News

eBay-PayPal Merger Moving Ahead

eBay's acquisition of PayPal has not closed yet, but it's one step closer. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 passed without a second request for information from the Department of Justice, which is a good sign for the companies.

However, there are still several obstacles to overcome before the deal can close. The companies face two lawsuits filed by investors seeking to block the merger, eBay and PayPal stockholders still need to give their approval, and other regulatory approvals also are required. In spite of all this, the companies are optimistic and expect the deal to officially close in the fourth quarter of 2002.

In other news, PayPal has agreed to stop processing payments to online casinos made from customers in New York state by Sept. 1, 2002. The announcement was in response to the New York State Attorney General's inquiry into payments made to online gambling merchants using PayPal's service.

PayPal says it has agreed to the terms voluntarily and is not admitting to any violation of law. The company has offered to pay penalties of $200,000 to the state to cover the costs of the Attorney General's investigation and will alert law enforcement officials if it finds any customers engaged in illegal Internet activity. eBay previously announced that once the acquisition is complete, it would not allow PayPal to process any transactions for online gambling.

Stored-value Cards Gain Popularity with Top Retailers

A recent USA Today article reported that since January 2002, Starbucks has sold 5 million magnetic stripe stored-value Starbucks cards, worth $70 million. Starbucks cards can be reused and reloaded for values from $5 up to $500, for the really serious coffee drinkers. Retailers such as Wal-Mart, Sears, Walgreens and Kinko's also have been pushing some form of a stored-value or gift card.

ValueLink, a subsidiary of First Data Corp., is one of the largest card manufacturers, making cards for retailers such as Abercrombie & Fitch Co., Bed Bath & Beyond, Toys"R"Us, IKEA and Blockbuster. ValueLink says the stored-value card industry will top $32 billion this year.

Study on Barriers to B2B Electronic Payments

The New York Clearing House published the results of its market research study, conducted to determine specific barriers to the adoption of electronic payment processes between businesses.

The study found five major barriers:

Businesses dislike the lack of remittance information that currently comes with payments.

There is a perceived loss of check float associated with making electronic payments - businesses prefer to receive rather than send electronic payments.

Businesses also dislike being debited by other companies - they like to control the timing and amount of payments.

There is a reluctance among businesses to give out their account numbers for processing because of security concerns.

There is a lack of functionality and integration of payment systems with accounting systems.

The study targeted financial professionals in charge of payments in 155 companies and followed with nine focus groups of executives and senior managers overseeing company finances and accounts payable/receivable. You can view a summary of the research at www.nych.org.

Oklahoma Partners with VeriFone for EBT

In 1998, the state of Oklahoma learned through an audit that many of its licensed child-care facilities had been overpaid government benefits. The state also found that the inundation of paperwork made it difficult to identify suspected program violations, control fraud and monitor child attendance at contracted facilities. The Oklahoma Department of Human Services therefore determined that it needed an automated, electronic system for tracking and administering child-care benefits.

VeriFone and ACS State and Local Solutions have partnered to provide a Web-based point-of-service electronic benefits transfer system to the state of Oklahoma to automate the tracking of time and attendance for more than 46,000 subsidized recipients in 4,500 child-care centers across the state, increasing the speed and efficiency of benefits distribution.

The Oklahoma Department of Human Services expects the electronic benefits transfer (EBT) child-care system to be implemented by March 2003. The system recently received the 21st Century Achievement Award from Computerworld magazine for visionary use of information technology.

Announcements

A Million Biometric Transactions

BioPay LLC announced that as of Aug. 4, 2002, one million financial transactions have been conducted and verified using its Paycheck Secure biometric identification technology. Using PayCheck Secure, merchants capture and store the electronic image of a customer's fingerprint and then record check transactions made by that person. Using BioPay, merchants are alerted to any negative transaction history. For customers, no paper ID is required to cash a check; rather, merchants scan the customer's finger for ID verification. BioPay systems are in place at more than 200 merchant locations in 22 states.

500 Million SIM Cards

Gemplus, provider of smart card-enabled solutions, announced that it has passed the 500 million mark in terms of providing Subscriber Identity Module (SIM) cards. Since the standardization of Global System for Mobile Communication in 1992, Gemplus has delivered 1.36 billion SIMs for the global telecom industry - that's more than one in every three SIM cards.

Visa DPS Processes 11 Billion

Visa Debit Processing Services recently announced that it has processed more than 11 billion transactions. Visa DPS, processor of PIN- and signature-based debit products, processes more than 1 billion debit transactions every 60 days. The company has been in operation for six years.

CrossCheck Joins Industry Check Council

Rohnert Park, Calif.-based CrossCheck, Inc., provider of check authorization technology and check guarantee services, is now a member of NACHA's Electronic Check Council.

NACHA formed the Electronic Check Council to unite industry leaders so that together they may find solutions to problems facing paper check processing systems such as increasing costs and fraud.

The Council sets standards for the ACH Network and other payments systems, steers the development of new payment applications and provides education and pilots on new technologies, including check conversion. CrossCheck markets several check conversion programs as part of its check guarantee services.

NACHA represents more than 12,000 financial institutions through direct memberships and a network of regional payments associations and 650 organizations through its industry councils.

Tranax Mini-Banks Released

Tranax Technologies announced the availability of all monochrome configurable versions of the Mini-Bank 1500, with color monitor availability soon to follow. The Tranax Mini-Bank 1500, introduced in June 2002 and featured in the June 24, 2002 issue of The Green Sheet ("Good Things Come in Small Packages," 02:06:02), is designed as a configurable platform for free-standing retail ATM locations.

