NEWS

NRF weighs in on holiday shopping: Debit to increase

According to the National Retail Federation's 2006 Holiday Consumer Intentions and Actions survey, debit/check cards remain the favored form of payment this holiday season, with 39% of consumers using their debit/check cards most, up from 34% in 2005. According to the survey, 30.5% of consumers plan to use credit cards, 24% plan to use cash, and 6% plan to write checks. NRF projects that holiday sales will increase 5%, bringing holiday spending to $457.4 billion.

Holiday shopping prediction: New Englanders to spend most

According to The Conference Board, U.S. households are expected to spend an average of $449 on gifts during the holiday season, down from last year's estimate of $466. Top spenders will be New England households who intend to spend $545. Lowest spenders will be in the Mountain region, with an average of $348.

Slightly more than 31% of all households will spend more than $500; 36% will spend $200 to $500, and 33% will spend less than $200. Approximately 35% of all consumers will buy holiday gifts on the Internet, up from 33% last year.

Study says prepare to wait

According to a survey conducted by Braun Research Inc. and Bank of America Corp., consumers spend an average of four hours and 35 minutes shopping at retail stores during the holiday season. One hour and 22 minutes of that time is spent waiting in checkout lines.

Survey says 40% of Americans shop at work

According to a survey conducted by Harris Interactive and commissioned by Google Checkout, 40% of employed U.S. adults say they'll be doing at least some of their online holiday shopping from work this year.

Fraudsters pocket $3 billion from U.S. e-commerce

The CyberSource Corp. survey of e-commerce fraud shows that U.S. merchants will lose as much as $3 billion in e-commerce revenue to fraud in 2006, up from $2.8 billion the previous year. Merchants say 1.1% of accepted orders are fraudulent. This number has been steady for three years, but merchants say they are rejecting 4% of orders on suspicion of fraud.

Fraud chargebacks represented 35% of fraud. Of orders originating from outside the United States and Canada, 2.7% were fraudulent, which is 2.5 times higher than U.S. and Canadian orders. Eighty-one percent of merchants engage in manual review, compared with 73% last year. The use of anti-fraud tools grew 14%. To view the survey results visit www.cybersource.com/fraudreport

Unused gift card values on the rise

TowerGroup expects gift card sales in the United States will exceed $80 billion in 2006, a more than 20% increase over 2005. TowerGroup noted that the unused value on these cards has a bigger impact on consumers than the combined total of both credit and debit card fraud. Card fraud in the United States totals $3.5 billion annually. TowerGroup estimates that nearly $8 billion is lost due to unredeemed value, expiration or loss of gift cards.

Coalition says interchange doesn't help merchants

The Merchants Payments Coalition said merchants do not benefit from rewards programs, which constitute nearly half of the $30.7 billion in credit and debit card interchange fees Visa and MasterCard collect annually in the United States.

The group cited evidence from a new report, "A New Business Model for Card Payments," issued by Chicago's Diamond Management and Technology Consultants Inc. Processing comprises 13% of interchange costs. Meanwhile, the largest component of interchange, paying for issuer rewards programs, accounts for 44% of interchange costs, "but merchants get nothing out of these programs," the report states.

Isaacman recognized

United Bank Card Inc. Chief Executive Officer Jared Isaacman was named one of five winners of BusinessWeek magazine's "Best Entrepreneurs Under 25." Isaacman was ranked third among the top five.

Credit scores declining, report finds

According to Experian Consumer Direct, the rate at which consumers are opening new credit accounts declined 17% compared with five years ago, and late payments increased 13%. The National Score Index study also found that the national average credit score is 675, seven points lower than 2001. Study results can be found at www.NationalScoreIndex.com

ANNOUNCEMENTS

BankCard Services named fast-growing company

BankCard Services ranked No. 34 in Los Angeles Business Journal's list of 100 Fastest Growing Private Companies in L.A. County. The company recorded 82.4% revenue growth from $22 million in 2004 to $31 million in 2005. As of September 2006 BankCard Services has recorded $44 million in revenue.

