BA Lawsuit

American Express reportedly threatened to end its relationship with British Airways over a dispute in regard to discounted ticket payments. The beleaguered airline filed suit this week in New York to stop the AmEx action. British newspapers said two weeks ago BA stopped paying fees on corporate card transactions involving discounted fares in the UK to save cash. AmEx declared a breach of its merchant contract with BA and threatened to pull the plug on the entire BA account with thirty days. The newspapers suggested BA is looking to pay a flat minimum fee instead of a percentage for each airline ticket purchased. BA has been offering deeply discounted tickets to UK corporate travelers. Reportedly, more than 70% of major British companies use corporate AmEx cards for travel expenditures.

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CompuCredit Fraud Protection

CompuCredit has signed a deal to partner with Online Insight to offer fraud protection services to cardholders and has launched an interactive e-direct campaign this month, targeting over 100,000 of CompuCredit’s Aspire cardholders. The campaign will invite customers to select fraud protection products and services that match their unique preferences for features such as access to credit report and score, personal credit fraud alerts, protection from unsolicited marketing, credit education, and annual subscription fee.

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MedUnite & Eldorado

MedUnite Inc. and Phoenix-based Eldorado Computing, Inc. have signed a deal to assist Eldorado’s customers in reaching HIPAA compliance through real-time and batch electronic transactions such as payer claims processing, eligibility verification, claim status inquiry, and referrals and authorizations. The two companies will securely link and integrate their ASP data centers to provide Eldorado’s customers with a HIPAA-ready solution for processing healthcare transactions electronically. MedUnite’s EDI technology will be available to all existing and new Eldorado customers in a tightly integrated environment.

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Oasis CEO

Toronto-based Oasis Technology has named David Pasieka as president and CEO to replace CEO and co-founder Ashraf Dimitri, who has led Oasis since its inception in 1989. Pasieka brings more than 23 years of global operations, senior management and business development experience at several of Canada’s technology companies, including World Gaming PLC, AT&T Canada, MetroNet Communications Corporation, 724 Solutions Inc., and Bell Canada. Since January 2002, Pasieka has held the position of president for Cedarvue Partners, a consulting company focused on supporting early-stage technology companies.

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Card Cops

A tiny southern California firm has taken it upon itself to catch online credit card fraudsters. Two weeks ago, Cardcops.com launched a bogus Web site selling laptop computers. Within the first 12 hours the company received 16 orders using stolen credit cards totaling over $27,000. Cardcops.com says the orders came from foreign IP’s and had United States drops as shipping addresses. The firm has since shipped bogus orders to the shipping addresses to ID the culprits. The Secret Service is now investigating. The firm has conducted other sting operations and has found most of the fraudulent card activity coming from Indonesia, Romania, Turkey, and Bulgaria. Cardcops.com says merchants need to make the U.S citizens who are picking up the stolen merchandise so paranoid to go to the shipping address that “the foreign carders can’t find anyone foolish enough to be their mule.”

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Online Profits

Online sales to consumers has reached critical mass, and more e-retailers are now posting profits according to a new study released this morning. The report projects a 41% growth in online sales this year, hitting $72.1 billion. “The State of Retailing Online 5.0” annual study conducted by The Boston Consulting Group with market-sizing data supplied by Forrester Research, says shoppers spent $51.3 billion online in 2001, up 21% from the year before. Operating margins rose from a net loss of 15% in 2000 to a loss of 6% in 2001, with break-even expected this year. Catalog-based retailers continued to have the most success, with positive margins of 6%. Significant drivers of improved profitability in 2001 were increased consumer spending online and continued operational performance improvements in a variety of areas such as increased marketing efficiency, an increase in the number of repeat online buyers, and tighter expense control. Repeat buyers accounted for 53% of revenue in 2001, up from 40% in 2000. The study was sponsored by Shop.org, a division of the National Retail Federation.

