Debit Card Miles

Cleveland-based KeyCorp confirmed yesterday it is taking its MasterCard debit card to a higher altitude with the addition of Continental “OnePass” miles for off-line purchase transactions. In the second quarter, Key will offer its two million “MasterMoney” debit cardholders the opportunity to upgrade to the new rewards debit card. The issuer becomes the second U.S. issuer to offer Continental “OnePass” miles for signature debit POS transactions. In February 1999, Chase Manhattan launched the first co-branded debit card program in the USA. Teaming with Continental Airlines, Chase offers one “OnePass” mile for every two dollars spent on both PIN and signature purchases. Chase has since launched a business debit card version of the program. In 1998 Chase took over the Continental co-branded credit card program from Marine Midland Bank. Chase charges a $30 annual fee for the card. Key says details of their program will be announced in several weeks. However, Key said it will offer additional bonuses upon program enrollment, and when the card is used to buy tickets for Continental flights. Existing or new Key clients will have the option to either enroll in the program to begin earning “OnePass” miles, or to maintain their current debit cards without earning “OnePass” miles. Continental Airlines is the world’s seventh-largest airline and has a hub in Cleveland. (CF Library 3/20/98; 5/4/98; 2/23/99; 8/3/99)

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Datakey Java Card

Minneapolis-based Datakey has introduced its “Model 330J Java Card” that features a highly efficient cryptographic and data management applet, built-in to ROM. With this built-in applet that supports a broad range of IT and security applications, the Model 330J card reserves most of its 32K EEPROM for other applications and data storage and enables rapid card deployment by virtually eliminating application personalization.

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Thin Loyalty Cards

London-based Black Sun and MORI have released a report on loyalty cards that shows 57% of the U.K. population have one or more of the 39 million loyalty cards in circulation; yet 25% of cardholders never redeem their points; only 40% say that having the card makes them shop at the store; 69% say they are not swayed by having a card; and 85% of card holders regard lower prices as preferable to loyalty points. Speaking this week at “Cards Europe 2003,” Black Sun`s Knowledge Management Director explained that the key reason for this is that the current loyalty programs are strong on volume and weak on value. Black Sun says the current loyalty programs are little more than thinly disguised discount programs. Not only is the discount “thin”, its usually 1%, but also the fact that it is simply a discount scheme is only slightly disguised by the issuing of points for earnings and redemption. Black Sun cited the “Nectar” loyalty card as an example.

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OPC & NYC

Official Payments Corporation has been authorized by the City of New York to provide electronic collection of credit card payment services for real estate taxes on behalf of the city, which collected more than $8.7 billion in real estate and other related taxes last year. New York City taxpayers should be able to pay their taxes by credit card through the program in time for the beginning of the city’s fiscal year in July. New York City real estate taxes for each fiscal year beginning July 1 are paid either quarterly or semi-annually.

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Collegiate Debt

A new survey on student loans has found that the percentage who reported using credit cards for part of their cost of undergraduate education has not increased from the 27% reported 5 years ago. However, those who used credit cards to pay for part of their education reported a median credit card balance of $3,400 at the time they left school, compared to a median balance of $1,600 for all students with a credit card. The “2002 Nellie Mae National Student Loan Survey” found the median credit card balance for all respondents was about $1,000. Nearly 40% of the group using cards to finance their education had credit card balances exceeding $5,000 when they left school. Although levels of credit card balances and levels of education debt are not correlated, those who reported using credit cards for undergraduate educational expenses have average undergraduate debt of $21,200, compared to average debt of $17,700 for those who did not rely on credit cards. The Nellie Mae survey also discovered that 18% of borrowers said they did not have a credit card when they left school.

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USTT Patents

PA-based USA Technologies has received “Notice of Allowance” for three more vending patents which enable the customer interface, including the card reader and LCD display, to be more easily and more cost effectively installed into a vending operator’s existing vending machines. The new, patented hardware operates in conjunction with the coin mechanism and bill validator and installs into the same space that is traditionally allocated solely for the bill validator. This gives USA Technologies the ability to quickly transform millions of vending machines into intelligent terminals at significantly lower cost.

