Currently spending over $650 million, users (retailers) will spend more than $1.6 billion for CCAS/CGS by 1990 (see Exhibit 1 11-8), Expenditures for credit card authorization services will drop from half to approach 40% of total processing services. Credit card transaction volume will increase less than 3% annually.

The portion of total transactions authorized will rise from approximately 25% to in excess of 50% for an annual growth rate of 23%. Telephone and audio response delivery will give ground to totally electronic authorizations which, together with economies of scale, will limit total expenditure growth to 17% annually.



sufficiently large for separation into computer-to-computer and VAN service modes.

Check verification/guarantee information services are targeted primarily to retailers and other service providers to consumers.

User expenditures in the retail sector, as shown in Exhibit 111-7, represent some 34% of total.

Check guarantee services have been particularly effective in the gambling subsector of the services industry.

Specialized services are offered to independent truckers in the transportation sector.



Vendors also provide credit authorization services to other industry sectors such as medical and utilities.


Guaranteeing retail checks is by far the major service offering in this sector. As shown in Exhibit 1 11-5, check verification represents about 8% of the total market. Retailers find identification of bad checks helpful to reduce bad debt but with verification, the burden of check acceptance remains with the retailer.

Check verification services usually provided on a local or regional basis by small services vendors are primarily transaction priced and average 30 cents per transaction. Check verification services are primarily delivered through voice and audio response services modes. A few are delivered through polled terminals at large retail outlets.

Expenditures for check guarantee services include the underwriting fee, protecting the retailer from all forms of check loss. Nearly $13 billion, or less than 3%, of total retail check amounts are currently guaranteed for an average expenditure of 2.3% of the check amount.

Voice, as shown in Exhibit 111-6, is still the major method (45%) of total expenditures for delivery check verification/guarantee services to retailers.

The proliferation of the variety of POS and ECR terminals installed at retailer sites, the major portion of which can be connected to both card authorization and check guarantee networks, is growing at a rate approaching 30% annually in the 1985 check guarantee marketplace.

Although CCAS and CGS at times reach retailers through each other’s networks, the volume of interchange for check guarantee services is not


Just as we must weigh the constructive possibilities inherent in our association policies, so too must we be aware of and carefully analyze the eventual results of plans and procedures which may in the end be liabilities — ^possessed of and having attached to them negative or actual detrimental influences to our business in its entirety. What proves to be harmful to our business in general must in the ultimate reflect itself upon and be disadvantageous to our individual associations in their operations. Speaking as an association executive, one cannot help but view with less equanimity than some the tendency on the part of a relatively few of our institutions to secure savings funds through the use of individuals classified as brokers or by dividend rate advertising far beyond the normally accepted areas of operation. There is no longer any question in my mind that the middlemen who have attached themselves to us tend by their pursuits to champion a type of thinking and public relations which appear to the vast majority as unsound and unproductive of lasting good. Certainly all of us appreciate the necessity for an awareness of and a continual attention to the development of strong loss reserves. Is it possible that long-distance, high-dividend-rate advertising and brokers, directly or indirectly advocating greater dividends in the face of already low and declining money rates on investments, can have an end result which is not injurious to our business?


Not long ago, your , nationwide trade organization upon invitation participated in a Rational meeting of material men, furnishes of home equipment, lumber dealers, arid financial institutional lenders to determine and to explore the possibilities inherent in soundly financing American families to a more complete home unit. To many of the business leaders in that gathering, held in New York City, under the auspices of the Architectural Forum, for the first time came a realization of the importance of our savings associations in the field of home financing. Of equal moment was the discovery of our desire and of our availability to do the job that for years they have been wanting done. The financing of home improvements and equipment can be accomplished better, quicker, and with less financing cost to the borrower than has been true up to this point. In the field of consumer financing, there is much we can do under the additional advance provisions in our mortgage contracts or; through financing or refinancing on a mortgage basis with absorption of costs by the institution. It is a field of considerable earning power that as yet is untouched by most of us. If developed, it can; become a sound outlet for the investment of a goodly portion of the savings entrusted to us and, at the same time, provide a type of fundamental public since we were created to fulfill. The stimulation of this idea of merchandising; our services presents a real challenge and opportunity to us.


