MasterCard Worldwide reported in its fourth quarter 2011 financial statement that it will take an after-tax charge of $495 million to cover a possible settlement with 10 plaintiffs that opted out of a lawsuit challenging interchange fees.
Kroger, Walgreen Co. and eight other companies reportedly opted out of the class action and are now involved in settlement talks with MasterCard.
The litigation, brought by major retailers and retail associations, including grocery store chains Kroger Inc. and Safeway Inc., Payless ShoeSource, the nac National Association of Convenience Stores, and the National Restaurant Association, alleges MasterCard and Visa Inc., along with their card issuing banks, violate antitrust laws regarding interchange fees. Thirteen of the largest U.S. banks were named as defendants in the case.
The suit is set for trial in September 2012 in the U.S. District Court for the Eastern District of New York before Judge John Gleeson - the same venue and judge that presided over the 1996 antitrust case brought by Wal-Mart Stores Inc. against the card brands and their banks over debit card fees.
That settlement cost the card brands and banks $3 billion in damages and, according to Deutsche Bank research, a minimum $25 billion loss due to business changes the settlement required.
Ajay Banga, MasterCard President and Chief Executive Officer, does not believe a settlement will affect interchange fees. "I want to make clear that we would not agree to any significant or long-term reductions in MasterCard's credit interchange rate as part of any settlement," he said.
Visa estimated that its card issuing banks had distributed 1 million Europay/MasterCard/Visa (EMV) cards in the United States by the end of 2011. The company called this "significant progress" in its effort to get the U.S. retail market to adopt EMV technology and standards.
Stephanie Ericksen, Visa Head of Authentication Product Integration, noted in 2010 that no Visa-branded EMV contactless chip cards had been issued in the United States. She said the 1 million card milestone is a testament to the "strong interest among U.S. issuers large and small to invest in chip technology."
Visa is introducing a suite of solutions to promote EMV chip technology and near field communication (NFC)-based mobile payments, as well as to help issuers adopt such technologies with a "minimal infrastructure investment." The suite includes chip setup solutions, as well as chip authentication, confirmation and verification services.
In other news, Visa said payWave, its NFC application that allows consumers to pay at the POS with mobile devices, is now certified for use with LG, Samsung and Research in Motion smart phones. "The players are now in place for mobile payments to become a reality," said Sandra Alzetta, Visa Europe Head of Mobile Business Unit and Innovation Strategy.
She added the card brand is working with banks, mobile network operators and phone manufacturers to ensure "future payment technologies are as easy, intuitive and secure as card-based transactions are today."
Heartland Payment Systems Inc., the official concessions processor for Super Bowl XLVI in Indianapolis, said it processed 43,982 credit and debit card transactions, a total of $924,500, over the Super Bowl weekend of Feb. 4 and 5, 2012.
In expectation of a big transaction weekend, Heartland added 60 wireless terminals to the 600 already in use at Lucas Oil Stadium where the game was played.
Heartland Chairman and CEO Robert O. Carr said the processing of so many transactions in such a short period was a "testament to the reliability and security of our processing platform and customer service support."
In other news, Heartland launched a recruitment and awareness building campaign in Tallahassee, Fla., in February 2012. The effort to recruit, hire and build its local sales force continues with an intensive media effort through March 9, 2012.
The company said the program is intended to bring jobs to an area that has been suffering from a greater than 8 percent unemployment rate the last two years.
PayPal Inc., the payment service owned by eBay Inc., doubled its 2012 prediction for mobile payments. The company said it believes it will now process up to $7 billion in mobile payments this year. One of the reasons for the company's optimism is its new mobile payment pilot launched in Singapore subway stations in February 2012.
Commuters in Singapore can now scan quick response codes in subway stations to shop and pay for goods using smart phones that connect to PayPal accounts. PayPal said the pilot requires no additional infrastructure upgrades by merchants or NFC-equipped mobile devices from consumers.
