NEWS

Updates to PCI coming this summer?

Over the past several months, a number of publications have reported that changes to the Payment Card Industry (PCI) Data Security Standard (DSS) could be expected this summer, and the changes may include more flexible requirements for some merchants. Visa U.S.A. responded to our inquiries about this issue by releasing the following statement on July 12:

"Visa along with other payment brands including American Express, Discover, JCB and MasterCard [is] currently considering potential recommended enhancements to the PCI Data Security Standard based upon feedback provided by other industry stakeholders. A date for release of a revised standard has not yet been determined. "However, there are no plans to make any of the PCI DSS requirements less robust. PCI DSS will continue to require all entities that store, process or transmit cardholder data to render sensitive cardholder data unreadable anywhere it is stored (including data on portable media, in logs, and data received from or stored by wireless networks).

"Any future enhancements to the standard are intended to foster broad compliance without compromising the underlying security requirements of the current standard."

Data security concerns small business?

Data security concerns are penetrating small businesses. More than 64% have taken action within the last 12 months to better protect customer financial information, according to a new survey from Visa and the U.S. Chamber of Commerce.

The survey, however, also found that small retailers spend more resources preventing the theft of products and cash from their stores (34%) than securing customer data (20%). Additionally, 53% of retailers think their customers rarely, if at all, worry about their personal information.

NACHA publishes training materials

NACHA - The Electronic Payments Association is making available education and training materials for businesses and financial institutions to implement NACHA's new rules on identifying business checks ineligible for conversion.

For materials specific to businesses, visit http://businesscheck.electronicpayments.org For materials specific to financial institutions, visit http://businesscheck-fi.electronicpayments.org

ANNOUNCEMENTS

ACH Direct launches newsletter

ACH Direct Inc. published the first issue of its newsletter, "ACH Directions," which will be posted quarterly on its Web site. The first issue contains information about electronic payment trends and regulations and ACH Direct-specific news and products.

CO-OP pledges $100K

CO-OP Financial Services donated $100,000 to Biz Kid$, a half-hour personal finance program supported by Junior Achievement. Biz Kid$, funded exclusively by the credit union movement and set to begin airing in January 2007, is a joint project of Junior Achievement and the former producers of the "Bill Nye the Science Guy" program.

Digital Dining achieves compliance

Digital Dining's software suite achieved compliance with the Payment Application Best Practices (PABP) benchmark, developed by Visa. AmbironTrustWave submitted a compliance report, which Visa validated.

EMG continues expansion

Eliot Management Group will open additional sales facilities in Ogden, Utah, and Anchorage, Alaska, by the end of the year. Each branch office will provide the city and surrounding area with sales, service and support for EMG's credit card and electronic payment processing services.

Fast Transact works with nonprofits

Fast Transact Inc. announced its Sustaining Donor Solutions program for nonprofits. The modular system delivers integrated services for organizations that accept one-time or recurring donations online by credit card or electronic check.

Hypercom complaint dismissed

The U.S. District Court for the District of Arizona "dismissed with prejudice" (meaning, the complaint can never be filed again) the Second Consolidated Amended Class Action Complaint filed against Hypercom Corp. and John W. Smolak, the company's former Chief Financial Officer.

The Amended Complaint related to Hypercom's restatement of its financial statements for the first three quarters of 2004 because certain leases generated by Hypercom's United Kingdom subsidiary were incorrectly accounted for as sales-type leases, rather than operating leases.

NetBank offers free shipping

NetBank Payment Systems Inc. will provide free freight on all Triton equipment to Value Added Partners for deals submitted with a processing agreement between July 1 and July 31, 2006.

Pipeline Data enters $37 million agreement

Pipeline Data Inc. reached an agreement with several institutional investors to purchase $37 million of convertible notes and warrants. The notes, which mature four years from the date of issuance, can be converted into Pipeline common stock \at the conversion price of $1.30 per share. Proceeds from the transaction are earmarked to refinance $17 million of short-term indebtedness and to fund acquisitions.

Shift4's drivers validated

Shift4 Corp. was added to Visa's List of Validated Payment Applications for the custom payment drivers it developed to secure third-party POS systems. These drivers enable legacy POS systems to conform to Visa's PABP.

PARTNERSHIPS

AmbironTrustWave partners with Fifth Third

AmbironTrustWave formed an agreement with Fifth Third Processing Solutions to provide PCI compliance technology and services to Fifth Third's merchants. Fifth Third's merchants will have access to the services required for validating PCI compliance.

BofA launches AmEx card

Bank of America Corp. announced the new Bank of America American Express Rewards Card, the first BofA credit card to be accepted for payment on AmEx's global network.

