NEWS

Judge Rejects TFC's Motion in Visa, MasterCard Settlement

U.S. District Court Judge John Gleeson rejected Minneapolis-based TFC Financial Corp.'s "motion to intervene" with Visa and MasterCard's April 2003 settlement with Wal-Mart and nearly 4 million other retailers. TFC had complained that the settlement hurts banks that issue debit cards, such as TFC ("Card Associations Face New Actions" The Green Sheet, May 26, 2003, issue 03:05:02). The judge also issued a preliminary approval of the settlement. The plaintiffs' attorneys now will start to notify retailers included in the class-action suit.

NextCard Plans Liquidation

Bankrupt Internet credit card company NextCard, Inc. submitted plans with U.S. Bankruptcy Court in Wilmington, Del., on June 16, 2003 to liquidate its assets. As part of liquidation plans, the company would pay out between $2.5 million and $17 million to creditors. Total claims against NextCard are listed at $464 million, but the company objects to a $397 million claim that's part of a shareholder lawsuit.

The lawsuit alleges that NextCard was dishonest regarding the finances of its subsidiary, NextBank. In November 2002, NextCard filed for bankruptcy protection, citing total assets of $18 million and total debts of $5 million.

Visa President/CEO Will Not Renew Term

Visa International President and CEO Malcolm Williamson announced he will not seek another term when his current five-year term ends in March 2004.

"While I have found the opportunities as well as the challenges of this role immensely stimulating, I am at a point in my professional career where I am looking forward to pursuing both a different career course and my other interests in the United Kingdom," Williamson said in a statement. "I also relish the chance to spend more time with my wife, Hang, and to be more deeply involved in the lives of our two teen-age children."

As a member of the Executive Committee of the Visa International Board, Williamson will be involved in the search for and appointment of his successor.

Study Predicts Prepaid Debit Cards to Soar

Over the last 15 years the prepaid industry has focused on telecommunication services, but now it is on the verge of expanding into every sector of the economy, according to a new report from The PELORUS Group titled "Stored Value: 21st Century Currency." Stored value cards, aka prepaid debit cards, affect how consumers use cash, checks and traditional credit cards. The PELORUS Group projects that the number of prepaid debit cards will surge from 6.2 million in 2002 to 40 million by 2007. The report lists several factors that will contribute to the dramatic growth of prepaid debit cards, such as the millions of U.S. adults without credit cards or bank accounts who want access to e-commerce; people who do have credit cards but whose cards are maxed out; and the recent settlement by Visa and MasterCard with retailers over debit card transactions.

"[It] could encourage retailers to promote debit cards at the expense of credit cards, thereby eroding the number of credit cards issued annually," said Tom Miezejeski, Vice President of Research for The PELORUS Group.

For more information, visit the Reports section of The PELORUS Group's Web site at www.pelorus-group.com/pelreprt.htm.

First Data's Western Union in Iraq?

First Data Corp. is in talks over regulatory issues with the U.S. Treasury Department about the possibility of opening locations of its Western Union subsidiary in Iraq. First Data believes there are individuals and organizations in Iraq that would benefit from the ability to send and receive funds, Reuters reported. Western Union has 159,000 locations in 195 countries.

ANNOUNCEMENTS

Amex Named in Top 3 for Women of Color

Working Mother Magazine named American Express Co. one of the top three companies in its survey of "Top Companies for Women of Color," which tracks corporate progress on advancement and workplace culture for women of color, including work/family practices.

Robins Resigns from Catuity Board

Rob Robins, a member of Catuity, Inc.'s Board of Directors, resigned from his position on the Board effective June 10, 2003. Robins recently was named Executive Vice President of Business Development at National Processing Corp. (NPC) and attributes increased responsibilities at NPC to his resignation. Catuity said there are no plans at this time to replace him, and the Board now will number four members: one executive director and three non-executive directors.

ECHO Relocates

Electronic Clearing House, Inc. (ECHO) is relocating its Los Angeles-area headquarters. ECHO signed a five-year lease on 20,030 square feet of a 40,000-square-foot office building in the Camarillo Business Center in Camarillo, Calif. Nearly 65% of ECHO's employees will be relocated from the company's current headquarters in Agoura Hills, a distance of 20 miles. The move is scheduled for August 2003.