PayPal teamed with eight Singapore merchants to leverage Valentine's Day shopping by offering discounts on flowers, chocolates, fashion totes, spa massages, shows and city tours.
In other news, PayPal teamed with one of the largest retail banks in Spain, la Caixa, to offer Instant Account Creation to the bank's customers. Paypal said the service allows customers to quickly create PayPal accounts online.
La Caixa then ensures credit and debit cards are automatically added to the PayPal mobile wallet. PayPal purchases made by la Caixa customers will generate card acquiring volume for the bank.
Herndon, Va.-based check cashing and alternative financial services company AllTrust Networks released a new, web-based POS service called Retail Connect. The company said the service allows consumers to cash checks and conduct other business at the POS in single transactions. The service also reportedly expedites payments for merchants, as transactions are logged and reconciled the same day they are made. AllTrust Networks has slated bill payment, money transfer and prepaid card services to be added to Retail Connect.
Wireless transaction and information solutions provider Apriva LLC said it processed a company record $7.035 billion in wireless transactions in 2011 - a 27 percent increase over 2010. The company added that the fourth quarter of 2011 was the most successful period in its 13-year history, as it processed $1.89 billion in transactions.
Additionally, Apriva reported it now offers a discounted rate program on Visa-branded credit, debit and prepaid cards to merchant acquirers and ISOs that use its Apriva Vend cashless vending technology.
U.S. Bancorp's payment processing subsidiary Elavon Inc. won the Best Merchant Acquiring Initiative award at the 2012 Card & Payments Awards held Feb. 1, 2012, in London. The award was for Elavon's international payment processing technology that allows acquirers to design and create a "single, cross-border, multilingual/currency IT platform."
Cambridge, England-based payment services company CashFlows, a division of Voice Commerce Ltd., won the Best Security or Anti Fraud Initiative award at the Card & Payments Awards. The company won for its biometric voice signature program VoicePay.
Electronic Payments Inc. revamped the websites for itscorporate platform and bankcard sales program (www.electronicpayments.com and www.bankcardprogram.com). Company founder and CEO Michael Nardy said the redesigned sites feature new branding and updated features, and website navigation is now simpler and more intuitive for ISOs, agents and merchants.
First Data Corp. released the following additions to its product suite: Smart Routing, a solution that automatically directs a transaction to the least costly option for PIN debit transactions; Global Gateway e4, a new payment gateway offering multicurrency and global payment processing; and TransArmor Solution, for the encryption and tokenization of cardholder data.
Dutch digital security firm Gemalto NV rolled out the Dexxis EMV instant issuance card solution for U.S. banks. Gemalto said the technology, designed to help streamline and accelerate EMV migration in the United States, allows banks to immediately issue and activate EMV chip cards at branch locations.
Newark, Calif.-based Payment Processing Inc. changed its name to PayPros. The ISO said the name change reflects the company's dominance in payment technology, products and services. The company reported that over 1,700 partners and nearly 54,000 merchants have relied on its payment services since 1995.
"We've planned, implemented and are now launching a new generation of payment technology that will dramatically change the value of payments for software developers and their resellers," said Eddie Myers, President of PayPros.
Vantiv LLC released a new mobile payment solution developed in conjunction with Verizon Wireless. The new solution for mobile devices that run on Google Inc.'s Android operating system features end-to-end POS security and offers business applications through Verizon's Private Application Store for Business.
U.K. mobile payments provider Bango.net Ltd. signed an agreement with Facebook Inc. to collect mobile payment data for online content purchases and provide that data to mobile marketers and websites.
MasterCard and web security firm Silver Tail Systems Inc. joined to fight online fraud. The companies are creating technology to help merchants distinguish in real time between legitimate online transactions and fraudulent ones.
Online payment provider mopay Inc. teamed with Brazil's paymentez to add an online direct carrier billing method to paymentez' micro-transaction processing platform.
