News

Positives of Debit Cards

Visa USA announced that in the first two quarters of 2002, more Visa customers used their debit cards than their charge cards. Visa processed 3.04 billion check card transactions compared to 2.96 billion Visa credit card transactions. Visa also released results from a recent study conducted on why consumers are choosing debit cards over credit cards. People surveyed cited reasons such as not wanting to carry a checkbook, getting through checkout lines more quickly, carrying less cash and having a better idea of where they spend their money.

Humboldt Deal with iPayment Delayed

Humboldt Bancorp says the sale of its proprietary merchant processing division to iPayment Holdings, Inc. has stalled. Humboldt expected the deal to close at the end of August 2002. Although iPayment Holdings declined to sign an amendment extending the Aug. 30 termination of the agreement, the companies are still negotiating.

Certegy Earnings Guidance Lowered

Certegy Inc. announced it expects to report third quarter 2002 diluted earnings per share of $0.40, before restructuring charges and has revised previous revenue and earnings guidance for full year 2002 and 2003. Revenue in 2002 is expected to increase by 8 to 9 percent over 2001. Full year 2002 diluted earnings per share are expected to be between $1.39 and $1.40, before restructuring charges. Certegy lowered its revenue estimates for 2002 and 2003 by $77.7 million.

The company cited several reasons for the change: a delay of the planned Q4 2002 rollout of a check-cashing program for a major discount retail customer, a decrease in the number of machines to be deployed by the end of 2002 in conjunction with the company's kiosk-based check-cashing program, the de-conversion of Brazil-based Banco Real's card portfolio in February 2003 and the weakening of that country's currency because of an unstable economy, and the loss of a large merchant processing customer.

Announcements

Safeway's New Payment Method

Safeway Inc. has introduced a new way for customers to pay for groceries in its stores. The PIN-activated Safeway Smart Check card combines into one card a customer's Safeway Club card and access to the customer's personal checking account. Customers using the Smart Check card also can benefit from in-store promotions such as Safeway Club card discounts and receiving cash back. Safeway is offering a 10% savings award for customers who sign up for the card by October 31, 2002.

Tranax Makes Film Debut

The Tranax Mini-Bank 2100, an ATM manufactured by Tranax Technologies, Inc., is featured in the recently released MGM movie, "Barber Shop," starring Ice Cube. In the opening scene of the movie, two amateur thieves steal the Mini-Bank 2100 from a convenience store. The strength of Tranax's ATM is depicted as one thief unsuccessfully tries to break into the machine. The thieves and the stolen ATM are highlighted in comical scenes throughout the movie.

e-Checks Gain Popularity

According to NACHA statistics, more than 200 million e-check payments were made during the first half of 2002, an increase of more than 300 percent from the same period in 2001. NACHA defines an e-check as "an electronic debit to a checking account that is initiated at the point-of-sale, on the Internet, over the telephone, or via a bill remittance sent though the mail, and is processed using the automated clearing house network (ACH).

Concord Buying Lipman Terminals

Concord EFS signed an agreement with Lipman USA to purchase 20,000 point-of-sale terminals. This contract will allow Concord to provide its customers with NURIT wired and wireless POS solutions, including the Class A-certified NURIT 3020 countertop payment terminal.

Skylight Financial Gets $12M from GTCR

GTCR Golder Rauner, LLC, a Chicago-based private equity investment firm with investments in payments industry companies such as VeriFone, Transaction Network Services, Genpass, TransFirst and Risk Management Alternatives, has announced a $12.8 million investment in Atlanta-based Skylight Financial, Inc.

Skylight Financial provides FDIC-insured checkless account-based ATM and debit services at the point-of-sale to employers and underserved members of the population. Skylight has customers in 46 states, and more than 60% of Fortune 100 companies have employees with a Skylight account.

Walnut Investment Partners, an existing investor in Skylight, also participated in the financing.

PayPal Lauded for Fraud-Busting

PayPal has been dealt its share of headaches this year: an inquiry from the New York State Attorney General into the use of PayPal's service for online gambling, and lawsuits filed by shareholders seeking to block the merger with eBay and by Bank One Corp. saying PayPal violates Bank One's patents on a "cardless payment system." (Bank One's eMoneyMail is a competitor to PayPal.)

So it's no wonder PayPal wanted to spread some good news. The company's anti-fraud team received several recognition awards from the U.S. Postal Service in appreciation of its aid in the investigation of a man accused of Internet auction fraud. Jay Nelson, 34, of Gilsum, N.H., recently pleaded guilty to charges of mail fraud, wire fraud and money laundering for failing to deliver thousands of items he offered for sale on Internet auction sites.

BNA Certified by Major Processors

BNA Smart Payment Systems announced that its payment application is certified to process credit and debit transactions through Paymentech and has received Class B Certification by Vital Processing Services to process retail transactions for credit, debit and EBT card payments.

The BNA application runs on a Banksys C-ZAM/SMASH terminal and has been developed in the standard Java programming language. The Banksys terminal reads both standard magnetic stripe and smart cards and features a configurable Ethernet communications card, an integrated pin pad, EMV level 1 and 2 compliance and standalone and multi-unit configurations. BNA is also the North American distributor of Banksys' terminals.

Alogent's CEO Ranks in Atlanta Top 50

Alogent Corp., a developer of transaction processing solutions for banks, announced CEO Brian Geisel has been named one of "Atlanta's Top 50 Entrepreneurs" by Catalyst Magazine. The top 50 entrepreneurs were chosen by Catalyst Magazine based on a number of criteria including annual revenues, contributions to the business community and philanthropic efforts.

