HN Financial Migrates to Keycorp’s K23 Platform

HN Financial, a division of Hospitality Network and subsidiary of Saskatchewan Crown communications company SaskTel, has committed to Keycorp’s “K23” platform for deployment with merchants across Canada. HN Financial has already ordered 200 K23s and is actively promoting the Keycorp platform as its flagship POS terminal solution. HN Financial offers merchants the opportunity to use the POS terminals to generate revenue by charging their customers a service fee or a surcharge per debit transaction. Keycorp Canada, located in Toronto, Ontario, Canada is a wholly owned subsidiary of Keycorp Limited based in Chatswood, Australia.

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Smart Card Revenues to Top $1.6B by 2009

A new study by Frost & Sullivan entitled “World Card Reader Markets” shows that the smart card industry generated revenues totaling $1.17 billion in 2002, and is projected to reach $1.66 billion in 2009. The advantages of smart cards over magnetic stripe have caused a visible migration to chip cards but this process is not likely to be complete for at least seven to eight years. Although unit shipment of magnetic stripe, smart card and hybrid readers will receive a boost by the falling prices of components, profit margins will take a beating. To maintain high margins, vendors have to simultaneously expand into several markets such as low-end swipe, high-end ATM and the insertion reader segments. Frost & Sullivan is a global leader in strategic growth consulting. This ongoing growth opportunity analysis is part of the AutoID Subscription, which also includes market insights on Biometrics, RFID and POS terminals.

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Bank One Offers VISA Extras to Small Businesses

Bank One has launched a “VISA Check Card” that enables small business customers to earn rewards that range from retail gift certificates to companion airline tickets to NFL tickets. Bank One began offering the rewards program, called “Bank One VISA Extras,” to its 480,000 small business customers early this month and is the first bank to nationally launch the program, which was developed by VISA. Customers earn points toward rewards with each off-line purchase with “THE ONE Business Card.” With “Bank One VISA Extras,” users of “THE ONE Business” card will be able to earn 1 point for each $1 in qualifying purchases and 2 points for each $1, after $4,000 in qualifying purchases. Redemptions start at 2,000 points.

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Fiserv’s Personix Moves and Beefs-Up Service

Fiserv’s Personix division has moved its St. Paul card production operations to a larger facility in the same area and now offers next-day shipment on personalized card orders received before noon Central time. Other significant technology improvements include an automated inventory and picking system to enhance the company’s ability to effectively manage multiple plastic and insert inventories; refinements in security technology to integrate the latest systems that protect client data, card inventory and the facility itself; increased capacity for UltraForm, the Personix card carrier solution that enables clients to add customized messages; and expanded production capacity for gift cards. The new facility also features state-of-the-art phone and network technology that allows for increased capacity in Personix’s client services area, facilitating responsive communication with its clients. Personix, a division of Fiserv, Inc., is a leading provider of business critical communications to the financial services, healthcare, telecommunications and retail sectors.

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GE Mortgage and Equifax Canada Team to Offer Credit Score Access

GE Mortgage Insurance and Equifax Canada have signed a deal to enable Canadians to get personalized credit reports and scores online at GE Mortgage Insurance Canada’s Web site. GE Mortgage Insurance also announced that consumers who hold GE-insured mortgages through participating lenders have access to Equifax’s online credit reports and credit scores at a 15% discount as part of GE’s “Homebuyer
Privileges Program.”

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ID Theft Last Year Approaches 10 Million Consumers

The Federal Trade Commission yesterday reported that 27.3 million Americans have been victims of identity theft in the last five years, including 9.9 million people in the last year alone. According to the survey, last year’s identity theft losses to businesses and financial institutions totaled nearly $48 billion and consumer victims reported $5 billion in out-of-pocket expenses. The survey found in the past 12 months that 3.23 million consumers discovered that new accounts had been opened, and other frauds such as renting an apartment or home, obtaining medical care or employment, had been committed in their name. In those cases, the loss to businesses and financial institutions was $10,200 per victim. Individual victims lost an average of $1,180. Where the thieves solely used a victim’s established accounts, the loss to businesses was $2,100 per victim. For all forms of identity theft, the loss to business was $4,800 and the loss to consumers was $500, on average. According to the survey results, fifty-two percent of all ID theft victims, approximately 5 million people in the last year, discovered that they were victims of identity theft by monitoring their accounts. Another 26 percent – approximately 2.5 million people – reported that they were alerted to suspicious account activity by companies such as credit card issuers or banks. Eight percent reported that they first learned when they applied for credit and were turned down.

