NOVEMBER / DECEMBER 2009

All debit all the time SM pulsationsThe Debit News MagazineSM

Debit Performance Tips for Becoming a Best-in-Class Issuer

ebit matters. It is at the core of the relationship between a Over the years, the study has found that, in each key debit financial institution and its account holders. What’s more, program benchmark measurement, there are a number of financial Ddebit is a key source of revenue for banks and credit unions. institutions that significantly outperform the others. These Improving the results of an institution’s program can institutions are referred to as “best-in-class issuers.” have a significant impact on the bottom line. To achieve best-in-class status, an issuer must be in the top “The challenge is for financial institutions to replicate the 25 percent of all issuers surveyed for a given performance metric. success of debit card issuers that consistently outperform the The 2009 Debit Issuer Study found that best-in-class issuers are ranks in key benchmark areas,” said Tony Hayes, a partner with well over 50 percent more effective in some metrics, such as PIN Oliver Wyman who served as project lead on the PULSE-sponsored debit fraud loss rates. Debit Issuer Study series. (continued on page 10) ICBA Community Bank Payments Survey: Debit Cards Dominate Payments

ebit cards are the most important consumer payments product or service for community banks, according to the Independent Association of Community Bankers 2009 Community Bank Payments Survey. Ninety-eight percent of community banks Dsurveyed offer debit cards, and – using a scale of 1 to 5 to rank product importance – survey participants gave debit cards the high- est ranking of all payment products. The survey, the third of its kind, is designed to track community bank trends and strategies in payments. More than 900 community banks participated. (continued on page 11)

Internet PIN Debit PULSE Expands ATM The Ins and Outs Aligns with Consumer Acceptance Beyond of Social Media Preferences United States Page 9 Page 4 Page 6 VIEW FROM THE TOP

Dear PULSE Participant,

or the first time since PULSE began commissioning the annual Debit Issuer Study in 2005, financial institutions reported a decrease in net fraud rates from debit Fcards. That’s right. Debit card fraud rates actually declined in 2008 for the issuers we surveyed. While this slight decline is positive news for debit card issuers, what’s more impressive is the average loss rate achieved by the issuers who are best at identifying fraud early or preventing it altogether. The top 25 percent of issuers surveyed for the Dave Schneider 2009 Debit Issuer Study achieved PIN debit fraud loss rates that were more than 87 percent lower than the average for all issuers. This gap illustrates the difference that improved fraud prevention tools and “While this slight decline processes can make in an issuer’s debit card program, because reductions in fraud [in fraud rates] is posi- losses go straight to an issuer’s bottom line. It also shows that it is possible for debit tive news for debit card card issuers to combat fraud effectively. PULSE is actively working to provide an expanded array of fraud prevention issuers, what’s more solutions and support services. In the near future, you can expect to hear about impressive is the average expanded services available through our DebitProtect® neural network-based fraud loss rate achieved by the prevention program. We also are developing an informational resource on fraud pre- vention best practices for network participants, and are continuing to collaborate with issuers who are best at others in the industry with the goal of improving fraud prevention technology and identifying fraud early or practices for everyone. preventing it altogether.” In addition to these efforts, it is important to remember that your cardholders are an invaluable asset in any fraud defense. Javelin Strategy & Research reports that 50 percent of fraud cases are first discovered by the consumer. Educating cardholders should be an ongoing priority for all financial institution. PULSE offers a wide range of printed and electronic materials for this purpose. To make these materials a part of your financial institution’s fraud prevention plan, visit www.pulsenetwork.com/debitsafety. If your institution is not already registered to participate in DebitProtect, contact your PULSE account representative, or call 800-420-2122. Registration is easy and only requires payment of a nominal charge. Once registered, the basic alert service is provided at no additional charge to PULSE issuers. By working together, we can continue to make strides in the quest to reduce debit fraud losses.

