CCDM ATMS

Wincor Nixdorf has introduced the newest “Check and Cash Deposit
Modules” (CCDM) that in addition to the acceptance of bulk deposits of
up to 50 checks or 50 banknotes, the module has been
optimized so that it can accept and process mixed bundles of checks and
banknotes,
irrespective of the way they are presented and that even includes checks
with MiCR and with more cassette
capacity, so armored car services need to attend less often to empty the
system. Cash and checks are validated using the latest, precise image
processing technology. The entire posting process is automated. There is
no need to process cash or checks manually anymore. The costs of cash
logistics are cut significantly,
without any reduction in availability. Interest paid and the cost of
replenishment and emptying are reduced, while the cash supply is made
more secure.

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FIS and OboPay to Introduce a P2P Service

The industry’s first core provider to launch a mobile
phone-based person-to-person payment service is taking shape.
Fidelity National Information Services and Obopay will launch a
person-to-person mobile money transfer service for financial
institutions using FIS core processing services. Obopay estimates there
are 260 million mobile consumers in the USA. Industry research shows
there could be as many as 80 million unbanked U.S. consumers. The FIS
mobile P2P service gives banks will open a new major market for banks.
The new FIS/Obopay service will initially be offered with checking
accounts or prepaid cards linked to the mobile phone. FIS has processing
and technology relationships with 40 of the top 50 global banks,
including nine of the top 10. Last month, Citi announced the launch of
“Citibank Paylink for Commercial Cards” and the launch of a pilot of a
new mobile person-to-person money transfer service with Obopay.
“Citibank Paylink for Cards” integrates a purchasing card into a
client’s accounts payable system. The MasterCard “Payment Gateway” acts
as the network between Citi, the buyer and the supplier. (CF Library
10/15/08)

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MagTek Unveils ExpressCard 1000 Platform

CA-based e-payment provider MagTek has introduced the all-in-one, secure
instant issuance and personalization platform “ExpressCard 1000” The
“ExpressCard 1000” can be economically personalized
using the thermal printer, encoded for magnetic stripe cards,
smartcards and contactless cards, embossed, and color tipped and indent
printed. Cardholders and financial institutions will benefit from
instant, onsite card creation and activation, eliminating the risk of
loss, cost and wait-time associated with mailing. “ExpressCard 1000”
offers a wide array of security features using MagTek’s proven MagneSafe
security architecture, surpassing the requirements of PCI DSS and the
card associations. “ExpressCard 1000” serves as a secure platform to
produce and register each card’s MagnePrint or Dynamic Digital
Identifier. This information can then be used by the financial
institution as part of its risk management analysis for all card present
transactions, enhancing security throughout the payment infrastructure.

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HP POS Offers a Solution-In-A-Box

HP has introduced the “HP POS” bundle that includes everything a
retailer needs to customize a complete in-store POS platform. The new
HP POS bundle is based on the recently introduced HP rp3000 POS
System and includes everything a retailer needs to customize a complete
in-store POS platform. Complementing the HP POS Solution-in-a-box is
the Intuit-HP Retail Solution, available direct from Intuit and its
authorized resellers. The Intuit-HP Retail Solution provides robust POS
functionality and enhanced software offerings to help small and midsize
businesses (SMBs) ring up sales, track customers, monitor inventory and
manage overall business operations. As part of the HP POS
Solution-in-a-box, customers will receive access to more than $1,000 of
value through the HP Total Care Access Card program. This program offers
SMB customers a full portfolio of services, support, security and
business offerings to help them manage, protect and grow their
organizations.

