NEWS

he majority (55%) of corporations in America suffered at least one incident of payments fraud in 2004, according to a survey by the Association for Financial Professionals (AFP). "The Payments Fraud and Control Survey" identified checks and automated clearing house (ACH) debits as the most frequent vehicles for payments fraud.

Organizations with revenues greater than $1 billion were twice as likely as smaller organizations to have experienced payments fraud. Ninety-four percent of fraud victims were subject to check fraud, while 34% of respondents were subject to ACH debit fraud.

Reasons cited for not implementing payment controls include the view that the potential fraud loss is not worth the cost; the service is technically difficult to implement; or the bank does not offer the service.

One-third of respondents indicated they would switch disbursement banks simply to obtain fraud control services. Obtain a copy of the report at www.AFPonline.org/research .

Shift to Electronic Payments Eroding Banks' Margins

A report by consulting firm DiamondCluster International predicts that the increase in electronic payments will have major ramifications on the U.S. payments industry. The report illustrates how information technology has changed the basis of competition in the industry over the last 30 years and outlines opportunities and threats for U.S. banks.

Order a complimentary copy of "Banking on Payments: Protecting and Extending Banks' Electronic Payments Franchise" by sending an e-mail to PaymentsReport@diamondcluster.com .

Paycom, MasterCard Dispute Dismissed

A U.S. District Court judge dismissed all claims brought against MasterCard International by Paycom Billing Services Inc. The judge ruled that Paycom suffered no antitrust harm as a result of MasterCard's rules or policies.

Paycom contracts with Internet merchants, most of which provide online digital adult content. Paycom's primary challenge was to MasterCard's chargeback system protecting against fraudulent purchases.

The court's ruling recognized that Paycom is free to stop accepting MasterCard on behalf of its clients, or to urge its clients' customers to pay with other card brands. The judge ruled that Paycom could not demonstrate that MasterCard's policies harmed competition.

The court also dismissed antitrust claims against additional MasterCard policies, including its Competitive Programs Policy (CPP), Cross-Border Acquiring Rules and Internet Merchant Qualification Mandates.

Business Owners Expect Sales Growth, Survey Finds

Expectations of rising sales are prompting small- and mid-sized businesses to plan increases in hiring and salaries, according to the biannual "PNC Economic Outlook," commissioned by The PNC Financial Services Group Inc.

The survey found that the outlook on sales and profits during the first half of 2005 reached its highest level since the survey began in March 2003.

Seventy percent of respondents expect sales to increase, up 17% from last fall, and 59% expect profits to increase, a 7% increase from the fall.

TeleCheck Downsizes Houston Office

First Data Corp.'s TeleCheck subsidiary will eliminate 380 manager and staff positions in its Houston office. The layoffs represent 32% of the company's Houston-area workforce.

TeleCheck will eliminate some accounting positions in July; the company will terminate other positions, including those in call centers, at the end of the year.

ANNOUNCEMENTS

CFSI Offering Investment and Grants

The Center for Financial Services Innovation (CFSI) is seeking candidates for investment and grant awards. CFSI will provide between $750,000 and $1 million to both non-profit organizations and for-profit companies that focus on pioneering yet practical applications moving underbanked, low-income consumers toward wealth creation.

CFSI is particularly interested in stored-value card solutions, bank-nonbank partnerships and self-service delivery channels. Download the request for proposal at www.cfsinnovation.com/investment.php .

Dynamic Achieves Visa, MasterCard Compliance

Dynamic Payment Ventures LLC achieved compliance with the Visa U.S.A. Cardholder Information Security Program (CISP) and the MasterCard Site Data Protection (SDP) program. Ambiron LLC conducted the Visa CISP audit.

Ingenico to Double Market Share in Europe

Ingenico will open subsidiaries in Poland and Hungary and an office in Serbia. Currently, Ingenico estimates that its market share in this region exceeds 25%. The company's goal is to control at least 50% of new terminal shipments by the end of the decade.

The Polish subsidiary, known as Ingenico Polska Ltd, is 80% owned by Ingenico and 20% by local management.

Linkpoint Certifies SLIM CD

First Data's Linkpoint division certified the SLIM CD software for use with the Linkpoint gateway. This certification allows merchants to send transactions to the gateway for high-speed transaction processing.

Prepaid Card Trade Association Established

TSYS Prepaid is sponsoring the creation of a prepaid card trade association. The association will help advance the prepaid market by focusing primarily on branded cards using open networks such as Visa and MasterCard, as well as EFT and ATM networks.

Anil D. Aggarwal, TSYS Prepaid Chief Executive Officer, will lead the development of the independent organization. The company is working to define objectives, which will likely include creating greater awareness of branded prepaid cards, promoting industry-wide standards and best practices, and defining current market size and viable business cases.

PARTNERSHIPS

Alogent Delivers Deposit Automation at ICB

Alogent Corp. signed a contract with Independence Community Bank (ICB) for implementation of the company's Sierra Xpedite deposit automation solution.

