Electronic Payments Week articles from August 2005

Electronic Payments Week archives from August 2005

Fiserv May Have Found Missing Piece Of Its Puzzle.(acquisition of BillMatrix Corp.)
August 2, 2005... July may go down as the month Fiserv Inc. turned the tables on its critics on Wall Street, three of whom recently downgraded its stock and argued that the company had pretty well mopped up its organic growth and would likely turn in a...

Merchant Discount Fee Lawsuit Thrown Out On West Coast.
August 2, 2005... A class action lawsuit challenging merchant discount rates, known as the Kendall suit, was thrown out of San Francisco federal court last week. Attorneys for the plaintiffs say they will appeal, based on what they allege was the ruling...

Dissidents Join AirNet Board.(AirNet Systems Inc.)
August 2, 2005... AirNet Systems Inc., under fire by various groups of dissident shareholders since January, added representatives of two of the dissident groups to its board on July 26 (see Electronic Payments Week, Jan. 25, April 12, May 3, May 10). The...

Yet More Lawsuits Against Credit Cards.(MasterCard International Inc., Visa U.S.A. Inc.)
August 2, 2005... Two new class action lawsuits were filed against MasterCard and Visa USA in Federal court in San Francisco on July 19 and 22, challenging the No Surcharge rule, which forbids merchants to add the discount fee to prices paid by consumers. ...

Bemusement of the Week: OCC Is Phishing Victim.(Office of the Comptroller of the Currency)(Brief Article)
August 2, 2005... Two weeks ago, the Office of the Comptroller of the Currency (OCC) issued an alert saying it's been the victim of a phishing expedition. Apparently somebody has been circulating fraudulent emails worldwide, and for some time, about the...

Corrections.
August 2, 2005... Last week Electronic Payments Week referred to Clifford Chance US LLP as Clifford Chance Rogers & Wells. The company has dropped the last two names from its official title. One of those names referred to William Rogers, formerly Richard...

Who's Who.
August 2, 2005... * Nancy Langer was hired as president of payment solutions at Wausau Financial Systems, a new post and company unit. Langer was previously president of Billeo, in which she retains her equity interest. Wausau was bought earlier this year by...

The Checklist.
August 2, 2005... American Express Co. [AXP] Amex reported that in the previous quarter, net income was $1.013 billion, or $0.82 per share, on revenues of $8 billion, compared with net income of $876 million, or $0.69 per share, on revenues of $7.23...

Stored Value Cards Have Bright Future Once Kinks Are Ironed Out.
August 2, 2005... Stored value cards have the potential to replace cash in many ways, but several obstacles need be removed first, says Ariana-Michele Moore, a senior analyst at Celent Communications. "Credit and debit cards are universally accepted as a...

If Merchants Win Credit Card Wars, What Happens Next?
August 9, 2005... The river of federal antitrust suits against the credit card associations has turned into a waterfall, with Kroger Inc. and its six allies filing an action against MasterCard Inc. and MasterCard International Inc. in New York, and two more...

HSBC Finance Fills Gap By Buying Metric Cos.
August 9, 2005... HSBC Finance Corp. bought Metris Cos. Inc. last week for $1.594 billion-- $15 per share, or 1.6 times book value and about a 9 percent premium to receivables. HSBC is the credit card unit of $1.467 trillion HSBC Group, formerly known as Hong...

AirNet Delisted From NYSE.(AirNet Systems Inc., New York Stock Exchange )(Brief Article)
August 9, 2005... As we previously reported as likely, AirNet Systems Inc. has received official notice from the New York Stock Exchange that it was being delisted as of July 29 because its shareholder equity and market capitalization had fallen below $75...

Barclays' Results Fall From Juniper Acquisition.(Juniper Bank)
August 9, 2005... John Varely, Barclays PLC's chief executive, said in a recent analysts' conference call that his Barclaycard credit card profits took a 17 percent hit in this year's first half, thanks to rising bad debts, but also because of its $292...

