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Industry UpdateNEWSCheck Volume Decreases at Federal Reserve
In contrast to check volume, the Federal Reserve's commercial ACH volume increased by 12.1% in 2003 to 5.59 billion payments. The report also noted that the unit cost to the Fed to process a check in 2003 increased by 13.3% while the cost to process an ACH payment decreased by 15.4%. In 1995, the Fed's unit costs for checks and ACH payments were virtually identical, but now the unit cost for a check is nearly five times as much as for an ACH payment. The Federal Reserve's 90th Annual Report to Congress is available online at www.federalreserve.gov /boarddocs/rptcongress/annual03//gs_archive.php?emagazineIssueNumber=040601. Self-checkout Transactions to Surpass $330 Billion Self-checkout systems will generate transactions worth $70 billion in 2004, according to the "2004 North American Self-checkout Systems Market Study" from IHL Consulting Group. The study also forecasts that the value of these transactions will increase to more than $330 billion by 2007. According to the report, in stores currently using self-checkout systems, as much as 40% of the total number of transactions now go through self-checkout. NCR currently dominates the market, but IBM and Fujitsu have recently entered the market through key acquisitions. For more information visit www.ihlservices.com or call (615) 591-2785. MasterCard Reports First Quarter Growth MasterCard International reported that total purchases on MasterCard credit and debit cards rose 13.6% in the first quarter of 2004, with each region reporting double-digit growth. Some of highlights include:
For more information visit www.mastercard.com. Economy Grew Slightly in Q1 2004 The U.S. economy grew at an annual rate of 4.4% in the first quarter of 2004, according to preliminary estimates of real gross domestic product (GDP) from the U.S. Department of Commerce's Bureau of Economic Analysis (BEA). In the fourth quarter of 2003, GDP increased 4.1%. Major contributors to the Q1 increase include personal consumption expenditures (PCE), equipment and software, federal government spending, exports and private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased. Retail e-Commerce Sales Up 28.1% U.S. retail e-commerce sales for the first quarter of 2004 were $15.5 billion, an increase of 28.1% from the first quarter of 2003, according to the U.S. Department of Commerce. Total retail sales for the first quarter of 2004 were estimated at $834.8 billion, an increase of 8.8% from the same period a year ago. E-commerce sales in the first quarter of 2004 accounted for 1.9% of total sales. For more information visit www.census.gov/estats. ANNOUNCEMENTSCHIPS Extends Hours The Clearing House Interbank Payments System (CHIPS) has expanded its processing hours to more closely align with business days across the globe. The new extended day will allow CHIPS operating hours to overlap the business day in Asia. CHIPS hours are now 20 hours long, from 9:00 p.m. until 5:00 p.m. the following day. Concord EFS Certifies TPI Software TPI Software, LLC has announced its support for payment processing with Concord EFS, Inc. Gift/Loyalty Cards in its Payment Server platform. The TPI Payment Server enables merchants to process payments in retail, e-commerce, mail order and wireless industries using the Internet as the primary communication channel resulting in three- to five-second transaction times. TPI Software also provides a software developer kit that allows third party application developers to integrate this functionality into their applications. First Data Increases Stock Buyback First Data Corp.'s share repurchase program has been increased by $2 billion. Since 1998, the company has repurchased more than 180 million shares for $6.1 billion under repurchase programs authorized by the company's board of directors. The company has $2.017 billion remaining for repurchase following approval of this new authorization. Global Payments Receives Honors The Atlanta Journal-Constitution recognized Global Payments Inc. as one of Georgia's 100 best-performing public companies. The newspaper placed Global Payments as number 19 in its annual "Best of Business" rankings, up 11 spots from its 2003 ranking. Additionally, the company was named to the TECH 50 2004 list of Georgia's top revenue producing technology companies. Global Payments ranked ninth based on its fiscal 2003 revenue. Heartland Payment Expands Call Center Heartland Payment Systems, Inc. (HPS), has expanded its call center at the Heartland Service Center in Jeffersonville, Ind. The Service Center, which employs 295 workers, plans to hire up to 185 more over the next 18 months. Hiring plans include call center and help desk support as well as data entry personnel, risk/fraud managers, merchant credit card terminal technicians, finance staff, credit underwriters and merchant processing sales support positions. Recently, G3 Technology nominated the call center for the Call Center Innovator of the Year Award. In