Electronic Payments Week articles from November 2005

Electronic Payments Week archives from November 2005

CLS Has Mostly Succeeded, But Still Has Growing To Do.(Continuous-Linked Settlements Bank )
November 1, 2005... When the Continuous-Linked Settlements Bank (CLS) was conceived in 1997, the idea was to eliminate default risk from the $1.2 trillion-a-day foreign exchange market. That market, among other things, makes international payments possible by...

Why CLS Was Created.(Continuous-Linked Settlements)(Brief Article)
November 1, 2005... Herstatt risk is named for the Herstatt Bank, which defaulted on its trades in 1974 and created the conditions--narrowly averted--of a global, house- of-cards default. At that time, the forex market was based on the idea that all parties...

Venture Capitalists Build The Future By Tracking Consumers.
November 1, 2005... In the popular imagination, venture capitalists, also known as VCs, are gusty entrepreneurs who decide people's destiny by finding a genius with the future in his or her hands. The reality? VCs are hard-working prospectors, trying to meet...

AirNet Finds Mystery Buyer.
November 1, 2005... AirNet Systems Inc., a target of unwanted attention from investment groups since its check courier business was impaired by Check 21, has signed a letter of intent to sell the company to a nationally recognized but unnamed private investment...

NACHA Proposes New International ACH Rules.
November 1, 2005... Requests from the federal Office of Foreign Asset Control (OFAC) have led NACHA to propose new ACH rules for international transactions, especially involving so-called specially designated nationals and blocked parties. NACHA's request for...

Wal-Mart's Utah ILC Application Running Into Flack.
November 1, 2005... Wal-Mart Stores Inc.'s application to open an Industrial Loan Corp. (ILC) in Utah is running into predictable opposition from community bankers who fear being crushed by the giant retailer and who reject the idea that the company is only...

Bill Payment By Payment Card Growing.
November 1, 2005... The trend away from checks for bill payment is growing, and an increasing fraction of those payments are going on payment cards, according to a recent study by MasterCard International. The study, released last week, says that Americans...

Puerto Rican Banks Slide.
November 1, 2005... Three of Puerto Rico's largest banks--Doral Financial Corp., First Bancorp, and R&G Financial Corp.--have seen much of their stock market value collapse in the wake of their failure to file their quarterly financial statements with the...

Who's Who.
November 1, 2005... * Ed Clark, William E. Bennett, Bharat Masrani, and Wilbur J. Prezzano have joined the board of TD Banknorth Inc. as class B directors. Masrani is chief risk officer and vice chair of the bank. (Contact: TD Banknorth Inc., 207- 761-8517) ...

The Checklist.
November 1, 2005... Advanta Corp. [ADVNB; ADVNA] Advanta, which has two classes of stock, says that in the previous quarter, consolidated net income was $3.9 million, or $0.13 per share, on revenue of $96.4 million, compared with net income of $10.6 million,...

Consumer Trust Is Highest For Financial Sites.
November 1, 2005... Consumers may be losing some faith in online security, but they trust financial services Web sites more than any other type of site, according to the findings of a recent study from Consumer Reports that was conducted by Princeton Survey...

Banks Not Buying New Core Platforms, Even If Needed.
November 8, 2005... There's a very long list of reasons for banks to replace their old, silo- based core operating platforms with next-generation computer systems. But despite the predictions of consultants, the requirements of regulators and legislators, and...

Payments Industry Learns Key Lessons From Katrina.
November 8, 2005... The preliminary lessons being drawn from Hurricane Katrina all show how entwined the payments industry is with the fabric of society. Most of the lessons that are being learned, in fact, have less to do with the payments system itself...

iPayment War Coming To A Head.
November 8, 2005... The internal war being fought at third party processor iPayment Inc. between its founder, Greg Daily, and the company board he installed seems to be drawing to a close. In March, Daily made an offer to take the firm private, but the...

SAR Review #9 Released.
November 8, 2005... The Financial Crimes Enforce-ment Network (FinCEN) issued its most recent SAR Review last week, and in a welcome move, FinCEN made sense of it all in a narrative, instead of publishing only reams of statistics. The bulk of the issue...

Report From The Interchange War.
November 8, 2005... Early last week, Visa USA said it was changing the makeup of its board so that a majority of it members are not from financial institutions. Eight of Visa's 17 board members will be from this category, seven from financial institutions, and...

Wachovia And MBNA Divorce, Wachovia To Reenter Card Biz.
November 8, 2005... As part of Bank of America's acquisition of MBNA, recently approved by MBNA shareholders, MBNA will no longer be processing Wachovia Corp.'s credit cards, and Wachovia will again be issuing its own cards, beginning this January. With 13...

Who's Who.
November 8, 2005... * Brad Hanson was named executive vice president and director of Meta Financial Group, MetaBank, and MetaBank WC, and joins the executive committee. He is president of Meta Payment Systems. (Contact: Meta Bank, 712-732-4117) * Ty Miller...

