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January 25, 2010updated 20 Jul 2022 1:20pm

News Digest 25.01.10

Opening the door to significant outsourcing revenue, NCR Corporation has formed an alliance with Co-op Financial Services (CFS), the US largest credit union payments services organisation, to offer a comprehensive managed ATM service to US credit unions. Indicative of the potential the alliance represents for the US financial services hardware vendor, CFS has 3,000 credit union members encompassing around 26 million cardholders, 28,000 surcharge-free ATMs and 3,700 shared branch locations.

By EPI editorial

ATMs

Alliance creates major ATM outsourcing opportunity for NCR

Opening the door to significant outsourcing revenue, NCR Corporation has formed an alliance with Co-op Financial Services (CFS), the US’ largest credit union payments services organisation, to offer a comprehensive managed ATM service to US credit unions.

Indicative of the potential the alliance represents for the US financial services hardware vendor, CFS has 3,000 credit union members encompassing around 26 million cardholders, 28,000 surcharge-free ATMs and 3,700 shared branch locations.

Offering services such as ATM processing, electronic funds transfers and credit and debit card processing, CFS undertakes processes some 2 billion transactions annually.

Commenting on the alliance, CFS’s CEO Stan Hollen said: “The partnership between NCR and Co-op Financial Services is focused on helping credit unions increase operational efficiencies and reduce the cost of support services associated with maintaining an ATM network.”

The new service, branded as Co-op ATM Managed Services, offers ATM terminal driving, implementation support, cash management, terminal monitoring, IP data communication and the options to add features like cheque imaging, content distribution and other advanced ATM functionality.

NCR will handle ATM sales, deployment and servicing as part of the service.

COMPANIES

First American looks for non-profit sector growth

Marking its entry into the non-profit sector, US card payments processor First American Payment Systems (FAPS) has acquired Canada-based International Automated Transaction Service (IATS) from entertainment ticketing specialist Ticketmaster Canada for an undisclosed sum.

Specialising in the processing of donations made via credit card and direct debit, IATS provides payment processing solutions to about 9,000 non-profit organisations in Canada, the US, the UK, Europe, Australia, Hong Kong and New Zealand.

Commenting on the acquisition, FAPS’ chairman and CEO Neil Randel stressed that it provided a “tremendous opportunity for growth.”

Randal predicted that in the US where donors make almost 80 percent of payments – totalling $307 billion annually – by cheque, there will be a shift towards the use of credit cards and debit payments.

Based in Forth Worth, Texas, FAPS provides payment processing services to about 100,000 merchants in the US.

COMPANIES

VeriFone goes for growth in electronic payments-linked advertising

A pioneer of electronic payments in the taxi industry, VeriFone has announced plans to build on its success by increasingly utilising onboard payment systems for advertising purposes.

Explaining the rationale behind the strategy, Douglas Bergeron, VeriFones’ CEO, said: “The payment experience provides a unique opportunity to reach a variety of audience segments, such as premium business travelers heading to and from an airport, utilising large, interactive colour displays that are in front of the consumer for a considerable period.”

Taxis and other specialised POS venues automatically segment audiences to provide “highly desirable advertising efficiency” he added.

The US-based company provides advertising opportunities on a number of its taxi payment systems in New York City and intends to broaden this to include taxi advertising nationwide, as well as beginning a major initiative introducing other payment-enabled media opportunities.

Separately, VeriFone announced a licensing agreement with a South African company, iMobilise Transportation Systems (iMTS), for deployment of its taxi payment and media solutions in South Africa.

iMTS anticipates installation of systems in 1,500 taxis in time for the 2010 World Soccer Cup in June 2010.

Systems to be deployed incorporate credit card, chip and PIN-based debit and contactless payments.

COMPANIES

End of the road for payments processing high-flier in US

Established in 2004, Canopy Financial shot to the forefront of the US’ health care and health insurance electronic payments market, earning business publication INC Magazine’s ranking as the country’s 12th-fastest growing private company in 2009.

This growth ended in December 2009, when the US Securities and Exchange Commission (SEC) charged Canopy’s co-founder and former chief operating officer, Jeremy Blackburn, with defrauding investors in a $75 million private placement offering and misappropriating investor funds.

Among numerous allegations, the SEC stated that Blackburn provided investors with falsified financial statements, a falsified bank statement and a falsified audit opinion purported to be from financial services firm KPMG.

The SEC noted that the fraud came to light when KPMG discovered that Canopy had been claiming that KPMG had audited its 2007 and 2008 financial statements.

Canopy’s services included HealthDirect, an account management and electronic payment platform for banks, and CareGain, a solution for health plans and administrators to, among others functions, manage accounts and electronic payments.

Canopy’s products incorporated online bill payment, automated clearing house processing and card management systems.

Canopy is now in the process of being liquidated.

REMITTANCES

Western Union expands online remittances

Expanding the availability of its internet-based money services, Western Union has launched transactional websites in Belgium and Portugal.

This bring the number of countries in which the money transfer specialist now offers online services to 18.

“The Western Union dotcom business is a high-growth and profitable channel,” commented Gail Galuppo, executive vice-president and chief marketing officer, Western Union.

“Our international sites posted 40 percent transaction growth in the third quarter of 2009.”

Countries in which Western Union’s online service is available are: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, the UK and the US. Payouts of online money transfers are undertaken by Western Union’s 400,000 Western Union Agent locations in some 200 countries and territories.

PAYMENTS PROCESSING

CT-Payment increases its Canadian footprint

Telus, Canada’s second-largest telecommunications company, is exiting the payments processing market with the sale of its Assure Pay debit and credit card processing business to CT-Payment.

For CT-Payment, the payments processing unit of Canadian property tax management company Central Tax, the deal brings capabilities in new markets including all major credit cards, fleet cards and the travel and entertainment sectors.

