With credit card fraud rates running ten times higher for Internet merchants than their brick and mortar counterparts, a new Internet payment processing engine has been developed to provide a long-term and cost-effective solution. First National Merchant Solutions this week launched PayFuse, an all-in-one payment processing software with fuses the merchant Web site with the payment engine, allowing merchants to obtain real-time authorizations on credit card transactions in a secure environment. PayFuse determines whether a credit card number is valid or considered too risky, based on prior fraud attempts or chargeback records. When the customer clicks on the “Buy” button, PayFuse accepts the transaction from the storefront via a secure SSL network connection, calculates shipping charges, screens for fraudulent orders with FraudShield, authorizes the transaction in real-time and reports the transaction information to the merchant. In addition to saving its merchants’ money by reducing fraud, overall processing fees decrease with the all-in-one software since it does not require an outside authorization or application vendor.



TransUnion, a leading global information solutions company, announced the availability of TransRisk Account Management for the Canadian marketplace. TransRisk Account Management is a new risk assessment tool to help credit grantors more effectively manage existing accounts and maximize account profitability.

This version of TransRisk Account Management was specifically developed based on Canadian consumer characteristics and will be used exclusively by TransUnion Canada, a TransUnion subsidiary. TransUnion also offers a version of TransRisk Account Management in the United States.

“TransRisk Account Management is a Canadian-specific risk model that provides Canadian credit grantors a superior solution to their account management needs,” said Mark Merritt, director of TransUnion Canada. “TransUnion is committed to serving the Canadian credit marketplace and will continue to develop innovative solutions like TransRisk Account Management to better server our customers.”

TransRisk Account Management targets the needs of risk managers by predicting the likelihood of an existing account becoming 90 days or more delinquent within 12 months of scoring. It has the unique ability to focus on the behavior of existing accounts while identifying creditworthy accounts among those previously considered unscoreable by traditional risk models.

“TransRisk Account Management can help mitigate losses and lead to improved portfolio performance, especially when used in conjunction with one of our other risk models,” said Chet Wiermanski, vice president of TransUnion, who oversaw the development of the risk model.

TransUnion is a leading global information solutions company that customers trust as a business intelligence partner and commerce facilitator. TransUnion offers accurate and reliable financial data through a broad range of products and services that enable customers to manage risk and capitalize on market opportunities. The company uses leading-edge technology coupled with extensive analytical capabilities to prevent fraud and facilitate credit transactions between businesses and consumers across multiple industries and channels, including the Internet. Founded in 1968, Chicago-based TransUnion employs 3,600 associates that support clients in 24 countries. Visit us at

TransUnion of Canada, Inc., a fully owned subsidiary of TransUnion, has offered the highest quality consumer credit related products and services to the Canadian market since 1989. Our products are developed to meet the demands of Canadian businesses while respecting consumers’ needs and expectations. Visit us at


Mobile Payments Network

eONE Global and Sprint confirmed this week they have joint plans to build a mobile payments network in the USA to enable consumers to make purchases and payments with their wireless devices. eONE Global is owned by First Data and iFormation Group, a company founded by The Boston Consulting Group, General Atlantic Partners, and The Goldman Sachs Group. Sprint, which will be the founding member of a standards and marketing entity for the mobile payments network, and eONE Global will actively seek other U.S. operators to join them in developing this mobile payments network. The development follows an announcement by Europe’s largest mobile operators, which outlined similar intentions to launch an interoperable mobile payments platform in Europe. eONE Global’s subsidiary, Encorus Technologies Limited, will supply its PaymentWorks technology for the open standard platform including multiple channel access, authentication, routing, and settlement of transactions. The solution will provide for multiple payment options, including traditional credit and debit cards. In addition, smaller purchases may be billed direct to a customer’s telephone bill, to a stored value account presented by the operators, or to other new micro-payment alternatives.



Comdata Corporation announced that its Stored Value Systems, Inc. subsidiary, the leading provider of gift and cash card services to the retail and other industries, has established an international division. SVS International will be primarily focused on expanding the popularity and convenience of electronic gift cards to retail clients and their customers outside the United States, while also supporting existing U.S. retailer expansions into other countries.

“Many of the countries where we are currently building operations are familiar with the properties of a traditional paper gift certificate, but have not learned of the convenience and security afforded by an electronic cash card. We have begun to introduce the cash card’s value proposition to our the Canadian retail community such as increasing gift certificate sales by nearly 100%, providing sales lift approaching 63% over the card’s original value and increasing store traffic by nearly 155% over the current gift certificate customer volume,” said Tom Recktenwald, SVS International executive vice president and managing director. “Cash cards allow retailers to turn an old concept into a new product by taking the paper gift certificate out of the drawer and putting them on the shelf, thereby delivering many impulse buyers to our clients. In this regard, SVS International is setting new trends in gift giving by expanding our domestic presence throughout North America and other continents.”

