Australia Takes on EFTPOS and Debit Interchange

The Reserve Bank of Asutralia’s Payments System Board is recommending that interchange fees for the EFTPOS and “VISA Debit” payment systems be slashed by approximately 70%. The bank says the current levels of these fees are not conducive to the efficiency of the Australian payments system. If the proposed standards are implemented, the maximum interchange fee in the EFTPOS system is likely to be around 5 cents paid to the merchant’s bank. This compares with the current average fee of around 20 cents. In the “Visa Debit” system, the interchange fee paid to the cardholder’s bank would fall from an average of around 40 cents, to a maximum of around 15 cents. The combined effect of these proposed changes would be to reduce the gap between the two interchange fees from around 60 cents at present to a maximum of around 20 cents. The EFTPOS standard would also further reduce the gap between the interchange fees in the EFTPOS and credit card systems. The Payments System Board also proposed the removal of the current requirement that merchants accepting VISA credit cards also have to accept “VISA Debit” cards.

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Chase Outlines Aggressive Card Goals for 05

Chase has set a target to achieve a return on outstandings of 3.5% compared to its current 2.2%. The nation’s largest issuer says it plans to cut expenses, invest in marketing, raise revenues, and maintain credit to meet its goal. Chase indicated it will also consider a portfolio acquisition in the range of $2 billion to $7 billion. Chase hopes to raise revenue through cobrand partnerships, growth in outstandings, risk-based pricing and universe expansion, better management of credit lines, improved cross-sell effectiveness/retention, and, improved collections efficiency. Expense reduction will come from a lower headcount, vendor management, site consolidation, waste management, more effective leveraging of fixed expenses, and adoption of the most efficient operational processes. Chase said it intends to reinvest in marketing through brand building. The issuer said it will also expand its judgmental credit by reaching into the “near prime” segment. Chase also noted yesterday it will raise minimum payments in the second half of this year to comply with FFIEC rules.

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Euronet’s Annual Profits Jump 56%

Euronet Worldwide reported that consolidated revenue for the fourth quarter jumped 61% to $113.1 million, compared to one-year ago. Net income for the year increased 56% to $18.4 million. The EFT Processing Segment reported annual revenues for 2004 of $77.6 million, up 47% over 2003. The EFT segment completed the year with 5,742 ATMs owned or operated, compared to 3,350 ATMs at the end of 2003 and to 5,404 ATMs at the end of the third quarter 2004. The segment processed 232 million transactions for the full year 2004 and 73.4 million transactions in the fourth quarter 2004, compared to 115 million and 33.2 million transactions for the same periods last year, respectively. The Prepaid Processing Segment reported annual revenues for 2004 of $289.8 million, compared to $136.2 million reported for 2003. Total transactions processed by the Prepaid Processing Segment increased to 65.8 million for the fourth quarter 2004, compared to third quarter 2004 transactions of 59.8 million and to fourth quarter 2003 transactions of 39.8 million. Total transactions processed during 2004 increased to 229 million, compared to 101 million for 2003. The Prepaid Processing Segment processes electronic point-of-sale prepaid transactions at more than 175,000 point-of-sale terminals across more than 85,000 retailer locations in Europe, Asia Pacific and the U.S. For complete details on Euronet’s latest results, visit CardData ([www.carddata.com][1]).

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

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ScanSoft and Diebold Team for Talking ATMs

Massachusetts-based ScanSoft and Diebold have teamed to provide speech-enabled ATMs across the USA. ScanSoft(R) RealSpeak(TM) helps visually impaired users navigate transactions from simple requests such as account balance information to deposits and cash withdrawals and provides alerts to any errors that may have occurred during the transaction in an easy-to-understand, natural-sounding voice, enabling quickly completed transactions with increased ease. ScanSoft, Inc.,is a global leader of speech and imaging solutions that are used to automate a wide range of manual processes. Ohio-based Diebold, Inc. is a global leader in providing integrated self-service delivery systems, security and services.

