NEWS

Bank Clears $95,000 Fake Check

Eight years ago Patrick Combs deposited in his bank account a junk mail check he received for $95,093.35, and the check cleared, SFGate.com reported. Combs meant it as a joke, but the bank deposited the funds because the fake check met the nine criteria of a valid check. And later, the bank failed to inform him in time that the check would bounce as a "non-cash" item. Combs eventually returned all the money to the bank (he said it was the right thing to do) and is now a successful motivational speaker. His solo show, Man 1, Bank 0, ran in San Francisco at the end of September. For more information about Combs visit www.goodthink.com.

Visa, MasterCard Must Alert Customers of Refund

Visa and MasterCard should take a number of steps to make sure cardholders claim more than $800 million in refunds due for hidden currency conversion fees, a California judge said in a recent remedy order. In April 2003, Alameda County Superior Court District Judge Ronald Sabraw ruled that Visa and MasterCard violated California's unfair competition law for not properly disclosing currency-conversion fees charged to consumers using their credit cards abroad, and that the credit card associations would have to refund millions of dollars in fees.

In the remedy order, Judge Sabraw strongly recommended that Visa and MasterCard, with the help of their 30 top member banks, use inserts in monthly statements and place ads in publications to alert cardholders about the refunds. He also suggested the associations establish a Web site and a toll-free number for processing refund claims. Both Visa and MasterCard said they would appeal the final judgment.

eFunds Cuts 180 Jobs

As part of an effort to streamline operations, eFunds Corp. laid off about 180 employees in mid September 2003, the Associated Press reported. The cuts will affect eFunds' offices in Minnesota and in Glendale, Wis., New Berlin, Wis., and Phoenix. A company spokesperson said more layoffs are likely. eFunds, based in Scottsdale, Ariz., employs about 4,500 people worldwide.

Citigroup Shutting c2it

Citigroup Inc. will close its three-year-old c2it online payments service on Nov. 9, 2003. Citigroup attributes the close to too few accounts and increasing competition from other payment services such as PayPal; CheckFree Corp.'s Auction Payments; First Data and Western Union's BidPay; Yahoo and HSBC Holdings plc's PayDirect; and Wells Fargo & Co.'s SecureSource. Citigroup plans to return customer balances by check.

ANNOUNCEMENTS

E-Chex Certifies Ingenico Check Readers

E-Chex has given a "Class A" certification to Ingenico's eN-Check 2500 and 3000 check readers for use through E-Chex Network Services. E-Chex certified the products to provide check verification, electronic check conversion and electronic check conversion with guarantee using E-Chex proprietary host and network services.

Ingenico Receives MasterCard TQM

MasterCard International approved Ingenico in its Terminal Quality Management (TQM) program. Ingenico is the first terminal vendor to obtain this label from MasterCard, which created the program last year to help ensure the quality of EMV-compliant terminals worldwide. The certification process includes an on-site audit of the entire lifecycle of creation of a product-from design to manufacturing to field support.

Talento Certified by Paymentech

Paymentech, L.P. awarded "Class A" certification to Thales e-Transactions, Inc.'s Talento line of point-of-sale products on the Paymentech Platform. Paymentech now supports retail, restaurant and MO/TO applications for credit, debit, EBT, check and multi-merchant transactions for Thales' customers.

Prism Processing Re-named Paymentech

Paymentech, L.P. announced it re-branded its sales and service unit for bank customers (formerly known as Prism Processing Services) under the Paymentech name in order to eliminate any confusion. The division provides customized outsourced payment processing services to banks' merchant customers, from authorization to clearing and settlement services. Paymentech acquired Prism Processing Services in 1998.

New Name for Schlumberger Smart Cards

Schlumberger Smart Cards & Terminals, a division of Schlumberger, changed its name to Axalto. The company said it wanted to bring more visibility to the group and reinforce the company's image as a leader in this market segment. The division wanted a name that reflects its strategy of providing smart cards and POS terminals-'Axalto' combines the concept of secure, personalized access to information and transaction networks with increasing altitude, a symbol of the company's vision to be a top player in the market.

