A consumer protection lawsuit against Direct Merchants Credit Card Bank, and its parent company Metris Companies was filed yesterday in Minnesota state court. The suit alleges Direct Merchants/Metris engaged in widespread deceptive and unlawful business practices. The lead plaintiff is a California resident. The action seeks class action status. Among the alleged misconduct by Direct Merchants Bank: routinely assesses fees for the purchase of fee-based services, such as its ‘PurchaseShield’ program, that cardholders did not authorize; repeatedly charges late payment fees and interest for cardholder payments that are not in fact late or delayed; makes solicitations in connection with checks issued to cardholders that are misleading and do not disclose the true value of the checks issued to cardholders; and regularly promises a lower interest rate in connection with balance transfers, convenience checks and cash advances than the interest rate that the cardholder receives. The national law firms involved in representing consumers are Lieff, Cabraser, Heimann & Bernstein and Zimmerman Reed. Direct Merchants and Metris says it will vigorously defend itself.Details
Participants in NACHA’s ‘Internet Secure ATM Payments’ pilot confirmed Wednesday they have successfully sent a digitally signed payment through an EFT network. This marks a first for the USA. The payment was made during a series of technical tests to enable ATM/debit cards to be securely used to pay for Internet purchases. In the technical tests, a digitally signed payment request was successfully sent from a simulated merchant web site through the STAR network to Citibank, which verified the digital signature to complete the transaction. A collaboration of ActivCard, AmeriNet, ANI Services, A-OK Network, Certicom and UTM Systems developed the technology and protocols. A full pilot is scheduled for later this year. In the full pilot, a consumer making an Internet purchase using an ATM card would use his or her card number, but instead of using a PIN, the consumer would digitally sign an electronic payment request. The digital signature is generated by a private key, which has been issued by the consumer’s bank and is securely stored in a chip on a device such as a smart card, token or software storage device.Details
NCR Corporation announced orders with India’s leading new private sector banks, HDFC Bank, IDBI Bank, UTI Bank and ICICI Bank totalling 500 ATMs. Some 250 ATMs have also been ordered by other financial institutions in India.
These orders account for a four-fold growth for NCR this year and represent a 50% increase in India’s total installed base of ATMs.
NCR’s success includes an order for 200 Personas 75 ATMs from UTI Bank. According to Hemant Kaul, vice president of marketing and retail banking, UTI Bank Ltd., “Our partnership with NCR has been central to our strategy of bringing new technology in the financial services market in the country and pioneering new uses of ATMs like bill payments.”
NCR sees the consumer benefits of self-service fueling further growth in ATM deployment across India. “The region’s leading banks recognize that the convenience of self-service gives them the edge in an increasingly competitive market,” said Bob Tramontano, vice president of marketing and new business development for NCR’s Financial Solutions Group. “We are investing in further support services for ATM deployers in India. By the end of this year we expect to be number one in market share after only four years of entering the market.”
As C.N. Ram, head of information technology at HDFC, who ordered 150 NCR ATMs, explains, “NCR has helped us to develop one of the most efficient and reliable self-service networks in India. And the new color-branded Personas ATMs have been a crowd puller, enhancing the brand of the delivery channel.”
About NCR Corporation
NCR Corporation (NYSE: NCR) is a recognized world leader in providing Relationship Technology(TM) solutions for the retail, financial, communications, travel and transportation, and insurance markets. NCR’s Relationship Technology solutions include store automation, ATMs and privacy- enabled Teradata(R) warehouses. The company’s business solutions are built on the foundation of its long-established industry knowledge and consulting expertise, value-adding software, global customer support services, a complete line of consumable and media products, and world-leading hardware technology. More information about NCR and its solutions may be found at [http://www.ncr.com].
