SVS’ HQ Gift Cards Intros Gift Card Central

HQ Gift Cards, a division of Stored Value Solutions, has launched “Gift Card Central” kiosks in Atlanta office buildings and residential towers planning to take the program nationwide next year. Office workers and residents in 25 of Atlanta’s class A office developments and residential condominium towers can purchase a variety of retail, dining, affinity and experiential cards at the lobby desks run by Concierge Services of Atlanta. The concept seeks to make gift card-buying even more convenient for busy corporate executives, office workers and luxury condominium residents. Stored Value Solutions provides custom gift card solutions for prepaid cards, loyalty and B2B applications and serves six of the top ten U.S. retailers, annually processing one billion transactions for 600 clients and their 580 million cardholders.

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INGENICO & SAGEM

Ingenico and Sagem Securite have agreed to merge their electronic payment system businesses. Sagem will sell its payment terminal activities operated by its subsidiaries Sagem Monetel and Sagem Denmark in return for more than 10.6 million new Ingenico shares. Post transaction Sagem will become the main shareholder with a 25% stake of the combined businesses. Combined the businesses posted about 646 million euros in 2006 pro-forma revenues. During the first six months of this year, the two companies have seen a marked growth in revenue and profitability, with an operating margin of 12.6% for Sagem and 8.9% for Ingenico. A new Board of Directors of Ingenico will also be formed, comprising 13 members, of whom 7 will be chosen from those representing Ingenico’s current shareholders, 4 will be proposed by Sagem Securite and 2 will be independent. The deal is expected to close next year.

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Planet Group Acquires Opticard Payment Services

Omaha-based Planet Group has signed an agreement to acquire AZ-based Opticard Payment Services. Opticard provides end-to-end gift and loyalty solutions for retailers and merchants. Additional services include check authorization, debit, credit, ACH and electronic benefits transfer. Opticard currently supports more than 7,000 merchants. The Company processes over 20 million transactions per year at nearly 50,000 installed POS locations. Privately held Planet is a provider of IT consulting, payment-enabling technologies and transaction processing services. The acquisition is expected to close on January 1st.

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Two Thirds of Acquirers Offer Free Terminals

First Annapolis recently examined the equipment financing strategies of 19 acquirers ranging from small ISO’s to the largest of acquirer-processors and representing 60% of the industry by volume. Almost two thirds of these acquirers utilize free terminals on the merchant level and approximately 9% of merchants receive a free terminal as opposed to a terminal that is rented, leased, or sold. Many acquirers, and especially the ISO community, have traditionally relied on the upfront revenues associated with equipment to fund their sales compensation plans and field sales organizations. The free terminal phenomenon is occurring at the same time that competition is intensifying and sales productivity is falling causing acquisition costs to increase. Though 9% doesn’t seem like much, for an average ISO, this particular form of price competition is disproportionately disruptive to cash flow precisely because it is front end loaded (as opposed to a reduction in discount rate with the same NPV). But even more fundamentally, when the net acquisition cost (cost net of upfront revenue) of a merchant becomes higher than the value of that merchant in a sale, then most ISO’s main economic premise is fundamentally altered. When the net acquisition cost of a merchant is greater than the lifetime value of that merchant, then it is “game over.”

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Ingenico and Sagem to Combine E-Payment Units

Ingenico and Sagem Securite, both based in France, have agreed to merge their electronic payment system businesses. According to this week’s CardFlash International, Sagem will sell its payment terminal activities operated by its subsidiaries Sagem Monetel and Sagem Denmark in return for more than 10.6 million new Ingenico shares. Post transaction Sagem will become the main shareholder with a 25% stake of the combined businesses. Combined the businesses posted about 646 million euros in 2006 pro-forma revenues. During the first six months of this year, the two companies have seen a marked growth in revenue and profitability, with an operating margin of 12.6% for Sagem and 8.9% for Ingenico. A new Board of Directors of Ingenico will also be formed, comprising 13 members, of whom 7 will be chosen from those representing Ingenico’s current shareholders, 4 will be proposed by Sagem Securite and 2 will be independent. The deal is expected to close next year.

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CCX Selects CPI Card Group for Membership

Card manufacturer CPI Card Group is an Associate Member of the Chicago Climate Exchange and its Colorado plant is Carbon Neutral. CPI purchases 100% wind electricity. Other green initiatives at CPI Card Group include promoting more environmentally friendly products such as biodegradable card stock. CPI is involved with recycling materials used in the manufacturing process, printing with UV inks that are not solvent based and use water-based silkscreen inks that do not generate VOCs. CCX emitting Members make a voluntary but legally binding commitment to meet annual GHG emission reduction targets. Those who reduce below the targets have surplus allowances to sell or bank; those who emit above the targets comply by purchasing CCX Carbon Financial Instrument contracts. Chicago Climate Exchange is the world’s first and North America’s only legally binding rules-based greenhouse gas emissions allowance trading system, as well as the world’s only global system for emissions trading based on all six greenhouse gases. CPI offers a single source for plastic cards from foil cards and holograms, to translucent and smart cards.