Well may we be proud of our progress to the point of being  of the great segments of this nation’s financial structure. If we are to remain in that position and enhance that standing, we must be alert to the changing world, in which we live and, where sound to do so, move to meet and offset such variations. If we fail, bur influence in the fields of thrift and home ownership will by degrees become lost to the bogus political economy now being foisted on the American public under the guise of one kind of blessing or another. If as executives, we become too. immersed in daily routine, we shall have no time for the type, of thinking, understanding, and play of imagination essential to a full development of our savings associations and of put thrift institutional .business in its entirety. Our planning and put spirits must be projected into the realms of possible but not as yet achieved service. There is no more certain way for demise to come rapidly to any business than to rest content in what it believes to be its accomplishments.

The American Savings and Loan Institute

It would indeed be remiss if no mention were to be made this evening of a unit in our business which is very close to my heart — The American Savings and Loan Institute, the organization for education within our field of endeavor.  Company offers instant approval loans from  – one of the member of this Institute. With its 60 chapters, its seven study clubs and its home study courses, it continues each day to broaden its sphere of sound influence. We must have leadership to carry forward the tremendous good which lies within our business. Probably the best way to achieve that end is to develop within our own ranks those who will carry on in the posts of responsibility. For years, this is just what our Institute has been doing to an ever-increasing extent. As of October 31, 1949, there were 3,409 students in the Institute. Of this group, 404 were pursuing home study courses in those areas where there were neither Institute chapters nor study clubs. With such a proven need of and demand for the services of the Institute, each of us in the management phases should extend our active support to that unit dedicated to the perpetuation and further development of our business. For an annual cost so small in amount, $25 for a $5,000,000 association, it is indeed an astonishing tong to find only several hundred of our thousands of savings associations having a sustaining membership in our Institute. And what a great difference .it would make if they all did. With its splendid record of service over the years, it cannot be that we do not value and believe in the essentialness of our educational facilities. Might it be that we take far too much for granted and do too little to justify that certainty? If we give credence to the necessity for developing soundly trained men and women for the staffs of our organizations; and if we believe in maintaining the very life blood of our business, then we cannot help but give even greater support to our Institute. The additional income flowing from sustaining memberships will do a great deal to establish more firmly and expand the necessary and essential work of our local chapters and our national headquarters. We have but scratched the surface of the possibility of fulfillment of the essential need for and work of The American Savings and Loan Institute


After working closely with them all year and watching their wholesome and unremitting efforts to build strong and friendly relations between your League and our savings institutions, one should certainly take this bit of time to salute the field service department. Our League and our business are much beholden to you.


Full well does your national trade organization recognize the existence of many questions at the management level in our associations. For some time now, a program has been under way to furnish to directors and to the senior executives pamphlets or manuals covering each of such problems. The past several years, in addition to those already mentioned, there has been prepared material on such matters as: The Sale of Money Orders; Safe Deposit Services; Handling of Travelers Checks; Proxy Voting; The Cashing of Checks; Organization and Compensation of Executive and General Staff Personnel. Thus, your League maintains a constant watchfulness to be aware of the agencies of its membership and to take care of them.


Some 3,000 of our member savings institutions are currently using the services of our Advertising Division. This particular department of our League is completely self-supporting. It prepares material on any type of advertising such as direct mail, radio, newspapers, house organs, and television. Its services range all the way from handling the special public relations problems of the individual association to syndicated materials. Through it, a specialized complete advertising service is available. To me the realization of the hope of my immediate predecessor. Past President General Ralph M. Smith, our staunch New England friend and respected leaders for a national advertising program to be conducted by your League in the interests of our entire business is an essential. One must be realistic and recognize that there exist sincere differences of opinion on the method of accomplishing such a program. However, there should be a continued effort to resolve all important variances in thinking on this subject in order that such a vital objective may come to fruition.