other company news, HPS has certified the Digital Dining POS System from Menusoft Systems Corp. This certification allows Digital Dining clients to process online, high-speed payments using an integrated interface direct to Heartland's data processing center, HPS Exchange. Ingenico and NCR Agree to License Terms Ingenico and NCR Corporation announced an agreement in which Ingenico will license NCR's signature capture patents. This license agreement, which contains a cross-license provision, will enable Ingenico and its customers to continue incorporating NCR's signature capture features into its touch screen-based payment and electronic signature capture terminals. MasterCard Expands Loyalty & Reward Programs MasterCard International has expanded its suite of loyalty and reward programs to help issuers of the Debit MasterCard BusinessCard acquire users and increase usage among current cardholders. The new programs include a turn-key rewards platform, a direct mail cash rewards activation campaign and a sales incentive for employees of MasterCard financial institutions who secure new commercial debit card holders. Pipeline Data Increases Cash Flow Due to a recent acquisition campaign, Pipeline Data Inc.'s merchant portfolio grew more than 25% in 60 days. The acquisitions, which include a portfolio of 1,500 accounts recently acquired from Millennium Merchant Services, Inc., represent approximately $1.4 million in annual net operating cash flow. ConverTrex SP1 Certified by Paymentech TechTrex Inc., has completed certification for its ConverTrex SP1 IP device for communication with Paymentech's NetConnect secure gateway. NetConnect enables merchants to process POS transactions via the public Internet. The ConverTrex is certified for use with Paymentech's VeriFone 3200 Retail/Petroleum application, as well as certain integrated POS systems. Union Bank of California Successful with Image Capture Union Bank of California recently reported more than 100 million items captured and processed without a single missing image. The bank reported no missing images since the middle of February on 111,695,854 images. Those numbers are in keeping with similar reports from other banks using VECTORsgi's high-speed image capture product, VECTOR: Capture for Prime Pass. Visa Introduces Standard of Measure Visa USA unveiled the Commercial Consumption Expenditure (CCE) index, the first financial metric to standardize how business and government spending is tracked within the United States. The index enables the payments industry to measure and forecast the actual and future penetration of commercial payment products. CCE draws on government data in methods similar to the Personal Consumption Expenditure index. The CCE uses the same source of measures from the Bureau of Economic Analysis and the Census Bureau. Using CCE, Visa estimates that total business and government spending will reach $14.3 trillion by the end of 2004. Visa will update its CCE forecast annually; the next analysis will be published in July 2004. PARTNERSHIPSCrossCheck Pairs with Two Retailers More than 20 locations of Great Expectations meeting and dating service have begun using CrossCheck, Inc., check guarantee services. Additionally, CrossCheck will provide its services to retailer Western Warehouse. The retailer will use CrossCheck's services throughout its thirty locations in the Southwest and California. ECHO and First Third Provide POS Check Service Electronic Clearing House Inc. (ECHO) has partnered with Fifth Third Bank Processing Solutions. ECHO provides the third-party processing for Fifth Third's POS Check Service, which allows merchants to convert paper checks to electronic entries at the POS. The solution has been successfully demonstrated at Pearle Vision stores and will now be piloted at Things Remembered locations. Hypercom Wins Two Overseas Contracts MBF Cards, the largest MasterCard merchant acquirer in Malaysia, agreed to purchase 10,000 EMV-certified Hypercom Corp. T7Plus card payment terminal and operating software. The purchase from Hypercom's distributor represents the largest single order ever of Hypercom technology in Malaysia. The terminals will be rolled out to retail outlets during the next 12 months. Additionally, Mokejimo Korteliu Sistemos (MKS) has ordered nearly 5,000 ICE 5500Plus and S9 card payment devices. This new contract marks the largest one-time order for Hypercom Russia. NOVA and Shift4 Team Up Shift4 merchants, POS vendors and value-added resellers (VARs) previously connecting to NOVA Information Systems via dial-up have been successfully migrated to a direct high-speed connection. Average authorization transaction times are reduced from around 15 seconds over dial to less than 3 seconds. Merchant locations included Trump Plaza in Atlantic City and JFK International Airport. Precidia and BellSouth Provide Flash Foods Solution Precidia Technologies deployed its EtherDial product across the Flash Foods chain of 163 stores, connecting ATMs to the company's wide area network (WAN). Between July