Wednesday, February 1, 2012

MasterCard Extends Debit Relationship with KeyBank

KeyBank Signs a new Multi-Year Contract, Adds PIN Capability and Employs MasterCard IPS Debit and Prepaid Processing Platform
PURCHASE, N.Y.--()--MasterCard today announced a new multi-year contract with KeyBank to deliver industry-leading debit payment solutions and processing capabilities.
“For more than a decade, we have worked with KeyBank to develop meaningful ways to empower cardholders in their daily financial activities”
As a result, Key will continue to provide its consumer and business customers with a safe, simple and secure experience every time they use their debit card online, in stores or at the ATM.
KeyBank’s Debit MasterCard program will add the capability for PIN transactions to the long-standing signature purchases and ATM withdrawal functionalities. Under the agreement, KeyBank will implement the world-class debit and prepaid transaction processing capabilities of MasterCard Integrated Processing Solutions® (IPS).
“We’re pleased to continue our long-standing-relationship with MasterCard,” said Bill Koehler, president of Key Community Bank. “The changing dynamics of the payments and debit card space today require new thinking and strategic innovation. Our partnership with MasterCard will allow us to deliver debit and processing solutions that meet the needs of our clients.”
MasterCard IPS is a leading-edge debit and prepaid processing platform that offers a complete processing solution to create differentiated products and services and quickly expand payments portfolios across business channels efficiently and with minimal infrastructure investment. The platform provides a complete range of processing services for signature and PIN debit, as well as ATM and global prepaid.
“For more than a decade, we have worked with KeyBank to develop meaningful ways to empower cardholders in their daily financial activities,” said Chris McWilton, president, U.S. Markets, MasterCard. “By expanding our relationship, KeyBank has added a flexible foundation to serve the many needs of its cardholders for years to come.”
KeyBank and MasterCard have been partners since 1997, offering cardholders a range of MasterCard-branded card options, including KeyBank Gold Debit MasterCard®, Rewards Debit MasterCard®, and World Debit™ MasterCard® cards.
About KeyCorp
KeyCorp was organized more than 160 years ago and is headquartered in Cleveland, Ohio. One of the nation’s largest bank-based financial services companies, Key has assets of approximately $89 billion.
Key provides deposit, lending, cash management and investment services to individuals and small businesses in 14 states under the name of KeyBank N.A. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name.

