PayPath Signs Another University Client

KS-based TouchNet has signed Eastern Michigan for its “PayPath” service. The service enables colleges and universities to accept MasterCard, American Express and Discover credit cards without paying merchant fees. “PayPath” charges the payer an administrative and technology fee of 2.75%. “PayPath” also connects to the campus student information system in real-time to update student accounts. EMU says it expects to save nearly $1 million this year in transaction fees. The university paid about $30,000 for the software to integrate with “PayPath.” Over 3,000 students have signed up for the service this year. The University of the Pacific started using TouchNet services this past summer. Other clients include: Baylor University, Georgia Institute of Technology, and the University of Wisconsin – Stout.

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EMV Supporters to Reduce Costs

According to Frost & Sullivan, smart card shipments for the world banking markets totaled 311.6 million in 2004 and by 2010 unit shipments are expected to reach 1123.8 million. While most banks or card issuers and retailers have considered the adoption of
Europay-MasterCard-Visa (EMV) or migration to smart cards a lengthy and
costly process. However, industry efforts coupled with support from the
major card associations or payment organizations are poised to reduce
the cost of migration. Application in areas such as
telecommunication and transportation have provided added impetus to the
acceptance of smart cards in banking (financial and loyalty) based
operations coupled with the growing realization of its multiple
benefits- enhanced security features, large memory size and type of
interface have added to the appeal of smart cards in the banking sector.
However, multi-purpose smart cards have not yet taken hold. Many
currently available smart card projects in both banking and non-banking
applications are considered to be very dedicated cards with simple
applications.

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Authentify FraudChaser Targets Phishers

California-based Authentify has launched “FraudChaser” to detect fraudulent accounts created by phishers and spammers by creating a legally binding audit trail to the individual that opens an ISP account. In order to activate an account with an ISP protected by FraudChaser, online users must accept an automated phone call and complete an integrated voice/Web authentication process that requires they use their telephone and computer at the same time. FraudChaser adds less than 60 seconds to a typical online registration. Authentify, Inc. is an ASP providing automated authentication services that enable organizations to quickly and cost-effectively perform real-time user authentication during an Internet session.

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Austin Ventures Prowls for Processing Firms

Texas-based Austin Ventures, with $3 billion in assets, has teamed with Ty Miller, former President/CEO of Bank One Global Treasury Services and former director of Paymentech and VISA, to pursue investments in the transaction and payment processing sectors. Miller’s industry experience includes 28 years at Bank One, where he served as President and CEO of Bank One Global Treasury Services (GTS) until the business merged with JPMorgan Chase in the summer of 2004. Prior to GTS, he was Chairman and CEO of Bank One, Texas NA. Miller served as a director of Paymentech and was on the Executive Committee of The Clearing House, New York. Austin Ventures has provided startup and growth capital to emerging companies for over twenty years.

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Hypercom Asia-Pacific Exec to Target China

Hypercom has re-hired TK Cheung, previously with the Company for seven years and formerly with American Express, as SVP/GM Asia-Pacific. Mr. Cheung has 26 years of experience in the telecommunications and electronic payment industries. He has held a number of international and US-based posts for Hypercom. Hypercom has refocused its operations in the People’s Republic of China and will retain and build channel sales and technical personnel in the cities of Beijing, Shanghai, Guangzhou and Shenzhen. Hypercom provides card payment terminals, network and server solutions in more than 100 countries.

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NBD FIFA MASTERCARD

National Bank of Dubai has introduced a new credit card offering a sweepstakes to win one of 20 fully expense-paid trips to Germany to see the one of the games in the “2006 FIFA World Cup.” Cardholders of the new “MasterCard 2006 FIFA World Cup Germany” qualify to enter the
contest when they spend a minimum of Dh1,000 between October 17th and March 28th. The card also offers gift voucher rewards for Adidas outlets in the UAE. National Bank of Dubai is the oldest, locally incorporated bank in the Southern Gulf. MasterCard is an Official Sponsor of the “2006 FIFA World Cup Germany.”