BIS publishes paper

The Bank for International Settlements published its 2005 summary of statistics on payment and settlement systems in selected countries. The document is available at www.bis.org/publ/cpss75.pdf

Program provides rewards for consumers and nonprofits

Boston Main Streets recently debuted "Boston Community Change," a rewards program for consumers and nonprofits. The program returns a portion of each transaction, paid by participating merchants, to customers' designated schools or nonprofit organizations, as well as a cash rebate to consumers. Merchants decide how much of a rebate to provide, which is typically 4% to 6% of the total sale. The program uses transaction technology from Nietech Corp.

Comstar announces weekend customer support

Comstar Interactive increased customer support hours. Support is now available Monday through Friday 9 a.m. to 8 p.m. and Saturday and Sunday 9 a.m. to 5 p.m. EST.

NCHA records record volumes

The National Clearing House (NCHA) reported record image volumes of 98.4 million items settled in October. Image volumes now represent approximately 18% of the total of items settled by NCHA.

Hypercom launches customer authentication initiative

Hypercom Corp. announced a program designed to reduce identity fraud at retail bank branches by using Hypercom's POS terminals and PIN entry devices to authenticate customers. The initiative includes wired, wireless and unattended hardware that can be used at teller windows and information stations, outside bank branches, and in handheld scenarios.

Biometric check-cashing service launched for banks

Pay By Touch's Paycheck Secure service is being offered to financial institutions. The service is a biometric check-cashing solution that can help banks and credit unions generate noninterest fee-based income while decreasing the risk of fraud and meeting regulatory compliance requirements.

Q Comm clarifies voluntary delisting

Q Comm International Inc. clarified its plans to withdraw from listing its shares of common stock on the American Stock Exchange. Q Comm is undertaking this process to eliminate accounting fees, legal fees and other costs associated with being a public company.

Alliance revamps Web site

The Smart Card Alliance redesigned its Web site at www.smartcardalliance.org Features include free reports, case studies and position papers, a smart card reader catalog, and the Smart Card Alliance career center, a resource for making online employment connections in the smart card industry.

VeriFone provides software for subway trial

VeriFone is providing the integrated payment solutions used in the contactless subway trial in New York. VeriFone's Secura system combines contactless smart card capabilities with management software.

PARTNERSHIPS

AdvanceMe signs new partner

Merchant Management Systems Inc. and AdvanceMe Inc. partnered to offer merchant cash advance services to MMS' merchant customers.

AmbironTrustWave announces partnerships

CommercialWare Inc. and AmbironTrustWave partnered to offer Payment Card Industry (PCI) Data Security Standard compliance services to its joint customers. Additionally, Visa Canada will help Canadian merchants comply with PCI by offering free compliance validation services through AmbironTrustWave. This offer is available to merchants processing between 250,000 and 1 million Visa transactions in Canada annually.

Cardtronics selects Postilion

Cardtronics Inc. will install S1 Corp.'s Postilion software to provide in-house ATM transaction processing for its network of more than 26,000 ATMs.

Fast Transact and InfoMerchant team up

Fast Transact Inc. partnered with InfoMerchant.net. Together they will provide merchant services and credit card payment processing.

First Data partners with IFSG

First Data Debit Services signed an agreement with Interactive Financial Services Group Inc. to provide a school and charity rewards feature as a component of First Data's Debit Rewards program. Consumers can enroll their debit card and designate a school or charity to receive a donation from their participating financial institution. The feature will be available in the second quarter of 2007.

Retail Decisions selects GoldenGate Software

Retail Decisions Inc. (ReD) deployed GoldenGate Software to increase availability of data across ReD's International platforms. GoldenGate's solution ensures that Retail Decisions' databases are available and identical, sharing transaction data in real time across international platforms.

Symbol and Hypercom receive orders

Symbol Technologies Inc. and Hypercom received the first product orders for Symbol's new PD8700 and PD4750 multilane electronic payment terminals.

MasterCard and VeriFone debut Tap & Go in cabs

MasterCard Worldwide and VeriFone announced the first U.S. acceptance of MasterCard PayPass "Tap & Go" contactless payments in taxicabs. The program is expected to roll out to all taxis licensed by the Philadelphia Parking Authority.

ACQUISITIONS

Euronet to acquire RIA Envia

Euronet Worldwide Inc. announced the execution of a stock purchase agreement to acquire RIA Envia Inc. Euronet will acquire 100% of RIA's outstanding common stock for $380 million in cash and $110 million in Euronet stock. The transaction is anticipated to close during the first or second quarter of 2007.

