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Table of Contents

Lead Story

The power to pay it forward

News

Industry Update

FTC agrees to settle with TJX

UIGEA - punt or pass?

Welcome to Bank of AmEx

Splitsville for First Data, JPMC

A taxing situation

TJX cyber thieves get slammed

Features

Gather 'round for a tale of business savvy and doom

Prepaid en fuego in Latin America

The golden rule of payments

The long road to payments

Views

Visa's 'campaign' promise

Ken Musante
Humboldt Merchant Services

Education

Street SmartsSM:
Ask and ye shall sell

Jason Felts
Advanced Merchant Services

Preparing to sell a micro deal

Lane Gordon
MerchantPortfolios.com

A clean exit

Adam Atlas
Attorney at Law

Get time on your side

Vicki M. Daughdrill
Small Business Resources LLC

Want to be trusted? Earn it

Nancy Drexler
SignaPay Ltd.

Company Profile

CSH Consulting Inc.

New Products

Processing on the edge

TransNet
Precidia Technologies Inc.

True end-to-end encryption

Hypersafe Secure
Hypercom Corp.

Inspiration

The magic of gratitude

Miscellaneous

POScprit

Departments

Forum

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

November 24, 2008  •  Issue 08:11:02

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Industry Update

NEWS

Let's hear it for ACH

Payment processing giant ACH Direct Inc. celebrated its tenth anniversary this month. The company began by serving the recurring transaction processing needs of small businesses. By the end of its first year, ACH Direct had several hundred customers and landed its first major account - a small startup called PayPal. By October 2001, PayPal was processing over 1.8 million automated clearing house transactions each month.

In 2007, ACH Direct was recognized in the top half of Inc. magazine's 5000 list (celebrating the 5,000 fastest growing private companies in the United States) acknowledged as one of the top growth companies in the payments sector. ACH Direct currently serves over 13,000 customers, including small business, government, education, utility, telecommunications and Fortune 500 merchants.

Gray market goods overlooked

According to Archstone Consulting - a firm specializing in management strategy and operations - manufacturers and distributors have generally overlooked gray market goods, one of the primary contributors to piracy in the financial services industry.

Gray market goods refers to the unauthorized leakage of products into the marketplace, resulting in manufacturers not receiving full payment. This includes leaking of excess inventory via unauthorized channels, products that are sold illegally and distributors misreporting damaged or destroyed products that are sold into the market.

The costs and detrimental impact on businesses include lost revenues, reduced profits, decline in customer satisfaction and a deteriorated brand name, Archstone noted.

Archstone reported that gray market goods represent over $125 billion in lost revenue annually in the United States. "The issue of piracy and gray market goods is one of the most important concerns facing the electronic payments industry today," said Robin Gray, Executive Vice President of the National Electronics Distributors Association.

"Members need to evaluate their business practices and operations to ensure that best practices are implemented to address some of the key root causes of gray market piracy."

All-time high for check imaging

SVPCO, the check image exchange business of The Clearing House Payments Co. LLC, reported a record volume of check images and dollar value in October 2008. Highlights include:

"The SVPCO experienced another very strong month of volume growth, and October marked the eighth time in 10 months that the key indicator of check image volume set a new record," said Susan Long, Senior Vice President of The Clearing House. "Volume continues to increase steadily because financial institutions are realizing compelling cost savings and process improvements by moving from paper to electronic payments."

ANNOUNCEMENTS

BlueStar launches new Web site

BlueStar Inc. introduced its newly designed Web site, www.bluestarinc.com. The company's online ordering and information tool, BlueStore, has not changed.

Comdata combats card fraud

Comdata Corp. deployed the IRIS fraud prevention solution to protect its payment methods and combat card fraud. IRIS is deployed in data centers in both Brentwood, Tenn., and Louisville, Ky.

MasterCard educates merchants

MasterCard Worldwide offers two new online seminars to help merchants comply with the Payment Card Industry (PCI) Data Security Standard (DSS) and thereby protect payment card data, as well as reduce the likelihood of fraud and reputational risk. Available at www.mastercard.com/us/gateway.html, the seminars are titled "Data Storage" and "PCI DSS Requirements - Version 1.2."

M-Com top innovator

International mobile banking solution provider Mobile Commerce Ltd. (M-Com) was selected for Bank Technology News' 2008 The Innovators list. The award recognizes the 25 most progressive people, companies and technologies in financial services.

