LG RESCUE PLAN

It appears that LG Card will avoid bankruptcy after its creditor banks reached an agreement on a 1.65 trillion won bail out plan. However, the issuer suspended cash-advance services this week as the deal was being worked out. Kookmin Bank, one of LG Card’s ten creditor banks, led the opposition to the bail out plan, but later caved in to pressure by the government. Some of the creditor banks wanted the state-run Korea Development Bank to cover more of the losses and spread the rest evenly among the participants. Under the rescue plan, KDB will end up owning 25% of LG Card in return for investing 500 billion won. National Agricultural Cooperative Federation and Kookmin will be the next biggest contributors in the debt-for-equity plan, taking a 16% and 14% stake respectively. If the rescue plan failed the LG Card would have faced court receivership or liquidation. If a liquidation of LG Card takes places it could produce losses of some US$22.5 billion for the creditor banks. The South Korean Financial Supervisory Service recently reported that LG Card’s delinquency rate rose from 11.4% in October to 14.7% for November.

Details

Intellectual Property Solutions Collaborates on Taxi Payment Solution

Intellectual Property Solutions has signed a two-year deal with Massachusetts-based Pipeline Data’s SecurePay subsidiary to offer a wireless taxi credit card acceptance solution. The Pipeline / IPS mobile card acceptance solution was certified for use by the City of Chicago, through IPS’s subsidiary, C&C Enterprise Co., Ltd., and has resulted in contracts being finalized with two Chicago area taxi companies. Certification is currently being sought in additional major US metropolitan markets.

Details

WesPay Acquisition Finalized

The Clearing House has completed its acquisition of Western Payments Alliance’s Check Services business. WesPay will continue to operate as an ACH Association, with approximately 1,000 financial institutions and 100 corporate members in California, Hawaii, Idaho, Nevada, Oregon, Utah, Southern Washington and Guam. The Clearing House is the nation’s oldest banking association and payments processor. The Western Payments Alliance is a not-for-profit financial trade association providing electronic fund transfer services to approximately 1,000 financial institutions and 100 corporate members in California, Hawaii, Idaho, Nevada, Oregon, Utah, Southern Washington and Guam.

Details

Chex Services Gets Booted from FL Casinos

Native American Cash Systems of Florida has abruptly run Chex Services out of its casinos and invited MN-based Cash Systems in. Chex Services, owned by CO-based Equitex, says NACSF claimed breaches of the five-year contract signed in December 2001. The termination notice required Chex Services to immediately vacate five of the Seminole Tribe of Florida Tribal casino properties by midnight on Sunday, January 4th. Equitex says the contract provided about $1 million in revenue per quarter. Meanwhile, Cash Systems has signed a multi-year contract with NACSF to provide cash access services at the Seminole Tribe of Florida casinos, including ATM, check cashing and cash advance services. Cash Systems says the contract is one of its biggest ever.

Details

Euronet Expands U.S. PaySpot Service Through an Acquisition

Budapest-based Euronet announced that its U.S. subsidiary, PaySpot, has acquired the California-based prepaid service provider Prepaid Concepts. The acquisition will add 4,500 POS terminals to PaySpot’s prepaid network. Precept distributes prepaid products for all the major U.S. wireless carriers, including ALLTEL, AT&T Wireless, Cingular, T-Mobile, Tracfone and Verizon Wireless, as well as several regional carriers. Precept also provides electronic recharge services for three current “Boost Mobile” master agents. PaySpot was launched in the USA during 2002, and features a state-of-the-art switching engine offering billing, customer service, trouble reporting, credit management, settlement and reconciliation. The system supports online electronic top-up at retail locations via a range of POS terminals or through integrated electronic cash registers for retailers with multiple locations and multiple checkout points. Euronet Worldwide has two other prepaid services subsidiaries, e-pay and Transact, which collectively provide services in 8 countries.

Details

FTC Shuts Down Major Card Scam

A federal district court has frozen the assets of a nationwide telemarketing operation who operated under the names “Royal Credit Solutions,” “Imperial Consumer Services,” and “Beneficial Client Care.” The FTC says the operation misrepresented to consumers that they were likely to receive an unsecured major credit card in exchange for an advance-fee payment. FTC alleges that since January 2002, the defendants have telemarketed advance-fee credit cards to U.S. consumers with poor credit histories, offering them a credit card with a $2,500 limit for a one-time “processing” fee of $197 to $300. The FTC alleges that the defendants never delivered the promised credit cards to consumers who paid the fee. At best, some consumers allegedly received a package containing a credit repair book with coupons, a list of banks that issue credit cards, and other materials with little or no value. The defendants ran their operation from Palm Beach, Florida, and Montreal, Canada.

Details

National City Overhauls ATM Machines

Cleveland-based National City Corporation has launched a $30 million initiative that will replace or upgrade all of the bank’s six-state network of approximately 1,580 ATMs over the next 30 months. More than 1,000 ATMs will be replaced. The new machines will be Diebold “Opteva” ATMs. The new machines will be equipped with new security features that include consumer awareness mirrors, recessed keypads and display areas to assist in preventing theft and fraud. A choice of English or Spanish text will also be available on all National City ATMs. With the rollout of the new machines and the enhancements to the remaining ATMs in National City’s fleet, all of National City’s ATM network will provide voice-guidance capabilities for the visually impaired, with a choice of an English or Spanish voice.

Details

Personal Advantage Card Ready to Roll

Los Angeles-based Direct Card Service has completed an approved sales program for a bankcard under the trademark “Direct Card Services- Personal Advantage Card”. The bankcard will work in existing bankcard networks as well as existing ATM networks. The bankcard will be coupled with DCS’s proprietary DirectTrak System. DRFL will market the combined products to various media groups. Direct Response Financial Services, Inc. makes it easier, faster and more secure for people and businesses to buy goods and services, using virtually any form of payment: credit, debit, smart card, stored-value card, electronic check at the point-of-sale, or over the Internet.

Details

Shift4 Completes Debit Testing

Shift4’s “$$$ ON THE NET” product has been certified to authorize and settle both credit and debit card transactions directly to Fifth Third Bank. The debit PIN pad machines are connected to $$$ ON THE NET via Shift4’s Universal Transaction Gateway (UTG), which is also used to support signature capture and check verification. Shift4’s UTG ensures successful integration to merchants, regardless of the point of sale or property management systems they are utilizing, without requiring programming at the point of sale. Shift4, a leading developer and provider of financial transaction processing software and services, provides enterprise e-payment solutions for leaders in the hospitality, retail, foodservices, healthcare and e-commerce markets.

Details

Concord EFS Sets Record Date of Jan. 16

Concord EFS has set a record date of January 16th for the upcoming special shareholder meeting to vote on a proposal to merge with First Data. Concord will send a definitive proxy statement/prospectus to shareholders of record, which will contain important information about the merger with First Data Corporation. Shareholders are urged to read the proxy statement/prospectus when it becomes available. Concord EFS, Inc., a vertically integrated electronic transaction processor, provides the technology and network systems that make payments and other financial transactions faster, more efficient, and more secure than paper-based alternatives.

Details