SVS International has recently established a presence in Canada, with operations in Toronto, its first offices outside the United States. “We have established a Canadian sales team to expand our cash card services in the retail, apparel, fast food and other industry segments where we are predominantly engaged in the United States,” said Recktenwald. “Canada is extremely technology-friendly, so this is a natural progression for us. Comdata and SVS have had a presence there for some time in supporting nine domestic U.S. customers’ expansion to the Canadian provinces, including Pier 1 and BlueNotes. We also serve many other Canadian-based businesses with information management services.”

“Additionally, we have recently setup operations in the United Kingdom where retail gifting cultures resemble those of the United States. Within the next couple of years we anticipate operating in most continental European countries.”

In September 2000, SVS became the first cash card provider to automatically calculate foreign and United States currency equivalents in real-time, at the point-of-sale. The feature, exclusive to SVS, allows international shoppers to buy items in U.S. stores and in the same namesake stores within their home countries without time-consuming steps for manual conversion at checkout.

SVS pioneered the electronic magnetic-striped cash card product in 1995 and now counts some of America’s most recognizable names in the retail, restaurant and entertainment industries among its clientele.

“Our core domestic competencies like database management, point-of-sale technology, call center management and card production will translate into a more powerful shopping experience for our international clients,” said Recktenwald. “We’re looking forward to introducing the electronic cash card to shoppers all over the world.”

About Stored Value Systems (SVS)

Stored Value Systems (SVS) is one of the world’s leading providers of electronic gift certificate and card-based transaction programs. International retailers rely on SVS to create customer loyalty, increase sales, and strengthen their competitive position in the retailer marketplace, via both traditional sales channels and on the Internet. At the core of the SVS product is a commitment to use technology to build retail brands as well as customer satisfaction and commitment for retailers around the globe. Headquartered in the United States, Stored Value Systems is a wholly-owned subsidiary of Comdata Corporation.

About Comdata Corporation(R)

Comdata is redefining the movement of money and information through technology for businesses, their customers and employees. A leading provider of transaction and information services, Comdata provides credit and debit processing and reporting for commercial fleets and merchants, electronic cash, gift and chip card programs for retailers and governmental agencies, Comchek(R) eCash payroll services for food, retail and other service industries, and point-of-sale equipment for travel plazas and convenience stores. Headquartered in Brentwood, TN, Comdata employs nearly 2,000 people throughout the United States and Canada. Comdata is a wholly-owned subsidiary of Minneapolis-based Ceridian Corporation (NYSE: CEN).


Kathol Chairs TC68

First Data announced that Gene Kathol, VP of research and development, has been named chair of Technical Committee 68 Financial Services, an official committee of the International Standards Organization headquartered in Geneva, Switzerland. Kathol assumed the ISO post by unanimous acclamation of the TC 68 membership during their recent annual meeting held in Delft, Netherlands. Kathol has participated in or chaired several domestic work groups, and held various management positions, including serving as chair of a national standards group the Retail Electronic Financial Transactions sub-committee from 1996 to 2001.


Bankruptcy Reform Dead

The prospects that bankruptcy reform legislation could soon be headed to the President’s desk dimmed yesterday as Democrats and Republicans made only slight progress in their debate over a provision banning abortion protesters from using bankruptcy laws to avoid paying fines for unlawful conduct. Sen. Charles Schumer (D-NY) and Rep. Henry Hyde (R-IL) debated the difference between a “blockade” and a “peaceful protest” by someone near an abortion clinic. Hyde says protesters should be allowed to discharge their protest-related debts if they were fined for inadvertently stepping across lines designed to keep them a certain distance from an abortion clinic. However, Hyde admitted yesterday that blockading should not be dischargeable. Democrats indicated they believe a compromise is not going to come. House Judiciary Committee and Conference Committee Chairman James Sensenbrenner (R-WI) told Hyde and Schumer to meet and work out the language differences over the next two weeks. Another meeting is tentatively set for the week of June 10th. Bankruptcy reform bills were first introduced in Congress five years ago.