UT-based ProPay introduced a personal payment service that enables consumers to beam payments to each other via PDAs. The ProPay system allows individuals to accept credit card payments from one another in person or online. Individuals can accept payments once they obtain a free individual merchant account, or ‘Commerce Account’, by registering at the ProPay Web site. There are no set-up fees or monthly charges normally associated with a merchant account. The only cost is a transaction fee, which is currently 35 cents plus 3.5% of the transaction total. Unlike systems that only use credit cards to pre-fund an account, buyers retain the ability to charge back a disputed transaction. For a limited time, new account holders will receive a $10 deposit into their ProPay account and a $10 referral bonus for each friend who opens an account.Details
Transaction Systems Architects, Inc. announced it has acquired WorkPoint Systems, Inc., an Omaha-based technology company focused on business process automation software. WorkPoint Systems will become a part of Insession Technologies, TSA’s business unit specializing in e-infrastructure solutions.
About Transaction Systems Architects
Transaction Systems Architects’ software facilitates electronic commerce and e-payments by providing consumers and companies access to their money. Its products are used to process a wide range of e-payment transactions involving credit cards, debit cards, smart cards, Internet banking services, checks and high-value money transfers, as well as e-payment clearing, settlement and management. Transaction Systems’ solutions are used on more than 3,550 product systems in 79 countries on six continents.Details
MerchantOnline.com named international electronic commerce expert Scott Dueweke its vice president of strategic development. Dueweke most recently held the same title with Cardservice International.
“Scott Dueweke comes to us with an outstanding international reputation for knowing what is happening in the Internet marketplace,” said Jim Gitney, MerchantOnline.com’s chief operating officer. “His expertise spans a tremendous range, including worldwide marketing, branding and development, international electronic payment systems and corporate communications. Scott is a key addition for MerchantOnline.com becoming the global trendsetter for integrated payment solutions.”
While at Cardservice International, Dueweke was responsible for the creation and branding of NanoMerchant. Prior to joining Cardservice, Dueweke was marketing manager for IBM’s (NYSE:IBM) Internet Payments and Digital Certificates group, heading the brand management and technical marketing efforts for the CommercePOINT family of products. From 1994 to 1996 Dueweke was senior national account executive with NaBANCO (now Chase Merchant Services) (NYSE:CMB), where he led the company’s charge into the e-commerce age. Throughout his career, Dueweke has spoken at numerous high-tech conferences as a leading e-commerce authority.
“MerchantOnline.com is in a unique position to enable the e-commerce marketplace with products that redefine security, ease of use and functionality,” Dueweke said. “No other company can match its ability to combine secure e-commerce solutions such as micropayments and merchant processing with a secure hardware device and proprietary ATM/debit network. This combination will lead to MerchantOnline.com emerging as the dominant provider of back-end secure payment products and services. It’s an exciting time to join this team.”
After earning his International Relations degree in 1986 from Michigan State’s James Madison College, Dueweke was appointed by the Reagan Administration to the U.S. Department of State. While at the Department of State, Dueweke acted in roles including the Department’s liaison with the Soviet Embassy during the relief efforts for the Armenian earthquake, the U.S. Congress, and as spokesman for the U.S. Agency for International development.
Founded in December 1997, MerchantOnline.com provides a secure transaction network that enables businesses and consumers to use one payment system for both their real world and virtual world needs utilizing credit card, ATM/debit card and other payment programs.Details
Online Resources & Communications Corp. announced it now offers a credit monitoring service through a new alliance with iPlace, Inc. (formerly ConsumerInfo.Com). The alliance is the latest in a series of Online Resources’ Internet partnerships that expand the range of services financial institutions can offer their customers while providing another source of online revenue for the company and its client institutions.
iPlace’s CreditCheck Monitoring Service enables institutions to offer their online customers a free copy of their credit report with a free trial membership. Customers are invited to purchase a membership to receive continued benefits beyond the trial period. Regular members receive unlimited free credit reports along with ongoing monitoring of their credit files so that they can check their credit status at any time during the paid membership period. Online Monthly Monitoring Alerts, a highlight of the service, inform members of important changes to their credit files, including new derogatory information, recent inquiries and several indicators of possible credit fraud. (For those customers who prefer to receive their reports through U.S. mail, Monitoring Alerts are provided on a quarterly basis.)
