Clear MasterCard

PA-based E-Duction, Capital One, First Data, and MasterCard have teamed to re-launch a payroll deduction card under a new name. The “Clear” MasterCard enables employees to make purchases and have the payments drawn directly from future paychecks over the next two months, interest-free. The program establishes a credit line equal to 2.5% of the employee’s annual salary and charges an annual fee of $29 to each participating employee. E-Duction says the program saves employees time and money since there are no interest charges, late fees, or penalties. The card was first launched last year. E-Duction has financial backing from First Data, RRE Ventures, among others. The company has raised approximately $26 million in three rounds of funding since its inception.

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EUROPAY MERGER

Waterloo-based Europay is now part of MasterCard International. The conversion of MasterCard International into a private share corporation in conjunction with its merger with Europay International was officially completed this week. The Europe Region will continue to be based in Waterloo. MasterCard’s Center of Excellence for Debit and the Center of Excellence for Chip and Mobile Commerce will also be located in Waterloo, to leverage Europay’s proven expertise in these areas. Dr. Peter Hoch, Europay’s chief executive, has become president of MasterCard’s Europe Region. MasterCard’s other regions, Asia/Pacific, Latin America/Caribbean, South Asia/Middle East/Africa and North America will continue to maintain their regional boards. MasterCard says the restructuring will provide full globalization of MasterCard’s processing functions with significant economies of scale. The integration also provides the opportunity for the Europe Region to benefit from MasterCard’s global expertise in brand building such as its “Priceless” advertising campaign, now seen in 45 languages and in 90 countries. MasterCard says its European customers will also benefit from the delivery of enhanced customized relationship management and consulting services.

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California Injunction

The U.S. District Court for the Eastern District of California has granted a preliminary injunction against enforcement of the new minimum payment disclosure law that was scheduled to go into effect on July 1st. A hearing on the matter has been scheduled for November 8. The new law, Civil Code Section 1748.13, also known by legislation number AB 865, requires credit card issuers to show certain consumers the impact of making minimum payments. The California law requires credit card companies to disclose on customer bills the total costs and length of time it will take to retire credit card debt of $1,000, $2,500, and $5,000 if a consumer makes just the minimum payment. Consumers who make the minimum payment for six months will receive this information based on their exact outstanding balance. Credit card companies are also required to maintain a toll-free telephone number to call a “live” customer service representative so that individualized minimum payment information can be obtained. The new disclosure requirement was a compromise proposal signed into law after the financial industry lobbied Governor Gray Davis in 2000 to veto a stronger version of the bill that would have required credit card issuers to send minimum payment warnings to all cardholders. The lawsuit was filed by a group of major credit card issuers, including Citibank, who had a hand in crafting the compromise legislation last year. (CF Library 1/4/02; 6/19/02)

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Bill Me Later

NJ-based Retail Decisions has signed an agreement with I4 Commerce, formerly GoPin, to provide the Bill Me Later option for merchants utilizing its LiveProcessor electronic payment software solution. Bill Me Later is a payment method that eliminates the need for a credit card. Customers receive instant purchase approval during the checkout process followed by one monthly bill that aggregates all Bill Me Later purchases from different merchants. The balance can be financed or paid in full at no extra charge. Retail Decisions’ LiveProcessor combines online, call center, retail and IVR transactions into a single system, and integrates real-time authorization, batch processing and settlement functionality with existing order processing, subscription and electronic commerce systems. LiveProcessor is the only payment processing application to support VISA CVV2 and Amex CID security codes, procurement level 2 and 3 cards, electronic check processing, foreign currency settlement support and multiple bank interfaces in a single product.

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GE Card Head

GE Capital has promoted Mark Begor from COO of GE Card Services to president and CEO of GE Card Services, succeeding Edward Stewart, who will continue to serve as an EVP of GE Capital and a member of GE Capital’s board of directors. Prior to joining GE Card Services in January, Begor was executive vice president and chief financial officer at NBC, reporting to NBC Chairman and Chief Executive Officer Bob Wright. Begor also served as president for NBC Business Development and Interactive Media. While at NBC, Begor led financial activities for NBC’s $5.5 billion network, cable, station, international and Internet businesses, as well as business development and information technology.

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MOSAIC SIGNS CU

London-based Mosaic Software announced that US-based Honda Federal Credit Union, a financial services cooperative with more than $275 million in assets, has selected Mosaic to provide ATM Driving. Honda Federal Credit Union will install Mosaic Software’s advanced EFT Postilion solution to handle all aspects of ATM transaction processing and management. Honda’s Postilion system will interface to their Symitar host system for on-us transaction processing and will route foreign transactions directly to the CO-OP Network, the nation’s largest network of credit union ATMs and retail point-of-sale terminals. Honda will operate Postilion on a Stratus ftServer 3200 series system. Mosaic Software major partners include Stratus Technologies, MasterCard, SmartTrust, Diebold, and NCR.

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PIN-Debit Potential

U.S. Bancorp Piper Jaffray projects a long runway for continued growth of PIN-based debit payments considering that only 26% of U.S. merchants with credit card terminals can process PIN-based debit card payments. The research firm recommends investors consider Concord EFS, owner of the STAR network, and First Data, 64% owner of the NYCE network, as solid plays in this growing market. U.S. Bancorp Piper Jaffray says it believes the recent emergence of a new breed of payment processor, those that acquire transactions and own EFT networks will aggressively promote PIN-based debit at the point of sale and drive higher penetration at merchant outlets. The firm notes that more than 80 billion cash and check transactions per year are up for grabs. The 2003 antitrust debit card trial will also lay a major role in driving more PIN-based debit card transactions as merchants migrate to lower cost PIN-based transactions and possibly benefit from lower off-line debit card transaction fees.

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VISA E-SCHOOL

VISA International has launched an e-learning service which allows the employees of VISA’s 687 member institutions in the Asia-Pacific region to take courses through VISA Business School, a
training portal devoted to credit card operations and management. The new service is powered by NetDimensions’ Enterprise Knowledge Platform which is able to handle both Asian and Western languages.
More than 100,000 people in 14 Asia Pacific countries are eligible to take courses using the portal. During 2001, a total of US$480 billion was spent in Asia Pacific using VISA cards, an 80% increase over the previous year.

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Fraud Shield

Experian has introduced Fraud Shield Score which blends 22 predictive fraud indicators with key predictive credit risk variables into one score. Among these warning signs are indications that consumer credit was established before the applicant was 18, credit was established prior to the issue date of a Social Security number, and a high probability the Social Security number on the application belongs to another consumer. Other predictive fraud indicators include inconsistencies with telephone numbers, addresses and drivers’ license numbers. Implemented in conjunction with Experian’s proven Fraud Shield tool, the new scoring capability assists lenders by reducing the number of applications that require costly manual review by providing a full perspective on fraud risk and the potential of first-payment default.

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Customized ATM Screens

Fujitsu Transaction Solutions has teamed with Philadelphia-based mCom to offer a new application that creates personalized ATM screens tailored to a customer’s transaction needs and patterns of interaction and behavior integrating Fujitsu’s Series 8000 Web-enabled ATMs and Prism software. Under the agreement, effective immediately, Fujitsu will offer mCom’s suite as a value-added portion of its ATM products and services, and mCom will develop and integrate the software.

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