BALCARD PROTON PRISMA

The Balcard Consortium, headed by Athens-based Mellon Technologies, an
electronic transaction systems provider, has signed a license agreement to
employ “Proton Prisma” for its smart card technology and
infrastructure, with a major pilot set for the second quarter of this year.
The “Balcard” project, launched in February 2002, is an EU co-funded
project that aims to develop a framework for low-value cross-border
transactions over the Internet through the use of smart cards. The project
includes Balkan countries Bulgaria, Cyprus, Greece and Romania. Card
issuers involved in the project include Eurobank
Cards from Greece, Bulgarian Post Bank, JCC Payment Systems
from Cyprus and Bank
Post from Romania. Bulgaria’s national card payment operator
Borica and French card manufacturer SchlumbergerSema are also members of
the Balcard Consortium.

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Mortgage Originator Rewards

Phoenix-based Desert Document Services has launched a service to enable mortgage lenders, and their originators, to purchase mortgage documents online via credit cards with reward points awarded for each transaction. BrokerDocs and DesertDocs on the Web are the only all Web products in the mortgage document industry to include the transportation of closing documents via the Internet. This benefit adds a level of convenience for the user when changes to documents are needed because the user has access to closing documents via any Internet connection without being tied to a desktop system.

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CELLBUCKS GOLF

Toronto-based CellBucks Payments Network has installed a new wireless
payment service at Georgia USA’s Laurel Springs Golf Club. The CellBucks
service enables golfers to order food and beverages via their mobile phones
and have it caddied to them on the golf course. Once the customer has
selected their menu items, they’ll dial the toll free telephone number
provided on the menu and enter their pass code. The customer then selects
numbered items that correspond with the menu selections, routing them
through an automatic validation and credit card authorization process, with
a final order transmission through to the kitchen. The refreshments are
delivered to the customer and an e-mail detailing the day’s transactions
will also be sent to the customer as further confirmation of the member’s
account activity. The Laurel Springs Golf Course is owned and operated by a
joint venture between ClubCorp and Golden Bear International.

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Card Email Annoys

A new survey has found that email messages offering mortgages, loans or credit cards rank as the second most annoying kind of unsolicited email. While many people are annoyed by many different kinds of spam, messages selling pornography (91%), loan products (79%), investments (68%), and real estate (61%) annoy the largest number of people. According to the research of The Harris Poll, fully 80% say that they find spamming very annoying, a huge increase from the 49% who felt this way two and a half years ago. As a result of this hostility, an overwhelming 74% to 12% majority of those online favors making mass spamming illegal.

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Card Mail Soars

Despite a heavily saturated credit card market and rising consumer sensitivity to debt, direct mail volume for credit card offers increased 10% last year, by nearly 300 million pieces. Balance transfers were part of the package in approximately 60% of all acquisition offers last year. There was a growing trend to offer the balance transfer rate for 12 or more months. According to Mintel’s Comperemedia, toward the end of 2002, over 70% of the balance transfer offers were for 12 or more months, compared to 30% to 40% in the beginning of the year. The marketing research firm says that to-date, 37% of the offers tracked were at an 8.00% to 9.99% APR, compared to only 19% in 2001. In 2002, only 22% of the offers were over a 14% APR compared to 51% in 2001. While the majority of the cards offered have no annual fee, late fees have steadily risen. In the beginning of 2002, late fees were predominantly between $11 and $20 says Comperemedia. Now the majority are between $31 and $40 and many issuers tier their late fees based on the outstanding balance.

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Wincor Nixdorf 2002

Wincor Nixdorf reported this morning that profits for last year hit $94.1 million on revenues of $1.41 billion. The company says 2002 was a particularly strong year in the U.S. market. Worldwide sales of POS terminals grew 14% last year. In Taiwan, Wincor Nixdorf installed 1,550 ATMS in 7-Eleven, as part of an IT modernization project in conjunction with two large domestic banks. Wincor Nixdorf has been ranked the third largest provider of POS systems and ATMs worldwide. Wincor is also ranked first in Germany and ranked second in Europe in POS systems and ATMs.

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Coinstar CFO

WA-based Coinstar announced that its CFO, Diane Renihan, will be leaving the Company in early February. Coinstar Inc. owns and operates the only network of supermarket-based machines that offer coin counting and other electronic services. The company has more than 10,000 machines linked by a sophisticated interactive network throughout the United States, as well as in Canada and the United Kingdom.

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Funds Transfer 2.0

Digital Insight has released “Funds Transfer 2.0” which now supports both risk and good funds models, includes an enhanced administrative tool to control application settings, and keeps records of transfer and payment activity. “Funds Transfer 2.0” enables customers or members to transfer money between accounts at their host institution and other institutions via the ACH network. It also enables those customers or members to send money to friends and family via the ACH network; in which case, the payment recipient receives an email notifying them to collect their payment once the funds have cleared. “Funds Transfer 2.0” integrates directly with “AXIS Internet Banking” for secure single sign-on, ensuring an easy experience for the end user.

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LML and Verus Financial Management Come to Terms

VISA Canada reported that it processed more than 2 million credit card
transactions totalling approximately $232 million in sales volume on the
day after Christmas. During the busiest hour on “Boxing Day” VISA processed
267,000 transactions valued at $29.8 million. In early December, VISA
projected that Canadians will spend a total of $809 on holiday season gifts
this year versus $816 the previous year,
basically representing flat year-over-year spending. In total, Canadians
were expected to spend an estimated $18 billion on holiday season gifts
this year.

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Card Profits

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Credit card profits among monolines, banks, and credit unions rose across the board in 2002. Interestingly, profits among monolines remained below card profits by banks, presumably by the collapse of the sub-prime market. According to data compiled by R.K. Hammer Investment Bankers, pre-tax card profits at monolines last year came in at 3.83% compared to 4.28% for banks. Credit Unions delivered a pre-tax ROA of 1.10%, compared to 1.00% for 2001. In 2001, monolines pre-tax ROA was 3.23% and banks were 4.00%.

CREDIT CARD PRE-TAX ROA (%)
1998 1999 2000 2001 2002
Monolines: 4.61 5.59 4.56 3.23 3.83
Banks: 2.50 3.16 3.65 4.00 4.28
Credit Unions: 0.90 0.95 1.10 1.00 1.10
Source: R.K. Hammer Investment Bankers

[1]: /graphic/rkhammer/cardprofits.jpg

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TouchCredit & Isaacson

CA-based TouchCredit Financial Services has named Bond Isaacson, currently Concord EFS President of Financial Services, to its board of advisors. Prior to joining Concord EFS, Isaacson was a payments executive for Bank of America Corporation, where he was charged with positioning Bank of America as a payments leader. In addition to profit and loss responsibility for the integrated payment services unit, his responsibilities included creating new payment products and revenue streams by leveraging the opportunities among merchant services, debit cards, stored value products, and ATMs.

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