NEWS

Survey Finds Debit Use Increasing

A Harris Interactive poll, commissioned by Visa U.S.A., shows that young consumers are driving debit card usage. The poll found that 58% of debit card holders ages 18 - 34 somewhat or strongly agree that they will use their debit cards more this year for fall shopping. Fifty-eight percent of women and 54% of men in this same group agree that they'll use debit cards to better track shopping expenses. The poll also found that many consumers still do not understand the security of debit cards. Fifty-seven percent of those surveyed believe liability limits exist for fraudulent charges if their cards are lost or stolen. The survey also found that 18 - 34 year olds prefer debit cards to cash or checks. Fifty-four percent of 18 - 34 year-old consumers would use a debit card to purchase an item, versus 23% for cash and 5% for checks.

Electronic Payments Expected to Increase 10% by 2007

Electronic payments are expected to grow from 33% of the consumer payments mix in 2002 to 43% by 2007, according to a new report from market research publisher Packaged Facts. The report, titled "Third-party Processing in North America," found that increased Internet commerce, international expansion and an increased number of debit transactions are primarily fueling growth. The report also states that according to Federal Reserve figures on U.S. consumers and electronic banking, the number of households banking by computer grew threefold between 1999 and 2003. Those using debit and smart cards more than doubled.

Phishing Fraud to Reach $500 Million

A recent national study conducted by Ponemon Institute and sponsored by NACHA - The Electronic Payments Association and TRUSTe, an online nonprofit privacy organization, revealed that 76% of consumers experienced an increase in spoofing and phishing incidents and that 35% receive fake e-mails at least once a week. The report estimates the nation's total monetary loss to victims of these incidents at approximately $500 million. Based on a national sample of 1,335 Internet users across the United States, seven out of 10 respondents revealed that they have unintentionally visited a spoofed Web site and more than 15% of spoofed respondents admit to being phished and providing sensitive private information including credit card numbers, checking account information and Social Security numbers. In total, slightly more than 2% of all respondents believe that they experienced a direct monetary loss resulting from a phishing attack.

Gift Cards Preferred to Cash

Fifty-two percent of American consumers would prefer to give an electronic gift or spending card rather than cash or a paper gift certificate, according to the fourth annual "Consumer Insights" survey commissioned by ValueLink, a First Data Corp. company. The survey of 1,006 U.S. adults shows that American consumers are purchasing more gift cards at higher values than at any time since ValueLink started tracking the figures in 2001. Sixty-four percent of the adults said they purchased and/or received a gift card in the previous 12 months, versus 36% in a 2001 survey. Consumers purchased an average of just under seven gift cards in the previous 12 months with an average value of $59 per card, up from four cards at $44 per card in 2001. Additionally, consumers spend gift cards quickly. Twenty-seven percent of those who received a gift card in the previous 12 months said they spent the initial value of their card within one week of receiving the card. Fifty-five percent said they spent more than the initial value of the card they received.

ANNOUNCEMENTS

AmEx Offers Free Identity Theft Assistance

American Express Co. (AmEx) recently launched identity theft assistance, a new benefit available to AmEx card members at no extra cost.

The identity theft assistance benefit provides support that can help card members safeguard their personal information, determine if someone has stolen their identity and if so, provide assistance in helping regain it.

The new identity theft assistance benefits include access to representatives 24/7 to help navigate the recovery process, assistance with evaluating suspicious activity to determine if identity theft has occurred, and materials to help cardmembers re-establish good credit, including sample letters to credit bureaus and credit card companies.

GASA Publishes "Best Practices for ATM Cyber Security"

The Global ATM Security Alliance (GASA) published its international "Best Practices for ATM Cyber Security." Whereas GASA's previously published "General Cyber Security Manual" helps ATM companies with computer and network security at the corporate level, this new ATM-specific cyber security manual focuses on defending windows-based ATMs against hacking, denial of service attacks and other cyber threats. It is the first time international cyber security guidelines have been published for the ATM industry.

United Bank Card Moves to New Premises

Formerly headquartered in High Bridge, N.J., United Bank Card relocated its operations to a new facility in Hampton, N.J. With 17,000 square feet, it's nearly three times as large as its previous 6,000 square foot office. The added square footage will allow the company to add up to 75 additional jobs. All phone numbers will remain the same.

Pipeline Data Debuts Wholesale Processing Division

Pipeline Data, Inc.'s wholesale processing division, Pipeline Data Processing, is now operational. The Alpharetta, Ga.-based facility enables Pipeline to provide application processing, risk management and payment tools to ISOs.