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Australia Card Balances Increase 14%+

Total credit card balances exceeded A$30 billion for first time during December in Australia. In addition, gross dollar volume for purchases on credit card and charge cards in December soared by more than 17% from the prior month, according to CardFlash International. Over the past twelve months, credit card balances have increased more than 14%. Based on historical data from the Reserve Bank of Australia, revolving balances topped $A20 billion for the first time during December. The latest data show that revolving balances increased to A$20,224,000,000 during December, up 12% from one-year ago. During December, Australians charged A$15.1 billion in purchases on credit/charge cards compared to A$13.7 billion one-year ago. At the end of December, consumers owed A$30.2 billion on credit cards versus A$26.5 billion for December 2003. Card credit limits reached A$78.0 billion at the end of December, compared to A$69.4 billion for December 2003. There are 11.6 million credit card and charge card accounts in Australia, compared to 10.9 million one-year ago.

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Record Number of CUs Unload Portfolios

Sales of credit union credit card portfolios with at least $1 million in assets rose 9.5% last year to $459 million. Over the past three years, more than $1.1 billion has changed hands with an ever increasing number of credit unions deciding that an agent partnership was the best way to meet member needs and free up resources for other core products. According to New Hampshire-based Brookwood Capital, 67 credit unions with credit card portfolios of over $1 million in outstanding balances sold their portfolios in 2004. The fourth quarter was particularly active, with 19 portfolio sales closed. On average, the size of the portfolios sold in 2004 was $6.9 million, down from $7.1 million in 2003.

Total Average
Year Portfolios Sold Outstandings Size
2002 41 $285 million $7.0 million
2003 59 $419 million $7.1 million
2004 67 $459 million $6.9 million
Source: Brookwood Capital

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eFunds’ Q4 Profits Rise Nearly 12%

Arizona-based eFunds reported fourth quarter net income of $11.3 million, compared with net income of $10.1 million in the fourth quarter of 2003. Net revenue decreased $4.9 million to $130.5 million in the fourth quarter of 2004, compared to net revenue of $135.4 million reported in the fourth quarter of 2003. This decrease was principally due to the sale of the Company’s ATM portfolio in November. eFunds recorded net revenue of $552.1 million for the year, compared to net revenue of $532.1 million recorded in 2003. eFunds expects full-year net revenues for 2005 to increase approximately 8% to 12% on a combined organic and acquisitive basis over the $431 million baseline revenue achieved across eFunds’ three remaining segments — electronic payments, risk management and outsourcing — in 2004. The Company expects net income to increase 17% to 22% in 2005 over the net income of $40.8 million reported in 2004. For complete details on eFunds latest results, visit CardData ([www.carddata.com][1]).

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

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Vesdia Card Loyalty Program Adds Infone

Oregon-based Infone has signed an agreement with Vesdia Corporation to make Infone services available to members of Vesdia-managed credit card loyalty and reward programs. Metro One Telecommunications, Inc. is the leading developer and provider of Enhanced Directory Assistance and other enhanced telecom services. Infone is Metro One’s premium personal assistant telephone service.

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Parcxmart Smart Card Goes Live in San Jose

The Parcxmart smart card payment platform has gone live in stores in the Japantown section of San Jose, California, enabling merchants to load value onto these cards using VeriFone “Omni 3750” POS terminals for in-store purchases and to integrate for future use to make parking meter and garage payments. Parcxmart is an electronic payments company specializing in smart card payment solutions, with its initial focus on municipal parking operations and local merchant communities.

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Commercial Cards Drive U.S. Card Market

A new study has found that commercial cards have been a major driver of growth for the U.S. card market with double digit growth rates over the last decade. According to the Mercator report, commercial card volume reached $264 billion by the end of 2003. However, the market potential is still far from being tapped. According to VISA’s new “Commercial Consumption Expenditure” index, the U.S. commercial spending will reach $14.3 trillion this year. Mercator says barriers to increasing the use of commercial cards can be removed by delivering data-rich/process -aware solutions such as the American Express “Variance Report,” Bank of America “Payment Manager” and MasterCard “e-P3.”

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TransFirst Introduces a New Product Strategy

Dallas-based TransFirst has created a new product division to roll-out a new check processing services program, prepaid and stored-value cards, a fleet card program and an insurance eligibility program. The first product announcement will showcase TransFirst’s proprietary product, Transaction Central, a Web-based centralized payment-processing engine that delivers flexible, comprehensive and end-to-end processing solutions to merchants of all sizes. TransFirst is a provider of transaction processing services and payment enabling technologies and currently processes approximately $20 billion in annual sales volume for more than 160,000 merchants and more than 760 financial institutions.

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