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Industry Update


MasterCard Sued Over Interchange

The same group of supermarket and drugstore merchants who filed suit in July 2005 against Visa International and Visa U.S.A. over interchange price fixing and competition-stifling practices, have now filed a similar case against MasterCard International (see "Retailers File Another Interchange Lawsuit," The Green Sheet, Aug. 8, 2005, issue 05:08:01).

The merchants, led by Kroger Co., claim that MasterCard violates antitrust law by illegally setting interchange rates. The merchants filed separate lawsuits to show that they do not allege conspiracy between the two card Associations, "The Wall Street Journal" reported.

IPayment Committee Rejects Takeover Proposal

Gregory S. Daily, Chief Executive Officer of iPayment Inc., recently proposed to acquire all the outstanding common stock of the company at $38 per share. The Special Committee of the Board of Directors of iPayment determined that the $38 offer price undervalues the prospects of the company and did not recommend proceeding with a transaction at that price. The Special Committee will explore alternatives to enhance stockholder value, including the sale of the company. After notification of the Special Committee's determination, Daily withdrew his proposal.

Research Identifies Untapped Gift Card Market

According to a study by First Data Prepaid Services, the introduction of gift cards as customer incentives creates a new growth opportunity for the retail and service industries. Nearly 10% of the companies surveyed offer customer incentives. The most popular gift cards given are for table service restaurants (67%), specialty stores (56%) and department stores (45%). Twenty percent of the companies offering gift card customer incentives said they will increase use in the coming year, and 52% of all companies surveyed said they are likely to use gift cards as incentives in the coming year.


AmStar Kiosks Debut in Colorado

AmStar Systems Inc., a self-service financial kiosk manufacturer, rolled out 18 of its full-service, multi-function ATMs in Colorado. The AmStar eca$hier financial services kiosks are being placed in grocery stores and convenience stores.

Checkgateway Offers Reseller Promotion

Checkgateway is offering a reseller incentive campaign through Sept. 30, 2005. For every merchant a reseller signs with Checkgateway, the reseller will earn a 60/40 split above the buy rate for the life of the contract. Typical reseller commission is a 50/50 split above the buy rate.

COCARD Opens New Office

ISO COCARD recently opened its 50th office. The newest addition is located in Savannah, Ga. The company, which is 100% owned by the various offices throughout the United States, was formed in 1998.

ETA Accepting Presentation Proposals

The Electronic Transactions Association (ETA) is accepting presentation proposals for the 2006 ETA Annual Meeting & Expo. ETA will hold the meeting April 18 - 20, 2006 in Las Vegas. The volunteer program planning committee is seeking proposals to develop a well-balanced program in the following categories: sales and marketing, operations, technology, risk/fraud/security, and legislative and regulatory issues.

The committee will review the proposals based on a variety of criteria, including level of content, timeliness of topic, expertise of presenter and practical application of material. ETA must receive proposals by Aug. 31, 2005. For more information visit .

POSLynx220 Certified by Vital

Precidia Technologies Inc. received the Class-B certification of its POSLynx220 secure multiport Internet protocol (IP) converter from Vital Processing Services. The POSLynx220 connects up to four existing dial- or serial-based POS devices, including payment terminals, ATMs, PC cash registers and petroleum monitors, to broadband networks.


BluePay and AmbironTrustWave Offer Compliance Services

BluePay Inc. and AmbironTrustWave will jointly offer Visa U.S.A. Cardholder Information Security Program and the new Payment Card Industry Data Security Standard compliance services to all levels of merchants. Airport Renews CO-OP Network Contract

The Salt Lake City International Airport renewed its joint ATM operating, branding and marketing agreement with CO-OP Network. The ATM partnership of CO-OP Network, Delta Employees Credit Union, American Airlines Employees Federal Credit Union, Western Federal Credit Union and Mountain America Credit Union was originally signed in 2000.

E-Smart Technologies Delivers Super Smart Cards in Korea

E-Smart Technologies Inc. recently rolled out its inaugural Super Smart Card in Busan, Korea. Pursuant to an agreement signed in July 2005 between e-Smart and Mybi Company Ltd., e-Smart began distribution of the first multi-application e-currency biometric smart card to be used in Busan as an e-government ID card and payment card for mass transportation, banking, POS, Internet and other payment card transactions.

