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The Green SheetGreen Sheet

The Green Sheet Online Edition

April 14, 2008 • Issue 08:04:01

Industry Update

The Green Sheet, Inc.NEWS

MasterCard posts new interchange rates

Once again, it's time to master MasterCard Worldwide's latest interchange rates, which went into effect April 2008. To get started, download the updated rates at and click on Inter-change Rates in the Business column.

EC challenges Visa Europe

The European Commission has opened antitrust proceedings against Visa Europe Ltd. regarding its multilateral interchange fees for cross-border POS transactions within the European Economic Area (EEA) and Visa's honor all cards rule as it applies to these transactions. The proceedings will seek to establish whether these practices infringe upon the EC Treaty and the EEA Agreement, which forbid restrictive business practices.

Consumer confidence plummets

The Discover U.S. Spending Monitor reached a new low in March 2008 due to consumers' economic concerns. The monitor fell to 85.1, down more than a full point from February and lower by 11 points than six months ago. There was also a 12-point increase (from 40 percent in February to 52 percent in March) in the number of consumers who expect to spend more next month on necessities.

"With no relief in sight at the pump or grocery store, consumers are actively cutting back on discretionary expenses to help keep budgets in balance," said Margo Georgiadis, Executive Vice President and Chief Marketing Officer of Discover Financial Services. "Beyond sacrificing a family vacation or night out on the town, many consumers also are cutting back on savings to offset higher household expenses."

The survey revealed that all demographics and income levels are affected, even consumers making $75,000 or more. Forty-nine percent of this segment expect to spend more on necessities next month - up 19 points from February.

Fed speeds up infrastructure revamp

The Federal Reserve Banks recently accelerated the schedule for check processing infrastructure changes. This accommodates the shift from paper checks to electronic payment forms and electronic check processing.

Philadelphia, Cleveland, Atlanta and Dallas are designated regional check processing sites providing a full range of paper check processing services. They are receiving transactions from other sites in a phased transition. Other sites have been or will be reducing operations. All locations will print substitute checks; some will also capture paper check images for processing.

The revised schedule is effective immediately, with seven sites transitioning throughout 2008. Also, the transition timeline has been shortened and is set to conclude in early 2010. The Fed will continue to review this infrastructure annually to respond to further change within the nation's payments system and meet statutory requirements for long-term cost recovery.

Farewell, Pay By Touch

Solidus Networks Inc., doing business as Pay By Touch, ended its fingerprint-based biometrics operations effective March 19, 2008, after filing for bankruptcy under Chapter 11 in December 2007. The decision to end Pay By Touch's biometric operations reflects skepticism among the company's creditors about the near-term prospects for the technology.

Phoenix Check Cashing Inc. purchased Solidus' check-cashing unit BioPay Paycheck Secure. Pay By Touch bought the business in 2006 for $82 million as part of multiple acquisitions in the biometric payments and financial services sectors. The sale was a result of a Feb. 22, 2008, auction in the United States Bankruptcy Court, Central District of California, Los Angeles Division, which is overseeing Solidus' reorganization.

In addition, CardWorks Processing acquired Pay By Touch's operating assets. The acquisition was approved by the court. CardWorks is a Merrick Bank subsidiary. The acquired data processing assets are used to facilitate the acceptance of credit and debit cards through major payment networks.

"We are focused on ensuring that merchants using Pay By Touch processing retain the uninterrupted ability to accept payment cards and maintain continuity in the payment system," said Dave Watson, Chairman of Merrick Bank. The bank is working with regulators and the major payment networks to ensure the continued integrity of the information security systems associated with its newly acquired data processing assets.

The Green Sheet, Inc.ANNOUNCEMENTS

E-learning for level 4 merchants

The Aegenis Group Inc. introduced an e-learning solution that helps educate level 4 merchants regarding their responsibilities to protect cardholder data and comply with the Payment Card Industry Data Security Standard.

Aegenis offers partnership programs for acquirers, franchises and other organizations seeking to provide educational resources for their merchants. For more information, visit www.aegenistraining.com.

