NEWS

Class action attorneys cut settlement checks in Wal-Mart case

The Constantine Cannon law firm, lead counsel for merchants in the Visa Check/MasterMoney antitrust case, mailed the third round of checks to class members.

These are for overcharges on Visa U.S.A. and MasterCard International (now Worldwide) signature debit and credit card transactions dated October 1992 to July 2003. They include claims filed and approved by March 10, 2006, that did not involve consolidation of multiple store locations, as well as claims requiring consolidation that were filed and approved by Oct. 20, 2006. This distribution totals $300 million.

The first distribution was made in December 2005 and the second in June 2006, representing more than $650 million in claim payments.

Lloyd Constantine expects the remaining claim forms involving signature debit and credit card overcharges to be approved and ready for payment before the end of 2007. The firm plans to make payments in 2007 for online PIN debit overcharges.

The 128,000 checks just mailed include 29,400 worth $1,000 or more and 40 valued at $1 million or greater. The settlement included an injunction valued by the court at $25 billion to $87 billion to U.S. merchants and consumers. In approving the settlement, the U.S. District Court and the Court of Appeals for the Second Circuit called it "the largest antitrust settlement in history" and stated it "produced significant and lasting benefits for America's merchants and consumers," according to Constantine Cannon.

Details are available by phone at 888-641-4437 or on the Web at www.inrevisacheckmastermoneyantitrustlitigation.com

Visa issues security alert

Visa issued an alert in late December 2006 regarding the following emerging social-engineering schemes criminals are using to gain sensitive cardholder data:

· Phone scheme targeting CVV2: Unlike phishing e-mails, criminals use a phone or voice over Internet protocol (VoIP) device to obtain Cardholder Verification Value 2 (CVV2) information. This is sometimes referred to as vishing (voice phishing). VoIP allows spoofing of the Caller ID, making the phone call appear to come from a legitimate source.

The scheme usually relies on using information already known to the criminals to achieve an initial level of comfort in the conversation. Then a fraud scenario is presented to encourage the cardholder to reveal sensitive data.

· Combined Threat: DDoS and Phishing: To improve the effectiveness of phishing schemes, criminals have recently combined distributed denial of service attacks (DDoS) with phishing e-mails.

Cardholders from a single bank are targeted with a bogus phishing e-mail advising them of an unexpected network outage, while the criminal simultaneously subjects the financial institution to a DDoS attack.

The attack creates an actual network outage to make the phishing e-mail appear legitimate. The e-mail contains an alternate link redirecting the cardholder to a Web page that replicates the look and feel of the legitimate Web site.

Feds shut down processor to telemarketers

A federal court has shut down a payment processing operation that allegedly helped telemarketers fraudulently take millions of dollars from consumers' bank accounts.

Alleging violations of the Federal Trade Commission Act and the Telemarketing Sales Rule (TSR), the FTC complaint names Ira Rubin of Tampa, Fla., and the businesses he controls: Global Marketing Group Inc., Global Business Solutions LLC, Globalpay Inc., Synergy Consulting Services LLC, and First Processing Corp.

According to the complaint, since January 2003 the operation allegedly induced consumers to allow an electronic debit of several hundred dollars from their bank accounts in exchange for unsecured credit cards that consumers never received. At best, they received a "benefits package."

The complaint alleges that the processing companies debited funds, deducted processing fees and forwarded the balance of the proceeds to the telemarketers. The court order prohibits the defendants from processing payments for telemarketers and violating the TSR. The order also freezes the defendants' assets.

Report advocates merging wire transfer and ACH systems

A new report from Aite Group, "Converging Wire Transfer and Automated Clearing House (ACH) to Revolutionize U.S. Electronic Wholesale Payments," advocates replacing the existing ACH and wire transfer systems with a single electronic wholesale payment system. Converging the two could provide significant cost savings and revenue-generating opportunities.

ANNOUNCEMENTS

Number of AAPs at all-time high

NACHA - The Electronic Payments Association accredited or re-accredited 668 payments industry professionals in 2006 under the Accredited ACH Professional (AAP) Program. The number of AAPs nationwide is at an all-time high of 3,036, having increased by 85% since 1999.

MasterCard to discuss 2006 financial results

MasterCard Inc. will release its full-year 2006 and fourth-quarter financial results Feb. 9, 2007. A conference call will begin at 9 a.m. EST. The call can be accessed through the company's Web site at www.mastercard.com

Canada's Interac sets new record

Interac Direct Payment, Canada's national debit service, set a new record with 31.2 million transactions processed on the two busiest shopping days of the year, Dec. 22 and 23, 2006. This marks the largest two-day total in IDP's history, eclipsing last year's record by 1 million transactions.

CO-OP sets single-day record

CO-OP Financial Services, which operates CO-OP Network, established a single-day processing record on Dec. 23, with over 5 million transactions. The company's previous milestone was 4.5 million transactions on Dec. 24, 2005.

Q Comm delists from the AMEX

Q Comm International Inc. withdrew its listing from the American Stock Exchange, in preparation for deregistration as a public company.

The company expects deregistration with the Securities and Exchange Commission to be effective no later than April 2, 2007.

Credit Union 24 converts to Fifth Third Processing

ATM and POS network Credit Union 24 has completed its switch-processor conversion from Fiserv EFT to Fifth Third Processing Solutions.

PARTNERSHIPS

Cards coming to vending machines, toll roads

Cadbury Schweppes Americas Beverages is working with MasterCard and USA Technologies Inc. to equip 1,000 vending machines with e-Port cashless transaction solutions to accept credit card payments. CSAB's machines (selling Dr Pepper, 7Up, Snapple and Canada Dry) in Dallas, New York and Chicago will be enabled to accept major credit cards, including MasterCard's PayPass.