First Data Reports Fourth Quarter and Full-Year 2011 Financial Results

  • Fourth quarter 2011 consolidated revenue of $2.7 billion, down 2%; adjusted revenue of $1.7 billion, up 3%
  • Fourth quarter net loss attributable to First Data improved $110 million; adjusted EBITDA up 16%
  • Generated $1.1 billion in operating cash flow for 2011 and ended the quarter with $1.7 billion in unrestricted liquidity
ATLANTA--()--First Data Corporation today reported its financial results for the fourth quarter ended Dec. 31, 2011. Consolidated revenue for the fourth quarter was $2.69 billion, down $43 million or 2%, compared to a year ago on a $115 million decline in debit network fees. These fees are passed directly to customers and therefore did not impact operating income. Adjusted revenue, which excludes certain items including debit network fees, increased $47 million, or 3% year-over-year to $1.73 billion.
“Our commitment to bringing innovative products to market and serving our customers positions us well to take advantage of the dynamic changes in the payments industry.”
For the fourth quarter, the net loss attributable to First Data was $69 million, compared to a loss of $179 million a year ago. The change was largely driven by a $171 million improvement in operating income. Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) was $655 million, up $91 million, or 16%, compared to $564 million in the fourth quarter of 2010, driven by revenue growth in Retail and Alliance Services and cost reductions across the business.
Consolidated revenue for the full year 2011 was $10.71 billion up 3% due to revenue growth in the global merchant acquiring business and higher pass-through debit network fees. Full-year adjusted revenue increased 2% to $6.59 billion. The full-year net loss attributable to First Data was $516 million, a year-over-year improvement of $506 million. For 2011, adjusted EBITDA was $2.25 billion, up $221 million, or 11%, compared to $2.03 billion in 2010.
First Data generated $1.12 billion in operating cash flow, after interest payments of $1.44 billion, for the full year and finished the quarter with $1.72 billion in unrestricted liquidity—$255 million in cash available for corporate use plus $1.47 billion under the revolving credit facility.
“Despite a challenging economic environment, we grew adjusted EBITDA 11% for the full year of 2011 through a combination of top-line growth and expense reductions,” said Chief Executive Officer Jonathan J. Judge. “Our commitment to bringing innovative products to market and serving our customers positions us well to take advantage of the dynamic changes in the payments industry.”
Segment Results
Retail and Alliance Services segment revenue for the fourth quarter was $926 million, up $53 million, or 6%, compared to $873 million in 2010. Core merchant revenue was up 9% driven by lower debit interchange rates and new processing revenue from the Bank of America Merchant Services alliance. Transaction growth was 3%, credit mix was stable at 72% and regional average ticket was $69, or flat compared to a year ago. Product revenue was also flat as growth in prepaid was offset by declining check-processing as consumers migrate from checks to electronic payments. Segment EBITDA was $416 million, up $43 million, or 12%, compared to 2010 driven primarily by revenue growth. Margin for the fourth quarter improved to 45%. During the quarter, Retail and Alliance Services added six new independent sales organizations, five bank referral agreements, and three new revenue sharing agreements.
Full-year Retail and Alliance Services segment revenue was $3.4 billion, up $67 million, or 2%, compared to $3.3 billion in 2010. Revenue was driven by 6% transaction growth, lower debit interchange rates and new processing revenue from the Bank of America Merchant Services alliance. Growth in prepaid and point of sale equipment was offset by declines in check processing. During the year, Retail and Alliance Services added 32 new independent sales organizations, 39 bank referral agreements and six new revenue sharing agreements. For 2011, segment EBITDA was $1.4 billion, up $85 million or 6%, compared to $1.3 billion in 2010. Margin improved to 42%.
Financial Services segment revenue for the fourth quarter was $354 million, down $4 million, or 1%, compared to $358 million in the same quarter of 2010, as new business and volume growth were offset by lost business, expected levels of price compression, and a prior-year contract termination fee. Active card accounts on file were up 4% compared to the prior year. Debit issuer transactions were up 6%. Segment EBITDA was $158 million, up $17 million, or 12%, compared to $141 million in 2010. Expenses declined by $22 million compared to a year ago driven primarily by lower technology and operations costs. Margin for the fourth quarter improved to 45%. During the quarter, Financial Services renewed more than 400 contracts with financial institutions.
Full-year Financial Services segment revenue was $1.4 billion, down $30 million, or 2%, compared to 2010. New business and volume growth were more than offset by lost business, price compression and lower contract termination fees. Segment EBITDA for 2011 was $593 million, up $40 million, or 7%, compared to $553 million in 2010, due primarily to lower technology and operations costs. Margin improved to 43%. During the year, Financial Services renewed more than 1,400 contracts with financial institutions.
International segment revenue for the fourth quarter was $441 million, up $1 million, or essentially flat, compared to $440 million in the prior year. On a constant currency basis, segment revenue was up 2%. Merchant acquiring revenue, on a constant currency basis, grew 3% on higher transaction volumes, partially offset by lower revenue resulting from changes that were made in the company's product mix in order to improve margins. Issuing revenue, on a constant currency basis, grew 1% as pricing increases in Asia, volume growth in Latin America and a contract termination fee in Europe were offset by lost business and product mix shifts away from lower margin revenue. Segment EBITDA was $131 million, up $35 million, or 36%, compared to $96 million in 2010 due to cost reductions and the revenue items mentioned above. Margin improved to 30%. Foreign currency exchange rates had a negligible impact on EBITDA.
Full-year International segment revenue was $1.8 billion, up $140 million or 9%, compared to 2010. Segment revenue on a constant currency basis was up 4%. Segment EBITDA was $454 million, up $125 million, or 38%, compared to $330 million for 2010. Margin improved to 26%. Segment EBITDA benefitted from revenue flow through, cost reductions and favorable foreign currency exchange rates.
Non-GAAP Measures
In certain circumstances, results have been presented that are non-GAAP (generally accepted accounting principles) measures and should be viewed in addition to, and not in lieu of, the company's reported results. Reconciliations to comparable GAAP measures are available in the accompanying schedules and in the "Investor Relations" section of the company's website at
Investor Conference Call
The company will host an investor conference call and webcast on Wednesday, Feb. 1, 2012 at 10 a.m. ET to review fourth quarter 2011 financial results. First Data Chief Financial Officer Ray Winborne will lead the call and will be joined by Chief Executive Officer Jonathan J. Judge.
The call will be webcast on the “Investor Relations” section of the First Data website at and a slide presentation will accompany the call.
To listen to the call via teleconference, dial 800-561-2693 (U.S.) or 617-614-3523 (outside the U.S.), pass code 83799682.

Discover’s Cashback Bonus® Redemption Continues to Trend Upward

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Company Enhances 2012 Cashback Bonus® Program