Merchant Service Group seeks MLSs

Merchant Service Group-West Coast, with offices in Phoenix; San Diego; Seattle; and Orange County, Calif., is recruiting experienced, high-level merchant level salespeople (MLSs) throughout the West Coast of the United States. The new firm specializes in custom-tailored credit and debit card processing programs for high-volume businesses. It is located on the Web at http://msgwc.com.

North American Bancard launches division

North American Bancard created a new division for the electronic payment processing needs of organizations and downstream clients requiring merchant services segment specialists, such as value-added resellers, software developers and financial institutions. David L. Tepoorten will lead the division.

On-Line Strategies gains compliance

On-Line Strategies Inc.'s transaction processing engine, OLS.Switch, achieved compliance validation with the Payment Application DSS.

OptumHealth grows

OptumHealth Inc. reported its financial services unit experienced a 26 percent increase in processing of electronic payments and statements, compared with one year ago. The number of health care professionals using OptumHealth's Electronic Payments and Statements has increased as well, up 30 percent to 366,000, the company noted.

ATM for the unbanked

Privier Inc. developed ATMSend, which allows users without bankcards or bank accounts to transfer cash using ATMs to recipients who also lack bankcards or bank accounts.

A sender, funded and authorized via ATMSend, enters his or her cell phone number. A 10-digit withdrawal number is sent to the cell phone. The sender then contacts the recipient with the 10-digit withdrawal number. The recipient can then withdraw the money using the 10-digit number and the specified amount at an ATM within the bank's ATM network.

ProfitPoint's grand opening

ProfitPoint Inc. celebrated the opening of its new corporate headquarters at The Rockbourne Falls Business Center in Clifton Heights, Pa. The new facility will allow the company to pursue its internal growth plans as well as execute strategic acquisition opportunities.

Back Yard Burgers selects Radiant

Back Yard Burgers chose Radiant Systems Inc.'s POS hardware and software solution for its 250 corporate and franchise locations. The chain operates in 20 states throughout the Southern and Midwestern United States, chiefly in Tennessee and Mississippi.

Alliance takes LEAP

The Smart Card Alliance created the Leadership, Education and Advancement Program for those interested in improving their knowledge and professional proficiency in the smart card industry. In 2009, LEAP members will be able to earn a Certified Smart Card Industry Professional designation.

United Bank Card ranks 30th

United Bank Card Inc. was named to Deloitte's Technology Fast 50 Program for New York, New Jersey, and Connecticut, a ranking of the 50 fastest growing technology, media, telecommunications and life sciences companies in the area. Rankings are based on the percentage revenue growth from 2003 to 2007.

U.S. Bancorp tests Micro Tag

Visa Inc. and U.S. Bancorp are piloting a program to test consumer preferences for an alternative electronic payment device, the Visa Micro Tag. It is the smallest Visa payWave-enabled device available. The tag is tied to a prepaid U.S. Bank Visa gift account and can be used anywhere Visa payWave is accepted.

ViVOtech mobile in Guatemala

ViVOtech Inc.'s provisioning software for near field communication (NFC) mobile payments is being used in the first NFC payment trial in Latin America. The trial is led by Visa in Guatemala.

PARTNERSHIPS

BOC selects Trustwave

BOC Credit Card Ltd. selected Trustwave as its preferred partner to provide PCI DSS compliance validation services.

Global Select to offer voice messaging

Customers of Global Connect LLC will have access to the gateway services of Payment Vision from Autoscribe Corp. PayAPI will connect to Global Connect's voice messaging system so users can offer electronic payment options within their outbound and inbound interactive voice response menu.

Global Payments begins chip testing

Global Payments Inc. selected Collis/B2 Processing Solutions Inc. to provide EMV Chip testing and certification tools for its POS payment solutions in Canada.

Hypercom's triple

Hypercom Corp. introduced the Optimum T4205 card payment terminal and heralded a North American consortium of distributors to market the device. The consortium, consisting of The Phoenix Group, TASQ Technology and POS Portal, will have exclusive indirect distributorship rights to sell the terminal through 2009.

Hypercom also revealed that Autstria's PayLife Bank GmbH will deploy thousands of the company's Artema Mobile payment terminals.

Also, Hypercom's Wymix PIN pad received MasterCard PayPass certification. The pad with built-in antenna can be used to process payments made by contactless cards as well as NFC-enabled mobile phones.

Oasis, SVC Cards distribute new solutions

Oasis Online Technologies Corp. entered into a three-year revenue sharing agreement with SVC Cards Inc. to market and distribute a suite of payment products and services including major branded prepaid debit cards, a mobile phone payment application, EFT services and ACH payments.