Obama opts for Comodo

Democratic Sen. Barack Obama's presidential campaign selected Comodo Group, a secure sockets layer certification authority and identity trust and assurances authentication services provider, to secure the Obama '08 Web site.

Fraudsters masquerading as government agencies, not-for-profit organizations and political campaigns have reportedly increased significantly since 2006, so the need for increased vigilance in site security is heightened.

"As we look to 2008, we fully expect to see an increase in complexity of phishing and malware attacks focusing on the political arena, as this represents new revenue potential for the criminals," said Melih Abdulhayoglu, Comodo's Chief Executive Officer. "We will continue to support all political campaigns and candidates to ensure that all sites where individuals contribute to political candidates are encrypted and secure."

GNB turns to gold

Kansas-based Gardner National Bank selected Goldleaf Financial Solutions Inc.'s Retriever system for its core processing needs. Goldleaf, an integrated technology-based solutions company, will provide GNB with a processing platform to improve performance and efficiently handle future growth.

In addition to Goldleaf's core system, GNB picked 10 other Goldleaf solutions including data processing, item processing and check imaging, branch capture, report storage, document imaging, and an automated teller platform.

NASA soars with JPMorgan Chase

As part of the U.S. General Services Administration's SmartPay2 charge card program, the National Aero-nautic and Space Administration selected JPMorgan Chase & Co. as its travel, purchase and fleet card services provider.

According to the initial three-year contract, Chase will supply NASA with approximately 20,000 charge cards for its employees. NASA's charge volume in fiscal year 2007 amounted to over $156 million.

VeriSign wows credit unions

More than 100 credit unions are protecting their Web sites with VeriSign Inc.'s security solutions. Michigan State University Federal, NIH Federal, University of Wisconsin and San Mateo credit unions are among those using VeriSign EV SSL.

VeriSign provides a defense against phishing scams that lure consumers to imposter sites, which appear almost identical to the targeted financial institution's Web site. Identity thieves use fraudulent pages to capture valuable information, including passwords and account and credit card numbers.

The Green Sheet, Inc.PARTNERSHIPS

BofA, MIT team for the future

Bank of America Corp. and the Massachusetts Institute of Technology Media Laboratory created the Center for Future Banking. BofA has committed $3 million to $5 million annually to the collaboration for the next five years.

The center will be situated at the Media Lab on the MIT campus. It is expected to serve as an innovation engine to help transform banking operations in a world of rapidly changing economic, social and information landscapes. BofA and MIT intend for the center to invent technologies that reveal and leverage insights across a wide range of physical and social scales, from one-on-one customer interactions to global transactions.

BlueStar rises on New West horizon

Florence, Ky.-based BlueStar, a solutions-based distributor of POS, bar coding, data collection, radio frequency identification and wireless mobility products, signed an agreement with New West Technologies Inc., an integrator of retail POS software solutions and Microsoft Dynamics retail products, to distribute New West's Mobile Suite Pro software.

"New West's snap-on applications for RMS [retail management system] users will allow retailers to expand their POS activities outside the four walls with Mobile POS," said Jason Firment, BlueStar Business Development Manager for Microsoft Dynamics.

Currency conversion makes Olympic leap

Global Payments Inc. and Planet Payment Inc. will offer Pay in Your Currency service to Hong Kong and Shanghai Banking Corp.'s merchants in the People's Republic of China prior to the 2008 Olympics in Bejing.

Pay in Your Currency is a component of Planet Payment's suite of multicurrency processing solutions that includes dynamic currency conversion, which gives consumers the opportunity to have payment transactions converted to their selected currency with the benefit of immediately knowing the payment amount.

Privacy for e-commerce, online bill pay

Metavante Corp., a banking and payment technologies solutions provider, will process and settle transactions for NACHA - The Electronic Payments Association's Secure Vault Payments, an automated clearing house-based Internet payments system that allows consumers to conduct e-commerce and bill payment transactions without sharing personal or account infor-mation online.

Metavante delivers its Secure Vault Payment solution in an open market format, meaning all financial institutions, including those without existing Metavante relationships, can use this service. Secure Vault Payments offers consumers a way to pay online without sharing credit or debit card information.

