HBOS to Replace 15 Million Debit Cards with Smart Gemplus Cards

Gemplus has won a contract to provide Halifax Bank of Scotland with 15 million smart cards to replace the magnetic stripe system on the bank’s debit cards. HBOS current issues approximately five million debit cards per annum. The contract call for Gemplus to supply up to 15 million smart cards over the next three years. Although all banks are required to go through the EMV migration, HBOS will be among the first UK banks to do so. As part of HBOS’ migration to EMV the bank will also be introducing PIN based customer verification. This is in conjunction with the UK PIN at POS, or “Chip & PIN,” initiative. HBOS currently has more than 25 million customers.

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JCB Launches U.S. Co-Branded Card

JCB has teamed with California’s largest Japan-affiliated membership-only supermarket to launch a co-branded credit card, according to this week’s CardFlash International (www.cardflasinternational.com). The new “Marukai JCB Card,” to be launched November 8th, will function as both a membership ID card as well as a credit card. The Marukai membership bar-code information is built-in on the back of the new card. JCB piloted the card in Hawaii one year ago. The issuer says the Hawaii program generated over 10,000 co-branded “Marukai JCB Cards” within a six-month period. The new no annual fee card offers cardholders up to 3% cash back on purchases made at Marukai, and up to 1% cash back on purchases made anywhere else. Upon signing up for the “Marukai JCB Card,” the Marukai membership fee is waived for one year. Marukai currently has over 90,000 household members, making it the largest Japan-affiliated supermarket in the state.

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MRA Renews ABN AMRO Merchant Services Contract

The Michigan Restaurant Association has renewed its merchant processing contract for its 2,000 members/4,000 restaurants in Michigan with ABN AMRO Merchant Services, a joint venture of LaSalle Bank and National Processing Company. Under the terms of the agreement, AAMS will continue providing credit card authorization and settlement services for Michigan Restaurant Association members. Michigan Restaurant Association (MRA) is the recognized leader of Michigan’s hospitality industry, providing assistance, representation, promotion and education to its members. LaSalle Bank Corporation is headquartered in Chicago with more than $107 billion in assets. Its primary subsidiaries are LaSalle Bank N.A. and Standard Federal Bank N.A., which is headquartered in Troy, Michigan, with more than $49.7 billion in assets.

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AmEx Receives Clear Card Patent

The U.S. Patent Office has awarded American Express a patent for the invention of clear card technology that can be used in infrared-beaming machines, such as ATMs. AmEx released its first translucent payment card in 1999 with the launch of “Blue,” which also sported an imbedded computer chip. However, there were immediate problems with using the card in ATMs and other payment machines. After further testing, AmEx solved the problem in early 2000. The issuer then went on to experiment with transparent cards, testing various inks, films and other materials. The company then introduced the first transparent card product in the U.S. in 2002 with its “Blue” card program. AmEx says the new patent gives it the right to prevent others from producing and marketing clear technology for both transparent and translucent card products that can be used in ATM or infrared-reading machines. AmEx says the transparent card technology is currently used for “Blue,” “Blue Cash,” and several other card products.

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Smart Chip Technologies Lands Broad Patent for a Loyalty System

The Canadian Intellectual Property Office has approved Smart Chip Technologies patent for a card loyalty application. The patent for “Method and System for Allocating and Redeeming Incentive Credits between a Portable Device and a Base Device” is an expanded version of the patents owned in the USA, Mexico, Australia, and Japan. The Canadian patent is based upon SCTN’s U.S. patent with 36 claims for business processes and systems for allocating and redeeming incentive credits. The patents are key to SCTN’s end-to-end loyalty program management solution that is engineered for EMV, Global Platform, and MULTOS compliance for integration with credit and debit payments.

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U.S. Senate Passes S. 1753

The U.S. Senate yesterday overwhelmingly passed the “National Consumer Credit Reporting System Improvement Act” (S. 1753), which would permanently re-authorize the “Fair Credit Reporting Act.” The 95-2 Senate vote set up a permanent state preemption for FCRA. The preemption provision, set to expire January 1st, prevents state and local governments from enacting stronger protections for credit data. The bill passed the House of Representatives on September 10th with a 392-30 vote. The FCRA was first enacted in 1996. The bill will now go to a conference committee. President Bush has already indicated he will sign the legislation.