Vital Certifies TPI Product

Vital Processing Services has certified TPI Software LLC's Payment Server to process credit card transactions for retail, restaurant, e-commerce, direct marketing and purchasing. TPI's Payment Server helps merchants process payments in retail, e-commerce and wireless industries entirely over the Internet.

PARTNERSHIPS

Bank Picks Fifth Third's Merchant Services

Fifth Third Bank will provide Independence Community Bank of Brooklyn's customers with merchant services such as EBT, ACH, credit, debit and check processing; they also will have access to Fifth Third's Jeanie network, the Premier Issue gift card program, and Fifth Third Direct, a back-office operating system. Independence Community Bank of Brooklyn has more than $9 billion in assets.

GoDaddy.com to Offer ACH/Check Services

Certegy Inc. will provide fully integrated ACH/electronic check warranty services through its PayNet solution to GoDaddy.com, an Internet domain registrar. With Certegy's solution, GoDaddy.com customers will be able to pay for domain registration and other products and services directly from their checking account.

Intellect Wins Two U.S. Deals

General Credit Forms Inc. (GCF) will be the first distributor in the U.S. to offer Melbourne, Australia-based Intellect International N.V.'s PRESTO 210p point-of-sale product. Intellect will provide GCF with 3000 units within the next 12 months. Intellect has been selling the PRESTO 210p in Australia, Belguim and the UK and has recently entered the U.S. market. Intellect also recently partnered with GMS Worldwide, LLC, a member service provider of JPMorgan Chase. Intellect will provide GMS with 5000 PRESTO 210p products for distribution in the U.S. over the next 12 months.

Hypercom and BioPay Partner at POS

Hypercom Corp. and BioPay, LLC have teamed to rollout a new point-of-sale solution allowing consumers to pay with a touch of their finger. The two companies integrated their technologies-Hypercom's POS terminals with BioPay's finger scanning pads, and the new payment solution will be available at nearly two dozen locations in Northern Virginia and Maryland.

Here's how it works: A customer provides the merchant with a blank personal check and their driver's license and selects a 10-digit unique BioPay number (e.g. a telephone number). The customer's two index fingers are scanned on the finger pad and converted into an algorithmic code.

Whenever participating customers make future purchases at a participating retailer, they enter their BioPay number and place their index finger on the BioPIN biometric finger pad. Payment is then authorized from their checking account.

MSI Renews with Global Payments

Merchant Services, Inc. (MSI), of Plainview, N.Y., extended its contract with Global Payments Inc. for electronic payment processing services. MSI provides processing services to more than 70,000 small-to-mid sized merchants across the U.S.

ACQUISITIONS

Euronet Acquires AIM

Euronet Worldwide, Inc. acquired Austin International Marketing and Investments, Inc. (AIM), seller of prepaid services including wireless, long distance, gift cards and debit cards through point-of-sale terminals in the U.S. AIM distributes prepaid services through a network of more than 140 independent sales agents representing over 3,500 retail locations. Through the acquisition, Euronet plans to expand PaySpot, its own U.S. prepaid program that allows consumers to purchase wireless and long distance services from U.S ATM and POS terminals. Euronet bought AIM on an "earn-out" basis--$1.9 million of the purchase price was paid in cash and Euronet stock at the close of the transaction, and the remainder will be paid over two years.

PayMate to Acquire Jumpware

PayMate.net announced plans to acquire all of the assets of Jumpware, Inc., a point-of-sale system provider. Through the acquisition, PayMate plans to offer Jumpware's product that integrates cash registers and payment terminal functions and improves operations for its customers. PayMate said the integrated product provides 2 - 4 second credit card authorizations and real time Web-based reporting. Both companies are based in Austin, Texas.

Sterling Commerce's BSD Acquired

Thoma Cressey Equity Partners, a private equity firm, purchased a majority interest in Sterling Commerce's Banking Systems Division (BSD) and created a new independent company from the acquisition called VECTORsgi. VECTORsgi provides applications that automate internal processes of financial transactions such as check imaging, check image exchange and electronic payments. Sterling Commerce is a wholly owned subsidiary of SBC Communications, Inc. Financial terms of the deal were not disclosed.

