NOVA + PMT = #4

The fourth largest provider of merchant bankcard processing services was formed yesterday as NOVA Corp. and PMT Services announced plans to merge. The merger agreement is structured as a tax-free pooling of interests and is valued at $1.23 billion or $24.27 per share of NOVA. With the combined portfolio of NOVA and PMT producing an annualized charge volume of more than $40 billion, the merger will move NOVA ahead of BA Merchant Services. The three largest merchant processors are FDC, NPC and Paymentech. The combined company, with 350,000 accounts, will become the new market leader in providing payment processing services to small to medium sized merchants.  Under terms of Thursday’s deal, PMT will become a wholly owned subsidiary of NOVA, and Richardson Roberts, Chairman and CEO of PMT will remain CEO of PMT and will serve as Vice Chairman of the NOVA Board of Directors. Both firms have extensive M&A expertise, with more than 130 transactions in the last 6 years. The combined company intends to leverage that expertise. Yesterday’s deal is expected to close by early October. According to company reports the two companies had combined revenues of $620 million last year.

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Card Scam

King Marketing, Inc of  Aurora, IL was charged this week by the Illinois Attorney General with operating a phony credit card scam. The firm allegedly promised consumers so-called “guaranteed” and “pre-approved” major credit cards.  The company solicited victims by placing ads in newspapers around the country offering major credit cards with a $2,500 limit to consumers who called their 800 number. Consumers who called were told that a “guaranteed” major credit card would be mailed to them for an advance fee ranging from $79 to $98.  Defendants then asked for bank account information and subsequently deducted the fees from consumers’ accounts.  Consumers never received a major credit card.  Instead, defendants sent consumers a “Credit Plus” catalog with a letter explaining that consumers must pay another fee to obtain a charge card to purchase catalog items only.

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Gillette Phone Card

ATCALL Inc. has created a prepaid phone card to promote the new Gillette MACH3 razor to be introduced early this summer.

ATCALL has produced prepaid phone cards with a design of the new MACH3 razor on the front. Gillette Sales Representatives will distribute the phone cards at the General Merchandise Health and Beauty Care Conference this month. The remainder of the phone cards may be used in subsequent customer mail-outs.

While Gillette also manufactures batteries, writing instruments and toothbrushes, the company is best known for it’s shaving products. The triple-blade MACH3 razor will be available at retail locations this July. The new razor is expected to further strengthen Gillette’s worldwide leadership position in blades and razors.

Headquartered in Vienna,VA, ATCALL, , offers a complete line of telecommunications products and services including residential and commercial long distance, calling cards and prepaid phone cards.

ATCALL has significantly expanded its presence in the retail prepaid phone card market by establishing distribution channels with mass merchandisers, supermarkets and drug store chains.

ATCALL is a member of various telecommunications industry organizations including the International Telecard Association (ITA) and the Telecommunications Resellers Association (TRA).

ATCALL Inc. Partners With LET’S TALK Cellular & Wireless to Sell Prepaid Phone Cards

ATCALL Inc. announced Thursday that LET’S TALK Cellular & Wireless, a nationwide retailer of cellular and high-tech communications products, will begin selling ATCALL’s prepaid phone cards.

LET’S TALK will launch a program selling ATCALL’s standard 20, 40 and 80 minute prepaid phone cards. ATCALL is currently in the process of designing a customized prepaid phone card with the LET’S TALK logo on the card. ATCALL offers customized private-label phone cards to retailers at no additional cost.

Based out of Miami, FL, LET’S TALK is the largest retailer specializing in wireless communication and advanced communication products.

ATCALL’s prepaid phone cards will be sold in all LET’S TALK locations nationwide. “We are extremely excited about our new partnership with LET’S TALK,” said Nic Negretti, ATCALL’s Eastern Regional Sales Manager, adding, “there could be no better partnership than that of these two dynamic companies both specializing in the telecommunications field.”

Headquartered in Vienna, ATCALL offers a complete line of telecommunications products and services including residential and commercial long distance, calling cards and prepaid phone cards.

ATCALL has significantly expanded its presence in the retail prepaid phone card market by establishing distribution channels with mass merchandisers, supermarkets and drug store chains.

ATCALL is a member of various telecommunications industry organizations including the International Telecard Association (ITA) and the Telecommunications Resellers Association (TRA).

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GCS Resolution

In an effort to relieve the accounting burden related to chargeback disputes for the hospitality industry, three companies joined together yesterday to offer an automated resolution to the problem. Paymentech, Global Card Services and Checkmate Electronics are working together to offer GCS’ ‘Resolution’. Resolution is an automated chargeback/retrieval request solution that enables Paymentech to electronically respond to such requests on behalf of the hotel or resort. When Paymentech receives a retrieval request, the processor interfaces with the GCS folio and transaction database, captures the needed information, and automatically submits the item to the credit card issuing bank. In most cases, the issue is resolved with no inconvenience to hotel accounting staff.  GCS will also offer Checkmate’s ‘eN-Touch 1000’ guest activated terminal as a POS option for the ‘Resolution’ package. Hotel clients can select an entry-level application or more sophisticated options such as fully integrating ‘Resolution’ into the property management system.

