The economy is starting to pick up after a couple of years in the doldrums, according to the National Association of Credit Management.
   According to NACM's credit manager index, credit and collections picked up 2.2 percent in September, reaching its highest level since April.
   The improvement was driven by the manufacturing sector, which jumped 5.2 percent over its August level, reaching its highest level since May 2002. It appears the manufacturing sector is well into recovery and renewed strength. The service sector, however, is showing signs of slowing growth. Although its growth remains strong, the service sector is slowing on a month-over-month basis. In August, after showing seven consecutive months of improvement, the service sector index lost 90 basis points. In September, it lost another 40 basis points.
   The CMI survey asks credit managers to rate favorable and unfavorable factors in their monthly business cycle. Favorable factors include sales, new credit applications, dollar collections and amount of credit extended. Unfavorable factors include rejections of credit applications, accounts placed for collections, dollar amounts of receivables beyond terms and filings for bankruptcies.
   Hypercom Corp. recently sold its Golden Eagle Leasing Inc. leasing business to Northern Leasing Systems Inc. for $30 million.
   Hypercom said it would recognize a fourth-quarter pre-tax gain of approximately $7 million as a result of the sale. The company made the sale in order to concentrate on electronic payments and processing.
   Access ATM, Inc., a national ATM service provider and Petroleum Card Services, Inc., a pay-at-the-pump credit card processing service provider, recently formed a distributing alliance.
   Petroleum Card Services will be able to market its distributors and merchants on- stop-shopping of ATM and pay-at-the-pump processing services and enable Access ATM to offer its distributors the pay-at-the-pump processing from an industry expert. The alliance allows participating distribution channels additional sales and residual income streams by being able to offer multiple services to the same target markets.
   EWI Holdings, Inc., in Septmber, filed suit in the U.S. District Court in the Eastern District of Texas against PRE Solutions, Inc., alleging that it infringed EWI's patent relating to the processing of prepaid transactions through real-time PIN delivery solutions.
   The suit asks the court for both unspecified damages for the infringing activity and for an injunction to force the defendant to cease all future use and sale of the infringing services and products.
   Visa USA has instituted an optional interchange category for electronically authorized purchases under $15 at fast food restaurants, parking lots and garages, motion-picture theaters, videotape-rental stores, taxies and limousines.
   For credit and debit card purchases, merchant acquirers will pay 1.65 percent of the sale plus 4 cents, according to Visa. Acquiring merchants have the option of electing to pay under the rates of a different category, the Visa's Express Payment Service interchange program. Under that program, acquirers pay 2 percent of the sale plus 2 cents for credit card purchases, and 1.23 percent of the sale for check card purchases.
   Cardtronics was recently named one of America's fastest growing privately owned companies by Inc. Magazine for the third year in a row.
   The 23rd annual Inc. 500 list ranks the nation's leading entrepreneurial firms according to sales growth during the previous five years. Cardtronics, ranked 82nd, achieved a strong 1,742 percent growth from $3.7 million in net sales in1998 to $68.8 million in 2002. As of August 2003, the Company already exceeded last year's total sales and anticipates another year of strong growth.
   Cardtronics also continued to diversify its regional network participation through an agreement with the NYCE Corp.
   Cardtronics has signed a NYCE Banking Terminal Participant Agreement, adding its 12,000 ATMs to the network and providing access by 80 million network cardholders to Cardtronics ATMs.
   The NYCE Network is one of the largest shared regional electronic payments networks in the country. It provides financial institutions and retailers with shared network services for ATMs, on-line debit POS and electronic benefits transfer transactions.
   Moneris Solutions recently teamed up with Inc. to enable merchants to accept credit cards for online or mobile commerce in multiple currencies.
   The DXStorm/Moneris collaboration already enables merchants to process both U.S. and Canadian currencies, with plans to expand to 180 currencies. This multi-currency processing system will enable businesses to offer products and services in approximately 180 different currencies and to receive payment for them from the range of 16 settlement currencies.
   Concord EFS, Inc. recently unveiled its package of turnkey ATM solutions, combining the newest Windows-based ATM hardware with transaction processing services at a fixed and predictable rate. Financial institutions and other ATM deployers can obtain end-to-end solutions including hardware, software, transaction processing, gateway access, monitoring and maintenance support with no up-front capital investment and a discounted monthly cost. The packaged service can be customized to meet the current and future needs of financial institutions.