TNS & Convenience Connexions

VA-based Transaction Network Services has joined in the multi-vendor Convenience Connexions Alliance, formed by the NCR, to provide new transaction functions to customers by enabling ATMs to cash checks and process money orders and wire transfers. As one of the partners enabling these new ATM functions, TNS is providing the network backbone through the use of TNS’ nationwide, secure IP transaction network, TNS Connect. TNS Connect is a dedicated, private IP-based network that transports ATM transactions to the required processor hosts, while adhering to the highest security standards. During the transaction process, TNS Connect routes the information over its secure IP network to the appropriate partner in order to complete the transaction.



NamITech Limited and the Mpumulanga Government have implemented a smart card and biometric system to handle an existing welfare grant payment system. With the new Empilweni Payout Services, the beneficiary inserts his smart card into the smart card reader installed on the payout machine. The last transaction number stored on the card is compared with the transaction number in the system database, to ensure that the beneficiary has not yet been paid. The biometric template is read off the card or from the local database, if this is available, following which the beneficiary places his finger on the fingerprint reader. If the fingerprint verification is successful, the kiosk dispenses the amount owed to the beneficiary, takes a digital photograph of the beneficiary and the card data is updated and ejected. NamITech is currently supplying 20,000 cards per month to the Empilweni project, and the upgraded system will be rolled out over the next six months. Some 160,000 beneficiaries were enrolled on the existing system within three months and payment commenced from month four. The system has proved to be extremely stable and is now paying 180,000 beneficiaries from 36 workstations over 13 days per month. NamITech Limited and the Mpumulanga Government plan to eventually add e-purse applications.


TNB Hires Agent Issuer Manager

TNB Card Services has hired Jay Kurian, formerly of Banco Popular, as SVP and Agent Issuer Program manager, to provide an alternative to credit unions that choose to sell their card portfolios and issue cards through TNB rather than manage the programs themselves. Most recently, Kurian was with Banco Popular as director of U.S. card products in Orlando, Florida. Previously he held management positions responsible for card products at Signet Bank and AT&T Universal Card.


Privacy & APRs

A new study suggests that proposed opt-in privacy regulations could drive credit card interest rates higher. The study says the intense rate competition over the past decade was driven, in part, by information-based strategies used by card issuers, particularly non-bank issuers, such as MBNA and Capital One. The study’s authors, Michael Staten of Georgetown University’s McDonough School of Business and Fred Cate of Indiana University School of Law, say the percent of credit card balances being charged an interest rate of 18.0% or more plummeted from 70% to 44% in just 12 months during 1991-1992. This was the time when the national credit card market was first absorbing the impact of competition from MBNA, Capital One, and other information-based credit card issuers. The Staten/Cate study examined the likely consequences of “opt-in” privacy regulations, which have been proposed at the federal and state level. The regulations would require explicit consent before identifying information — such as name, address and household income — could be shared. The professors said each of the three types of proposed opt-in regulations would have the effect of choking off competition, raising costs, and possibly increasing the number of mailings required to achieve the same level of return. The authors also found that privacy regulations would have the unintended effect of restricting the industry’s antifraud protections. The study was sponsored by the Privacy Leadership Initiative.


eFunds Product Manager

eFunds Corporation says that Mick Spilsbury, formerly of Union Bank of California, will join the company as SVP of Product Management on June 1. A 25-year veteran of the banking industry, Spilsbury has served eFunds for the past several months in a consulting capacity. Before joining eFunds Spilsbury was Executive Vice President of eCommerce and Operations/Customer Service at Union Bank of California. Prior to that he served as Executive Vice President, Internal Services and Senior Vice President Strategic Planning and Marketing at The Bank of California.


Credit Stress

Consumers who stay on a debt management program for 18 months increase their level of satisfaction with their current financial situation by 25%. FL-based InCharge Institute of America says clients of its non-profit Profina Debt Solutions reported decreases in the incidence of financial stressors such as receiving overdue notices (down 55%), telephone calls from creditors (down 54%), calls from bill collectors (down 60%), and writing a check with insufficient funds (down 43%). InCharge also found a 74% decrease in the incidence of cash advances on credit cards as well as a 66% decrease in using a cash advance to pay another creditor. Active clients also reported a 44% reduction in writing bad checks with insufficient funds in their accounts. The population for the study was 4,000, the sample was 1,800, and the return rate for the sample was 25 percent. Over 70% of the people participated in the panel study for 18 months. Sixty percent were females and 40 percent were males. Most were within the age grouping of 26 to 39 years. The average monthly income for Profina clients is $2,300, average age is 37, average number of unsecured credit accounts is 7, and the average unsecured debt enrolled in the program is $13,000.