Debit Battle Begins at the POS

The CEO of The De Palma Group says that the merchant battle to keep interchange costs down starts with steering consumers to PIN debit at the point of sale. De Palma says he has seen countless point of sale terminals that prompt for debit or credit before the consumer even swipes the card, which shifts the opportunity for best routing from the merchant to the consumer, who doesn’t know or care about the various permutations of interchange. De Palma says by putting the logic at the beginning of the process through the use of a BIN file, merchants will realize considerable savings with each and every transaction. De Palma suggests that merchants look to their processor or acquirer to provide the BIN file or more sophisticated terminal applications.

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MicroBilt to Resell Falcon ID

MicroBilt has become the first reseller of Fair Isaac’s “Falcon ID” solution to the financial services industry. Falcon ID provides businesses identity fraud detection by applying predictive data from both internal and external sources and determines identity fraud risk while enabling the processing of applications and transactions of genuine customers. MicroBilt provides credit bureau data access and retrieval, credit, collection and data sources. Fair Isaac Corporation is a provider of creative analytics,offering predictive modeling, decision analysis, intelligence management, decision management systems and consulting services.

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Prepaid Market Set for a Big Growth

A new forecast shows that the number of consumer incentives cards issued will more than double over the next four years. Using data derived from the 2004 and 2005 prepaid market benchmarks that investigated both the Open and Closed prepaid markets, Mercator has produced the prepaid industry’s first four year forecast predicting the total spend and the total number of cards issued for market segments identified by Mercator. The report also delivers the first comparison of Open spending versus Closed spending for all relevant prepaid market segments – information critical to anyone planning a prepaid strategy since it identifies markets where Open Cards are gaining market share over Closed Solutions, where Closed Solutions remain dominant, and where the markets are expanding to embrace both solutions.

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CyberSource Beefs-Up Decision Manager

CyberSource has beefed-up its anti-fraud system for merchants. Version 2.0’s new screening capabilities focus on order patterns within an individual merchant’s business. Merchants can also be alerted when a purchaser is ordering unusually large quantities of any product over a designated period of time. Merchants using “Decision Manager 2.0” are now able to make automated judgments about whether an order violates established monetary limits, order repetition, and product quantities. Other new features includes updated risk scoring models and negative lists with chargeback information of confirmed fraud to maintain fraud detection accuracy. “Decision Manager 2.0” enables payment processors to automatically update a merchant’s negative lists with chargeback data. “Decision Manager 2.0” also allows merchants to enforce different acceptance rules by time of day, day of week, or calendar date to accommodate differences in business patterns, review staffing levels, customer service availability, etc.

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Online Resources Avoids a Nasdaq Delisting

Online Resources announced that it received on August 18th, then cured on August 19th, a notice of potential delisting from Nasdaq Stock Market. The Nasdaq notice was delivered in connection with the delayed filing of the Company’s Form 10-Q for the period ended June 30, 2005. The Company is now in compliance with the listing standard regarding filing of reports. Online Resources powers Internet financial services for over 700 firms, three million consumer end-users and processes over $12 billion in payments annually.

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Federal Reserve Clarifies ATM Disclosure

The Federal Reserve Board on Friday published proposed amendments to “Regulation E” to clarify the disclosure obligations of ATM operators with respect to fees imposed on a consumer for initiating an electronic fund transfer or a balance inquiry at an ATM. Currently, the regulation provides that an ATM operator that charges a fee for initiating an EDT or balance inquiry must post notices at ATMs that a fee will be imposed. The proposed revisions would clarify the intent of the rule that ATM operators can satisfy the requirement by providing a notice that a fee “may” be imposed if there are circumstances under which some consumers would not be charged for services. ATM operators must continue to provide the consumer with a separate notice, either on the screen of the ATM or on paper, that a fee will be imposed and the amount of the fee, before the consumer is committed to paying a fee.

