CyberSource Reconciliation Solution Launched

CyberSource has released “CyberSource Reconciliation Solution” to enable online merchants to eliminate up to 90% of the manual processing required to reconcile orders with receipts and to manage chargebacks and rejected payment requests. Reconciliation Solution compares order data recorded by the merchant with payment activity data automatically downloaded from the merchant’s payment processor. It takes automated action to resolve discrepancies and chargebacks, based on business rules established by the merchant. It generates exception reports to enable targeted, efficient staff action. An administration interface provides consolidated access to reports, case status and administration, and all associated order information.

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FDC Lands First-of-a-Kind Agreement in China

China’s first full bankcard outsourcing agreement has been signed between China Everbright Bank and First Data. China Everbright Bank already has issued more than 10 million debit cards and has total assets of more than $39.8 billion. The bank plans to launch a credit card product later this year. The bank has a branch network in 23 of China’s provinces and 36 cities, including Shanghai, where First Data opened an operations center for north Asia last October. Under terms of the multi-year agreement, First Data will provide business consulting and transaction processing services, including authorizations, account management, backroom services, and merchant account processing. First Data’s “VisionPLUS” software will be used as the processing platform.

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California Couple Sues Card Companies for Gambling Losses

A California couple has filed a lawsuit against VISA, MasterCard, Discover, and the banks that issued their credit cards, over losses they sustained by gambling online. Lisa and Andrew Harding filed the lawsuit in Alameda County in response to a lawsuit filed against them by Retailers National Bank. The Hardings claim they lost more than $100,000 gambling online with their credit cards. The lawsuit charges the card networks and the issuers with violating the California “Unfair Business Practices Act” and a California prohibition against providing credit for gambling, as well as violating the USA Patriot Act. VISA and MasterCard have rules to enable member banks to prevent the use of their cards in connection with Internet gambling transactions. The rules require that, in order for a merchant to seek payment authorization in connection with an Internet gambling transaction, the merchant must code the authorization request to indicate that the transaction is an Internet gambling transaction. Merchants who will not abide by these rules are not permitted to accept cards.

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VISA’s Streamlined Charge-Back Process Pays Off

VISA USA’s “Re-Engineering Disputes” initiative, introduced three years ago, has produced a 21% decline of charge-backs last year, resulting in approximately $238 million in fewer losses for members. VISA’s upgraded dispute resolution process is aiming to resolve most cardholder disputes in one billing cycle. A key component of the VISA initiative to speed and simplify the dispute resolution process is “VISA Resolve Online,” which enables disputes to be handled through the Internet. VISA previously eliminated the requirement for formal written disputes and copies of credit receipts. VISA also reduced dispute categories to 24.

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Voice Authentication Study Released

TouchPoint Consulting and FSTC have completed the industry’s first in-depth and independent study of consumer views on voice authentication and have found that financial services consumers react positively to voice authentication. Leading financial institutions, including Charles Schwab, The Dreyfus Corporation, Visa, and Wells Fargo, were among the study’s primary sponsors. FSTC and TouchPoint Consulting partnered to develop the study for the sponsor group. The study, the first of its type, comprised qualitative and quantitative research as well as hands-on testing of several voice authentication applications in a lab setting.

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Catuity Edges Closer to Profitability

Loyalty system specialist Catuity reported second quarter revenue of $1.7 million, compared to second quarter 2002 revenue of $918,000. The company reported a net loss of $15,000, compared to a second quarter net loss one year ago of $987,000. The company noted that for the first six months of this year revenue of $3.1 million, is already higher than it was for the full calendar year 2002. Catuity is a provider of application software that allows merchants, transaction processors and card issuers to establish and administer customer loyalty programs integrated to the payment system at the point of sale. For complete details on Catuity’s 2Q/03 performance visit CardData (www.carddata.com).

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Bank One to Promote Other Cards on Yahoo!

Bank One has expanded and extended its relationship with Yahoo! that will enable the issuer to market its products and services on the Yahoo! network. Under the new agreement, Bank One will also market its co-branded credit cards featuring other brands, as well as consumer and small business banking products on the Yahoo! network. Bank One currently issues the “Yahoo! Titanium VISA” card, a co-branded credit card with a built-in rewards program. The expansion of the alliance also allows Bank One to market Yahoo! premium services such as Yahoo! “Finance Market Tracker” to Bank One cardholders.

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CATUITY 2Q/03

Catuity reported second quarter revenue of $1.7 million, compared to second quarter 2002 revenue of $918,000. The company reported a net loss of $15,000, compared to a second quarter net loss one year ago of $987,000. The company noted that for the first six months of this year revenue of $3.1 million, is already higher than it was for the full calendar year 2002. Catuity is a provider of application software that allows merchants, transaction processors and card issuers to establish and administer customer loyalty programs integrated to the payment system at the point of sale.

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FDC Hires Regulatory Compliance Executive

First Data has hired Christine Carnavos, formerly with FinCEN of the U.S. Department of the Treasury, as SVP of Global Compliance for the company’s Payment Services businesses, including Western Union. Ms. Carnavos brings more than 25 years of compliance, legal and government experience to her new role, which was established to support First Data’s commitment to regulatory compliance. She will be focusing on ensuring the company remains compliant with anti-money laundering initiatives, Bank Secrecy Act, USA Patriot Act and related global regulatory requirements. FDC is the leader in electronic commerce and payment services, First Data serves approximately 3 million merchant locations, 1,400 card issuers and millions of consumers, making it easy, fast and secure for people and businesses to buy goods and services using virtually any form of payment.

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SPAR EMV

Independent supermarket chain SPAR is deploying “VeriFone SC 5000” PINpads across 1,200 of its convenience retail stores in the UK.
Approximately 2,800 units will be deployed beginning in September, transitioning SPARÕs payment systems in readiness to meet the January 2005 deadline set for EMV migration. In addition, later this month SPAR will be installing units at selected retailers in Northampton, as part of the UK town trial of Chip and PIN. VeriFone has been involved in the trial since its launch in May this year, and is currently working with leading sports retailers all:sports and JJB Sports, and pet superstore retailer Pets at Home. The “SC 5000” features an integrated smart card reader with support for 0, 2, or 4 “Security Access Module” slots to enable support for a broad range of smart card-based loyalty and electronic purse schemes. It also offers an optional built-in magnetic-stripe card reader. The “SC 5000” is PED-compliant and offers a range of security protections including tamper-detection circuitry, “VeriShield” file authentication, and the flexibility to develop and support virtually any key-management scheme.

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Cap One’s Morris to Receive $750,000 Annually

Capital One shed more light on the employment agreement with the departing co-founder and top executive, Nigel Morris. Under terms of his deal, Morris will receive $750,000 annually, beginning January 1, 2004, and benefits including an automobile, an allowance for personal financial services, home security protection, executive assistance and home office support. He will also be prohibited from working for or advising any company that is engaged in a consumer lending business that competes with the Corporation’s business in any country where the Corporation does business, through 2008. If Morris violates the employment agreement at any time he will lose annual pay, benefits, and will be liable for a lump sum payment to Capital One of $25 million, as well as to sue for actual and punitive damages and injunctive relief. Morris will officially leave the company on April 30, 2004.

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