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The Green SheetGreen Sheet

The Green Sheet Online Edition

January 21, 2009 • Issue 09:01:02

Industry Update

The Green Sheet, Inc.NEWS

U.S. merchants crossing over

First Annapolis Consulting reported that U.S. merchants control a significant portion of the Canadian marketplace, while Canadian merchants' impact on the U.S. marketplace has been minimal. The study found that U.S.-headquartered merchants have a hold on approximately 25 percent of Canada's retail industry and up to 20 and 30 percent of Canadian restaurant and hotel markets, respectively.

Already, U.S. acquirers influence more than 40 percent of the Canadian acquiring market. Canadian acquirers in the United States have yet to break 1 percent. This market dynamic is good news for U.S.-based businesses, as the expansion of U.S. merchants into Canada creates new growth opportunities.

Paymentfest for First Data

First Data Corp., the world's largest payment processor, and WestLB, a German bank with a strong European presence, introduced First Merchant Solutions, a new business that will provide card acceptance services for retail customers throughout Germany and the rest of the European continent.

Against the backdrop of the Single Euro Payments Area (SEPA) - which involves creation of a zone for the euro in which all electronic payments are considered domestic and within which there is no difference between national and intra-European cross-border payments - the retail sector's need for valid, cross-border card acceptance is real.

"First Merchant Solutions embodies our efforts to fulfill the retail sector's market needs, which have been evolving in Europe as a result of SEPA," said Steffan Kowalski, a member of WestLB group's executive management team. "With this cooperation, First Data's acquiring solutions will be offered in Germany, as well as 37 other countries and territories across Europe."

According to Carlos Gomez-Saez, Managing Director of First Merchant Solutions, WestLB is one of the leading banks providing payment services in Europe, making it an ideal partner for this relationship. "The business will also draw on First Data's extensive payment experience in Europe and its expertise with innovative solutions to merchants."

MasterCard consolidates, integrates

MasterCard Worldwide implemented company-wide organizational changes on Jan. 6, 2009, to better align its global, customer-focused strategy with customer expectations in the current economy and marketplace. The company now combines international customer accounts with the regions in which they are headquartered to integrate all products and solutions in each region.

In the United States, MasterCard also established an expanded business unit to encompass its U.S-based global accounts and its U.S. regional accounts. This new division, U.S. Markets, will continue to work with MasterCard regional presidents to manage all markets outside the country's borders.

SVPCO has banner year

The SVPCO Image Payments Network, a project of The Clearing House Payments Co. LLC, exchanged a record 5.6 billion check images in 2008, up 97 percent from 2.8 billion in 2007. Dollar volume also reached an all-time high of $8.5 trillion in 2008, up 71 percent from the previous year. Financial institutions exchanging check images almost doubled, from 24 in 2007 to 44 in 2008.

"The Gateway DTA with an Internet-based connection is one of the reasons our image network is growing so dramatically," said Susan Long, Senior Vice President of The Clearing House. "By using the Gateway DTA, financial institutions can get all the advantages of being part of this network without the expense of installing a dedicated line and server. In 2009, we expect this gateway to be the network connection of choice and a key driver on reducing costs."

The Green Sheet, Inc.ANNOUNCEMENTS

CPI to open doors

By acquiring three companies and partnering with Chief Executive Officer-in-Residence Robert Wechsler, venture and growth capital firm Austin Ventures has formed Century Payments Inc. The new company will be headquartered in Dallas and will focus on providing growth-capital strategic assistance to ISOs and on building best-in-class sales forces to support its network of distribution partners.

ClairMail launches m-banking for iPhone

ClairMail Inc. debuted the latest release of the ClairMail System that includes a mobile Web solution optimized for Apple Inc.'s iPhone. The solution sports the mobile banking and payment functionality found in ClairMail's traditional mobile Web offering - specifically account management, electronic funds transfers (EFTs), bill payments, and ATM or branch locators.

Discover releases Q4 '08 results

Discover Financial Services recently reported results for the fiscal quarter and year ending Nov. 30, 2008. Full year income from continuing operations was $1.1 billion, up 10 percent from 2007. Also, the company's third-party payment segment volume grew 39 percent to $34 billion, including $7 billion of Diners Club Inter-national volume.