Antitrust Lawsuit Against Diebold Shelved.(Financial and Security Product Association)(Brief Article)
August 9, 2005... Diebold Inc. won a dismissal last week of the federal antitrust lawsuit brought against it by the Financial and Security Product Assoc. (FSPA). The FSPA, a trade group for ATM mechanics, had sued Diebold last year (see Electronic...

Popular Inc. Buying E-Loan.
August 9, 2005... A chapter of online commerce history came to an end last week when $46 billion Popular Inc., parent of Puerto Rico's Banco Popular, announced it was buying E-Loan, the well established Internet lending site, for $300 million, and that as a...

Congress Takes Up Data Security Bill.(Brief Article)
August 9, 2005... The Senate Commerce Commit-tee on July 28 passed one of several data security bills now before Congress. All of the measures would require businesses to better protect credit card and other sensitive data, limit the trade in customer data,...

Who's Who.(executive movement)(Brief Article)
August 9, 2005... * Leila S. Carr was named executive vice president of retail banking at Synovus. She was promoted to retail banking executive earlier this year. (Contact: Synovus, 706-641-3781) * Donnalee A. DeMaio has been named president of MetLife...

The Checklist.(Transaction processing services)
August 9, 2005... Advanta Corp. [ADVNA, ADVNB] This monoline credit card bank with two classes of common stock says that for the most recent quarter, net income was $18.3 million, or $0.64 per share, on revenue of $94.4 million, for both share classes,...

Maximize Volume By Maximizing Payments Options.
August 9, 2005... Online sales grew 24 percent last year and now total 5 percent of all retail sales, or $360 billion, says Elizabeth Robertson, a senior analyst at TowerGroup. But for every $1 of online sales, shoppers leave $5 in their shopping carts....

First Data Folds Encourus But M-Payments Won't Die.
August 16, 2005... First Data Corp. closed down its Encourus mobile payments unit and wrote off its undisclosed investment last week, taking a $0.04 charge against its third-quarter earnings, $0.03 of which will be non-cash. In March, it sold much of Encourus'...

PCI Data Security Problems Anything But Isolated.(Payment Card Industry )
August 16, 2005... The credit-card business has taken great pains to paint the CardSystems Inc. security breach as an isolated, if regrettable, incident with no implications for card associations' overall data security programs. But that's all nonsense,...

Yet Another Credit-Card Class-Action Suit.
August 16, 2005... Fifteen class-action lawyers from across the country filed a class-action suit against many of the nation's biggest credit- card banks, alleging it illegally conspired to force its customers to submit loan and fee disputes to arbitration...

Wells Fargo Settles Card-Fees Suit.(Brief Article)
August 16, 2005... Recent reports say Wells Fargo & Co. is paying around $34 million to settle a lawsuit alleging it improperly levied credit-card processing charges on around 96,000 California merchants during a four-year period. The settlement amounts to a...

U.K. Checks Dead In 20 Years?(Brief Article)
August 16, 2005... The U.K.'s Halifax Bank believes paper checks will disappear in that country within 20 years, replaced by electronic banking direct-debit operations. Halifax is part of the Bank of Scotland. According to bank research, Britons are writing...

Heartland Payments Files For IPO.(initial public offering)(Brief Article)
August 16, 2005... Heartland Payment Systems, Inc., a Top 10 merchant acquirer, is selling 6.75 million shares in an initial public offering (IPO) at $18 per share. According to its 10-Q, Heartland had 94,000 active merchants as of March 31 along with...

NY Passes Security Breach Law.(New York)(Brief Article)
August 16, 2005... The New York State Assembly last week passed a security breach law that says companies and government agencies must notify customers if their systems have been hacked or if customers' personal information has been stolen. All...

Electronic Bill Payments Take Off.(checks get replaced )(Brief Article)
August 16, 2005... According to a recent paper by James C. McGrath of the Federal Reserve Bank of Philadelphia, electronic bill payments are replacing checks at an accelerating pace. (Editor's note: Those interested in the paper can find it at the bank's Web...

