OH-based Diebold has introduced its “ImageWay” distributed capture solution set, enabling financial institutions to quickly implement a cost effective imaging model that minimizes the need for infrastructure investments. Complementary solutions under the “ImageWay” name include payment processing, document imaging and archiving, and compliance monitoring services. A recent report from Dove Consulting estimates that check volumes will decrease by 10 percent between 2000 and 2010 due to card usage. As a result of this declining check volume and the Federal Reserve Bank’s decision to move away from paper check processing, financial institutions are experiencing increased per item operating costs associated with check processing. Diebold reported revenue of $2.9 billion in 2006.Details
A recent report shows that even though the share of unbanked households continues to decline, the actual number of totally unbanked people has increased slightly between 2004 and 2001, from 24.9 million households to 25.1 million households. The Aite Group study says that as a result alternative financial services providers, such as check cashers and payday lenders, have considerably expanded their footprint over the past few years. The study on “Check Cashing Technologies” also found that direct deposit is gaining share over check payments — with government benefits, in particular. Also, payroll and general spending prepaid cards are gaining momentum among the unbanked and the underbanked. Aite notes that though immigrants are only one of the constituents that use check cashing services, changes in the immigration policy affect the check cashing industry. In recent years, stricter border controls and internal crackdowns have had a negative effect on illegal immigrants’ check cashing volumes. In the meantime, the strong economy continues to offer plenty of opportunities to both legal and illegal low- to middle-income immigrant workers.Details
First Data and China UnionPay have inked an alliance to expand the acceptance of “CUP” cards. FDC will provide Chinese visitors to Australia access to its “Cashcard” ATM network. “CUP” cardholders now have access to more than 5,800 “Cashcard” ATMs across Australia. In addition, the companies have reached an agreement to expand their relationship to promote the acceptance of CUP cards in other markets outside China. Together, First Data and CUP will promote the acceptance of CUP cards in certain global markets at ATM locations and merchant point-of-sale locations using First Data systems. First Data will also provide transaction routing and payment processing services. At the end of 2006, 1.175 billion Chinese bankcards have been accepted via the “CUP” network. Also, 189 member institutions have issued “CUP” cards and 520,000 merchants accept the cards.Details
CA-based Tempo Payments and OK-based gas retailer QuikTrip Corporation have introduced a company-branded debit card that will provide customers with lower-priced gas at the pump. QuikTrip will begin a phased roll-out of a debit card that can be used at 200,000 other retail outlets nationwide that accept payments via Tempo, including Wal-Mart, Sam’s Club and CVS. QuikTrip is a marketer of motor fuel and convenience store merchandise. Tempo provides all card-accepting merchants with a low fee per transaction that is significantly less expensive than traditional credit and debit cards.Details
The “New York Times Travel Show,” presented by American Express reported nearly 30,000 attendees for the fourth annual event held in New York City. Visitors were able to research, plan and book vacations to all parts of the world; attend cooking demonstrations and learn food and wine travel tips from some of today’s top chefs; get exclusive discounts to hundreds of resorts from around the world; and attend seminars led by some of the travel industry’s leading experts.Details
A new study has found that more industry executives this year believe that mobile payments will achieve critical mass sooner. About 29% of respondents in the survey say mobile payments will hit critical mass within two to five years, compared to 17% in 2006. The Edgar Dunn research also found that more than half of payment professionals say critical mass in mobile payments will happen between five and ten years. When asked which participants in the mobile payments value chain will be the most crucial in achieving critical mass, 70% say it is merchants while 65% say it is consumers. Only 20% believe card issuers are the most critical. Edgar Dunn also found that the most significant barrier to adoption is consumers at 58% and merchants at 54%. Nearly half of the respondents said agreement on a common mobile payment platform was the most significant barrier.
Mobile Payments – Critical Mass
0-2 Years 2% 1%
2-5 Years 17% 29%
5-10 Years 51% 51%
10+ Years 30% 20%
Source: Edgar Dunn & Company
Debit card issuers are expanding the types of reward programs offered to cardholders. A new report has found that of those offering debit rewards 58% offer points for rewards as opposed to 16% offering miles and 16% offering cash-back. The report by Dove Consulting also found that points can drive increased transaction activity, between 13% and 46%. Some issuers offering cash-back found a 29% lift in average transaction size and a 15.5% decrease in closed accounts. Active card rates have also risen due to mileage rewards, some reporting an 85% active rate compared to 71% overall. Industry wide, Dove found that 37% of issuers currently offer debit rewards programs to some or all of their customers. Among rewards program issuers, 63% offer rewards for signature debit transactions. “VISA Extras” is the most common rewards program offered by issuers.
Debit Card Rewards
Source: Dove Consulting
CA-based Apollo Enterprise Solutions has entered into an strategic partnership with Card Acquisition to provide debtors access to the “Affirm Card Balance Transfer Program” through Apollo’s web-based “Intelligent Debt Solution” system. The combination of these collection tools is expected to increase the recovery and netback to portfolio owners up to 30% or more, while reducing the cost of collections by as much as 60%. Apollo Enterprise Solutions provides enterprise-class web-hosted solutions for receivables management and debt collections.Details
Ceridian Corporation has reached a mutual agreement with Douglas C. Neve, who resigned as CFO March 8 and has appointed Gregory Macfarlane as its chief financial officer. Macfarlane joins Ceridian from the General Electric Company, where he most recently served as executive vice president and chief financial officer for GE-WMC Mortgage. He was heavily involved in WMC’s capital markets strategy and execution, and was a leader in developing WMC’s in-house securitization capability. Previously, Macfarlane served as the senior vice president and chief financial officer at GE Partnership Marketing Group from 2001-2004. Macfarlane holds an MBA from the Kellogg Graduate School of Management at Northwestern University. Ceridian Corporation is an information services company.Details
First Gulf Bank has unveiled the Mid-East’s first stand-alone,
unsecured Islamic credit card. The new “Makkah VISA” offers cardholders the ability to earn “Steps” to travel to the Holy City of Makkah. For every AED 1 spent on the card, users earn one “Step.” “Bonus Steps” are also accrued by those paying their monthly administration charges on time. First Gulf says the new card will shortly be followed by a number of other Sharia-compliant products and services. FGB-IBD’s Sharia Supervisory Board consists of prominent Islamic scholars with a strong background in law and economics. All FGB-IBD’s products and transactions are carried out in full compliance with Sharia Supervisory Board’s pronouncements. First Gulf Bank is one of the largest equity based banks in the UAE with shareholders equity at AED 9 billion at end 2006.
VISA USA’s top executive told 400 attendees of its “Security Summit” that payment security must become a strategic priority for businesses and that all entities touching payments must invest in security to maintain consumer trust. President and CEO John Philip Coghlan said data security must move out of the back office and into the boardroom. VISA says in the last year, PCI compliance among the largest merchants doubled from less than 15% to more than one-third. Last year VISA launched the $20 million “PCI Compliance Acceleration Program” which combines both incentives and penalties as a means of growing industry compliance levels. VISA also announced it is adopting a new policy related to interchange fees. VISA’s best interchange rates will only be available to merchants through their acquirers if they validate PCI compliance by September 30, 2007. The impact to tiered merchants varies from $250,000 to more than $20 million depending on the merchant’s qualifying VISA volume. The summit was co-sponsored by VISA USA and Harvard Business School Publishing.Details