Ingenico introduces PCI PED 2.0 terminal

Ingenico's ICT200 CounterTop payment terminal has been PCI- (Payment Card Industry) PIN entry device approved. The terminal includes two chips: one manages the security and sensitive devices (for example, keyboard and readers); the other manages applications and communications.

Institute publishes special POS issue

The Institute of Business Forecasting and Planning is publishing a special issue of the Journal of Business Forecasting, which includes 12 articles about demand planning and forecasting with POS and syndicated data. To download a sample article from the institute, visit www.ibf.org.

MyECheck's revenues up 1,096 percent

MyECheck Inc. reported it had successfully processed approximately 2.1 million transactions in 2008 - its first full year of operation on its patented electronic transaction system.

Unaudited 2008 financial results indicate the company's fourth quarter revenue was approximately $235,000 on processing of approximately $40 million, compared to about $41,000 in revenue in the fourth quarter of 2007.

MCC service commences at Planet

Planet Payment now offers a multicurrency service through its iPAY payment gateway. The service is designed to enable card not present merchants, such as MO/TO businesses, to display pricing and allow customers to pay in chosen currencies while merchants continue to receive funding and reporting in U.S. dollars.

December a record for PDS

Payment Data Systems Inc., an integrated electronic payment solutions provider, reported its December 2008 processing volumes were its highest of the year, as well as the third highest in the company's history: Dollars processed increased 25 percent compared to the previous month and grew 5 percent over December 2007; transactions processed increased 11 percent compared to the previous month and grew 13 percent over December 2007.

VeriFone contactless PINpad available

VeriFone introduced a contactless version of its PINpad 1000SE. In addition, VeriFone unveiled SingleCI, a single contactless interface with development tools for acquirers and developers.

Visa debuts: Android service, SMS passwords

Visa Mobile, Visa Inc.'s advanced mobile payment-related services, are now operational on mobile devices powered by Android, the Open Handset Alliance's open source platform for mobile devices.

In other news, Visa partnered with banks in China and Taiwan to introduce a simple message service-based, one-time password system for cardholders making online purchases. The service is based on the Verified by Visa authentication system, which requires cardholders to use secret PINs when paying for goods online. But instead of cardholders using fixed codes, users are sent one-time passwords to their mobile phones to verify identities.

Wausau to recruit ISOs to sell RDC

In early 2009, Wausau Financial Systems Inc. plans to introduce a version of its WebDDL remote deposit capture product specially designed to be sold by ISOs. The company has already started recruiting ISOs via product presentations put on jointly with Epson America Inc.

The Green Sheet, Inc.PARTNERSHIPS

BankCard hires search-engine marketer

BankCard USA and Connection Marketing Inc. have joined forces to reduce pay-per-click fraud against online advertisers.

BankCard USA has commissioned CMI to create a universal protocol to identify and catch perpetrators. The findings will be made public free of charge at www.bankcardusa.com.

eBay adds payment options

EBay is adding two new payment methods for its U.S. customers by striking deals with Australia's Paymate and U.K.-based Moneybookers Ltd. Both options become available to customers in February 2009. Paymate and Moneybookers join Propay Inc. as third-party providers offering payment alternatives to eBay-owned PayPal Inc.

EFT Network offers Digital Check technology

Digital Check Corp. signed an agreement with EFT Network Inc. which enables EFT to be an authorized reseller of Digital Check's technology.

Additionally, the agreement allows EFT to employ Digital Check's scanners in conjunction with EFT's Web-based remote deposit capture solution.

EBS goes for Precidia payment engine

POS systems reseller Emerald Business Systems is leveraging Precidia Technologies Inc.'s TransNet payment engine. With TransNet, EBS customers can integrate secure payment functionality with a POS device, personal computer or application. TransNet reportedly works with most POS devices and can route transactions to any processor.

Fifth Third offers eBillme

Fifth Third Processing Solutions partnered with eBillme and can now refer eBillme's payment alternative to Fifth Third's merchant processing customers.

