The 50 bps rate cut by the Feds yesterday sent a jolt through the financial markets including the payment card industry. Transaction volumes have been declining for the past four months, and it appears the economy has a long ways to go for recovery from the 2001 recession. The Federal Open Market Committee decided today to lower its target for the federal funds rate by 50 basis points to 1.25%. The Board of Governors also approved a 50 bps reduction in the discount rate to 0.75%. The FOMC says incoming economic data have tended to confirm that greater uncertainty, in part attributable to heightened geopolitical risks, is currently inhibiting spending, production, and employment. The prime rate fell to 4.25% overnight the lowest level in more than 40 years. The impact on credit cards will be minimal given the prevalence of fixed interest rates and the previous triggering of floor interest rates.Details
Athens-based Alpha Bank has completed the implementation of
CardinalCommerce’s “Payment Authentication Platform” software for its card
issuing and transaction acquiring business. The implementation was
completed in connection with Alpha Bank’s adoption of the “Verified by
VISA” online authentication standards. Alpha Bank has 2.6 million
customers, 1.5 million active card accounts, over 70,000 merchants, and
30,000 POS terminals. Cardinal and several partners, including Delta
Singular, the largest VISA and MasterCard processor in southeastern Europe,
WorldWide Trust and Safe3w, a provider of strong authentication products,
recently formed a consortium to market online secure payment solutions in
Europe. CardinalCommerce and Delta Singular plan to activate MasterCard
“SecureCode” in the near future for Alpha Bank.
Atmel Corporation has expanded its “C51” chips to address any application
using a serial, USB or PCMCIA smart card reader. The new “AT8xC5122” and
“AT83C5123” join Atmel’s line up of other “C51”-based one-chip solutions
currently used in serial smart card readers for mobile phones, PDAs and
energy meters and are available in Flash, RAM or ROM versions. Pricing is
US$4 for 10,000-unit quantity for the AT8xC5121 Flash version and US$2.50
for the ROM version. All devices retain a fully integrated DC/DC converter
with 75 to 98% efficiency, which powers the target card with the
appropriate 5, 3 or 1.8 Voltage regardless of the voltage source. An
ISO7816 UART is also integrated for easy data transfer to the card.
Metris Companies/Direct Merchants Credit Card Bank has launched the co-branded “Lillian Vernon MasterCard” offering cardholders a 3% rebate on all Lillian Vernon purchases and 1% on all other purchases. For every $10 in rewards earned, cardmembers will receive a $10 Rewards Certificate in their monthly credit card statement, which can be used for any Lillian Vernon purchase.Details
Shanghai-based Bank of Communications and MoneyGram International have
signed an agreement that will offer MoneyGram service throughout China.
MoneyGram service will be introduced initially at bank branches in major
cities and then rolled out to other cities step by step. Customers will
soon be able to send funds anywhere in the world through the MoneyGram
network at any of the Bank of Communication’s 2,700 outlets in 86 Chinese
cities and five overseas outlets. Bank of Communications is the first
joint-stock commercial bank in China and is one of that country’s leaders
in the remittance business.
First Data confirmed yesterday it has filed a counter suit against VISA alleging “anti-competitive and monopolistic practices that limit competition, innovation and choice in the payments industry.” In April, VISA filed suit against FDC over its First Data Net, which offers a private arrangement to provide direct connections to authorize or to clear and settle transactions outside of VisaNet. Since the filing of the suit, VISA has decided to ban all private arrangements. First Data says its private network enables direct connections between merchant acquirers and card issuing banks, eliminating unnecessary detours in the payment process. FDC says VISA requires payments to go through its own network, even if a payment can be processed securely and more directly between a merchant and a card-issuing bank.Details
InteliData Technologies reported revenue for the third quarter of $6.0 million, an increase of 13% over the $5.3 million reported for the third quarter 2001. Gross profit for the quarter totaled $3.6 million compared to $2.9 million for the third quarter of 2001. Looking to 2003, the Company is projecting preliminary full-year revenues to be between $25 million and $30 million, or 25% growth as measured against the mid-point on a year-over-year basis. For complete details on InteliData’s 3Q/02 results visit CardData ([www.carddata.com]).
Diebold said yesterday there has never been a robbery at a “RemoteTeller”-equipped facility in the six years the product has been on the market. The new “RemoteTeller Self-Service” (RT-SS) concept combines all of the best features of Diebold’s original “RemoteTeller” system and ATM technology by giving consumers the option to select one of several financial transaction delivery channels, either teller-assisted or self-service, from a single lobby station. Currently, more than 200 customers have installed 945 “RemoteTeller” units at 350 locations across the country. Customers using “RT-SS” are greeted with a ‘welcome screen’ offering either a self-service or assisted transaction, or they can view marketing and promotional information. When selecting a self-service transaction, all the features of a full-function ATM are available. However, should assistance be required at any time, the customer can summon the “RT-SS” teller, who can assist with transactions via the same two-way audio/video connection and pneumatic tube carrier used by the current “RemoteTeller” system.Details
A new study has found that ATMs must offer advanced functions to drive real returns and move beyond selling movie tickets, postage stamps, or topping-up prepaid cellular phones. TowerGroup believes two advanced ATM functionalities will ultimately provide the highest return on a bank’s investment. In the US, deposit “truncation” that could be enabled by the eventual passage of the “Check Truncation Act” will significantly reduce the cost to process deposits. Globally, customized customer contact via the ATM will deepen the relationship with the customer by providing a superior level of personalized (though automated) service. TowerGroup says the $1.2 billion in revenue brought in by selling stamps and tickets seems impressive, but when spread out across the 1 million-plus ATM machines globally, the real per-machine revenue can be a challenge to justify in terms of return on investment. The research firm says the key to increasing the ATM value will be in providing higher levels of service and convenience, both through end-to-end deposit processing and personalized customer relationship management.Details
CardinalCommerce and nCipher have teamed to combine nCipher’s “Hardware Security Modules” with Cardinal’s “Payment Authentication Platform”. The combined solution provides a low risk opportunity for acquiring banks, credit card and payment processor companies, issuing banks and a wide range of financial service institutions to implement cardholder and payment authentication systemsDetails