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The Green SheetGreen Sheet

The Green Sheet Online Edition

September 08, 2008 • Issue 08:09:01

Industry Update

The Green Sheet, Inc.NEWS

Card brands debit battle continues

In October 2004, Discover Financial Services filed a lawsuit in a New York federal court seeking damages from Visa Inc. and MasterCard Worldwide as compensation for anticompetitive practices. The Department of Justice antitrust case ruling enabled financial institutions issuing Visa or MasterCard debit or credit cards to issue cards from other brands.

The two bankcard giants were denied appeals in 2004 by both the U.S. Supreme Court and the Second Circuit Court of Appeals. However, on Aug. 22, 2008, a Visa representative said that the high court resolved several disputes in this case, including:

  • Dismissing Discover's claims of debit monopolizations against Visa

  • Rejecting Discover's allegations of an inter-association antitrust conspiracy between Visa and MasterCard

Visa said it believes Discover's business model and decisions - and not the actions of competitors - have limited its options in the marketplace.

Hackers dig deep into Wells

Wells Fargo & Co. warned 5,000 customers nationwide that identity thieves stole personal data, including Social Security and driver's license numbers. The hackers could use the information to make counterfeit cards, but the bank said it does not yet know if such debit and credit cards have been produced.

Microbilt Corp., a Kennesaw, Ga.-based security firm, notified Wells Fargo July 1, 2008, of unauthorized activity on the bank's consumer data system. Wells Fargo believes the thefts occurred in May and June 2008. The company notified affected customers by letter and provided them with free, one-year subscriptions to identity-protection software IdentityGuard.

OCC takes sides against HR 5546

According to Consumers Union, the nonprofit publisher of Consumer Reports, HR 5546, the Credit Card Fair Fee Act of 2008, is designed to prohibit banks from engaging in unfair and deceptive credit card lending practices.

But on Aug. 21, 2008, the Office of the Comptroller of the Currency sent a letter to the Federal Reserve Board, the Office of Thrift Supervision, and the National Credit Union Administration stating that restricting these so-called unfair practices would hamper banks' ability to offer credit to consumers.

The OCC recommends the proposed rules be scaled back dramatically and that federal regulators require banks to provide more comprehensive disclosure about their practices. It also maintains that HR 5546 - as it is currently written - will make banks vulnerable to litigation for past practices designated as unfair and deceptive under HR 5546.

The Green Sheet, Inc.ANNOUNCEMENTS

Compliance, neither cheap nor fast

A benchmark report from Aberdeen Group Inc., PCI DSS and Protecting Cardholder Data, found that best-in-class organizations have achieved superior protection of cardholder data through compliance with the Payment Card Industry (PCI) Data Security Standard (DSS). Organizations in the study generally underestimated the time and cost required to achieve PCI compliance; they also underestimated the cost to sustain it.

CrossCheck's Optimum optimism

CrossCheck Inc.'s check conversion and standard guarantee applications are certified on Hypercom's Optimum T4200 payment terminals. The T4200 series supports authorizations through CrossCheck's host for standard guarantee and electronic check conversion services, as well as driver's license swiping.

DCS wins 400th customer

Dynamic Card Solutions LLC signed its 400th customer: SAFE Federal Credit Union. DCS is working with SAFE Federal Credit Union to implement a program that instantly issues Visa debit cards at the branch level. The credit union plans to roll out the program to its 15 branches throughout South Carolina.

First Data earnings up 7 percent

First Data Corp. reported its financial results for the second quarter of 2008. Consolidated revenues were up 10 percent to $2.2 billion and adjusted earnings were up 7 percent to $653 million.

Ingenico certified for chip cards

Ingenico Inc. received Class A certification from Chase Paymentech Solutions for its POS terminals running the EuroPay MasterCard Visa (EMV) application. The terminals will allow Chase Paymentech merchants to accept chip-enabled credit cards.

Jack Henry fiscal 2008 upswing

Jack Henry & Associates Inc., provider of technology solutions and outsourced data processing for financial institutions, reported fiscal 2008 results. Total revenue increased 11 percent, and gross profit grew 7 percent. Income from continuing operations remained flat, as did net income.

