Gemplus, Monday announced the availability of the two best selling smart card interfaces in a single card. The move significantly broadens the market for multi-application smart cards. The GemCombi/MPCOS card is the first to provide two standard interfaces on a single chip. MPCOS for high security contact cards is the most widely used smart card operating system in banking applications. Mifare for contactless operation is the industry standard for applications where speed and ease of use are important.Details
Each year the state contacts more than 600,000 taxpayers asking for past due tax returns. Starting Monday, 2,000 of these taxpayers will receive something different — an already completed state tax return awaiting their review and signature, according to the Franchise Tax Board (FTB).
“Making the tax system less burdensome is fundamental to my intent of making government more responsive to the people it serves,” said State Controller and Chair of the Franchise Tax Board Kathleen Connell.
The FTB Prepared Return pilot program aims to increase non-filers’ voluntary compliance with the tax laws while improving customer service by expanding tax filing options. FTB envisions that many taxpayers will someday file their tax return without completing any forms. Taxpayers will simply view their tax information online and “file” their return by indicating they agree with the figures. They will be able to make any needed changes online and file their returns without completing the traditional paper form. This pilot program is the first step toward achieving FTB’s vision of “form-free” tax filing. Taxpayers selected for this pilot will receive a notification letter and a completed tax Form 540A. If the taxpayers agree with the amounts reported on the prepared return, all they need to do is sign it and send it in. FTB is also extending its credit card payment option to taxpayers selected for this pilot. Taxpayers can pay the past due taxes shown on the prepared return by using their Discover/NOVUS, MasterCard or American Express card. To take advantage of the credit card option, taxpayers will need to call a toll-free number directly to the credit card processing vendor. The entire transaction will be completed over the phone.
FTB encourages individuals that have received one of these prepared tax returns to review it closely for accuracy. If they disagree with the information reported, it is important that they complete and send in an accurate tax return. Taxpayers who have general questions about filing or paying taxes may call FTB’s toll free assistance phone line at 1-800-852-5711. Business hours are from 7 a.m. to 8 p.m. Monday through Friday. FTB also has tax help available on the Internet at [www.ftb.ca.gov].
Paymentech, the nation’s third largest credit card processor, is launching recurring credit and debit card payments for major life/health and property/casualty insurers. The new business signals growing interest in new electronic payment options that allow consumers to conveniently pay their bills. Paymentech projects almost two million transactions annually once all programs are fully underway.
Some of the programs also include processing for one-time payments for agent sales, phone transactions, and web site applications. Paymentech?s processing menu includes credit card, debit card and automatic checking account deduction.
Paymentech?s direct response unit is highlighting automated recurring bill payment programs for the insurance industry at the Insurance Accounting and Systems Association conference in San Diego. With recurring payments, consumers pre-select a credit, debit, or electronic check option to cover regularly scheduled automobile, property/casualty or life insurance premiums. Customers receive statements for their review and records.
Paymentech Recurring Payments 2-2-2-2-2
For recurring payments, Paymentech interfaces with billing systems to extract a file of non-check payments for authorization and settlement, including those that directly debit a bank account. Insurance providers electronically collect receivables, reduce the payment cycle time, and access funds sooner. Lock box, collection agency and insufficient funds bank fees are also reduced. Insurance companies believe customers find credit cards more convenient. There are no checks to write, stamps to buy or statements to return. Recurring payment programs can also be used as tools for building consumer loyalty. Responding to MasterCard and Visa market research, Paymentech, the largest processor for card-not-present payments, created programs specific to the insurance industry. ?Over half of the top 20 insurance companies offer some type of credit card acceptance,? said Gary Beck, senior director for recurring payments at Paymentech. Research also suggests that credit card usage can help close initial sales and reduce walk-in payments.
?Credit cards currently account for 5% of all premium payments. Automated monthly or quarterly payments will increase that,? said Beck. ?MasterCard research shows that 34% of consumers favor automatic recurring payments and that 82% of service companies cite customer service enhancements as the key reason for offering recurring payments.?
