POS Terminal Manufacturers Need a Killer Application

A new report says POS equipment manufacturers are faced with the daunting task of reselling to the same customer base that prefers refurbished units to new ones and needs to come up with a killer application that leads to terminal upgrades or a total re-terminalization of the market. The report by Frost & Sullivan says terminal manufacturers also need to look to new markets. The government sector and the quick-service restaurant segment in the USA, with their low POS terminal penetration, are two potential growth areas that the participants can focus on to increase market share and profits. Efforts can also be channeled toward targeting new geographic regions such as India and China where the payment card industry is currently making giant strides. F&S says the world EFT terminal market generated revenues worth $1.8 billion in 2002 and is likely to reach $2.6 billion by 2007.

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ABN AMRO Bank Names MasterCard Preferred Payment Card Brand

MasterCard International and ABN AMRO Bank have signed a multi-year strategic alliance under which MasterCard will be the bank’s preferred payment card brand in more than 60 countries. Although ABN AMRO will continue its multi-brand strategy in selected markets, MasterCard will be ABN AMRO’s preferred business partner and preferred payment card brand world-wide. An important element in the partnership will be to strengthen ABN AMRO’s MasterCard portfolio in one of the bank’s home markets, the Netherlands, by focusing on innovation of the product line and increasing the profitability of the existing card business. ABN AMRO has more than
3,000 branches in more than 60 countries.

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U.S. Consumers Charge $2 Trillion on Payment Cards

Americans racked-up $2.1 trillion in purchases and cash advances on general purpose payment cards last year, a 9.2% gain over 2002, but down from the 11.4% increase for the previous year. The second quarter of 2003 was the most sluggish period as gross dollar volume on credit and debit cards only increased 7.3% over the prior year. The most active quarter was the third quarter when GDV topped $540 billion, a 10% gain over 3Q/02. For all of 2003, VISA processed 52.6% of the total volume; MasterCard produced 30.3%; American Express 12.5%; and, Discover 4.7%. During 2002, U.S. consumers and employees used credit and debit cards to make $1922.8 billion in transactions. In 2001, the figure was $1725.9 billion. For complete details on the network volume, by quarter, visit CardData (www.carddata.com).

General Purpose Credit and Signature Debit Card Volume
GDV Y/Y
1Q/03 $477.1 billion +9.7%
2Q/03 $515.9 billion +7.3%
3Q/03 $540.5 billion +10.0%
4Q/03 $566.9 billion +9.9%
TOTAL $2100.4 billion +9.2%
Source: CardData (www.carddata.com)

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METRO Group Expands Deployment of NCR’s FastLane

METRO Group will deploy NCR “FastLane” in 50 of its “Real” hypermarkets and “Extra” supermarkets in the country by the beginning of next year. The decision follows successful initial installations last year at METRO Group locations in Rheinberg and Ratingen. More than 50 retailers in Europe, North America and Asia have installed NCR self-checkout. METRO Group employs about 240,000 employees in 28 countries. The retail brands of the METRO Group are METRO Cash&Carry with the trademarks Metro and Makro, Real hypermarkets, Extra supermarkets, Media Markt and Saturn electronics markets, Praktiker DIY markets and Galeria Kaufhof department stores.

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First American Payment Systems Names General Counsel

Fort Worth, TX-based First American Payment Systems has hired Howard Herndon as EVP/General Counsel. Mr. Herndon has substantial experience in matters involving the electronic transactions industry, mergers and acquisitions, securities and corporate finance, and venture capital financing. Mr. Herndon received his Bachelor of Arts degree from Washington and Lee University, graduating magna cum laude, in 1981. He was a member of Phi Beta Kappa. First American Payment Systems, L.P. provides full service credit card processing for merchants throughout the United States.

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WOW! CARD

Dubai-based Mashreqbank has launched a new credit card that utilizes the smart chip to reward repeat behavior as opposed to one-time transactional loyalty. The new “WOW! MasterCard” and “WOW! VISA” have more than 1,000 participating merchants with smart card readers that will rebate between 5% and 35% back to the cardholder. Merchants are also offering surprise rewards. The card uses the enhanced XLS payment solution developed by Welcome Real Time. Bank executives say cardholders can earn up to Dh6000 annually, based on spending patterns. Mashreqbank is making the card publicly available and will upgrade all of its 100,000 existing cardholders to the new program. Mashreqbank was the first bank to introduce credit cards in the UAE in 1982 and offers the popular “MashreqMillionnaire” credit card program. It is the largest private bank in the UAE with 34 branches.

