Belgium-based VASCO Data Security International and the French firm ActivCard have come to terms over a patent infringement dispute, according to today’s issue of CardFlash International (cardflashinternational.com). ActivCard sued VASCO for infringing on two ActivCard patents, and that the design of VASCO’s “Digipass” products violated ActivCard’s trade dress. The agreement reached this week dismisses the lawsuit, grants VASCO a worldwide license under the patents, and avoids further disputes between the parties as to the current VASCO product line.Details
After extracting a 30%+ discount in off-line debit card interchange in a recent lawsuit settlement, the world’s largest retailer has set out to get a bigger discount for itself by playing the nation’s two largest credit card networks against each other. As a result, Wal-Mart announced yesterday it is booting MasterCard debit cards out of its store effective February 1st, but will continue to accept VISA debit cards. Wal-Mart says MasterCard’s fees are too high, even though MasterCard debit cards account for less than 1% of Wal-Mart transactions. Wal-Mart insists it will pass the savings on to consumers via lower prices. However, VISA said yesterday that there will not be a definitive or conclusive arrangement for continued VISA debit card acceptance at Wal-Mart until Judge John Gleason issues an order granting final approval of the settlement of the Wal-Mart/retailers’ litigation. VISA says it believes the vast majority of merchants will continue to accept the “VISA Check Card” because of the significant value that it provides to them. MasterCard said it regretted not being able to reach an agreement with Wal-Mart, but said it must manage the MasterCard system in a way that balances the needs of all participants in the system. MasterCard said in the long run, its decision will maintain the strength of America’s highly competitive payment system. MasterCard holds slightly more than a 20% share of U.S. off-line debit card market. According to CardData (www.carddata.com), VISA racked up $118 billion in third quarter gross dollar volume for its off-line debit cards while MasterCard posted $30.4 billion.Details
VASCO Data Security International and ActivCard have come to terms over a patent infringement dispute. ActivCard sued VASCO for infringing on two ActivCard patents, and that the design of VASCO’s “Digipass” products violated ActivCard’s trade dress. The agreement reached this week dismisses the lawsuit, grants VASCO a worldwide license under the patents and avoids further disputes between the parties as to the current VASCO product line.Details
While Wal-Mart’s decision to deny consumers use of their MasterCard debit cards next year provided fodder for the news media, it clearly demonstrates how consumers will be affected by the retailers’ debit card lawsuit for years to come. Forcing consumers to remember their PINs, whip out their checkbook, or dig in their wallets for cash at the check-out because they have the wrong debit card, will create nothing but confusion in the marketplace, unraveling an established and highly efficient payments system in the USA. On top of the acceptance confusion issue, consumers will also face more fees from banks for the way they use their debit cards. As reported in yesterday’s CardFlash, more banks are phasing in per transaction fees for PIN POS debit card transactions as some banks now penalize consumers for not making at least one off-line POS debit card transaction each month. MasterCard said yesterday that Wal-Mart is putting its hand into its customers’ wallets, and telling them which form of payment they must use. MasterCard says there are more than 50 million Americans who hold MasterCard signature debit cards and use them because they receive rewards from their bank, or perhaps because they are uncomfortable entering their PIN into a terminal in a public place. MasterCard says it is surprising in today’s environment for any merchant to make a conscious decision that will result in dissatisfied customers and lost sales.Details
GlobalPlatform has named its new Chair, Vice Chair and Secretary/Treasurer following the elections in mid-November. Bob Beer, VP of Datacard Group and new Board Member of GlobalPlatform, has been named as Chair. Jim Lee, SVP Emerging Technologies at VISA International, retains his position as Vice Chair for a third term. Shoji Miyamoto, Deputy General Manager, Smart Card Solutions at Hitachi, takes on the role of Secretary/Treasurer. In October, the fifth GlobalPlatform Board was named. Five of the eleven Board seats were open for re-election and three of those went to incumbents: Gilles Michel of Gemplus, Richard Fletcher of MasterCard International and Yves Moulart of STMicroelectronics.Details
Cubic Corporation reported Tuesday that sales for its Transportation Systems segment, for the fiscal year ending September 30th, were up nearly 10% to $253 million. The revenues were driven by higher sales in North America as well as work on the “Prestige” contract in London. Operating income for the segment increased 5% to $24.4 million, compared to the same period in 2002.Cubic noted the increase came even though it incurred legal costs related to a dispute with a subcontractor on the “Prestige” contract and a legal settlement in Australia. Cubic’s end-of-year backlog was $762 million, compared to $672 million at the close of last year. Transportation backlog increased in 2003 primarily because of a contract for nearly $95 million awarded by the city of Brisbane, Australia for a fare collection system and 10 years of operations and maintenance. After the 2003 fiscal year closed, Cubic inked a $72.5 million deal with the Metropolitan Atlanta Rapid Transit Authority for a smart card-only multi-modal fare collection and revenue management system. Under terms of the contract, Cubic will replace MARTA’s existing magnetic ticketing and token-based system with the company’s open architecture smart card ticketing technology that will enable commuters to use one card to pay for rail, bus, paratransit fares and park-and-ride fees.The contract could be worth up to $104 million if all options are exercised. For complete details on Cubic’s latest results visit CardData ([www.carddata.com]). (CF Library 11/3/03)
LML Payment Systems has granted a personal, non-exclusive license for its patented processing of electronic check transactions Tennessee-based Verus Financial Management.