The CreditCheck Monitoring Service also offers many additional features and benefits. Members receive the quarterly CreditCheck Newsletter, either online or through the mail, with helpful information about managing credit. Knowledgeable customer service representatives provide assistance via a toll-free number. For members who wish to dispute inaccurate information on their credit reports, the service gives online guidelines on how to do this. Membership also includes access to Members-Only extra tools and features such as neighborhood and home sales’ reports.
‘This CreditCheck Monitoring Service empowers online customers who want to make sure their credit status is always up to date and correct, and at the same time, generates a new revenue opportunity for institutions, which will receive a percentage of the membership fee paid by their customers,’ said Ron Bergamesca, Online Resources’ senior vice president of marketing. ‘We will seamlessly integrate the service into an institution’s Web site, providing their customers with yet another reason to use the institution’s site as their online financial hub.’
‘Because of Online Resources’ leadership in the community bank market, we’re very excited to have our service offered through its clients Web sites,’ said Ed Ojdana, president of the credit division of iPlace, Inc. ‘We believe our CreditCheck Monitoring Service is an important ‘value-add’ for institutions looking to leverage the power of the Internet.’
Over the past few months, Online Resources has signed agreements with the industry’s leading Internet companies to provide services such as personalized consumer start pages bearing a financial institution’s brand, brokerage services, Web-based data mining to improve customer service and marketing, and sophisticated cash management solutions for institutions’ commercial clients.
Online Resources & Communications Corporation ([http://www.orcc.com]) is a leading outsourcer of privately-branded Internet financial services for regional and community banking institutions. The McLean, Virginia-based company has more than 400 institutional clients nationwide. It provides consumer bill paying and banking services and aggregates lending, insurance, securities trading and investment services. Online Resources performs real-time processing through its patented EFT gateway and full customer service for client institutions, giving them a comprehensive ‘hub’ solution from a single vendor. Client consumer marketing programs are conducted under the bankonline.com co-brand.
iPlace,Inc., ([http://www.iplace.com]) created by the merger of eNeighborhoods and ConsumerInfo.com, provides consumers with access to recent home sales, neighborhood information, credit education & services, and information on maintaining protecting and improving the value of consumer’s homes. Within its auspices are eNeighborhoods, a provider of timely neighborhood and home value information software for real estate professionals. [http://www.freecreditreport.com], a site offering users online delivery of their credit report and a credit monitoring service. [http://www.creditmatters.com] , site offering expert information on consumer credit reporting.
Hypercom Corporation (NYSE:HYC) — Universal Payment Processing is deploying Hypercom(R) ePic ICE(tm) 5500 touch-screen based payment terminals to enhance its Universal Total Check(tm) and Universal Connect(tm) products. The number of terminals initially planned is 3,500. Universal Payment Processing is a vertically integrated electronic transaction processor.
“Hypercom’s ePic ICE 5500 card payment terminals are extremely user-friendly devices that allow us to support the many new value-added services that we are taking to our merchant base, which translates into more revenue and profit opportunities for the company,” said Florian DeVitis, senior vice president of Sales, Universal Payment Processing. “We are partnering with Hypercom to differentiate ourselves in the industry with the first touch screen point-of-sale solution that along with ePic applications and solutions, will change the course of payment processing completely.”
Packed with value-added features, Hypercom’s ePic applications and ICE 5500 terminal platforms form a powerful, multi-function payment system incorporating high-speed communications using Hypercom’s FastPOS modem technology and screen-based operations, an absolute requirement in supporting Internet browser access. This browser capability will allow the management of Hypercom’s or any other vendor’s e-commerce web storefront, cost-effectively bridging the merchant’s physical retail payments needs and the merchant’s web-based e-commerce storefront management needs. ePic (ePOS-infocommerce(tm)) will also enable merchants to access a range of Internet-based services via their in-store ICE terminals, including e-mail, on-screen advertising, interactive electronic coupons, electronic receipt capture, access to DDA account information and cash management reporting — in addition to traditional secure payment processing functions.