Paymentech Recognized for Low Rates

Visa USA awarded payment processor Paymentech, L.P. the 2003 Service Quality Performance award for its "lowest duplicate transaction rate." Paymentech also announced it will offer the National Independent Automobile Dealers Association's (NIADA) 17,000 members payment-processing services for recurring payments and fleet and prepaid card acceptance.

NAB Offers MLS a Mirror Image

North American Bancard announced a new addition to its offerings specifically for Merchant Level Salespeople called the "Mirror Image Website," a free hosted site intended to help sales reps support their merchants. An MLS can customize the site to fit the specific needs of his or her merchants with such features as hardware, software, choice of leasing, pricing and discount rates.

Patent Issued for Multi-Account Smart Card

Quest Products Corp. was awarded U.S. Patent No. RE 38,137 for its multiple-account smart card system, which allows a credit, debit, frequent flyer or hotel, telephone calling card and other types of consumer accounts as well as personal information of the account holder to be maintained on a single card.

The card stores a record of every transaction for which the card was used. It also can take the form of a plastic card or as an embedded chip installed in a cell phone, PDA or other wireless or wired device. The entire contents of the card can be accessed with a single "PIN" number or biometric access code such as a fingerprint.

SLIM CD Checks Security

SLIM CD, Inc. announced it has successfully passed an audit by SecurityMetrics, a vendor recommended by American Express for security monitoring services. SecurityMetrics also will provide weekly monitoring of SLIM CD's processing systems.

Wildcard No Longer a Wildcard

Wildcard Wireless Solutions, Inc. has changed its name to TransAKT Corp. Wildcard said it wanted to align the company's corporate identity with its product line of wireless point-of-sale terminals, called TransAKT.

PARTNERSHIPS

CrossCheck Fights Loss from Stop Payments

United Bank Card, Inc. will use CrossCheck, Inc.'s check authorization systems for its private-label check guarantee program. UBC's merchant customers will use check authorization services to help prevent against loss caused by stop payments. CrossCheck also announced that Global Electronic Technology, Inc. is marketing CrossCheck's check guarantee services.

First Data Extends Contract with GE

First Data Corp. signed a five-year extension of its agreement to provide payment-processing services for GE Consumer Finance-Americas, a division of General Electric Company. First Data is converting GE Consumer Finance-Americas portfolios to the First Data system, which processes bankcard and private-label credit card transactions. FDC expects the conversions to be complete by the end of 2004.

Moneris Has Two New Partners

Moneris Solutions will offer Ingenico's latest point-of-sale products to its customers throughout North America. Moneris also will be included on Ingenico's product advisory board, providing input from its customers on product development and pricing. The Association Forum of Chicagoland selected Moneris to be its exclusive provider of credit card processing. Association Forum's membership base consists of more than 1,600 nonprofit organizations in the U.S. As a member of the Association Forum's Member Advantage Program, Moneris will provide payment processing through point-of-sale hardware, software, e-commerce solutions and Web-based financial reporting, and gift and loyalty card programs.

Four Casinos Pick Global Payments

Four more casinos will use Global Payments Inc.'s VIP Preferred suite of products for check-cashing and cash-offering: Riviera Hotel and Casino, Imperial Palace Hotel and Casino, Cannery Hotel and Casino and the Tuscany Casino.

Heartland Offers Ingenico Product

Heartland Payment Systems, Inc. (HPS), is offering its customers Ingenico's Elite 510 point-of-sale terminal. Heartland plans to develop applications to be used on the terminal for targeted industries such as restaurant, hospitality and financial services. Heartland will equip the Elite 510 with up to five applications, including credit card processing and gift/loyalty card programs, and will offer a five-year warranty with the terminal.

Hypercom Wins Big Contracts

Hypercom Corp. will provide ISO POS Payment Systems with up to 5,000 of its T7Plus point-of-sale terminals. In addition, Staples, Inc. will purchase and install 6,500 Hypercom EMV-approved ICE 6000Plus terminals with HyperSafe operating system security. The terminals will be installed at Staples' checkout counters throughout the U.S.

MD On-Line Picks NPC

MD On-Line, Inc. signed a multiyear agreement with National Processing Co., LLC. NPC will provide MD On-Line with payment-processing services such as ACH payment capabilities, payment consolidation and electronic remittance advice reporting to their payers and providers through NPC's payment platform, HealthePay for their LINK and WEBLINK solutions.