Also, MasterCard, USA Technologies and Paywerks Inc. are conducting a PayPass trial at exit lanes and service plazas on the Ohio Turnpike, reportedly the first toll road in the country to accept payment cards for self-service toll transactions.

Europcar picks signature capture from Ingenico

Ingenico will supply Europcar International with the i6770 electronic signature-capture solution for paper-free car-rental contracts in Europe. The terminal will allow customers to display and validate contractual data using a digitized signature on the color touch-screen terminal.

14K+ service stations to accept Fleet One cards

Fleet One LLC announced agreements with Sunoco Inc. and Chevron Products Co. The Fleet One Local fuel card will be accepted at Chevron's 10,000 participating Chevron- and Texaco-branded retail gas stations across the country, as well as Sunoco's 4,600 gas stations and APlus convenience stores along the East Coast.

Hospitality service provider chooses DTI

TEK POS, a provider to the hospitality industry, chose Direct Technology Innovations Inc. as a preferred vendor.

Green Dot sells Discover-branded prepaid card

Green Dot Corp., a provider of retailer-sold prepaid debit cards and operator of Green Dot Financial Network, is offering a reloadable prepaid card on the Discover Network.

Internet retailer offers alternative-payment option

Alternative-payment provider MODASolutions Corp. announced that Internet computer retailer TigerDirect Inc., a subsidiary of Systemax Inc., offers its customers the Secure-eBill payment option, allowing them to pay for purchases from their online bank accounts.

Multicurrency support for gateway clients, London taxi pilot launched

USA ePay certified its products to support global multicurrency payment processor Planet Payment. The processor's multicurrency pricing service is now available to USA ePay's network of merchants and resellers.

Also, Planet Payment and JourneyPay Ltd., a transport-payments specialist, began a four week pilot of a mobile payment solution for the taxi industry, enabling drivers in London to accept credit cards using their current mobile phones. The companies are also exploring opportunities in North America.

First Premier re-ups with FDC

First Premier Bank/Premier Bankcard has renewed its agreement with First Data Corp. for credit card processing services, which will include statement production and mailing and plastics personalization for the bank's 4.3 million cardholders.

ACQUISITIONS

Carreker acquired

CheckFree Corp. agreed to purchase Carreker Corp., expanding its software business and consulting expertise. CheckFree will acquire all outstanding shares of Carreker for approximately $206 million.

ACR and chief join ePayments

EPayments Corp. announced the acquisition of Automated Check Recovery LLC, adding a substantial number of educational services accounts to ePayments' electronic check collection business. ACR Managing Partner Sean Ros joins the firm as National Sales Manager of Educational Financial Services.

Processor acquires bank portfolio

Solveras Payment Systems acquired a bank merchant portfolio consisting primarily of independent retailers and distributors with geographic concentration in the Southwestern United States. The acquisitionadds approximately $40 million in annual transaction volume to Solveras' merchant processing business.

APPOINTMENTS

Devitt named President, Point and Pay

Industry veteran George E. Devitt, most recently Vice President and Chief Marketing Officer for WAY Systems and previously an executive for Hypercom Corp. and VeriFone, has joined Point and Pay Inc. as President.

The company is a provider of convenience payment services to government agencies and utilities.

Cannon named advisor to MyFraudDog

Thomas Cannon, Chief Executive Officer of Whitehall Advisors and Pay Commerce Inc., has been named to the advisory board of directors of Instant Credit Card Security Systems Inc., doing business as MyFraudDog.

GET appoints Senior VP to board

Global Electronic Technology Inc. appointed Michael C. Lohmueller to the company's board of directors. Lohmueller recently became GET's Senior Vice President.

VeriFone hires three veterans, Bergeron extends contract

VeriFone added three executives to its Integrated Systems and Retail Systems management teams. Walter Allen, formerly General Manager of Hypercom's multilane retail business, joins as Director of Business Development.

Marty Widmann, who was responsible for solution engineering and sales support at Hypercom, assumes the same role at VeriFone. Joe Biondi, the leading multilane retail salesperson for Hypercom, joins VeriFone as Account Executive, responsible for several tier-one retail accounts and strategic partners.

Douglas G. Bergeron, VeriFone's Chairman and CEO, extended his employment contract through Oct. 31, 2009. He has led the company since July 2001.

WRG restructures management team

WRG Services Inc. announced a restructuring of its management team that began with previously announced appointments of a director of marketing, director of sales and total quality manager.

Greg Adkins, formerly of Diebold Inc., was promoted to Director of Operations and Sales. John Parkanzky, also of Diebold, recently joined WRG as Sales Coordinator. Peter Miller, formerly of Henkel of America, was named IT Systems Administrator.

Damian Sherwood was promoted to Production Manager. And Jason Kuhn, former Vice President of Operations, was promoted to Vice President of WRG Services.

BOTTOM LINES

• According to a report by Aberdeen Group entitled "Retail Contactless Payment Systems: Improving Customer Retention and Loyalty," 58% of survey respondents across multiple retail classifications plan to implement contactless payment solutions within the next 18 to 24 months.

• Quick-service restaurants are projected to register sales of $150.1 billion in 2007, a gain of 5% over 2006. According to the National Restaurant Association, 48% of adults say they eat in their car less frequently than they did two years ago.

• Outstanding consumer revolving credit, which includes credit card debt, rose an estimated 11.9% in November 2006, to $872.6 billion, the Federal Reserve reported.