First Data and Wells Fargo have reached an agreement for FDC to acquire Well’s Instant Cash Services business. Instant Cash Services provides debit card and ATM payment processing services for more than 500 community banks, credit unions, thrifts and non-financial institutions in 20 states. The business was created in 1977 by Northwestern National Bank of Minneapolis, a predecessor of the former Norwest Corporation, to process payments for community banks and credit unions in the Upper Midwest. First Data will continue to operate the Instant Cash Network under the “Instant Cash” brand. Financial terms of the transaction were not disclosed.Details
VISA is reportedly gearing-up to launch a new high-end card to compete with American Express’ high volume card users. The new “VISA Signature Preferred,” to be introduced in mid-April, will be aimed at cardholders charging more than $50,000 per year. The Wall Street Journal noted that VISA USA will charge 14% more per transaction than the current rates for “VISA Signature.” The WSJ says the VISA rate will be an average 2.27% of a transaction on the “Signature Preferred” card, compared with 1.99% on other high-end cards from VISA. VISA says “Signature” cardholders generate an average annual spend per active card of roughly $25,000. In the third quarter of 2006, volume on “VISA Signature” grew 16.8% to $34 billion, in a year-over-year comparison. (CF Library 2/13/07)Details
Biometric leader Pay By Touch and Saatchi & Saatchi Worldwide have teamed to build a global “Lovemark”. Through the alliance, Saatchi & Saatchi will provide Pay By Touch with strategic and creative counsel to build the “Lovemark” by providing business strategy, brand identity, industrial design, advertising, direct response, in-store marketing and interactive. Pay By Touch has introduced its new “SmartShop” service that let shoppers make purchases and get personalized rewards with the touch of a finger. “SmartShop” gives shoppers customized offers on the products they buy most when they enter the store before they shop. More than 3.6 million consumers are using Pay By Touch in 3,000 locations across 44 states, the UK and Singapore.Details
After some rough sailing in the first half of last year, Oberthur Card Systems says cost controls and a pick-up in European sales paid-off in the second half. Total annual revenues rose nearly 5% to $698.4 million but net income plummeted from $40.9 million for 2005 to $12.7 million for 2006. In the microprocessor card segment Oberthur posted a 39.4% gain, delivering more than 271 million cards last year. Revenue in the magnetic stripe card segment rose by 3.5% to $104.1 million. The services and personalization business, which is tightly linked to smart card deliveries in banking, reached $142.5 million, a 4.7% increase year-on-year. Europe represented the largest region with revenues at $334.7 million but posted an 8.5% fall essentially due to unfavorable cyclical trends in the payment segment in the UK. North America grew by 16.1% compared to 2005 with sales reaching $179.4 million. Under the leadership of its new CEO, Philippe Geyres, Oberthur says cost controls remain in place with on-going reviews of all its operations worldwide. For complete details on Oberthur’s latest performance visit CardData ([www.carddata.com]).
2002: $586.8 million
2003: $573.3 million
2004: $599.7 million
2005: $667.4 million
2006: $698.5 million
Source: CardData (www.carddata.com)
Gemalto reports that annual revenues slipped 1.5% last year to $2.26 billion due to extreme price pressure in the SIM mobile card and EMV smart card segments. Profits collapsed to $2.1 million, compared to $180.8 million for 2005, due to merger-related expenses and other extraordinary items. The average SIM card selling price was down 31% at constant exchange rates. However, the year-on-year price decrease improved throughout the year from 34% in the first half year to 32% in the third quarter and 25% in the fourth quarter. Deliveries of microprocessor cards were up 20%, driven by on-going EMV deployment, primarily in North Asia, Latin America, Turkey and Russia. Average selling prices decreased, reflecting more intense competition in certain high growth markets migrating to EMV. Deliveries of microprocessor products (mainly contactless, high-end cards and e-passports) were up 81%, fueled by the initial deployments of large scale identity programs, mainly in Europe. For 2007, Gemalto says cost synergies from the Gemplus-Axalto merger are materializing progressively in line with the Company’s expectations, but they will not be sufficient to offset the adverse effect on the operating margin of the strong price decline of the last twelve months. For complete details on Gemalto’s latest performance visit CardData (www.carddata.com).Details
Spending on the contactless hardware, software, and services market
will grow at a compound annual growth rate of 25% for the next five
years. A new report says proprietary transportation ticketing, and open
credit, debit, and e-purse payments tied to financial service networks
are the primary drivers for contactless transactions. ABI Research
estimates that the contactless support market will grow from $260
million last year to $800 million by 2011. Contactless transportation
ticketing dominated spending on contactless hardware, software and
services in 2006, accounting for more than four times the expenditure in
the banking market; however, by 2011 card issuers and other financial
groups will be spending three times as much as transportation providers.