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ZAO CITIBANK AWARD

The European Banking Technology magazine has named ZAO Citibank
as the “Best Straight-Through Processing” bank, recognizing the
organization’s exceptional ATM/cash processing rate. Specifically, the
organization is recognizing Citi’s ATM processing for Instant Cash-In
Machines (CIM) and the ability to instantly book the cash deposited.
Moreover, with this recognition, the solution evidently met criteria that
reflected success in getting customers to use the service, customer
expansion and has demonstrated growth in tangible benefits. This was
decided on by a panel of experts in the industry. Citibank ZAO employs
over 3,500, has a $5+ billion balance sheet with distribution network of
over 60 branches and 300 ATM’s in six cities throughout Russia while
Citi has some 200 million customer accounts throughout more than 100
countries.

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Consumer Confidence Stabilizes in December

A monthly barometer has found that consumer sentiment remained low, but stable in December, following a significant drop in November. RBC Financial Group says its research shows that Americans’ expectations for future prospects and their confidence in jobs improved slightly this month, but their evaluations about current conditions and investments continued to decline. The composite “RBC CASH Index” for December 2007 stands at 65.9, compared to 64.0 in November. The “RBC Expectations Index” for December rose 12 points from negative territory. The “RBC Current Conditions Index” slipped again this month reaching 85.3, down 5 points from November’s 90.3 level, and down more than 15 points from October when it stood at 101.1. The “RBC Jobs Index” registered a small gain this month, reaching 113.9, compared to 111.8 in November. The “RBC Investment Index” was down another four points to 79.7, compared to 83.4 last month.

RBC INDEX HISTORICAL
Dec 06: 86.9
Jan 07: 95.3
Feb 07: 103.0
Mar 07: 92.3
Apr 07: 85.4
May 07: 87.1
Jun 07: 81.4
Jul 07: 76.1
Aug 07: 89.3
Sep 07: 71.1
Oct 07: 80.6
Nov 07: 64.0
Dec 07: 65.9
Source: RBC Financial Group

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MOBILE WALLET

Indian banks and M-commerce solution providers have designed a
“Mobile Wallet” solution to provide consumers with enhanced security
when conducting mobile phone transactions. This solution has been
developed as an alternative to the security risks posed with SMS
transaction services with a JAVA based downloadable application.
This application can be used on a GPRS enabled phone that contains
the customer’s account information and allows for payment or
transaction initiation only through PIN verification. The “Mobile Wallet”
is projected to be a popular commodity in the coming months given that
there is currently 33 million GPRS-enabled mobile phones across India,
nearly 3 times as many Internet users.

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EBAY & YAHOO

eBay has returned to the Japanese market after 5 years in its newly
formed partnership with Yahoo Japan. These agreements
stipulate terms of cross border trade among the two organizations
and allow Yahoo visitors to bid on eBay items. These developments
have culminated in the collaborative website managed by Shop Airlines,
“Sekaimon.com”, to make eBay inventory available in the Japanese
language. This is an avenue eBay sees as an opportunity to enforce and
expand its Asian presence and is looking forward to prospective similar
agreements with local partner sites. Shop Airlines will provide for the
website translation to Japanese, oversee shipping, payments and customs
operations, eBay will supply the merchandise and Yahoo Japan will,
ideally, channel its users to bid on “Sekaimon.com”.

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PAX SP30

Pax Technology’s “SP30” PIN Pad has received PCI-PED
certification, replacing its predecessor, the “PP20” terminal. The new
device is powered by the USIP Innova Card microtroller and allows
for a security enhancing USB-wired connection to POS terminals. The
“SP30” has received EMV 1 & 2 certifications, PBOC accreditation,
supports M-Stripe transactions, M-Chip transactions and 14443 A/B
interfaces. The terminal operates on a 32-bit Flash microcontroller, a
random number generator and a memory controller for the provision of
encryption and security. Experts from both organizations expect this to
result in an extended partnership over the coming years.

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ADVANTEX & RAPIDADVANCE

Advantex and RapidAdvance have announced the recent completion of
their sales and marketing agreements. The multi-year agreement with
RapidAdvance holds that Advantex will operate as the organization’s agent
for the sales and marketing of working-capital financing programs across
Canada. Subsequently, this is projected to complement core business
operations of RapidAdvance’s financial performance and afford Advantex
commission and residual fees on both customers gained and customer
renewals. Moreover, RapidAdvance provides merchant cash advances to
small and mid-sized business owners and has seen U.S. renewal rates of
85% while Advantex marketing provides over 700 merchants with its
services.

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