TRM Net Income Doubles as Revenues Grow 18%

OR-based TRM Corporation reported that net income for the second quarter more than doubled to $2.7 million as revenues increased 18% to $24.4 million. During the second quarter ATM gross sales increased by 47.5% to exceed $15.4 million and transacting ATMs grew to 4,616, an increase of 1,343 units over the prior year. TRM reports that total withdrawal transactions increased from 7.3 million to 9.2 million; average withdrawals per ATM increased from 386 to 399; and, average sales per withdrawal increased 12%, from $2.50 to $2.81. At mid-year, the Company’s ATM network consisted of 4,616 units deployed in the UK, USA, Canada and Northern Ireland. For complete details on TRM’s latest performance visit CardData ([www.carddata.com][1]).

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

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VeriFone Adds Two Sales Executives

VeriFone has hired Dale Laszig, former VP/Sales at Hypercom, as a Senior Sales Representative, and Rhonda Walsh, formerly with Delta Card and MCCS, as a Sales Trainer. Prior to Laszig six years with Hypercom she spent two years with Thales North America and seven years with First Data as a sales development specialist and national trainer. Walsh brings a whole new element to the knowledge base of the VeriFone ISO sales and training team. VeriFone, Inc., recognized worldwide as the trusted leader in secure electronic payment technologies, provides expertise, solutions and services for today with a smart migration strategy for tomorrow.

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JAA/JCB CARD

Macoto Bank and Japan Asia Airways, a subsidiary of Japan
Airlines Corporation, have teamed to launch a co-branded JCB international credit card. The new “JAA/JCB Card” enables cardholders to earn mileage rewards that they may exchange for ticket awards with JAL Group and other partner airlines, upgrade awards on JAL Group flights, free hotel accommodation awards, a 10% discount for in-flight purchases on JAL Group international flights, and many other premiums. Macoto Bank says its target market for the new card is approximately 9 million
in Taiwan, and it anticipates issuance of more than 30,000 cards
in the first year. JAA was established in 1975 to operate between Japan and Taiwan, after JAL agreed to stop its services to Taiwan in exchange for the right to fly to mainland China. JCB has formed alliances
with more than 320 financial institutions globally to increase merchant coverage and cardholder base.

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Heartland Payment Systems Plans an IPO

NJ-based Heartland Payment Systems has filed a registration statement with the SEC for a IPO. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. Heartland Payment Systems Inc. is a leading provider of bank card-based payment processing services to merchants in the United States and, according to The Nilson Report, in 2003 was the eighth largest card acquirer in the United States ranked by processing volume.

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Equitex/Denaris Sign a Payroll Card Deal

Equitex/Denaris have signed a non-binding letter of intent with UT-based Financial Freedom International to distribute stored value card and payroll card products. Financial Freedom International is a provider of educational materials, software and services to consumers with troubled debt. Their products and services help people in financial crisis avoid bankruptcy, improve credit rating and reduce their debt to manageable levels. Equitex, Inc. is a holding company operating through its majority owned, publicly traded subsidiary FastFunds Financial Corporation of Minnetonka, Minnesota, as well as its majority owned subsidiary Denaris Corporation.

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TNS Inks The Huntington National Bank

OH-based The Huntington National Bank has signed a multi-year agreement with Transaction Network Services for always-on, managed ATM network connectivity. Under the multi-year agreement, Huntington National Bank will use TNS TransXpress(R) Secure to support its ATM portfolio. The Huntington National Bank is the principal subsidiary of Huntington Bancshares Incorporated , a $31 billion regional bank holding company. Transaction Network Services is one of the leading providers of business-critical, cost-effective data communications services for transaction-oriented applications.

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Diebold & FDC to Certify IFX for ATMs

Diebold and First Data announced they are certifying their new “Interactive Financial eXchange” for ATMs. IFX is an XML-based message protocol, which can become the communication standard across a financial institution’s delivery channels. Because IFX fosters interoperability among banking systems, it’s capable of providing another layer of openness within the realm of financial service solutions. First Data also offers a variety of payment services to businesses around the world. Diebold, Incorporated is a global leader in providing integrated self- service delivery systems, security and services.

