VISA and FDC Settle Their Transaction Dispute

VISA USA and First Data confirmed that they have agreed to settle a four-year legal dispute over the processing of VISA payment card transactions. The two companies also agreed to work together to build a stronger business relationship. The two giants say that new leadership recognized a mutual interest in resolving legal differences. VISA agreed to provide financial support to pursue mutual business opportunities and cost cutting initiatives that are expected to drive new innovation, reliability, security and new merchant acceptance. First Data agreed to transition existing private arrangements between itself and VISA member financial institutions onto “VisaNet.” Specific terms of the settlement are confidential.

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Late Stage Delinquency Begins to Build Again

Delinquency is slowly but surely returning as the economy faces new hurdles. The latest figures for “prime” credit card-backed securities shows delinquency (60+ day) has been climbing for the past three months. According to the latest “Fitch Credit Card Index,” “prime” delinquency increased to 2.41% in May, compared to 2.37% for April and 2.34% for March. Fitch says it expects a slowdown in consumer spending, although credit card usage may increase as they are used to purchase gas and consumers revolve more frequently.

ABS HISTORICAL
Month Delinquency
Dec 05: 2.54%
Jan 06: 2.26%
Feb 06: 2.09%
Mar 06: 2.34%
Apr 06: 2.37%
May 06: 2.41%
Source: Fitch Ratings

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Metavante Acquires a Payment Software Concern

Milwaukee-based Metavante Corporation has inked a deal to acquire CA-based VICOR a provider of corporate payment processing software. VICOR will provide Metavante with the opportunity for future growth in other markets that require complex payments and receivable processing, such as healthcare and government payments, and the brokerage industry, where Metavante also offers a suite of other payment-related products. VICOR, Inc. is the leading provider of solutions that optimize the processing of complex payments for businesses and financial institutions. Metavante Corporation delivers banking and payments technologies to financial services firms and businesses worldwide.

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NBPCA Partners with Prepaid Media

The Network Branded Prepaid Card Association has partnered with Prepaid Media, and will host workshops in conjunction with the “2007 Prepaid Card Expo” next February. Through the partnership, the NBPCA will offer its members significant discounts on attendance and exhibiting opportunities at the upcoming Prepaid Card Expo 2007 in Las Vegas, a conference and trade show addressing the specific needs and interests of the network branded prepaid card industry. Prepaid Media provides a host of business-to-business, integrated media and information services to numerous emerging industries. The Network Branded Prepaid Card Association (NBPCA) is an inter-industry trade association that supports the growth and success of network branded prepaid cards and represents the common interests of the many players in this new and rapidly growing payments category.

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Abanco and VeriFone Team for Wireless Payments

IL-based Abanco International has teamed with VeriFone to expand its wireless payment processing services using the “VeriFone V(x) 610” terminal. With the addition of the V(x) 610, Abanco continues to lead the payments industry by offering the most technologically advanced wireless payment programs available. VeriFone Holdings, Inc. (“VeriFone”) (NYSE:PAY), a global leader in secure electronic payment technologies, provides expertise, solutions and services for today with a migration strategy for tomorrow. Abanco International, LLC, headquartered in Rosemont, IL, was founded with a mission of providing the best “Total Payment Solutions” available.

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LaSalle Bank Names STAR its Primary ATM Network

First Data has renewed its agreement to provide “STAR Network” access and signature debit processing for more than one million cardholders of Chicago-based LaSalle Bank. As a coast-to-coast electronic payments network and an expert in secure, real-time electronic transactions, the STAR Network connects LaSalle Bank’s U.S. customers with their cash at ATM and retail locations, as well as provides access to various national and international ATM and point-of-sale networks. LaSalle Bank Corporation is the largest bank holding company headquartered in Chicago with $116 billion in assets, with subsidiaries in 23 states. First Data Corp. (NYSE: FDC) is a leading provider of electronic commerce and payment solutions for businesses and consumers worldwide.

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Pipeline Data Acquires Paynet Systems

MA-based Pipeline Data has entered into an agreement to acquire Paynet Systems for $9.5 million in cash and $1 million in stock. The deal will add about 6,500 merchant accounts to Pipeline’s existing portfolio, resulting in approximately $200,000 in additional monthly cash flow. It will also generate 400 new merchant applications monthly. Pipeline Data currently services more than 25,000 accounts.

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MoneyPass Surcharge Free ATMs Top 10,000

Elan Financial Services and Genpass have completed the merger of the “MoneyPass” and “Fastbank Free” surcharge free ATM networks which was announced earlier this year. The new network, which retains the “MoneyPass” name provides more than 10,000 ATMs located in all 48 continental states and ranks as the nation’s third largest surcharge free ATM network. “MoneyPass” now has more than 600 participants, bringing more than 21 million cardholders into the network.

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EU Decides Not to Fine MasterCard Interchange

MasterCard recently received a “Supplementary Statement of Objections” from the European Commission. The EU Commission has informed MasterCard that it does not envision imposing a fine upon MasterCard in the event that it determines MasterCard’s cross-border interchange fees do not comply with the competition laws. The “SSO” sets out the Commission’s understanding of card payments and concerns it has regarding some of MasterCard’s business arrangements. It supplements a “Statement of Objections” issued in September 2003, to which MasterCard responded in January 2004. The issuance of a “SSO” is part of the administrative process for the Commission to form a view on the compatibility of MasterCard’s business practices with EU law. MasterCard now has the opportunity to respond in writing to the Commission’s “SSO” and present its views in a hearing later this year.

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MASTERCARD WORLDWIDE

MasterCard International has changed its corporate name to MasterCard Worldwide, unveiled a new corporate signature and adopted a new corporate tagline. The current interlocking circles logo will continue to appear on all MasterCard-branded cards and at merchant acceptance locations around the world. Other MasterCard brands such as “Maestro,” “Cirrus,” and “MasterCard Advisors” will not change. The new tagline is “The Heart of Commerce.” However, MasterCard will continue the “Priceless” advertising campaign, now seen in 106 countries and in 49 languages. MasterCard says the three circles of the new corporate logo build on the interlocking red and yellow circles of the current MasterCard consumer brand, and reflect the company’s unique, three-tiered business model as a franchisor, processor and advisor.

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National Contactless eTicketing System Planned

The 26th recent “kontiki Conference” in Rotterdam focused on
the world’s first realization of a national contactless eTicketing
system in the Netherlands. Participants from seven European countries
learned about the many aspects involved in the national implementation
of the smart card. Four tours of city transport, regional transport,
railway, and a provider answered a number of questions raised by
participants during presentations or from their own experiences with
eTicketing. In addition to the extensive presentation and tour program,
the three kontiki working groups – “Models, Interoperability, and
Mobility” – were able to continue their work.

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