Sincerely,

Dave Schneider President

All debit all the time SM 2 Ignite Award Commemorates Sue Carpenter

ULSE has bestowed its inaugural Ignite Award, an annual employee P honor that recognizes the signifi- cant and admirable contributions the late Sue Carpenter made to PULSE’s staff and customers. “PULSE lost a special employee and friend when Sue passed away last November,” said Dave Schneider, PULSE president. “We created this award to recognize individuals who consistently demonstrate the fundamental qualities that come to mind when we think of Inaugural Ignite Award Winner Janet Meadors (front row, second from left) is pictured with Sue Carpenter’s family. Sue: inspiration, growth, neighborliness, integrity, teamwork and effort.” of Carpenter’s family. Meadors was Through the Ignite Award, the Janet Meadors, a manager in honored for her work on the toughest values and qualities that made Sue PULSE’s project management office, company-critical projects with patience Carpenter a remarkable person won the Ignite Award at a ceremony in and adaptability, as well as for taking continue to resonate at PULSE. October attended by several members pride in supporting colleagues.

Debit Research Can Impact Your Bottom Line

FACT: Despite business debit’s high profitability, it remains a small portion of the overall debit market with only 6% of all cards.

FACT: Debit card fraud loss rates declined in 2008, though ATM losses pose a growing problem for issuers.

FACT: Seventy-nine percent of issuers are satisfied with their rewards programs, but cardholder engagement remains a key challenge.

Download your complimentary 2009 Debit Issuer Study Executive Summary today pulsenetwork.com/research

3 p u l s e n e t w o r k . c o m Internet PIN Debit Provides Opportunity to Align with Consumer Preferences

esearch shows that as consumers payment method that mimics one consum- continue to make purchases online, ers are already familiar with – point-of-sale Rpayment preferences are expanding debit. Institutions can retain transactions, to include “pay now” debit alternatives. A while continuing to leverage branded white paper, authored by Javelin Strategy & relationships with customers. Research, delves into the potential that Internet PIN debit provides merchants and Merchants financial institutions to align consumer Internet PIN debit provides merchants preferences with their own initiatives. with immediate benefits through increased The paper includes findings from a volume, reduced manual review of pur- By focusing on the benefits to financial recent study commissioned by PULSE and chases and lower costs, including overhead institutions, merchants and consumers, Acculynk and conducted by Javelin on from fraud and management. the paper illustrates that Internet PIN debit PaySecure™, the new Internet PIN debit Minimal changes and costs required for fits the profile of a preferred deposit-based payment method provided by Acculynk. implementation make Internet PIN debit an payment option through an established Concentrating on the need for acceptance attractive option for merchants to improve method. It highlights the opportunity to by financial institutions, merchants and their bottom line. capture a significant portion of Internet consumers, the paper highlights opportuni- transactions. ties to capitalize on new trends by offering Consumers “This white paper highlights Internet Internet PIN debit payment options. As they shop online, consumers want PIN debit opportunities,” said George payment methods that are easy to use and Danforth, vice president of emerging Financial Institutions provide a level of assurance that their products for PULSE. “We view this new When making online purchases, an money will be transferred securely. method as a tremendous opportunity to increasing number of consumers are look- Internet PIN debit options, such as bring PIN debit payments online.” ing to alternative payments, including PaySecure, fulfill consumer needs for ease You can download a complimentary e-mail payment methods and stored value of use and security by capitalizing on a copy of the white paper from PULSE at products. Internet PIN debit enables familiar payment behavior. www.pulsenetwork.com/IPDpaper. financial institutions to offer an online PULSE Exchange Enables Secure Online Data Sharing ULSE offers a secure online method documents that pertain to their institution completing and submitting the form, users for network participants to upload or organization. will be granted to both DebitProtect Pand download shared files. This PULSE Exchange is the exclusive and PULSE Exchange. online repository, accessed from the method by which users of PULSE’s The PULSE Exchange User Guide is PULSE Web site, meets compliance DebitProtect® fraud detection and alert available online at www.pulsenetwork.com/ requirements for sharing sensitive data. service can obtain their lists of potentially pulseexchange. Questions about the tool PULSE Exchange is convenient and affected cards following card data should be directed to the PULSE Fraud easy to use, and it is provided at no addi- compromises. Network participants can Department at 800-420-2122 or via e-mail tional cost to network participants. Users enroll in DebitProtect by e-mailing at [email protected]. are required to have an authenticated [email protected] to obtain login, and they can see only those a User Access Request form. After