The Checklist.
November 8, 2005... BioPay This privately owned biometric transaction processor says it received a patent for its biometric check-cashing process, marketed as BioPay Paycheck Secure. BioPay's business model allows consumers to make purchases with their...

Payments Trends Are Well-established And Continuing, ABA Finds.
November 8, 2005... The good news in the recently issued, biannual American Banker's Association payments study is that the trend lines in payments have become easily visible. But as a result, surprises are in short supply. According to the study, conducted...

First Data Selling Its Card Issuing Unit.
November 15, 2005... First Data Corp.'s hiring of Morgan Stanley last week to advise it on selling its Card Issuing Services unit prompted observers to scratch their heads about where it will take the company. While the move makes some short-term sense, it's...

U.S. Being Outflanked In Mobile Payments.
November 15, 2005... Last week, three Canadian companies said they were joining to create a cell phone infrastructure that over time would allow cell phones to be used as payments vehicles. Also last week, NoCoMo, the major Japanese cell phone operator, said it...

iPayment Redux.
November 15, 2005... iPayment Inc.'s founder and chairman, Greg Daily, has apparently won his point with the board of directors. Following a $0.50 per share improvement on his previous $43 a share offer (see Electronic Payments Week, Nov. 8), the board's special...

BoNY Settles Its Money Laundering Case.
November 15, 2005... The books were closed last week on the long-running money laundering case against the Bank of New York that arose over charges that as much as $7 billion in illicit Russian funds, connected to that nation's highly criticized 1990s...

Consumers Would Rather Switch Than Fight Computer Crime.
November 15, 2005... A study just released by Unisys Corp. says that 45 percent of the 8,000 consumers polled for a study on their attitudes on computer crime say they'd switch banks over security concerns, and about one-third say they have no problem paying...

U.K. Payment Systems Task Force Investigating Checks.(Brief Article)
November 15, 2005... The Payment Systems Task Force of Great Britain's Office of Fair Trading (OFT) is continuing its evaluation of that nation's payments system, and is now examining the check-clearing system as another step in what had been intended as the...

DataTreasury Wins Another Round.
November 15, 2005... DataTreasury Corp., which has been waging a courtroom war to enforce its patent on the ideas comprising much of the check-imaging business, won another round last week when France's Groupe Ingenico settled with DataTreasury on the day of...

Who's Who.(Donald Lafler retires from Pacific Capital Bancorp.)(Tim Patneaude and Joe Sanders were hired by Wausau Financial Systems)(Brief Article)
November 15, 2005... * Donald Lafler is retiring next year as executive vice president and chief financial officer of $5.7 billion Pacific Capital Bancorp. He will stay with the bank through the transition process. (Contact: Pacific Capital Bancorp,...

Make Biometric Authentication Foolproof.
November 15, 2005... If you were a builder, why would you buy a cushy SUV when you could buy a heavy duty pickup truck--something that did everything you wanted it to do, and did it better? Financial institutions should be asking themselves that question as...

New to Market.
November 15, 2005... * Avalara, a tax payment automation company, says that Nodus Technologies will integrate Avalara's sales tax automation Web service into Nodus' suite of electronic payment and online commerce products. (Contact: Avalara, 206-780- 7035; Nodus...

The Checklist.(sales of Intelli-Check, Inc)(acquisitions of Jack Henry & Associates Inc.)(sales of Lipman Electronic Engineering Ltd)
November 15, 2005... American Bancorp of New Jersey, Inc. [ABNJ] This $443 million community banks says the Office of Thrift Supervision denied its application to buy back up to 5 percent, or 708,484, of its shares, in the open market. The bank says it will...

'Insourcing' Accelerates Among U.S. Banks And Providers.
November 22, 2005... America's banks and IT providers are finding new markets for their payments operations overseas, and the idea seems to be gaining traction. The Bank of New York (BoNY) recently signed Thailand's Krung Thai Bank to process the state-owned...

Wal-Mart To Accept Debitman Cards, But Won't Issue Them.
November 22, 2005... Wal-Mart Stores Inc. agreed to accept Debitman cards last week, giving the company some much needed brand recognition at a time when merchants claim they are looking for card payment options that are cheaper than traditional credit cards....

Yet More Interchange Suits.
November 22, 2005... The American Booksellers Association recently joined the merchant's class action suit, currently before the U.S. District Court in Connecticut, against Visa USA, MasterCard and a number of major banks over interchange fees. The plaintiffs...

Merchants Complain About Interchange But Do Little About It.
November 22, 2005... To listen to the various merchant groups suing Visa and MasterCard over interchange, you'd think they're innocent victims of a sinister conspiracy by the associations and their owners to steal revenue--revenue they'd gladly pass on to their...

New Relief Act Out Of House Financial Services Committee.(Financial Services Regulatory Relief Act of 2005)
November 22, 2005... Last week, the House of Rep-resentatives' Financial Services Committee approved HR 3505, the Financial Services Regulatory Relief Act of 2005. Much of the bill as written seeks to minimize the regulatory impact of such strictures as the...