Paymentech, Inc., founded in 1985, is the third largest processor of bankcard transactions and a leading issuer of commercial cards in the United States The company processed approximately 2.2 billion total transactions and $54 billion in sales volume during calendar 1998.
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Paymentech Recurring Payments Fact Sheet
Recurring payments (RPs) account for over $500 billion in annual payments. Less than 2% is currently captured on cards. Approximately 5% of payments are made through direct debits of consumer checking accounts. (Nilson Report, August 1996) According to a MasterCard survey, 93% of all recurring bills are paid by writing a check, however, 36% of consumers currently use some type of recurring payment method for at least one bill. Automatic payment type preferences were
– automatic checking account debit (electronic check processing)
– automatic paycheck deduction
– credit card recurring
– 34% of consumers (not currently using) would prefer a recurring payment
– about one in four consumers mentioned they would switch to a
competitor if that company could do automatic recurring payments
Insurance Industry Statistics
– total annual premium payments for homeowners, auto and life insurance is
– credit card volume accounted for about $767 million
Benefits of RPs
Merchants (service industry providers):
– secure transactions
– streamlined processing
– improved collections
– improved customer service and retention
– incremental sales
– convenience, saves time and money
– option to revolve
– earn points in co-branded and frequency award programs
VeriFone, Monday announced that it is offering retailers electronic gift-certificate and check-authorization applications. PreNet, a new VeriFone customer and electronic cash-card issuer, also is implementing IPS to offer a new payment-processing service. Retailers can add e-gift-certificate and check-authorization services to VeriFone’s open e-services technology framework. IPS is a new technology framework developed by VeriFone that incorporates Internet technologies and allows retailers to easily add and deliver new payment applications.Details
VISA International’s Board of Directors elected William Boardman as it chairman yesterday to succeed Peter Ellwood. Boardman is a SVP at Bank One and is currently chairman of the VISA U.S.A. Board of Directors. Peter Ellwood, chief executive of Lloyds TSB of London, has served as VISA International chairman since 1994. Ellwood indicated last year he would relinquish the chair after Malcolm Williamson settled in as the new VISA International CEO. Ellwood said it was less than satisfactory for the Chairman and CEO to come from the same country. The Visa International Board also appointed Paul Vessey as vice chairman of the board, succeeding F. Phillips Giltner, chairman of First National of Nebraska. Vessey is EVP of Canadian Imperial Bank of Commerce.Details
Blue Square-Israel Ltd., together with Bank Leumi Israel Ltd., and Visa C.A.L, Monday announced the launch of the “Buy & Bonus – Visa” credit card. The initiative integrates Israel’s largest customer loyalty club, Buy & Bonus, with Visa. The “Buy & Bonus – Visa” can be used both as a normal credit card and for Buy & Bonus purchases. New members will receive a package of benefits, including free cellular phones, coupon booklets, discounted travel packages, extra Buy & Bonus points, and other special offers and gifts.Details
Providian continues to encounter more lawsuits in the wake of allegations pertaining to its credit card practices. Last week shareholder litigation specialist Wolf Popper filed a class action lawsuit on behalf of persons who purchased Providian securities in the open market during the period Jan. 15, 1999 through May 18, 1999. The complaint alleges that Providian improperly obtained revenues, and misrepresented the source of its revenues and income in public filings and press releases. The suit charges Providian with improperly conducting its credit card business by, among other things, intentionally failing to post credit card payments on time in order to enable Providian to improperly record as revenues late fees and penalties, improperly enrolling new credit card customers without their permission, and improperly charging credit card customers for Providian’s fee-based products not requested. Wolf Popper says once the facts concerning defendants’ conduct became known and it was disclosed that Providian was the subject of an investigation by the San Francisco district attorney’s office, the price per share of Providian’s stock fell over 40%.Providian says it has not seen this particular lawsuit but firmly states that the allegations are absolutely without merit and it intends to defend itself vigorously against these claims. Yesterday Providian’s stock closed at 79 9/16 per share compared to its 52-week high of $138 per share.Details
BSI2000, Inc. yesterday announced and demonstrated, at the American Healthcare Alliance 1999 Provider System Conference in Kansas City, Missouri, its new MedSAFE 2000 optical medical card system. In addition, BSI2000 and AHA announced that they have signed a contract, on a mutually exclusive basis, to take the MedSAFE 2000 optical medical card product to market.