The deal will increase CT-Payment’s annual processing volume to about 110 million transactions.

“This acquisition is consistent with our strategy and makes us the largest third-party payment processor with actual connections to all Canadian acquirers,” said CT-Payment’s CEO Denis Savard.

The acquisition of Assure Pay for an undisclosed sum was financed by CT-Payment’s major financial backer, The Solidarity Fund QFL, a Quebec-based non-profit organisation focused on investment in small and medium-sized companies.

Financial backing was also provided by Quebec-based development agency Investissement and National Bank of Canada.

CT-Payment was established in March 2009 following Central Tax’s acquisition of Canadian business process services company CGI Group’s internet-based credit and debit card processing unit, which has as its primary customer the Quebec Ministry of Finance.

MOBILE PAYMENTS

Travelex aims to let travelers pay by mobile

UK foreign exchange specialist Travelex will soon be offering customers an alternative to paper travelers cheques and its prepaid travel card, Cash Passport – the mobile phone.

The alternative – to be developed by UK mobile banking and payments technology vendor Monitise – will be downloadable to a Cash Passport cardholder’s handset, allowing them to check balances, reload the card over the air and set up balance alerts.

“Mobilising our Cash Passport is a landmark product development step for us,” commented Mark Horgan, MD of cards and mobile payments at Travelex.

“The prepaid travel card market is growing fast, it is essential that we innovate and bring new value-added services to our cardholders.”

Travelex has some 1.75 million Cash Passport cardholders.

INDUSTRY TRENDS

Barclays card for budget-minded consumers

Barclays Bank unit Barclaycard’s ambitious contactless payments strategy in the UK has taken another step forward with the launch of the Orange credit card in a joint initiative with mobile network operator Orange.

Enabling contactless payments for purchases up to £10 ($16) each, the card also offers services for budget-conscious users delivered via mobile short message service (SMS).

As standard features, SMSs alert card users weekly about their balance, limit and credit remaining and monthly about payments due and received.

Customers can also set SMS alerts and blocks on card spending online, abroad or for high-value transactions, set a weekly or monthly budget and set alerts when the budget is reached or automatically decline transactions if the budget is exceeded.

COMPANIES

Gemalto ramps up mobile payments reach

Consolidating a long-standing relationship, Gemalto has acquired a majority stake in Netsize and an option to acquire the French mobile payments specialist outright at a later stage.

No financial details of the deal – which increases the Dutch payments technology vendor’s stake from the 24 percent it has held since 2001 – were disclosed.

Founded in 1998, Netsize offers mobile payment solutions based on operator billing through, for example, premium short message services for 100 mobile operators, reaching over 1 billion billable subscribers in 28 countries.

Commenting on the transaction, Netsize’s founder and CEO Stanislas Chesnais said the capital injection from Gemalto will facilitate expansion into new markets such Latin America, Africa and South-East Asia.

Chesnais will stay on as CEO of Netsize, which will operate as stand-alone company within the Gemalto group.

MOBILE PAYMENTS

Luup aims to link UAE and Indonesia

Following hard on the heels of the launch of its Mobile Salary Disbursement solution in the Middle East in December 2009, Norwegian mobile payments technology developer Luup International has announced plans to establish a mobile phone-based remittance service between the United Arab Emirates (UAE) and Indonesia.

Partnering with Luup is Koinstar Dhasatra Indonesia Remittance, an Indonesia-based company with a network of 120 banks and 5,000 post offices around the country. In Luup’s sights as users of its planned service are some 300,000 Indonesians living in the UAE.

Luup’s first involvement in the UAE came in July 2009 when it was awarded a contract by the National Bank of Abu Dhabi, the UAE’s largest bank, to establish a mobile money transfer service across the bank’s network spanning nine countries.

PAYMENTS PROCESSING

First Data powers into Indian market

Providing it with a major strategic position in India’s merchant acquiring market, First Data has teamed up with ICICI Bank, India’s second-largest bank, to establish ICICI Merchant Services, a merchant acquiring joint venture (JV) which has absorbed ICICI Bank’s merchant acquiring portfolio.

Though financial details of the deal were not announced, Indian newspaper The Economic Times reported that First Data paid $80 million for an 81 percent stake in the JV.

Commenting on the formation of ICICI Merchant Services, David Yates, president of First Data’s international business, said: “This new alliance gives us the scale and presence that we can build from, with a highly-regarded partner.”

With some 150,000 merchants ICICI Bank’s portfolio is one of India’s largest, representing about 30 percent of the country’s merchant acquiring market.

COMPANIES

Deal gives Temenos a major boost in France

In its largest acquisition ever, Swiss core banking systems vendor Temenos has acquired rival French company Viveo Group for $81 million in cash. The deal, which Temenos anticipates will be “strongly accretive” to its earnings from 2010, is being financed by existing debt facilities.

“Viveo brings a large, very high-quality customer base, deep domain expertise in sales and development, as well as market-leading complementary products,” commented Temenos’ CEO Andreas Andreades.

Viveo comes with an impressive 400-strong customer-base in France including banks such as BNP Paribas, Caisse d’Epargne, Société Générale, Crédit Agricole, Banques Populaires and La Compagnie Financière Edmond de Rothschild. Viveo also serves another 350 financial institutions in 35 countries.

In addition to core banking solutions, Viveo provides solutions for payments, compliance, securities and anti-money laundering.

According to Temenos, Viveo’s anti-money laundering and payments products in particular are “highly prized” and used globally by Tier 1 banks.

Indicative of the scale of the acquisition from Temenos’ perspective, Viveo reported turnover of $66 million in 2008 while Temenos reported turnover of $407 million.

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