Innovative Aggregation Solution by Cardis International Addresses the Challenges of Durbin Amendment

Amsterdam (ots/PRNewswire) - The Durbin Amendment in
the US is putting the card payments business model under significant
pressure. With major revenue loss, especially on higher value card
transactions, it will be even more difficult for the banks to provide
attractive merchant fees for the huge number of low value payments -
everyday small purchases below $20, typically made in cash.

Processing costs for low value payments are prohibitive - Durbin
could make this worse The primary weakness of the current business
model in processing low value payments stems from the processing
costs, which are independent of the transaction amount, and incurred
by the banks for each individual transaction. These costs result in a
transactional charge associated with every payment that is
prohibitively high for smaller transaction amounts, making it
unacceptable to the merchants. Maximum fees under the new legislation
are likely to become de facto fees for all transactions, making low
value payments even more expensive than today, and having negative
impact on merchant acceptance. The consumers may also be negatively
impacted as indicated by Mr. Dimon, the CEO of JPMorgan Chase during
the earnings call on January 14, 2011. Due to the significant revenue
loss the banks may increase charges for debit cards. Another adverse
consequence would be making 5% of current bank clients unbanked
because the banks will not be able to profitably serve them.

This creates a negative spiral with revenue loss driving reduced
bank investment in payment systems, thereby stifling innovation,
unattractive merchant and consumer fees reversing the current cash
replacement trend, and a larger part of the population being forced
out of the financial system. This negative spiral can be averted only
by removing a significant portion of the processing costs from the
payment system, making low value payments economically viable for all
stakeholders. The existing model has reached the limit where
economies of scale and tweaks to the existing processes cannot
deliver the required results.

Cardis' aggregation solution makes low value payments
economically viable Cardis' innovative aggregation solution for low
value payments reduces the processing costs of the existing payment
system by approximately 10 times and enables a new business model
which the industry needs to address the above critical challenges. It
supports all form factors including EMV cards, contactless cards,
mobile NFC phones, and uniquely supports both physical retail and
m/e-commerce payments.

"This fundamental rethink of the existing model is a great
example of effective innovation in the payments sector", said Nebo
Djurdjevic, the CEO of Cardis. "Like all good innovations the Cardis
solution builds on the current infrastructure and delivers
significant improvement to the performance of current payment
products, allowing them to service very low value payment
transactions at a cost proportional to their value. It can provide a
stimulus for new growth, new channels, new merchants, and complement
advanced technologies including EMV, contactless, and mobile NFC."

Cardis is moving forward globally in a post Durbin environment

"The US is not an exception", continued Djurdjevic. "Regulatory
intervention impacting electronic payments profitability is a global
phenomenon, while, paradoxically, at the same time nearly all
governments are keen to see the demise of cash and paper transactions
which still dominate Low Value Payments. Cardis is the catalyst to
make low value payments economically viable in a post Durbin
environment. In 2010 significant interest in the Cardis solution was
shown amongst banks, telcos and others in Europe and North America,
and there are already plans for at least one pilot starting in 2011."

About Cardis:

Cardis provides a unique solution for low value payments with
transaction economics an order of magnitude better than the existing
payment products. The Cardis solution supports multiple
implementation and business models that provide true economic
advantage to banks, payment schemes, payment processors and mobile
operators in the different eco-systems. It is a proven,
ready-to-market solution that can capture the cash replacement
opportunity for low value payments in POS, e-commerce and mobile
environments. Cardis Enterprises International BV is based in the
Netherlands.

For more information, please visit
http://www.cardis-international.com

ots Originaltext: Cardis International
Im Internet recherchierbar: http://www.presseportal.de

Contact:
CONTACT: Contact Nebo Djurdjevic,
+1-905-339-2665,nebo.d@cardis-international.com