Rahaxi Inks a Deal with Tasmaprojekti Information

FreeStar Technology’ Helsinki-based subsidiary Rahaxi has entered into a
sales and referral agreement with Tasmaprojekti Information Systems. The agreement will expand Rahaxi Processing’s footprint in the
Finnish market for its wide variety of international standard products
and services, such as the newly developed Rahaxi-OTI (Open Terminal
Interface) middleware solution. Rahaxi currently processes in excess of
1.3 million card payments per month. Over 600 companies in Finland use Tasmaprojekti Information Systems Oy.’s software and software components in their own POS and cash management systems.

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STAR Renews Bank of Hawaii & Fulton Financial

Bank of Hawaii has renewed its relationship with the STAR Network for PIN-secured debit services. Bank of Hawaii is the largest independent financial institution in the state of Hawaii. PA-based Fulton Financial has also renewed STAR Network as its primary ATM/debit network. The STAR Network is now the primary network for ATM and PIN-secured debit access for Fulton Financial’s approximately 250,000 ATM and debit cards. First Data will also continue providing ATM processing services for all of Fulton Financial Corporation’s 235 ATMs.

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U.S. Bancorp Q4 Debit Card Volume Up 20%

U.S. Bancorp reported that its fourth quarter merchant acquiring volume grew more than 9% over 4Q/04 to $43.6 billion, produced from more than 712,000 merchants. Debit card volume surged by 20% and corporate credit card volume increased 21% during 4Q/05, compared to one-year ago. Debit card volume was $6.661 billion for the fourth quarter compared to $5.548 billion for 4Q/04. Consumer credit card volume for the quarter was $9.207 billion, up 5.3% over 4Q/04. Corporate credit card volume was $7.102 billion, compared to $5.871 billion for the year-ago quarter. For the quarter, U.S. Bancorp’s Payment Services net income was down about 8% to $166 million due to increased bankruptcy filings. For complete details on US Bancorp’s 4Q/05 performance, visit CardData ([www.carddata.com][1]).

MERCHANT ACQUIRING VOLUME HISTORICAL
4Q/03: $27,447,000,000
1Q/04: $27,335,000,000
2Q/04: $33,646,000,000
3Q/04: $39,385,000,000
4Q/04: $39,891,000,000
1Q/05: $39,477,000,000
2Q/05: $43,231,000,000
3Q/05: $44,600,000,000
4Q/05: $43,600,000,000
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com

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Hypercom Extends the Optimum Terminal Line

Hypercom introduced two new multi-lane “Optimum” payment terminals, the “L4200” and higher-resolution “L4250” with signature capture capabilities. The new Optimum L4200 multi-lane “Optimum” payment terminals, the “L4200” and higher-resolution “L4250” with signature capture capabilities offer lower-cost alternatives to the full-color Optimum L4100 released last year. The new models provide an out-of-the-box, plug-and-play capability that meets PCI PED and Interac security requirements without add-on components, simplifying deployment and ensuring compliance with the industry’s new security requirements.

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Parkeon Powers the NYC Muni-Meter Pilot

Parkeon, f/k/a Schlumberger e-City, says the New York City Department of Transportation is using 260 Parkeon pay and display parking meters equipped to accept payment cards for a six-month pilot. Each “Muni-Meter” in the study area has been upgraded with the installation of a wireless data network modem and software that connects the meters to Parkeon’s “EPSUM Payment Server” that processes and authorizes credit card payments in real-time. They have also been outfitted with instructional decals and fliers are being distributed to educate the public about the new payment alternative. Parkeon says in the past 18 months, a number of other major U.S. cities have installed pay and display machines with credit card payment facilities and have seen parking revenues increase by up to 40%, on a like-for-like basis. In some cases, up to 60% of all transactions are being completed with credit cards. The NYC pilot launched November 21st. Last year the City introduced 1,100 single space parking meters in Brooklyn, Manhattan and Queens with the capability to accept payments made with the NYC “Pre-Paid Parking Card.” (CF Library 11/18/05)

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BIG & DDM to Offer Prestige Payroll Cards

Florida-based Morgan Beaumont, Bostrom International Group and Diversified Data Management have finalized an agreement to offer Morgan Beaumont “Prestige Payroll Cards to all of DDM’s clients’ 35,000 employees. Morgan Beaumont’s Prestige Payroll Card is a PIN-based and signature Visa branded prepaid debit card that can be loaded with funds via employer payroll direct deposit. The card can be used to access those funds at ATM machines worldwide and anywhere Visa debit cards are accepted. BIG is an insurance and business consultancy offering innovative enterprise solutions including health benefits programs and employer payroll cards. DDM Payroll Systems is a payroll preparation service designed to meet the needs of small to medium sized businesses.

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Card Profits Get the Seven-Year Itch

Credit card profits slipped during 2005 for the first time in seven years, driven down by fierce competition, soaring charge-offs and escalating cost of funds. The average pre-tax, return-on-assets for credit card portfolios last year is projected to decline to 4.3%, compared 4.5% for 2004, and 4.4% for 2003. CA-based R.K. Hammer Investment Bankers says its data show that charge-offs rose 10 basis points last year due to cardholder reaction to new bankruptcy legislation. Operating expense decreased 20 basis points in 2005 to 4.7%, due to the seasoning of earlier technology investments. However, the maturity blended cost-of-funds moved upward during 2005 by 20 basis points to 2.7%. Hammer says some major issuers increased dollar profits even though ROA percentages declined by growing their receivables much faster than the impact of a declining ROA percentage factor.

U.S. Bank Credit Card Profitability Historical
(VISA, MasterCard, and Discover)
YEAR INC OX CO COF ROA
1989 21.3% 5.5% 3.8% 7.9% 4.1%
1990 20.9% 5.1% 4.3% 7.8% 3.7%
1991 20.5% 4.8% 4.7% 7.6% 3.4%
1992 19.4% 4.9% 4.9% 6.5% 3.1%
1993 18.6% 4.7% 4.6% 6.0% 3.3%
1994 18.5% 4.5% 4.4% 5.7% 3.9%
1995 18.0% 4.2% 4.1% 6.1% 3.6%
1996 17.9% 4.3% 4.2% 6.1% 3.3%
1997 17.4% 4.3% 4.6% 5.9% 2.6%
1998 17.3% 4.4% 4.7% 5.7% 2.5%
1999 17.9% 4.5% 4.4% 5.9% 3.1%
2000 18.4% 4.5% 4.3% 6.0% 3.6%
2001 18.8% 4.7% 5.1% 5.0% 4.0%
2002 18.5% 4.9% 5.4% 4.0% 4.2%
2003 17.6% 5.0% 5.8% 2.4% 4.4%
2004 17.5% 4.9% 5.6% 2.5% 4.5%
2005 17.4% 4.7% 5.7% 2.7% 4.3%
INC-total income; OX-operating expense; CO-charge-offs;
COF-cost-of-funds; ROA-net pre-tax return-on-assets
Source: R.K. Hammer Investment Bankers

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