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Consumers May Limit NFC Transactions

Consumers may use their cell phones or other mobile devices for in-store payments, but most want to limit wireless payments to a single payment card, according to new findings from technology research firm ABI Research.

The preference for just one mobile-payment-enabled card stood out in results from the mid-November survey of more than 1,000 U.S. consumers, according to principal analyst Jonathan Collins. Such cards would be capable of handling transactions from devices empowered with near-field communication (NFC) technology. NFC enables handsets and payment terminals to exchange data with each other at short distances.

Consumers said they also were concerned about fees. In mobile payments, these could come from financial institutions as well as telecommunications providers in the form of a charge for data traffic, similar to the way text messaging is priced.

Shoppers Extend Season

Although the gift-buying frenzy for the holiday season is over, December 26 marked the beginning of the next phase of the holiday-shopping season as consumers headed off to redeem gift cards, search for post-Christmas clearance items and to return or exchange gifts. According to a survey by the International Council of Shopping Centers, Inc. (ICSC) and UBS Securities LLC, 18 percent of consumers—or nearly one-in-five consumers—surveyed were planning to shop on December 26 alone.

"Gift cards have transformed the holiday-shopping landscape and they have extended holiday
shopping—this time for yourself—well past Christmas Day. December 26th begins that new
phase of the holiday shopping season” said Michael P. Niemira, ICSC chief economist and
director of research.

And where consumers go, electronic payments follow, extending the peak season for processors, as well.

Intuit to Buy ECHO

Intuit announced Dec. 19 that it will pay approximately $131 million to acquire electronic payment processing solutions provider Electronic Clearing House (ECHO). Intuit said the acquisition will help it deliver solutions that address the most commonly utilized payment options, such as credit card, debit card, automated clearing house, gift card, check verification, collection, guarantee, and conversion. The deal is similar to one announced and then withdrawn in early 2007.

Among ECHO's offerings are check, debit card, and credit card processing, as well as check verification, collection, guarantee services, and ACH capabilities. Following the deal's expected closure in the first quarter of 2008, ECHO will become a wholly owned Intuit subsidiary. "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 Intuit small business group general manager Brad Smith.

Amex, First Data Sign Processing Deal

American Express and First Data Corp. have signed an agreement under which First Data will offer American Express Card acceptance as part of an integrated solution for small- and medium-sized merchants. Specific terms and conditions of the agreement are not being disclosed.

Under the agreement, American Express will retain the acceptance contract with participating merchants, establish merchant pricing, and receive the same transactional information it does today. First Data will provide payment processing services to merchants on behalf of American Express for American Express card transactions under the new agreement. New merchants who sign up for the program will receive an easy, cost-effective, all-in-one solution with the convenience of a single source for statements, settlement and customer service for all major card brands. The program will be available to merchants that are new to American Express Card acceptance in the second quarter of 2008.

"First Data continues to bring innovation to the marketplace that is focused on customer-based solutions," said Brian Mooney, president of First Data Merchant Services. "Through our relationship with American Express, merchants will benefit from a single payment for all major card transactions, consolidated statements, a single point of contact for all customer service, and a one stop shop for all their payment needs."

"This innovative program with First Data offers small to mid-size merchants the choice of a new way to streamline payment acceptance so that they can focus more time on serving customers and growing their business," said Kim Goodman, executive vice president, Merchant Services North America, American Express. "Consumers will also enjoy the convenience of being able to use the American Express Card at even more locations and the opportunity to earn valuable rewards whenever they use their Card."

Electronic payments leaving checks behind

The number of checks we write keeps going down and electronic payments are increasing, according to a Federal Reserve study released Monday. The study found that more than two-thirds of noncash payments were made electronically in 2006, up from 50 percent in 2003, the last year studied by the Fed.

In 2006, the Fed counted 62.7 billion electronic payments in the United States, compared to 30.6 billion checks paid. The electronic payments had a value of $34.1 trillion, while the checks paid had a value of $41.7 trillion.

The annual growth rate of electronic payment transactions was 12.4 percent from 2003 to 2006, compared to a 6.4 percent annual decline for checks. One of the biggest drivers of increasing electronic payments came from debit card transactions.

The Fed has been cutting back check-processing operations in recent years as a result of the increasing use of electronic payments. The Charlotte Fed branch will shift work to Atlanta in the second quarter of 2009. A small staff will remain to print so-called "substitute checks" -- hard copies of electronically shipped checks.

Pipeline Data Buys COCARD, Merges with Innovative Resource Alliance

Pipeline Data says it has signed a binding letter of intent to acquire Innovative Resource Alliance, the parent corporation of TenderCard, a gift, loyalty and stored value solutions provider with more than 12,000 merchants based in Falmouth, Massachusetts and Merchant Services Network, a retail merchant services provider based in West Palm Beach, Florida, in exchange for up to 25.7 million shares of Pipeline Data Common Stock, subject to certain earn in provisions. In addition to its current portfolio of 5,000 merchants, IRA has initiated negotiations and executed letters of intent to purchase for cash portfolios totaling approximately 15,000 merchants.

As merged, Pipeline Data/IRA will acquire COCARD(R) Marketing Group, LLC ("COCARD"), a Nashville, Tennessee-based merchant services provider catering primarily to small and medium-sized retail accounts. COCARD currently services over 25,000 merchants. The Definitive Merger Agreement to acquire COCARD for approximately $101 million in cash was entered into on October 22, 2007.