MasterCard Adds Two New Board Members

MasterCard has elected two new Board members. Jose Octavio Reyes Lagunes joins the MasterCard board as a “Class A” director. He is President, Latin America Group at The Coca-Cola Company. Silvio Barzi, also joins the MasterCard board as a “Class M” director. He is the EVP of UniCredit Group, Head of New Markets, and founder and Chairman of UniCredit Consumer Finance, a bank specializing in credit cards and consumer credit. With these appointments the MasterCard Board of Directors includes a full complement of nine “Class A” directors and three directors representing the financial institutions that own MasterCard “Class M” shares. Richard Haythornthwaite, a partner of UK-based Star Capital Partners, serves as non-executive chairman of the board.

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Oberthur Expands U.S. Card Plants

Oberthur Card Systems has launched a multi-million dollar expansion at its U.S. manufacturing facilities and personalization centers. The company installed two new presses in 2007 for its card manufacturing facilities and will add more presses and finishing equipment over the next 12 months, more than doubling its contactless capabilities. Additional investments will be made in the company’s smart card manufacturing capacity, including contact, dual, and dual-hybrid cards. The company will hire and train new associates to further emphasize customer service, allow for accelerated delivery and reduce time to market of new products. Oberthur also plans to standardize processes at its U.S. plants and increase the number of cards that can be printed on a sheet, which will permit more printing.

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Food Lion Selects nFinanSe’s Pay Card

nFinanSe has inked a deal with Food Lion and Hannaford Bros. to be the exclusive pay card program provider for its employees. Under the agreement, nFinanSe will provide nFinanSe “Discover Network Pay Cards” to participating employees and manage the execution of the program, including the application of payroll payments to cards and ongoing cardholder service and support. Delhaize America is a supermarket operator in the United States with over 1,500 stores in 16 states and operates under the banners of Food Lion, Bloom, Bottom Dollar, Harveys, Hannaford Supermarkets, and Sweetbay.

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EXCEL CREDIT CARDS

Bank Sohar has introduced its “Excel Credit Card” available in 3
different variations, including the “Classic”, “Platinum” and “Gold” Credit
Cards. The “Classic” card offering provides cardholders with a free-for-
life offering, with no annual charges through an introductory offer for a
limited time. The “Gold” card offering targets upper-class consumers,
provides customers with free membership for the first 2 years, a
complementary “Priority Pass” Membership card to provide access to
500 airport VIP lounges in 90 countries and a free AAA Membership
to provide discounts at member establishments. The “Platinum” card
provides all the benefits afforded “Gold” card customers, plus travel
insurance coverage of up to US$ 2 million. For the entire “Excel”
product line, Bank Sohar is offering an introductory interest rate of 12%
for a member’s first year and a rate between 18% to 24%, thereafter.

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Credit Card Yields Decline in December

Credit card portfolio yield has declined to its lowest level in more than a year driven by lower interest rates offset somewhat by rising fee income. Yesterday’s Fed rate reduction will cut variable credit card interest rates another 75 basis points over the next 45 days as many issuers have yet to establish floor rates. According to CardData ([www.carddata.com][1]), portfolio yield, which is determined by dividing the sum of gross interest and non-interest revenue by the average managed card outstandings and then annualizing, shows a 14.63% figure for December compared to 14.80% in the prior month. Since summer credit card portfolio yield has declined about 30 basis points. According to R.K. Hammer U.S. credit card issuers generated an estimated $30 billion in cardholders fees last year, about 6% higher than 2006. U.S. cardholders also paid approximately $97 billion in interest charges. According to CardTrak (www.cardtrak.com) the average variable interest rates stands at 15.79% for January, compared to 16.59% one-year ago. (CF Library 1/22/08)

CARD YIELD
Jun 07: 14.93%
Jul 07: 14.77%
Aug 07: 14.80%
Sep 07: 14.71%
Oct 07: 14.82%
Nov 07: 14.80%
Dec 07: 14.63%
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com

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UMB Calls on Fintura to Expand Card Biz

Atlanta-based Fintura account origination and portfolio management company has signed an agreement with UMB Bank to help the issuer expand its credit card business in MO, IL, CO, KS, OK, NE and AZ. Fintura’s New Account Origination solutions are designed to accelerate growth with offerings designed to motivate consumers to do business with financial institutions. Working in partnership with internal marketing staff, Fintura implements market opportunities based on their potential to build long-term revenue streams by applying targeting models and methodology. The organization also manages the direct marketing campaign through printing development, postage and mailing.