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Kabira and Kanbay Ink Partnership

San Francisco-based Kabira Technologies and IL-based Kanbay have inked a deal whereby Kanbay will serve as a preferred integrator and key domain expert for Kabira’s “Infrastructure Switch” software and “Model-Driven Framework Solutions” for credit and debit card services. This alliance will focus on supporting the development and deployment of advanced payment services for leading financial institutions around the world. Such services include: credit and debit card services, risk/fraud management and real-time micro-payments, in addition to custom value added service offerings. Kanbay is a global integration and managed solutions company with a rich heritage in serving the financial services industry. Kabira makes the software Infrastructure Switch and solution frameworks for providers of high-speed, high-volume, Real-Time Enterprise services.

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Credit Card Mail Volume Sinks for the Past Year

Credit card mail volume continues to decline for the fourth straight quarter, dropping nearly 20% from one year ago, even though response rates have edged up slightly. The latest figures also show a 25% decrease in May mail volume compared to April, and in June, mail volume was down by 4.5% compared to May. Research by Mintel’s Comperemedia and Synovate’s Mail Monitor both show that the decline in mail volume is led by Citibank, Bank One, Chase, Providian, and American Express. However, direct mail credit card pieces from Capital One and MBNA have continued at the same space. Mintel’s Comperemedia says it shows a 50% decline in card mail volume from Citibank and BankOne. Synovate’s Mail Monitor also reportedly showed that response rates increased to 0.6% for the second quarter of this year, compared to 0.4% one year ago. But, Mail Monitor data show that response rates in the first quarter of 2003 hit a record 0.9%. Synovate says historically issuers mail more in the second quarter and then cut back in third quarter as US households go on vacation. Mintel’s Comperemedia says that about half of all cards now have an introductory rate on purchases, but introductory rates on balance transfers have become more prevalent in the past 18 months. Card issuers are becoming more likely to offer the introductory rate on only balance transfers. Card issuers continue to use teaser rates to entice new cardholders; 90% of offers have some kind of introductory rate on purchases, balance transfers, or both. Card issuers have also continued to use rewards as part of their acquisition strategy. Approximately 50% of the card offers in June had some type of reward program attached to the card, compared to only 30% in June 2002. Over 80% of these cards have no annual fee attached.

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Intuit Buys Innovative Merchant Solutions

Intuit has signed am agreement to acquire Innovative Merchant Solutions. The Calabasas, CA-based provider of credit and debit card processing services for small businesses has 110 employees. Intuit says that in three years it has attracted 40,000 customers and created a $9 million business with a limited offering. Intuit will retain all IMS employees as well as Joe Kaplan, IMS’ CEO. Intuit had annual revenue of more than $1.6 billion in its fiscal year 2003.

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U.S. Bank Expands Off-Line Debit Rewards Program

Minneapolis-based U.S. Bank has launched four debit card reward programs that it projects will generate more than $30 million in cash rewards to customers by the end of 2004. However, most of the off-line debit reward programs offer a reduced reward structure compared to one year ago. The reduced rewards are attributed the recent debit card settlement which has cut off-line debit card interchange by 33% as of August 1st. U.S. Bank is now offering the “Cash Bonus VISA Check Card,” “VISA Extras for Check Card,” “WorldPerks VISA Check Card,” and the “Harley-Davidson VISA Check Card.” All four products are part of the “Checking That Pays” program. The “Cash Bonus VISA Check Card” offers users a 0.25% cash rebate for qualifying off-line purchases. The “VISA Extras for Check Card” programs is a points-based reward option in which customers will receive one reward point for each dollar on qualifying transactions, with a nominal value of 1/4 cent each. The “WorldPerks VISA Check Card” offers one Northwest Airlines mile for every $2 in signature-based purchases, with a nominal value of one cent each. The “Harley-Davidson VISA Check Card” offers one entry into the monthly drawing and one entry into the bonus drawing at the end of the year for each qualifying off-line purchase. The sweepstakes gives away one new Harley-Davidson motorcycle every month.

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Metris’ Woo Takes Over CFO Job at Trimas

Benson Woo, former SVP of business development at Metris Companies, has joined MI-based TriMas Corporation, a high-end, specialty niche manufacturing business, as CFO. Woo has 24 years of solid financial and executive management expertise, having served as corporate CFO and treasurer in large global organizations, including 15 years with General Motors Corporation. He also has significant experience conducting business in Europe, Latin America and Asia. Woo earned a bachelor of science degree in electrical engineering from the Massachusetts Institute of Technology in Cambridge, Mass. and a master’s of business administration in finance from Harvard Business School in Boston, Mass. He is fluent in Portuguese and Chinese. TriMas is a diversified growth company of high-end, specialty niche businesses manufacturing a variety of products for commercial, industrial and consumer markets worldwide.

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CheckFree Nabs UK’s Martin Pearce

Atlanta-based CheckFree has hired Martin Pearce from Morgan Stanley Asset Management Group as Executive Director of Business Development. Pearce has been a member of the ISITC executive committee, co-representative for the UK Securities Market Practice group, a member of the global executive SMPG committee and the GSTPA fund manager’s council. CheckFree is the leading provider of financial electronic commerce services and products.

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