FSV and FBMC Announce Alliance

FSV Payment Systems (FSV) and Fringe Benefits Management Co. (FBMC) have formed an alliance using FSV's stored value FLEXFUNDS solutions platform for FBMC's EZ REIMBURSE MasterCard-branded card issued by MetaBank. FBMC is an employee-benefits administrator. FSV provides the prepaid card platform and card account-management services for card participants.

First Data Signs Multiyear Contract in South Asia

First Data Corp. signed a multiyear agreement to manage credit card and merchant processing services for DBS Bank's portfolio of more than 13,000 merchants and 2 million credit card accounts in South Asia. DBS is one of the largest financial services groups in Asia. The contract extends the relationship between First Data and DBS.

Since 1999, First Data has provided DBS its VisionPLUS software under license to manage card-issuing and acquiring services in-house.

Fiserv and Moneris Deliver Processing Solutions

Fiserv Inc. and Moneris Solutions teamed to offer payment processing solutions for financial institutions. The agreement enables bankers to control payment processing for their business customers while outsourcing backroom functions and credit review.

Association Endorses HealthCard Systems

The International Guild of Hair Removal Specialists (IGHRS), a nonprofit organization, endorsed HealthCard Systems as its transaction processing partner of choice for IGHRS and its international membership.

Wine Group Chooses Idology

WineAmerica, the National Association of American wineries, selected IDology's IDlive product to develop an age- and identity-verification program for members to use when taking online orders. IDology will provide WineAmerica members the opportunity to use the service on a trial basis before making a decision. The company will then charge members on a per-transaction basis.

International Merchant Services to Process With First Data

First Data Merchant Services (FDMS) and International Merchant Services Inc. (IMS) have partnered. FDMS will provide payment processing and POS equipment leasing services to IMS merchant clients.

KeyBank First to Issue PayPass Debit Cards

KeyBank recently became the first bank in the nation to offer customers MasterCard PayPass debit cards. KeyBank will replace its existing cardholders' debit cards with PayPass-enabled debit cards beginning Sept. 1, 2005. Also, new KeyBank customers will receive a PayPass-enabled debit card when they open a checking account.

BAWAG Bank CZ a.s. Selects Global Payments' Subsidiary

MUZO a.s., Global Payments Inc.'s Prague-based subsidiary, executed an agreement with BAWAG Bank to provide credit card issuing services including card management, card personalization, PIN printing and distribution, and card statement printing in the Czech Republic. MUZO will also provide credit card authorization services for BAWAG Bank's Czech Republic customers. MUZO is one of the Czech Republic's largest indirect processors. It provides card-issuing and processing services throughout Central and Eastern Europe.

TNB Card Services Converts Five to STAR Network

TNB Card Services finished converting the first five credit unions to migrate to its new STAR Network platform. The credit unions range in size from 4,000 to 32,000 members, with assets between $12 million and $367 million. TNB converted a total of 22,000 debit cards. The credit unions are Jersey Shore Federal Credit Union, IBM Texas Employees Federal Credit Union, 1st University Credit Union, BP Federal Credit Union and Texas Industries Employees Credit Union.

Convenience Store Selects TNS

Fas Mart selected Transaction Network Services Inc.'s (TNS) Point-of-Service division to provide network transaction solutions for approximately 125 of its convenience stores in the Mid-Atlantic region. Fas Mart contracted with FusionPoint by TNS to provide network connectivity and data communications services for credit card and ATM authorizations, fuel tank monitoring systems, Voiceover IP capabilities and back-office connectivity.

Valutec Selects Hypercom's HBNet

Stored value card system provider Valutec Card Solutions switched to HBNet Inc., a Hypercom Corp. subsidiary, for high-speed transaction transport services. Valutec helps small and medium sized merchants implement their own gift and/or loyalty card program.


Diebold to Buy ATM Manufacturing Plant in India

Diebold Inc. signed an agreement to purchase Tata Infotech's ATM manufacturing plant in India. Located in Goa, the plant will focus on supplying ATMs for customers in India and the surrounding regions in Asia.

