Magazine article American Banker

Deluxe, Concord EFS Settle Benefits Transfer Suit

Magazine article American Banker

Deluxe, Concord EFS Settle Benefits Transfer Suit

Article excerpt

Deluxe Data Systems Inc. and Concord EFS Inc. have settled a lawsuit that had put a cloud over the future of electronic benefits transfer programs.

Concord, a Memphis-based transaction processing company, filed the original suit on Feb. 8, 1993.

In it, Concord charged Deluxe, a transaction processor, with violation of antitrust laws in carrying out a contract to handle Maryland's EBT program.

Industry observers expressed concern that the Concord lawsuit against Deluxe would put the brakes on electronic benefits transfer, which is in its infancy.

With electronic transfer, recipients of government benefits are issued cards similar automated teller machine cards and receive their payments through ATMs or point of sale terminals.

In a statement released last week regarding the settlement of the lawsuit, James G. McGowan, president of Deluxe Data, said that all disputes were resolved with Concord and that both companies will continue to compete against each other in the electronic funds transfer processing market.

Concord officials refused to comment, and neither party would disclose terms of the settlement.

The suit contended that Deluxe had monopolized the electronic funds transfer business in Maryland grocery stores.

Maryland had contracted with Deluxe in 1991 to receive EBT processing services for six years. The contract called for Deluxe to install POS terminals in grocery stores free of charge. When Concord filed its original suit, Deluxe had already installed 9,000 of the terminals, representing what a spokesman characterized as a "majority of the grocers" who would end up participating in the program. …

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