closed-loop fare
management providers.

Details

ViVOtech Hires a Global Sales Executive

NFC provider ViVOtech has hired John Shap, previously with DemandTec, as SVP of Global Sales.
Shap served as SVP, World
Wide Sales & Marketing at DemandTec, a consumer demand
management SaaS solution provider that helps retailers
and consumer product manufacturers strategically plan, optimize, and
execute demand-driven merchandising and marketing programs based on a
qualified understanding of consumer demand. Shap held the same
executive-level position for SPSS Inc., a
worldwide provider of predictive analytics and market research software,
solutions and services that also served the retail and financial verticals.
Shap is a graduate of Northern Illinois University.

Details

First Data Adds Two Proprietary Terminals

First Data has rolled-out two new POS terminals. The new “FD300” is designed for operations that have more than one business at the same location, and the new “FD200” is an all-in-one device that supports multiple payment types. Other features of the “FD300” include a large, easy-to-use color touch screen display; fast downloads via IP with dial-up as back up; terminal/printer combination; future availability of built-in, full browser support; the ability to accept virtually all payment types; five USB ports to support a full range of peripherals; two RS232 serial ports and the option for Wi-Fi. The “FD200” offers multiple TeleCheck processing products including electronic check acceptance, which converts paper checks to electronic transactions at the POS. Other features of the “FD 200” include a single, integrated device with the ability to settle in the preferred payment type; enhanced check imaging technology; dual-CPUs, one for checks and one for all other services; dual-printers, inkjet to void checks and thermal to print receipts.

Details