In return, eBillme gains access to Fifth Third's online retailers to extend the reach of its payment offerings.

Heartland, transmodus initiate new service

Heartland Payment Systems Inc. and transmodus launched a check management system employing service oriented architecture. The service allows merchants the ability to accept check payments through POS systems.

M&I Bank taps Metavante

M&I Marshall & Ilsley Bank is standardizing its services on RemitEnterprise, Metavante Corp.'s retail and wholesale receivables management platform.

The platform enables processors to deliver images and transaction data to treasury management clients in a variety of formats with minimal key entries.

Open Solutions, CNS develop affiliation

Open Solutions Inc. expanded its relationship with Consumer Network Services to provide EFT products and services. Open Solutions has been reselling CNS EFT services for more than 20 years. The new agreement will introduce products not previously available to many of Open Solutions' in-house clients.


Electronic payment processing solutions provider Payment Alliance International recently unveiled a strategic partnership with the USWCC | New Deal Financial, the business and financial services arm of the U.S. Women's Chamber of Commerce. PAI will provide credit and debit card processing services for online, traditional retail and business-to-business transactions.

The Green Sheet, Inc.ACQUISITIONS

MasterCard adds processing capabilities

MasterCard gained Orbiscom Ltd., a Dublin, Ireland-based payment software provider to financial institutions. The purchase price is approximately $100 million, a portion of which is contingent upon the future performance of Orbiscom's business. The acquisition builds on the companies' existing partnership for MasterCard inControl, a payment platform designed to assist financial institutions in creating new and enhanced payment offerings.

Orbiscom's products fall into three categories: consumer card, commercial card and alternative payment solutions.

Yapstone buys Paymerica

YapStone Inc., processor to the property management industry, acquired the assets of privately-held ISO Paymerica LLC. The acquisition reportedly enables YapStone to instantly become a dominant processor in the utility sector, recruit new ISOs and agents to resell YapStone's technology platform, and establish a Southeast sales presence for YapStone's processing services. Paymerica's founders and most of its employees will be retained by YapStone as part of the acquisition.

The Green Sheet, Inc.APPOINTMENTS

ControlScan's CEO joins ETA committee

Joan E. Herbig, ControlScan's CEO, has joined the Electronic Transactions Association's Risk and Fraud Committee.

Since ControlScan is exclusively focused on helping smaller merchants achieve PCI compliance, Herbig will reportedly bring to the ETA committee a unique perspective on this market segment and its impact on the broader industry.

ETA's Risk and Fraud Committee monitors risk, fraud and PCI compliance-related issues in the industry and recommends related best practices and other risk mitigation strategies.

Hypercom taps Hönick, Taylor

Hypercom Corp. appointed Ulf Hönick to Vice President, Health Care, and Stuart Taylor to Vice President, Global Marketing.

Hönick, who has more than 10 years of international experience in the health care and IT sectors, will be responsible for driving sales and extending Hypercom's global footprint in the growing health care payment sector.

Taylor has more than 20 years of international marketing and business development experience. For eight years he served VeriFone in leadership roles, including Vice President and General Manager, Global Marketing.

Previously he held marketing and sales positions in Australia, Europe and the United States for Intellect Australia Pty Ltd.

Doin' it right

In the summer of 2007, Steve Norell, Director of Sales at U.S. Merchant Services Inc., was watching television when a new show debuted on the National Geographic Channel. The show, called DogTown, tells the story of the nonprofit organization Best Friends Animal Society, which runs a 33,000 acre animal sanctuary in southern Utah's Angel Canyon.

Best Friends Animal Sanctuary houses and rehabilitates thousands of abused and neglected animals every year. Coming from shelters and rescue groups across the country, dogs, cats, horses, rabbits (virtually any lost or injured animal) find a home and the care they need at the sanctuary. Once returned to health, many of the animals are given new homes with individuals and families.

Of course, Norell loves animals. But he also has a business interest in them as well. As a registered ISO of First Data Corp., USMS processes payments for perhaps 400 veterinary clinics nationwide, Norell said. Additionally, USMS is the only payments industry business that participates in the North American Veterinary Conference, a nonprofit that provides education to the veterinary health care industry.

