Transactors Drop

The number of American cardholders paying off credit card balances in full each month, often sarcastically referred to as “deadbeats,” continues to decline after a steady increase in each of the past 20 years. The reversal in the “transactor” trend began to take place in July 2001 as the effects of the recession took hold. In June 2001, 44.6% of consumer cardholders were clearing balances each month according to CardData (www.carddata.com). The following month the number declined to 44.1% and continued to decline to 42.1% by year-end 2001. Since the first of this year, the percentage of transactors has dipped to 40.3%.

BANK CREDIT CARD CONVENIENCE USAGE
(percentage of cardholders that consistently pay-off balances in-full each month)
1990: 28.6% 1997: 40.2%
1991: 29.2% 1998: 42.0%
1992: 31.3% 1999: 43.4%
1993: 33.7% 2000: 44.4%
1994: 35.1% 2001: 42.1%
1995: 37.9% 2002*: 40.3%
1996: 38.5%
* as of April 30, 2002
SOURCE: CardData (www.carddata.com)

Details

NPC Renews NSRA

National Processing Company has renewed a multi-year agreement with the National Shoe Retailers Association to provide NSRA members with discounted merchant processing solutions for both credit and debit card transactions accepted at their stores. The NSRA is a trade organization that provides independent shoe retailers with solid, practical workplace benefits that enable them to operate their business more profitably and successfully.

Details

IDT Phone Cards

NJ-based IDT Corporation reported that calling card revenues during the quarter ending April 30th, amounted to $255.3 million, up 3.0% from the previous quarter, and 20.4% more than the calling card revenues for the same period one year ago. IDT’s growth in calling card revenues was fueled by the introduction of several new calling cards in the U.S., as well as the continued expansion of both the scale and the scope of European calling card operations. IDT Europe’s calling card operations have moved into Spain, Germany and the Netherlands. IDT’s gross margins for calling cards were 24.1%, up from 21.6% from the previous quarter, and up 11.6% from one year ago. The gross margin performance for calling cards during the quarter was the highest since 1999. For complete details on IDT’s recent performance visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

Details

CISCO AVVID GAINS SUPPORT

Brussels-based VASCO has joined the Cisco Architecture for Voice and Video Integrated Data Partner Program. The Cisco AVVID Partner Program sets criteria for interoperability testing by independent third parties and is a co-marketing program enabling leading product and services firms to deploy innovative e-business solutions. With Cisco AVVID partner offerings, customers can now deploy Digipass Pro 300 v1.2, including the VACMAN Radius Middleware functionality, with the Cisco PIX Firewall family running version 6.1(2) and Cisco Access Control Server version 3.0 to provide enhanced Authentication, Authorization, Administration security to enterprise customers. VASCO Digipass tokens replace unsafe static password authentication with more secure, random one-time passwords to ensure that remote network access does not become the weakest link in a secure network. VASCO’s customers include hundreds of financial institutions, blue-chip corporations, and government agencies in more than 50 countries.

Details

Experian-TSYS

TSYS inked a deal to implement Experian’s Probe strategy management software. The software will enable TSYS credit card clients to improve process efficiency by being able to more quickly tailor their account management strategies to fulfill the needs of the customer, ultimately resulting in better offers and services throughout the customer life cycle. TSYS has more than 229 million accounts on file.

Details

AMEX & SHINSEI

Shinsei Bank has reportedly signed an agreement with American Express Global Network Services to begin issuing the Shinsei-American Express Card in August. Since the start of offering retail bank services one year ago, Shinsei has issued about 20,000 VISA credit card accounts. The Nihon Keizai Shimbun reported that Shinsei indicates its VISA business has been unprofitable and it seeks to phase out the relationship with VISA International as it develops its American Express portfolio. American Express has slightly more than one million cardholders in Japan. Shinsei Bank was created from failed Long-Term Credit Bank in March 2000 and is owned by an international group led by US-based Ripplewood Holdings. Shinsei is Japanese for “rebirth.” The bank currently has 250,000 customers. American Express established Global Network Services in 1997 to form strategic alliances with banks and financial institutions around the world to issue cards on American Express’ global merchant network. To date GNS has built 77 partnership arrangements in 79 countries around the world.