Javien offers sweet dreams

Children's Web site Speakaboos implemented Javien Digital Payment Solutions Inc.'s Total Commerce Solution. The solution is an e-commerce platform that includes support for mobile sales of digital content, allowing users to download nursery rhymes and lullabies for 99 cents each. The platform also leverages Javien's micropayment technology to aggregate and batch transactions.

Simple and free

PaySimple, provider of SaaS (software as a service), on-demand electronic payment solutions for small businesses, launched a new online customer training and support program. The program is free of charge and offers unlimited access.

Retail Equation is PCI A-OK

The Retail Equation Inc., provider of retail transaction optimization solutions, is compliant with the PCI DSS. All of the company's systems involved in using credit card data used for identification and analysis were evaluated by Trustwave.

Trendy Synovus

Financial services company Synovus Financial Corp. was ranked number 19 on Georgia's Top 100 Companies list by Georgia Trend magazine. The annual list includes public companies headquartered in the state and ranks them based on revenue as of Dec. 31, 2007.

Teletrack makes good on loans

Teletrack Inc., a consumer reporting agency that serves businesses catering to nontraditional credit consumers, will market its Real-time Electronic Payments e-commerce solution to its existing payday advance clients. Upon a loan's due date, the solution converts a loan customer's collateral check into a real-time debit transaction via a POS terminal software application.

The Green Sheet, Inc.PARTNERSHIPS

Allies fight fraud

Accertify Inc., a provider of credit card fraud prevention solutions, partnered with 192business.com, a provider of global identity verification solutions. U.K.-based 192business.com maintains a global database exceeding a billion records that can be searched by e-commerce businesses to validate customer identity and defend themselves against credit card fraud.

Alliance Data inks wholesaler deal

Alliance Data Systems Corp. signed a multiyear agreement with independent wholesaler Southern Pipe & Supply Co. Inc. to create a commercial private-label credit card program. Alliance Data will provide account acquisition and activation, receivables funding, card authorization, card issuance, statement generation, marketing services, remittance processing and customer service functions.

ExaDigm sold here

ExaDigm Inc., innovator of wireless and wired POS terminal solutions, recently partnered with Merchant Warehouse. ExaDigm's XD2000 mobile payment terminal can now be purchased directly from Merchant Warehouse.

First Data offers retail therapy

First Data Corp. entered into a seven-year payment processing agreement with Nordstrom fsb, a wholly owned subsidiary of Nordstrom Inc.

First Data will provide card processing, call center and back-office automation tools, fraud and risk management, customer analytics, as well as e-statements and e-mail alerts for Nordstrom's 4.5 million card portfolio, including private-label credit and debit cards, as well as commercial cards for employees.

Bremer banks on Fiserv

Fiserv Inc., a provider of information technology services to the financial industry, revealed that Bremer Bank, with assets of $7.5 billion, selected Fiserv's CheckFree Small Business to provide an online bill-payment service tailored to the needs of its business customers.

ICBA to sell prepaid currency

The Independent Community Bankers of America's member banks will sell Travelex UK Limited's Cash Passport and CashPax products. Cash Passport is a prepaid foreign currency card available in euros and British pounds. It can be used to withdraw money from ATMs and make purchases.

CashPax is a wallet-sized pack of foreign currency providing travelers with enough foreign currency to pay for taxis and other immediate cash transactions. It is available in a variety of currencies.

M&I Bank gets a clear view

M&I Marshall & Ilsley Bank, the largest Wisconsin-based bank, will begin using Viewpointe's Pointe2Pointe solution for check image exchange.

NexCen glowing over partnership

NexCen Brands Inc. selected the Radiant Systems Inc. retail solution for two specialty retail concepts, The Athlete's Foot and ShoeBox New York. The stores will use Radiant's POS terminals and CounterPoint software, which include inventory management, touch screen POS ticket entry, customer relationship management, automated purchasing and reporting.

Visa and JPMC share pilot's seat

Visa Inc. and JPMorgan Chase & Co. debuted a consumer pilot that delivers merchant offers directly to the mobile devices of Chase credit and debit cardholders in Phoenix. The offers are tailored to match the personal interests selected by cardholders and are redeemable at the POS or Web site of participating merchants.

