News April 26, 2010 • Issue 10:04:02 Industry Update .......................................14 Job rebound in acquiring? ........................48 Processors press industry Wal-Mart: A new center for more standards ...............................49 Retailer wanted breach of gravity for payments connection hushed up ...........................51 Trade Association News The ETA, celebrating 20 years in style .....84 Features GS Advisory Board: Positive signs and actions – Part 3 ..........32 SellingPrepaid: Prepaid in Brief ....................................38 Consumers in the prepaid driver's seat .............................41 Security standard in store for stored-value ....................................42 Research Rundown...................................80 Views ACH grows, B2B payments plod along By Patti Murphy, The Takoma Group .......24 The cost of credit card processing – past and present By Jared Isaacman al-Mart Stores Inc. is unique in the payments industry. It is the United Bank Card Inc. ...........................26 only financial services provider that allows a customer to pay The 'Wal-Mart case' revisited bills electronically, transfer money to friends and relatives, and By Brandes Elitch, CrossCheck Inc. .........28 W purchase an affordable set of bath towels. That combination of discounted retail goods with equally inexpensive financial products has proven Education a formidable business model. Street SmartsSM Pundits may haggle over the degree of Wal-Mart's influence on the industry, but No ISO demise with niche markets an impact it has had – not only in driving down fees across the prepaid card sector, for example, but also in fostering a deeper relationship between service By Ken Musante ...................................60 providers and customers. And yet the Bentonville, Ark.-headquartered com- Contractual pricing pitfalls pany's role as a payments trendsetter (and its prominence generally) has been By Adam Atlas, Attorney at Law..............64 over 30 years in the making. Building a global Web site By Carrie Hometh, Payvision..................68 Jim Grabow, former Senior Director of Financial Services at Wal-Mart, noted Crossing the POS chasm that the company was in the vanguard of POS automation when it electronified By Dale S. Laszig its cash registers in the 1970s. Wal-Mart was also instrumental in mitigating, to a degree, the power of the card brands through the 2003 "honor all cards" ruling Castles Technology Co. Ltd. ...................70 and an October 2004 U.S. Supreme Court decision, according to Grabow. Healing the Achilles heel of business By Nicholas Cucci In the "honor all cards" case, Wal-Mart and other big retailers, representing 5 Network Merchants Inc. ........................74 million merchants across the United States, were successful in knocking down a Social networks that boost your business Visa Inc. and MasterCard Worldwide rule that forced merchants to accept all of By Daniel Burrus the card brands' cards. The victory allowed merchants more control over what Burrus Research Associates Inc. ..............76 cards they took for payment at the POS. Continued on page 3 See Wal-Mart on page 55 3 AdvisoryBoard NotableQuote » Tony Abruzzio–Global Payments Inc. Despite all the bad publicity » John Arato–MagTek Inc. regarding rate increases, PCI fees » Adam Atlas–Attorney at Law and new fees, the cost of accepting » Clinton Baller–PayNet Merchant Services Inc. credit cards has never been lower. Maybe there are a few new fees, » Audrey Blackmon–TASQ Technology but these are insignificant when » Robert Christiansen–ARM Loyalty compared to the reduced margins » Steve Christianson–AAmonte Bankcard being charged for processing. » Steve Eazell–Secure Payment Systems Inc. » W. Ross Federgreen–CSRSI See story on page 26 » Ed Freedman–Total Merchant Services » Robert Ficarra–Sterling Payment Technologies » Marc Gardner–North American Bancard » Russ Goebel–Quantus Health Solutions LLC Inside this issue: » Matt Golis–YapStone Inc. CONTINUED » Curt Hensley–CSH Consulting » Jared Isaacman–United Bank Card Inc. Company Profi les » Kevin Jones–First American Payment Systems » Jerry Julien–Equity Commerce LP Secure Payment Systems Inc. » Lazaros Kalemis–Alpha Card Services Inc. » Dee Karawadra–Impact PaySystem An upfront and advanced processor ..................................................45 » Rod R. Katzfey–Consultant New Products » Alan Kleinman–Meritus Payments » Allen Kopelman–Nationwide Payment Systems Inc. Memory card-based NFC ....................................................................81 » Mitch Levy–Merchant Cash and Capital Portable gateway enhancement ............................................................82 » Dan Lewis–AmeriBanc National Ltd. » Douglas Mack–Payex Inspiration » Paul Martaus–Martaus & Assoc. » Biff Matthews–CardWare International Change, the best business medicine ......................................................85 » Tim McWeeney–WAY Systems Inc. » Justin Milmeister–Elite Merchant Solutions Departments » Patti Murphy–The Takoma Group » Michael Nardy–Electronic Payments Inc. (EPI) Forum ..................................................................................................5 » Steve Norell–US Merchant Services Datebook ...........................................................................................87 » Bulent Ozayaz–VeriFone » Michael Petitti–Trustwave Resource Guide ..................................................................................88 » Bill Pittman–SoundPOS LLC. » David H. Press–Integrity Payment Systems Advertiser Index ...............................................................................102 » Steve Rizzuto–TransFirst Miscellaneous » Charles W. Salyer–Ladco Leasing Inc. » Jeffrey I. Shavitz–Charge Card Systems Inc. QSGS: Quick Summary Green Sheet......................................................8 » Lisa Shipley–Ingenico North America » Dave Siembieda–CrossCheck Inc. Bottom Lines .......................................................................................14 » Rick Slifka–Exec-Links LLC » Nick Starai–Network Merchants Inc. Water Cooler Wisdom ........................................................................85 » Anna Soloman–Frontstream Payments » Ted Svoronos–Group ISO » Stuart Taylor–Hypercom Corp. » Scott Wagner–GO DIRECT Merchant Services Inc. » Dan D. Wolfe–Teledraft Inc. 4 President and CEO: Paul H. 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[email protected] Correspondence: The Green Sheet, Inc. 800-757-4441 • Fax: 707-586-4747 6145 State Farm Drive, Rohnert Park, CA 94928 Send questions, comments and feedback to [email protected] Send press releases to ...............................................press@greensheet.com NOTE – Please do not send PDF versions of press releases. Print Production: Hudson Printing Company Contributing Writers: Adam Atlas ................................................................... [email protected] Daniel Burrus ......................................................................office@burrus.com Nicholas Cucci.......................................................................ncucci@nmi.com Brandes Elitch .......................................................brandese@cross-check.com Carey Hometh .......................................................... [email protected] Jared Isaacman .....................................................jared@unitedbankcard.com Dale S. Laszig .......................................................dale_laszig@castech.com.tw Ken Musante ........................................................kenm@eurekapayments.com The Green Sheet (ISSN 1549-9421) is published semi-monthly by The Green Sheet Inc., 6145 State Farm Dr., Rohnert Park CA 94928. Subscription is FREE to participants in the payment processing industry, an annual subscription includes 24 issues of The Green Sheet and 4 issues of GSQ. To subscribe, visit