Who's Who.(appointments)(Brief Article)
August 16, 2005... * Michael Kosek was hired by Bottomline Technologies Inc. as vice president and general manager. Kosek previously was general manager for Microsoft's New England division. (Contact: Bottomline Technologies Inc., 603- 501-5219) * Carl F....

Princeton eCom Inc.: The Future Of Electronic Bill Payment.
August 16, 2005... Issues are approaching in electronic bill payments that banks and billers will need to resolve together, says Ron Averett, Princeton eCom Inc.'s president and CEO. The expectations of consumers, who want maximum choices at every step of the...

New To Market.
August 16, 2005... * Bank of America says it's rolled out its SiteKey authentication system to online customers in Texas, Arizona, Nevada, Oregon and New Mexico. SiteKey is now available in 19 states. (Contact: Bank of America, 415-622-6397) * BioPay LLC...

The Checklist.(company sales and earnings)
August 16, 2005... AirNet Systems Inc. [ANS] AirNet, which has been under pressure from investment groups to sell itself for what they called sub-par performance, reported that, for the previous quarter, net income was $2.1 million, or $0.20 per share, on...

iPayment On The Block, Internal Drama Plays Out.
August 23, 2005... iPayment Inc. has been put up for sale by its own board, but that's probably the least dramatic piece of the story surrounding this merchant acquirer. "It's a soap opera; it is drama," says Colin W. Gillis, an equities analyst with...

Bisys: In Better Shape Than People Think.
August 23, 2005... Bisys Group Inc. has had its share of serious problems lately, but they seem unrelated to its banking systems unit. The company has failed to report its earnings to the Securities and Exchange Commission (SEC) for the past two quarters,...

Arab Bank Signs Consent Order With FinCEN, OCC.
August 23, 2005... Arab Bank agreed to pay a civil penalty of $24 million to the Financial Crimes Enforcement Network (FinCEN) and the Office of the Comptroller of the Currency (OCC) as part of the settlement of an OCC cease-and-desist order and to, as its...

Discover Card Stays At Morgan Stanley.
August 23, 2005... Morgan Stanley & Co. said last week it was going to keep Discover Financial Services after all, despite an announcement earlier this year that it was considering spinning off the operation. At the time, that move was seen in some circles...

SVPCO Launches Image-Based Check Clearing.(The Clearing House Payments Co. LLC)(Brief Article)
August 23, 2005... SVPCO, the check imaging unit of The Clearing House Payments Co. LLC, says it's now able to automatically settle checks from their images alone--no paper checks need apply. The system works because every bank using it operates under the same...

WAMU-Providian Skeptics Raise Their Hands.
August 23, 2005... Despite their best efforts, the folks at Providian Financial Corp. are having some trouble convincing their shareholders they're getting their money's worth by selling itself to Washington Mutual Inc. (WAMU) for $6.45 billion, or $18.71 per...

Correction.(Correction Notice)
August 23, 2005... In our Aug. 16 issue, we said in this space that Heartland Payment Systems' most recent 10-Q says it "collects and stores sensitive data about its merchant customers and bank cardholders" and that, as a result, it seemed to have been in...

Who's Who.(Scott Cruickshank joins the board of CyberSource Corp)(Janette Koon and Paul St. Pierre joined the board of Heartland Bancshares Inc. and its Heartland Community Bank unit)(Brief Article)
August 23, 2005... * Scott Cruickshank joined the board of CyberSource Corp. Cruickshank is president and COO of Qsent, a contact data- authentication company. (Contact: CyberSource Corp., 650-965-6042) * Janette Koon and Paul St. Pierre joined the board of...

Cyber Crime: Black-Hat Hacker Problems Worsen.
August 23, 2005... Phishing, pharming, keylogging viruses, worms and the rest of the hacker toolkit may be the stuff of cocktail chatter by now, but that's no reason for complacency, says Paul Stamp, a Forrester Research computer security analyst. In fact,...

