POS and Retail

Alliance Data Systems Inc. said Monday that the May net chargeoff rate in its master trust dropped 138 basis points from April but climbed 53 basis points from a year earlier, to 5.28%.

United Kingdom-based payments-network provider PayPoint plc Monday announced it has secured a new credit and debit card interchange agreement with UK-based Lloyds TSB Group plc to enable its affiliated retailers to pay a maximum of 1.4% on credit card payments and a flat fee of 14 pence per debit card payment. PayPoint's terminals accept payments for gas and electricity bills, mobile phone top-ups, and transportation tickets. PayPoint has more than 19,800 terminals in such UK and Irish shops as Spar, Costcutter, Sainsburys Local, One Stop and Londis.

Superior Bancorp of Birmingham, Ala., and Heartland Payment Systems Inc. have formed a joint marketing agreement offering their payments and banking services to businesses.

Visa Europe will keep its cross-border interchange rates as is, even though MasterCard Europe, facing hefty fines from European regulators, said Thursday it would "temporarily repeal" its rates while continuing its appeal of the regulators' decision. "The announcement has no impact in Visa Europe's interchange," Visa said in a statement issued Friday. "We are in ongoing talks with the European Commission about how we (will) set our interchange in the future, and these continue." The commission is investigating Visa Europe's interchange and card practices. In December, it gave MasterCard six months to lower its rates or face paying daily fines amounting to 3.5% of global revenues. Regulators say the rates are anticompetitive. On Friday, Visa Europe repeated that it hoped to reach agreement with the commission. But one analyst questioned how much negotiating power Visa has in the wake of MasterCard's interchange decision. "The way the situation is evolving, it's clear that MasterCard and Visa have little leverage over the [commission]," Gwenn Bézard, senior analyst for the Aite Group, a United States-based consultancy, tells CardLine Global. "It's not good news for Visa." Meanwhile, European retailers welcomed MasterCard's decision to repeal its rates. "This signals a major victory in the battle against this hidden taxation of purchasing, which will bring significant benefits to consumers and retailers," retail trade association EuroCommerce said in a statement issued Friday.

MasterCard Europe has "temporarily repealed" its interchange rates that European regulators say violate antitrust rules, the card company said Thursday. The action applies to cross-border interchange merchant acquirers pay card issuers when customers use cards carrying the MasterCard or Maestro debit brands. On 19 Dec. 2007, the European Commission ordered MasterCard to lower the rates within six months or face daily fines amounting to 3.5% of global revenues. On 1 March, MasterCard filed an appeal with the European Court of First Instance. The card organization is continuing that appeal, though MasterCard does not expect a judgment until "the second half of 2010," a MasterCard spokesperson tells CardLine Global. The interchange rates average 1% of the sale for MasterCard-branded cards and 0.5% for Maestro-branded cards, the spokesperson says. "MasterCard believes its cross-border interchange system has kept the cost of payment cards low for cardholders," Javier Perez, MasterCard Europe president, says in a statement. In March, the European Commission said it was investigating the interchange rates applied to Visa card transactions in Europe and the card organization's rule that merchants must accept all Visa-branded cards regardless of the issuer or type of transaction. Visa said it expects to reach a "negotiated settlement" with regulators (CardLine Global, 3 April).

First Data Corp. has extended an agreement to provide merchant processing services for customers of Webster Financial Corp. of Waterbury, Conn.

Cam Commerce Solutions Inc., a Fountain Valley, Calif., provider of payment processing systems for small and midsize merchants, said Tuesday that it has agreed to sell itself to Great Hill Partners LLC, a Boston private-equity company.

Consumers will be able to cash checks at Diebold Inc. ATMs that use Valid Systems' check-cashing software, the two companies announced Monday at SourceMedia's third annual Underbanked Financial Services Forum in Miami. Diebold plans to offer the check-cashing services with its Opteva line of ATMs, Margaret Bost, Diebold director of financial industry marketing, tells CardLine. The Opteva ATMs create an image of a consumer's check, verify the user's identity and the check's validity using Valid Systems' software, and pay the consumer the check amount minus a fee, Bost says. Deployers can set the ATM so check-cashers do not need a debit or credit card to use them, she says. Valid Systems already provides software to such banks as Minneapolis-based U.S. Bancorp and Cleveland-based KeyBank that enables them to offer check-cashing services through tellers, John Templer Jr., the Fort Worth, Texas-based company's CEO, tells CardLine. Consumers must register with a bank by providing identifying information such as a driver's license, fingerprint and Social Security number, he says. Consumers do not need to provide all the information each time they cash a check, so the bank can decide which information it wants customers to use to identify themselves at ATMs, Bost says. The software then examines each transaction to ensure it complies with the Bank Secrecy Act, Office of Foreign Asset Control and Patriot Act regulations, Templer says. It also processes the check's bank-routing and account numbers to ensure the document is legitimate, he says. SourceMedia publishes CardLine.

