Retailers

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By combining elements of several payment systems, Metavante Technologies Inc. has developed a customized auto loan processing platform for the El Segundo, Calif., servicer National Payment Network Inc.

The transaction processor Heartland Payment Systems Inc. of Princeton, N.J., said its May acquisition of Alliance Data Network Services LLC boosted its revenue and led to record second-quarter earnings.

The mail carrier Canada Post Corp. has agreed to purchase more than 7,000 payment terminals from VeriFone Holdings Inc.

The U.K. retailer Marks & Spencer PLC is using card management software from S1 Corp. to manage its gift card program, the banking technology provider said Monday.

U.S. Bancorp has acquired the merchant processing operations of Capital City Bank Group Inc. of Tallahassee, Fla.

Merchant acquirers will have to report their retailers' credit and debit card transactions to the Internal Revenue Service under the Housing and Economic Recovery Act of 2008, which President Bush signed into law Wednesday.

Merchant-level salespeople should keep two tips in mind when they close a deal: Ask for the business, and ask the merchant to pay.

Independent sales organizations can increase revenue and decrease turnover costs by recruiting agents that fit company goals and strategies, says Curt Hensley, president and CEO of CSH Consulting Inc., a Phoenix-based executive-recruitment firm. "They'd not only be producing, they'd stay, and you wouldn't have to incur more training costs again" from hiring replacement agents, he says. An agent will fit well with an ISO if both have the same expectations, says Hensley. For instance, agents who work best when ISOs provide sales leads for them will not prosper at an ISO that requires agents find and pursue their own leads, he says. The cost of turnover depends on an ISO's recruitment and training costs, says Hensley. Training alone can range from $1,000 to $2,000 per employee, he estimates.

President Bush this morning signed into law the Housing and Economic Recovery Act of 2008, which contains a provision mandating merchant acquirers to report their retailers' credit and debit card transactions to the Internal Revenue Service. Acquirers will have to submit annual reports listing the name, address, taxpayer identification number, and the gross amount of credit and debit card transactions for each of their merchant customers, according to the new law (CardLine, 7/28). The annual requirement will apply to merchant card transactions made after Dec. 31, 2010. Mandatory reporting of merchant credit and debit card transactions to the IRS could prove time-consuming and costly for acquirers and the independent sales organizations that work with them, according to Paul Martaus, president of the Mountain Home, Ark.-based consulting firm Martaus & Associates Inc. Acquirers and ISOs may have to absorb the costs of collecting and securely storing merchants' information, he says (CardLine, 7/29).

Fifth Third Bancorp plans to ask the full 3RD U.S. Court of Appeals in Philadelphia to review a recent ruling by a three-judge panel from the court that would open the door for card issuers to seek damages from third-party processors for costs of merchant-data breaches. Pennsylvania State Employees Credit Union and Sovereign Bank both filed suit against BJ's Wholesale Club Inc. and Fifth Third seeking reimbursement for the costs of reissuing cards compromised in a data beach at BJ's in 2004. Fifth Third was the merchant acquirer for the Natick, Mass.-based chain when the breach occurred. The issuers charge Fifth Third was responsible for BJ's failure to comply with Visa USA operating rules that bar merchants from retaining credit card data after completing transactions. A Massachusetts District Court dismissed the issuers' suit against Fifth Third, but July 16 the appeals-court panel unanimously reversed the ruling and sent the case back to the district court. Fifth Third's lawyers immediately petitioned the appeals court for a review of the July 16 ruling. If accepted, all nine judges of the appeals court would review the panel's ruling. Last week, the court granted Fifth Third an extension, until Aug. 15, to file a petition for the review.

Mandatory reporting of merchant credit and debit card transactions to the Internal Revenue Service could prove time consuming and costly for acquirers and the independent sales organizations, according to Paul Martaus, president of the Mountain Home, Ark.-based consulting firm Martaus & Associates Inc. A provision of the Housing and Economic Recovery Act of 2008 would require merchant acquirers to provide annual reports listing the name, address, taxpayer identification number, and the gross amount of credit and debit card transactions for each merchant customers to the IRS (CardLine, 7/28). Acquirers and ISOs likely would have to absorb the costs ofh collecting and securely storing merchants' information, Martaus says. Depending on how the IRS handles the provision, "there is a very strong likelihood that the ISOs themselves are going to have to go to every merchant location in the country they have clients in and reprogram all the terminals," says Martaus. In the past, acquirers and ISOs have not collected some information the IRS would require under the provision, such as taxpayer identification numbers. Consumers, though, may ultimately pay for the change. "Acquirers and ISOs will have to absorb the cost of this," but they will pass those costs to merchants, who will increase prices for consumers, Martaus says.

Following its purchase of a 51% stake in HSBC Holdings PLC's U.K. merchant acquiring business, Global Payments Inc. has a "strong" appetite for acquisitions, according to Paul R. Garcia, its chairman, president, and chief executive.

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ISOs are working to take the confusion out of what some merchants consider misleading pricing in the merchant-acquiring industry.

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