Under terms of the deal, Verus paid LML a fee on closing for a release regarding potential past infringements of the patent and will pay a running royalty fee based upon each electronic check transaction processed under the license. Verus offers a wide range of payment processing services including electronic payment processing for associations, retail, mail order/telephone order and Internet based merchants. LML provides check processing solutions including electronic check authorization, electronic check conversion and primary and secondary check collection including electronic check re-presentment to national, regional and local retailers.
Canadians are expected to spend an average of $1,500 this year buying gifts, decorations, food and other holiday-related goods. A survey for Moneris Solutions by Ipsos-Reid shows that Canadians will spend an average of $761 on gifts and an average of $724 on other holiday-related spending such as clothing, travel and decorations. Almost three quarters of the survey’s respondents selected debit or credit card as the payment form they will use most often when shopping this season. Three in ten Canadians prefer using credit card and 26% prefer cash. Almost half of all women say debit cards are their first choice for holiday shopping payment options, compared to 38% of men, while almost one-third of men prefer credit cards, compared to only 28% of women. Other survey findings: 58% say “they don’t set a budget and spend as they go”; and 38% of Canadians say they are last-minute shoppers.Details
Mobile Sense Ltd., a new, wireless payment provider has licensed “Sanchez Profile.” The “Sanchez/Mobile Sense” solution expects to begin accepting mobile top-up transactions early in 2004. The solution will use “Sanchez Profile” as the core transaction processing and customer system operating on a Linux platform. When implemented, the solution will be the second iteration of “Sanchez Profile” running on Linux. Sanchez provides the world’s only core bank processing solution to operate in the Linux environment. Mobile Sense will enter the market as a top-up merchant, and will differentiate its role by eliminating the need to make a cash purchase at a merchant store or bank ATM.Details
Diebold has formed a sales and service operation in Peru. Following the acquisition of certain assets from Olivetti Peru, Diebold has established a direct, in-country presence to provide retail ATM sales and service operations. Diebold will now have a sales, administration and service headquarters, along with a separate warehousing facility based in Peru’s capital of Lima.
Diebold say Peru represents a new, practically untapped market.
Dallas-based ACE Cash Express announced that president/COO Jay Shipowitz will become the new CEO on June 30th. Jay is an innovator and an executive who can consistently deliver outstanding results and under his leadership the management team will achieve continued success. Mr. Shipowitz has served as the President and Chief Operating Officer and as a Director of the Company since January 2000 and as the Company’s Senior Vice President and Chief Financial Officer from May 1997 to January 2000. Mr. Shipowitz is a Director and member of the Executive Committee of Financial Service Centers of America, the industry trade association. ACE Cash Express, Inc. is the largest owner, operator and franchiser of check-cashing stores in the United States.Details
American Express has launched a new campaign to pit its charge cards against debit cards. The strategy hits as the industry cuts merchant fees and adds cardholder fees to debit card products. The AmEx “Swipe It” campaign encourages consumers to charge everyday expenses to help stay on budget and to avoid debit card fees and potential interest charges. AmEx also promotes its online access and detailed monthly statements as expense-control tools. The new campaign comes on the heels of an extensive re-pricing in the debit card market. VISA and MasterCard have been forced to reduce off-line debit card interchange by more than 30%. The card associations are also, reportedly, in the midst of negotiating further cuts in debit card fees with individual major merchants. As of January 1st, merchants have the right to stop accepting VISA and MasterCard off-line debit cards. Consumers have also been drawn in the debit card restructuring. Some banks have already begun charging fees for PIN POS debit card transactions. As of December 1st, MD-based Mercantile Bankshares Corporation is charging a 30 cents per PIN POS debit card transaction. NC-based BB&T is charging its customers a $2 per month inactivity fee if they do not make at least one off-line POS debit card transaction each month.