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The Green SheetGreen Sheet

The Green Sheet Online Edition

May 14, 2007 • Issue 07:05:01

Industry Update

The Green Sheet, Inc.NEWS

Retailers, FBI to share crime info

In response to a rise in organized retail crime, the National Retail Federation and the Retail Industry Leaders Association, in collaboration with the FBI, launched the Law Enforcement Retail Partnership Network (LERPnet), a secure, national database allowing retailers to share information.

Retailers and law enforcement will be able to alert the merchant community to illegal activity, including organized retail crime, burglaries, robberies, counterfeiting and online auction fraud.

LERPnet is expected to become the national standard for sharing retail crime information confidentially, giving companies and law enforcement the ability to collaborate. Retailers, law enforcement, data privacy specialists and technology experts combined resources to create the technology platform.

Under the current system, retail crimes following specific patterns are reported separately to local police officers. With LERPnet, retailers will communicate across jurisdictions about crimes occurring in their stores.

Companies can include information about suspects, getaway vehicles and identification numbers of stolen products. According to the NRF's 2006 Organized Retail Crime Survey, 81% of retailers said they have been a victim of organized retail crime.

Consumers prefer debit to credit

For the first time, consumers prefer debit cards to any other type of payment for POS purchases, according to the PaymentDynamics 2007 Preferred Payments Study, conducted by TransUnion and Edgar, Dunn & Co.

The 2007 study is the first to combine consumer credit risk characteristics with consumers' choices of all payment options, including cash, check, credit cards, debit cards, electronic payments and new online payment technologies.

Twenty-nine percent of respondents prefer debit cards, versus 26% for credit cards. Fewer consumers (31%) are adding payment products to their wallets, and more (20%) are eliminating products than in prior years.

When adding payment options, pricing is the primary driver, followed by rewards programs, particularly among the prime and super-prime risk segments.

Also, rewards credit cards represent 50% of all preferred credit cards today, with 83% of rewards card owners using their rewards credit cards. Following are other insights into consumer preferences:

  • Proprietary rewards credit cards have gained in preference over cobranded and affinity credit cards. Moreover, 80% of rewards cardholders have the lowest credit risk profile.
  • More than 50% of consumers preferring cash, check and debit cards are in prime and super-prime categories, suggesting that preference is driven by choice.
  • For the first time, a relationship rewards program connected with the consumer's financial institution is a greater incentive than lower interest rates when acquiring a new credit card from that institution.
  • 55% of respondents said they owned a person-to-person account (e.g., PayPal), and 10% reported active use.

The Green Sheet, Inc.ANNOUNCEMENTS

Gravity cuts chargeback losses

Gravity Payments reported its losses due to uncollected chargebacks for 2006 were only four-tenths of one basis point, or 0.00004 of the company's overall volume.

Lang and company named outstanding entrepreneur

Vanessa Lang and 888QuikRate.com Merchant Services were given the 2007 Small Business of the Year award by the Fort Worth Star-Telegram. Lang received an advertising package valued at $10,000 to grow the business she co-founded with Jon Perry. The company teaches small-business owners how to create and maintain Web sites and donates the proceeds to the Fort Worth Women's Business Center.

PayProTec adds mobile to free equipment program

Payment Processing Technologies LLC will supply agents with free Mobilescape 5000 terminals. The wireless, handheld payment device is manufactured by Commerciant to process credit cards and electronically convert checks.

Planet Payment registered as third-party processor

Planet Payment was registered by Visa and MasterCard as an end-to-end third-party processor, following its acquisition of a processing platform.

In addition, the company obtained Class B+ certification for its Hypercom T7 Plus terminal application operating on First Data's Omaha transaction platform. Planet Payment was also recertificated compliant with the Payment Card Industry (PCI) Data Security Standard.

Contactless council elects new officers

The Smart Card Alliance Contactless Payments Council announced new officers, elected in February 2007. The following are new officers: Sunil Dewan, First Data Corp.; Mohammad Khan, ViVOtech; and Charles Walton, Inside Contactless.