   Concord will provide ATM driving, STAR network switching and gateways to other networks, reporting and settlement for switched transactions, call-center help desk, and 24x7 monitoring. Concord ATM partners will provide ATM hardware, software, maintenance services and financing. Diebold is the first ATM manufacturer with whom Concord is deploying the program. Terminal options available from Diebold will include its newest line of ATMs, Opteva, as well as ix series units.
   JBM Electronics recently unveiled the modem termination card for the ATM and POS market, enabling JBM's Gateway products to interface into any ATM or POS device.
   Today many companies use dial-up POS devices in their stores such as ATMs or credit card verification units. These terminals dial-up to a transaction network carrier who then transfers the transaction data to an EFT company, with a fee for every dial-up transaction. These transactions add up to millions of dollars in fees. Customers using a JBM gateway with a modem termination card can now eliminate these dial-up circuits and take advantage of their existing LAN/WAN network already deployed in most store locations. The transaction data can now ride free of charge on the company's network and be terminated at the company's host site. From there, a dedicated connection can be establish to an EFT for clearing.
   The modem termination card connects to any standards based V.90 or V. 92 Async modem on a POS device. The card then provides dial tone to simulate a carrier's central office, allowing the gateway to terminate the call. Once a POS device initiates a call the Gateway makes a connection, communicates with that device's protocol (Visa, Poll-Select, or other Async protocols), converts the protocol to TCP/IP, and then routes the transaction to a pre-assigned IP address.
   NetBank, Inc., parent company of Internet bank, NetBank recently announced it would acquire Financial Technologies, Inc. (FTI), a privately held provider of ATM services for retail and other non-bank businesses. Pending regulatory approval, FTI will operate as a subsidiary of NetBank. The transaction is expected to close within the fourth quarter and be immediately accretive.
   "This deal is part of our ongoing revenue diversification strategy," said Douglas K. Freeman, Chairman and CEO, NetBank, Inc. "The addition of FTI will allow us to further build out our transaction processing lines of business in a quick, cost-effective way. Our companies have a similar mission to provide small institutions or non-bank retail businesses the means of distributing ancillary financial services to their existing customers. There are also natural synergies with our own retail and small business banking services that we can realize over time."
   NetBank, Inc. purchased FTI for cash and $1 million worth of restricted stock. The final agreement also provides for potential cash payments of contingent consideration based on the compound average annual growth rate of FTI's earnings over the next five years.
   FTI has been profitable in each year of its seven-year operating history. Its deployment of more than 4,300 ATMs across the country places it fifth among the top third-party, off-premise ATM providers in the U.S. On average, FTI machines process approximately 1.5 million or $60 million worth of transactions per month.
   CyberSource Corp. will offer its merchants the option to accept payments from PayPal Inc.
   PayPal has 31 million account holders, while CyberSource, Mountain View, Calif., provides processing for more than 3,000 merchants who accept Web- and telephone-based transactions.
   CyberSource is the first payment solutions provider to make PayPal available to its merchant clients. It fits into CyberSource's larger strategy of providing a single source solution to online merchants.
   The PayPal option will be integrated into CyberSource's complete payment management solution for electronic commerce. Through a single payment interface, merchants can access a complete spectrum of payment options, plus built-in tools such as fraud screening, online tax calculation, export control, recurring billing and automated reconciliation management.
   PRE Solutions, Inc. has partnered with Coinstar Inc., to offer a variety of prepaid consumer products.
   The product suite available from PRE Solutions includes prepaid wireless, prepaid long distance, prepaid Internet, and prepaid Web content, including ringtones and games. Coinstar will have the ability to selectively add these products to its self-service devices to meet retail partner requirements.
   International Automated Systems, Inc. debuted its automated technology at Chefplex, the world's first completely self-service order and pay restaurant.
   IAS's OrderXCEL system allows customers to order and pay using cash, check, credit or debit without the need for a cashier.
   Chefplex ( opened its doors September 2003. It features five independent authentic restaurants under one roof. Customers get a gourmet selection of authentic Mexican, Italian, Thai, American and Ice Cream on a single ticket.
   Each authentic restaurant featured at Chefplex is owned and operated independently with its own kitchen area and chef. Customers simply touch pictures of food on the OrderXCEL's monitor to order menu items from any of the different restaurants and pay automatically with cash, check, credit or debit.
   Chefplex has already financially committed to an additional 20 OrderXCEL terminals for its next two locations. The company intends to open several restaurants over the next year.
   Major League Baseball's St. Louis Cardinals manage credit card processing of ticket sales with GO Software's payment processing solution, RiTA (Rapid Transaction Authority).