The Green Sheet, Inc.ACQUISITIONS

AmEx goes corporate

American Express Co. and GE Money (a division of General Electric Corp.) signed an agreement setting forth terms for AmEx's purchase of Corporate Payment Services, GE's commercial card and corporate purchasing business units, for $1.1 billion in cash. The sale is expected to be completed by the end of April 2008.

The sale also includes the purchase of GE's vPayment technology, which enables payment for large-ticket purchases. This platform supplies unique account numbers for each transaction that expire once the purchase has been authorized in an effort to reinforce fraud control.

PAI scoops up ATM Express

Payment Alliance International, an electronic payment processing solutions provider, acquired Montana-based ATM Express Inc., an automated teller machine management services provider. With the purchase of ATM Express, PAI's customer base grows to over 26,000 ATM locations and more than 35,000 credit and debit merchants.

TNB portfolio grows

TNB Card Services purchased Wilbraham, Mass.-based ValleyStone Credit Union's credit card portfolio. The acquisition added more than $2 million in balances to TNB's holdings, along with more than 1,600 cardholder accounts.

The Green Sheet, Inc.APPOINTMENTS

Blockley heads EDC

Edgar, Dunn & Co., a financial services and payments consulting firm, appointed Lance Blockley as CEO and Managing Director. Blockley will work out of the firm's Sydney, Australia, office.

Prior to joining EDC, Blockley held senior management and consulting positions in the United States, U.K. and Asia Pacific for more than 30 years.

TSYS claims Boyer

Rod Boyer will take the helm as President of TSYS Loyalty, a division of Total Systems Services Inc. and provider of card-based rewards and loyalty marketing solutions. He was previously Chief Operating Officer of Acquiring Solutions for TSYS.

Boyer will be responsible for TSYS' entire loyalty enterprise, including client relations, operations, product development and implementation, and sales and marketing.

LinQpay adds Kvederis to board

LinQpay Inc., a mobile phone-based and global payment services provider, named David Kvederis, President and CEO of Bankserv Ltd., to its board of directors. Kvederis brings more than 37 years of banking, financial and payment services experience to the LinQpay Board.

Previously, Kvederis spearheaded the creation of direct deposit, private-label electronic check conversion and global wire transfer outsourcing. He also worked for the U.S. Department of the Treasury and served as an Advisor to the Government of Lithuania.

TMG plus two

The Members Group recently added two new staff members: Sara Petty, Vice President of Strategic Development, and Donna Rehtmeyer, Director of New Client Partnerships.

Petty formerly served as Vice President with Bank of the West and First Data Corp., where she led portfolio management of Bank of the West's debit and credit card products. She is working on several TMG strategic initiatives designed to encourage company expansion and help situate TMG for anticipated growth over the next five years.

Rehtmeyer, who serves the company's Midwest territory, brings more than 20 years of client relations experience to TMG. She is a liaison between the company and decision-makers with prospective credit union clients, introducing them to TMG services through on-site visits.

Hypercom selects VPs

Hypercom Corp. named Ronald R. Rhodes to Vice President, Global Supply Chain Management, and Tim Jones to Vice President, Global Human Resources.

Rhodes will be responsible for directing the company's worldwide supply chain operations, and Jones will be in charge of managing and directing Hypercom's human resources department.

Both appointments are effective immediately.

The Green Sheet, Inc.BOTTOM LINES

  • Major U.S. retail ports surveyed monthly by the National Retail Federation and Global Insight handled 1.24 million TEU (twenty-foot equivalent units) of container traffic in February 2008, the latest month for which data are available and, traditionally, the slowest month of the year. The number was down 5.4 percent from February 2007, making it the seventh consecutive month to show a year-to-year decline.

  • Sixty-seven percent of 1,529 U.S. consumers responding to a recent ICOM Information Communications survey indicated they are more likely to use coupons during a recession - 45 percent were much more likely, and 22 percent were somewhat more likely to do so.

  • An American Journal of Psychiatry telephone survey revealed nearly 6 percent of the U.S. population fits the compulsive-buyer mold; the problem afflicts both sexes equally.
end of article

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