VeriFone Holdings Inc. is splitting its European sales-management team into two units, the point-of-sale terminal maker announced this week.

Teaching merchant-level sales agents about interchange takes a continuous process, not a one-shot event, experts say. "There is no fast or easy way to learn or teach interchange," Tyler Hurley, senior sales executive for Group ISO, an Irvine, Calif.-based independent sales organization, tells CardLine sister publication ISO&Agent Weekly. "When we work with our agents, it is not just an introductory, one-time training [course]. It is a consistent learning experience for our agents." When merchant-level sales agents understand the complexities of interchange, they are ready to pass that knowledge on to their merchant clients. However, many merchants do not care to learn about interchange, which is not a bad thing, experts say. "We're happy to educate them but, because of time and interest, they don't necessarily want to know," says Jim Hilber, western regional manager for International CyberTrans, an ISO based in Albuquerque, N.M. Merchants generally do not fully understand their processing and interchange rates, but if they are getting what they expect out of them, then they feel "it is a good deal," he says.

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The Center for Financial Services Innovation announced Wednesday that it has invested in iSend, an international payments company, and Progress Financial Corp., a lending company focused on Hispanic immigrants. The Chicago-based center, which is a nonprofit affiliate of the Chicago-based ShoreBank Corp., made the investments through Catalyst Fund LP, a limited equity partnership it created to invest in financial-services companies that serve the underbanked, the center says in a statement. Center spokesperson Lori Bonhma would not say how much it invested in each company. Progress Financial, which is based in Mountain View, Calif., makes unsecured loans between $500 and $5,000 to underbanked Hispanic immigrants, according to its Web site. It has four locations in California and has plans to expand across the country. Watertown, Conn.-based ISend enables immigrants living in the United States to pay for goods and services in their home counties. Consumers who use its service can pay utility bills and mobile-phone bills in Mexico, Brazil, Guatemala, Honduras and El Salvador, by visiting an iSend store, according the company's Web site. Consumers also can make mortgage payments in Mexico, Brazil and Guatemala, the company says on its site.

Global interchange rates could fall by 15% within the next three years, says Rob Walker, an analyst at London-based RBR Research Ltd. "I can foresee a situation where the rates on MasterCard and Visa [transactions] in the United States will, within the next two to three years, decrease because of all sorts of pressure," Walker tells CardLine sister publication ISO&Agent Weekly. "It's a reasonable expectation that within the next three years they might go down by 15%." Factors include not only legislators inquiring about how rates are set (CardLine, 5/29), but also actions by regulators in other countries and merchant pressure, Walker says. Interchange is regulated in Australia, and the European Commission has fought MasterCard Europe on its cross-border interchange rates. In Europe, Walker estimates that the average interchange rate will decrease by 10% from today's average in the next two to three years. "That trend will increase and accelerate," he adds

Payment-terminal vendor Ingenico said Wednesday it would offer merchants in Finland a "new rental model" that could decrease the cost of terminals that accept smart cards, according to a company statement. The France-based vendor says it hopes to "double its share" of Finland's terminal market. Ingenico will work with Finland-based Screenway Ltd., which sells retail-payment systems and is a subsidiary of Louttokunta Group, a card-payment service firm owned by banks and merchants in Finland. Renting enables merchants to pay fixed monthly fees for terminals and related services instead of making "major investments in equipment," Ingenico says. The program could lead to the deployment of 40,000 terminals that accept chip-and-PIN payments over the next three years, Ingenico says. Finland has at least 4.6 million payment cards in circulation. The vendor did not respond immediately to CardLine Global requests for comment. Ingenico's effort in Finland is "unique ... because the push is coming from the manufacturer," Adil Moussa, an analyst at United States-based Aite Group, tells CardLine Global. "There are variations of this [fixed-pricing] model in the U.S." Ingenico's push represents "a great strategy to deploy contactless terminals faster, with or without the merchant's opinion in the matter," Moussa adds. Still, he notes, banks must issue contactless cards, and backers of the technology must make consumers more aware and accepting of contactless payments. Moussa saw no drawbacks Wednesday to Ingenico's plan, saying the initiative could reduce merchants' costs and ensure they do not get stuck with obsolete terminals. "This can become a model that can be introduced in other countries once the industry sees the result of this strategy," he says.