Retailers

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.

First Data Corp. and JPMorgan Chase & Co. today announced they have agreed to end their joint venture, merchant acquirer Chase Paymentech Solutions LLC, by the end of the year. New York-based Chase will retain 51% of Chase Paymentech's assets, including most of its employees, its Canadian and European operations and the company's Dallas-based headquarters, according to the announcement. Greenwood Village, Colo.-based payments processor First Data will assume management of the ISO and Agent Bank division of Chase Paymentech and will integrate 49% of the assets, including a portion of the staff, into its established merchant acquiring business. The September buyout of First Data by Kohlberg Kravis Roberts & Co. triggered a clause in the joint-venture contract that enabled Chase to end the alliance (CardLine, 3/14). Chase and First Data formed Chase Paymentech in 2005. Observers expect fierce competition between Chase and First Data when they operate as two separate entities, according to Adil Moussa, an analyst with Boston-based Aite Group LLC. Chase "used to compete quite openly with First Data. There's no secret about that," Moussa tells CardLine sister publication ISO&Agent Weekly. "They would go after the same accounts and really outbid each other. Now it's going to be even more so." Banks and ISOs typically use differing strategies to acquire merchants, with ISOs usually acting more assertively, Moussa says, adding that First Data has no such advantage in this case. Chase "has proven it's not that type of bank. [Chase is] not going to sit back and wait for merchants to show up. They will go after them aggressively."

MoneyPass has signed a series of new agreements that the company's top executive says partly reflects banks' and credit union members' cardholders' nail biting about the worsening economy. Since April, the Minneapolis-based surcharge-free ATM network has made deals with South Valley Bank & Trust, a Klamath Falls, Ore.-based community commercial bank (CardLine, 5/23); Bellingham, Wash.-based Horizon Bank; and Vienna, Va.-based Navy Federal Credit Union. Those agreements represent only the surface of the problem, Doug Miraglia, president of MoneyPass, tells ATM&Debit News, a CardLine sister publication, in an e-mail message. Since January, MoneyPass has signed 100 financial institutions, and as a result the company anticipates a busy second half, Miraglia says. "It may have something to do with the economy because consumers seem particularly cost- and fee-conscious right now," he says. MoneyPass's surcharge-free ATM network has 12,000 to 15,000 surcharge-fee ATMs nationwide.

SignaPay, Ltd., an Irving, Texas-based independent sales organization, has launched SenorPay, a sales division concentrating on Spanish-speaking merchants. Additionally, SenorPay will sell iPay Station, a product unbanked consumers can use to pay bills and buy prepaid phone cards, alongside credit and debit card payment services and merchant cash advances. The effort amounts to more than a Web site translated into Spanish, John Martillo, company president and CEO, tells CardLine sister publication ISO&Agent Weekly. The company will provide all support services in Spanish, and documents and marketing materials will be in Spanish, too, Martillo says. The risk manager, who assesses whether a merchant is creditworthy enough to accept payment cards, is bilingual. Martillo says SenorPay is available as a reseller program for independent sales agents. These agents will benefit from something Martillo lacked when he first sold processing services to the New York Hispanic market. "There were no marketing materials to support me as an agent," Martillo says. On average, according to the 2006 Consumer Expenditure Survey from the U.S. Bureau of Labor Statistics, Hispanic consumers spend $43,053 a year on household goods, apparel, transportation and other products and services.

A federal appeals court has upheld a lower court's ruling that AdvanceMe Inc. holds no patent on merchant cash advances.

The name change may seem subtle, but it reflects monumental changes. That assessment of the switch from Merchant Processing Inc. to Phoenix Merchant Processing Inc. comes from Jim Keller, CEO of the Beaverton, Ore.-based ISO.

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Heartland Payments Systems Inc., a Princeton, N.J.-based payment processor, is buying the Network Services business of Dallas-based Alliance Data Systems Corp. for $77.5 million, Heartland announced this week.