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Article published in Issue Number: 070202

Industry Update

NEWS

First Data plans U.S. platform consolidation

Beginning in 2007, First Data Corp. will consolidate its 13 U.S. merchant platforms down to four. The company will also reduce its 12 U.S. data centers to three and its seven command centers to two.

Chairman and Chief Executive Officer Ric Duques estimated the project would begin in late 2007 and take 2.5 years. The company also plans to reduce the number of application platforms. Duques said a timetable would likely be ready by the third quarter of 2007.

"Our investment in technology will yield not only fewer physical locations, but significantly more efficient processing environments," Duques said in a conference call with investors. "The first step is to review our plans with our clients. We want to make sure they know what we're doing."

First Data reported commercial services revenue for 2006 of $4.1 billion, up 7%. The company added 139,000 merchant locations during the fourth quarter and 600,000 locations during the year.

First Data also added 26 ISOs, bringing the 2006 new-ISO total to 115. Duques said the company had sold 78,000 FD-100 payment terminals, which were introduced in September 2006.

FDIC defers decision on Wal-Mart bank

The Federal Deposit Insurance Corp. deferred for a year its decision on Wal-Mart's application to buy an industrial loan company (ILC). On Jan. 31, the FDIC extended its moratorium - which began July 28, 2006 - on retailers chartering or acquiring ILCs.

Rep. Paul Gillmor, R-Ohio, and House Financial Services Committee Chairman Barney Frank, D-Mass., had requested the extension, which gives Congress time to act on the Gillmor-Frank ILC reform bill. "It is vital that Congress acts to close this loophole, which is ... eating away at the separation between banking and commerce," Gillmor stated.

Vendors form PCI alliance

Eight data security companies formed the Payment Card Industry Security Vendor Alliance (PCI SVA). The organization will educate the business community on the PCI Data Security Standard (DSS).

Founding members include Configuresoft Inc., Cyber-Ark Software Ltd., Modulo Security, Proginet Corp., Protegrity Corp., Reflex Security Inc., SafeNet Inc. and VeriSign.

The PCI SVA will present case studies, seminars and ROI analyses showing how organizations may efficiently achieve compliance. The alliance advocates compliance with the PCI DSS to meet national and state laws governing security and privacy. For information, visit www.pcialliance.org.

MasterCard sees GDV increase

During the fourth quarter of 2006, MasterCard Inc.'s domestic gross dollar volume (GDV) increased 13.8% to $532 billion.

The number of transactions increased 17.4% to 4.4 billion. As of Dec. 31, 2006, 817 million MasterCard-branded cards had been issued worldwide, an increase of 12.3% over 2005.

Net revenue for 2006 was $3.3 billion, a 13.2% increase over 2005. The company increased its dividend from $0.09 to $0.15 per share.

ANNOUNCEMENTS

Alpha Card launches Zero to Remember

Alpha Card Services Inc. released its Zero to Remember program, which enables merchant level salespeople to offer zero transaction and statement fees. Also, for the 13th consecutive month, customers experienced zero hold times for technical support and customer service in December 2006. The company guarantees residual payments by the 20th of each month.

EMG celebrates 10th year, will open four branches

Eliot Management Group celebrates its 10th anniversary in 2007. With 21 branches currently, the ISO will add four sales, service and support facilities in Anchorage, Alaska; Los Angeles; Oklahoma City; and Salem, Ore.

Equity Commerce posted 600% growth

Equity Commerce LP posted 600% revenue growth for its second full year of operation, driven by 465% growth in dollar volume and a 612% increase in transactions. Agent recruitment and organic growth in the existing portfolio fueled the trend.

Euronet makes list of growth companies

Euronet Worldwide Inc. was ranked No. 7 on Forbes' annual list of the 25 fastest-growing technology companies. Euronet, with a five-year annualized sales growth of 69%, was added to the list this year.

Panini is leading check scanner provider

Research conducted by Celent LLC verified that Panini has installed more than twice the number of check scanners at the top 100 U.S. banks than its closest competitor.

Real estate payment provider completes SAS audit

PropertyBridge Inc. has completed the American Institute of Certified Public Accountants' Statement on Auditing Standards (SAS) No. 70, Type II audit. The review reportedly is the first to be completed by a service provider offering more than three payment types to property-management organizations.

Rent processor designated level 1

RentPayment, a payment processor in the multifamily housing industry, has been recognized as a level 1 service provider by Visa U.S.A.