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NCO Portfolio Management Revenues Up 22% in 4Q/03

Baltimore-based NCO Portfolio Management reported total collections on purchased accounts receivable for the fourth quarter of $42.0 million, a 26.1% increase from the fourth quarter a year ago. Revenue for the quarter increased 21.6% to $3.6 million. Net income was $2.2 million compared to net income of $2.0 million for 4Q/02. Servicing fees as a percentage of collections for the fourth quarter of 2003 and 2002 were 30% and 31%, respectively. NCPM is a purchaser and manager of delinquent accounts receivable. For complete details on NCO Portfolio Management’s latest performance visit CardData (www.carddata.com).

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ICBA/TCM Bank Add Five Community Agent Banks

ICBA Bancard and its TCM Bank subsidiary have signed five agent banks, including Country Bank of NYC; Liberty 1st Bank of Missouri; Farmers Savings Bank of Iowa; 1st United Bank of North Palm Beach; and Mercantile National Bank of Indiana. Total Card Management’s programs are delivered through ICBA Bancard’s wholly owned subsidiary, TCM Bank, N.A. Total Card Management’s newest participants have all joined the 20/20 agent bank program. ICBA Bancard is a wholly owned subsidiary of the Independent Community Bankers of America, “The Nation’s Leading Voice for Community Banks.”

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Dione’s Bluetooth Smart Card Terminal Produces Strong Response

Dione plc reports it has logged more than 50,000 advance orders for its new, portable smart payment card terminal. The “Xplorer” terminal uses Bluetooth wireless technology and is EMV level 1 and 2 compliant. It is also fully PIN-enabled and certified for “VISA PED” and “ZKA.” In December, Dione Dione launched a new version of its EFTPoS payment terminal which includes an integral modem and printer. The new “Xtreme Integrated” is designed as a compact counter-top solution that can read magstripe and chip cards, is fully PIN enabled and approved to the “VISA PED” standard. The printer is self-feeding and features a clam-shell design for easy paper loading. Dione introduced its “Xtreme Handset” terminal earlier this year. In September, Dione’s “Xtreme” PIN pad and “IC-Xpress” swipe & park card reader passed “VISA’s PIN Entry Device Offline” security requirements.

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Citishare Renews the eFunds EFT Contract

Citigroup’s Citishare Corporation has signed a five-year contract for eFunds to continue providing EFT network switch processing for its worldwide network affiliates. Under the agreement, eFunds will continue processing transactions for Citishare’s worldwide network affiliates, and will continue to provide zero service outage and currency conversion capabilities for Citishare’s international endpoints. Citishare is Citigroup’s retail electronic funds subsidiary. Citigroup, the preeminent global financial services company with some 200 million customer accounts in more than 100 countries, provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, insurance, securities brokerage, and asset management. eFunds Corporation is an industry leader with nearly 30 years of experience and expertise in electronic payments.

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Barclays and Lloyds TSB May Follow RBS into the U.S. Credit Card Market

Less than one week after the Royal Bank of Scotland announced its planned acquisition of Connecticut-based People’s Bank credit card business, there is renewed speculation that Barclays and Lloyds TSB are making a run at San Francisco-based Providian’s credit card business. Interestingly, both U.S. banks were previously active in the U.K. credit card business. In April 2002, Barclaycard completed its acquisition of Providian Financial’s U.K. card business. The deal represented $543 million in receivables and approximately 500,000 accounts. Barclaycard took ownership of Providian facilities in London and in Crawley which employed 600 people. In April 2001 People’s Bank sold its U.K. credit card portfolio to Citigroup International PLC for approximately $526 million. Last week, the Royal Bank of Scotland confirmed plans to purchase People’s $2.3 billion credit card business for a 15.5% premium. RBS will maintain People’s credit card business employment base in Bridgeport. Providian currently has $16.9 billion in U.S. credit card outstandings and 10.5 million accounts.

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Taco Bueno Installs VeriFone IP Terminals

VeriFone reported last week that TX-based Taco Bueno has completed its installation of VeriFone “Omni 3750” IP-enabled terminals in its locations nationwide. SageNet, the Oklahoma-based network integrator, designed and installed the IP network over which the “Omni” terminals communicate to Paymentech, Taco Bueno’s credit card processing services bureau. The QSR chain says it upgraded due to its need for payment terminals to process transactions via IP rather than phone lines. Taco Bueno has 124 locations across Texas and Oklahoma.

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