The Prepaid Press - May 15, 2008 - (Page 20)

PAYMENTS May 15 · 2008 - 20 First Data to Acquire InComm Rollups and Mergers Create New Behemoth First Data History First Data was incorporated in June 1971 to provide processing services to the Mid-America Bankcard Association of Omaha, Nebraska, a non-profit bankcard processing cooperative. First Data had 110 employees and $2 million in annual revenues the first year of operation. In 1980, American Express Information Services Corporation bought 80% of First Data, and the rest over the next three years. In June 1983, First Data was spun off from American Express and finally went public in 1992. A merger with First Financial Management Corp. led to a company with three major business units, including Western Union. First Data continued to expand, both in the U.S. and overseas with operations in United Kingdom, Australia, Mexico and Canada. During this period, First Data also grew like POSA terminals. It grew its operations, leveraging its technological expertise, into prepaid wireless, debit cards and gift cards. In 2006, InComm had a First Data may have been frustrated by their inability to create their own gift card distribution business, so they looked for a short cut. retail presence in over 75,000 locations when it acquired KwikSystems, Prepaid Enterprises and PRE Solutions, all in February of that year. By adding KwikSystems and PRE’s 60,000 retail locations, InComm became one of the largest U.S. prepaid distributors. PRE Holdings was an Atlanta-based company with a broad range of prepaid products, including prepaid wireless airtime, long-distance cards, gift cards, music downloads, ringtones and online games. PRE also provided the Mio Money Prepaid MasterCard to over 60,000 retail locations including grocery stores, discount dollar stores, travel centers and convenience stores. In March 2006, InComm acquired a majority interest in AirTime Technologies, another company with POS prepaid and debit transaction solutions. But, InComm was not finished snowballing yet. In October of the same year, 2006, InComm acquired Canadian-based prepaid calling card provider, DataWave. DataWave had a network of 10,000 retail locations and 6,000plus point-of-sale-activation terminals located in Canada and the U.S. InComm integrated this into its existing network of more than 145,000 retail locations. from page 1 InComm, will become the leader of First Data’s Global Prepaid Services division when the transaction closes. “We are pleased to join First Data and are confident that this partnership will deliver even more value to our current customers. Additionally, First Data’s global reach, unmatched scope of solutions and commitment to service excellence will not only enable us to enter new international markets, but also help to expand distribution and deliver innovative prepaid solutions to the small and mid market,” said Smith. The company said the acquisition is subject to customary closing conditions and regulatory approvals and is expected to be completed in the second quarter of this year. Payments in Brief nFinanSe Inc. has appointed Kenneth E. Lawson to the position of Vice President – Compliance, effective May 12, 2008. Lawson was most recently with the international consulting firm of Booz Allen Hamilton Inc., where he directed an international, anti-money laundering, anticorruption and counter terrorist project for the government of Indonesia. Previously, Lawson held positions with the U.S. Department of Homeland Security and the U.S. Department of Treasury. nFinanSe – www.nfinanse.com With the over $300 million in 2007 net revenues, representing almost $8 billion in retail sales transactions processed in 2007, InComm is one of the U.S.’s largest distributors… the network of Western Union agent locations. Beginning in 2001, First Data had a series of acquisitions, including a $6.6 billion merger with Concord EFS in 2004. This merger added the STAR Network and expanded First Data’s PIN-based debit acceptance to more than 1.9 million ATM and retail locations. In January 2006, after a weak performance throughout 2005, First Data announced its intention to spin off Western Union into an independent publicly traded company. The move was a surprise, since Western Union accounted for much of the company’s profits. Ric Duques, First Data’s CEO at the time, said that First Data had to focus its efforts, and decided that the growing card business had more potential for the future. In early 2007, First Data announced that it had received an offer earlier to sell the company to a private equity firm for $29 billion. The agreement allowed First Data to invite other investors to try and beat the offer. In April, Duques announced that a New York private equity firm, Kohlberg Kravis Roberts & Co., had help create the IPS platform, which provides banks a suite of branded debit network and card issuer processing services including PIN and signature debit and prepaid processing, and ATM driving. ACI Worldwide - www.aciworldwide.com Card Payments Processor, Metavante Technologies Ltd., and hosted telephony provider, NewVoiceMedia, have announced an agreement to provide a new service that will allow callers to retrieve essential card account information including their PIN securely over the phone. This service - a white label IVR (Interactive Voice Response) developed by NewVoiceMedia and resold by Metavante, provides a more secure solution with significant cost savings to the card issuers. It also enables the cardholder to retrieve their PIN information in minutes from any location around the world. Metavante – www.metavante.eu; NewVoiceMedia – www.newvoicemedia.com Heartland Payment Systems, a provider of credit/debit/prepaid card processing, payroll, check management and payment services, has signed a definitive agreement to acquire the Network Services business of Alliance Data Systems Corporation. According to the most recent Nilson Report, Alliance Data’s Network Services is one of the industry’s 20 largest payment processors, handling over $17 billion of total annual bank card volume and 604 million transactions in 2007. In addition to Visa/MasterCard acquiring, Network Services handles a wide range of payment transactions for its predominantly petroleum customer base, including providing approximately 2.6 billion transaction authorizations each year. Heartland, one of the nation’s 10 largest processors, handled $51.9 billion of total annual card volume last year. Heartland Payment Systems www.heartlandpaymentsystems.com Berman Holdings, Inc. has filed with the State of Nevada Secretary of State a “Certificate of Amendment to Articles of Incorporation” to change the name of the Company from Berman Holdings, Inc. to Prepaid Card Holdings, Inc. The company has also applied for and received a new Cusip number which is 74071E 108. Prepaid Card Holdings - www.bankfreedom.com ACI Worldwide, Inc., an international provider of software for electronic payment systems, has announced that MasterCard Worldwide has selected ACI’s electronic payment solutions as key elements of the new MasterCard Integrated Processing Solutions (IPS). MasterCard selected ACI’s next-generation payments solutions to Fiserv, Inc., a provider of information technology services to the financial and insurance industries, says its CheckFree FraudNet automated fraud detection and case management system has blocked more than 21,000 attempted fraudulent bill payment transactions totaling $287.9 million since the service went live in November 2005. While the actual incidence of fraud for electronic payments is low, FraudNet provides a solution for financial institutions to lower fraud rates even further. The FraudNet service is part of a suite of fraud prevention solutions offered by Fiserv that helps detect and mitigate fraud from log-in authentication to back-end payment processing, resulting in a lower cost of ownership in the online channel for financial institutions. Fiserv – www.fiserv.com But, InComm was not finished snowballing yet. In October of the same year, 2006, InComm acquired Canadian-based prepaid calling card provider, DataWave. offered approximately $29 billion. The transaction was completed in September 2007 and Duques retired. Previously publicly traded First Data became a private company when the transaction closed. InComm History InComm was founded in 1992 as a provider of prepaid long distance services and technology, Future of First Data If you look at the two businesses, said Mark Herrington, current president, First Data Global Prepaid Services, “You really get excited about an opportunity where there is virtually no overlap.” Herrington said this leaves a tremendous amount of opportunity in a couple of areas. “First Data’s footprint is in the merchant community, large to small, so there is tremendous opportunity to expand distribution of the InComm products,” he said. “Through our current relationships, prepaid is one of the fastest growing categories in retail. Since Michael Cappella has taken over as CEO, he has been looking for opportunities to provide higher value solutions to clients.” Cappella took over the reins of First Data when Duques retired. “We certainly think this represents one of those opportunities,” added Herrington. One industry observer, Tim Sloane, Director of the Debit Advisory Service for Mercator Advisory Group, sees the combination as a ”natural fit “ for First Data, one of the largest in-store gift card processors and acquirers. He speculated that First Data may have been frustrated by their inability to create their own gift card distribution business, so they looked for a short cut. “I have to believe the only reason it took so long was that First Data thought they could launch a competitive offering using internal resources, but then discovered that they couldn’t get the initiative off the ground,” said Sloane. Sloane said that he thinks that Comdata will be frustrated at losing this deal, and may look elsewhere http://www.aciworldwide.com http://www.nfinanse.com http://www.metavante.eu http://www.heartlandpaymentsystems.com http://www.newvoicemedia.com http://www.bankfreedom.com http://www.fiserv.com

