Charter One’s Free Gift Cards Strikes a Chord

OH-based Charter One Financial reports it sold more than 600,000 of its “MasterCard Gift Cards” from November through December. The bank says it projected sales of approximately 200,000 cards. Retail banking centers accounted for roughly 80% of total sales, while the remaining 20% were ordered over the Internet and phone. Charter One launched its new gift card in late October. The card was the first “MasterCard Gift Card” featuring no upfront fees for the card, or fees for processing. Bank of America, the largest issuer of bank gift cards, charges a $5.95 fee for new cards with up to $300 in value, and a $7.95 fee for values between $300 and $600. Most issuers of VISA- or MasterCard-branded gift cards charge processing fees. However, Charter One charges a $2 fee for each ATM withdrawal or cash advance and a $1 fee for each PIN POS transaction. (CF Library 10/29/03)


Lawsuit Filed Over Translucent Cards

IL-based Perfect Plastic Printing announced this morning it has received two patents on its transparent/translucent card technology, and has received notices of allowance from the U.S. Patent Office on two additional patent applications indicating the allowability of claims directed to clear card technology. To enforce its patent rights, PPP says it has filed a complaint for patent infringement and interfering patents against American Express. The suit was filed in the U. S. District Court, Northern District of Illinois, Chicago. AmEx introduced its translucent “Blue” card in September 1999.


Fair Isaac Gets New Business Strategist

Fair Isaac has hired Gresh Brebach, formerly of McKinsey & Co., as VP/Corporate Development. Brebach is a recognized authority on transforming businesses by aligning corporate business strategies with organizational structures, operating processes and IT infrastructures. Formerly a Director in the New York office of McKinsey & Co., Brebach led the North American IT/Systems practice and served several multinational clients in the development and rationalization of corporate strategy on a global basis. Fair Isaac Corporation is the preeminent provider of creative analytics that unlock value for people, businesses and industries.


Royal Ministry of Finance Issues an E-Money License to Contopronto

The first-ever European E-banking license allowing for payments and money transfers to any bank, credit card, business or individual through mobile phones from Europe has been granted to an Oslo-based firm.
The Norwegian Royal Ministry of Finance issued “E-Money License” to Contopronto which permits transactions up to approximately 1250 euros. The license was issued after a one-year pilot program. Contopronto says it has some clients that pay their employees salaries directly into their mobiles. Companies such as McDonald’s, Peppe’s Pizza, and Norway’s number one loyalty program Trumf are participating in Contopronto’s e-banking system. The Company says the system will shortly be available in taxis in 25 cities in Norway. Contopronto says it has just added a London office and expects to soon have E-money banks across Europe to tap into a market of 550 million Europeans.


TXT Card Launched in the UK and Europe Market

Hybyte Limited and GlobeTel Communications have launched the “TXT Card” in the UK and Europe market. “TXT Card” is a new way of providing pre-paid calling cards mobile phone users. Mobile phone
users simply pay for pre-paid calling services, such as accessing low International rates, by sending a SMS request to purchase a virtual calling card, and almost instantly, the user receives back a PIN,
enabling them to make international or long distance calls. Payment is linked to the customers’ mobile phone account or to the customers’ debit/credit cards such as GlobeTel’s “Pre-paid Magic Money Card” which is
also expected to launch this year in Europe. The “TXT Card” service is being launched initially in the UK and Germany in January, where SMS is used extensively. International markets including Asia Pacific will be opened in second quarter 2004.


2004 to be Banner Year for U.S. Smart Cards

Oberthur’s top executive predicts that 2004 will be a growth year for the smart card industry, after a lousy 2003. CEO Philippe Tartavull says that smart card companies that have large multi-site issuance capabilities will enjoy particular success as government agencies and banks seek third-party assistance in the management and distribution of cards. Tartavull predicts financial institutions will invest in new card designs and technologies to a greater extent this year, to differentiate their products. Having noted the warm consumer reception for striking designs such as the “VISA Mini Card,” the “MasterCard SideCard” and the Oberthur-manufactured “Discover 2GO Card,” banks will increasingly seek to use custom form factors as a marketing tool. Tartavull believes the most important development in the US payment industry for this year will be the expansion of contactless payments cards in the U.S. market, following the very positive feedback MasterCard has received from its “PayPass” pilot in 2003.


Euronet’s PaySpot Acquires Precept

Euronet’s PaySpot subsidiary has acquired the California-based prepaid service provider Prepaid Concepts. The acquisition will add 4,500 POS terminals to PaySpot’s prepaid network. Precept distributes prepaid products for all the major U.S. wireless carriers, including ALLTEL, AT&T Wireless, Cingular, T-Mobile, Tracfone and Verizon Wireless, as well as several regional carriers. Precept also provides electronic recharge services for three current “Boost Mobile” master agents. PaySpot was launched in the USA during 2002, and features a state-of-the-art switching engine offering billing, customer service, trouble reporting, credit management, settlement and reconciliation. The system supports online electronic top-up at retail locations via a range of POS terminals or through integrated electronic cash registers for retailers with multiple locations and multiple checkout points. Euronet Worldwide has two other prepaid services subsidiaries, e-pay and Transact, which collectively provide services in 8 countries.


Diebold Buys its Local Sales and Service Distributor

Diebold has acquired its sales and service distributor in Taiwan. Since 1999, Licent Information Technology has been a Diebold partner. With headquarters in Taipei, Diebold will now have more than 60 professionals and more than 100 combined years of banking automation experience with 24-hour service centers in Taipei, Taichung and Tainan, and a depot repair center in Taichung.


Monoline Card ROA Jumps 42 BPS Last Year


West coast investment bankers and credit card portfolio brokers, R. K. Hammer, released their model for 2003 credit card industry earnings.

Comparative Pre-tax Net Income Among Competitors, & Trend From Prior Year

Credit Unions: 1.05% ROA (down 5 basis points)
General Bank Cards: 4.53% ROA (up 25 basis points)
Monolines (pure-plays) 4.25% ROA (up 42 basis points)

Monolines, in real dollar earnings, not ROA percentages, still have the vast lion’s share of industry earnings, as they have held for many years.


Wausau Financial Promotes Director of Marketing Communications

WI-based Wausau Financial Systems has named Mona Roth to its Executive Committee and promoted her to EVP/Professional Development. Roth will be responsible for associate development, education and development services, and corporate communications. Additionally, she will be responsible for the oversight for customer communications and events such as the company’s user group conference, newsletters and websites, all geared to enhancing the customer experience with WFS. Wausau Financial Systems (WFS) is the recognized leader in the development and implementation of knowledge-based products for the payment and transaction processing industry.