All debit all the time SM 4 IndustryVoice Paying it Forward: Payments Now, Soon and Later

campaigns to existing customers. More- best way of defending e-commerce over, while the RDC land grab for core card-share against the recent gains of deposits rages on, some institutions are alternative payment providers like PayPal pulling back to make sense of the RDC risk and Amazon.com. management guidance issued by the Federal Financial Institutions Examination Payments Later Council in January. The bottom line is that All of these payments trends and financial institutions must decide now developments lead to one thing: the mobile whether to get serious about RDC or be phone. The biggest question in mobile By Lee Wetherington banking today is: How can my financial ProfitStars® left behind. On the consumer side, it’s debit, debit, institution generate revenue? The answer is debit. Last year was the first time the use mobile payments. hese days, it’s easy to be gloomy of debit cards exceeded that of credit The mobile phone will ultimately be the about everything, and payments are cards, and, over the course of the reces- payments device of , a device that T no exception. The recession cut sion, consumers turned to their debit cards can wirelessly present the consumer’s growth rates of debit card and ACH in droves. This practice buoyed a positive choice of payment instrument at the point transactions dramatically and ushered in a growth rate in debit card volume through- of sale – be it a debit, prepaid or steady and steep decline in credit card out the recession. Savvy institutions are – without having the physical card present. volume. Combined, these factors hurt capitalizing on this debit trend with The stakes are huge, and since so many of financial institutions’ fee income, fed fears targeted rewards programs, more transpar- today’s mobile phones (and likely all of of further decline and “forced” many to put ent and less punitive overdraft protection tomorrow’s) are Internet-connected, plans for the future on hold. programs and automated tie-ins to savings PayPal and Amazon.com will also be But, there is good news: Transaction accounts. The goal here is to position debit competing for those point-of-sale volumes are stabilizing, and the impending card programs in ways that address payments. recovery means payments franchises consumer pain by educating, encouraging represent the biggest opportunities for and enabling them to spend sensibly and Pay it Forward growth, both short- and long-term. Many save regularly. Don’t let the recession and its aftermath financial institutions are still paralyzed by blind your financial institution to current wait-and-see fear, which only makes the Payments Soon and coming opportunities in payments. opportunity that much bigger for those The mid-term priority for a payments Winners are made in transition, and those with the foresight and fortitude to act now. franchise should build upon the migration financial institutions with the insight and to debit by promoting secure use of debit foresight to recognize and pursue opportu- Payments Now cards online and offering open-loop nities in payments will be those who exit The biggest short-term opportunity in prepaid cards in a variety of flavors, such the recession stronger than they entered. payments is Remote Deposit Capture as gift cards and travel cards. Prepaid Pay it forward. (RDC). Checks still make up 70 percent of cards provide an alternative means of receivables among two-thirds of all U.S. paying with plastic instead of cash, while Lee Wetherington, AAP, is Director of businesses. This, along with the mandate also giving financial institutions a source Strategic Insight for ProfitStars, to cut costs and collect faster in dire of fee income. provider of best-of-breed solutions that economic times, is fueling 80 percent More exciting still are the pilots, like enhance the performance of financial growth in the number of businesses that being conducted now by PULSE and institutions of all sizes and charters adopting RDC this year. other networks, testing secure ways to use using any core processing system. He Yet, only a small percentage of financial PIN debit cards online. Once these oversees communications and public institutions offering RDC are successfully methods and technologies are standard- relations initiatives with the financial acquiring new relationships and the low ized, an institution’s objective will be to services industry. For more information, cost deposits that come with them. This is promote usage of debit cards for visit www.profitstars.com. because most RDC institutions limit their e-commerce. This will ultimately be the

5 p u l s e n e t w o r k . c o m PULSE Expands ATM Acceptance Beyond U.S.

