SINSYS

Banksys (Belgium), Interpay (the Netherlands) and SSB (Società per i Servizi Bancari – Italy) have joined forces to create the first pan-European initiative in international card processing. The new Brussels-based SiNSYS joint venture will handle annual volumes amount to 800 million transactions for 18 million cards and 500,000 merchants. Banksys and Interpay each hold a 24.5% interest, SSB holds 51%. SiNSYS services will be opened to other interbank organizations at a later stage. The three companies said the introduction of the euro has facilitated the development of a European market for payment processing. Many national and international processors are now looking beyond their borders for greater cost-efficiencies. The previously local payment systems are converging in their search for (international) IT standardization, economies of scale and stronger commercial relationships with clients.

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Outsourcing to India Among USA financial Services to Grow 20% in 4Q/03

Outsourcing activity among US financial services companies to offshore areas, such as India, will grow by as much as 20% in the 4th quarter according to a new survey. ICICI OneSource and A.T. Kearney estimated that US banks, brokerage firms, insurance companies, mutual funds and other financial services firms will relocate offshore eight percent of their workforce, representing more than 500,000 jobs, over the next five years. These relocations are expected to reduce annual operating costs by more than $30 billion. ICICI OneSource is one of the largest third-party BPO services companies in India, with offshore facilities in Mumbai and Bangalore and international business development offices in New York and London.

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Korean American Grocers Association Inks Card Deal

The Korean American Grocers Association has inked a deal with Providential Holdings and its Touchlink Communications subsidiary. Under terms of the contract Touchlink Communications will install and provide prepaid calling cards, prepaid mobile service, prepaid VISA/MasterCard, money transfer services, and credit card and ATM processing services for KAGRO member stores. KAGRO is a non-profit organization serving the interests of Korean-American grocery and liquor business owners. The association has become the largest convenience store network with over 25,000 members and $16 billion in annual revenues.

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DNC Registry Battle Continues as Implementation Nears

The Federal Trade Commission filed a motion Wednesday in the United States District Court for the Western District of Oklahoma for a stay pending appeal of the court’s September 23, 2003, order declaring the FTC’s Do Not Call (DNC) registry invalid. The Commission has also filed a notice of appeal of the September 23rd order.

The rule’s registry provisions that protect consumers from unwanted telemarketing calls were scheduled to take effect on October 1, 2003. Consumers may continue to sign up for the registry, and telemarketers may continue to access area codes in the registry. The Do Not Call registry currently contains 50.6 million consumers’ telephone numbers.

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Euronet Takes AIM to Expand PaySpot in the USA

Euronet Worldwide has acquired the assets of Austin International Marketing and Investments, to expand its U.S. prepaid “PaySpot” program. Kansas City-based AIM currently delivers prepaid card and wireless products through a network of more than 140 independent sales agents representing over 3,500 retail locations. Of those, more than 1,700 locations have electronic distribution of prepaid services via a POS terminal. The assets of AIM were purchased on an “earn-out” basis, with $1.9 million of the purchase price being paid at closing in cash and Euronet stock and the remainder being paid over two years based upon defined financial results of the network purchased. “PaySpot” was launched in 2002 with support from a number of ATM industry partners including Concord EFS, Genpass Technologies and a number of ATM manufacturers including Triton, Tidel, Nextran and WRG. PaySpot has since signed more than 25 independent sales organizations with over 25,000 supported ATMs to market the “PaySpot” program.

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Issuers Focus Internet activities on Customer Service, Not Acquisition

A new survey shows that credit card issuers are focusing their future Internet activities on customer service more than new account acquisition. The “2003 Summer Executive Online Credit Card Survey,” commissioned by TSYS and conducted in partnership with FiSite Research, also found that 85% of the institutions surveyed reported some card-related activities on the Internet, usually customer servicing activities like account information, bill payment, customer care or other self-service functions. The research revealed that about half of the issuers use the Internet to attract new accounts, and two-thirds of these use some form of Internet advertising. Yet three out of four respondents report that the Internet generated less than 10% of new accounts in the past year. About 60% of issuers surveyed don’t predict greater reliance on the Internet as an acquisition channel because of “customer quality issues,” and 40% cite “low approval rates” from online sources.

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CREDIT-EXPERT

Experian is set to offer consumers in the United Kingdom online access to their complete credit history. The “CreditExpert” monitoring service is similar to Experian’s credit monitoring products in the USA. Unique to the UK market, “CreditExpert” sends an alert by email or SMS text messaging that informs consumers when important new information has been added to the their credit report. Experian Consumer
Direct launched the first U.S. online credit monitoring service in 1996 and currently has more than 1.6 million members.

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Off-Line Debit Stays Strong Despite Rising Threats

Debit card executives from Bank of America, FleetBoston, and Suntrust told attendees at the ABA/Foreward Financial Bank Card Conference in Dallas this week that charging fees to consumers for debit card transactions to offset the recent reduction in interchange for merchants, is a knee-jerk reaction that could ultimately hamper growth. Beyond the recent margin compression of off-line debit cards, the executives listed off other threats to off-line debit growth including the expanded deployment of PIN pads, Wal-Mart’s promotion of ACH transactions, the “Debitman” card, and the Western Union/NYCE debit card. With only 30% of U.S. merchants currently using PIN pads at the POS, and with the 33% reduction in off-line debit interchange, all agreed that the shift to PIN will most likely level off. On Monday, VISA USA’s CEO said that since the debit card settlement, there has been no impact on off-line debit card activity. Card Pascarella said between May and August, VISA “Check Card” transactions were up by 24%.

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