Intuit Takes a 2nd Stab at ECHO Acquisition

Intuit has inked an agreement to acquire Electronic Clearing House for about $131 million. Intuit had previously signed a deal to acquire ECHO in December 2006, but the parties mutually terminated the arrangement in March after ECHO encountered a government probe of its Internet wallet merchant business. ECHO reported this week that third quarter revenue declined 4.5% to $18.5 million. However, bankcard and transaction processing revenue grew 6% to $15.5 million, while bankcard processing volume increased 7% to $484.5 million. ECHO currently expects total revenue for fiscal year 2008 will increase by 10% from total revenue of $76.9 million for fiscal year 2007. Intuit says the combination will be able to round out its payment offering with check services. (CF Library 12/17/07)

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SmartCard Marketing & PDS Ink a Deal

Prepaid card provider SmartCard Marketing Systems has entered into an ISO agreement with TX-based Payment Data Systems to market payment processing services. This agreement is an expansion from the initial private label, open-loop debit card agreement between the two companies signed in March 2007. The first card program, a corporate promotion card for incentives, premiums and loyalty reward distribution, was successfully launched in September 2007. Payment Data Systems is an integrated payment solutions provider to merchants and billers.

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USAT e-Port to Utilize ViVOtech Readers

USA Technologies has announced that it has purchased more than 2,000 ViVOtech NFC card readers its “e-Port” contactless technology in vending machines. ViVOtech s following up with another order of 8,000 to be delivered in 2008. These readers accept all major credit cards, both magnetic swipe and contactless NFC cards. USA Technologies provides networked credit card and other non-cash systems in the vending, commercial laundry, hospitality and digital imaging industries.

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FIS Completes the BB&T Card Integration

BB&T Bankcard Corporation’s 1.1 million credit card accounts have been successfully converted to the Fidelity National Information Services platform. FIS is now processing all transactions for credit cards issued by BB&T Bankcard Corporation, a wholly owned subsidiary of BB&T Corporation. The 10-month conversion project involved extensive planning and cooperation between BB&T and FIS, and included the introduction of expanded product functionality and greater operating efficiencies.

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US Dataworks & Hyundai Scuttle Partnership

Payment processor US Dataworks and Hyundai Syscomm have terminated their Software Integration and Resale Agreement due to “timing differences”. Hyundai will return the 6.1 million shares of the Company’s common stock, which has been held in escrow, and will no longer be entitled to receive any warrants to purchase shares of the Company’s common stock. The Company plans to retire the returned shares, which shall have an accretive effect on the remaining shares outstanding and as a condition of the nullification, each party will no longer have any duties or obligations ascribed to the Resale and Purchase Agreements.

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TJX Reaches More Settlements Over its Breach

Litigation between TJX and several banks and bankers associations has been settled over damages resulting from a TJX security breach disclosed earlier this year. The settlement involved the Massachusetts Bankers Association, Connecticut Bankers Association, and the Maine Association of Community Banks, together with Eagle Bank, Saugusbank, and Collinsville Savings Society. TJX has agreed to reimburse the settling plaintiffs for a negotiated portion of the costs and expenses that they incurred in the case. The bankers associations are also recommending that their member banks which are VISA issuers to accept the “VISA Alternative Recovery Offer.” Through that offer, TJX has agreed to fund up to $40.9 million in payments to VISA issuing banks which may have suffered damages as a result of the data breach. TJX created a $107 million reserve in the second quarter to cover settlements in the case.

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Merchant Groups Jump on the EU/MC Decision

Following yesterday’s decision by the European Commission to restrict MasterCard Europe’s cross-border interchange fees, U.S. merchants are jumping on the news to bolster their efforts to lower U.S. interchange rates. The National Retail Federation says European authorities are telling MasterCard it is double dipping in Europe and driving up costs for consumers as well as retailers. The NRF suggests that authorities in the U.S. should take the European ruling as a signal that it’s time to bring the same relief to U.S. consumers. The Merchants Payments Coalition says that American consumers and merchants pay more than twice as much as Europeans, and that such fees in the U.S. are out of proportion to the amount that would be paid in a competitive market. MasterCard Europe said it is appealing yesterday’s EU decision based on its firm conviction that market forces, not regulation, should drive key decisions such as the setting of interchange fees and retailers’ choices over which forms of payment to accept. MasterCard cites the experience in Australia, the only other jurisdiction in the world to regulate interchange fees, where consumers have ended up paying more for credit cards and receiving fewer benefits and less choice. (CF Library 12/19/07)

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Market Conditions Delays a Target Card Sale

Target says the initiative to unload all or part of its credit card portfolio is taking longer than expected. Blaming current market conditions, Target says it now plans to announce a decision in the first calendar quarter. Last month Target reported that its pre-tax credit card profits for the quarter ending November 3rd increased 17% over the year-ago quarter. Target reported that its total credit card receivables, which include its VISA and “Guest” cards (together known as “REDcards”), were $7.652 billion as of November 3rd, compared to $6.906 billion for 2Q/07 and $6.148 billion one-year ago. For complete details on Target’s latest performance, visit CardData (www.carddata.com).

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Discover U.S. Card Profits Climb 43% Y/Y

Discover Financial Services reported this morning pre-tax U.S. credit card profits of $327.5 million for 4Q/07, a 43% increase over the year ago quarter, but down 4% sequentially. The Company also reported an overall loss of $84 million due to impairment charges related to its U.K. “Goldfish” business. U.S. managed loans rose 5% year-on-year to $48.2 billion. U.S. credit card sales volume rose 6% to $22.6 billion. The managed U.S. credit card net charge-off rate rose to 3.84%, 14 basis points higher than the third quarter. The managed U.S. credit card 30+ day delinquency rate was 3.59%, up 43 basis points from last quarter’s level. The firm also reported that transaction volume across the Discover and PULSE Networks rose 14% over last year. Discover says its U.S. card business was driven by growth in sales volume and receivables, strong credit results and improved revenues and operating efficiencies. In its “Third-Party Payments” segment, Discover’s network volume reached almost $25 billion in the quarter, an increase of 28%. For complete details on Discover’s fourth quarter performance, visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

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Transcard Names a New President

TN-based Transcard has appointed John Ainsworth, previously with Mastercard, as President of Stored-Value Processor. Prior to joining Transcard, he served as senior business leader with MasterCard Worldwide. His seasoned background includes over 15 years of executive sales and management experience with leading financial organizations such as SunTrust Bank, Visa International, and BlueTarp Financial. TN-based Transcard offers electronic funds transfer services including direct-to-card payroll technology, electronic fuel and transaction processing, asset management services, and research and development of technology services.

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