ULSE’s parent company, Services, acquired Diners P Club International in the summer of 2008. Since that time, PULSE has been working to expand ATM and cash access acceptance outside the U.S. in support of Diners Club. As part of this effort, PULSE has signed acquiring agreements with , Canada’s EFT network, and TRIONIS, a European interbank processing network. In July, acceptance of Diners Club International® cards was initiated at the ATMs and over-the-counter cash access locations of participating acquirers in more than 100 countries. And, as of October 2009, Discover® cards are now accepted at those same ATMs. “Our initial focus has been to provide cash access in major international busi- ness and leisure destinations,” said Amy Parsons, PULSE senior vice president and director of global ATM expansion. “Going forward, our focus will be to continue adding ATMs and cash access locations Participant Impact PULSE communicated the impending in these countries, as well as in the U.S. Earlier this year, PULSE participants ATM acceptance expansion to network and around the world.” began earning ATM acquirer interchange processors and financial institutions in on transactions made with internationally mid-August, along with details about the issued Diners Club cards at PULSE ATMs. fee structure. Pricing for these The inclusion of Diners Club cards in the non-U.S.-initiated ATM transactions is PULSE network represents an additional highly competitive. and highly competitive revenue opportu- For pricing details on these transac- nity for PULSE ATM acquirers, and one tions, participants may access the PULSE that is available only through PULSE. Participant Fee Schedule in the password- 15% In addition, debit cards issued by protected area of the PULSE Web site. Number of mobile phone PULSE’s more than 4,500 financial institu- Visit the “Forms & Requirements” area users who used their tion participants are now accepted at ATMs in the Financial Institutions section at mobile devices to perform in Canada bearing the PULSE acceptance www.pulsenetwork.com (login required). a banking function mark. International acceptance of PULSE in the past month. cards will be expanded in the near future to include ATMs in popular travel destina- tions throughout Mexico and the Caribbean. Source: Javelin Strategy & Research

All debit all the time SM 6 AFFN and PULSE DNMDEBIT NEWS MINUTE Networks Sign Phishers Target New Medium Reciprocal Agreement American Banker Fraudsters have begun aiming phishing hrough a new reciprocal acceptance as expanded ATM acceptance through this attacks at the chat windows many finan- agreement with the Armed Forces new reciprocal agreement with AFFN,” cial institutions use to communicate Financial Network (AFFN), PULSE said Judith McGuire, PULSE senior vice T with consumers online. RSA, a security cards will be accepted at 195,000 AFFN president, product management. solution provider, says the technique ATMs at or near U.S. military installations For pricing details on these transac- was used against customers of one bank worldwide beginning November 9, 2009. tions, participants may access the PULSE and is likely to draw copycats. The scam The agreement will enable PULSE and Participant Fee Schedule on the PULSE began at a phishing Web site, from AFFN cardholders to conduct withdrawals, Web site. Visit the “Forms & Requirements” which consumers were passed on to the transfers and balance inquiries at both area in the Financial Institutions section at legitimate bank Web site to avoid detec- networks’ ATMs. www.pulsenetwork.com (login required). tion. At that point, a bogus chat window “PULSE is always seeking new opportu- appeared, and the scammer imperson- nities to enhance the value of the services ated a bank employee. we provide to network participants, such