Alliances

Wireless and Prepaid Partnership

Radiant Telecom and Comstar Interactive Corp. have partnered to bring a new prepaid wireless solution to market. Radiant has integrated its Radiant Prepaid point-of-sale application with Comstar Interactive Corp.'s CHARGE ANYwhere wireless credit card processing solution ("Wireless POS Mighty Mite," Green Sheet, March 25, 2002, issue 02:03:02). The joining of these two products offers merchants the ability to activate and recharge prepaid products from a wireless device. Merchants such as delivery drivers, flea market attendants and taxi cab operators will be able to provide customers with prepaid, rechargeable long distance, wireless, Internet, dial tone and bankcard products. The products have no value until they are swiped through the CHARGE ANYwhere device and assigned a dollar amount. Radiant plans to offer the integrated solution to the marketplace through its sales network.

VeriFone, TNS Making it Better

VeriFone, Inc. and Transaction Network Services have joined forces to improve terminal performance and network connectivity in various communications environments in order to benefit processors and merchant customers. Using TNS' data-communication services, VeriFone terminals can now interface with networks quickly, consistently and securely. TNS is a provider of data communications for transaction-oriented applications. TNS says its network transported approximately 6.7 billion point-of-sale and ATM transactions in 2001. VeriFone says it has shipped more than 10 million payment terminals worldwide, with more than five million installed in the U.S.

Time.com Selects New Payment Solution

Yaga, Inc. and iBill announced Time Inc. has selected their e-commerce payment technology. Time.com will use Yaga's and iBill's solution to charge its customers for archived Web content and offer readers a wider variety of payment and services options such as micro-payments, subscriptions, time-based passes and gift subscriptions.

NPC Renews with Target

National Processing Company (NPC), a provider of merchant credit card processing and a wholly owned subsidiary of National Processing, Inc., renewed a multiyear EBT, credit and debit card processing agreement with Target Corp. NPC has served as Target's merchant processor for more than 14 years. NPC also announced it has signed a new multiyear merchant-processor agreement with natural and organic foods retailer Wild Oats Markets, Inc. and with ShopKo Stores, Inc., a discount retailer with 365 ShopKo and Pamida store locations in 23 states.

SPS Makes Whale of a Deal

Secure Payment Systems, Inc. (SPS), provider of both electronic check conversion and gift card services, has partnered with Wyland Galleries to introduce and process a series of stored value gift cards. Wyland, a painter, sculptor and muralist, is the world's premier ocean artist and has completed 89 "Whaling Wall" murals throughout the United States, Canada, Japan, Australia, Mexico, France and New Zealand. The designs of the Wyland Galleries gift cards will be based on Wyland originals. In addition to gift cards, the Wyland Galleries also will implement SPS' point-of-purchase electronic check imaging systems.

Acquisitions

MerchantWired Acquired

First National Merchant Solutions, a payment processor and wholly owned subsidiary of First National Bank of Omaha, announced it has acquired payment processing assets and business relationships of MerchantWired Financial Services, a subsidiary of the Simon Property Group.

Appointments

NCR President to be COO, TOO

NCR Corp. has named Mark Hurd Chief Operating Officer of the company. Hurd most recently served as President of NCR and Chief Operating Officer of its Teradata division. Hurd, a 22-year veteran of NCR, will remain NCR's President and will continue to report to NCR Chairman and Chief Executive Officer Lars Nyberg. Hurd started his career at NCR in 1980. He was chosen to lead the Teradata division in October 1999 after advancing through a number of sales and marketing leadership positions. In July 2000, Hurd was appointed COO of the division, and the following year he was elected President of NCR.

Pegasus Adds First Data Corp Exec to Board

Pamela H. Patsley, Senior Executive Vice President of First Data Corp. and President of First Data International, has joined Pegasus Solutions, Inc.'s Board of Directors. Pegasus is a provider of transaction processing and electronic commerce solutions to the hotel industry. Patsley previously has served as President of First Data's merchant transaction-processing business unit.

EXS Appoints VP for Product Marketing

Electronic Exchange Systems (EXS), supplier of merchant transaction processing services, has appointed Peter Scharnell as Vice President, Product Marketing. Scharnell has more than 15 years' experience in the software development industry. Before joining EXS, Scharnell served as Senior Product Manager at Day Software, Inc.

eFunds Fills CEO Position

eFunds announced Paul F. Walsh has been appointed to the offices of Chairman of the Board and Chief Executive Officer, succeeding J.A."Gus" Blanchard. Blanchard will serve as Transition Advisor until his retirement Dec. 31, 2002. Walsh served most recently as Chairman and CEO of Clareon Corp., an electronic payments provider.

From 1999 to 2000, Walsh was Chairman of iDeal Partners, a private equity firm. From 1995 to 1998, Walsh was President and CEO of Wright Express Corp. Walsh's experience also includes a CEO role for the Investor Services and Diversified Services divisions of BankOne (1990-95); head of Institutional Trust at Norwest Capital Management (1987-90); and multiple positions, including CEO of Diner's Club-Germany for Citigroup (1975-87).

Concord EFS Appoints Executive VP

Bond R. Isaacson has joined Concord EFS as Executive Vice President, reporting to Edward A. Labry III, President. Isaacson previously served as Payments Executive for Bank of America Corp. He also has held various positions at Visa USA, including Executive Vice President of the member and merchant sales organization and President of Visa's Internet division. Before VISA, Isaacson worked nearly two decades at IBM Corp, holding numerous positions in technology, finance, marketing and sales with a primary focus on consulting with the financial services industry.