American Express Says “Swipe It” Not “Deb-It”

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.

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Tesoro Drops Gas Card, Offers Juniper MasterCard

Juniper Bank’s co-branding efforts have moved from airlines to hotels and now, to gasoline stations. Tesoro Petroleum is dropping its proprietary gas card at the end of this year, switching to a MasterCard issued by Juniper. The new “Tesoro Platinum MasterCard” rewards cardholders with a Tesoro gift card each time they accumulate $20 in rebates. Under the program, cardholders earn a 3% rebate on purchases at Tesoro branded locations, and a 1% rebate on all other purchases. During the first two months after an account is opened, cardholders will earn double rebates for every purchase. The no-fee card also features a 0% introductory rate on balance transfers for 6 months and a 12.99% variable go-to APR. Juniper has already started issuing the new MasterCard to current, creditworthy, gas cardholders and will now accept applications from the general public. Tesoro’ has 560 branded retail stations, of which over 220 are company operated under the Tesoro and Mirastar brands. In August, Juniper inked a co-branded credit card deal with Best Western. In May, Juniper Bank launched the co-branded “Frontier Airlines MasterCard.” Juniper also issues the “AirTran A-Plus Platinum VISA” and the “Midwest Express Airlines MasterCard.” (CF Library 5/22/03; 8/5/03)

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BancorpSouth Utilizes PULSE Access for Gift Card

BancorpSouth has selected “PULSE Access” to enable its customers to choose from a selection of personalized messages and designs to emboss on the bottom of the new “BancorpSouth MasterCard Gift Cards”. The card can be used anywhere MasterCard debit cards are accepted, and card balance and transaction history are easily tracked by accessing BancorpSouth’s Web site at or by calling the InfoLine at 888-797-7711. BancorpSouth, Inc. is a bank holding company headquartered in Tupelo, Mississippi, with an estimated $10.2 billion in assets. BancorpSouth operates approximately 250 commercial banking, insurance, trust and broker/dealer locations in Alabama, Arkansas, Louisiana, Mississippi, Tennessee and Texas. PULSE is the nation’s leading independent financial industry-owned and controlled electronic funds transfer network, currently serving more than 4,300 bank, credit union and savings institution members across the country.

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A Strong Year for Credit Union Portfolio Sales

Approximately $268 million in credit union credit card portfolios have changed hands so far this year. Through the third quarter, 43 credit unions with portfolio of over $1 million in outstanding balances have sold their credit card portfolios, with six of them being greater than $10 million in outstanding balances. According to Peterborough, NH-based Brookwood Capital, the number of portfolios sold has already surpassed last year’s figures, where 41 portfolios of over $1 million in outstanding balances were sold. Last year, total balances sold were approximately $285 million with the largest being approximately $30 million. The largest credit union portfolio sold so far this year had balances of slightly more than $30 million. On average, the size of the portfolio sold has decreased slightly from this last year to this year (from approximately $6.9 million to $6.2 million). Brookwood Capital specializes in assisting credit unions in the financial analysis and strategic review of their credit card portfolios.

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Treasury’s FMS Incorporates Datakey Smart Card in SPS

The US Department of Treasury’s Financial Management Service has incorporated Datakey’s “CIP” client software and “Model 330” smart card into its recently developed “Secure Payment System, which replaces the existing “Electronic Certification System.” The ECS previously utilized one-time password tokens for user authentication, but with the new SPS architecture, smart cards provide strong user authentication to the system as well as support the use of PKI to digitally sign the electronic payment schedules. Datakey Inc. focuses on delivering complete smart card-based solutions that simplify access throughout the enterprise.

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Poor Budgeting Contributes to Holiday Stress

VISA released a survey this week that shows 40% of consumers have no specific budgeting process for the holidays, and only 21% budget for other non-gift-giving-related holiday expenses such as travel. Savvy consumers and experts agree that the one smart choice to avoid holiday tension is the Visa Gift card. Prepaid gift cards are one of this season’s hottest trends — a welcome alternative to the traditional non-returnable, ill fitting, or otherwise undesirable holiday gift. Retail experts Bain and Co. estimate that the gift card market will balloon to $42-45 billion this year — a 15 to 20 percent increase over 2002. Visa is the world’s leading payment brand and largest consumer payment system, enabling banks to provide their consumer and merchant customers with a wide variety of payment alternatives.

