Debit Eats Check and Cash Share at the POS

Debit cards are quickly and surely displacing checks and cash at the POS. A new survey, comparing 2001 and 2003, found that check use in the under $100 purchase category has declined by more than 50% and that cash use has dropped by approximately 15%. The “MasterCard International Attitude and Usage Study,” released yesterday, shows that users of ATM/debit cards report making debit payments for nearly a third of all their purchases under $20, a 61% gain over 2001. In the $20 to $50 category, debit payments account for more than half of all purchases, a 31% increase since 2001. In the same category the preference for checks and cash declined by 50% and 18%, respectively, during the same period. In the $50 to $100 category, debit payments capture 52% of all purchases, compared with 47% in 2001, as check use declined from 25% to 12%, and the use of cash remained unchanged. Credit cards continue to rule the over $100 category, capturing 46% of all purchases while debit remains unchanged at 36%. The MasterCard study was conducted in December in 26 geographically dispersed markets in the U.S. and included 750 respondents.

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Teens Embrace Gift Cards Big Time

A new study has revealed that 66% of American teenagers have purchased one or more gift cards during the last 12 months and that 90% of teens have received a gift card. The study of 1,600 college-bound teens, conducted by the Center for Teen Insight for Stored Value Systems, also found that 75% of teenagers report spending more than the face value of the gift card; this compares to 79% of adults who say they usually spend something more than the card’s value. Approximately 75% of surveyed college-bound teens indicate they plan to use gift cards for purchasing necessities once they reach campus. More than 60% of teen respondents indicated the appearance and having a choice of gift card designs is important in their purchase decision. Apparel and music retailers were the preferred retail categories where teens purchase gift cards (nearly 70% of purchases). The most popular average gift card values are between $10 and $24, and $25 to $49, the study found.

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Phishing Attacks Cost Issuers $1 Billion Annually

New research has concluded that U.S. banks and credit card issuers are shelled out $1.2 billion last year to combat phishing attacks by hackers against online consumers. The Gartner study estimates that 57 million Americans likely have received these fraudulent e-mails. Based on survey responses from 5,000 adult Internet users, Gartner analysts project that approximately 30 million adult Internet users believe they have definitely experienced a phishing attack, and another 27 million believe they have observed what looked like a phishing attack. Phishing attacks are not new, but they have become more pervasive in the past 12 months. According to the Gartner survey, 76% of the known or suspected attacks occurred within the past six months, and another 16% occurred during the six months before then. Thus the combined results suggest that 92% of these phishing attacks took place in the past year. The Gartner survey, completed in April, indicated a high rate of success for phishers. Based on survey data, Gartner estimates that about 19% of those attacked, or nearly 11 million U.S. adult Internet users, have clicked on the link in a phishing attack e-mail. Moreover, 3% of those attacked, or an estimated 1.78 million adults, report giving phishers their financial or personal information.

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Moneris to Offer ECHO’s VISA POS Check Service

Electronic Clearing House has signed a contract with Moneris Solutions to provide the VISA “POS Check Service” to Moneris customers. ECHO is one of only two third-party processors and one of five acquiring processors authorized for Visa’s POS Check Service. Under the agreement, Moneris will have an exclusive right to sell the Visa POS check product to its U.S.-based merchants, which constitute a portion of its total North American merchant base. Moneris Solutions ([www.monerisusa.com][1]) has a 30-year history as one of North America’s largest electronic transaction processors, delivering advanced payment card processing capabilities through point-of-sale hardware, payment processing software, e-commerce solutions and a gift and loyalty program. ECHO ([www.echo-inc.com][2]) provides a complete solution to the payment processing needs of merchants, banks and collection agencies.

[1]: http://www.monerisusa.com
[2]: http://www.echo-inc.com

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Metavante Acquiring Check-Imaging Concern

Metavante has signed a definitive agreement to acquire Advanced Financial Solutions of Oklahoma City, which provides check-imaging technology for over 7,000 financial institutions in the USA and 25 other countries. The acquisition includes AFS affiliates CheckClear LLC, which owns and operates Endpoint Exchange, and The Medical Banking Exchange, a healthcare payment-processing platform. The transaction is expected to close in June 2004, pending regulatory approval. AFS has delivered high-quality image-based and conventional check processing solutions to the financial services industry. Metavante Corporation delivers virtually all of the technology that an organization needs to offer financial services.