RIVERWOODS, Ill.--()--Discover cardmembers redeeming their Cashback Bonus® rewards continued to trend upward in 2011, with the company citing a 20 percent increase over 2010. Both online and mobile redemptions also grew in popularity as 73 percent of cardmembers redeemed this way in 2011.
“Not only did cardmembers respond favorably to the extra Cashback Bonus that more than 70 top retailers offered during the holiday season, but they also appreciated the various enhancements we made throughout the year to ShopDiscover, such as adding merchant coupons and site functionality,” said Dana Traci, vice president of rewards and product management at Discover. “As for increased redemption, cardmembers clearly are seeing there’s great value in redeeming their Cashback Bonus,whether it be for partner gift cards, merchandise, statement credits or on”Online shopping sales for Discover’s exclusive online shopping portal, ShopDiscover, also increased at a pace significantly above industry averages. ShopDiscover sales increased 64 percent compared to last year and site traffic was up 41 percent as cardmembers flocked to receive an additional 5-20%Cashback Bonus at top online retailers. The total Cashback Bonus awarded to cardmembers who shopped on ShopDiscover was up 62 percent compared to last year.
Building on the momentum of 2011, Discover recently revealed its 2012 5% Cashback Bonus calendar with new merchant categories, giving cardmembers the potential to earn up to $75 of additional Cashback Bonus for the first and second quarter of 2012.
Through March 31, Discover cardmembers can sign up to earn 5% Cashback Bonus on up to $1,500 in gas, movie and museum purchases. They’ll have that same opportunity from April through June on purchases made at restaurants and movie theaters. After reaching the $1,500 spending limit for each quarter, cardmembers will still automatically earn up to 1% Cashback Bonus every time they use their cards.
For nearly seven years, Discover’s 5% Cashback Bonus program has consistently provided cardmembers with the opportunity to earn5% Cashback Bonus in rotating categories throughout the year. Categories are chosen based on consumer shopping patterns to provide the most relevant and valuable rewards opportunities. Merchant categories for the second half of 2012 include gas, movies and theme parks for third quarter, and movies, department, electronic and toy stores for fourth quarter.

Crédit Agricole Selects Gemalto for Large-Scale Deployment of Contactless EMV Payment in France

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Banking Card That Facilitates Easier Payment and with Added Security Features is Also Certified By “Groupement d’Intérêt Economique – Carte Bancaire
AMSTERDAM--()--Gemalto (Euronext NL0000400653 GTO), the world leader in digital security, announces it is behind Crédit Agricole’s large-scale deployment of contactless EMV banking cards in France. The Crédit Agricole group is market leader in full-service retail banking in France and one of the largest banks in Europe. Gemalto is the first to market the highly secure Optelio contactless EMV banking card certified by GIE-CB (“Groupement d’Intérêt Economique – Carte Bancaire”) with optimized EMV risk management features for the French market.
The card also features additional protections that reinforce security and complement the traditional EMV payment functionality. These added features provide improved flexibility while maintaining a high level of risk management for Crédit Agricole.The deployment opens the door to the world of contactless payment for all of Crédit Agricole’s customers. Cardholders can enjoy a new payment experience by simply waving or tapping their card in front of a contactless reader at the point-of-sale for purchases under 20 euros, while transactions above that amount will require a PIN confirmation. The technology saves time for both merchants and cardholders and greatly reduces cash handling.
"Leveraging their global expertise in EMV and contactless rollouts worldwide, the Gemalto team put forward the right product at the right time for our program in France," according to Crédit Agricole.
"With this new project, Crédit Agricole is keen to offer their customers secure and reliable payment solutions, while benefiting from the latest technological innovations," added Gabrielle Bugat, Senior Vice President, Gemalto. “Contactless is one of the key cooperation and development areas for 2012, both for Gemalto and Crédit Agricole."
About Gemalto
Gemalto (Euronext NL0000400653 GTO) is the world leader in digital security with 2010 annual revenues of €1.9 billion and over 10,000 employees operating out of 87 offices and 13 Research & Development centers in 45 countries.
Gemalto is at the heart of our evolving digital society. Billions of people worldwide increasingly want the freedom to communicate, travel, shop, bank, entertain, and work—anytime, anywhere, in ways that are convenient, enjoyable and secure. Gemalto delivers on the growing demands for personal mobile services, identity protection, payment security, authenticated online services, cloud computing access, modern transportation, e-healthcare and e-government services. Gemalto does this by providing secure software, a wide range of secure personal devices, and managed services to wireless operators, banks, enterprises and government agencies.
Gemalto is the world leader for electronic passports and identity cards, two-factor authentication devices for online protection, smart credit/debit and contactless payment cards, as well as subscriber identification modules (SIM) and universal integrated circuit cards (UICC) in mobile phones. Also, in the emerging machine-to-machine applications Gemalto is a leading supplier of wireless modules and machine identification modules (MIM). To operate these solutions and remotely manage the software and confidential data contained in the secure devices Gemalto also provides server platforms, consulting, training, and managed services to help its customers achieve their goals.
As the use of Gemalto’s software and secure devices increases with the number of people interacting in the digital and wireless world, the Company is poised to thrive over the coming years.

Apple iPhone 5 Will Have NFC?

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The Apple iPhone 5 has been expected to support Near-Field Communications (NFC) ever since rumours began. Infact, we're quite surprised it wasn't added to the iPhone 4S, but perhaps Apple wanted to wait until the technology was more wide-spread.

International Business Times

By Wendy Li: Subscribe to Wendy's RSS feed The Near Field Communication (NFC) technology will reportedly be packed in the next generation iPhone - dubbed iPhone 5. NFC is short range wireless communication technology, which can be used in mobile phones ...

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