Debit Cards as Safety Rewards DelawareOnline.com Healy Long and Jevin, a Delaware-based Network Operating concrete construction company, is using prepaid debit cards as incentives for safe on-the-job behavior. The company rolled Rules Revised out the incentive program in August 2008, distributing a card to every he PULSE Rules and Operating To view the new rules, visit the “Forms employee. Each month, if employees Procedures have been updated to & Requirements” section of the Financial work a minimum of 30 hours a week T reflect recent developments at PULSE Institutions, Processors or Retailers/ISOs without a recordable injury, they all get and within the payments industry in gen- areas at www.pulsenetwork.com (login $25 electronically deposited onto their eral. PULSE notified participants in early required). Available on those pages are: SafeRewards cards at the end of the July of the availability of the new rules • The PULSE Rules and Operating following month. If there is a recordable document, Version 9.3, on the PULSE Web Procedures, Version 9.3 injury, no one receives the bonus. site. The rules took effect August 10, 2009. • A comparison version showing changes to Version 9.2 The recent changes to the PULSE • A communication summarizing the ATM Surcharge Fees Rise rules impact the following areas: changes Cardline • Confidentiality Financial institutions increased their • Termination transition assistance If you have any questions regarding ATM surcharge fees this year, while • International transactions and these revisions, please contact your PULSE “foreign” ATM fees have declined. currency conversion account manager, or call the client services Bankrate.com surveyed 250 U.S. banks, • Security compliance for acquirers team at 877-247-8573. finding that the average ATM surcharge • Reconcilement fee had risen to $2.22 from $1.97 last • Suspension of participation year. Foreign fees – assessed when an institution’s account holders use ATMs owned by other organizations – aver- aged $1.32 this year, compared with $1.46 in 2008.

7 wp w u wl s. ep nu el st ew - oe rf kt . c o m PCI Council Promotes Skimming Prevention he Industry Security input from law enforcement and industry • Prevent or deter criminal attacks Standards Council (PCI SSC) in experts. According to the council’s press against point-of-sale terminals and T August announced the availability of release on the new resource, suggested terminal infrastructure a new guide to educate merchants about guidelines help merchants to: • Identify any compromised terminals preventing card skimming attacks. The • Evaluate the risks related to as soon as possible and notify the document, Skimming Prevention – Best skimming appropriate agencies to minimize the Practices for Merchants, provides informa- • Understand the vulnerabilities inher- impact of a successful attack tion on subjects such as physical protection ent in the use of point-of-sale termi- To download a copy of the PCI SSC of terminals, prevention of PIN compro- nals and terminal infrastructure Skimming Prevention paper, visit mises and training of store personnel. • Assess challenges associated with www.pcisecuritystandards.org. The guide was developed by the coun- staff members that have access to cil’s PIN Entry Device Working Group, with consumer payment devices Embracing Gen Y Maximum productivity, maximum profitability

or the first time in U.S. history, four Internet, they hunger for instant gratifica- Gen Y in the Marketplace generations of professionals are tion and continuous progress. Dorsey believes that Gen Y buyers F working side by side. At this year’s So how do business leaders channel need to see an immediate and convenient PULSE Conference, author Jason Dorsey – Gen Y’s passion for high-tech, fast-paced application for every product they acquire. a member of Generation Y – shed some living into productivity and success? How They want to know, “How am I going to light on the mindset of the youngest gen- do we make Gen Y a competitive advantage use this today?” This generation also eration in our workforce, and how best to on both sides of the desk? thrives on individuality and likes to know inspire and motivate this group as both that their purchase is unique. Products like professionals and consumers. Gen Y in the Workplace instant-issue debit or credit cards and per- The self-proclaimed Gen Y Guy™ out- Gen Y is accustomed to growth and sonalized accounts are ideal for this group. lined the major characteristics of each change, and diverse challenges will keep Further, Dorsey recommended that generation, and how those defining traits them engaged. For example, ask a Gen Y service providers be an information affect perspectives and expectations. Many employee to start a blog designed to reach resource for these young consumers. Gen Y-ers, currently ages 14 to 32, were a new demographic for the company. Utilizing social media to attract their atten- raised by hard-working Baby Boomers who Succeeding at this type challenge can tion and engage their interest can be more were determined to make their children’s reinforce self-worth and hold their interest. effective than using traditional media. paths easier than their own. So, Gen Y kids While these young associates may be Make it a point to know what resources often did not work during their school intelligent, remember that they often lack they are using, such as www.mint.com and years, and were subsequently encouraged real-world experience and might not intui- www.current.com, and be prepared to to find a job that makes them happy. tively know what is expected of them. keep up with changes and developments. Therefore, many members of this gen- Providing examples of performance expec- Gen Y is the fastest growing demo- eration have a sense of entitlement, and tations will set them on the right track. graphic in the workforce, and the age gap define themselves by what they do after And when they succeed, reward them. between business associates working side five o’clock, Dorsey said. More importantly, Gen Y’s view time as currency, so shaving by side is at its greatest in our history. they often have no previous work experi- an hour or so off their day goes a long way. Jason Dorsey’s energy, sense of humor and ence – a fact that Baby Boomers may not Gen Y’s are very lifestyle-driven, so skip passion for these young professionals take into account. The wake-up call from the gift card in favor of concert tickets. translates into practical business sense Dorsey: “If we don’t seem like we know Regardless of the outcome, feedback for reaching a powerful segment of society. what we’re doing, it’s because we don’t!” should be delivered frequently, and in short For more information, visit Jason at This generation tends to be driven by bursts. Waiting for the annual review could www.jasondorsey.com. outcome rather than process. Raised in the mean losing a Gen Y employee’s interest age of high technology and the dawn of the and loyalty, and ultimately the employee.