ICB will use Alogent technology to deliver image and data capture, validation and management of check deposits in its more than 120 branches.

Alogent's partner is Unisys, which provides Unisys My Vision X scanners to teller and back counter locations throughout the bank's system.

AmEx and Russian Standard Bank Form Alliance

American Express Co. (AmEx) and Russian Standard Bank (RSB) partnered. RSB will exclusively issue and market AmEx card products in Russia. RSB will issue the first Russian ruble-denominated AmEx cards as well as U.S. dollar-denominated AmEx cards.

RSB will issue the cards, manage the customer relationships and provide customer service, billing and credit management.

First Data Integrates Customer Behavior Software

First Data and Austin Logistics Inc., a provider of software that predicts customer behavior, agreed to incorporate Austin Logistics' predictive analytic EarlyDetection System into First Data's credit card processing system.

The alliance gives First Data's customers the capacity to predict revenue, varying levels of activation and fraud/delinquency risk.

RBS Lynk First to Automate Payments for Azar

RBS Lynk signed Azar Computer Software Services to participate in its LynkPartner association referral program. As part of the agreement, Azar certified its billing software on RBS Lynk's payment processing platform, enabling electronic payment processing including credit, debit and recurring ACH bank drafts.

The Bancorp Bank and ACH Direct Partner

The Bancorp Bank launched an online, electronic bank, www.ACHDirectBank.com, through a partnership agreement with ACH Direct. The Bancorp Bank provides branded, Internet-enabled banking services to enhance the platform.

Cardservice Offers MLSs Semtek Mobile Swipe Solution

Cardservice International is offering Semtek Innovative Solutions Corp.'s Mobile Swipe solution to retail merchants through its sales agents. Semtek's card readers connect through wireless handheld devices, such as PDAs and mobile phones.

Semtek prices its solutions to enable organizations of all sizes to accept payments from remote locations.

Wincor Nixdorf to Supply POS Software to ChevronTexaco

Through a global agreement, Wincor Nixdorf Inc. will supply POS software to ChevronTexaco Corp.'s branded service stations.

ChevronTexaco purchased an enterprise license agreement for the NAMOS Compact software, Wincor Nixdorf's software solution for service stations.

Heuristic Technologies Signs Debit Card Agreement

Heuristic Technologies Inc. signed a service and joint marketing agreement with Copeland, Burtnick & Associates Ltd., (CBA) an e-commerce technology and infrastructure company.

Heuristic will provide data processing services to CBA. The parties will jointly market the CashTech.Card, a MasterCard stored-value card distributed by Heuristic and issued by MetaBank. The agreement calls for CBA to distribute a minimum of 15,000 cards within 14 months of the agreement.

ECHO Provides POS Check Services to CTW Prepaid

Electronic Clearing House Inc. signed an agreement with CTW Prepaid LLC to provide Visa POS check services to CTW's customers. ECHO will provide CTW check processing services, including check verification, ACH processing, check return processing and collection.

TNS Inks Deal With First Data in Spain and Portugal

First Data appointed Transaction Network Services S.A. (TNS), the Spanish subsidiary of TNS Inc., its sole provider of dial-up connectivity in Spain. The three-year contract with First Data Iberica (FDI) will make FDI's payment processing services available at 18,000 privately owned POS terminals.

Leisure Link Chooses TransAct Printer

Leisure Link selected TransAct Technologies Inc.'s Epic950 to use as the exclusive thermal ticket printer in Leisure Link's products. Leisure Link is the United Kingdom's largest manager of public space gaming and entertainment machines.

Leisure Link expects an initial rollout of 8,000 new devices using TransAct's Epic950 printer to enter the United Kingdom market in 2005.

In other TransAct news, the company responded to allegations made by FutureLogic regarding TransAct's patent on technologies contained in the Epic 950 printer. TransAct stated that the technologies covered under the notice of allowance it received from the U.S. Patent and Trademark Office are different from technologies developed by FutureLogic.

Givex and MyThum Combine Talents

MyThum Interactive, a provider of mobile messaging solutions, and Givex Corp. launched the Mx-Coupon program to enable the delivery of coupons to mobile phones through text messaging.

The solution allows MyThum to deliver text messages with a Givex coupon number to mobile phone users as a component of permission-based marketing campaigns and loyalty programs.

Consumers show the messages at the POS, where merchants can redeem them by using the Givex gift card processing platform.

Hostway Offers PayPal

Hostway launched a new payment service for its e-commerce customers. By providing PayPal's online payment service, Hostway now allows e-commerce customers to process online transactions via their Hostway Merchant Manager stores without incurring set-up charges and monthly fees.

Hostway bases fees on the dollar amount and volume of transactions processed through PayPal.

Ingenico Selects Peppercoin

Peppercoin and Ingenico partnered to integrate Peppercoin's small payment service with Ingenico's Debitek payment systems. The solution lets consumers use cards for small payments in addition to cash, at locations such as vending machines.

