No-Sig Small Tickets Up 25% in 2005

VISA is seeking to expand its small ticket acceptance program by offering acquirers lower credit and debit interchange rates on consumer card transactions of $15 or less in seven new merchant categories. VISA also reports that its volume on purchases of less than $25 in targeted small ticket segments totaled $49.1 billion in 2005, up 25% from 2004. VISA currently has a total of 14 categories for reduced rates for small ticket transactions. The new categories include bus lines, car washes, dry cleaners, laundries, news dealers/newsstands, quick copy services, tolls/bridges. Most of the under $25 tickets are under VISA’s “No Signature Required” program. VISA says that by the end of this year as many as 27% of all VISA transactions may qualify for its “No Signature Required” program. VISA says the merchant segments that qualify for its “No Signature Required” program represents approximately $750 billion in consumer spending.

Small Ticket Card Transactions Historical
2000: $ 5.7 billion
2001: $ 9.7 billion
2002: $14.0 billion
2003: $23.7 billion
2004: $39.2 billion
2005: $49.1 billion
Source: CardData (www.carddata.com)

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American Associates Releases eCheck RDC Solution

American Associates Group’s new subsidiary EPP Secure has released its new
secure “eCheck RDC Solution.” eCheck allows any organization accepting a
large quantity of paper checks to convert those checks to a Check 21
compatible bank exchangeable image. Using the Check 21 system, checks
received are fed through a simple, inexpensive imaging device connected
to any PC with Internet access. Optical character recognition (OCR) in
the secure eCheck software captures the information on the face of the
check. Invoices or receipts
can be scanned with the check and appended to the check image digitally
stored in an easily user-accessible file. American Associates Group
specializes in internet security and alternative payment
processing.

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Internet Users Embrace Financial Services Online

ACNielsen Canada has released the latest edition of its Internet Planner,
an annual survey of Canada’s Internet population. A key insight from this
year’s survey is the continued increase in the number of consumers
accessing the Internet to use financial services. More than half (59%) of
all Internet users currently access online financial services. The
growth in online financial services use by females over the past four
years has outpaced the growth shown by male Internet users (+12 points and
+5 points respectively since 2002). The Internet Planner includes data,
analysis and commentary highlighting potential trends and opportunities
for the future of Internet use by Canadian consumers.

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Zebra Introduces a Rugged Printer

Illinois-based Zebra Technologies has introduced the “RW 220,” a super rugged mobile thermal printer suitable for indoor/outdoor receipt printing and payment processing applications. The RW 220 — designed for printing tickets or receipts up to two inches wide, provides route delivery, field service and other mobile workers an option for printing receipts supported by advanced security standards, including WPA and virtual private networks (VPN).

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Wal-Mart Knocks on the Banking Door

Wal-Mart’s grand plan to operate an Industrial Bank Company in Utah to lower its credit card, debit card and electronic check processing costs drew a cynical response by bankers yesterday at a FDIC hearing. The American Bankers Association says Wal-Mart’s appetite to engage in full-servicing banking represents a threat to the nation’s policy of seperating banking from non-financial commerce. Wal-Mart says its only goal is to save money on transaction costs and will continue to support and expand the 1,150 independent bank branches already in its stores. However, bankers joined together to question Wal-Mart’s credibility, citing its many sins particularly with labor issues. Bankers say Wal-Mart cannot be trusted and that the bank branches in its stores operate under very loose contracts. Wal-Mart receives more than 150 million credit, debit and electronic check payments per month. The giant retailer spearheaded the debit card lawsuit against VISA and MasterCard which led to a record $3 billion anti-trust settlement in 2003.

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E-Bill Payers Beat Offline Customers

New research shows that online bill payment users maintained aggregate bank balances 257% greater, on average, than offline customers. Also, these users maintained deposit balances 205% greater, on average and maintained loan balances 284% greater, on average, than offline customers. The study by Digital Insight concluded that financial institutions derive significantly greater per-customer benefit from online bill payment users than from offline customers due to higher retention rates, average deposit and loan balances and an increased ability to sell products and services online to a receptive customer.

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LIPMAN & VERIFONE

Lipman Electronic Engineering is being acquired by U.S.-based VeriFone for US$793 million in cash and stock. The deal will create the largest global provider of electronic payment solutions and services with annual revenues of nearly $750 million. Lipman produced more than $235 million in sales during 2005, up more than 30% from 2004. VeriFone recently reported that net revenues for the fiscal quarter ending January 31st rose 21% to $134.6 million as profits more than doubled. Terminal manufacturer Lipman Electronic Engineering reported fourth quarter revenues of $68.8 million, an increase of 5% over the prior year and a 27% increase over the prior quarter. Closing is expected to occur by the end of October. Lehman Brothers acted as financial advisor to VeriFone on the acquisition. Merrill Lynch acted as financial advisor to Lipman. For complete details on VeriFone’s or Lipman’s latest performance, visit CardData (www.carddata.com). (CF Library 2/8/06; 3/3/06)

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Debitman Card Names a New Top Exec

CA-based Debitman Card has named Mike Grossman, former CEO of LiveCapital, as its new CEO replacing Scott Hatfield who now becomes VP/Business Development but remains a member of the board. Under Grossman’s leadership, LiveCapital raised more than $70 million. Previously, Grossman was employed at Intuit, where he directed the marketing and development effort for Quicken on CD-ROM and launched the first version of Quicken Deluxe. He also managed Intuit’s first online banking product delivered via the Internet and America Online. Debitman created and operates The Retailer’s Network, an interoperable electronic payment network for retailer-issued debit cards.

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Commonwealth Bank Launches a PayPass Pilot

The Commonwealth Bank will be the first to pilot MasterCard’s “PayPass”
contactless payment technology on its next generation credit card. The
trial will take place on the NSW Central Coast, in the Sutherland Shire
south of Sydney, and in Wollongong over the next six months.
Approximately 35,000 existing customers with Commonwealth Bank
MasterCard cards will be sent a new card with “MasterCard PayPass” and
instructions on where and how to use it. More than 150 merchants will
take part in the trial, including 7-Eleven convenience stores and Subway
stores. To date, there are more than 5 million “PayPass” cards and
devices with more than 25,000 merchants accepting “PayPass” globally.

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GECF and Yamaha Launch a New Card

GE Consumer Finance and Yamaha of America is launching a new private label credit card through more than 1,400 Yamaha music dealers nationwide. The new credit card program will provide special credit promotions exclusively for Yamaha dealers, as well as no-cost marketing support. It complements the installment financing program GE launched in October 2005 for Yamaha piano customers.

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Bain and Advantage Partners Acquire MEI Conlux

Bain Capital and Advantage Partners have announced they have entered
into an agreement to acquire unattended payment systems provider MEI
Conlux from Mars, Incorporated. MEI Conlux has the worldâ™s largest
installed base of unattended payment systems, handling over 1 billion
cash transactions every week. The transaction is subject to normal
regulatory approvals. Terms of the transaction were not disclosed.
Financing for the transaction will be provided by Citigroup Japan and
Nikko Citigroup. Mars Incorporated was advised by Goldman Sachs.
Bain Capital is a global private investment firm with more than
$35 billion in assets under management. Advantage Partners is a
private equity investment firm and manages about $1 billion in
funds.

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