Other offerings include customized interfaces and reporting, gift and loyalty products, gateway products, wireless tools and tailored retail solutions. Pipeline's Chief Operating Officer, Kevin Smith, is in charge of the operations at Pipeline Data Processing.

TNS Certifies WAY Systems

Mobile Phone POS Solutions provider WAY Systems received certification from Transaction Network Services (TNS) for its mobile transaction terminal (MTT), the first out-of-the-box packaged solution for the mobile phone POS market. TNS recently acquired the assets of U.S. Wireless Data and now offers connectivity to a majority of U.S. processors. The new alliance will enable ISOs to connect the MTT to their processor of choice through TNS.

PARTNERSHIPS

Advanced Payment Services Partners With Paymentech

Advanced Payment Services (APS) now offers the Paymentech, LP front-end to existing and new sales offices. With access to multiple platforms, APS can help sales offices looking to service their old and new merchants at no additional cost.

AspDotNetStorefront Partners With CardinalCommerce

AspDotNetStorefront, an Asp.Net shopping cart platform provider serving nearly 1,000 online merchants, recently released its version 3.8. The software supports the Verified By Visa and MasterCard SecureCode initiatives. AspDotNetStorefront partnered with authentication technology provider CardinalCommerce Corp. to integrate its Cardinal Centinel technology with the AspDotNetStorefront shopping cart platform.

Canadians Can Use Debit at 1 Million U.S. Retailers

An alliance among Acxsys Corp., architect of the Interac national PIN-debit services in Canada, NYCE Corp. and major Canadian financial institutions now makes it possible for Canadian consumers to use their debit cards to pay for purchases at nearly one million U.S. retail locations.

RBC Royal Bank is the first major financial institution to offer the service to its cardholders; Scotiabank, TD Canada Trust, National Bank of Canada and Desjardins Group will follow in the coming weeks.

Certegy Chosen by Credit Union

Suncoast Schools Federal Credit Union selected Certegy Card Services to process its 100,000 Visa credit cards. With $275 million in credit card loans outstanding, Suncoast is the third largest card issuing credit union in the nation. With $4.3 billion in total assets and 350,000 members, Suncoast is the largest credit union in Florida.

Integrated Merchant Alliance to Market CrossCheck Services

Integrated Merchant Alliance, Inc. will market CrossCheck, Inc.'s services as part of an enhanced, private label merchant program. Integrated Merchant Alliance now offers check conversion, checks by phone, fax and online authorization for the guarantee services. Merchants will also have the option of accepting checks online, as well as have access to multiple check, stop payment and check-on-delivery (COD) services.

EXS Signs Renewal With Global Payments

Electronic Exchange Systems (EXS) extended its relationship with Global Payments Inc. by signing a multi-year agreement. This full-service contract calls for Global Payments to provide a variety of acquiring solutions including authorization, capture, settlement and BIN sponsorship for credit, debit and EBT payment card processing.

First Data to Provide Services to Peoples Trust

First Data Corp. and Canada-based Peoples Trust signed a long-term agreement in which First Data will provide card-processing services for Peoples Trust secured card MasterCard accounts.

Payment Data Systems Signs Agreement With KUBRA

KUBRA Data Transfer, Ltd. selected Payment Data Systems, Inc. (PDS), an integrated electronic payments solutions provider, to become its preferred electronic credit/debit card payment processor. KUBRA provides enterprise information solutions to its portfolio of EBPP customers, and processes hundreds of millions of dollars in consumer payments each year.

The partnership provides for both a referral agreement and incentive warrants for a three-year term, renewable thereafter. Under the terms of the referral agreement PDS will become KUBRA's preferred provider of credit/debit card payment processing.

Moneris to Provide Services to Two Universities; Establishes Alliance with Peppercoin

Santa Clara University and Seattle Pacific University selected Moneris Solutions to provide credit card processing services. Under the agreements, the universities will outsource their credit card payment services to Moneris Solutions through their partner, infiNET.

With the Moneris Solutions and infiNET service charge program, students and third-party payers can pay tuition and fees with their credit cards. The payer will be assessed a fee for using the service, but the student and parents will still have the flexibility to directly pay the university via other no-cost payment options. The schools use Moneris Solutions' services and support to accept credit cards through the Internet.

The universities are currently equipped to accept MasterCard and Discover/Novus and will soon add American Express. In other Moneris news, the company formed an alliance with Peppercoin. Peppercoin recently introduced the Peppercoin 2.0 system to drive increased small payments traffic over the payments network.

