Brian Rogal

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Over the past several years, administrators at the St. Charles Medical Center in Bend, Ore., have seen a growing number of patients struggle to pay their bills. More patients are showing up who do not qualify for Medicaid or other government assistance and who also do not have private health insurance.

The explosion in electronic payments has many transaction processors approaching the limits of their capacities. The introduction of San Mateo, Calif.-based Kabira Technologies Inc.'s high-capacity processing software could help processors handle the escalating volumes.

In August 2005, Capital One Financial Corp., which up to that point did its processing in-house, signed a five-year agreement with Total System Services Inc., or TSYS, and began turning over most of its $46.4 billion card portfolio to the Columbus, Ga.-based transaction processor. Largely implemented during 2006, it was Capital One's biggest technology project ever.

Though credit card companies constantly tout the latest technological innovations, such as tap-and-go readers or embedded memory chips, they still struggle to make consumers see their cards as something more than just cold pieces of plastic used for payment transactions.

When Bank of America Corp. bought MBNA Corp. in 2005, many financial analysts thought the purchase would provide a windfall for credit card processor Total System Services Inc. The Columbus, Ga.-based transaction processor had just signed a five-year contract extension to process BofA's consumer and commercial cards, and it seemed that the purchase would drop all of MBNA's card business into TSYS's lap.

In early 2006, some industry analysts were predicting that North America's four major payment-terminal manufacturers would, in the next few years, merge into two or three companies. In fact, that prediction came true within months, when VeriFone Holdings Inc. announced the signing of a deal last April to acquire Lipman Electronic Engineering Ltd.

The financial windfall issuers are experiencing from unspent funds on their prepaid cards, called "breakage," may be gradually decreasing. Consumers, it appears, are becoming more savvy about gift cards.

Officials in the United Kingdom have announced that, starting in late 2007, British businesses will get even large wholesale payments cleared within hours instead of days. The UK Faster Payments Initiative will allow companies to initiate the payments, complete with complex remittance information, with their bank or over the Internet and get quick clearance. That has many Americans wondering if something similar can happen here.

Television viewers have been bombarded by a series of commercials recently from Capital One Corp., the McLean, Va.-based credit card issuer. The ads feature hapless, all-American families whose vacation plans go horribly awry when the frequent-flyer miles they painstakingly built up with their credit cards expire.

Ever since he was hired in 1998, Chris Fitzgerald, president and CEO of Albuquerque, N.M.-based Rio Grande Credit Union, worked hard to run Visa and MasterCard credit card programs alongside the institution's traditional auto and home-lending activities. But in the last several years, he began to see problems.

A couple months ago, Scott Fluhrer, founder of Miami-based RoseSource.com, says he learned that Google, the Internet search engine, had just launched a payment service called Checkout. RoseSource.com for more than three years has been shipping flowers from farms in South America to customers in the United States, Canada and Europe, some of whom found the business through a Google search.

I'm a little old-fashioned in some ways," says Jack Amon, the proprietor of the Marx Brothers Cafe in Anchorage, Alaska. Although the use of cash and checks is declining, Amon refuses to use credit or debit cards to purchase most of the goods and services he needs to run his restaurant, a fine-dining and catering establishment that boasts an extensive wine cellar.

Visa USA has begun helping a number of merchants process their proprietary gift cards over VisaNet, the card association's switch that routes transactions between merchants and card issuers or their processors, industry sources tell Cards&Payments. Within the past 18 months, they say, Visa has started allowing merchants to get authorizations for their gift card transactions via a VisaNet link to their gift card processors using nonVisa account numbers.

While consumers are accustomed to paying for goods with a swipe or touch of a card, most businesses still complete transactions by exchanging mounds of paper invoices. This, say some card industry players, represents one of the few big opportunities remaining for issuers to significantly build their portfolios.

Over the years, Americans have grown more comfortable using credit and debit cards. But only recently have technological advances given manufacturers, independent sales organizations and banks the tools they need to offer smaller merchants and municipalities the opportunity to accept electronic payments.

Most of the coverage of the Hurricane Katrina disaster has focused on the plight of poor New Orleans residents and their day-to-day struggles to survive. But the storm's effects will linger for years, and many worry the financial hardships will force many from the area to declare bankruptcy, a step made more difficult by the reform law that went into effect Oct. 17.

The big dog just got bigger. On July 1, The Cbord Group Inc., the nation's leading provider of cashless systems for colleges and universities, announced it had paid $38 million for one of its largest competitors, the Card Systems Division of Diebold Inc. It was just the latest in a series of shakeups and buyouts in the college-campus card market.