“We are pleased that Universal has chosen the ePic ICE 5500 terminal platforms for its merchant customers,” said John Marshall, senior vice president and general manager, Hypercom North America POS.
“Touch screens are the new medium in point-of-sale transaction technology, and form the minimum basis to move forward with all of the new value-added services that Universal’s customers are demanding from their point-of-sale platform in the 21st century,” Marshall said.
Universal Payment Processing, a wholly owned subsidiary of Universal Savings Bank, F.A., a federally chartered savings bank, is a vertically integrated electronic transaction processor. Universal provides transaction authorization, data capture, settlement and funds transfer services to over 45,000 business clients nationwide. Universal offers credit and debit card processing, electronic check processing, time/attendance and payroll processing, pre-paid phone products, electronic gift cards, and e-commerce solutions. Visit Universal online at http://www.usb.com.
Hypercom Corporation (NYSE:HYC) is a global provider of end-to-end electronic payment solutions, including card payment systems, peripherals, network products, software and e-commerce payment solutions that add value at the point-of-sale for consumers, merchants and acquirers.
Headquartered in Phoenix, Ariz., Hypercom markets its products in more than 70 countries through a global network of affiliates and offices in Argentina, Australia, Brazil, Chile, China, Germany, Hong Kong, Hungary, Japan, Puerto Rico, Mexico, Russia, Singapore, Sweden, the United Kingdom and Venezuela. Hypercom’s Internet address is www.hypercom.com.Details
The Consumer Financial Network announced this morning it has received investments totaling $130.5 million. This is one of the largest rounds of equity funding for an Internet company. New CFN investors include: Capital Research and Management Company; Chase Capital Partners; Royal Bank of Canada; First Union; Hearst-Argyle Television; J. & W. Seligman & Co.; Equifax Communications, Westway Capital; and several private investors. These companies join original CFN investors GE Capital Equity Investments Group and iXL Enterprises.Details
Smart VISA cards are finally coming to the U.S. Yesterday, First Data Resources announced it has become the first processor in the industry to be registered to personalize all VISA chip card products. FDR’s secure embossing facility in Omaha was audited in November and was recently granted the registration by VISA. First Data has the capability to encode the VISA chip with information such as credit limit, maximum dollar amount, and expiration date, depending on the card issuer’s needs and the type of card. First Data, one of the first 30 members of the VISA-led Global Platform consortium launched last year to create cross industry standards for multi-application smart cards, has been providing smart card personalization services since 1997. Internationally, the company provides smart card processing services for more than eight clients in the United Kingdom representing 2.8 million smart cards on file.Details
MasterCard International announced this morning that its U.S. Region Board of Directors has elected Michael Rhodes as its new chairman. MasterCard also announced that John Klein, Richard Srednicki, and Patrick Swanick were named to the U.S. Board. Rhodes is a vice chairman of MBNA America Bank. He was named vice chairman and a member of the Board of Directors for the U.S. Region of MasterCard International in 1998. Rhodes will succeed Ronald Zebeck of Metris Companies, as chairman. John Klein is chairman of the Board, President and CEO of People’s Bank. Richard Srednicki is EVP of The Chase Manhattan Bank. Patrick Swanick is president and CEO of Key Electronic Services, the electronic commerce subsidiary of KeyCorp.Details
Associates First Capital and Tractor Supply Company announced yesterday an exclusive private label credit card agreement. TSC is one of the largest and most rapidly growing retail farm and ranch store chains in the U. S. The firm has 282 stories nationwide. The program will be operated by Associates Commerce Solutions.Details