Retailers

August 2008 Issue

IMGCAP(1)]

IMGCAP(1)]

IMGCAP(1)]

IMGCAP(1)]

IMGCAP(1)]

IMGCAP(1)]

IMGCAP(1)]

IMGCAP(1)]The European Central Bank continues to push for the creation of a third pan-European card network, but it has no plans to subsidize or launch a new scheme, a central bank official said Thursday at the Cards & Payments Europe 2008 conference in Brussels, Belgium. Francisco Tur Hartman, deputy of the bank's payment systems policy division, says the Single Euro Payments Area could harm competition if Europe is left with a "duopoly" of card schemes handling cross-border debit payments. "Will there be any competition with Visa and MasterCard?" asks Hartman. "We hope so. We are happy with Visa and MasterCard, but we hope there [will be] competition." The central bank plans to urge financial institutions and other payment-industry players to launch a new scheme when the central bank issues its sixth progress report on the SEPA rollout later this year, says Hartman. The central bank called for a third card scheme last year in its fifth progress report. The central bank monitors financial institutions' implementation of SEPA, which is designed to tear down national borders for electronic payments. But the central bank does not exercise direct authority over the way institutions meet the SEPA mandates. At least some central bankers believe a Visa/MasterCard hold on cross-border card payments could drive up fees for merchants. "Are we prepared to deliver a card scheme ourselves? At the time being, no. We would like the market to deliver it," Hartman says. Market observers say a European Commission ruling late last year against MasterCard's cross-border interchange rates makes it more difficult for European banks to build a business case for a third scheme. Despite that, some big banks in France and Germany have told European regulators they are considering launching a new card brand, the so-called "Monnet scheme," although they would need more "clarity" on interchange before moving forward. Another group, the Euro Alliance of Payment schemes, centered in Germany, also is weighing prospects. And a Belgium-based startup, European Payment Solutions, says it plans to test a third scheme called "PayFair" by 2009. A large merchant, likely in Belgium, would issue the debit cards and accept the payments for that trial.

IMGCAP(1)]

IMGCAP(1)]

IMGCAP(1)]

IMGCAP(1)]

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.