Contactless Awareness Grows in 2005

A new survey shows that four out of ten consumers are aware of ExxonMobil’s “Speedpass” contactless program while only 20% are aware of the American Express “Express Pay” and MasterCard “PayPass” contactless programs. Less than 10% say they have heard of “blink” from Chase or “VISA Contactless.” Overall, more than half indicated awareness of at least one of the programs according to the September survey by Atlanta-based SYNERGISTICS RESEARCH. However, the recent aggressive issuance of “blink” cards from Chase is likely to raise consumer awareness of all contactless cards in the USA. In January, Chase reported it issued more than six million of its credit cards with “blink” in nine states. SYNERGISTICS says 20% report that they are aware of contactless payment compared to one in seven who reported awareness in 2004. (CF Library 1/11/06)

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Tier Signs a Government Business Exec

Tier Technologies, which owns Official Payments Corp, has hired Steven Beckerman, formerly with Certegy Card Services, as SVP of Government Business Process Outsourcing. Beckerman brings over 25 years of successful executive leadership and hands-on management experience in sales, operations, administration, cost containment and strategic planning in a number of diverse industries. Mr. Beckerman joins Tier from Fidelity National Information Services, Inc. (formerly known as Certegy, Inc.), where he was Senior Vice President of Product Management for Certegy Card Services, Inc., Certegy’s card processing division. In this role he was responsible for the development and management of card issuing, loyalty and internet products for more than 6,000 financial institutions across North America. Prior to joining Certegy, Mr. Beckerman was Senior Vice President for First Data Oil Services, a division of First Data Corporation, where he managed the Oil Company and Private Label Credit Card Operations Center.

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MERCHANT FEES 4Q/05

The average merchant service fee charged by Bankcard, MasterCard and VISA in the fourth quarter edged up slightly while fees charged by American Express and Diners Club remained more than twice as high. Yesterday, the Assistant Governor of Financial Systems for the Reserve Bank of Australia confirmed that since it forced pricing reforms on VISA and MasterCard in 2003, the market share of American Express and Diners Club has climbed from 14.5% to 16.5% and that the year-on-year growth in the value of transactions for all credit cards has declined to less than 10% compared to nearly 30% five years ago. The pricing advantage has enabled American Express and Diners Club to offer more generous rewards program. The average merchant service fee charged by Bankcard, MasterCard and VISA in the fourth quarter rose slightly to 96 basis points but remains down by three basis points compared to one-year ago, but up four basis points from the prior quarter. American Express’ average merchant service fee declined by five basis points to 2.30% from the prior quarter and eight basis points lower than one year ago. Diners Club edged up by four basis points to 2.33%, compared to the prior quarter.

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Merchant Fee Reforms Alter the Landscape

The average merchant service fee charged by Bankcard, MasterCard and VISA in Australia for the fourth quarter edged up slightly while fees charged by American Express and Diners Club remained more than twice as high. Yesterday, the Assistant Governor of Financial Systems for the Reserve Bank of Australia confirmed that since it forced pricing reforms on VISA and MasterCard in 2003, the market share of American Express and Diners Club has climbed from 14.5% to 16.5% and that the year-on-year growth in the value of transactions for all credit cards has declined to less than 10% compared to nearly 30% five years ago. The pricing advantage has enabled American Express and Diners Club to offer more generous rewards program, according to this week’s CardFlash International. The average merchant service fee charged by Bankcard, MasterCard and VISA in the fourth quarter rose slightly to 96 basis points but remains down by three basis points compared to one-year ago, but up four basis points from the prior quarter. American Express’ average merchant service fee declined by five basis points to 2.30% from the prior quarter and eight basis points lower than one year ago. Diners Club edged up by four basis points to 2.33%, compared to the prior quarter.