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GE Taps Into eBay’s Database to Offer Biz Credit

eBay and GE Business Credit Services have inked a deal to offer a new financing program for small businesses. The new program allows small businesses that buy and sell on eBay to apply for GE Business Credit Services’ unsecured working capital credit lines up to $50,000. Secured credit lines over $50,000 are available for purchases, when those purchases are used as collateral. As part of the agreement, GE Business Credit Services will waive its application fees, account opening fees and first year annual fees for businesses that apply for its credit programs through eBay. Today, more than 430,000 individuals make a living by selling on eBay. Under the terms of the agreement, eBay will market the GE Business Credit Services financing programs to small businesses on eBay, as well as PayPal merchants, who are also eligible for the program, through emails and other direct marketing programs. MBNA and Providian jointly issue the co-branded “eBay Anything Points MasterCard,” under a deal signed last year. (CF Library 10/2/03)

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Metris Lands a $300 Million Loan, Drops Notes

Metris Companies has entered into a new credit facility to provide for a three-year $300 million secured term loan with a group of institutional investors, dropping its previously announced $250 million senior secured notes offering. The Company previously paid off its term loan facility that was due in June 2004 and will use the proceeds from this transaction to pay off its 10 percent Senior Notes due in November 2004. The $300 million secured term loan will carry an annual interest rate of one-month LIBOR + 9.5 percent. Metris Companies Inc., based in Minnetonka, Minn., is one of the largest bankcard issuers in the United States.

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Fair Isaac TRIAD and IBM BDW Integrate

Fair Isaac and IBM have made the first integration of Fair Isaac’s “TRIAD” adaptive control technology with IBM’s “Banking Data Warehouse” for a major North American bank. Fair Isaac’s TRIAD products promote understanding, evaluation and retention of profitable customers by supporting analytics-based decisions at the account and customer level. IBM is the world’s largest information technology company and provider of IT services, as well as a preeminent technology partner to the world’s financial services industry. Fair Isaac Corporation is the preeminent provider of creative analytics that unlock value for people, businesses and industries.

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GPN Clears NBS Technologies’ Products

NBS Technologies has received certification for its “Commerce Gateway” and “Virtual Terminal” products with Global Payments. Processing over 30 million transactions in North America last year, the NBS Commerce Gateway is a high-speed payment engine designed to serve the needs of merchants everywhere. Global Payments Inc. is a leading provider of electronic transaction processing services to merchants, independent sales organizations, financial institutions, government agencies, and multinational corporations located throughout the United States, Canada, the United Kingdom, and Europe. NBS Technologies is a leading provider of card personalization, secure identity solutions, and point of sale transaction services for financial institutions, governments, and corporations worldwide.

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DRFS Seeks a Debit Card Loading Network

Los Angeles-based Direct Response Financial Services says it is establishing a debit card loading network for its “DCS Personal Advantage Media Prepaid MasterCard Cards issued by Optimum Pay.” As part of the agreements, the loading partners will accept the DCS Personal Advantage Media Prepaid MasterCard(R) Cards issued by Optimum Pay for crediting via cash or cash equivalent. Direct Response Financial Services, Inc. makes it easier, faster and more secure for people and businesses to buy goods and services, using virtually any form of payment: credit, debit, smart card, stored-value card, electronic check at the point-of-sale, or over the Internet. Optimum Pay, Inc. Optimum Pay, Inc. is the leader in electronic data exchange and delivers proven value-added electronic payment products and services to the financial services industry.

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Citi Increases Upromise MasterCard Contributions

Citibank has beefed-up its no-annual fee “Citi Upromise MasterCard” with increased contributions. Cardholders now receive 10% of purchases on more than 7,000 Upromise items at participating grocery and drug stores, as well as 2% on gasoline purchased at over 15,000 Exxon and Mobil locations. Additionally, cardholders who are AOL members will receive 20%, or double the contributions on purchases at participating grocery and drug stores, as well as 4%, or double the contribution, on gasoline purchased at Exxon and Mobil locations. There is no limit on the contribution amount cardholders can earn on participating grocery, drug and gas purchases. In addition, cardholders earn a 1% contribution on all other purchases made with the “Citi Upromise Card.” Citibank is the largest contributor to Upromise members’ accounts.

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