Global Payments Europe acquires Diginet d.o.o.

Global Payments Inc. completed the acquisition of the assets of Diginet d.o.o., an indirect payment processor for POS and ATM transactions based in Sarajevo, Bosnia-Herzegovina. Diginet's management team and employees will join Global Payments Europe and will help expand its reach into the Balkan region.

Pay By Touch purchases portfolio

Pay By Touch closed an asset purchase agreement to acquire nearly 1,000 merchant accounts from the portfolio held by Camelot Systems Inc., dba Paynet Transaction Services. Included in the portfolio are more than 50 NCAA sporting venues, Polo Warehouse and Sean John Outlets.

APPOINTMENTS

RBS Lynk names COO

RBS Lynk named Spencer Allen as its Chief Operating Officer. Most recently, Allen served as Director of Credit Services at The Home Depot.

FAPS names CIO

First American Payment Systems LP named Mike Lawrence as its new Senior Vice President and Chief Information Officer. Lawrence comes to First American from ACE Cash Express Inc. where he served as Vice President of Retail Store Systems. He previously was the Director of Applications Development/Systems Integration at American Parts System Inc.

Goldleaf appoints McCabe as Chairman

Goldleaf Financial Solutions Inc. appointed Robert A. McCabe, Jr. Chairman of the Board. McCabe is also Chairman of the board's audit committee. McCabe has more than 30 years of banking experience and currently serves as Chairman of the Board for Pinnacle Financial Partners.

MWAA confirms members of boards

The Midwest Acquirers' Association confirmed its 2007 board of directors. President is Jim McCormick of General Credit Forms Inc. Vice President and Secretary is Lori Carney of First Data. Treasurer is Mark Dunn of Field Guide Enterprises LLC. Directors are Juan Ortiz of BluePay Inc.; Donna Ayers of ABN AMRO; Lisa Lenczyk of VeriFone; and Linda Noble of BankCard Central.

The MWAA Advisory Board Members were also approved. They are Regina Dumas of Pay By Touch; Stacia Smith of Retriever Payment Systems; Mary Winningham of VanBrackle Consulting; Rod Katzfey of Comdata; Donna Embry of Payment Alliance International; and Mike Petitti of AmbironTrustWave. Brent Barg of Solution Finders/I Stream was approved as a member and liaison to the MWAA board.

Industry veteran joins TransFirst

Walter C. Patterson is the new Senior Vice President of TransFirst's Government Services Division. Previously he was Senior Vice President for Affiliated Computer Services Inc. He also served as Chairman and Vice Chairman of the Electronic Funds Transfer Association board of directors.

Riddiford joins Apriva team

David Riddiford joined Apriva as Chief Financial Officer. Previously Riddiford served as Senior Vice President and Treasurer at The Dial Corp. and most recently as Chief Financial Officer for Action Performance Companies.

Simmons, McAnally join board

SWACHA - The Electronic Payments Resource recently elected Dennis Simmons and Ben F. McAnally to the NACHA board of directors. Both will begin two-year terms in January. Simmons has 20 years' industry experience and is President and CEO of SWACHA. He is also a member of the Advisory Council and faculty of the Bank Operations Institute at Southern Methodist University.

McAnally is the Executive Vice President, First Financial Bank-Abilene. He has more than 31 years' experience in the industry and currently serves on the board of directors for SWACHA, Big Country March of Dimes and the Campaign Cabinet for the United Way of Abilene.

BOTTOM LINES

• According to Retail Decisions, online retail sales volume increased 109% on Black Friday, the day after Thanksgiving. Most shoppers were online in the afternoon; the peak shopping time was between 3 and 4 p.m.
  
• Nearly $2 billion in U.S. e-commerce sales have been lost in 2006 due to consumers' concerns about Internet security, according to a Gartner Inc. survey of 5,000 adults in August. Forty-six percent say fears of data breaches and theft of information have affected their online commerce behavior (including online banking, payments and shopping).
  
• The number of consumers whose bankcard payments were late by 90 days or more dropped by 11.9% from 2001 to 2006, according to Experian Consumer Direct, a provider of credit reports. Simultaneously, the rate at which consumers opened new bankcard accounts declined 19.6%, while balances on installment loans increased.