Verus to be Acquired by UK Firm for $325MM

Nashville-based Verus Financial Management is being acquired by the UK’s Sage Group for $325 million in cash. Verus is a credit card processor that focuses on small and medium-sized businesses. Verus posted 2005 revenues of $64 million compared to $51 million in 2004. Operating profit, before depreciation and amortization was approximately $21 million compared to $7 million in the prior year. At the end of 2005, Verus had gross assets of approximately $25 million. Verus was found in April 2002 by Rich Roberts. Roberts was the previous founder and CEO of PMT Services which was sold to NOVA for $1.3 billion in 1998. Verus acquired Network 1 in July 2002. Sage says Verus will form the core of its North American Merchant Services Division, complementing Sage’s existing North American Payroll Services.

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Credit Card Delinquent Dollars Stay Under 4%

Credit card delinquencies, based on total dollars outstanding, dipped to its lowest level in more than ten years for a third quarter period. Sequentially, delinquent dollars rose a modest 14 basis points while the number of past-due credit card accounts edged down slightly by seven basis points from the record set in the second quarter. Based on total dollars outstanding, credit card delinquencies remained below 4.00% during 2005 for the first time since 2000. However, based on the number of past-due credit card accounts, delinquency has been hovering at record levels for all three quarters. According to the American Bankers Association’s “Consumer Credit Delinquency Bulletin,” delinquencies based on total dollars outstanding for 3Q/05 were 3.74%, compared to 4.60% in the second quarter and 4.36% for 3Q/04. Based on the number of accounts past-due, the figures were 4.74% for 3Q/05, 4.81% for 2Q/05, and 4.26% one-year ago. The ABA noted that the rise in the number of delinquent accounts is likely linked to rate increases by the Federal Reserve and high gas prices.

3Q CREDIT CARD DELINQUENCY HISTORY
(based on total dollars outstanding)
1980: 3.40%
1985: 3.15%
1990: 4.01%
1995: 4.21%
2000: 3.93%
2005: 3.74%
Source: ABA Delinquency Bulletin

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Multimedia Gift Card to Pilot in Q1

Tulsa-based EnXnet and One28 Marketing Group report that MoxyCard, a new multimedia gift card, will be piloted by a few large retailers during the first quarter. MoxyCard combines the functionality of a magnetic stripe gift card with the electronic capabilities of optical disc media, enabling merchants to place rich media advertisements containing special offers, printable coupons or full video presentations and web link connections.

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Bank Midwest and FDC Expand Relationship

Missouri-based Bank Midwest has inked a deal to form a new merchant services alliance with First Data that includes online sales capabilities and gift card programs. First Data will provide all merchant payment processing services on behalf of Bank Midwest and offer an expanded portfolio of electronic payment products and services such as online sales capabilities and gift card programs. First Data currently provides official check and money order services to Bank Midwest. Bank Midwest, a subsidiary of Dickinson Financial Corporation (DFC), has over $3 billion in assets and over 70 banking centers.

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BA Merchant Services Lands the USPS Contract

BofA’s BA Merchant Services has inked a contract with the U.S. Postal Service to provide credit card processing and settlement services for more than 34,000 sites, including post offices, automated postal centers and the online postal store at USPS.com. Services are expected to begin in March. BA Merchant Services processes nearly $350 billion in annual credit card volume, serving approximately 530,000 merchant relationships at over 850,000 locations.

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RoboServer Lands a Pilot in California

RoboServer Systems has signed an Oceanside, CA Dairy Queen to pilot its “Line Buster” self-serve and checkout system. RoboServer has begun customization of the Self-Serve Machine’s user-interface and food menu, with plans to promptly install the Machine on location upon completion of the customization. RoboServer Systems provides point of sale and self-serve software technology for the restaurant industry.

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BillMatrix Powers Insurance Payments

The Main Street America Group, which has more than 500,000 policyholders is now offering cards, phone and online payment methods via Fiserv’s BillMatrix Corp. The new service is available 24 hours a day, seven days a week. The Main Street America Group operates four property and casualty insurance carriers: NGM Insurance Company, Old Dominion Insurance Company, Main Street America Assurance Company and MSA Insurance Company and provides property and casualty insurance products, programs and services to individuals, families and small businesses, with more than $800 million in direct premium written exclusively by more than 1,300 independent insurance agents. BillMatrix Corp. provides outsourced alternatives to traditional payment methods using automated technologies.

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Royal CU Deploys Two Cyota Solutions

Royal CU, one of Wisconsin’s largest credit unions, has selected Cyota’s “eSphinx” two-factor authentication and “eStamp,” a reverse authentication watermark for online banking. Cyota’s eSphinx authenticates all users and transactions, behind the scenes, based on their computer and profile. It asks for further authentication through member-defined challenge-response questions or other means for high-risk transactions. Cyota, Inc. is the leading provider of online security and anti-fraud solutions for financial institutions and fraud reduction tools for e-commerce and online banking. Royal Credit Union, is a federally insured credit union serving over 102,000 Members with 11 full service offices.

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Global Cash Expands to Caribbean Casinos

Global Cash Access recently signed or renewed contracts with six gaming
establishments in the Caribbean region. They include properties in
Santo Domingo, Dominican Republic, St. Johns, Antigua; four Princess
Entertainment Ltd. properties located in Belize and one located in
Corozal. GCA offers ATM technology, cashless gaming products and
marketing services. Among the products and services the Caribbean
properties will take advantage of are GCA’s QuikCash cash advance
terminals and Central Credit services. Global Cash Access is a provider
of cash access products and related services to approximately 960 gaming
properties and other clients in the United States, the United Kingdom,
Switzerland, Canada and the Caribbean.

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ACTCARD

British Columbia-based start-up ActCard Systems International has launched a companion device for smart payment cards, featuring integrated biometrics, automatic authentication, and a large-format display. The new patent-pending “ActCard” device will manage up to 20 smart credit cards from different issuers. The solution will enable cardholders to see a display of their current transaction that appears “push mode” on their “ActCard.” There is no requirement for the cardholder to go to a secondary location, use an auxiliary device, or in fact to even remove the device from their wallet to retrieve the data. This function, like the authentication process, occurs automatically and in the background. The software will also support a proprietary targeted
advertisement function that will permit merchants to execute strategies
previously only available with online clients. Additionally, the Company says “ActCard” will permit leveraging the network to generate new and
significant revenue streams without degrading the network quality of
service.

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Head of World’s Foremost Bank Retires

David Roehr, EVP, Chairman, President and CEO of World’s Foremost Bank, Cabela’s wholly-owned credit card bank subsidiary has retired and Orrin Wilson, a director, has been named interim Chairman of the Board, Ralph Castner, Cabela’s VP and CFO, has been named interim CEO and Tom Boatman, World’s Foremost Bank’s current COO and Secretary, has been named interim President. Cabela’s Incorporated is a direct marketer, and a leading specialty retailer, of hunting, fishing, camping and related outdoor merchandise.

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