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FINANCIAL INSTITUTIONS

FINANCIAL INSTITUTIONS

Financial institutions include commercial banks, S&Ls, credit unions, finance companies, and brokerage houses.

Financial institutions are the major interface with retailers for establishing credit card programs including authorization, transaction processing, and check clearance. Financial institutions are also a major marketeer of check verification/guarantee services.

Less than 200 of the 20,000 plus financial institutions offer credit authorization services directly to retailers.

Approximately 5,000 financial institutions offer credit card programs through financial institutions (primarily large commercial banks) and through credit card vendors, including credit card associations and commercial processing vendors.

Credit card authorization services accomplished by financial institutions for their subscribing retailers are considered “in-house.” Such EDP expenditures have not been included as expenditures for information services in this study.

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MARKET STRUCTUREMARKET STRUCTURE

MARKET STRUCTURE

• The market for credit card authorization/check guarantee services focuses on consumers. In the aggregate, the size of the potential marketplace is defined by 1984 industry based data statistics:

Credit cards: seven billion transactions with a total volume approaching $300 billion.

Retail checks: over 20 billion checks with total check volume exceeding $470 billion.

• With respect to market penetration, 1984 industry data indicates that:

Less than 25% of all credit card transactions currently receive credit authorization.

Less than 3% of retail check dollar volume is validated/guaranteed.

• The six vendor groups that make up the structure of the credit card authorization and check guarantee services marketplace are shown in Exhibit lll-l. These groups interact through elaborate and complex voice and data networks to provide CCAS/CGS through an increasingly electronic retailer interface to consumers.

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POTENTIAL FOR ADDITIONAL SERVICES

POTENTIAL FOR ADDITIONAL SERVICES

• The market for CCAS/CGS is made even more attractive by the high potential for offering additional services, both to the existing client base and in other market areas.

• The technology for offering CCAS/CGS is directly applicable to the delivery of additional services that address needs within the existing client base and in new market areas:

Increased intelligence in ECR and POS authorization terminals permits offering services for data capture, transaction balancing, funds clearance, and settlement.

Intelligent terminals can be downloaded to handle real-time order entry and inventory control services; this same data can be sold to the

100,000+ suppliers of goods sold by retail chains, allowing competitive analysis, measurement of the effect of advertising, and sales forecasting.

Interconnecting intelligent terminals through vendor authorization networks will allow financial institutions to offer cash management services directly to the retail outlets.

Vendors can use voice authorization networks to offer telemarketing and teleordering services for national retailers and mail order houses.

• This same authorization technology is directly applicable to a wide array of reservation services, e.g., airlines, auto rental, motels, and hotels.
POTENTIAL FOR ADDITIONAL SERVICES

• To Existing Clients

– Data Capture and Balancing

– Clearance and Settlement

– Order Entry and Inventory Control

• Using Authorization and Network Technology

– Cash Management

– Telemarketing

– Reservation Services

– Management of Advertising Effectiveness

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Federal Reserve

The Federal Reserve Board’s 1949 Survey of Consumer Finance shows: 20,000,000 nonfarm families own their own homes; the equity in these homes is $132 billion; the average equity value is $7,000; of these 20,000,000 homeowners, 55% have no mortgages; there are now more homeowners than renters; 6,000,000 have been added since the war.

Federal Reserve Building, Washington DC, USA

This number should increase about a million a year if the government program does not further stifle individual initiative and opportunity for home ownership.

This unprecedented record is the result of the freedom of choice of the average American citizen. He likes his home. The policy of the Government in guaranteeing credit has helped in building that record. But the bulk of the credit goes to the community loaning agencies which through their work among their neighbors have made such a sound program possible. Today in spite of the fact that bank and insurance investors have entered the field of home financing, savings and loan associations constitute about one-third of the mortgage market. Mortgages today constitute about 80% of all such associations’ investments. Your business is as characteristically American as is the desire for home ownership. The two cannot be separated.

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Congress

In the light of that philosophy let us briefly look at the program enacted by and remaining before the Congress as it bears upon your expanded and productive business.

Our free enterprise system was on trial before the First Session of our 81st Congress, Except for the National Housing Act of 1949 and the dangerous policy of peacetime deficit financing it was not much more friendly to the growing state socialism than was the 80th Congress. But the margin of protection against substituting police state controls for traditional American liberties has been greatly lessened.

Remember that the 80th Congress, much maligned in the last campaign, is the only one that has balanced the budget and reduced taxes in the last 16 years. Cutting the cost of government and reducing the burden of taxes lie at the very bottom of any program of progress.

Scrutiny of false promises and resistance to bureaucratic planning come finally from those who have made their own way. The hard core of that group are those who have acquired their homes through their own thrift and initiative.

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Market

This market focus report is produced by INPUT as a part of the Processing Services Program of INPUT’S Market Analysis and Planning Service (MAPS). The report analyzes credit card authorization/check guarantee services markets in the United States.