ABI notes that it is in Japan and South Korea that contactless
technology is making the greatest headway, in part because contactless
payments have been built on the foundations of contactless
transportation ticketing with a large degree of interoperability between
the two payment environments.
Lloyds TSB, with The London Organizing Committee of the Olympic Games,
has announced that it has become the exclusive Banking Partner and first
domestic partner of the London 2012 Olympic and Paralympic Games. This
partnership gives Lloyds access and category marketing rights to Team GB
and Paralympic GB for Beijing 2008, Vancouver 2010 and London 2012. The
company will focus on youth and bringing the Games to the wider
community. Partner companies are vital in providing the 2 billion GBP
necessary for essential goods, services, infrastructure, technology and
personnel to stage the Games. Over the past twenty years, Lloyds TSB
Foundations has made grants totaling over 300 million GBP to grass roots
charities throughout the UK.
BBS and PBS have agreed to merge their card transaction processing activities into a new company. The new company, Northern European Transaction Services, will handle an annual volume of more than 3 billion transactions. Nordea, the largest bank in the Nordic region, has decided to consolidate its card acquiring transaction processing in Denmark, Norway and Sweden through NETS. BBS and PBS will own 50% each of NETS. NETS will offer its services in the North European markets, and aims at 5 billion transactions within the end of 2008.Details
Citi Platinum MasterCard customers will now be able to collect “iTunes
music points” to be redeemed at Apple’s online music store. Cardholders
earn one “iTunes music point” for every 1 GBP spent on their card. For
example, one music track costs 79 pence and requires 150 points. The
points can also be used to exchange for iPOD movies, entire music albums
and MP3 Players. Cardholders need to have accumulated 150 points before
they can start to redeem them and, if they spend 250 GBP worth of
purchases within three months of receiving their Platinum MasterCard,
they will earn 2000 bonus points.
Wirecard will work with IT consulting company e-velopment of the
Schneider Group on electronic payment solutions and risk management for
mail-order business. e-velopment develops solution requirements of mail
order businesses using its’ software platform, “360degrees.” Wirecard AG’s software platform is used by more than 6,000 companies across the globe.
From December 2005 to December 2006, credit card debt rose $21 billion.
In the same period, the number of bankruptcies filed rose by 20%.
Correlating with these statistics, credit provided to private consumers
rose 14.9 % and spending has risen 5% between January 2006 and January
2007. Due to the detrimental impact this tends to have on the family
institution, Pia Vogel, managing director of HomeSource homeowner
advocacy, is pushing for government policy limiting excessive credit
card spending. Vogel pushes for government regulation citing that
financial stress is a major contributing factor to family break-ups.
First Data has partnered with mobile payment provider, NCS Network, in
an agreement to offer “Crandy” e-commerce and mobile payment services.
The new service currently provides merchants with a mobile payment
system for handling micro-payments and customers with an easy payment
solution. To establish “Crandy” service, the customer calls, requests an
account and their mobile number, essentially, becomes their “Crandy”
account number. As a result of the payment solution, on-street ticketing
and vending merchants stand to gain revenue as consumers use the mobile
payment option over cash. Furthermore, the service reduces merchant and
consumer transaction costs because of transaction routing efficiency.
Also, Banks and other issuers can offer services to merchants and
consumers. “Crandy” currently serves 360,000 consumers in Europe.
First Data serves 4.9 million merchant locations and 1,900 card issuers.