In 2002, Diebold and Tata Infotech entered into a contract-manufacturing agreement in which Tata set up a separate facility to manufacture Diebold ATMs in India for distribution by Diebold throughout India, South Asia and Southeast Asia. Diebold will rename the facility Diebold Goa Manufacturing.

Euronet Concludes Acquisition

Euronet Worldwide Inc. recently completed acquisition of consumer financial services company TelecommUSA (TUSA). TUSA offers consumer money transfer services, primarily between consumers in the United States and Latin America, and bill payment services within the United States. The company will operate under the name Euronet Payments and Remittance Inc., and will be part of Euronet's Prepaid Processing Segment.

First Data Finalizes Acquisition, Plans Another

First Data completed the acquisition of EuroProcessing International, a card processor in Central and Eastern Europe. EuroProcessing International will lead First Data's operations in the Nordic markets.

First Data also recently signed an agreement to acquire Austrian Payment Systems Services GmbH (APSS), an Austrian processor of card-based payment transactions. APSS' headquarters will remain in Austria, and the company will continue to manage its relationships with Austrian banks locally.

Metavante Completes Acquisition, Forms MBI Benefits

Metavante Corp. completed its acquisition of Med-i-Bank Inc. (MBI), a provider of payment services for employee benefit and consumer-directed healthcare accounts. The company will operate under the name MBI Benefits Inc., and will be a wholly owned subsidiary of Metavante.


Credit Union 24 Shareholders Elect Three to Board

Credit Union 24 (CU24) shareholders elected Edwin Collins, Chris Leggett and Larry Scott to the CU24 Board of Directors. New to the Board is Chris Leggett, President and CEO of First Coast Community Credit Union.

Ed Collins, President and Chief Financial Officer of Lockheed Georgia Employees' FCU and a current Credit Union 24 Board member, was elected to another term. Larry Scott, President and CEO of Campus USA Credit Union and a former CU24 Board Chairman, returned to the Board.

ProPay Announces Executive Team Additions

ProPay hired James M. Martinos as Chief Operating Officer and Bill Elrick as Executive Vice President and Director of Sales. Martinos previously served as a Senior Managing Consultant for Microsoft Corp.

He also worked in systems development for MasterCard and most recently was co-owner of an IT consulting service. Elrick previously served as Director of the Reseller Channel at Authorize.Net .

COCARD Owner Joins ETA Committee

Breina Montalvo, owner member of COCARD in Northville, Mich., has been appointed to serve on ETA's Best Practices Committee. The committee is responsible for identifying and developing recommendations for the industry.

First Data Appoints China and North Asia Business President

First Data appointed Nigel Lee President of its China and North Asia business. Lee joins First Data from Electronic Data Systems, where he served as Director of Financial Services, Asia Pacific, with responsibility for Pan-Asian financial services, consulting and line management business.

Savant Joins Strategic Management Partners

Strategic Management Partners hired Jamie Savant as an Associate of the management consulting firm. Savant has worked with major processors, financial institutions, large merchants and ISOs for 20 years. He was a co-founder of Humboldt Merchant Services.

President of its China and North Asia business. Lee joins First Data from Electronic Data Systems, where he served as Director of Financial Services, Asia Pacific, with responsibility for Pan-Asian financial services, consulting and line management business.

Savant Joins Strategic Management Partners

Strategic Management Partners hired Jamie Savant as an Associate of the management consulting firm. Savant has worked with major processors, financial institutions, large merchants and ISOs for 20 years. He was a co-founder of Humboldt Merchant Services.


  • Tupperware Corp. announced plans to purchase the direct selling business of Sara Lee Corp., which sells beauty and personal care products. Tupperware anticipates the transaction will take place in Q4.
  • A report released by the Securities and Exchange Commission on Aug. 10, 2005, documents "$25.6 million in erroneous or inappropriate accounting" at Krispy Kreme Donuts, "The New Times" reported. The report mentions several high-level executives by name, but falls short of any specific accusations.
  • Pepsico will open three mall lounges geared to teenagers, where they will be able to play video games, watch movies and buy Pepsi products. The stores will open in California, Florida and Illinois. Coca-Cola did the same thing two years ago with stores in California and Illinois.
Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.
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