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Private Label Gift Cards Become Less Popular

Three major factors will likely to drive down gift card sales for
retailers but not for banks this year in the USA. New research projects
that sales of private label gift cards will decline by as much as 14%
for 2008 while network-branded gift card sales will rise nearly 6%.
TowerGroup says that the significant decline in the merchant-sponsored
label gift card sector will primarily be driven by a shift to general
purpose gift cards that can to be used on consumable products such as
groceries and gasoline. Also, the overall decrease in retail sales and
the lack of consumer confidence in retailer-sponsored gift card products
will dampen merchant-sponsored gift card sales. TowerGroup projects that
private label gift cards will generate $59.9 billion in total sales
through 2008 year end, as compared to $70 billion in 2007. Branded cards
from financial institutions are expected to grow to $28.5 billion in
total sales in 2008, versus $27 billion in 2007. TowerGroup also notes
that, to date, 36 states have enacted legislation to address private
label gift card issues such as expiration, fees, disclosures, and
escheatment. Early indications are that these protections, along with
awareness that the product is not intended to be a savings device will
further drive down unused card value – from $8 billion in 2007 to $6.4
billion by year-end 2008.

U.S. GIFT CARD SALES
(merchant + bank branded)
2002: $30 billion
2003: $45 billion
2004: $53 billion
2005: $66 billion
2006: $80 billion
2007: $97 billion
2008: $88 billion
Source: TowerGroup

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OneCause & Chase Unveil National PTA Visa

The nation’s largest child advocacy organization has assembled a
general purpose credit card program that generates contributions to
local parent teacher associations. The National PTA, OneCause and
Chase Card Services this week will introduce the “PTA Visa Platinum”
credit card. Under the program the first time every new card is used,
PTAs will earn a one-time $20 contribution. After that, 1% of all Visa
purchases will be contributed to PTAs. There are more than 25,000 PTAs
across the country and more than five million members. Boston-based
OneCause integrates supporters, nonprofits and merchants to increase
contributions by blending social networking with social shopping and
contributions from everyday shopping. OneCause programs have contributed
more than $200 million dollars to thousands of nonprofit causes and
schools since 1999. In addition to the new “PTA Visa” credit card,
OneCause helps PTA supporters earn contributions when they shop at
participating merchants wherein contributions up to 20% per sales is
contributed back to the PTA.

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PCI SSC Offers QA for QSAs and ASVs

The PCI Security Standards Council has launched a QA program for
Qualified Security Assessors and Approved Scanning Vendors. The new
program was designed to provide QSAs
and ASVs with a set of requirements that helps ensure they provide
consistent, quality validation and assessment services to merchants and
service providers. Through the program, the Council and assessor
community will uphold the best interest of the assessor client; adhere
to validation requirements among the assessor company; adhere to
validation requirements among the assessor employee; maintain consistent
assessor procedures and reporting; interpret the PCI standards
appropriately as applicable to the client’s systems & environment;
remain current with industry trends and PCI SSC updates in the
assessor community; report all opinions as factual, documented and
defendable, and; maintain a positive relationship between the assessor
and PCI SSC. Participation in the program will be required for the
Council’s registered QSAs and ASVs, in order for them to retain the
ability to conduct PCI assessments.

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PreCash Names a New Operations/CFO Exec

TX-based repaid card and e-payment provider PreCash for the underbanked
community has named Steve Taylor, previously SVP, as
EVP of Operations/CFO. Taylor has been with PreCash since August of
2002, most recently serving as the
senior vice president of operations. Prior to that role he served as VP
of finance for three years. Taylor also served
as CFO for Assembletech, vice president of finance at TeleCheck Service,
audit manager with KPMG, and manager of planning, analysis and
international accounting at Vinson Elkins. Taylor is a CPA with a
Bachelor of Science in Accounting from Northern Arizona University.

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2008 Holiday Gift Card Sales to Slip 6%

An annual holiday season survey reveals that gift
card sales will decline about 6% this year to about $25 billion.
Obviously the economy is a factor as the research also showed that the
number of consumers who plan to purchase a gift card this holiday season
compared to last year has dropped to 53.5% compared to 56.6% for 2007. Gift card shoppers will be spending less overall on the cards: $147.33 for 2008 versus $156.24 one-year ago. The sixth annual National Retail
Federation’s “Gift Card Survey,” conducted by BIGresearch, also found
that the main reason shoppers plan to buy fewer gift cards this holiday
season was because they feel the cards are impersonal (23%), that they
would rather stretch their dollar by buying merchandise on sale (11%),
and because they do not want to buy a card with expiration dates or
added fees (10%). Other shoppers say they simply do not know which gift
card a person would want (8%), while a small number of people say that
they are worried the gift recipient will lose it (4%) or that the
retailer will go out of business (3%).

