Paytrust Acquisition

Marshall & Ilsley’s Metavante Corporation announced this morning it has signed a definitive agreement to acquire substantially all the assets of a privately held online bill management company based in Lawrenceville, N.J. Paytrust has successfully deployed private-label electronic bill centers for 23 clients, including such premier financial service providers as American Express, Citibank, E*TRADE, and Capital One. The company also has developed proprietary technology including SmartBills, a bill aggregation tool now for 33 direct biller web sites, representing 50 electronic billers; and SmartBalance, an online check register now connected to more than 200 financial institutions. Through the acquisition of Paytrust, Metavante plans to consolidate its consumer service provider operations onto one technology platform. Integration costs, primarily related to operating duplicate platforms for a limited period of time, are anticipated to be approximately $6 million after tax, and will be incurred over approximately nine months following the transaction.

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CA Firm Settles FTC Charges

Canoga Park, CA-based D.C. Credit Services, Inc. has agreed to pay a $300,000 civil penalty as part of a settlement of FTC charges of violating the FCRA and FDCPA. The settlement also would require the defendants to notify consumer reporting agencies to delete all adverse information the defendants previously had furnished to them over the past seven years. The consent decree would permit the defendants to re-report such adverse information only if, upon proper examination, they determine that the adverse information is accurate and reportable.

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RBA & DEBIT

The Reserve Bank of Australia is expected to issue a working group document this month to propose changes to fees associated with the EFT/POS network. The RBA report will also touch on fees associated with VISA debit cards, according to some sources. VISA has about three million debit cards in the country. The EFT/POS network report comes on the heels of proposed changes to the interchange fees for credit cards. The
RBA credit card proposal involves changes to what are known as four-party payment systems such as MasterCard, Bankcard and VISA. Three-party payment systems such as American Express and Diner’s Club, which typically carry higher fees than four-party systems, are excluded from the proposal. Under the terms of the proposals unveiled on December 14, 2001, the RBA would regulate three key areas of four-party credit card systems: the setting of interchange fees, surcharging, and who can join the system. VISA and MasterCard say the proposal would significantly reduce interchange fees with the result that credit card issuers would be forced either to raise fees or reduce services to cardholders.

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GPN Wireless

Atlanta-based Global Payments has introduced a mobile application for the Lipman NURIT 3010 POS terminal. Retail @dvantage NURIT Wireless is positioned to serve mobile retailers such as limousine services and home delivery, as well as merchants using temporary locations including stadiums, parking lots, concession stands and providing outdoor or temporary services. Operating on the NURIT 3010 terminal with integrated printer and PIN pad, the new GPN service is designed for ease-of-use and provides complete point-of-sale credit, debit and check processing capabilities. Global Payments will provide transaction processing and full implementation for this retail application including deployment, training, and customer support in the U. S. marketplace.

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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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