Industry News

Visa increased its interchange rates for retail purchases by a nickel, and boosted the rates on corporate card purchases by 15 basis points in the most recent round of interchange adjustments in October. Most other rates changed little, if at all.

The change in the corporate rates could be the most significant, keeping a lid on any rebound in travel and entertainment spending, according to an industry expert.
Another significant change was the restriction Visa put on interchange fees refunded on credits (e.g., for merchandise returns). All interchange will now be refunded at a flat rate. Previously, processors may have received a lower rate (e.g., qualified retail transaction) when debiting the transaction, but may have put the credit through at a higher rate, meaning they received the difference.

Bank of America Corp. is analyzing a recent test of its QuickWave payment system at some two dozen downtown restaurants and shops located near Bank of America's Charlotte, N.C. headquarters.

Employees making purchases at participating retailers paid by waving a small card on a key chain over a sensor pad, much like the Speed Pass program used at some McDonald's restaurants. The system is designed for payments of less than $20.
"We're always looking for ways to make payments more convenient for the customers, a B of A spokesperson says. "We had a good response when we first offered the program to our employees."

National Processing Company recently signed a multi-year credit card processing agreement with Jack in the Box Inc., operator and franchiser of Jack in the Box restaurants. Under the terms of the agreement, NPC will provide authorization and settlement services for all MasterCard and Visa transactions accepted at participating Jack in the Box restaurants.

   "Jack in the Box is a leader in the industry and were among the first to offer credit cards as an alternative payment option," says Tim Munto, NPC Senior Vice President and General Manager. We are honored to have been selected as their processor of choice and look forward to providing the kind of products and services that are required to meet the needs of their customers."
   Jack in the Box has about 200 restaurants that accept credit cards now, and hopes to have about half of its 1870 restaurants accepting the cards by May and the rest by the end of 2004.
   Credit card transactions take about one-third the time to process as cash transactions, according to restaurant officials.

Cynergy Data recently agreed to buy $1.5 million of Lipman's NURIT POS terminals, peripherals and services. Under the terms of the agreement, Lipman will supply Cynergy with a customized version of the NURIT� 3020 terminal, a portion of which will be sold as a component of Lipman's ImagePak transaction imaging solution.

Cynergy Data will customize the NURIT 3020 with the Cynergy brand, as well as a Spanish language application. Cynergy will also market Lipman's ImagePak- a complete receipt, signature, and check imaging solution.
"Cynergy customers are looking for reliable and affordable POS solutions," said Marcelo Paladini, CEO of Cynergy Data. "Lipman's ImagePak provides our customers with a complete transaction processing solution, enabling them with the ability to focus on a better bottom line."

The Kroger Company, one of the nation's largest grocery retailers, is using BioPay's Paycheck Secure for its check cashing operations located in stores throughout Indiana.

   The Paycheck Secure check cashing system uses biometrics to verify a person's identity and confirm their check cashing history. If a customer has a negative check cashing history, the clerk can cancel the transaction, saving the store money that would have otherwise been lost on a fraudulent transaction.
   The system enables customers to use their fingerprint image for positive identification and to initiate a transaction. No other ID is needed, so personal information is kept private and is not shared.
   More Kroger locations are expected to implement Paycheck Secure by the end of the year.

Maitland, FL-based Star and Montvale, NJ-based NYCE, recently implemented interchange rates for quick-service restaurants. Star's rate of 12.5 cents per transaction, is far below the previous tiered rates that averaged just under 20 cents per transaction. Quick-service restaurants have smaller average ticket sizes, so the higher rate was a higher percentage for these merchants than for other retailers, says Barbara Span, Star Systems Vice President.

Star is aggressively targeting quick-service restaurants, where 99 percent of the transactions are still completed with cash. Star has agreements with three of the top 10 quick-service restaurants, Span says.
NYCE issuers will receive 0.5% of the sale plus 5 cents, up to 22 cents.

San Francisco-based Cryptography Research is selling its fraud detection system to card manufacturers, testing labs and issuers to help them determine whether a smart card is vulnerable to a "power-analysis" attack.

In such an attack, secret codes on a chip card can be determined by measuring variations in the power consumption of the card as it processes numbers.

Citing an industry study, LakeWest Group's Retail Insight newsletter says that almost 50 million adults bought electronic gift cards in the last year.

   Merchants benefit for several reasons, including 5 percent "slippage" � the average amount on each card that is never used.
   Another survey, by Innovative Merchant Services, reports that 61 percent of respondents said they spent more than their original amount on the card at the store.
   "In the future, more possibilities for the [stored value card] programs, and for the technologies behind them, will emerge," predicts Lake West President Robert Antall.