Panini, J&B join forces

Panini, a leader in the distributed check capture market, and J&B Software Inc., a provider of enterprise-wide transaction, document management and payment system solutions, signed a reseller agreement. J&B will now offer its customers check scanning with Panini's Vision X, which has been certified by J&B Software to work with the company's Web-based remote capture solution, eCapture.

In addition, Wausau Financial Systems certified Panini's Vision X check scanner and integrated its WebDDL remote deposit and payment capture solution with Panini's newest software interface.

Rogers, RBC, Visa in mobile pilot

RBC Royal Bank of Canada, Visa Inc. and Rogers Wireless joined for the next phase of the mobile phone payment pilot, which will allow Canadians to make purchases at the POS with a wave of their mobile phones. The customer phase of the pilot is expected to launch in mid-2009.

SmartPay, Shanghai Baihai partner

SmartPay and Shanghai Baihai Information Technology Co. Ltd. united for online game payment. As the payment partner, SmartPay will provide payment solutions for Discovery Online players, including online bank and alternative card payments.

TNB to process $25 million card portfolio

U.S. New Mexico Federal Credit Union signed a multiyear agreement with TNB Card Services to process and grow its $25 million credit card portfolio. TNB will take over the processing of U.S. New Mexico's more than 12,000 credit cards. U.S. New Mexico will also roll out TNB's Rewards2U loyalty program.

ACQUISITIONS

eBay completes Bill Me Later acquisition

EBay Inc. completed its acquisition of Bill Me Later Inc. for approximately $820 million in cash and approximately $125 million worth of outstanding options.

Fiserv acquires The Data Center

Fiserv Inc. acquired The Data Center from Compass Bank. TDC was a licensee and reseller of the Fiserv ITI Premier core banking system. Fiserv is acquiring all of TDC's assets and contracts, and the center's 30 employees will become employees of Fiserv.

APPOINTMENTS

First Data names manager

First Data Corp. opened an office in Karachi, Pakistan, and appointed Khurram Gul Agha as its Country Manager. Agha joins First Data from United Bank Ltd. Pakistan where he was the Executive Vice President responsible for cash management, financial institutions and home remittances. He previously worked for Citicorp and TCS Pakistan.

Redwave Solutions taps CEO

John Ekers, Senior Vice President, Technology and Product Marketing for the ABnote Group, has been named Chief Executive Officer of Redwave Solutions. Redwave, a service manager for NFC technology, was established by ABnote and Datacard Group.

SCA names leaders

The Smart Card Alliance selected its 2008 - 2009 executive committee. They are as follows: Chair, Greg Garback, Washington Metropolitan Area Transit Authority; Vice Chair, Neville Pattinson, Gemalto; Treasurer, Robert Merkert Sr., CardLogix; Secretary, Linda Brown, Infineon Technologies; Assistant Treasurer, Willy Dommen, Booz Allen Hamilton; Technology Vice Chair, Roger Roehr, Tyco International.

Global's executive changes

James G. Kelly was promoted to President and Chief Operating Officer of Global Payments Inc. David E. Mangum was appointed Global's new Executive Vice President and Chief Financial Officer.

Additionally, Joseph C. Hyde will become the com-pany's President - International, and Carl J. Williams, current President - International, will transition out of that role in fiscal year 2009.

Cocard revamp

Cocard Marketing Group LLC members voted to change the organization's corporate structure. Rick Pylant was appointed President of the company and remains the company's board Chairman.

Malcolm Carnahan will continue his role as Chief Operating Officer. And Tracy Richmond will join the company's Board of Managers.

Springbok enhances security, board

Springbok Services Inc. appointed Patti Ann Johnston its new Director of Compliance and Risk Management. She joins the company from MasterCard Worldwide, where she was most recently an Internal Auditor.

Previously, she held analyst and management positions in MasterCard's Security and Risk Services department. In her new role, Johnston will augment Springbok's focus on risk and compliance in an effort to further protect the interest of existing clients and cardholders.

In other company news, Kevin Royal and William H. Haughey joined Springbok's board of directors. Royal serves as the CFO of Blue Coat Systems Inc. Prior to joining Blue Coat, he was the CFO at Novellus Systems Inc. Haughey previously worked for Goldman, Sachs & Co.

Most recently, he served as part of the founding team of Goldman Sachs Investment Partners. He remains with that firm in a consulting capacity.

BOTTOM LINES

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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Spotlight Innovators:

North American Bancard | Harbortouch | USAePay | IRISCRM.COM | Humboldt Merchant Services