Moneris will make Peppercoin 2.0 available to its existing merchants and Peppercoin merchants by the end of the fourth quarter of 2004. Moneris will leverage Peppercoin 2.0 and its suite of small transaction services to make card-based small payments profitable for retail and Web-based merchants.

SPS to Provide Humboldt Suite of Services

Secure Payment Systems (SPS) reached an agreement with Humboldt Merchant Services to provide a comprehensive package of services to their sales agents and employees. The suite of services includes check guarantee, check verification, check conversion, gift and loyalty card services and now Web ACH and payroll cards.

SVPCO Provides Network Access for All Financial Institutions

VECTORsgi, a provider of transaction processing solutions, and SVPCO, the electronic check processing business of The Clearing House Payments Co., developed software for SVPCO's gateway distributed traffic agent (DTA). The gateway DTA will provide an alternative to make it economically possible for regional and smaller depository financial institutions to send image exchange files through the SVPCO network.

The gateway DTA opens the door for any size financial institution to participate in SVPCO's image exchange network by providing an additional access method. A single gateway DTA can provide service to multiple financial institutions, which will reduce the cost incurred by a single financial institution.

Unlike the DTA, which would be placed inside each of the participating large financial institutions, SVPCO will house and operate the gateway system. Customers will send a single file with a series of cash letters, which will route to different destinations.

TrustCommerce Renews With REBNY

IP-based payments solutions provider TrustCommerce recently renewed its service agreement with the Real Estate Board of New York (REBNY), the industry's leading trade association in New York State. The agreement includes Internet-based payment processing and related services.

ValueLink Selected by ESPRIT

Clothing retailer ESPRIT Holdings, Ltd selected ValueLink to assist in the development and implementation of ESPRIT's electronic gift card program in the United States. The launch builds on ESPRIT's relationship with ValueLink in eight European countries.

APPOINTMENTS

Catuity Names New CEO and Board Member

Catuity, Inc. named John Racine to President, Chief Executive Officer and Director. Racine replaces Michael V. Howe. Racine has 14 years' experience in the financial services and payments industries. He founded Altamont Partners in 1997 and has advised many payments organizations in North America and Europe about strategic and merger related issues. Prior to Altamont Partners, he served as a principal at SNL Financial, a merger and financial analytics provider for the financial services industry.

Clifford Chapman was appointed to serve on Catuity's Board of Directors. Most recently, Chapman served as the CEO and investor in the turnaround of mindSHIFT Technologies, a managed services provider focused on IT outsourcing. Prior to MindSHIFT, Chapman was the Vice President of Business Integration for AppNet, a full-service Internet service and managed hosting company that he helped take public in 1999 before it was sold for $2 billion in 2000. Prior to AppNet, Chapman co-founded NMP, a consulting business and managed hosting company.

Dunn Joins Optimal Payments

Mark Dunn joined the management team of Optimal Payments, Inc. as General Manager, U.S. Sales. Dunn is the President and co-founder of the Midwest Acquirers' Association (MWAA) and also founded Field Guide Enterprises, a company that conducts payments industry professional education seminars. Dunn has been involved in the payments industry for more than 15 years. Most recently, he served as Senior Vice President for transaction services for Universal Savings Bank. Previously, he held executive positions with Newtek Merchant Solutions, Vital Processing Services, VeriFone, Inc. and ICVerify.

Check Recovery Systems Appoints New VP

Check Recovery Systems appointed Donald E. Stewart Vice President of Finance and Administration. Stewart will oversee all finance and financial accounting operations across the company's national processing platform, as well as technology operations. Stewart joins Check Recovery Systems with more than 16 years of senior financial and executive management experience.

He was responsible for a variety of financial and general management functions, including supply chain management, investor relations, private equity sourcing, operations and acquisitions. He spent 11 years in finance and operations for a privately held c-store in the Mid-Atlantic region, and most recently served as Chief Financial Officer of Castle Rock Industries.

Bottom Lines

• Wal-Mart Stores, Inc. plans to increase its store space by 8% in the fiscal year beginning in February 2005, including nearly 250 more Supercenters and 45 new discount stores, Reuters reported.
• Starbucks raised its prices in October 2004 for the first time since August 2000. The company said prices will increase 11 cents per cup on average.
• The Conference Board's Consumer Confidence Index declined slightly in September 2004, the second consecutive monthly dip.
• The 2004 "Shop.org/BizRate.com Online Holiday Mood" study found that 98% of merchants are anticipating online growth this holiday season. Also, 32% of consumers plan to do more of their holiday shopping online this year.