U.S. Bancorp Piper Jaffray Analyst Expects Debit Card Payments to Continue
To Take Market Share
MINNEAPOLIS, June 28 /PRNewswire-FirstCall/ -- U.S. Bancorp Piper Jaffray
Senior Financial Technologies and Services Analyst Jeff Baker says that the
heated debate pitting PIN-based (online) debit, versus signature-based
(offline) debit at the point of sale tends to distract investors from the most
important issue regarding debit payments. In a recently issued report titled,
The Debit Debate: Focusing On The Big Picture, Baker outlines the most
important issue, which is transaction growth for debit card payments.
We believe the most important 'big-picture' issue investors should be
focusing on is the penetration opportunity for debit payments to continue
taking market share away from cash and check transactions, said Baker.
believe the recent emergence of a new breed of payment processor, those that
acquire transactions and own Electronic Funds Transfer (EFT) networks, will
aggressively promote PIN-based debit at the point of sale and drive higher
penetration at merchant outlets.
In his report, Baker states that paper-based payments still dominate the
U.S. retail payment system. He writes, according to The Nilson Report, paper-
based payments represented 63 percent of the dollar volume and 69 percent of
the transaction volume of purchases at the point of sale in 2001.
represents an enormous opportunity of 81.4 billion transactions per year for
the stakeholders of both PIN-based debit and signature-based debit to realize
future gains in transactions, dollar volumes and revenues, said Baker.
Baker points out that PIN-based debit payments are only accepted at
26 percent of the U.S. merchant outlets that currently accept credit card
payments today. This in turn creates a long runway for continued growth of
PIN-based debit payments. Baker says Concord EFS, Inc. (CEFT - $29.40, Strong
Buy, #), owner of the STAR network, is the single best way for investors to
play the high-growth trend of debit payments, followed by First Data
Corporation (FDC - $36.58, Outperform, #), which owns 64 percent of the NYCE
We believe that the outlook for the continued high growth of debit
payments remains favorable, as both PIN-based debit and signature-based debit
transactions continue to take market share from checks and cash transactions,
We expect the continued mix shift of payments toward electronic
transactions, aided in large part by debit growth, will provide solid growth
opportunities for payment processors for the foreseeable future.
U.S. Bancorp Piper Jaffray, a subsidiary of Minneapolis-based
U.S. Bancorp (NYSE: USB), provides a full range of investment products and
services to businesses, institutions and individuals. The company's investment
banking business has grown significantly in the last several years by focusing
on the needs of growth companies in the health care, technology, financial
institutions, consumer and communications growth sectors. U.S. Bancorp Piper
Jaffray has a national reputation for its expertise in fundamental research
and equity and debt financing. U.S. Bancorp offers a comprehensive range of
financial solutions through U.S. Bank, U.S. Bancorp Asset Management, U.S.
Bancorp Investments and U.S. Bancorp Piper Jaffray.
The following disclosures apply to stocks mentioned in this report if and
as indicated: (#) U.S. Bancorp Piper Jaffray (USBPJ) makes a market in the
company's securities. (ˆ) USBPJ analysts who follow this company, or members
of their household, have a beneficial interest in the company's securities.
USBPJ analysts or members of their household may sell such positions while a
Strong Buy, Outperform, or Market Perform rating is maintained; however, they
may do so only upon appropriate USBPJ management approval. (>) USBPJ analysts
who follow this company, or members of their household, have a beneficial
interest in the company's securities that were acquired in a private
transaction pre-IPO. USBPJ analysts or members of their household may sell
such positions while a Strong Buy, Outperform, or Market Perform rating is
maintained; however, they may do so only upon appropriate USBPJ management
approval. (@) Within the past three years, USBPJ was managing underwriter of
an offering of, or dealer manager of a tender offer for, the company's
securities or the securities of an affiliate. (˜) A USBPJ officer, director,
or other employee is a director and/or officer of the company.
This material is based on data obtained from sources we deem to be
reliable; it is not guaranteed as to accuracy and does not purport to be
complete. This information is not intended to be used as the primary basis of
investment decisions. Because of individual client requirements, it should not
be construed as advice designed to meet the particular investment needs of any
investor. It is not a representation by us or an offer or the solicitation of
an offer to sell or buy any security. Further, a security described in this
release may not be eligible for solicitation in the states in which the client
resides. U.S. Bancorp and its affiliated companies, and their respective
officers or employees, or members of their families, may have a beneficial
interest in the company's securities and may purchase or sell such positions
in the open market or otherwise. This report is a communication made in the
United Kingdom by U.S. Bancorp Piper Jaffray to market counterparties or
intermediate customers and is exclusively directed at such persons; it is not
directed at private customers and any investment or services to which the
communication may relate will not be available to private customers. In the
United Kingdom, no persons other than a market counterparty or an intermediate
customer should read or rely on any of the information in this communication.
Additional information is available upon request.
Nondeposit investment products are not insured by the FDIC, are not
deposits or other obligations of or guaranteed by U.S. Bank National
Association or its affiliates, and involve investment risks, including
possible loss of the principal amount invested. Securities products and
services are offered through U.S. Bancorp Piper Jaffray Inc., member SIPC and
NYSE, Inc., a subsidiary of U.S. Bancorp. (5/99-0679)
U.S. Bancorp Piper Jaffray Inc. is a member of the National Association of
Securities Dealers, CRD number 665.
MAKE YOUR OPINION COUNT - Click Here
SOURCE U.S. Bancorp Piper Jaffray
/CONTACT: Susan Beatty, Public Relations of U.S. Bancorp Piper Jaffray,
/Web site: http://www.piperjaffray.com /
(USB CEFT FDC)
CO: U.S. Bancorp Piper Jaffray; U.S. Bancorp; Concord EFS, Inc.; First Data
IN: FIN REA
-- MNF002 --
8049 06/28/2002 09:37 EDT http://www.prnewswire.com