NYCE secures nice deal

Fifteen subsidiary community banks of Wintrust Financial Corp., as well as Amcore Bank, have joined the SUMSM selective ATM surcharging program, provided by NYCE Payments Network LLC. The program differs from others in that the fee structure is primarily based on usage.

The Green Sheet, Inc.ACQUISITIONS

ePayments enters recovery

The Federal Payments LLC division of the ePayments Group of Companies, an electronic payments processing and support services company, recently acquired Federal Check Recovery Inc. of Columbia, Mo. Federal Payments will assume the electronic check recovery accounts of FCR, increase staffing and continue to work with existing FCR management.

TNB acquires million dollar portfolio

TNB Card Services purchased the $4 million card portfolio of 1st Credit Union of Gainesville. The Florida credit union has 5,300 members and assets of $44 million.

U.S. Bank purchases ATM, cash vault services

U.S. Bank signed an agreement to purchase the ATM and kiosk terminal management services, cash management and vault cash operations of the Electronic Banking Solutions Division of Palm Desert National Bank. The new business will become part of Elan Financial Services, a business of U.S. Bank that provides electronic funds transfer and payments services to banks, credit unions and ISOs.

The Green Sheet, Inc.APPOINTMENTS

VSoft beefs up North American roster

VSoft Corp., information and technology provider for financial institutions, expanded its North American sales team. Kevin Beals is a new Account Manager, Mac Crisco is Director of Sales for Large Financial Institutions; Joy Feyt is Senior Sales Executive; and Michael Trefero is Director of Sales for the Western Region. Each brings VSoft more than 20 years of financial industry experience.

Fleet One adds five

Fleet One LLC, a provider of fuel cards and fleet-related payment solutions, hired Jeremy "Chad" Head as a Technology Specialist responsible for terminal support. Jeff Uselton and Sara J. Noriega also joined Fleet as Local Account Executives, while Todd J. Kubiak and Sherri Elder are the organization's newest Over The Road Account Executives.

James, Della Badia compatible with Cynergy Data

Dane James joined Cynergy Data LLC as Executive Vice President of Corporate Sales, and Tom Della Badia is the company's new Vice President of Business Development. James previously served as Senior Vice President, General Manager for First Data Commercial Services. Della Badia's prior experience includes the role of Senior Vice President for IRN Payment Systems. He will now manage ISO and referral relationships for Cynergy.

VeriFone pencils in CFO

VeriFone appointed Clinton Knowles as its interim Chief Financial Officer. Knowles is a partner with Tatum LLC, an executive services firm. He has served as CFO, controller and treasurer for a variety of companies in the manufacturing, distribution, retail, technology, mining and food processing industries.

Trombetta goes digital

Alex Trombetta is the new Managing Director of Digital Check Corp.'s international sales division. Trombetta has more than 20 years of sales and management experience in the technology sector. Previously he served as Chief Executive Officer and Vice President of Sales for CTS North America.

Purepay hires true experience

Private equity fund Purepay named Ron Williams President of its Electronic Payments division. Williams is a 25-year veteran of the payments industry, having founded one of the first ISOs. He served as Senior Vice President for Interbank and also founded and managed EZCheck.

Wernick loyal to Vesdia

Loyalty marketing and merchant network services provider Vesdia Corp. appointed Melanie Wernick to the new position of Vice President, Interactive Marketing. Wernick has more than 15 years of experience in the marketing sphere and was formerly Vice President of Sales and Marketing at Primedia Inc. She also handled business development and marketing for MindSpring Enterprises.

The Green Sheet, Inc.BOTTOM LINES

  • A 2008 Food Marketing Institute survey of 55 retailers operating 4,978 pharmacies in the United States found that over-the-counter and prescription drug sales in supermarkets increased 3.4 percent from 1997 to 2007.

  • DoubleClick Performics released a report stating 83 percent of Internet users 10 to 14 years old spent an hour or more a day online, and 68 percent did research online before making a purchase (or bugging their parents to make one).

  • According to the U.S. Labor Department, consumer prices in all retail sectors rose 5.6 percent from July 2007 to July 2008. This was the highest annual increase since January 1991.
end of article

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