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HONOR Mom

American moms are more popular than Santa Claus according to the HONOR ATM network. The company reported Thursday that the day before Mother’s Day 1998 topped Christmas Eve 1997 for the all-time record number of ATM and POS transactions processed in a 24-hour period. HONOR processed a record 3,477,462 transactions for May 9, beating the previous one-day record of 3,430,643 transactions set on Dec. 24, 1997. HONOR also set the all-time monthly transaction record in May with 68,487,043 network transactions. The company offered no projections on this weekend’s Father’s Day.

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Perfect Betting

Betting Inc. said Thursday its business plan is to facilitate PERFECT wagering transactions between the players and the gaming operators.

A PERFECT wager is a personal encrypted transaction that is originating from a remote site such as a home or and which is encrypted office or car, and is either ATM card or value-added smart card authenticated. These are real-time electronic cash transactions for the gaming operator.

Wagers will originate from competing landline, wireless or computer equipment.

These PERFECT devices will be given away as with the Shop While You Wait application or will be aggressively mass marketed to the consumer by the phone or utility industry as a method to pay bills from home without writing checks, or to purchase without giving a credit card to an operator.

It is the contention of Betting Inc. that many competing types of PERFECT equipment will flood into the marketplace, such as the ET&T Pay Master (web site:hpos.com) and that consumers will pay bills, send donations, purchase or wager with these devices.

The business of Betting Inc. is to provide a service interface between the bank host processing centers such as ET&T who are processing these incoming PERFECT wagers by smart card, or ATM card and the gaming operators who need to acknowledge receipt of payment to the host processing centers. Betting Inc. is paid a fee per transaction for this service. No accounts receivable.

Since the PERFECT wager is bank to bank, then instant government taxation of the player’s winnings being sent by the gaming operator’s bank to the player’s bank is a reality.

The massive marketing forces of industries pushing to save substantial costs by cutting back on receiving bill payment by checks from their banked customers, closing walk-in bill payment locations for their non-banked customers who will now use PERFECT equipment and value-added smart cards from their homes to pay bills, combined with instant taxation of PERFECT wagering winnings in developed countries, will drive PERFECT equipment to give aways and will allow the average consumer PERFECT wagering on a global basis by 2001.

The mission of Betting Inc. is to establish a global PERFECT wagering presence and to service the first multibillion-dollar pool international PERFECT game occurring on the same day between participating countries.

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Towing Biz Goes Wireless

U.S. Wireless Data, Inc. announced Thursday that a number of automobile towing companies have begun utilizing the TRANZ Enabler, U.S. Wireless Data’s proprietary wireless credit card processing solution. The TRANZ Enabler solution will be employed at remote locations where automobile towing jobs are carried out.

USWDA sees the towing industry as one that could rapidly accelerate deployment of its TRANZ ENABLER solution. The New York City area has recently mandated that all towing companies must offer a credit card payment option to those whose automobiles are towed. Other areas throughout the U.S. have adopted similar mandates to those in New York, and other areas are expected to follow suit shortly.

Currently, if a tow truck driver accepts a credit card and uses the traditional “knucklebuster” card imprint machine, then the towing company must pay an additional fee, or a surcharge, to the processor of the transaction. These surcharges can dramatically impact the economics of the tow company. By using the U.S. Wireless Data TRANZ Enabler, the tow truck driver can swipe the credit card on site and receive real time approval from the processor of the transaction, and therefore avoid the “knucklebuster” surcharges.

U.S. Wireless Data’s wireless credit card processing solutions are currently in use by a number of towing companies throughout the United States, including: all boro towing in Brooklyn, NY, Lombardo’s Towing in Hempstead, NY, San Diego Towing in San Diego, CA, Ramirez Towing in Suisun, CA, and Finest Towing & Autobody in Brooklyn, NY.

Norman Teitler, Director of the New York Metropolitan Towing Association, commented, “The towing industry has struggled with the inability to offer payment flexibility without the tow companies incurring significant added expenses. With new mandates requiring tow companies to accept credit cards, the tow companies are forced to absorb the added processing surcharges.

“The TRANZ Enabler wireless transaction processing solution provides an excellent alternative. The ability to accept credit cards out in the field provides customers with added flexibility of forms of payment, satisfies new mandates and allows the tow companies to avoid processing surcharges. The industry can now offer a better service and actually reduce the overall credit card transactions expenses.”

USWDA’s proprietary enabling technology, TRANZ Enabler, converts a merchant’s existing dial-up TRANZ VeriFone credit card terminal into a high-speed wireless terminal. It provides merchants with a faster and more cost efficient way to transact business. The wireless transaction takes 3 to 5 seconds versus 11 to 20 seconds with a dial-up service.

