Intuit finally lands
ECHO…
Mobilians gets underway in
the US…
Hypercom expands European
reach…
Mobile contactless payment arrives
in Australia…

MERGERS AND ACQUISITIONS
Intuit finally lands ECHO

Intuit, a US company best known as a vendor of accounting
software, has acquired Electronic Clearing House (ECHO) a
California based electronic payments processor in a deal worth $131
million. Intuit had previously signed a definitive agreement to
acquire ECHO in December 2006, but the parties mutually terminated
the arrangement in March 2007.

“Since our last discussions with ECHO, we’ve continued to survey
the market and believe today, as we did then, that ECHO is a great
strategic fit for Intuit,” said Brad Smith, senior vice president
and GM of Intuit’s small business group. “We expect ECHO’s
technology and operational assets will help us accelerate Intuit’s
growth and strengthen our expanding small business ecosystem that
includes the fast-growing payments space.”

ECHO’s services include credit and debit card processing,
electronic cheque conversion automated clearing house services,
cheque guarantee, cheque verification and cheque collection. These
will complement Intuit’s existing payments services which are
spearheaded by Digital Insight, a unit providing front and back-end
transaction processing services to financial institutions. Digital
Insight was acquired in February 2007.

SECURITY
VeriFone and ArcSight tackle PCI compliance

Complying with the Payment Card Industry Security Standards
Council’s Data Security Standard (PCI DSS) is described by
VeriFone’s vice president of integrated systems marketing, Jeff
Wakefield, as “a nightmare issue for companies”. To assist
merchants meet the challenge, the US payment systems vendor has
teamed up with ArcSight, a developer of security and compliance
solutions, to jointly market the ArcSight PCI Protection Suite to
VeriFone’s merchant customers.

The ArcSight solution, launched in September 2007, is designed
to meet the stringent credit card data security requirements of the
PCI DSS covering 12 specific areas. Wakefield explained that
ArcSight’s system protects cardholder data against breaches,
insider threats and non-compliance risks across all 12 PCI DSS
requirements. This is accomplished by real-time monitoring and
early warning breach detection across all users, applications,
databases and other PCI-DSS-impacted IT infrastructure.

The Payment Card Industry Security Standards Council was founded
by American Express, Discover Financial Services, JCB
International, MasterCard Worldwide and Visa International.

PAYMENTS PROCESSING
BidPay finally bids farewell

After a chequered history dating back to its formation in 1999
online auction payment service provider BidPay.com ceased
operations for the last time on 31 December 2007. Its owners, US
electronic payments processor and risk solutions provider
CyberSource, will incur one-time charges totalling between $1.7
million and $2.7 million in the fourth quarter of 2007 related to
the shutdown.

CyberSource acquired BidPay for $1.6 million cash in March 2006
from payments processor First Data that had acquired BidPay from
its founders in 2001. Operations at BidPay, which First Data had
terminated in December 2005, were resuscitated by CyberSource in
June 2006.

ALTERNATIVE PAYMENTS
Mobilians gets underway in the US

Korean mobile payments service provider Mobilians, has formed an
alliance with US internet payments service provider, PaymentOne
Corporation, a move Pragnesh Shah, president and CEO of the US unit
Mobilians International, termed “the first phase in launching our
payment platform in the US.” Mobilians International was
established in October 2007.

PaymentOne’s flagship offering is PhoneBill, a service that
enables consumers to charge online purchases to their mobile phone,
landline phone or broadband accounts. This service parallels
Mobilians’ mobile phone-based service that has been in use in Korea
and other Asian countries for six years.

The agreement between Mobilians and PaymentOne presents
opportunities for future partnerships to develop a global payment
gateway alliance, said PaymentOne’s founder and CEO Joe
Lynam.