and December 2003, Flash Foods rolled out the EtherDial as part of its corporate strategy to IP-enable the convenience stores. BellSouth provides the network transport and equipment for Flash Foods' Frame Relay network, creating a WAN environment that allows ongoing data communication between the stores and the company headquarters. Plug & Pay Technologies Allies with Vermont Systems, Inc. Plug & Pay Technologies, Inc., formed an alliance with Vermont Systems, Inc. The alliance allows customers to use Vermont System's POS system and only need Plug'n Pay to complete its access to the credit card processing networks. STAR Renews Cardtronics Star Systems has renewed its agreement with Cardtronics. Under the terms of the agreement, the STAR Network will continue to provide PIN-secured debit access at Cardtronics' ATMs. In 2003, the STAR Network served 1.26 million retail and ATM locations nationwide. In February 2004, STAR became part of the First Data companies. SDC and Ingenico Develop High Speed Solution Ingenico partnered with Southern DataComm (SDC) to develop Multi-Point Terminal Service, a solution for merchants using high-speed dial terminals. The solution leverages SDC's Payment Delivery software with Ingenico's Elite 710 and 712 terminals. TermNet Merchant Services is the first merchant acquirer signed to distribute this new high-speed solution. In related news, Ingenico will integrate Debisys' suite of prepaid services on the Elite 710 and 712 terminals, as well as the newly released I5300 and I7770 short-range wireless terminals. USA ePay Teams with Humboldt Merchant Services USA ePay has partnered with Humboldt Merchant Services to offer HMS business partners the USA ePay retail program, Retail ePay. The program allows retail merchants to process wireless transactions at qualified retail rates. Since Retail ePay works through USA ePay's existing gateway, wireless retail merchants have the reporting benefits that e-commerce merchants receive, while maintaining their retail rates. ACQUISITIONSBank One Buys Circuit City Credit Card Operation Circuit City Stores, Inc., recently completed the sale of its private-label credit card operation, which included its private-label Circuit City credit card accounts and its co-branded Circuit City Plus Visa credit card accounts, to Bank One Corporation. Circuit City anticipates the net cash proceeds from the sale will total approximately $400 million. Bank One retained nearly all of Circuit City's private-label operation personnel. Coinstar to Acquire ACMI Coinstar Inc., supplier of e-payment services will purchase American Coin Merchandising Inc., (ACMI) and its parent company, ACMI Holdings Inc., for $235 million in cash. ACMI, operating as SugarLoaf Creations, owns and operates coin-operated amusement vending equipment. Combined, Coinstar and ACMI will have more than 40,000 distribution points. The transaction is expected to close in the third quarter of this year. TNS, Inc. Acquires Assets of U.S. Wireless Data, Inc. Following the bankruptcy of U.S. Wireless Data, Inc. in March, TNS, Inc., has acquired certain assets of the company. TNS acquired the Synapse platform, which enables wireless POS transactions. This is the first acquisition for TNS since going public in March. APPOINTMENTSFirst Data Approves Board Members First Data Corp., shareholders recently approved the re-election of Chairman Charlie Fote and three directors. Board members Ric Duques, Richard P. Kiphart and Joan E. Spero were re-elected to three-year terms on the Board of Directors. Cynergy Welcomes Thomas D. Lineen Thomas D. Lineen has been appointed as ISO Sales and Development Manager for Cynergy Data. Lineen will be working from Cynergy's Manhattan office to recruit top-quality ISOs across the country. Prior to joining Cynergy Data, Lineen served as Vice President of Sales and Marketing at iProcess Group and Director of Sales for Authorize.Net. MasterCard Promotes Javier Perez MasterCard International promoted Javier Perez to President of its Latin America and Caribbean Region. Perez previously served as General Manager of the Customer Division for MasterCard Europe; he has worked at the Association for more than eight years. Before joining MasterCard in 1996, Perez served in several top-level positions at Banco Bilbao Vizcaya Argentaria (BBVA), one of which was working as President of the Miami subsidiary. He has also served in executive positions at Visa International, Banca Catalana, Banco Argentaria and Banco Directo. Perez succeeds Jean Rozwadowski who is leaving the Latin America and Caribbean Region to return to Europe. BOTTOM LINES
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© 2004, The Green Sheet, Inc. |
he number of checks processed by the Federal Reserve decreased for the fourth consecutive year in 2003. The Federal Reserve System reported that it processed 15.81 billion checks in 2003, a 4.7% decline from 2002. Significantly, the 2003 rate of decline was the steepest of the past four years, more than doubling the 2002 rate of decline of 1.9%.