APPOINTMENTS

Lynk Hires National Sales Manager

Lynk Systems, Inc. hired Mike Bratton as National Sales Manager of its MSP sales channel. Bratton has more than 20 years of industry experience, most recently as a National Sales Manager for Bridgeview Bank and Trust.

EFTA Appoints Five to Emeritus Committee

The Electronic Funds Transfer Association appointed the following five past Chairmen of its EBT Industry Council to the Council's recently created Emeritus Committee: Tom McLaughlin, Senior Director of Citicorp Electronic Financial Services and Chairman from 1993 to 1997; Walt Patterson, Managing Director, Georgia Health Partnerships and Chairman from 1997-1998; Arthur W. Burger, Executive Vice President, Burger, Carroll & Associates and Chairman from 1998-1999; John Pfeuffer, Vice President, Citicorp Electronic Financial Services and Chairman from 1999-2000 and 2001-2002; Bob Bucceri, General Partner, Chaddsford Planning Associates and Chairman from 2000-2001.

Edward Miller Elected to AmEx Board

Edward D. Miller has been elected to American Express Co.'s Board of Directors. Miller has more than 35 years' experience in banking and has held a number of executive positions throughout his career. He served as President and CEO of AXA Financial, Inc. from August 1997 through May 2001. He most recently served as a member of the Supervisory Board and Senior Advisor to the Chief Executive of AXA Group. Miller is a Director of KeySpan Corp., TOPPS Company, Inc., and Korn/Ferry International. He also serves as a member of the Board of Governors of the United Way of Tri-State and is Chairman of the Board of Directors of Phoenix House. He is a Trustee of the Inner-City Scholarship Fund, the New York City Police Foundation, Pace University and the New York Blood Center.

Neistadt to Serve on MasterCard Board

Daniel J. Neistadt, Executive Vice President of Consumer Payment Sales at KeyBank, was appointed to MasterCard Inc.'s Debit Advisory Board. Neistadt has more than 25 years' experience in financial services. MasterCard Inc. is the parent company of MasterCard International.

MasterCard's Debit Advisory Board is comprised of 18 executives from MasterCard's top debit card issuers around the world. The board recommends debit strategies, policy changes and standards implementation to MasterCard International's Board of Directors.

Three New Execs Join NAB

North American Bancard (NAB) added three industry veterans to its executive management team: Gary Rutledge, Vice President of Risk and Underwriting, Laura Cooper, Director of Operations and Randy Lobban, Director of Risk Management.

The three have 60 years' combined experience in the payment processing industry. Rutledge previously served as Executive Vice President at First Data Resources, and he is the founder of ieWild Inc. and Payment Programs Management Corp.

Cooper was most recently Operations Officer for Prism Processing Services. She's also held executive-level positions at Buckley Financial Services and Telecom Business Services. Lobban most recently served as Vice President of Risk Management at Cornerstone Payment Systems. He's also held executive positions at Wildcard Systems, Inc., Network 1 Financial, NPC and NaBanCo.

Solveras Hires Pat Patterson

ISO Solveras Payment Systems hired Paul L. "Pat" Patterson, III to serve as Vice President and head the company's business development initiatives. Patterson previously worked at Fiserv, Inc. where he was SVP and General Manager of the Patterson Press division. Patterson has more than 13 years' experience in financial services.

BOTTOM LINES

• The Commerce Department reported that consumer spending increased 0.8% in August 2003 from the previous month.
• However, consumers lost confidence in the economy in September. The Conference Board's Consumer Confidence Index, which had rebounded in August, dipped nearly five points to 76.8.
• JoS. A. Bank Clothiers, Inc. opened 12 new stores in 10 different states and in D.C. The company plans to grow the men's retail chain to approximately 500 stores over the next three to five years.
• CompUSA announced plans to acquire electronics retailer Good Guys Inc. for approximately $55 million in cash.