MPCC

MPCC

Value added network (VAN) services, currently 10% of total user expenditures, are provided by the Visa and MasterCard Interchange Networks and more recently by TYMNET for the MasterCard Automated Point-of-Sale Program (MAPP).

CREDIT CARD AUTHORIZATION EXPENDITURES

Users are currently spending over $365 million to process over 2.5 billion authorizations at a cost of approximately 14 cents per transaction.

Approximately 1.5 billion authorizations are primary transactions delivered by information services vendors through the first five modes of service, as shown in Exhibit III —3. Over I.I billion secondary transactions are processed through VAN interchange.

Of approximately 1.9 billion primary transactions originated by information service vendors and “in-house” by financial institutions and commercial companies, approximately 60% are processed by VAN interchange networks.

Voice authorization services, costing about 55 cents/authorization, are still the leading (42%) type of processing service and are still growing. Voice authorization is in part being replaced by electronic methods, particularly POS and ECR.

Nearly half of user expenditures for credit card authorization services are, as shown in Exhibit 1 1 1-4, utilized by the banking and finance industry sector. Credit authorization vendors offer services to financial institutions as a primary distribution channel.

Some vendors also offer credit authorization services as well as support directly to the retail/distribution industry sector, though to a lesser extent, authorization services in the transportation and services industry sectors.

CREDIT CARD AUTHORIZATION VENDORS

CREDIT CARD AUTHORIZATION VENDORS

Less than 20 credit card associations and commercial vendors operate as third-party processors in the current marketplace. Credit card authorization vendors accomplish credit authorization on behalf of financial institutions and commercial vendors.

Vendors interface with retailers directly, and (indirectly) through value-added network (VAN) vendors and financial institutions.

Credit card authorization vendors at times utilize the networks of check verification/guarantee vendors to deliver credit card authorization services.

CHECK VERIFICATION/GUARANTEE VENDORS

There are two national (and less than 20 regional and local) check verification/guarantee vendors. These vendors offer check verification/guarantee services either directly to retailers or through financial institutions.

Check verification/guarantee vendors also use VAN vendors and credit card authorization vendor networks to deliver authorization/guarantee services.