The 2007 steering committee members are Brian Barrett, PricewaterhouseCoopers; Deborah Baxley, IBM; Jean-Marc Delbecq, VeriFone; Rod Donnelly, CPI Card Group; Rahul Gadkari, Gemalto; Greg Garback, Washington Metropolitan Area Transit Authority; Jennifer Hale, American Express Co.; Paul Legacki, Infineon Technologies; Kim Madore, Giesecke & Devrient; Ken Moy, MasterCard Worldwide; Liane Redford, Visa U.S.A. Inc.; and Garfield Smith, Oberthur Card Systems.

The Green Sheet, Inc.PARTNERSHIPS

CentralBancard adds Halo POS systems

CentralBancard Inc. (CBL) is bringing Vivonet Inc.'s Halo restaurant POS solution to CBL's network of ISOs. Halo provides affordable tools to small and medium-sized restaurateurs.

Coke bottler goes contactless

Coca-Cola Bottling Co. United Inc., the third largest bottler in America, is installing USA Technologies' e-Port G6 technology to enable its vending machines to accept MasterCard Worldwide's PayPass contactless payments, as well as traditional mag stripe credit card payments.

Comstar adds Blue Bamboo to terminal line

Comstar Interactive will bring Blue Bamboo's H50 wireless, handheld payment terminal and P25 Bluetooth printer to the U.S. market. Comstar's Payment Applications Best Practices-compliant Charge Anywhere POS software powers the H50.

Later this year, Comstar will offer special promotions to convert merchants from the Mobitex network to Sprint CDMA H50 terminals.

Cynergy re-ups with Chase Paymentech

Cynergy Data renewed its agreement with Chase Paymentech Solutions LLC for front-end credit card payment authorization to Cynergy's portfolio of 50,000 merchants.

ISOrap.org enables receipt advertising

DreamPlay Ventures LLC has formed the international standards organization for receipt ad placement (ISOrap.org). Its mission is to enable merchants to generate revenue by printing display ads and coupons on card receipts.

The organization was formed as a consortium by DreamPlay, Micro Design Services LLC and Crossgate Dynamics LLC. Merchant processors can utilize ISOrap to receive ads for placement on the receipts of their merchant clients.

AdvanceMe is preferred provider

First Data Merchant Services Corp. made AdvanceMe Inc. a preferred provider. The agreement enables First Data's ISOs to offer AdvanceMe's merchant cash advances as a funding alternative.

The product ensures merchants remain with their ISO for the duration of the funding contract, which averages eight months.

Merchant clients sign an average of 2.7 contracts with AdvanceMe. ISOs receive a percentage on upfront contracts and residuals on additional contracts signed by their merchants.

Hypercom's Optimum T4100 certified by Apriva

Hypercom Corp.'s Optimum T4100 payment terminal was Class A certified for use on Apriva's Intelligent Gateway. The certification enables credit, debit, gift, loyalty and check transactions on the IP-enabled terminal using the gateway.

Hypercom's SPOS 32 software for the T4100 will also support Planet Payment's multicurrency processing product.

Element and MagTek create PCI solution

MagTek Inc. and Element Payment Services Inc. have teamed to promote a fast-track solution for PCI compliance: PCI Compliance and Fraud Protection in a Swipe. Combined, MagneSafe's card readers and Element's Virtual Terminal are designed to create a secure way for merchants to comply with PCI.

Pay By Touch signs two retail outlets

Pay By Touch and Harps Food Stores Inc. launched Harps Rewards with S&H greenpoints. Pay By Touch's S&H greenpoints rewards program is the reinvention of Sperry & Hutchinson Green Stamps.

Harps also adopted Pay By Touch's SHPromo system, enabling the retailer to deliver one-to-one shopper messages in-store through multiple platforms.

ATM Direct, a division of Pay By Touch, announced that 2Checkout.com Inc. adopted its software-only Internet PIN-debit payment service to allow shoppers to buy goods online.