Synovus joins NACHA

Synovus Financial Corp. has joined NACHA - The Electronic Payments Association, bringing the number of direct members to 41.

TSYS announces jump in net income

TSYS Acquiring Solutions announced record results for 2006, with revenue of $1.8 billion and a 75% increase in net income in the most recent quarter over the same period in 2005.

UBC signs 20 financial institutions

United Bank Card Inc. established agent agreements with over 20 banks, credit unions, and savings and loans in 2006, giving ISOs tools to expand their sales opportunities.

PARTNERSHIPS

AmeriMerchant chosen by Bankcard Pros

Merchant cash-advance supplier AmeriMerchant has been exclusively included by Bankcard Pros in its Bankcard Account Tracking software.

Central Atlantic Merchant Services changes gift card platform

Central Atlantic Merchant Services has transferred its gift card program customers to the Smart Transaction Systems platform.

CIT Global looks to Dunn

CIT Global has contracted with Mark Dunn, President of Field Guide Enterprises LLC, as a sales and marketing consultant on its MaxPro product.

CrossCheck certifies WnetCheck

Medasyst Inc.'s WnetCheck has been certified by CrossCheck Inc. to provide merchants with check processing via the CrossCheck network.

DTI signs car dealers, supplement marketer

Direct Technology Innovations will provide credit card processing services to clients of AutoGro, a buying consortium for car dealers in Florida. In other news, nutritional supplement marketer AmeriSciences has chosen DTI as its preferred merchant service provider.

ISO taps into startups with IncFile.com

Fast Transact Inc. formed an alliance with IncFile.com LLC, a provider of business-incorporation solutions, to jointly market their product offerings for company formation and merchant services.

First Data certifies ACH Direct, signs Pakistani bank

First Data has certified ACH Direct Inc.'s PaymentsGateway to process credit card payments. Alfalah Bank, a leading card issuer and merchant acquirer in Pakistan, has signed a five-year agreement with First Data for card processing services.

First National Merchant Solutions offers retailers Bill Me Later

Home Décor Products Inc., NetShops Inc., Toshiba America Information Systems Inc. and Sharper Image have expanded their relationships with First National Merchant Solutions to offer shoppers Bill Me Later, a credit-based payment option.

Global Payments to put LightSpeed in 13 casinos

Global Payments Inc. announced agreements to provide its VIP LightSpeed cash-access products to 13 U.S. and Canadian gaming establishments.

AADOM picks HealthCard Systems

The American Association of Dental Office Managers endorsed HealthCard Systems as its preferred pro- cessing partner for its 1,800 members nationwide.

Partnership adds fingerprints to school lunch system

M2SYS Technology partnered with Schoolhouse Software, a provider of K-12 lunch-line management systems. Schoolhouse will integrate M2SYS' fingerprint software, Bio-Plugin, into its Touch-n-Serv school POS solution. Fingerprint authentication reportedly will speed lunch lines, eliminate ID cards and lunch tickets, and improve record keeping.

Moneris teams with esportsdeskpro.com

Moneris Solutions will offer Web-based payment services to the athletic-league clients of Recreation Sports Management Inc.

Nexternal supports FlexCache, Paymentech supports Vista

Nexternal Solutions now supports Chase Paymentech Solutions LLC's FlexCache gift cards. Also, Chase Paymentech will provide credit card processing to small businesses via the Windows Vista Business operating system.

NOVA picks bay6, certifies ComsGate

NOVA Information Systems selected bay6 LLC to provide a customized version of its back-office enterprise software for NOVA's Electronic Check Service. NOVA also certified Comstar Interactive's ComsGate payment platform.

StoreNext to resell Pay By Touch

StoreNext Retail Technologies LLC will resell and support biometric authentication and payment service from Pay By Touch to independent grocers, in conjunction with StoreNext POS systems.

Precidia chooses Traf-Sys technology

Precidia Technologies Inc. chose Traf-Sys Inc.'s people-counting technology for large retail chains.

Postilion chooses Retalix solutions

Retalix will deliver to Postilion Inc. an integrated commercial fueling solution for travel centers and an open-systems payment switch for credit and debit transactions for convenience stores.

Shift4 partners with restaurant POS provider

Shift4 Corp. and 1TouchSoftware Solutions Inc. partnered to offer secure payment processing to independent quick- and table-service restaurants.