Catuity signs Equity; Equity partners with Smart Payment Solutions

Catuity Inc. signed a three-year reseller agreement with Equity Commerce LP to provide terminal-based programs to Equity Commerce's sales agents. Catuity will support loyalty and gift card programs on the Lipman 8320 and Hypercom T-4100 POS terminals and provide support services including program set up, card design and production. In addition, Catuity has agreed to be a reseller of credit and debit card processing services from Equity Commerce.

In related news, Equity Commerce and Smart Payment Solutions Inc. formed a strategic partnership with dance management software company CompuDance. The companies will work to provide CompuDance clients payment processing solutions that can be accessed directly through the CompuDance software program.

Element certifies Hypercom

Element Payment Services Class A certified Hypercom's Optimum T4100 terminal. Element will immediately begin marketing the device to its merchant base and provide full support for the terminal.

PayGen signs contract with FAC

PayGen International signed a contract with Bermuda-based First Atlantic Commerce Ltd. PayGen will provide additional multicurrency merchant accounts, e-commerce payment processing and PIN-based alternative payment solutions in Europe and the Latin American Caribbean Region, in conjunction with First Atlantic.

First Data renews agreement with LaSalle Bank

First Data Corp. renewed its agreement to provide STAR Network access and signature debit processing for its more than 1 million cardholders of LaSalle Bank Corp. The agreement names STAR as LaSalle Bank's primary ATM network in the United States.

Zions Bank and Pay By Touch partner

Zions First National Bank and Pay By Touch introduced biometric check-cashing to 12 locations throughout Utah and Idaho. The service, Zions Express powered by Pay By Touch, uses a finger scan to identify customers when they cash a government or payroll check.

ACQUISITIONS

MoneyPass and Fastbank Free merge

Elan Financial Services and Genpass completed the merger of the MoneyPass and Fastbank Free surcharge-free ATM networks. The new network, which retains the MoneyPass name, provides more than 10,000 ATMs in all 48 continental states. The new company ranks as the nation's third largest surcharge-free ATM network, according to Elan.

Ingenico SA and Moneyline SA plan merger

The boards of directors of Ingenico SA and Moneyline SA approved a merger of the two companies, which are both based in France. The proposed exchange ratio is 2.08 Ingenico shares for one Moneyline share.

Pipeline Data to acquire Paynet Systems

Pipeline Data entered into an agreement to acquire Paynet Systems Inc. Pipeline expects the acquisition to add 6,500 merchant accounts to its portfolio, resulting in approximately $200,000 in additional monthly cash flow. It is also expected to generate 400 new merchant applications monthly. The purchase price is $9.5 million in cash and $1 million in Pipeline stock.

APPOINTMENTS

First Annapolis promotes Martien

Frank Martien was promoted to Partner of First Annapolis Consulting. Since joining First Annapolis in 1996, Martien was instrumental in the growth of the firm's card-issuing practice. Martien has led and will continue to lead the firm's commercial payments practice area.

WAY Systems strengthens management

Bruce R. Shirey was named Vice President, Global Services for WAY Systems Inc. Most recently with First Data, Shirey brings 10 years of merchant acquiring and product development experience for the retail merchant sector, including wireless mobile payments, Internet protocol-enabled quick service restaurants and petroleum markets.

The company also named Ben Pumphrey as Vice President, Program Management. Pumphrey comes to WAY Systems with a background in program, project and product management from various companies including First Data, Cardservice International and LinkPoint International.

ETA names committee chair

The Electronic Transactions Association appointed J. David Siembieda Chairman of ETA's Membership Committee. Siembieda is the President and Chief Executive Officer of CrossCheck Inc. Siembieda will work to identify and solicit prospective ETA members and develop new programs and events. He was Vice Chairman of the Membership Committee last year.

BOTTOM LINES

• Revolving credit, which includes credit card debt, jumped 10% for the month of May, the Federal Reserve reported in July. Consumer credit rose 2.5%, to a total of $2.174 trillion. The interest rate average for all credit card accounts stood at 13.14%.

• Gas station receipts were up 20% in June over the same month in 2005, the Commerce Department reported July 14. Total retail and food sales were down 0.1% from May, but were 5.9% ahead of last year. Compared against last year, sales at nonstore retailers were up 12.3% and new auto sales were down 4%. Department store sales were off 2.2% from last year.

• Restaurants and bars added 14,000 jobs in June, the ninth consecutive monthly gain, the National Restaurant Association reported, based on data from the Bureau of Labor Statistics. The national economy picked up 121,000 jobs in June, the strongest gain in three months.