All debit all the time SM 8 The Ins and Outs of Social Media Your Account Holders Are Using It – Shouldn’t You Be Too?

weets, blogs, friends and fans are services online. While some businesses To raise awareness of DebitFacts.org, redefining how individuals and com- use social media channels for sales, con- PULSE and Golin Harris developed a T panies communicate. To help put the tests and customer service, others use Facebook page and Twitter presence for extraordinary growth in the use of social them to disseminate facts and information, the Web site. This provided PULSE with media and social networking into perspec- positioning themselves as thought leaders additional channels for informing con- tive, consider this: the number of unique in their industry. Still others use these sumers about the merits of using debit visitors on the microblogging site Twitter sites as research forums, simply observing and counterbalancing inaccuracies about grew by 2,500 percent in just one year. And what practices are taking place in the debit cards. there are many more examples of explosive social media space, and how users are “Whether or not you embrace this trend growth in the social media arena (see responding. of new media, one overlying theme is clear “Facts” below). The over-arching purpose of social – people are talking about your business In July, PULSE presented a PULSE media is to allow consumers to connect and industry through these channels, Academy® professional development ses- directly to a company or brand in a public regardless of your participation, and they sion on social media. Glen Orr, senior vice forum, and foster community among like- may be filling the space with negative president of the public relations firm, minded users. Major companies such as information that could have lasting GolinHarris, and Steve Sievert, PULSE Blockbuster, Centex Homes, Michael’s, effects,” said Orr. “It is vital that you get senior vice president of communications Texas Instruments and Wells Fargo are involved and tell your side of the story.” and marketing, together explored the ways actively using these outlets to reach To listen to the complimentary PULSE financial institutions may be affected by their consumers. Academy webinar on-demand at your social media, even if they do not get convenience, visit the Professional involved. These experts guided partici- PULSE’s Participation Development area of the PULSE Web site pants through the current trends in social PULSE’s use of social media began as at www.pulsenetwork.com. media and how to leverage their business part of its effort to strengthen its role as a impact for maximum benefit. thought leader and community educator for the debit industry. Why Social Media? “We started DebitFacts.org to combat Besides networking sites like Twitter negative media coverage about debit,” said and Facebook, social media encompasses a Sievert. “Reports were circulating that wide variety of channels including blogs, presented a biased, uninformed point of feedback forums, “gripe sites” and viral view about the use of debit cards. Besides video sites such as YouTube. its negative impact, the information was In today’s Internet age, many individu- mostly inaccurate due to a lack of familiar- als begin their quest for products and ity with Reg E, which was put in place to protect consumers. By contrast, there was very little defense of debit in the media F@cts and online.” • Twitter hosted an estimated 19 million unique visitors in March 2009, up 95 percent from 9.8 million in February (and up 2,500% in the last year) • Facebook claims 300 million users, nearly equal to the U.S. population • MySpace has 70 million users • 50% of consumers have read a blog and made a purchase based on its information

• 52% of social networkers have “friended” or “fanned” at least one brand through a network Source: Anderson Analytics, 2009

9 p u l s e n e t w o r k . c o m Tips for Becoming a Best-in-Class Issuer (continued from page 1)

