News Digest

CHEQUES

Paper cheques dealt a hard blow

In a move calculated to enhance the attractiveness of electronic
payments, the US Federal Reserve Board (FRB) has announced
significant changes to its fee schedules for services provided to
depository institutions. Hardest hit are paper cheque deposits
which, from 2 January 2008, face a fee increase of about 12
percent. Contrasting with this punitive increase, fees for the
FRB’s electronic payment services will be reduced by 8
percent.

Seeking to encourage the use of electronic cheque processing, the
FRB said fees on cheque deposits destined for electronic recipients
would be lowered by 3 percent. The FRB said it would also offer
depository institutions greater incentives to receive their cheque
presentments electronically.

The average service fees charged for cheque deposits, paper and
electronic, will rise by about 5 percent while the overall average
fee charged by the FRB for all payments processing will rise by
about 3 percent.

 

MERGERS AND ACQUISITIONS

Qualcomm snaps up Firethorn

Wireless technology developer Qualcomm has made a successful $210
million cash bid to acquire Firethorn, one of the US mobile banking
technology sector’s fast-rising stars. Established in 2001,
Firethorn brings with it users of its mobile banking and payments
platform that include major financial services companies Wachovia,
SunTrust Bank, Regions Financial, BancorpSouth, Synovus and United
Services Automobile Association.

“The acquisition of Firethorn will allow Qualcomm to help drive the
evolution of mobile banking by leveraging Firethorn’s industry
expertise, reputation and success in developing relationships with
financial institutions, wireless operators and payment processors,”
said Len Lauer, Qualcomm’s executive vice-president and group
president.

Tripp Rackley, chairman and CEO of Firethorn, said: “Qualcomm is a
recognised technology leader and this acquisition is a strong
endorsement of the strategic importance of mobile commerce. The
team at Firethorn will now join this industry leader as we continue
to evolve mobile commerce solutions and bring new and exciting
functionality to the mobile handset, including expanded payment
options.”

In its 2007 financial year, Qualcomm reported revenue of $8.87
billion and net income of $1.13 billion.

 

TRANSACTION PROCESSING

Discover joins TSYS platform

Payments processor TSYS has secured a processor agreement with
Discover Financial Services’ payment card unit, Discover Network,
one of the US’s four major card brands. Discover joins the other
three major brands – American Express, Visa USA and MasterCard
International – that already have processor agreements with
TSYS.

“Our agreement with TSYS enables Discover Network to expand its
reach to a wider range of card issuers, from the nation’s largest
banks to smaller, independent financial institutions,” said
Discover Financial Services’ executive vice-president, Harit
Talwar. TSYS will process Discover prepaid and credit card
transactions.

In 2006 TSYS processed 13.2 billion issuing and acquiring
transactions for 300 financial institutions that have a combined
total of more than 400 million cardholder accounts.

 

CONTACTLESS PAYMENTS

Cellular South to roll out WirelessWallet

US mobile phone service supplier Cellular South has hailed as a
success its recently completed WirelessWallet trial, in which
consumers used mobile phones incorporating contactless payments
technology. A post-trial survey found that 87 percent of testers
were interested in using the mobile payment technology when it
becomes available, probably in early 2008.

The three-month trial, which was conducted in partnership with Bank
of America, wireless payments technology developer VivoTech and
mobile device manufacturer Kyocera, was the first community-wide
mobile commerce test that enabled partic