HSA Market Poised for Rapid Growth

A new study forecasts that large banks will support 40% of the health savings accounts market by 2010, up from 20% this year. Boston-based Aite Group also forecasts that specialty banks will support about 35% of the HSA market by 2010, up from 30% in 2006. The market currently represents about 1.9 million HSAs, but Aite Group is forecasting it to reach 11.2 million by 2010. The researcher says HSAs represent the first intersection of three different aspects of the financial services industry: banking, health insurance and investments. Aite also notes that the IRS and the U.S. Treasury will likely continue to issue periodic guidance on HSAs, but they are not likely to do anything that would suppress demand.

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Banks Most Trustworthy with Data

A new poll has found that 66% of consumers identified banks as the most trustworthy with their personal information. In a distant second place, government agencies received 11% of the vote, and universities were third with 10%. Retailers and data brokers garnered 3% and 2%, respectively. The American Bankers Association says its poll, conducted last month by Ipsos Reid, reflects the low incidence of data breaches at banks versus merchants.

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Oregon Bank Offers Coinstar’s Card Line

OR-based West Coast Bank is now offering customers the Coinstar line of gift card, prepaid wireless, cash card, and phone card products. Included in the product line are gift cards from top food, entertainment and retail businesses such as Chili’s, Borders(R), Starbucks(R), Circuit City(R), AMC Theatres(R), KB Toys(TM), and Timberland(R). Coinstar, Inc. (Nasdaq: CSTR) is a multi-national company offering a range of 4th Wall(TM) solutions for the retailers’ front of store consisting of self-service coin counting, electronic payment solutions, entertainment services and self-service DVD rental. West Coast Bancorp (Nasdaq: WCBO), one of Oregon Business Magazine’s 100 Best Companies to Work For, is a Northwest bank holding company with $2.3 billion in assets, operating 56 offices in Oregon and Washington.

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LINK & PULSE

LINK Interchange Network, the operator of the “UK Cash Machine Network,” announced a reciprocal agreement with PULSE that will allow the 4,200 financial institution participants in the PULSE ATM/debit network to offer their cardholders access to all but a handful of the more than 58,000 cash machines across the U.K. The deal will also allow LINK to offer its 38 participating financial institution members access to an additional 250,000 PULSE cash machines in the USA. PULSE and
LINK are working to enable the first live transactions early in 2007. The agreement allows PULSE and LINK issuers to opt into the program.

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Firestone to Accept the Wright Express Card

Bridgestone Firestone is now accepting the Wright Express fleet card at its more than 5,000 participating locations nationwide. This latest agreement continues to extend the number of accepting locations and automotive services available for purchase using the Wright Express Universal Card, a one-card solution that provides fleets an easy way to manage both fuel and service costs. BFS Retail & Commercial Operations, LLC (BFRC) is headquartered in Bloomingdale, Ill., and operates more than 2,200 consumer and commercial vehicle service and tire locations across the United States and Canada, including the Firestone Complete Auto Care, TiresPlus, ExpertTire and GCR Tire Centers store locations. Wright Express is a leading provider of payment processing and information management services to the U.S. commercial and government vehicle fleet industry.

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I.C.E. to Process for the Sweet Factory

CA-based International Card Establishment has signed an agreement to process credit card purchases at 111 Sweet Factory stores in 23 states. The agreement calls for I.C.E. to install credit card terminals at each Sweet Factory location and process credit card purchases; the rollout is substantially complete. Neos Merchant Solutions is full service payment processing company offering a turnkey solution to today’s retail merchants. I.C.E. is a rapidly growing provider of diversified products and services to the electronic transaction processing industry.

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Under $25 Ticket Volume Rises 17% This Year

VISA reported that its volume on U.S. purchases less than $25 in targeted small ticket segments totaled $27.3 billion in the first six months of the year, an increase of 17% over the same period in 2005. VISA also released a new survey that show Generation “P”, referring to consumers ages 18-25, is leading the trend of increased use of payment cards for everyday purchases. Sixty percent of Generation “P” prefers payment cards for purchases less than $25, particularly in new and emerging segments such as digital content, vending machines, public transportation, parking and newspapers. VISA says the “No Signature Required” program and the “Small Ticket Payment Service” have been key drivers of the increased volume. The “Small Ticket Payment Service” offers acquirers decreased credit and debit interchange rates on consumer card transactions of $15 or less in 14 merchant categories.

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Discover Card to Launch a New Ad Campaign

Discover is unveiling a new national advertising campaign this weekend. The campaign will focus on Discover Card’s commitment to clarity, control, rewards and service for its 50+ million cardholders. The new campaign will include integrated broadcast, print and online advertisements that begin by asking a series of “What if” questions that encourage consumers to consider what it would be like to have a credit card from a company that understands their needs and is committed to giving them more of what they want and less of what they don’t. The advertisements will feature animated scissors cutting up credit cards tossed to them by consumers who are relieved to get rid of them and move to a new relationship that puts them first. The advertising was developed in collaboration with The Martin Agency, and represents Discover Card’s first project with the firm since the agency’s selection in April.

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