BSI2000 designs and markets software/hardware products for the medical, drug and alcohol testing, and identification markets that substitute highly efficient and fraud-proof optical cards for older paper-based transaction systems.
American Healthcare Alliance (“AHA”) is a nationwide network of preferred provider managed healthcare systems and organizations with more than 18 million insured lives and 300,000 physicians in 3,800 hospitals and clinics across the country.
Optical cards are the same size and shape as regular plastic credit cards but hold millions of bytes of updatable information — thousands of pages of text (up to six megabytes) — in a secure, inexpensive, and permanent personal package. The market for optical cards is driven by their superior capacity — 750x that of smart cards; exceptional speed — 30x that of smart cards for writes; and far greater reliability and ruggedness.
MedSAFE 2000 stores and manages eligibility and medical information on optical cards, including: (a) Emergency information such as current medical conditions, allergic reactions, drug regimens, attending physician, next of kin, blood type, etc.; (b) Full clinicals, including detailed history of conditions, diagnoses, and treatments, detailed records of hospital stays and visits, surgical procedures, physician comments, and others; (c) Strong patient identification with digital photographs and automatic machine signature or fingerprint verification to virtually eliminate fraud and help prevent costly errors; (d) Insurance and payments records; and others. BSI2000 has already contracted with a small 5,000-patient clinic in Denver, Colorado — Western Medical Center, PC — to become the first MedSAFE 2000 site. Installation is scheduled for June 1999.Details
WesBanco yesterday announced the sale of its credit card portfolio to an Atlanta, Georgia-based InfiCorp. The credit card receivables are approximately $15 million. WesBanco and InfiCorp have entered into an agent bank arrangement in which InfiCorp will offer its credit card products to WesBanco customers using the WesBanco name. Current WesBanco credit card customers will be able to continue using their existing cards.Details
Bank of America is offering picture security with its introduction of the Photo ‘Security Check Card’ and Credit Card in Texas and New Mexico. The Photo Security Cards feature a customer’s photograph and signature on the front of the card. Both the Check Card and Credit Card offer a new level of protection against card fraud and theft. Merchants who accept the card for payment can easily verify a customer’s identification by just looking at the card.Details
The most efficient way in 1999 to acquire new accounts is the Internet while the most expensive method is through portfolio acquisitions, according to data released this morning by R.K. Hammer Investment Bankers. Hammer says credit card issuers racked up costs ranging from $38 to $180 to get new accounts so far this year. The average cost per acquired account is now $77. Despite the efficiencies of Internet marketing, the majority of new accounts continue to be generated by traditional solicitations and telemarketing, wherein the cost-per-account averages $69. By contrast, new accounts generated over the Internet, average $43. Hammer notes that the big question is: Will the lower cost Internet-acquired accounts produce differing renewal rates, thus altering their true long term net cost?
COST PER ACQUIRED ACCOUNT
METHOD RANGE AVG
Portfolio Acquisition $80 to $180 $116
Agent Bank Programs $75 to $90 $ 82
Solicitation $60 to $110 $ 69
Internet Driven $38 to $55 $ 43
Source: R.K. Hammer, Thousand Oaks, CADetails
Capital One and DoubleClick announced this morning that Capital One will be the preferred credit card partner on DoubleClick’s newly-created ‘Shopping and Services Program’, which was recently announced. Capital One will be able to utilize a variety of creative options-including banners,buttons and email text links-to acquire new customers and begin to learn more about the consumers’ interests and passions.Details