Headlines:
Paytraxx Seen as Non-Issue for CheckFree Moody's Downgrades Deluxe Corp. Bonds SVPCO's Daily Image Volume Reaches 3M N.J.'s Commerce to Use RSA Fraud Spotter
Paytraxx Seen as Non-Issue for CheckFree
Fiserv Inc.'s Paytraxx bill-pay service may not be much of a competitive threat to the dominant online bill-payment provider, CheckFree Corp., according to a Merrill Lynch & Co. analyst.
The Brookfield, Wis., vendor introduced Paytraxx last week and said it would offer the service to its core banking customers.
Gregory Smith, a research analyst with Merrill, wrote in a note issued Wednesday that Fiserv is trying to find ways to get more revenue from its customer base of 17,000 financial companies.
Paytraxx uses Fiserv software to run bill-payment Web sites, and Mr. Smith noted that the service also routes some payments through CheckFree's network; if Paytraxx' volume increases, so will CheckFree's.
"Thus, the near-term competitive threat" to CheckFree "is not as severe as we originally thought," Mr. Smith wrote. "In fact, CheckFree could actually benefit if Fiserv is able to gain share against other vendors."
Paytraxx was developed by Integrasys, a Frisco, Tex., core processor owned by Fiserv.
Moody's Downgrades Deluxe Corp. Bonds
Moody's Investors Service Inc. downgraded $10 million of Deluxe Corp.'s debt Tuesday, saying that the check printer's cost-cutting plan may not go far enough to stem the deterioration of its core businesses.
The New York agency cut its ratings for Deluxe's bonds to Ba2, a so-called junk grade, from Baa3, and for its short-term commercial paper to "not prime," from "prime-3." Moody's also gave its ratings for Deluxe a negative outlook.
Last month the Shoreview, Minn., vendor cut its stock dividend and announced a plan to eliminate at least $150 million of costs by the end of 2008. In the second quarter it lost $2 million, or 5 cents a share, and revenue fell 7% from a year earlier, to $403 million.
John E. Puchalla, a Moody's analyst, wrote in a note that the agency is "concerned that the company's overall business risk is increasing as the ongoing shift toward electronic payments and forms processing creates price, volume and adverse product mix pressure on the company's mature print-based product lines."
The cost cuts "have the potential to alleviate some of the intense margin and cash flow pressure, but do not remedy the fundamental concern over the revenue base erosion," Mr. Puchalla wrote.
SVPCO's Daily Image Volume Reaches 3M
The average July check image volume per business day on the SVPCO Image Payments Network rose 17.15% from June, to a record 3 million.
The Clearing House Payments Co. LLC of New York, which operates the network, said Wednesday that for the month it carried 60.2 million images worth $168 billion. In July of last year it carried 4.3 million, or an average of 216,000 a day, with a total value of $35 billion.
Fifteen major financial companies use the network to clear images, including PNC Financial Services Group Inc. of Pittsburgh, which said Monday it had started to use it last month.
George Thomas, an executive vice president of The Clearing House, said in a press release that he expects the network to be carrying 100 million images a month by yearend.
"The expanding volumes reflect the fact that the image payments network is fundamentally transforming check processing operations across the country, and will play an increasingly important role as more institutions migrate from paper checks to electronic payments," he said.
N.J.'s Commerce to Use RSA Fraud Spotter
Commerce Bancorp Inc. of Cherry Hill, N.J., has agreed to use an antifraud service from RSA Security Inc.
The Bedford, Mass., security vendor said Wednesday that Commerce plans to use its FraudAction, which can spot phishing Web sites in real time. It also provides information needed to shutter the bogus sites and track down the people who create them.
FraudAction is run from RSA's data center, which operates around the clock and employs more than 40 analysts to spot and block phishing attacks.
Chris Young, an RSA senior vice president and the general manager of its consumer solutions division, said in a press release that phishing accounts for most online fraud. "Financial institutions need to take a layered approach to security in order to protect themselves and their customers from emerging threats."