“Best-in-class status was not limited to “These issuers have notably lower fraud large issuers, nor were the top performers rates as well,” said Hayes, “suggesting that consistent across various metrics, suggest- better tools and processes can effectively ing that all issuers have the opportunity to combat fraud.” improve their performance in certain key Best-in-class issuers recorded PIN debit areas,” said Hayes. “Performance by these fraud losses of 0.10 basis points (bps) per institutions continues to highlight growth gross dollar value (GDV) and signature potential in issuers’ debit card portfolios, debit fraud losses of 1.44 bps per GDV. despite challenging economic conditions.” These figures compare to 0.80 bps/GDV and 5.24 bps/GDV, respectively, for all Performance Trends issuers surveyed. Best-in-class issuers achieved an “The most important take-away from average debit card penetration rate of 91 these findings is that all debit card issuers percent in 2008, compared to an average can impact their debit program’s perfor- of 73 percent for all issuers surveyed. mance by targeting improved results in key “These institutions tend to do the best areas,” said Hayes. “It’s a matter of decid- job positioning their debit cards with new ing which measures you want to target for account holders and have the most efficient improvement, analyzing the available data on-boarding processes,” said Hayes. related to your current performance in Issuers in the highest quartile saw an those areas and developing a program average of 9.3 PIN debit transactions and tailored to achieve the desired results.” “The most important take-away 16.0 signature debit transactions per active An executive summary of the findings from these findings is that all card per month in 2008. This compares to from the 2009 Debit Issuer Study is 6.3 and 12.6, respectively, for all issuers available on the PULSE Web site at debit card issuers can impact surveyed. www.pulsenetwork.com/research Best-in-class issuers also generated an (login required). their debit program’s average of $106 in net interchange revenue per active card per year in 2008, compared performance by targeting to an average of $81 for all issuers. improved results in key areas...” Tony Hayes, Oliver Wyman

U.S. Bank Extends Debit Network Relationship with PULSE

ULSE has extended its relationship “PULSE has a proven record of provid- By establishing long-term relationships, with U.S. Bank in a long-term ing reliable and high-quality PIN POS and PULSE is able to further solidify its commit- Pagreement that provides U.S. Bank ATM services, which was vital in renewing ment to network participants. customers with PIN debit point-of-sale our long-standing relationship,” said Lynn “We strive to provide quality services to (POS) and ATM services. Heitman, senior vice president in U.S. Bank all of our participants, and we are proud to U.S. Bancorp, with $266 billion in Retail Payment Solutions. “PULSE has work with a valued customer in U.S. Bank,” assets, is the parent company of U.S. Bank, been a strong partner of ours for many said Leah Henderson, PULSE’s executive the sixth-largest commercial bank in the years, and we look forward to continuing vice president of sales. “We look forward United States. The bank operates 2,847 to provide our cardholders with convenient to growing our long-held relationship with banking offices and 5,183 ATMs in 24 and accessible debit and ATM services U.S. Bank, as we continue to provide reli- states, and has been a PULSE participant through an industry leader like PULSE.” able network access and customer service since 2001. to our entire network.”

All debit all the time SM 10 Students Receive School Supplies

ULSE provided school supplies and Achievement, Read Across America backpacks to all 450 students of activities and incentive-based mentoring PDodson Elementary in Houston. sessions. Company donations will support Employees participated by stuffing the music department and technology for backpacks and distributing them to classrooms. the students. The event was part of a new community outreach initiative known as “Discover Success in Schools.” This company-wide program is designed to help build partnerships with local schools and further the company’s commitment to supporting education. PULSE staff members will take part in additional Discover Success in Schools events this school year, including Junior

Debit Cards Dominate Payments (continued from page 1)