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Fifth Third to Distribute SLIM CD Processing Software

Fifth Third Bank Processing Solutions has signed a contract to distribute SLIM CD’s high-speed merchant credit card processing software. Transactions are processed through SLIM CD’s certified high-speed connection in 2-5 seconds, without requiring the merchants to have a leased line or dedicated Internet connection. The SLIM CD includes a desktop application, data on demand, built-in gateway services, fraud detection services, a choice of shopping carts and backup dial-in connection capability. SLIM CD, Inc is a wholly owned subsidiary of Online Commerce Corporation (OCC), a privately held E-Commerce service provider.

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Americans May Spend Less This Holiday Season

FL-based Consolidated Credit Counseling Services says its surveys shows that 58% of Americans plan to spend less this holiday season than last year with 50% saying the cutbacks are due to current economic conditions. More than 18% said they’re spending less because they’re earning less — a 4% increase over last year. Over 66% said they’re spending less because they are carrying too much debt, down from 70% last year. Consolidated Credit Counseling Services, Inc. conducts the holiday spending survey annually.

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Orbtech Holdings Limited Acquires CreditPipe

Celtron’s Orbtech Holdings Limited subsidiary has acquired 100% of the outstanding stock of CreditPipe, a Mobile E-commerce platform and M-commerce enabler. Orbtech plans to launch the “Mobile Credit” service, that utilizes WIG technology that resides on a cell phone SIM card. This eliminates the need for any Web-based banking service or WAP. Users receive immediate transaction settlement in their bank account and confirmation is received in seconds via SMS protocol. Celtron has signed agreements with CreditPipe Holdings in the UK and CreditPipe Ltd in South Africa and that the acquisition will complement the current Mobile Solutions offerings of the group.

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VISA USA Deals with Cash Problems

VISA USA reportedly suffered from a short-term liquidity problem following the Wal-Mart debit card settlement and looked to its biggest members to prepay their membership fees as a solution for the cash shortage. VISA may have lost as much as $1.4 billion in its latest fiscal year, after producing close to $2.0 billion in annual revenues in recent years. According to internal documents leaked to the Wall Street Journal, top VISA members, Bank One, Wells Fargo, and Bank of America completed a funding plan last month to lend VISA funds through the early payment of their membership fees. Apparently VISA tried to borrow the funds from the banks, but did not like the terms, settling instead on the prepayments. VISA also reportedly experienced a negative equity position during the summer. However, after patching up its finances, VISA made its first installment payment of $200 million in the Wal-Mart debit card settlement three months ahead of schedule. VISA has committed to paying $200 million per year for the next ten years as part of the settlement. The Wall Street Journal says the early payment was made to qualify for a tax break.

**CLARIFICATION:** VISA USA’s effort to raise extra cash over the summer to pay for its share of the Wal-Mart debit card settlement through the early payment of membership fees was an offer extended to all members and not just the top members. VISA also noted that its loss for the 2003 fiscal year was an accounting loss as the full amount of the settlement was posted to its books.

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Online Holiday Spending to Top $17 Billion

Jupiter Research forecasts that online holiday retail sales will be $17 billion, a 21% increase over online consumer spending last year. Despite the fact that 46% of consumers stated they will shop more than four weeks before the holiday, Jupiter Research expects the convenience of online purchasing, the primary reason consumers shop online, to push purchasers to the very edge of the buying season. Jupiter Research’s Holiday 2003 Executive Survey shows that retailers have taken measures to improve their fulfillment and customer service capabilities this year, and to ensure they are ready for the last minute rush.

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Digital Insight’s AXIS Teams with BankServ

BankServ has been named Digital Insight’s preferred partner for wire transfer processing, integrating its back-office wire transfer technology with Digital Insight’s front-end “AXIS” cash management solution. Digital Insight and BankServ will develop a real-time interface between their products enabling a complete end-to-end wire processing solution. The solution will facilitate a greater number of transactions with enhanced reporting and data exchange and will also provide a comprehensive customer experience for Digital Insight clients and their business customers.

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