Bits and Bytes: News from the Technology World

thePoint
February 13, 2006

The following is a collection of brief financial industry technology news bites collected by editors at The Point for Credit Union Research and Advice:

• Pay By Touch, a provider of biometric authentication solutions, reached an agreement to purchase CardSystems Solutions Inc. in late 2005. CardSystems, a merchant payment processing provider, experienced a security breach earlier in the year that potentially exposed 40 million credit cards to fraud.

• BioPay, a biometric transaction processor, was issued a patent for its biometric check cashing process in late 2005. The patent covers BioPay's enrollment of check presenters, as well as its method of automatically assessing transaction fees, based on merchant-defined rules.

• Thirty-eight percent of Americans perform 50% or more of their banking online, according to the GMIPoll, which sampled 1,000 U.S. consumers. In addition, 81% answered "yes" when asked if services like online banking and phone banking improved the overall banking service quality.

• Two-thirds of U.S. households use automatic credit or debit card payments to pay one or more recurring bills, compared to 64% who pay one or more recurring bills by check, according to the 2005 MasterCard Recurring Payments Awareness, Behavior & Attitude study. Credit cards are the number-one method for automatic bill pay, but debit cards have experienced steady growth. In 2005, 31% of households used a debit card to automatically pay a recurring bill, compared to 26% in 2003.

• NACHA, the Electronic Payments Association, has approved an amendment to its operating rules offering new methods to allow originators to identify business checks that are ineligible for check conversion. According to existing rules, only consumer checks are eligible for conversion. One method provides that any check with an auxiliary on-us field in the MICR line is ineligible for conversion. In addition, checks more than $25,000 are also ineligible. The new rules will go into effect Sept. 15, 2006.

• FirstMerit Bank, a $10.2 billion-asset institution in Akron, Ohio, introduced a miniaturized debit card to its customers in November 2005. The card is three-quarters the size of a regular debit card, and is designed to fit on a key chain.

This article was prepared by the staff at the Point for Credit Union Research and Advice and is published online at http://thepoint.cuna.org/. Reprinted with permission.