The rapid deployment of credit authorization point-of-sale (POS) and electronic cash register (ECR) terminals in retail stores, gas stations, gambling casinos, and hotels to increase consumer convenience and combat fraud has created a rapidly expanding market.  Leader of loan market www.hryloanz.com with fast approval offers fast payday loans.

The expansion and interconnection of hitherto separate financial transaction networks is extending credit authorization and guarantee services to new locations and increasing the nationwide market for those services.

Fundamental changes are occurring in the retail terminal environment which permit successful offerings of expanded and additional information services to both consumers and retailers. The changes provide strategic opportunities for sustained growth in processing and value-added network (VAN) information services.

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GOVERNMENT ENCROACHMENT ON INDIVIDUAL FREEDOM

Hon. John W. Brigker
United States Senator from Ohio Member of Senate Banking and Currency Committee Columbus Ohio

A DISTRAUGHT WORLD has Changed the thinking of many people. Nations have chosen new courses under strange leaders and under policies our forefathers discarded centuries ago. Increaised populations and the growth of large cities have created new and challenging social and political problems. Many aspiring political leaders have discarded the clarion call of Patrick Henry — great liberal of his age — for “Liberty or death” and have modernized it to “Give me security or give me death.” There are many followers, for an insecure society generates a yearning for security.

Our country, where the watchwords of our political philosophy have been “individual liberty”, “private business,” “equality of opportunity”, “” has been caught in the backwash of some of this alien philosophy. Here everyone has yet a voice and a vote — too often unused — in the destinies of his community and government. Even though we have given, universal franchise, the assumption of bureaucratic control has weakened that voice and removed policy-making power further from the individual voter.

I believe, and I think the majority of our people still believe, that the greatest security for the individual is citizenship in this Republic.

Believing that, my public service has always been built upon preserving intact our personal liberties, improving individual opportunity, and keeping government responsive to the guiding will of our people. The duty of a good public servant today is to create the atmosphere in which the creative genius of our people will be most encouraged. Upon that creative productive ability we have builded mightily. Our necessaries are the luxuries of many people.

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Generations of Americans

We used to say that it could not happen here. It has already happened. The only question is how much further are the majority of the people going to let it go before we awaken and do something about it. Are we and the so many others like us going to let it go by default all the way with the accompanying destruction of everything generations of Americans have fought and died to preserve? It is indeed a sad commentary on the political economy of this nation that far too many of our representatives in federal public office from both major parties are today more interested in what they can get and keep than in what they can do to save this country from complete ruin. We now have government by a small, tightly entrenched clique. We and our friends and their friends must do one thing, we must carry this fight to all the people; must show them that the price tag attached to the so-called security of life philosophy that is being sold to them is terribly high — so high in fact that it is not measurable. Because to measure we must put monetary values and power as the motivating forces of man’s existence rather than the values all religions place upon a life devoted to the love of God, the love of country, and the love of neighbor. These involve the giving of oneself and the not taking from others through political spoils. If we do not soon return to the beliefs of our forefathers as to their fundamental duties to others and to themselves, we shall find freedom of individual thought replaced by predigested thinking by the state; freedom of action set aside for servitude to the state and obeisance to a central power composed of men superseding our belief in and duty of our God.

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SAVINGS AND LOAN ANNALS

The time has come when the people of this Republic must stand up and be counted in this cold war of national socialism against our proven and long-held American beliefs. The attempt by the believers and proponents of the pagan philosophy of “What can I grab for myself” to destroy the age-old Christian concept of “What may I give,” makes it essential that the men and women be separated from the appeasers. For far too long the citizens of this Republic have compromised with, have avoided facing and taking issue with the reality of what this band of ruthless destroyers really intends. These Machiavellians who dare to deny the identity of man^ deny that man is endowed with mortal and immortal individuality and accountable to a supreme being; they assert instead that man is merely a serf of the state with a beginning and end-all of nothing but homage to that central power group. In this country we have stood by while we have witnessed nationalization of finance; seen the replacement of government by the people with administrative law and regulation through federal commissions, corporations, and administrations; watched taxing power being perverted to destroy all initiative, to confiscate and redistribute wealth, to take and then waste the savings of the public; been spectators to the purchasing of votes of favored millions with billions of the taxpayers funds; observed the development in Washington of the greatest propaganda unit that man ha-s ever known. You have heard of thought control in the countries behind the iron curtain. We have a strong start on the same thing right in this country.

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British Business

In passing, we might note that foreign invaders were never able to enslave the British people. Their own socialist planners have been able to do it, with our country making it possible because our monetary contributions materially aid in maintaining the political control of that country in the hands of the Henry Wallaces, the Marcantonios, and the Earl Browders of Britain. It is not bad enough that our politicians should use the power of taxation to bring about the destruction of our form of government without also making it feasible for a group to stay in power which has completely subjugated and put into the position of slaves of the state the people of Britain?