   The software helps the Cardinals organization manage online, telephone and walkup ticket sales year-round, but was specifically implemented to manage credit card transactions for two unique days out of the year: the day tickets for regular season games first become available and the day playoff tickets first become available.
   "When we first began selling tickets online in 2002, we noticed that the number of tickets actually sold was much smaller than anticipated," said DeBord. "An analysis revealed that the credit card processing system was the culprit. Instead of the typical three to four second turnaround time, transactions appeared to take 25 to 30 seconds."
   Additional analysis revealed that fans were actually having to wait four minutes or longer for the transaction to process because of the virtual queue that formed while transactions waited their turns to be processed.
   Lloyd Constantine, attorney for the merchants in the so-called Wal-Mart suit that was settled earlier this year, told attendees at a recent Food Marketing Institute conference that between August and December 2003, off-line debit interchange was reduced by $854,000,000.
   "But I have heard that this reduction was disappointing and unacceptably meager," Constantine said. "That reduction occurred in the face of the continued tie between debit and credit. Come January 1, 2004, if the price is too high, each merchant has an individual choice of just saying 'no!'
   "If the recent past teaches us anything, the defendants will try to set the Jan. 1, 2004, posted debit rates as high as they can, cut special deals with selected key merchants and only lower the general posted rates if and when enough merchants reject off-line debit and begin to destroy the defendants' ability to make those claims of ubiquitous acceptance," Constantine said.
   So the merchant has to be willing to communicate with its customers and tell them what this game is all about and that lower prices and safer products for the shopper is the ultimate goal of the game, according to Constantine. "Visa and MasterCard constantly communicate with your customers about what they can do in your stores - you may have noticed they sort of seize your checkout counters - setting the rules - at least until January 1.
   Constantine's advice to merchants, "Communicate with your own customers about the way they make payment for your merchandise in your stores. Tell your shoppers all about the superiority of PIN debit, and that U.S. Bancorp has just removed the PIN debit choice from their cards in Minnesota. Tell them the names of competing banks who have preserved consumer and merchant choice concerning on-line PIN debit and off-line signature debit."
   The next several years will witness a series of moves and countermoves between the defendants and individual merchants, according to Constantine.
   In mid-October, Vital Processing Services announced it has acquired a majority interest in Merlin Solutions, L.L.C. a provider of outsourced dispute processing services to Acquirers and their merchant customers.
   "Exclusively focused on dispute processing services, Merlin has a strong reputation backed by a state-of-the-art and scalable operating platform that will bring many efficiencies to our clients," said Bev Wells, President and CEO of Vital Processing Services.
   Merlin Solutions provides a full range of outsourcing services for dispute processing. Its full capabilities extend from sales draft retrieval requests through chargebacks, reversals, representments to compliance, arbitration, collection services and customer support.
   Merlin is focused on helping Acquirers lower their risk, optimize retrieval revenues, improve merchant customer service and mitigate hassles associated with dispute processing.
   "We are pleased and excited to now be a part of Vital's back-office solutions," said Anthony Weare, President of Merlin Solutions.
   Merlin Solutions will continue to operate from its headquarters in Fredrick, MD, with the same management team and dispute processing professionals. Terms of the deal were not disclosed.
   In late October, the U.S. Justice Department filed a lawsuit to block First Data's acquisition of Concord EFS.
   In a civil antitrust lawsuit to block the proposed acquisition of Concord EFS by First Data Corporation, Justice contends that the $7 billion merger, if allowed to proceed, would substantially reduce the competition among PIN debit networks and could result in higher prices for consumers. Despite legal roadblocks, the two companies are moving forward with their plans. A Concord representative reported that 63.3% of the total outstanding shares, or approximately 98.5% of the votes cast at their special meeting after the suit was filed, were in favor of the merger.
   Further developments on their progress is to be expected throughout the coming months.
   First American Payment Systems, L.P. ("First American"), a U.S. merchant credit card processing acquirer announced in October that it had acquired substantially all of the assets and merchant agreements of Certified Merchant Services Ltd. ("CMS").
   The CMS portfolio is reported to support 31,300 small and medium-sized merchants located throughout the United States. The company claims that they generate 1,600 to 1,800 new merchant accounts per month. First American and the newly acquired CMS, project that they will process approximately $4 billion in VISA/MasterCard transaction volume in 2003 and will provide services for more than 63,000 merchants throughout the United States.
   Mary Dees, the current General Manager of CMS, President of, a leading credit card consulting firm and the current President of Electronic Transaction Association states, "The strong sales engine of CMS coupled with the operational excellence of First American will result in a rapidly growing, formidable competitor in the acquiring marketplace".