CONTACTLESS PAYMENTS
INSIDE Contactless attracts Motorola

In the closing round of its latest funding exercise INSIDE
Contactless added another key name, US wireless technology
developer Motorola, to its list of investors. Motorola via Motorola
Ventures, its strategic investment arm, joined another recent
newcomer Nokia Growth Partners, the private equity and venture
capital unit of mobile device manufacturer Nokia, as an investor in
the French smart card microprocessor developer.

“Motorola Ventures supports companies shaping the future of
mobile commerce and contactless payments,” said Motorola Ventures’
MD, Reese Schroeder. INSIDE Contactless’ products stand out in the
marketplace and are valued for their ability to efficiently enable
consumer devices with mobile commerce capabilities.

MOBILE BANKING
NACHA delves into mobile banking

US industry body the National Automated Clearing House Association
(NACHA) has formed a mobile banking working group under the
leadership of its Internet Council to develop an automated clearing
house (ACH) payment platform strategy for mobile banking.

NACHA said the group’s initial primary objectives are to assess
the NACHA operating rules for the accommodation of mobile banking
and payments, identify authorisation and authentication
considerations, identify unique security characteristics and
requirements, and assess systemic opportunities and barriers in the
ACH network.

“There is real opportunity here to build a common set of
strategic principles and tactical guidelines through a consensual
industry effort that will enable mobile banking and ACH payment
applications,” said Devon Marsh, chairperson of the working group
and vice president and risk manager for electronic services,
Wachovia Bank.

MERGERS AND ACQUISITIONS
Hypercom expands European reach

US POS payments technology vendor Hypercom Corporation has entered
into negotiations that are set to see it acquire French electronic
systems developer Thales’ e-Transactions unit for up to $150
million.The e-Transactions unit, which provides card payment
solutions in France, Germany, the UK, Spain, Belgium and Sweden,
generated total revenue of €104 million ($155 million) for the
first three quarters of 2007.

Commenting on the proposed deal, Hypercom’s CEO and president,
Philippe Tartavull said: “The e-Transactions business line of
Thales is focused on high security electronic transaction solutions
and is complementary in many ways, providing additional revenue
with cost and technology synergies which we believe is a
financially and operationally compelling combination.” He added
that the acquisition would “considerably strengthen our footprint
in Western Europe” and result in “significant operating margin
improvement”.

“This transaction has the potential to create a real global
market leader in the domain of electronic transactions at the point
of sales and thus create new business opportunities for the
combined activities,” added Hypercom’s executive vice president,
commercial and security operations Olivier Houssin.

MERGERS AND ACQUISITIONS
MasterCard and Europay France integrate

MasterCard Europe and Europay France have agreed to integrate their
French operations, a development anticipated to be completed in
April this year. Europay France is responsible for marketing the
MasterCard card portfolio in France.

Commenting on the move MasterCard Europe Continental Europe GM
Alfredo Gangotena said: “This agreement is essential to
strengthening our direct presence in this market, and ensuring that
French banks can have a single point of contact for their
electronic payment needs.”

Owned by six major French banks, Europay France manages the
performance of the payments network for all card payment operators
in France and processes the transactions for foreign cardholders in
France and French cardholders abroad.

PAYMENT SYSTEMS
SocGen and La Banque Postale join forces

La Banque Postale, the banking unit of France’s state-owned postal
service La Poste, and French banking group Société Générale
(SocGen) are to form a joint venture company that will be
responsible for the development and operational use of their
electronic retail transactions and ATM systems. The new company,
which will be owned equally by the two partners, will be
headquartered in Paris and should be operational by April 2008.

“As part of our development strategy in electronic payments, the
partnership with Société Générale is an answer to the challenges of
SEPA and the technological evolution in this area,” said La Banque
Postale’s CEO Patrick Werner.

SocGen and La Banque Postale have a combined total of 10 million
cards in use, over 100,000 retailer contracts and 10,000
ATMs.