Ski lift ticketer partners with Shift4

Shift4 Corp. and Comptrol Systems Inc. partnered to provide credit card processing through Shift4's $$$ On The Net with tokenization, which removes all transaction data from CSI's systems. CSI's Tracker Express lets customers avoid ticket lines by providing credit card numbers when they sign up.

TAA picks PropertyBridge

The Texas Apartment Association chose PropertyBridge Inc., a payment processor in the housing industry, as its exclusive multifamily payment provider. TAA's members will receive special pricing on automated processing services.

TransFirst offers desktop applications

IP Commerce Inc. and TransFirst LLC released services for merchants delivered via an Internet-protocol (IP) payment framework.

The partnership enables TransFirst to offer desktop commerce applications, including bankcard processing for Microsoft Office Accounting 2007, QuickBooks and a solution for golf pro shops.

The Green Sheet, Inc.ACQUISITIONS

AmbironTrustWave buys ReddShell

AmbironTrustWave acquired ReddShell Corp. Established in 2003, ReddShell provides risk management and data security solutions supporting compliance with regulatory requirements and industry standards.

These include Sarbanes-Oxley and PCI, among others. The five programs add $4.6 million in outstanding balances to TNB's agent issuing portfolio.

Peppercoin acquired by Chockstone

Chockstone Inc. bought Peppercoin, a provider of card-based merchant loyalty programs and services. Peppercoin's PCI-compliant services are used by restaurant brands.

FTS buys Boaz Payment Systems

Financial Transaction Services acquired Boaz Payment Systems. Boaz provides merchant processing for ADP Lightspeed, Honda, Kawasaki, Yamaha and the Association of Pool and Spa Professionals.

NCHA merges with PRO

Payments Resource One, a regional payments association for Arizona, Colorado, Wyoming and northern New Mexico, merged with the National Clearing House.

The Green Sheet, Inc.APPOINTMENTS

CardEx promotes Chamberlain

Card Express International named Barrett Chamberlain Vice President of Sales for the ISO channel. He joined the CardEx sales team in 2005 from RBS Lynk.

Strawhecker Group hires Horne

Susan Horne joined The Strawhecker Group as Associate. She will manage the merchant portfolio of a major acquirer. Horne is the former President and Chief Executive Officer at Redwood Merchant Services/National Bank of the Redwoods.

WAY appoints Duszak

Cheryl Duszak joined WAY Systems Inc. as Marketing Manager. She previously held marketing management and director positions at GSSI and Torrent Systems.

Grendi joins RBS Lynk

RBS Lynk named John Grendi Senior Vice President of Business Development. He most recently served as Client Development Leader at Deloitte Consulting.

Comstar welcomes Latimer

Jody Latimer has joined Comstar Interactive as Vice President of Business Development. He is the former Director of Sales for WAY Systems.

Rodrigues joins US Merchant Services

US Merchant Services Inc. appointed William Rodrigues Director of Operations. He has performed similar functions for Fortune 500 companies.

First Data promotes Warrington

First Data appointed Chris Warrington President of First Data Utilities. He joined First Data with the acquisition of Peace Software, where he was Executive Vice President of Global Customer Services.

The Green Sheet, Inc.BOTTOM LINES

  • Convenience store industry sales surged 15% to $569.4 billion in 2006, according to the National Association of Convenience Stores. Industry profits decreased 23.5%, falling to $4.8 billion. NACS attributed the decrease to a drop in motor fuel margins and the escalation of credit card fees, which now surpass industry profits.
  • When small-business owners were asked how they would spend $100,000 to be used to improve their work-life balance, 49% said they would invest or save it, according to a new survey by MasterCard Worldwide.

    The remainder indicated they would pay off personal debts (29%); improve/expand their businesses (26%); pay off business debts (27%); purchase business equipment and supplies (25%); donate it to charity (25%); or share it with employees in the form of increased salaries, improved benefits, bonuses or time off (20%).

end of article

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