Page 10 - GS170802

NewsBriefs

Editor's Note: Following are excerpts from news stories recently posted At half-million mark in U.S.,
under Breaking Industry News on our home page. For links to these and ATMs undergoing reinvention
other full news stories, please visit www.greensheet.com/breaking-
news.php?flag=previous_breaking_news. On the heels of news that between 475,000 and 500,000
ATMs are now operating in the U.S. market, the ATM
Class actions target EVO, allege hidden fees Industry Association published an industry blueprint
for next-generation ATMs. The blueprint was ratified by
Atlanta-based law firm Webb, Klase & Lemond LLC an international consortium of ATM deployers, vendors,
disclosed Aug. 2, 2017, that two class action lawsuits have suppliers and service-providers. The milestone in the
been filed against EVO Payments International and EVO U.S. market came after years of stagnant growth, ATMIA
Merchant Services. New Beginnings v. EVO Payments noted, citing the likely reasons as a struggling economy,
International LLC, et al. and Central Florida Liquidation Windows updates and a complex EMV (Europay,
and Sales v. EVO Payments International LLC et al. were Mastercard and Visa) migration. "These numbers confirm
filed in the United States District Court for the Eastern what we have suspected in recent months," said ATMIA
District of New York. U.S. Executive Director, David Tente. "There is growing
recognition of the important role that ATMs play in our
EVO is reported to be the largest privately held payment payments system, and alongside of it, in a new wave of
processor and acquirer for merchants, ISOs, financial branch transformation that is sweeping through the
institutions, government organizations and multinational banking industry."
corporations throughout the United States, Canada and Factoring on tap for financially strapped businesses
Europe. Plaintiffs in both class actions allege that privately
held EVO has misstated its merchant billing policies and According to a survey by the Federal Reserve Bank of
has been overcharging merchants. They additionally New York, U.S. startups were nearly twice as likely as
claim that EVO's payment processing fees and rates are firms in business for more than five years to be adding
disproportionately higher than those represented on the jobs and growing revenues (43 percent versus 22 percent,
company's merchant application. respectively). At the same time, more startup executives

Class action filed against admitted to being discouraged from applying for financing
Wells Fargo Merchant Services (27 percent versus 13 percent), despite facing perceived
financial shortfalls (69 percent versus 54 percent).
A class action lawsuit filed Aug. 4, 2017, against Wells Fargo
& Co.'s merchant services division is the latest in a series "Startups are the primary drivers of U.S. job growth, and
of grievances against the company. Plaintiffs in Patti's their success is essential to a healthy economy," said Claire
Pitas LLC and Queen City Tours v. Wells Fargo Merchant Kramer Mills, Assistant Vice President and Community
Services LLC accuse the bank of coercive sales tactics and Affairs Officer for the Federal Reserve Bank of New York.
hidden fees. The prosecution claims Wells Fargo misstated "Although financing is important for all companies, it's
fee policies, even after restructuring its card processing especially critical to these young firms who need funds to
division in response to customer complaints. weather initial costs and grow."

"As has become obvious in recent months, Wells Fargo While banks and online lenders were the most common
had a corporate culture which emphasized revenue and sources for financing cited in the Fed's 2016 Small Business
profit over customer wellbeing," stated E. Adam Webb, Credit Survey: Report on Startup Firms, alternative finance
Managing Partner at Atlanta-based Webb, Klase & methods such as accounts receivable factoring are poised
Lemond LLC. "In April of 2017, internal reports surfaced for growth, at least in other global regions.
that confirmed that this culture had infected the Merchant Detached smart card chips trigger privacy concerns
Services division. We have seen evidence of this through
the experiences of our clients, who have learned the hard At a time when the U.S. EMV migration is nearing
way that profit trumps promises at Wells Fargo." completion, reports of chips separating from plastic
payment cards triggered heated debates among payments
Queen City Tours and Patti's Pitas, both customers of analysts and others in the electronic payments sphere.
Wells Fargo Bank, claimed they were not advised of three- Some consumers and merchants, formerly convinced that
year contract terms or $500 early termination fees; they EMV technology would nearly eliminate counterfeit card
also allege the defendant failed to honor contractual fee fraud, expressed concern that missing EMV chips could
structures. present a new and severe threat to the payments chain due
to the levels of personally identifiable information on the
chips' embedded microprocessors.

10