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Banknorth Extends and Expands NYCE Contract

Banknorth, New England’s third largest banking company, has signed a deal to use NYCE for switching all its POS transactions, and to use NYCE in conjunction with an international network to provide its customers with global access to their accounts at ATMs. Banknorth is New England’s third largest banking company and one of the 35 largest commercial banking companies in the United States. Banknorth operates approximately 300 branches and more than 400 ATMs in New England and New York. NYCE Corporation is at the forefront of electronic payments in the U.S., providing consumers with secure, real-time account access 100 million times each month.

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Paymentech Rakes in the Dough with Domino’s

Domino’s Pizza has, for the second time, awarded Dallas-based Paymentech a multi-year payment processing contract for its 570 company-owned locations which produce about $50 million in annual volume; the contract also covers 2,700 franchise locations. Paymentech won the multi-year contract after a rigorous review of many leaders in the credit card processing industry. Domino’s Pizza operates a network of 7,332 Company-owned and franchised stores in the United States and more than 50 countries, and is the recognized world leader in pizza delivery. Paymentech, L.P. processes more payment transactions than any other company in North America — and more than half of all Internet transactions — for retailers accepting U.S. and international payments via traditional point of sale, Internet, catalog and recurring payments.

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Switch Re-Brands 10 Million of its 24 Million Cards

UK-based Switch reported this week it has issued 10 million dual-branded debit cards to-date. Britain’s leading debit card provider is in the process of migrating its 24 million “Switch” cards to the “Maestro” global debit brand by 2007. The dual-branded “Switch” cards carry both the “Switch” and “Maestro” logos on the front of the card, according to tomorrow’s edition of CardFlash International (cardflashinternational.com). The “Maestro” logo previously appeared on the back of “Switch” cards. Switch also reports that more than 19 million debit card transactions were made abroad in the first nine months of this year, up 22% on 2002. For the whole of last year some 20 million “Switch/Maestro” transactions were undertaken outside the UK, compared to 6 million five years ago. The “Maestro” brand mark now appears on 466 million cards worldwide and is accepted for purchases at over seven million merchant terminals in 93 countries and territories.

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MASTERCARD EMV

MasterCard reports a 50% jump in MasterCard-branded smart cards in the first half of this year, led by growth in the Asia/Pacific region. Europe is also strong with more than 200 chip migration programs now underway. Asia/Pacific has 40 MasterCard EMV migration programs currently in progress and 14.5 million smart cards in-force. This week MasterCard unveiled a subset of “OneSMART
MasterCard,” called the “M/Chip Deployment Program,” which provides a complete solution for MasterCardÕs customers who are migrating their payment cards from the magnetic stripe platform to chip. The “M/Chip Deployment Program” focuses specifically on addressing all aspects of chip migration and consists of three components: the “M/Chip” application and its enabling infrastructure; “M/Chip” implementation support services provided by MasterCard; and, industry products and services based on the “M/Chip” specification.

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SECUWA to Use HandySoft’s BizFlow

The School Employees Credit Union of Washington has selected HandySoft Global Corporation’s “BizFlow” BPM platform, to streamline its VISA credit card application process. The 45 Financial Management Representatives at SECUWA are cross-trained to provide members with “once and done” service, which means they all handle the processing of VISA credit card applications. the School Employees Credit Union of Washington (SECUWA), is a not-for-profit financial cooperative serving over 76,000 school employees and their families throughout the state. HandySoft Global Corporation is the premier provider of configurable software solutions that simplify and automate business processes; capture and enforce best practices; improve productivity and quality while reducing costs; integrate information technology; and foster collaboration among employees, customers, and partners.

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Infineon Executive to Head the MultiMediaCard Association

The vice president for Business Development at Infineon Technologies Flash has been elected the president of the MultiMediaCard Association. Juergen Hammerschmitt will preside over MMCA thrice-annual Business Meetings, as well as other Association meetings, and will assume strategic assignments as requested by the board. In 1998, he became responsible for the MultiMediaCard products at Infineon, and was a founding board member of the MMCA. He subsequently founded Ingentix, a joint venture between Infineon and Saifun of Israel, which in 2003 became Infineon Technologies Flash. The MMCA is the open standard memory card organization, promoting worldwide adoption of a postage-stamp size, removable storage card designed especially for mobile phones and digital imaging. Founded in 1998 with 14 companies, the MMCA has grown to more than 100 members worldwide.

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