MERCHANT SERVICE FEES
3Q/04 4Q/04 1Q/05 2Q/05 3Q/05 4Q/05
Bankcard/MC/VS: 0.97% 0.99% 0.94% 0.91% 0.92% 0.96%
American Exp: 2.38% 2.38% 2.36% 2.36% 2.35% 2.30%
Diners Club: 2.32% 2.34% 2.30% 2.31% 2.29% 2.33%
Source: Reserve Bank of Australia

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Checkgateway Inks an Account Executive

Phoenix-based Checkgateway has hired Norman Neracker, formerly with The Trane Company, as account executive. Previously, Neracker worked as an office manager and sales services coordinator at Friedman Recycling Company where he oversaw all office functions and was also the liaison for all customer accounts. Prior to that, Neracker was a senior sales representative at Boise Cascade Office Products. He has also worked in the past for VISA USA as a manager in the merchant training department. Checkgateway is a provider in the Automated Clearing House (ACH) payment processing industry.

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Debitman Card Lands Sales Executive

Debitman Card, Inc., creator of The Retailer’s Network debit card payment system, announced the appointment of financial services industry veteran Anthony Ruebner as vice president of sales and relationship management. As vice president of business development at Dun & Bradstreet, Ruebner directed alliance and product development initiatives, including a joint product initiative with Visa U.S.A. As vice president of financial services with Dun & Bradstreet, he led an organization that consulted with leading financial institutions on risk management best practices.

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Zoot Enterprises Names a New President

Montana-based Zoot Enterprises, a provider of advanced instant credit decisioning and loan origination solutions, has hired Dennis Dixon, formerly with EDS Montana, as President. During his tenure at At EDS Montana the organization grew threefold and was recognized as a top performing IT delivery center in the division. Dixon managed several different accounts and delivery organizations with the company, serving clients in the financial, health care, manufacturing and insurance industries. Dixon also held various managerial positions at General Motors for 10 years. Dixon is the founding chairman of TechRanch, a Montana technology venture center; a past director of the Gallatin Development Corporation, a local economic development organization; and co-founder and manager of the Bozeman Technology Roundup.

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Most CNP Merchants Suffer Credit Card Losses

A new survey on check, ACH and credit card fraud shows that 54% of organizations that experience card fraud suffer financial losses, primarily because they are a “card-not-present” merchant who assumes liability. The research by the Association for Financial Professionals also found that 68% of the organizations were targets of payments fraud last year but only a minority actually lost money as a result of check and ACH debit fraud. An organization that was a victim of ACH debit fraud in 2005 was more likely to suffer a financial loss than an organization hit by check fraud. About 27% of organizations that report an incident of ACH debit fraud lost money because of the fraud, as opposed to 19% of the victims of check fraud. AFP notes that 54% of organizations made material changes to their payments controls as a result of Sarbanes-Oxley.

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JCB and MasterCard Agree on Contactless Protocol

JCB and MasterCard have reached an agreement to share a common contactless communications protocol, the “MasterCard PayPass ISO/IEC 14443 Implementation Specification”, which provides for a global standardized technology for contactless payment services. VISA made an announcement to support the protocol in March. The common communication protocol ensures global interoperability for contactless payment products, and as a result it is anticipated that the pace of deployment of contactless terminals will accelerate. JCB rolled out the “QUICPay” contactless payment product in Japan in April, a scheme supported by Sony’s “FeliCa” chip specification.

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Chinese and English POS Terminal Unveiled

Phoenix-based Hypercom and CA-based U.S. Bankcard Services have teamed to offer the first multi-language card payment terminal featuring Chinese and English graphics and text. The new dual-language Hypercom “T7Plus” compact countertop POS terminal will be targeted at an estimated 60,000 Chinese-American retailers. The “T7Plus” with “Big 5” Chinese character font software is configured specifically to facilitate its operations by merchants in either Chinese or English languages. “Big 5” is a character encoding method used in Taiwan and Hong Kong to enable traditional Chinese characters to be rendered on computers. In 2003, Hypercom was selected by Industrial & Commercial Bank of China, the Bank of China, China Construction Bank, the Agricultural Bank of China and domestic payment network China UnionPay as a preferred card payment technology provider. U.S. Bankcard Services is a major “Merchant Service Provider” for credit card processing nationwide.

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