Users will be able to make online purchases, such as for virtual goods and online gaming content, by inputting phone numbers into pop-up windows, then confirming the purchases by entering PINs they receive via text messages. Purchases will be billed directly to users' mobile phone accounts.
Payment solutions provider USA Technologies Inc. renewed its contract with Elavon for an additional three years. The company has used Elavon as its payment processor for 10 years.
CO-OP Financial Services completed its acquisition of Corporate Network eCom LLC (eCom) assets. The assets include eCom's online and mobile bill pay services.
Florida-based electronic payment company Corporate Merchant Services Inc. said it agreed to acquire a 51 percent stake in Northern Star Financial Inc., the parent company of Northern Star Bank. Terms of the deal were not disclosed.
Identity security and card personalization solutions firm Datacard Group Corp. said it made an equity investment in, and formed a strategic partnership with, DeviceFidelity Inc., a developer of NFC-based plug-and-play technologies, services and payment applications for mobile devices. Dallas Venture Partners is also participating in the investment as an equity partner.
U.K. payment provider Sage Pay Europe Ltd. acquired Dublin, Ireland-based POS hardware and software developer Integral Computers Ltd. for approximately $26.2 million. Integral's systems are used at more than 25,000 POS locations in the U.K. and Ireland. Sage Pay said 87 million transactions, valued at about $6.6 million, were processed via Integral's systems in the last 12 months.
Former Total Systems Services Inc. executive Darrel Anderson became the new Executive Vice President of Sales and Client Solutions for Compliance Solutions and Resources. Anderson is responsible for sales and business development activities. He has 24 years' experience in the payment processing industry. Prior to joining CSR, Anderson was President of US Financial Services Group.
Deborah G. Arnold, a payment consultant and former Visa Vice President of Global Consumer Products, was appointed to USA Technologies Inc.'s board of directors. Arnold was a founding member of the NFC Forum, a group promoting NFC technology and standards.
Manel Baranera joined Kentucky-based POS hardware distributor BlueStar as Chief Financial Officer for European Operations. Baranera, the former CEO of SSI Datopack ID, will handle BlueStar's European controllership, manage European investments and capital structure, and advise on the company's European financial planning.
Jeff Broudy is the new Vice President of Sales and Marketing for Colorado-based ISO Total Merchant Services Inc. Broudy comes from Intuit Inc., where he headed up the Payment Sales Division.
Braintree Inc. nameded David Corken Chief Operating Officer and Tracey Weinberg Senior Vice President of Marketing.
Corken formerly served as Chief Operating Officer at Total Attorneys, a software solutions provider for the legal industry; he will oversee customer service at Braintree. Weinberg was Senior Vice President of Marketing with payment software provider iPay Technologies; she will be responsible for growing Braintree's business.
Chicago payment solutions company Ezic Inc. named David Holman Vice President of Sales, Randy Bishop Software Engineer and Lisa Puchalski Marketing Manager.
Holman has more than 10 years' experience in merchant processing and will work on expanding Ezic's business footprint. Bishop has more than a decade's experience in application and systems programming, customer support and network administration. He will work on new product development.
And Lisa Puchalski will be responsible for Ezic's marketing, including brand awareness, planning and developing advertisements, and managing internal and external communications.
Melvin E. Miller, Heartland Executive Vice President and Chief Investment Officer, announced his retirement effective Aug. 1, 2012. Miller joined Heartland in 1984.
Meanwhile, Moriah Murphy became Heartland's Director of Marketing. Murphy previously worked with the Florida Restaurant and Lodging Association and founded the Florida Association of Beauty Professionals. Murphy was also a co-founder and operator of a craft brewery. She will lead Heartland's city-specific, immersive marketing and recruitment campaigns in the Tallahassee, Fla., region.
Walter Perkins was named Manager of Relationship Management at Meritus Payment Solutions. He will manage the team that provides support to sales partners. Perkins has more than nine years' experience in the merchant services industry.
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