SECURITY
Capital One beefs up security

Amidst growing security concerns amongst consumers, the UK unit of
US credit card issuer Capital One has launched Capital One Identity
Alert, the first service of its kind offered free in the UK. The
service alerts Capital One cardholders via email of any key changes
on their credit file, including details of any applications for
credit that may have been made in their name with or without their
knowledge. The service is provided by UK credit reference agency
Equifax.

Capital One noted that the service’s launch follows a study it
carried out in 2007 that revealed that about 42 million adults in
the UK do not know how to discover if they have been a victim of
identity theft, while only one in ten knows exactly what do if they
suspect their identity has been stolen.

STORED VALUE CARDS
Australia slays
Virtual Money ATM cards

Action by the Australian Securities and Investments Commission
(ASIC) has brought an end to the sale of Virtual Money ATM cards
distributed in the country by the Australian unit of US
stored-value debit card developer Virtual Money Incorporated. The
cards enabled consumers to deposit money into a local Australian
bank account for later withdrawal or transfer to another Virtual
Money cardholder anywhere in the world.

In a release the ASIC explained that its action taken because
Virtual Money was selling cards to retail consumers without an
Australian financial services licence (AFSL) as required by the
Corporations Act. The ASIC added that it considers products like
the Virtual Money ATM card to be non-cash payment facilities and
thus a type of financial product. People who deal in such products
with Australian consumers must hold an AFSL. 

According to Virtual Money its ATM card is “being used actively”
throughout the US and in more than 70 other countries. The
company’s primary focus is on customers who do not have a bank
account.

ALLIANCES
HSBC boosts services in Japan

To coincide with the commencement of its Premier wealth management
service in Japan which targets individuals estimated to have liquid
financial assets of at least ¥10 million ($90,000), UK bank HSBC
has launched it first credit card in Japan, the MasterCard-branded
HSBC Premier Credit Card. The new card, which incorporates Japanese
software vendor Sony Corporation’s FeliCa near field communications
technology, is available at no annual fee to HSBC Premier account
holders.

Supporting its Premier service, HSBC has entered into an
alliance with Japan Post Bank and Seven Bank, a move that will
provide Premier clients access to a total of about 39,000 ATMs in
Japan. HSBC’s own ATM network in Japan now incorporates biometric
customer-identification technology.

CONTACTLESS PAYMENTS
Mobile contactless payment arrives in
Australia

Commonwealth Bank of Australia (CBA) continued its pioneering
efforts in the field of contactless payments in Australia when it
teamed up with MasterCard in November 2007 to launch the trial of
the first mobile phones in the country equipped with near field
communications (NFC) payments technology. For the launch, 50 mobile
phones equipped to execute payments of up to A$35 ($31) at
MasterCard PayPass contactless POS terminals were distributed to
merchants and journalists attending the MasterCard Masters golf
tournament.

For the trial US payments technology developer ViVOtech supplied
CBA with a bank-branded ViVOwallet mobile phone user interface
supporting downloads of MasterCard’s PayPass credit and debit
cards, a ViVOnfc Issuer Server that provides over-the-air loading
and personalisation of card details into the mobile phones and a
ViVOnfc Control Server to provide over-the-air management of wallet
loading and personalisation.

The mobile phone payments trial marks another first for CBA in
the field of contactless payments. In early 2006 CBA became the
first Australian bank to introduce contactless payment in a trial
involving 35,000 customers issued with MasterCard PayPass cards and
about 150 merchants. CBA is now issuing MasterCard PayPass cards on
a commercial basis.

MESSAGING
SWIFT sets up in India

The Society for Worldwide Interbank Financial Telecommunication
(SWIFT) has opened its first office in India, a move the financial
messaging co-operative said was in response to growth and
development of India’s financial services sector and the prolifer-
ation of international relationships between Indian financial
institutions and counterparties worldwide.

SWIFT already has 201 user institutions on the Indian
subcontinent, of which 92 are in India. SWIFT financial messages,
of which payments messages represented 58 percent of the total,
increased by19 percent in the year to October 2007. SWIFT
anticipates messaging growth will accelerate in 2008.