Efunds files lawsuit against MasterCard

Efunds files lawsuit against MasterCard

US payments processor eFunds has filed a lawsuit against MasterCard over the termination of a debit processing alliance agreement signed by the two companies in 2003.

In a filing with the Securities and Exchange Commission, MasterCard says eFunds filed the complaint on or about 30 January in an Arizona court, alleging that its termination of the marketing sales and services alliance agreement was "improper".

The agreement, which began in December 2003, involved the two parties working together to provide debit processing services to financial institutions. Under the deal MasterCard agreed to market and distribute eFunds' transaction processing platform and services as part of its debit payments processing programme.

But in its filing to the SEC MasterCard says: "After careful analysis of the needs of its customers and its business, on December 13 2006, MasterCard notified eFunds that, pursuant to one of the provisions in the agreement, it was terminating the agreement."

Efunds' complaint asserts several causes of action including breach of contract, breach of the covenant of good faith and fair dealing, and fraudulent inducement.

Efunds is seeking a declaratory judgment that the agreement remains in full force or that it receives monetary damages from MasterCard.

MasterCard says it has not yet been served with a copy of the complaint and therefore its time to respond has not begun to run.

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