Ohio Passes Data Security Bill.
November 22, 2005... Ohio Governor Bob Taft last week signed Substitute House Bill 104, which requires a state agency, an agency of a political subdivision, or a business that owns or licenses computerized data that includes personal information, to notify any...

NOVA Buys Citibank Card Acceptance In Europe.(Nova Information Systems Inc.)(Brief Article)
November 22, 2005... U.S. Bancorp's NOVA Information Systems unit last week said that it was buying Citibank Card Acceptance, a major European card acquirer, through its euroConex subsidiary. The deal brings NOVA about 100,000 European merchant...

Airnet Systems Update.
November 22, 2005... The deal to sell AirNet Systems Inc. to a still-unnamed foreign private equity firm has until the end of November to close, but last minute complaints from a rejected bidder have the potential to derail that deal. Universal Express Inc.,...

Corrections And Clarifications.(Correction Notice)
November 22, 2005... In last week's issue, we said that First Data Corp. had retained Morgan Stanley to sell its card services unit. The company says it hired Morgan to explore "strategic options", and requested a clarification. Also in last week's issue, we...

Enough, Already: Talks Should Settle Interchange Wars.
November 22, 2005... It's time for negotiations to settle the interchange wars, thinks Steve Mott, president of payments consultancy BetterBuyDesign. The alternative would be economic disaster for the card associations, he thinks. "You have a very small...

New to Market.
November 22, 2005... * Axalto says it has a new credit card product, Instant Issuance, which allows banks to issue personalized EMV (Europay MasterCard Visa) cards at their branches. (Contact: Axalto, 011-33-146-00-7104) * BSG Financial LLC says that...

The Checklist.
November 22, 2005... Acies Corporation [ACIE] This merchant processor and point of sale terminal vendor says that in the most recent quarter, it had a net loss of ($302,126), or $(0.01) per share, on net revenue of $2.045 million, compared with a net loss of...

Endpoint Exchange, Viewpointe Link Up.
November 29, 2005... A useful step toward widespread check image exchange was taken last week when Endpoint Exchange LLC and Viewpointe announced they were connecting their systems to allow their members to exchange check images. They will clear them through The...

Payments Data Could Be Key To Bank Prosperity.
November 29, 2005... As payments processing becomes a commodity, plenty of bankers are wondering if, given the non-bank competition, there's even a future for them in payments. There's little doubt that non-banks are making inroads into the payments arena....

Reserve Bank Of Australia Resets Interchange.
November 29, 2005... The Reserve Bank of Australia reset interchange rates on Nov. 22. Under the new structure, "the weighted-average interchange fee in each of these three schemes [Bankcard, Visa, and MasterCard] must be no greater than a common [cost- based]...

Shadowcrew Sentenced.(investigations of credit card fraud)
November 29, 2005... Six members of the so-called "Shadowcrew" have pleaded guilty to operating an informal--and international--gang of credit card thieves (see Electronic Payments Week, Nov. 9, 2004). This brings to 12 the number of guilty pleas in the case,...

Cashpoint President Indicted For Check Kiting.(Cashpoint Network Services Inc)(Brief Article)
November 29, 2005... Samuel Brevdeh, president of shuttered bill payment giant Cashpoint Network Services Inc., pleaded guilty on Nov. 18 on charges he masterminded a massive check-kiting scheme using ACH debits as its instrument. According to the U.S....

Latin American Public/Private Cooperation Helping Electronic Payments.
November 29, 2005... According to a new white paper from the Economist Intelligence Unit and sponsored by Visa International, a close and cooperative relationship between government and the financial services sector has helped promote and establish electronic...

Looking For New Markets?
November 29, 2005... Banks and other financial providers looking for new markets for payments operations could do worse than take a close look at the various kiosk businesses beginning to sprout up at chain stores like Wal-Mart or Barnes & Noble. The sector...

Who's Who.
November 29, 2005... * Bruce W. Van Saun and Donald R. Monks were named vice chairmen of the Bank of New York. Van Saun was named vice chairman of both the company and the bank; Monks was named vice chairman of the bank. Van Saun, with BoNY since 1997, is BoNY's...

BAI Says Contactless Cards Getting Traction.
November 29, 2005... The BAI reports that according to Visa USA, as many as 50 million contactless cards could be in circulation in the U.S. by the end of next year, along with up to 35,000 merchant locations. If that sort of success is achieved, it will be...

Non-Interest Income Growing At Nation's Banks.
November 29, 2005... Non-interest fee income from company sectors like payments and mortgage processing reached new highs at the nation's banks in the past quarter, according to the Federal Deposit Insurance Corp. (FDIC). In the previous quarter, the FDIC...

New To Market.
November 29, 2005... * The California Department of Motor Vehicles says that its 92 largest and highest-volume offices will soon begin accepting ATM/debit cards for payment. Currently, the department only accepts cash, checks or money orders. The conversion...

The Checklist.
November 29, 2005... AirNet Systems, Inc [ANS] AirNet reported a net loss in the recent quarter of ($7.933 million), or ($0.78) per share, on net revenues of $48 million, compared with a net loss of ($30.1 million), or ($2.99) per share, on net revenues of...