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Smart Chip Technologies Gets a New CEO

Smart Chip Technologies announced that the Airos Group’s President Miki Radivojsa has agreed to join Smart Chip Technologies as its new chairman and CEO. Radivojsa has built a profitable and growing software development company and brings more than 16 years of business and technical leadership experience in banking, payments, chip, telecommunications and embedded development. Smart Chip Technologies provides customer retention solutions that include loyalty, pre-paid stored value, and gift cards.

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U.S. Bank to Expand its Prodigy ATMs

U.S. Bank says it will expand its “Prodigy” replacement rollout of ATMs powered by Phoenix Interactive Design’s “VISTAatm” which provides text-to-speech technology, customized preferences set by customers and true one-to-one messaging. U.S. Bank has introduced several new features, including audio-assisted ATM user experiences and the ability for all U.S. Bank customers to customize and save their personal “fast cash” preferences. U.S. Bancorp, with $204 billion in assets, is the 6th largest financial holding company in the United States. Phoenix Interactive Design, Inc. provides a Windows(TM)-based multi-vendor ATM operating software to the financial services industry.

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Barclays and SB Terminate Card Venture

Due to Barclays Bank acquisition of a majority stake in ABSA Group, the credit card joint venture with The Standard Bank of South Africa has been terminated. Both sides said the decision was amicable. Under terms of the decision Standard Bank will increase its stake to 100% and SB will re-issue the existing Barclaycard customers with a Standard Bank branded card. Barclays will also be precluded from using the Barclays or Barclaycard brands on any credit card products in South Africa until 18 February 2007.

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CA to Permit International ATM Surcharges

The California Senate is set to vote on a bill next week that would enable ATM operators to levy surcharges for international transactions that are currently prohibited by MasterCard/Cirrus and VISA/PLUS internal policies. VISA and MasterCard EFT network policy provides an exception if a state’s law specifically permits such fees on international transactions. To-date, 12 states have passed such legislation. Senate Bill 389 is backed by Innovus, Cardtronics, First Data and others. Historically, the networks have paid a fee of $2.25 per transaction of each of these restricted transactions. Recently, however, the Plus and Cirrus networks have announced reductions to those fees to roughly $1.00 per transaction. The bill’s backers says there is a higher cost related to making ATM cash available to cardholders of non-U.S. banks and that the networks’ actions will further squeeze already tight margins for both bank and non-bank deployers.

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WVA AG Gets Cross Country Debt Canceled

San Diego-based Midland Credit Management has reached a settlement with the West Virgina Attorney General in regard to charge-offs it purchased from Cross Country Bank. Midland agreed to cancel more than $3.5 million in credit card debt allegedly owed by approximately 3,500 West Virginia consumers. Midland also agreed to close all of the accounts with a zero balance and notify credit bureaus to delete all references to the account from consumers’ credit records. In June, the West Virgina Attorney General reached a settlement with sub-prime issuer Cross Country Bank and Applied Card Systems in a lawsuit regarding CCB’s business practices. CCB and Applied agreed to pay $1.5 million into a consumer credit education fund and conflict resolution programs. The 2004 lawsuit charged that CCB and applied engaged in deceptive marketing of credit cards, offering low credit limits and charging exorbitant hidden fees to consumers who already had bad credit. The suit contends that Applied Card Systems used a wide range of abusive collection practices to coerce consumers into making payments if they contested the fees or defaulted on the account. (CF Library 6/4/04; 6/25/04; 6/22/05)

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Debit Card Volume Growth Slows in June

Debit card EFT/POS volume slowed in June to a per annum growth rate of 8.2%, compared to 12.2% in May. During June, Australian consumers used debit cards for A$6.5 billion in transactions. Over the past five years debit card volume has grown 124%. During June, Australians used debit cards for A$5.2 billion in purchases with 82.5 million transactions. Total EFT/POS transactions were 96.7 million for June according to the Reserve Bank of Australia. Over the past twelve months, Australians have used debit cards for A$61.5 billion in purchases. There were 25.1 million debit card accounts in the country at the end of June, compared to 24.7 million one-year ago.

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