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Personix Recognized in Best Practices Study

The Personix unit of Fiserv has received the highest rating of participants in a 2005 study of best business practices conducted by Madison Advisors. The Best Practices Study measures business practices associated with the composition, production and delivery of personalized documents such as statements, transaction summaries and checks for both print/mail and electronic (Web) delivery. Personix provides plastic card manufacturing, personalization and mailing services and high-volume laser printing, mailing and electronic document delivery solutions to more than 9,000 clients worldwide.

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Hypercom Targets China with New Exec

Hypercom has rehired TK Cheung as Senior Vice President and General
Manager – Hypercom Asia-Pacific. Previously associated with Hypercom
Asia-Pacific for seven years, he is returning to Hypercom from a
private consulting practice. Cheung has 26 years of experience in the
telecommunications and electronic payment industries. Before joining Hypercom in 1991, Cheung spent 13 years with American
Express. As President of Hypercom Network Systems, Cheung was instrumental in bringing the company’s innovative custom network management products to many of the world’s leading financial institutions and large networks in Asia, Europe, Latin America and the United States. With Cheung’s appointment, Hypercom has refocused its operations in the People’s Republic of China. The Company will retain and build channel sales and technical personnel in the cities of Beijing, Shanghai, Guangzhou and Shenzhen today; and potentially other cities in the future, to support Hypercom resellers who will now serve as the Company’s exclusive representatives in China.

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Single-Factor Authentication Inadequate

The Federal Financial Institutions Examination Council said yesterday that financial institutions offering Internet-based products and services should have reliable and secure methods to authenticate their customers. The FFIEC says its recent study revealed that single-factor authentication as the only control mechanism is inadequate in the case of high-risk transactions involving access to customer information or the movement of funds to other parties. The FFIEC says banks should implement multifactor authentication, layered security, or other controls reasonably calculated to mitigate those risks. The new guidance replaces the FFIEC’s “Authentication in an Electronic Banking Environment” issued in 2001.

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Card Fraud Drops to Three Basis Points

A survey of bank and law enforcement officials from across 18 markets in
Asia Pacific was conducted at the recent VISA Asia Pacific Risk
Management Conference. More than 80% of the respondents attribute the
historically low levels of card fraud to collaboration
among member banks, law enforcement agencies, merchants, regulators,
cardholders and payment card companies. Card fraud has dropped to three
cents for every US$100 spent in Asia Pacific, compared with seven cents
globally. Among the other attributes for the successes in the fight
against fraud were technology solutions, stronger legislation and
increasing public awareness. A mature EMV chip card environment was
cited as the best solution for counterfeit challenges.

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UK Card Bonds Deteriorate with Uncertainty

The performance of U.K. securitized credit card receivables continued to deteriorate. Moody’s says the aggregate payment rate continued to decline and gross yield appears to have reversed its downward trend over the period. The combination of a sharp deterioration in charge-offs during the second quarter and a slight upward trend in gross yield led to relatively stable aggregate excess spread during the first six months of this year. Moody’s says it remains to be seen whether charge-offs have reached an upper turning point or will deteriorate further from present levels. Overall, Moody’s notes that the rapid deterioration in charge-off levels, combined with the sustained increase in bankruptcies, highlights the problem of escalating consumer debt difficulties in the U.K.

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Women Entrepreneurs Not Leveraging Resources

The Small Business division of Capital One and Braun Research released a report that shows women entrepreneurs are not taking advantage of loans, credit lines and other common small business financing options and 65% don’t leverage online banking. More than 10 million companies in the United States are owned by women and those firms generate an estimated $2.5 trillion in sales each year. 41% of the women small business owners surveyed cited financial issues as the biggest hassle they face in building a successful company, noting the challenge of keeping up with day-to-day finances and getting the capital they need to grow their businesses. Despite these hurdles, nearly the same percentage of women (39.7%) reported that they are not taking advantage of available sources for small business financing.

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