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EIPP is Poised for Explosive Growth

A new study has found that two out of every three companies with annual revenues exceeding $500 million now use some form of “Electronic Invoicing Presentment and Payment” system. The “B2B Spend Management Survey,” jointly sponsored by MasterCard and Ariba, also found that 66% of respondents currently use some form of EIPP; 62% rely on such technology to make electronic payments to suppliers; and, 35% use the technology to receive payments from customers. More than half the respondents cited the reduced processing time and resulting lower costs as the primary benefits of using EIPP. The research revealed th at despite the growing utilization and popularity of EIPP, barriers to its adoption still persist. Survey respondents cited cost (25%), complexity (22%), and aversion to making changes to their IT systems (19%) as the top reasons for not deploying an EIPP system. Nevertheless, MasterCard believes eight out of 10 respondents from companies that don’t currently have EIPP are planning to implement it within the next two years.

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Debit Volume Up 19%; Transactions Soften

Gross dollar volume for off-line or signature debit cards during the second quarter continued to grow at a 19% annual rate. However, the growth in purchase volume slowed a bit to 20%, compared to 22% in the prior quarter, and the gain in the number of total transactions slipped from 19% to 17%. The number of signature debit accounts and cards maintained an annual growth rate of 11%-12%. During the second quarter, VISA and MasterCard processed $113.7 billion in purchase volume, compared to $95.0 billion one-year ago. Gross transactions for the second quarter increased 17% to 3.4 billion. Overall, gross dollar volume increased 19% to $170.0 billion. At the end of the second quarter, there were 207.6 million VISA- and MasterCard- branded signature debit cards in circulation in the USA, linked to 165.4 million accounts, according to CardData. Based on gross dollar volume, VISA’s share of the off-line debit card market is a solid 80%. For complete current and historical statistics on the U.S. debit card market visit CardData ([www.carddata.com][1]).

U.S. SIGNATURE DEBIT SNAPSHOT
2Q/03 2Q/04 Y/Y CHANGE
Gross Volume $142.7b $170.0b +19%
Purchase Volume $ 95.0b $113.7b +20%
Gross Transactions 2.97b 3.46b +17%
Total Accounts 148.0mm 165.4mm +12%
Total Cards 186.9mm 207.6mm +11%
Source: CardData (www.carddata.com)

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

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More Rate Hikes Likely Before Year End

As expected, the Fed yesterday afternoon raised the federal funds rate by 25 basis points to 1.5% and the the discount rate by 25 basis points to 2.5%, prompting many card issuers this morning to raise their prime rate to 4.50%. While many analysts previously believed further rate increases will be held at bay until after the presidential election, the Feds indicated more rate increases may be on the way before year’s end. The FOMC statement said “inflation has been somewhat elevated this year” and the “economy appears poised to resume a stronger pace of expansion going forward.” The likelihood of further rate hikes this year may force many issuers to abandon fixed rate cards in favor of variable rate pricing before or during the fourth quarter.

AUGUST RATE HISTORICAL
Prime Rate Card Rate
1992: 6.00% 18.04%
1994: 7.25% 17.22%
1996: 8.25% 16.35%
1998: 8.50% 16.76%
2000: 9.50% 17.66%
2002: 4.75% 15.02%
2004: 4.50% 15.57%
Source: CardData (www.carddata.com)

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CO-OP Network Signs NC-based Coastal FCU

CA-based CO-OP Network has signed one of the largest credit unions in the Southeast to provide full ATM, PIN POS and signature debit processing services. Under the agreement, CO-OP Network will provide full ATM, PIN POS and signature debit processing for Coastal FCU, providing its membership with surcharge-free access to 375 CO-OP Network ATMs throughout the Tar Heel state and more than 19,000 nationwide. CO-OP Network (www.co-opnetwork.org), established in 1981 and located in Ontario, Calif., is wholly-owned by its credit union shareholders and provides volume discounts on products and services that include risk management as well as debit and deposit access.

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