SecurityMetrics validates toolkits

Slim CD and SecurityMetrics have teamed to provide toolkits and discounted validations.

Slim CD's POS developers' and Web toolkits reportedly have been validated as meeting Visa's Payment Application Best Practices standard.

IBB partners with UBC

United Bank Card will offer comprehensive merchant solutions to member institutions of Independent Bankers' Bank.

Stores pick VeriFone signature capture

Stop & Shop and Giant-Landover food stores have selected VeriFone's MX870 customer-facing payment system with signature capture.

Broadway goes Visa Contactless

Sandbar Concessions, concessionaire for several Broadway theatres, now accepts Visa credit, debit and contactless payments to speed service during intermissions. Chase Paymentech implemented the installation of ExaDigm Inc. mobile payment terminals throughout the theatres.

ACQUISITIONS

ActiveCore enters electronic payments market

ActiveCore Technologies Inc. has transitioned its business activities to the electronic payments industry with two acquisitions. The company purchased ePocket Inc., which enables bank customers to make payments from deposit accounts, and CyBux, which runs an online payment system in Canada. In 2006, ActiveCore sold its business units not related to the payments industry.

AmbironTrustWave acquires security services firm

AmbironTrustWave has acquired managed-security provider SecurePipe. The company will continue to support SecurePipe products and services, including network security monitoring.

Euronet buys La Nacional

Euronet will acquire New York-based Envios de Valores La Nacional Corp. and its U.S.-based affiliates. La Nacional provides money-transfer services from 15 domestic states to Latin America.

Gravity acquires portfolio

Gravity Payments acquired a portfolio of 405 merchants. The acquisition adds $120 million in volume to its portfolio.

Hypercom expands POS offerings with TPI

Hypercom Corp. acquired TPI Software, a provider of PC credit/debit/gift card, automated clearing house (ACH) and check processing software.

Metavante acquires Valutec

Metavante Corp. acquired Valutec Card Solutions Inc., which provides gift and loyalty card solutions to small and medium-sized businesses. The subsidiary will continue to operate under the Valutec name.

Two ACH processors merge

Smart Payment Solutions LLC merged with Automated Financial Group. Both companies provide ACH processing. Smart Payment also offers credit card merchant accounts.

Sterling buys Lakeside Ventures

Sterling Payment Technologies will acquire the ISO Lakeside Ventures LLC.

TASQ integrates Canadian POS software supplier

First Data subsidiary TASQ Technology entered the Canadian market with First Data's acquisition of Solika Solutions Inc., a Canadian provider of inventory-management POS solutions.

APPOINTMENTS

MasterCard adds two to board

MasterCard elected Nancy J. Karch and Tan Teong Hean to its board of directors. Most recently, Karch was a Senior Partner at McKinsey & Co.

She also serves on the boards of Liz Claiborne, Genworth Financial and Corporate Executive Board Co.

Until 2006, Tan was CEO of Southern Bank Berhad and a Director on MasterCard's global and Asia/Pacific regional boards. He is Chairman of MasterCard's Asia/Pacific regional advisory board.

Consulting firm promotes four

First Annapolis Consulting announced four promotions: Dan Kreis, Scott Reaser and Nelson Irizarry were promoted to Principals. Erik Howell has been promoted to Senior Consultant.

Federated Payments appoints two

Federated Payments appointed Stacey Scott Director of Operations. Scott has over 12 years' experience in the merchant acquiring industry. She has worked with Hypercom, VeriFone, Vital Processing Services and Heartland Payment Systems.

The company also promoted Joanne Vassallo to Corporate Sales Manager. Vassallo most recently served as Director of New Accounts and Director of Special Projects.

Tartavull named Hypercom President

Hypercom appointed Philippe Tartavull President. He comes to the company from Oberthur Card Systems USA, where he was President.

BOTTOM LINES

  • The National Retail Federation attributed a jump in retail store sales for January historically the industry's slowest month to gift card redemptions. Retail industry sales (which exclude automobiles, gas stations and restaurants) rose 5.3% over January 2006.
  • The Aberdeen Group reports that 84% of retailers surveyed conduct sales in more than one channel (for example, stores and Internet or Internet and call center). Customer expectations of seamless purchase and delivery options across channels are a driving factor for 67% of retailers.
  • In a poll of 2,214 adults conducted by Harris Interactive for the Merchants Payments Coalition, 91% did not think credit card companies should be allowed to set interchange fees without notifying consumers.
Article published in issue number 070202

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