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Oberthur Card Systems Up 11% from Q3

Oberthur Technologies reported that revenues for its Card Systems unit grew 7% year-on-year and 11% sequentially to $239.9 million. Card Systems delivered over 117 million microprocessor cards in the fourth quarter, compared with 87 million in the last quarter of 2006, or a 35% increase in volume terms. About 26 million payment smart cards were delivered in the fourth quarter, up 11% from 4Q/06. However, conventional card sales were down, largely as a result of migration to EMV and the spread of contactless technology. Personalization services were up 11.5% from the previous quarter with sustained sales in the U.S. and Europe. Revenue from the payment segment as a whole (chip cards, magnetic stripe cards and personalization services) amounted to $104.2 million in the fourth quarter. For complete details on Oberthur’s latest results visit CardData ([www.carddata.com][1]).

OBERTHUR CARD SYSTEMS SALES
4Q/06: $225.1 million
1Q/07: $165.5 million
2Q/07: $209.5 million
3Q/07: $215.3 million
4Q/07: $239.3 million
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com

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Cellucom Picks HBNet for POSA Services

Wireless specialist Cellucom Group has selected Hypercom’s HBNet transaction transport subsidiary for POS activation services. Hypercom’s HBNet network speeds the authorization and processing of electronic transactions for retail point-of-sale, financial, government, health care and other customers in both the dial and IP POS markets. The use of the Hypercom’s high security transaction transport service will help Cellucom POSA quickly activate its prepaid wireless and long distance cards at the point-of-sale.

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InComm & Single Touch Intro M-Coupons

San Diego-based Single Touch Interactive, an ADC specialist, and Atlanta-based InComm have teamed to combine InComm’s POS integration at over 100,000 national retail stores with Single Touch Interactive’s ADC mobile technology to deliver mobile coupons. Consumers only need to sign up one time for the mobile coupon program via their mobile phone by dialing #SAVE and entering their loyalty card number or they can sign up online at any participating retailer. When the consumer visits a participating retail store, they dial #SAVE on their mobile phone to hear and activate available mobile coupons. At checkout, the consumer swipes their loyalty card to trigger the discount. InComm is a marketer, distributor and technology innovator of stored-value gift and prepaid products.

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Top 3 Issuers Post Modest Q4 Growth

The nation’s top three general purpose credit card issuers, who collectively control about 58% of the market based on card loans, posted a 5.2% gain in outstandings and a 4.9% gain in volume for the fourth quarter, compared to the year ago period. The modest gains pale in comparison to the double digit gains of prior years. Bank of America, Chase and Citibank reported outstandings of $436.7 billion for the fourth quarter, compared to $415.1 billion for 4Q/06, according to CardData ([www.carddata.com][1]). The top three also posted purchase volume of $248.1 billion for 4Q/07, compared to $236.5 billion one-year ago. In the volume category, Citibank led the group with an 8.4% gain, compared to 4.3% for BofA and 2.2% for Chase. For the latest issuer statistics for the fourth quarter visit CardData ([www.carddata.com][2]).

[1]: http://www.carddata.com
[2]: http://www.carddata.com

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Rapid Rewards VISA Offers Kravitz Perks

Southwest Airlines and Chase are co-sponsoring Lenny Kravitz’s upcoming “Love Revolution Tour,” offering special give-aways and experiences to “Rapid Rewards VISA Signature” cardholders. Southwest and Chase will offer a select number of tickets for the Denver, Philadelphia and San Francisco concerts for Southwest Rapid Rewards Visa cardmembers, will sponsor special lounge access for Southwest Rapid Rewards Visa cardmembers, who show their card, and provide an “in-lounge” sweepstakes for roundtrip air tickets.

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GE MONEY 4Q/07

GE reported that revenues for its GE Money unit grew 22% in the fourth quarter to $6.6 billion. Profits grew by 7% to $957 million, compared to one-year ago, but down from the prior quarter’s year-on-year growth rate of 13%. In December GE indicated it was looking to sell or form a partnership for some of its GE Money services including its U.S. private-label credit-card business. Overall, GE is reviewing between $30 billion and $50 billion in financial assets to sell or share. The Company cites a slowing U.S. consumer and a challenging housing market as reasons to reevaluate its financial services business. GE Money’s credit card business contributes about 16% of its $4 billion+ annual net income. During the quarter, GE Money and the National Tour Association established a five-year extension of the GE Money Travel Finance Program available through NTA’s more than 600 tour operators globally; established a relationship with FL-based decoupled ACH debit card provider National Payment Card to link National Payment Card’s ACH-based alternate payment system with the GE Motor Club; extended its consumer financing agreement with FL-based City Furniture; renewed its consumer financing agreement with Thomasville Furniture; and signed a multi-year agreement with Wood-Mizer for revolving and installment financing. For complete details on GE’s fourth quarter performance, visit CardData (www.carddata.com).

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