Details

Debit Future

TowerGroup’s Consumer Credit service has just published new research on the evolving debit card industry and the issues surrounding the competition between the different types of debit card transactions. The report is titled “The US Debit Revolution: How It Happened.”

In the early 1990s, debit cards had barely scratched the surface of the US consumer payments market. What a difference a decade can make. Debit now represents the US payment card industry’s most significant new product or service in 15 years. Debit cards have taken share away from both cash and checks and show strong growth rates. US consumers have found debit useful for precisely those types of purchases that are not suitable for credit-and this alone has significantly boosted debit volume and even more important, debit transactions.

Debit cards come in more than one variety. Offline debit runs on the major card associations’ networks, while online debit uses electronic funds transfer (EFT) switches as its transaction backbone. Both provide their own value in the evolving debit market, but to understand the implications of this revolution in consumer payments, it is critical to understand the products’ history, how they work and how they differ from each other.

In this report, TowerGroup provides an overview of the history of US debit cards and examines the two major kinds of debit card transactions-online and offline debit-as well as the technology and cost structure that differentiate them.

Details

WIRELESS AIRTIME PURCHASES

Scotiabank and Soft Tracks Enterprises have teamed to give Bell Mobility customers the option to purchase airtime services using their wireless phones and pay with a direct bank account transfer. The new service is the first in Canada to provide consumers with such an option. The payment service is facilitated by Scotiabank through the customer’s bank of choice. Pre-paid airtime fees or “top-ups” were previously made by using airtime cards, or credit cards. The service will be based on Soft Track’s Skypay payment architecture, which has been certified by the Canadian banks and processors to accept Interac debit and credit card transactions originating from wireless networks.

Details

SmartLink

MasterCard SmartLink has been certified by the SAP Integration and Certification Centre in Germany, as an interface software to SAP software solutions. SmartLink is a software solution that integrates transaction data from MasterCard commercial cards into an organization’s SAP solution-based environment. Through MasterCard SmartLink, an organization can obtain full details of a transaction for review within 48 to 72 hours after the purchase has been made, anywhere in the world, so that irregularities can be immediately picked up. One of the first sites worldwide to install MasterCard SmartLink is the Fancourt Hotel and Country Club Estate in George, South Africa.

Details

SMARTER V-SMART

Toronto-based Bioscrypt announced an enhanced firmware version for its V-Smart access control solution which now supports dual fingerprint templates and multiple application smart cards.
V-Smart, a dual factor system, combines fingerprint-based biometrics with a MIFARE or HID MIFARE contactless smart card. The new version 6.0 V-Smart firmware also adds support for multiple applications on MIFARE cards. Until now, MIFARE smart cards used for fingerprint biometrics with V-Smart were locked to other applications. A feature in the new firmware utilizes advanced MIFARE application firewalling capabilities and enables users to achieve the same level of security while letting other applications securely share the card.

Details

FDC Acquisition

As First Data held an investor conference in Paris this morning, it announced the acquisition of E Commerce Group, Inc., an EBPP company based in New York. ECG’s flagship product is its Speedpay software which provides custom-tailored electronic payment applications. Speedpay allows companies to receive electronic bill payments through multiple sources including call centers, automated voice response units, and the Internet. ECG will operate as a part of the Western Union family of businesses. The company will also continue to operate under the guidance of its current management team. ECG, in the fall, was ranked among the 200 fastest growing privately-owned companies in the U.S. by Inc. magazine and among the ten fastest growing privately-owned companies in New York City.

Details

IntelliCAT Upgraded

MagTek announced an upgraded version of its IntelliCAT integrated card issuing and management system which incorporates the recently released MagTek Motorized IntelliCoder card encoding device. The IntelliCAT system will allow financial institutions to securely manage customer PIN selection and on-site card issuing across multiple stations and installations. The IntelliCAT system consists of three components: the Motorized IntelliCoder card encoder; the IntelliPIN portable PINpad; and the IntelliCAT software suite.

Details