Watching DogTown, Norell wondered how USMS could help raise funds for Best Friends, which relies on the generosity of individuals and organizations - through volunteering and donations - to keep the sanctuary operating. Norell hit on the idea that USMS' merchants, and its veterinary merchants in particular, could partner with USMS to contribute to Best Friends.

Norell contacted Best Friends with his proposal. About nine months later, USMS had its plan in place. For every electronic payment that occurs at vets or other pet-related merchants that use USMS as their processor, USMS donates 5 cents to Best Friends.

Small change, big cause

Five cents may seem like a tiny amount. But given the size of some of USMS' vets, 5 cents per transaction adds up. "For instance, we have one vet that we process for, they do about $1 million in credit cards [monthly]," Norell said. "So the average ticket is $150, $200. If you divide that up, after all is said and done, it's about $300 a month [to Best Friends], just from that vet."

USMS' smallest vet practice averages $50,000 a month in payment card activity, Norell added. He estimates the mid-sized vets in USMS' portfolio will contribute between $25 and $50 a month to Best Friends.

Best Friends, which rehabilitated 22 of the most seriously abused and neglected pit bulls used in illegal dogfighting by convicted felon and former National Football League quarterback Michael Vick, will receive between $5,000 to $7,000 total from USMS by the end of 2009, Norell said.

To market the program, Best Friends supplies USMS with table tents to be placed on vets' checkout counters.

In addition to the good publicity USMS' program creates for vets, Best Friends is rewarding merchants that participate by furnishing them with flat screen TVs free of charge. The TVs, meant to be displayed in the lobbies of vet practices, entertain and inform customers with Best Friends programming.

To learn more about the Best Friends & U.S. Merchant Services Partnership Program, go to www.usmsllc.com/bestfriends.asp For further information about Best Friends Animal Society and its sanctuary, go to www.bestfriends.org.

Cynergy Data gets Oswald

Cynergy Data added Paul Oswald to its executive and management team. Oswald becomes Cynergy Data's Vice President of Third Party Acquiring.

With more than 18 years of experience in banking and sales, Oswald will be responsible for forging strategic relationships with new ISOs and further develop the company's network of existing ISOs.

TSYS gets director for Turkish market

Bulent Senver joined TSYS as Business Development Director in Turkey.

Senver, who has more than 25 years' experience and extensive knowledge of the Turkish banking and card payments industry, will spearhead TSYS' entry into the burgeoning Turkish payments market.

ViVOtech chooses Shap

Silicon Valley-based ViVOtech named John Shap Senior Vice President of Global Sales. Shap brings over 25 years of experience in management of sales and business teams. Shap will be tasked with growing the market for ViVOtech's POS and mobile payment products.

Townsend joins TransCard

TransCard hired Brad Townsend as its new Chief Financial Officer. Townsend has 20 years of professional experience, with 16 years in management positions in publicly and privately held firms.

Townsend's hiring is part of TransCard's desire to streamline its corporate structure and prepare the company for future growth, according to Craig Fuller, CEO of TransCard.

The Green Sheet, Inc.BOTTOM LINES

  • According to the National Retail Federation, initial 2008 holiday sales - which combine November and December sales - totaled $447.5 billion, down 2.8 percent from last year's $460.2 billion. This represents the first decline in holiday sales since the NRF started forecasting and tracking the numbers in 1995.

  • Seventy-two percent of online retailers surveyed in Shop.org's "The state of retailing online 2008," conducted by Forrester Research Inc., think online businesses can handle an economic slowdown better than their brick and mortar counterparts; 35 percent expect their online businesses to exceed expectations in the next 12 months.

  • Michael Burden, Principal at Excess Space Retail Services, predicted a record 14,000 stores may close in 2009. The International Council of Shopping Centers reported that 3,100 chain stores could close before July 2009.

  • The U.S. Census Bureau's advance estimates of U.S. retail and food services sales for December 2008 were $343.2 billion; that's down by 2.7 percent from November 2008 and 9.8 percent below December 2007.
end of article

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