Mobile Payments Headed for Critical Mass

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
2006 2007
0-2 Years 2% 1%
2-5 Years 17% 29%
5-10 Years 51% 51%
10+ Years 30% 20%
Source: Edgar Dunn & Company

Details

Debit Rewards Gather More Steam & Punch

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
Points 58%
Miles 16%
Cash 16%
Other 10%
Source: Dove Consulting

Details

Apollo Collections Offers The Affirm Card

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 Names a New CFO

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

MAKKAH VISA

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.

Details

VISA Ties its Best Rates to PCI Compliance

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

Xiring Revenues Climb 41% in 2006

French security solution provider, Xiring, showed strong growth posting
a 41% increase in revenue of 12.8 million Euro on December 31, 2006 and
a net profit up 160% to 1.3 million Euro. The company’s growth was
driven by increased sales of banking authentication solutions and a
strengthening position on the healthcare market. Remote banking solution
sales grew 65%, representing a 29% growth in a share of the business.
Sales of Xiring’s SESAM-Vitale healthcare products were up by 24%. This
growth throughout the year enabled the company an operating income of
1.1 million Euro, increasing the operating margin by over three points.
Intending to maintain this growth and, over the next three years, become
one of the three world leaders in the banking authentication market,
Xiring is pursuing a strategy of technology innovation. The company’s
targets for the 2007 financial year are growth in revenue of 30% plus
and an operating margin exceeding 7%.

Details

Security Impacts Retailer’s Reputation

A new study has determined there is a strong relationship between a consumer’s perception of a retailer’s reputation for safeguarding card account data and the consumer’s willingness to shop there. The Javelin Strategy & Research study found that consumers believe retailers share an equal responsibility with banks, credit card companies, processors, and cardholders themselves for protecting their credit and debit card account information. Javelin found that 85% of consumers would be likely to increase their shopping at a store if they knew it was a leader in devoting resources and technology to protecting its customers’ personal credit and/or debit card account information and had an excellent record in protecting its customers’ personal data. Only 20% said they would likely continue shopping at a store if they learned it had a data breach that may have compromised their card account information, while 78% said they would be unlikely to continue to shop there. The study was based on a nationwide survey of 1,200 credit or debit cardholders.

Details

PRIME CARD MASTERCARD

Prepaid card processor Nomad and IDT have successfully launched
the UK’s first fully functional instant issue MasterCard prepaid card.
The new “IDT Prime Card” was launched on a trial basis in West London
and Slough in the fourth quarter and is now available nationwide. IDT
Financial say the new card is the country’s first instant issue prepaid
MasterCard that can be purchased over the counter with no identification
or bank account. Nomad provided the open loop prepaid solution for the
new card and began working on the “Prime Card” project with IDT in
February 2006. The card is aimed primarily at the four million people in
the UK who do not have access to a bank account.

Details

First Data’s TakeCharge Takes-Off in GA

The Georgia Restaurant Association, along with the National Restaurant Association and First Data announced the Georgia launch of the “TakeCharge” payment program, designed specifically for the restaurant industry. “TakeCharge” provides increased payment choices and attractive rates for credit card processing to small and mid-size merchants in addition to national chains. In addition to exclusive rates for credit card processing, members receive easy-to-understand billing; acceptance for all major credit cards provided through First Data’s alliances with various banks; PIN-secured and signature-based debit acceptance through leading networks like the STAR Network; and the availability of merchandising programs including loyalty and gift cards; Internet Protocol (IP) based, near instant processing; the TeleCheck Electronic Check Acceptance (ECA) service; and Dynamic Currency Conversion services.

Details

Ukrainian Financial Network Selects Nomad’s CORTEX

Ukrainian Financial Network (UFN) has selected Nomad’s “CORTEX” software
to provide card payment services to network members. The software will
support a network of almost 700 ATMs and 500 POS terminals throughout
the Ukraine. These terminals support EMV card issuance as well as
authorization for member banks and access to external switches.
Fundamental to UFN’s decision to use “CORTEX” is Nomad’s partnership
with D8 Latvia SIA in the Central and Eastern European markets.

Details

THE GAME OF LIFE Literally Takes VISA

VISA and game maker Hasbro have signed a deal to add VISA cards to the latest version of “THE GAME OF LIFE.” Players of the new edition, due to be released in August, will receive a VISA card at the start of the game and will use an electronic banking unit to store each players’ financial data as well as their status in the game. The new electronic “LIFEPod” will replace the spin wheel from the classic game. In addition to including VISA cards, the new “Twists & Turns Edition” will allow players to choose four different non-linear paths while pursuing their life goals including an adventure track, family track, college track, and career track. Also, the new edition will feature elements of VISA’s “Practical Money Skills for Life” financial literacy program. Hasbro noted that the winner is no longer the person who accumulates the most money, but rather earns the most “life points,” which is a combination of wealth and life experiences. “THE GAME OF LIFE” was first launched in 1960 and is now produced in 20 languages.

Details