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FUSA Signature

First USA has upgraded the co-branded Marriott Rewards VISA program to the VISA Signature level. The move follows last year’s decision to upgrade the United Airlines Mileage Plus VISA program to the elite VISA card. The new Marriott Rewards VISA Signature card offers unlimited point-earning capabilities and the ability to exceed to the pre-assigned credit limit based on payment capacity. Other benefits include: 24-hour concierge service; Up to $1 million in travel accident insurance; and up to $300 in trip delay insurance. New cardholders will also earn 10,000 bonus Marriott Rewards points when making their first purchase with the new card. FUSA notes that it is not changing the annual fee or interest rates on existing accounts. (CF Library 11/29/01)

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Retail Pro & Paymentech

Paymentech will provide payment processing for Retail Technologies International and its flagship product Retail Pro, which is used in more than 22,000 stores and 60 countries. Retail Pro will enable transaction data to be automatically written into the Retail Pro database. There is no need to enter data twice and everything is done automatically. Paymentech processed approximately 3.7 billion total transactions and $114 billion in bankcard sales volume in 2001.

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Willumstad Goes Global

As part of a new management structure, Citigroup said yesterday that Bob Willumstad, President of Citigroup and Chairman and CEO, Global Consumer Group, will now have global product responsibility for credit cards; consumer finance; and consumer branch banking. Bob Willumstad will also oversee Citigroup’s operations in Mexico and Puerto Rico. In addition, Mr. Willumstad, as President, will continue to serve as a member of the Finance and Capital Committee, the Investment Committee, and the Risk Committee.

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POSTCARD

London-based Mosaic Software launched PostCard, a complete debit card management and issuer services system. PostCard integrates with the Postilion Realtime Framework to enable processors to service any number of issuers, each with potentially very different requirements. With PostCard, operators on card issuers’ premises can define new cards, update existing cards, and delete existing cards. The product also runs a card production staging process on a regular basis, allowing files to be built for the production of payment cards. The files can be used by the PostCard owner or by an independent card production company for the encoding of magnetic-stripe cards or personalization of EMV smart cards.

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Supreme Decision

The U.S. Supreme Court decided yesterday not to review the Second Circuit Court of Appeal’s decision upholding a grant of class certification in the antitrust lawsuit brought against VISA and MasterCard by a group of U.S. merchants. Although the Court made no comment on the case, the implications for VISA and MasterCard are significant since it may force the card associations to seek a settlement rather than risk a trial that could produce damages of more than $40 billion. MasterCard said yesterday that the U.S. Supreme Court missed an opportunity to clarify the confusing standards for class certification that exist among district and appellate courts and it may open the doors to increasing class action abuse. MasterCard noted that the Court’s decision does not relate to the merits of the case, which challenges its “Honor All Cards” rule. Noah Hanft, General Counsel for MasterCard yesterday said that MasterCard is confident that the attempt by retailers “to take away from consumers the ability to choose how to pay for their purchases will fail once the plaintiffs’ attorney is called on to present evidence, not rhetoric.” One year ago, VISA and MasterCard filed an appeal to the Second Circuit Court of Appeals seeking to reverse Federal District Court Judge John Gleeson’s decision granting class-action status. The Second Circuit Court of Appeals turned down the motion by a 2-to-1 decision. In the dissenting opinion, Judge Jacobs, the senior judge on the Second Circuit panel, argued that the Court was obligated to look at two fundamental issues: whether the case can be manageably tried as a class action and whether common issues predominate among the four million merchants now in the class. (CF Library 2/24/00; 6/8/00; 2/5/01; 4/4/02)

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DINERS AEROPLAN

Diners Club Canada has renewed its contract with Air Canada to offer Aeroplan Miles. Diners became the first card to offer Aeroplan Miles in 1989. Aeroplan is Canada’s leading frequent flyer program with more than 5 million Aeroplan members. The Diners/Aeroplan partnership also offers Diners Club Silver, Gold, and Maple Leaf Club cards. Maple Leaf Club cardholders have access to Air Canada’s Maple Leaf and affiliated airport lounges worldwide. Each year, Maple Leaf Club cardholders will receive a special two-for-one ticket offer on Air Canada.

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