Network Hopes Name Change Helps Pick up the Tempo

  Can a name change help a company grow its business faster? Debitman Card Inc., which in late November changed its name to Tempo Payments Inc., sure hopes so.
  Executives at the San Mateo, Calif.-based PIN-debit network say a study of consumers and retailers found that the Debitman name was inherently limited. "It only spoke to debit," says Mike Grossman, Tempo CEO. "We now have a name that has broader appeal."
  Tempo reportedly is exploring other payment formats, including prepaid cards and PIN-secured credit cards. Shifting from Debitman to the Tempo name will make moving into additional markets easier, Grossman says.
  "Any payment type that you see competing payment networks offer is something plausible that Tempo could offer," he says, claiming nothing specific is in the works.
  Tempo, which launched in 2002, is a merchant-based network with a fee structure designed to be a lower-cost alternative to the interchange fees merchants ultimately pay to accept bank-issued debit and credit cards. More than 200,000 merchant locations, including Wal-Mart stores, accept Tempo transactions, which are settled from cardholders' checking accounts through the automated clearinghouse system instead of through traditional EFT network switches.
  About a dozen merchants also issue Tempo cards and earn interchange when their cards are used at other retailers' stores. Tempo transactions are initiated at the same payment terminals that support bank card transactions and are routed through the same processors that process bank cards.
  Merchants pay 15 cents for a Tempo transaction-a 5-cent switch fee plus 10 cents in interchange. Issuing merchants receive 6 cents to 9 cents back in interchange, depending on their Tempo volume.
  While some observers say Tempo's biggest challenge is getting merchants to issue its cards, retailer acceptance is expected to grow. In conjunction with the name-change announcement, Tempo also reported that it has struck a deal with Fiserv Inc. to help increase merchant-processor participation in the Tempo Retailer Network.
  Merchant processors that already support Tempo acceptance include Fifth Third Bank Processing Solutions, Chase Paymentech Solutions and RBS Lynk.
  Under the Fiserv agreement, the Brookfield, Wis.-based company will enable its processor clients to offer their merchants the ability to accept Tempo transactions. Gateway access to the Tempo network likely will start in late January 2007, says Vince Forte, Fiserv senior vice president.
  Fiserv, known more as an issuer processor, has about a half-dozen merchant-processing clients. It provides its merchant-processing clients gateway access to about a dozen regional EFT networks, including its own Accel/Exchange.
  Though Tempo essentially competes with regional EFT networks, Forte does not view Tempo as a competitor to Accel/Exchange. Fiserv also will not promote Tempo to its merchant clients, positioning it as just another gateway they have the option to access.
  One observer who has watched Tempo's progress over the years, Gwenn B?zard, partner and research director at Aite Group in Boston, says the Fiserv deal is "good, but it's not that significant."
  "Tempo has done a good job the past few months striking partnerships, especially on the acquiring side," he says. "But the key issue for Tempo is to get issuers on board."
  B?zard says large merchants probably will not find significant savings from Tempo over the cost to accept bank-issued PIN-debit cards. And for small- and mid-sized merchants, the decision whether to issue Tempo cards may be a matter of priority, he says. "Merchants also have other agenda and priorities around loyalty, so Tempo may not fit their loyalty agenda."
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