New to Market.(online payment industry information)
August 23, 2005... * Axalto says JCB, the Japanese payments-card company, is using its Dynamic Data Authentication-enabled smart cards in Japan. The cards are based on the EMV (Europay-MasterCard-Visa) international standard, and they replace JCB's...

The Checklist.(electronic payment industry information)
August 23, 2005... Cash Systems Inc. [CKN] This provider of cash access solutions for gambling facilities says that in the second quarter of 2005, it had a net loss of ($1.7 million), or ($0.10) per share, on revenue of $16 million, compared with net...

Canada rewrites its financial services regulations.
August 30, 2005... Canada is midway through revamping its financial services regulations--it happens every five years--and what will emerge is likely to have an effect on the financial climate in the U.S. Among the areas likely to change: Check imaging;...

Micropayments Still Trying To Establish Itself.
August 30, 2005... In a world in which virtually all payments are going electronic, one sector resists: Payments for less than $5, also called micropayments. That space is currently occupied in the U.S. by Peppercoin Inc., a private company founded in 2001...

Ham-fisted, Inept And Foolish: You Call This A Policy?(payment cards)
August 30, 2005... This newsletter has nothing against the payment card associations: Payment cards are money, they're central to the American economy, and we applaud the very smart people who created them and make them work. All the more reason, then, that...

AmSouth gets Wells Letter.(AmSouth Bancorp. likely to be subject of civil action)(Brief Article)
August 30, 2005... About a year after it paid the Feds a total of $50 million in various fees for a long list of mistakes, errors and outright misdeeds, AmSouth Bancorp Inc. received a so-called Wells Letter from the Securities and Exchange Commission (SEC),...

iPayment update.(market share of iPayment Inc.)(Peter Chung resigns)(acquires First USA Bank)(Brief Article)
August 30, 2005... On August 19 iPayment Inc., embroiled in a dramatic internal war (Electronic Payments Week, Aug. 23) was notified by Summit Partners and Randolph Street Partners that they elected to convert about $15 million in convertible subordinated...

Chase, marketing, and good customer service.(Sami Habbas receives credit card solicitation from J.P. Morgan Chase & Co. addressed to "Mr. Palestinian Bomber")(Brief Article)
August 30, 2005... Earlier this month Mr. Sami Habbas, a grocery store manager from Corona, Calif., and a naturalized U.S. citizen, opened his mailbox and found a credit card solicitation from J.P. Morgan Chase & Co. addressed to "Mr. Palestinian Bomber." ...

Who's Who.(John Byrne joins BankAmerica Corp.)(Steven J. Freiberg named as co- head of Citi's Global Consumer Group)(Bruce Keenen named as the national client management leader at KeyBank N.A.)
August 30, 2005... * John Byrne is joining Bank of America as Anti-Money Laundering Strategy Executive. Byrne, long-time director of the American Banker's Association's Center for Regulatory Compliance, is one of the industry's most influential figures in the...

Online bill payment connected to check decline.(according to research by James C. McGrath of the Federal Reserve Bank of Philadelphia's Payment Cards Cent)
August 30, 2005... James C. McGrath, a researcher at the Federal Reserve Bank of Philadelphia's Payment Cards Center, has uncovered a surprising--but on reflection, perfectly reasonable--phenomenon: The more people pay their bills online, the fewer checks they...

New to Market.(deal between American Express and Bombardier Inc)(deal between Bottomline Technologies and Cheshire County Council)(CitiBank enhances its services)
August 30, 2005... * American Express says it has a new deal in its membership rewards program that lets card members earn points for private jet travel through Bombardier Inc.'s Skyjet and Flexjet private jet programs. As part of a special introductory offer,...

The Checklist.(ACE Cash Express Inc's revenue)(Doral Financial Corp.'s documents subpoenaed)(Federal Home Loan Bank of Seattle reviews accounting issues)
August 30, 2005... ACE Cash Express, Inc. [AACE] ACE reports that in fiscal 2005, it had net income of $27.4 million, or $1.98 per share, on revenue of $268.6 million, compared to net income of $17.1 million and $1.49 per share, on revenue of $246.7...