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VISA D FINANCING

Montreal-based VISA Desjardins is expanding its “accord D FINANCING” program after signing a deal with Cantrex Buying Group, the largest furniture buying group in Canada. VISA Desjardins has been offering VISA cards with an alternate credit limit, aside from the regular limit, that consumers can use to finance the purchase of durable goods directly from participating merchants. The financing is processed in seconds over the merchant’s POS terminal. The program has been highly successful in Quebec, with close to one million users, according to the The RAM Report ([www.ramreport.com][1]). There are currently over 2,800 participating businesses in the financing program.

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

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ATM Misperceptions

A new study shows a significant number of consumers are confused about the meaning of signage at ATMs. The study by Analytica for the PULSE EFT network found that 25% of survey respondents believed that the lack of a match between at least one brand on their card and on the ATM means that their card would not work, and 20% believed that if a match did exist, no fees would be charged. The study also revealed that some users still fear that their ATM cards will be “eaten” if inserted in a machine lacking a brand signage match. PULSE says the findings suggest the promotion of ATM brands may be counterproductive. The study also found slightly more than 60% of card users have conducted transactions with their card outside their home state, and almost one in five have used their card outside the country.

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VISA DESJARDINS & CANTREX

Montreal-based VISA Desjardins is expanding its “accord D
FINANCING” program after signing a deal with Cantrex Buying Group, the
largest furniture buying group in the country. VISA Desjardins has been
offering VISA cards with an alternate credit limit, aside from the regular
limit, that consumers can use to finance the purchase of durable goods
directly from participating merchants. The financing is processed in
seconds over the merchant’s POS terminal. The program has been highly
successful in Quebec, with close to one million users. There are currently
over 2,800 participating businesses in the financing
program.

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TSR Impact

A trade magazine serving the telemarketing industry says the proposed changes to the Telemarketing Sales Rule which include a national “Do-Not-Call” list is designed to eliminate outbound telemarketing. Technology Marketing Corporation estimates that roughly 3,500,000 million Americans are actively involved in the outbound telemarketing industry, and that an additional 1.5 million American jobs rely on outbound telemarketers for their viability. TMC says the proposed changes to the TSR would put all of these jobs at risk. TMC says the Direct Marketing Association has maintained a national do-not-call for 25 years with more than four million subscribers on it, plus more than 20 states currently maintain their own do-not-call lists.The publisher also says call center jobs are being driven overseas due to significantly lower labor costs and the fact that telephony can travel globally over the Internet and other networks for virtually no cost. If the new TSR rules go into effect, a company based outside American borders would be able to sell anything over the phone and call countless U.S. households, regardless of any federal do-not-call list.

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Top 10 Issuers

The nation’s top ten VISA and MasterCard issuers produced more than $918 billion in credit card gross dollar volume during 2002, ending the year with an average volume per active account of $4,519. Add American Express and Discover to the list and the total comes in just a tad under $1,250 billion. On average, cardholders of Bank One and American Express racked up the highest dollar volume. However, Citibank, MBNA, and Bank of America, topped $5,000 in annual volume per active account. Meanwhile, card balances among the top ten V/MC issuers came in at $2,616 per active account, and the average number of active accounts settled in at 55%, according to CardData ([www.carddata.com][1]).

ACTIVE ACCOUNT ANALYSIS
(as of December 31, 2002)
ISSUER AA AADB AAV
1. Citigroup 51% $2705 $5297
2. MBNA America 59% $2484 $5000
3. Bank One 53% $3915 $8011
4. Chase 59% $2954 $4850
5. Discover 49% $2261 $4301
6. Capital One 54% $1965 $2636
7. Bank of America 67% $3031 $5103
8. Providian 66% $2481 $2329
9. Household Bank 55% $1466 $3147
10. Fleet 59% $2893 $4518
AVERAGES: 55% $2616 $4519
AA – percentage of gross accounts that are active
accounts; AADB – average balance at EOY per active account; AAV – average
annual volume at EOY per active account.
Source: CardData (www.carddata.com)

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

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Magna Platinum Series Printer

Datacard has introduced the “Magna Platinum Series” card printer, a mid-volume desktop card printer for the issuance of employee badges, membership cards, student IDs, loyalty program cards and government-issued cards. Datacard offers both full-color and monochrome versions of the printer, as well as one- or two-sided printing capabilities. Users also can configure the new Magna Platinum Series printer with any combination of inline magnetic stripe, smart card and proximity card technologies to make cards compatible with access controls and other automated systems. Optional inline application of topcoats or laminates helps improve security and extend card life.

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