Payments fraud remains a major con- While just 6 percent of the banks To download an executive summary cern for community banks, with 88 percent surveyed offer mobile payments services of the 2009 ICBA Community Bank of respondents reporting credit or debit (including mobile banking), 27 percent plan Payments Survey, visit www.icba.org. card-related losses during the past year. to increase technology spending for these Ninety-one percent of banks surveyed services over the next two years. Interest reissued debit cards last year as a result in mobile payments services is of fraud. Sixty-five percent of community driven by larger, more urban banks noted that they have increased their community banks. spending to address payments fraud, while Community banks that focus less than 1 percent decreased spending on their payments strategy on fraud prevention. acquiring and retaining The survey also revealed that commu- business customers tend to nity banks’ investments in payments offer a wider selection of products remain strong despite a harsh payments products to all of their economic climate. Fifty-two percent of customers, according to ICBA. survey participants increased their invest- Not surprisingly, these banks ment in consumer payments products over also offer a broader array of the past two years. Most see this as a way business payments products. to increase profitability, deepen customer relationships, improve efficiency, create new revenue streams and differentiate themselves from competitors.

11 p u l s e n e t w o r k . c o m PRESORTED FIRST CLASS U.S. POSTAGE 1301 McKinney, Suite 2500 PAID Houston, TX 77010 HOUSTON, TX PERMIT NO. 173 Return Service Requested

PULSATIONS is produced bi-monthly by PULSE. Please send information for the newsletter to: Anne Rhodes, PULSATIONS Editor PULSE 1301 McKinney, Suite 2500 Houston, TX 77010 [email protected] PULSATIONS can be viewed on the PULSE Web site at www.pulsenetwork.com/PULSATIONS.

Seconds with... Steve Sievert Senior Vice President, Communications and Marketing

Networking Gets Social Use of online social networks is dra- opportunity to connect with customers, launched in 2008. The networking sites matically changing the way consumers keep your brand top of mind and cultivate have enabled us to engage in dialogue with interact with one another and businesses. customer loyalty. While it might be easy to consumers who had not previously visited Sites such as Facebook and Twitter, discount social networks as nothing more the site. Facebook and Twitter have with their friends, fans and tweets, make than a fad, the numbers suggest otherwise. become key channels for expanding the talking with someone or sending an e-mail Facebook generates 87 million unique reach of DebitFacts.org. Social networks seem old-fashioned. And, it’s not just teens views per month. MySpace boasts 70 mil- can be effective means of extending your and Generation Y who are championing lion unique monthly visitors. Use of Twitter brand, as well. the social networking cause. According to now stands at 21 million on a monthly Seventy-five percent of Americans are Forrester Research, the most rapid growth basis. The dominant players in the space still spectators to what is taking place on in social network use is among consumers might change over the next five years, but social networks. Many could be your 35 and older. social networking is here to stay. customers who are looking for a reason If your financial institution isn’t At PULSE, we entered social network- to get involved. Give them one by creating blogging, tweeting or building a Facebook ing this year by establishing a Facebook a social networking presence for your fan base, you are missing a valuable and Twitter presence for DebitFacts.org, financial institution (see related article the consumer debit awareness Web site on page 9).

IN CLOSING

Convenience Fee Notice Reminder The Independent Community Bankers location on or at the ATM, as well as on the institution. The notice also must include of America is encouraging community ATM screen – or on a paper receipt – before the name of the owner, operator or sponsor banks to ensure that ATM fee disclosure imposing fees. The physical signage must imposing the convenience fee or rebate. notices are posted on all of their ATMs. In state that a fee will be imposed for provid- The PULSE Convenience Fee and ICBA NewsWatch Today, the association ing electronic fund transfer services or a Rebate Guide, available on the PULSE Web cited class-action lawsuits that have been balance inquiry (or may be imposed, if site at www.pulsenetwork.com, includes a filed against banks whose ATMs did not that is the case) and disclose the amount sample disclosure. For more information, have the required signage. of the fee. visit the Documents & Forms page in the Section 205.16 of Regulation E requires PULSE goes a step further, requiring Financial Institutions section. ATMs to disclose any fees on a physical that the notice convey that the convenience sign in a prominent and conspicuous fee is in addition to any fees that may be assessed by the cardholder’s financial ©2009 PULSE A Discover Company

All debit all the time SM 12 p u l s e n e t w o r k . c o m