Vital Adds Check Imaging

Vital Processing Services has added check-imaging functionality to its POS check service offering. Vital's POS check service with imaging captures the entire check image and consumer identification information, such as name, address and telephone number. If there is an error or misread, Vital's software allows retrieval of the original check image. Five of Vital's acquiring customers have implemented the company's POS check service solution.

In other news, TransFirst recently renewed its contract with Vital. Vital has provided processing services to TransFirst since its inception in 1995 and will continue to provide merchant processing services, such as authorization, capture, clearing and settlement of payment transactions.

Debit Card Handheld Pilot Successful

Orion Commerce Group, a Tampa-Fla.-based software development firm and Hypercom value-added reseller (VAR), announced the completion of a successful 100-day beta of its 900 MHz credit and debit processing handheld device software and the first installation, at a drive-through dry cleaner service. The proprietary software is designed to run on Hypercom's ICE 4000 remote terminal with the ICE 5500 base. The Green Sheet reported on Orion Commerce Group in its July 8, 2002 issue ("Florida Buzzes about Skimming Sting, Advent of Tabletop POS Terminals," 02:07:01).

Partnerships

Certegy Wins 2 Major Retailers

Certegy announced it has completed the rollout of its check-authorization services to the 243 stores of the Saks Department Store Group, which includes Parisian, Proffitt's, McRae's, Younkers, Herberger's, Carson Pirie Scott, Bergner's and Boston Store. Certegy also will supply check risk-management services to San Jose, Calif.-based Orchard Supply Hardware (OSH), a subsidiary of Sears, Roebuck & Co. OSH is a hardware and garden retailer, with 82 stores in California. Sears uses Certegy's check products at its retail and service stores.

Health Care Processor Hires Global Payments

Global Payments will provide transaction authorization, settlement processing, merchant accounting and risk-management services to HealthCard Systems, LLC, a credit card processor for the health-care industry. HealthCard Systems provides proprietary processing systems compatible with most health-care software programs.

@pos Terminals Coming to Sport Chalet; Pharmacies, Too

@pos will provide Sport Chalet, a sporting goods retailer with 26 stores throughout Southern California and Nevada, with iPOS 3100 point-of-sale terminals for credit and debit transactions, signature capture and Crossvue's receipt-retrieval services. Crossvue, a POS terminal provider, was acquired by @pos in September 2001.

@pos also announced that Opus Core Corp., developer of software for pharmacies, will be a value-added reseller (VAR) of @pos' iPOS 3100 signature capture terminal. Opus Core is combining its SignatureRx software with @pos' terminal to provide pharmacies with a way to capture signatures and attach them to prescription records in their pharmacy systems.

Using Opus' solution, a pharmacist will be able to distinguish prescriptions that have been picked up from those that remain "in the bin." Opus Core's solution also will provide reporting capabilities on information such as patient name, the date the prescription was filled, amount paid, consultation and insurance-carrier information.

Appointments

Global Payments Elects Denham to Board

Jill Denham has been elected to serve on Global Payments Inc.'s Board of Directors. Denham is Senior Executive Vice President, Retail Markets for the Canadian Imperial Bank of Commerce (CIBC) and also is a member of CIBC's Senior Executive team. She joined the bank in 1983 and has served in several management positions in corporate finance and merchant banking in Canada and Europe, including her previous position of Executive Vice President and Managing Director of cibc.com. Denham succeeds David Marshall, Vice Chairman of CIBC, who is stepping down from the board in line with his previously announced retirement.

Welcome Appoints Asia-Pacific CEO

Welcome, a smart card software provider, announced that it has named Alex Tan CEO of Welcome's Asia-Pacific region. Tan is a veteran in the payments industry. He has filled several executive-level positions with a number of companies: Managing Director of M-Payment (m-commerce enabler and m-marketing solutions company), Managing Director of Thyron Technologies in Asia Pacific (end-to-end payment solutions provider, primarily on mobile commerce), Managing Director of ActiveCard in Asia Pacific and General Manager for Hypercom Asia. His background also includes senior management positions with MasterCard International, United Overseas Bank, NETS and Visa International.

Hypercom Has New VP

Hypercom Corp. announced the appointment of Eric Duprat to Vice President, Marketing and Business Development for the company's Transaction System Group (TSG). Mr. Duprat is an eight-year veteran of the electronic payments industry. Before joining Hypercom, Duprat held executive marketing positions with VeriFone, Inc., Schlumberger Technologies and Polaroid Corp.'s electronic identification division.

Duprat will report to Jairo E. Gonzalez, President of Hypercom TSG.

Changes at Alogent

Alogent Corp., a developer of payment transaction processing solutions for financial institutions, named William J. Gilmour CFO. Gilmour has more than 20 years of financial experience and recently held the position of CFO for MAPICS Inc., an Enterprise Resource Planning (ERP) software provider. Before coming to the U.S., Gilmour held executive finance positions for several Canadian-based companies.

Alogent also named Ian Culling Vice President of Product Development and promoted Amar Verma to Vice President of Product Management.

Culling previously held the position of Chief Technology Officer for Click Tactics Inc. He also was co-founder and VP of Engineering for Tango Networks Inc. and served as VP of Commerce Development at Clarus Corp.

Verma has been with Alogent since 1995, when the company was founded. Before joining Alogent, Verma was an item-processing consultant for Unisys and the Federal Reserve Bank. His background includes experience in the retail banking software industry. Verma also has served as a software consultant for Syntel.