Verus Chooses Merlin for Chargebacks

Verus Financial Management picked Frederick, Md.-based Merlin Solutions to process chargeback disputes for its customers, including its subsidiaries and ISOs and their merchants.

Metavante Signs Key Customers

Marshall & Ilsley Corp. subsidiary Metavante Corp. is extending its agreement with Global Payments Inc. whereby Global Payments will continue to provide Metavante's merchant portfolio with point-of-sale card processing services. Metavante also will provide Whitaker Bank Corp. of Kentucky with electronic funds transfer (EFT) and card-processing solutions, such as ATM driving and monitoring, gateway transaction processing and PIN-based card transaction processing, beginning in August 2003. ACQUISITIONS

NPC Sells Sales Offices to 3 ISOs

Looking to expand its partnerships with ISOs and grow its U.S. regional merchant business, National Processing Co. sold 14 non-bank aligned regional sales offices to three ISO partners - DiamondCard International of Rancho Cucamonga, Calif.; Security Check, LLC of Oxford, Miss.; and Universal Debit & Credit Corp. of Annandale, Va. - in June 2003. NPC's growth strategy is to manage multiple-distribution channels while strengthening relationships with ISOs.

APPOINTMENTS

VeriFone's Fitzpatrick Joins Tellermate

Tellermate, Inc. hired Linda Fitzpatrick to serve as Vice President of Sales for Eastern North America. Before joining Tellermate, Fitzpatrick worked at VeriFone, Inc. where she held various sales-management and business-development positions. Fitzpatrick has more than 20 years of sales, management and business-development experience. She previously served as Director of Sales at POS Systems Inc.

Advanced Payment Services Hires Two

Advanced Payment Services appointed Karen A. Johnson Vice President of Risk Management. Johnson is the former Senior Vice President of Risk Management for Concord Payment Systems. Johnson has 24 years of industry experience on both the issuing and acquiring sides of the business - from account acquisition and implementation to risk management, loss prevention and customer service. She will work at the company's new corporate headquarters in Plainview, N.Y.

Myrvin Garnett was appointed Vice President of Business Development for Advanced Payment Services. Garnett is the former Relationship Manager for Concord Payment Systems. He has 15 years of experience in chargebacks/compliance, customer service and technical support.

Cardtronics Appoints VP of Marketing

Lloyd Nobles will serve as Cardtronics' new Vice President of Marketing. Nobles has more than 20 years of experience in field operations and marketing in the convenience store industry, ranging from supply chain management, category management, customer service training, RFP development/analysis and sales. He joined Cardtronics in 2003 after previously serving as Category Manager for SSP Partners, a convenience store and petroleum chain.

TenderCard Hires Industry Veteran

Bob Robinson has been appointed Executive Vice President at TenderCard. Robinson has nearly 30 years of experience in the merchant acquiring business, including management positions with PNC Bank, MasterCard's Automated Point-of-Sale Program (MAPP), ENVOY Corp. and Lynk Systems, Inc.

ECHO Hires TeleCheck Exec

Electronic Clearing House, Inc. (ECHO) appointed Sharat Shankar Vice President of Risk Management and Business Intelligence, a new executive committee position. Shankar has nearly 10 years' experience and previously served as Vice President at First Data Corp.'s TeleCheck International Inc. At TeleCheck, he oversaw business analytics, operations support and risk management on a multibillion-dollar transaction portfolio.

BOTTOM LINES

• Bed Bath & Beyond, Inc. purchased Christmas Tree Shops (all 23 stores) for approximately $200 million in cash.
• The Kroger Co. bought 13 Food Town stores in the Toledo, Ohio, area and 231 stores in Ohio, Michigan and West Virginia.
• The National Association of Convenience Stores released its 2003 State of the Industry, a report on the convenience store and petroleum-marketing industry's 2002 performance. To order the report, phone 800-966-6227.
• Stores, the National Retail Federation's magazine, published its ranking of the largest U.S. retailers. The top five:
  1. Wal-Mart Stores
  2. The Home Depot, Inc.
  3. The Kroger Co.
  4. Target Corp.
  5. Sears, Roebuck & Co.