Going wireless means the merchant no longer needs a dedicated or shared telephone line to carry transaction traffic, thereby eliminating delays, busy signals and the cost to install or pay for monthly telephone service. And because it’s wireless, the merchant can transact business anywhere the customer wishes to buy, instead of being confined to a service counter with a telephone line.

U.S. Wireless Data, Inc. has developed, tested and is now delivering new proprietary products, programs and standards for the transaction processing and credit card industry which utilizes wireless cellular digital packet data (CDPD) networks. USWDA delivers the fastest and most cost-effective transaction processing solution to retail merchants in the United States today. The Company has joint marketing initiatives in place with GTE Wireless and Bell Atlantic Mobile.

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InSpec 9000

Mag-Tek rolled out a new card encoding quality tester yesterday. The new ‘InSpec 9000’ and its associated PC software tests critical parameters of encoded magnetic stripe cards, providing immediate feedback. All testing done with the ‘InSpec 9000’ assures that encoded cards meet ISO standards for Hi-Co and Lo-Co cards. Within seconds it can read three tracks simultaneously, and compare the parameters for amplitude, start sentinel and bit size to those of ISO standards. The results are shown on the PC monitor instantaneously. Every measured parameter is presented graphically and numerically. Test data is also stored for further review and to provide performance trends. The ‘InSpec 9000’ can also detect extra pulse or noise, sometimes referred to as an added pulse or background noise which can cause card read-errors in the field. The detection of this parameter, related to the magnetic media, is achieved by simply reading the card. A visual comparison of data encoded on the card to that embossed on the card is also possible.

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Federal Heat

The U.S. Department of Justice has not shelved its probe into alleged antitrust violations by VISA and MasterCard. Assistant attorney general Joel Klein told the Senate Judiciary Committee this week that he continues to be “personally” and “extensively” involved in the investigation. Klein indicated the delay in action is due to the fact that the bank card association issue is so “broad and profound for America’s economy”. Klein said “the matter has not receded into the twilight” and remains a top priority. At least one other member of the Committee expressed concern over the recently announced bank mega mergers which would concentrate the bank card industry even more. Reportedly the Federal Trade Commission has now launched a probe into debit card use.

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Garfield MasterCard

Tomorrow marks the 20th birthday of cartoon character ‘Garfield’, and MBNA is set to release a special MasterCard to honor the big, fat hairy cat. The wisecracking, nap-taking, coffee-guzzling, lasagna-loving, Monday-hating, dog-punting, credit-card-carrying fat cat was created by Jim Davis and is managed by Davis’ company, Paws, Inc. MBNA and IN-based Paws have teamed up to offer the card which will offer rewards towards ‘Garfield’ merchandise. ‘Garfield’ first appeared in 41 U.S. newspapers in 1978 and has grown to 2,550 newspaper clients, and nearly 600 licensees located in 111 countries around the globe. The cartoon character is read by over 220 million readers daily.

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AmEx Senior Marketer to Intellipost

Intellipost Corporation has named Randy Wise its Senior Vice President of Consumer Marketing, drawing on Wise’s direct marketing experience at American Express to strengthen the company’s member acquisition and product development efforts.

“Randy has spent the last decade perfecting the process of consumer acquisition and retention through database marketing and loyalty programs,” said Steve Markowitz, Intellipost President and CEO.  “His expertise is exactly what we need to meet the goals that we’ve established for Intellipost.”

Those goals include boosting membership in BonusMail , Intellipost’s flagship service that rewards consumers to receive targeted offers by email, into the millions.  Intellipost currently boasts more than 800,000 member relationships in BonusMail and co-branded versions of the company’s loyalty currency, Rew@rds.

During his tenure as Vice President of Acquisition Marketing in the Consumer Card Services Group of American Express Travel Related Services, Wise was directly responsible for over 75% of the credit card giant’s annual growth in consumer card membership.  In addition, Wise led the launch of over 20 new credit and charge cards to meet the multiple needs of American Express prospects.

Wise, who terms himself a “classically trained direct marketer who gets the Net,” has extensive experience in database marketing, product development and the use of rewards programs to promote brand affinity.  While concentrating on cardmember loyalty in American Express’s Charge Card Group, Wise increased card transactions and retention by introducing a successful loyalty program to recognize and reward the most profitable cardmembers.  At Intellipost, Wise will lead the aggressive push for new members while overseeing the development of new products and partnerships.

Corporate Background

Intellipost Corporation, a privately held company based in San Francisco, operates BonusMail, the Internet’s only program that rewards consumers to receive targeted advertisements by email.  Among the company’s investors are Henry R. Kravis and other partners of investment giant Kohlberg Kravis Roberts & Co. (KKR); Applewood Associates, a unit of GeoCapital, one of the world’s biggest venture investors; Brierley & Partners, a world leader in loyalty marketing; and Dai Nippon Printing Co., Ltd., the world’s largest printing company.

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