GIFT CARD SALES
2003: $17.24 billion
2004: $17.34 billion
2005: $18.48 billion
2006: $24.81 billion
2007: $26.25 billion
2008: $24.92 billion
Source: National Retail Federation

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Gift Cards Fees – a Labyrinth to Navigate

A new study has found significant variance among network-branded gift cards and retailer-branded gift cards. Bankrate discovered that gift cards from American Express cards don’t expire, but there is a $2 monthly service fee after 12 months; Visa cards expire after one year; MasterCard gift cards expire after 24 months, and Discover cards charge a $2.50 monthly maintenance fee if the card has not had any activity in more than 12 months and totally expires after 24 months, whether it has been used or not. To purchase network-branded gift card American Express and Discover gift cards cost $3.95 per card and MasterCard and Visa gift cards will cost around $4.95. Discover, Visa and MasterCard offer free First Class USPS shipping, but AmEx charges a $5.95 fee for the same service. Bankrate noted that the majority of retailers now allow consumers to redeem the gift cards in the store and online, a change from years past. In the latest survey, only CVS, Walgreens, Home Depot, Marshalls and TJ Maxx don’t allow cards to be spent online.

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NFCC Calls for Card Issuer Concessions

Even though the OCC last week shot down a proposal by The Financial
Services Roundtable and the Consumer Federation of America for a pilot
project that permits major credit card issuers to forgive up to 40% of
the amount consumers owe and allow borrowers to pay back the remainder
over time, the National Foundation for Credit Counseling is not giving
up in seeking concessions from top issuers. The NFCC is asking all
creditors to: set consumers’ monthly payments at 2% of their existing
balance, except in cases of extreme hardship where the payment rate
would be further reduced to 1.75% of the balance; waive late and over
limit fees; and trim interest rates to a level that would liquidate the
entire debt in 60 months or less. The NFCC says its counselors have
discovered that many consumers are simply not eligible for debt
repayment plans, sometimes short of eligibility by less than $100 per
month. Plus, over the last several years, plan concessions, including
payment amount, interest rate and program term, have been pulled back by
many creditors. The end result is consumers are left with no other
option but to walk away from their debt or file for bankruptcy. Last
week the OCC said that while it strongly encourages national banks to
work with distressed borrowers, the agency cannot approve a plan that
defers the timely recognition of losses, since that would compromise the
transparency and integrity of a bank’s financial reports and could lead
to a loss of public confidence in the banking system.

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Credit/Debit Rewards Face Restructuring

The weak economy, which is driving down spending and driving up losses,
coupled with potential regulation on interchange fees will likely
pressure a complete revamping of credit card and debit card rewards
programs. Rewards are the key driver of card acquisition, usage, and
retention and are largely funded by interchange fees. New research from
Boston-based Mercator Advisory Group suggests that credit card issuers
need to adjust to the new market by including merchant-funded rewards
programs; seeking out premium merchants; using data analytics for better
targeted marketing; and reviewing non-transactional rewards and programs
combined with non-traditional rewards components. Mercator also found
that forty of the “Top 50” banks currently have at least one debit card
reward program in place, and nearly half of these banks offer multiple
loyalty programs to debit cardholders. Most only reward signature-based
transactions. However, the overall effectiveness of debit card reward
programs in fostering customer loyalty is less clear.
Mercator says it is questionable how much weight customers put on a
debit reward program when choosing a new checking account. Nevertheless,
banks should continue to develop more innovative reward programs to
attract loyal customers and set programs apart from their competitors.
Sometimes, the most attractive reward is not necessarily redeemable by
points or cash back, but rather an efficient and pleasant customer
service experience.

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