Table of Contents Feed for the Digital Edition of The Prepaid Press - May 15, 2008

The Prepaid Press - May 15, 2008 Prepaid Attracts Press Attention First Data to Acquire InComm Contents The Retske Report: To Everything There Is A Season Regulatory Rundown: Rules, Bills and Probes Courtesy of the FCC 5 Minutes With Ray Horak, Telecom Author The Prepaid Press Expo Spotlight The Age of Prepaid Prepaid Wireless in Brief Prepaid Wireless Roundup American Wireless to Sell Virgin Mobile Openet Introduces Flexible Accounts Prepaid Reviews Launches Pay as You Go Podcast Motorola Reports Losses APC Wireless Buys Movida Virgin Mobile to Deliver Limbo Services The State of Prepaid Technology Start Your Engines! The Legal Line PhoenixSoft Adds Service Providers Blackstone to Distribute Viscom Calling Cards Spot Rates IVR Technologies Releases Talking SIP 3.4 Calling Cards in Brief Former IDT Employee Wins $10.5 Million Payments in Brief Hypercom SmartPayments Certified for Windows Pacific Resource Credit Union Selects TMG New Payment Software for QuickBooks POS Blood in the Water Prepaid 101: Give Me the Power 7-Eleven to Hold Innovation Event First Data Gives Ingenico I-Series Class A Support Coinstar Kicks Off Change Reuse Program Payment Application Data Security Standard Issued Forrester Predicts Online Sales to Climb Retail Focus in Brief Our Advertisers Contact Us

The Prepaid Press - May 15, 2008

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