Additionally, "closed" card networks such as college campuses, cruise ships and correctional institutions that employ Ingenico's Debitek MoneyClip solution will be able to accept consumers' existing debit and credit cards.

UBC Adds CHARGE ANYwhere to Program

United Bank Card Inc.'s (UBC) free terminal program enables UBC's ISO partners to offer a free NURIT 8320 credit card terminal, Ingenico eN Check check reader and Lipman E-Pad signature capture pad to their merchants.

UBC recently signed a $1.1 million deal with Comstar Interactive Corp. to add Comstar's CHARGE ANYwhere to the initiative.

CHARGE ANYwhere combines a card swipe device with a Web-based database and reporting system to give businesses a wireless solution to accept credit card payments.

TeleCash Reinforces Credit Card Data Security

TeleCash, a German payment processor, selected Ingrian DataSecure Platforms as an additional layer of security for the privacy and protection of credit card data.

With Ingrian, TeleCash adds capabilities for encrypting and securing data in applications and databases.

Q Comm Partners With Lipman

Q Comm International Inc. is developing its prepaid application to run on the Lipman NURIT 8320 multi-application POS terminal, for delivery of Q Comm's suite of prepaid products at retail points of purchase nationwide. The launch is scheduled for Q2 2005.

TransFirst Forms Partnership With Fundraising Technology Provider

TransFirst and SofTrek Corp., creator of PledgeMaker fundraising software, formed a strategic partnership to deliver a front- and back-end solution to help fundraising organizations achieve a streamlined and cost-efficient donation process.

With this solution, fundraising organizations also have the ability to establish recurring billing for repeat donations.

ACQUISITIONS

MoneyGram Acquires ACH Commerce

MoneyGram International Inc. will acquire ACH Commerce LLC, an ACH payment processor based in Tennessee. ACH Commerce will remain in Tennessee and staff will become employees of MoneyGram's Global Funds Transfer Group.

With the addition of ACH Commerce's services, MoneyGram will provide consumers and billers with payment choices, which will complete the bill payment cycle from payment origination to reporting and reconciliation.

These services will initially focus on one-time ACH, recurring ACH, and credit and debit card transactions via phone. Expansion to additional payment channels will take place in the coming months.

Euronet Acquires Three Prepaid Companies

Euronet Worldwide Inc. recently completed acquisitions of three new prepaid companies; one in Spain, the United Kingdom and the United States.

Euronet completed the acquisition of 100% of the assets of Telerecarga S.A., a Spanish prepaid wireless top-up company.

Euronet also increased its ownership of United Kingdom-based ATX Software Ltd., from 10% to 51%. In addition to the two European acquisitions, Euronet acquired 100% of the assets of Dynamic Telecom Inc., a prepaid service provider in the United States.

Cardtronics Acquires NYC ATM Portfolio

Cardtronics LP recently acquired an ATM portfolio from BAS Communications Inc., a N.Y.-based ISO. The transaction includes more than 450 ATMs in the New York City area.

The majority of the machines are located in non-chain, independent grocery stores primarily in Brooklyn, the Bronx, upper Manhattan and Queens and on Staten Island. Approximately 97% of the ATMs are turnkeys; the remainder are merchant-owned/managed.

Harland Completes Intrieve Acquisition

Harland Financial Solutions Inc. completed the acquisition of Intrieve Inc. for $78 million. With the addition of Intrieve's client base, Harland Financial Solutions' Core Systems Group now serves more than 1,200 financial institutions.

Harland named Beth Basil the Senior Vice President and General Manager of the Intrieve group. She will report directly to Raju Shivdasani, President of Harland Financial Solutions' Core Systems Group.

APPOINTMENTS

RBS Lynk Hires Two Executives

RBS Lynk hired two executives to lead its Petroleum National Sales division. The company appointed Gary Grant, a former Vice President and General Manager for VeriFone Inc., Vice President of National Sales for the Petroleum channel.

RBS Lynk named Ed Davis, formerly with Hypercom Corp. and TNS, Director of National Accounts for its Petroleum division. Davis will report to Grant.

JRs POS Depot Appoints Two

JRs POS Depot recently appointed Rick Pityer President and CEO, and named Riad Alakkam Executive Vice President of Sales.

Bottom Lines

• Nike Inc. made public a list of 700 of its worldwide manufacturing plants to stave off criticism of the working conditions for manufacturing employees around the world.
• National gasoline prices rose an average of $0.19 over the course of the three-week period ending April 9.
• Right now the retailing industry (especially department stores) is in a frenzy, "The New York Times" reported. Many big names, including Neiman Marcus, Saks and Bill Blass are for sale. Some of the reasons: billions in private equity and venture capital funds that must be spent or returned to investors and increasing interest rates.
• Costly promotions on DVD players and analog TVs, along with aggressive markdowns at year-end sales caused Circuit City's profits to be lower than expected for the last fiscal quarter.