VISA Card Use Growth Doubles Global Rate In Asia

VISA International Asia Pacific has reported a 31% growth in prepaid
and debit card use in 2006 for the region, twice the rate of the global
average, according to The India Financial Express. The card sales volume
for 2006, including cash transactions, was $156 billion for the year, a
31% increase over 2005. The global growth was 17%, which was 60%
of VISA global total consumer volume and more than 67% of the number
of VISA transactions. The number of India VISA debit and prepaid cards
was more than 33.9 million.

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Contactless & RFID Technologies Confusing

Frost & Sullivan says the market still lacks a clear understanding of what smart card technology and RFID technology is able to do in terms of security and processing. Contactless cards, in particular, are capable of transacting more sensitive and confidential information than RFID cards/tags as they are usually equipped with higher authentication mechanisms and security layers. It should not be confused with RFID technology, which is more popular in instances where less confidential data are transacted and single application is used. Frost & Sullivan says confusion between the two technologies could eventually impede the potential growth of the both the RFID and contactless smart cards markets.

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TM & AmBank Pool Resources

Telekom Malaysia Berhad (TM) has formed an alliance with
Amcorp Group, AmBank (M) Berhad and MCM Wireless Sdn. Bhd.
(MCMW) that will create new opportunities for all parties involved by
leveraging on each other other’s respective strengths. These strengths
will widen the companies’ distribution network, product development
and innovation for market penetration. The companies have signed a
Heads of Agreement to open new business opportunities and a
Collaboration Agreement for the use of AmBank’s distribution channels.
The latter will allow for the sales of TM’s “iTalk” cards and reload cards
and include the ATM machine channels, vending kiosk channels and
Internet banking channels. Also, because of this agreement, a co-branded
card program between AmBank and TM will combine AmBank’s
“NexG Prepaid” Mastercard and TM’s “iTalk”. AmBank and TM will
incorporate TM’s “iTalk” talktime and other products into AmBank’s
loyalty points reward redemption program enabling customers of both
parties to redeem their points with TM’s products and services. TM
currently has an operating revenue of more than RM16 billion.

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Cardinal Software Hires a New Sales Exec

TX-based Cardinal Software has hired Mike Witt, formerly with ACS and Fiserv, as SVP/Sales & Marketing. Mike’s most recent role at Fiserv was Sr. Sales Executive in the Southwest region. Witt began working in banking operations over 18 years ago. From there, Mike went on to Affiliated Computer Services (ACS) where he worked with system conversions, client services, and executive account management. He was the acting Sr. Account Manager in the bank services division when he left ACS to go to Fiserv where he spent the next 12 years. He is a graduate of Texas Wesleyan University.

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MasterCard Delays SEPA Interchange Rates

Mastercard Europe will delay the introduction of SEPA fallback
interchange rates for “Maestro” POS transactions and will not be
applied as of January 1st, 2008. This decision was made upon recognition
that European markets are implementing the solutions on different
market structures, competition, consumer and merchant expectations,
and regulations. MasterCard processes approximately 14 billion
transactions each year through its family of brands, including Maestro
and Cirrus®, and serves more than 210 countries and territories.

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AmEx Expands its Hilton Summer Promotion

Hilton Garden Inn has partnered with American Express and Dockers Golf to expand its annual “Great Golf Giveaway” promotion and to offer an AmEx-branded prepaid card worth up to $50 for guests who complete a stay booked online via “OPEN” and pay with any AmEx card.Guests who complete a stay booked online under Offer Code OPEN and pay with any American Express Card that includes two nights over Thursday, Friday, Saturday and/or Sunday night at any Hilton Garden Inn will receive an American Express – branded prepaid card worth $25 redeemable at any of the thousands of Hilton Family hotels worldwide. Guests who stay three qualified nights and pay with any American Express Card will receive a $50 card redeemable for a future stay at any Hilton Family hotel.

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CO-OP Logs a Record Patronage Distribution

The board of directors from CO-OP Financial Services announced a record patronage distribution, with member-shareholders dividing a $12.1 million cash disbursement, $9.8 million in allocated patronage dividend and a $26 million total net income from 2006. In 2006, CO-OP, which boasts nearly 2,000 member credit unions and 25 million cardholders, established an all-time volume record when ATM, shared branching, debit and POS activity reached more than 1.3 billion transactions.

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Payment Rates Continue to Head South

Monthly payment rates continued to spiral downward during April, falling to its lowest level in two years. The MPR, or the amount that cardholders pay on their credit card debt each month, peaked in October of last year, reaching almost 21%. The higher payment rates were driven by new minimum payment standards. According to CardData, the MPR declined to 18.04% in April, compared to 18.21% in the prior month and 20.01% one-year ago. While the dip historically has been seasonal, it appears that many borrowers are increasingly pressured by current economic factors. The combination of higher interest rates and a cooling off of the real estate market diminished the attractiveness of “cash out” refinancing activity in which many borrowers reduced their more expensive credit card debt by drawing on the equity in their home — either by refinancing their mortgages or by accessing their home equity lines of credit.

MONTHLY PAYMENT RATES
Apr 06: 20.01%
May 06: 19.68%
Jun 06: 19.99%
Jul 06: 20.46%
Aug 06: 20.20%
Sep 06: 20.02%
Oct 06: 20.83%
Nov 06: 20.01%
Dec 06: 19.70%
Jan 07: 19.88%
Feb 07: 18.79%
Mar 07: 18.21%
Apr 07: 18.04%
Source: CardData (www.carddata.com)

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OPTIMUM T4200

Hypercom is expanding its “Optimum” line of 32-bit multi-application electronic payment terminals in the third quarter with a new global countertop platform. The new PCI PED-approved “Optimum T4200” family will be available in three EMV and three non-EMV models, including a dial only model, Ethernet/SSL with dial backup and wireless GSM/GPRS connectivity also with dial backup. The new products can be used in either merchant-facing or hand-over payment environments. The six “Optimum T4200” models share the same compact form factor including a 19-key keypad layout. All six models in the new series incorporate a 160 x 80 pixel monochrome display, come standard with 24MB of memory that is four to eight times larger than similar products, and can process debit, credit, smart card and value-added transactions such as gift/loyalty and dynamic currency conversion.

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On Track Innovations Rise 15% in 1Q/07

On Track Innovations reported first quarter revenues of $10.4 million, an increase of 15% compared to 1Q/06. However, gross profit of $4.0 million slipped 10% compared to the first quarter last year, impacted by the weakness of the dollar. OTI says the revenue increase was driven by the petroleum and ID markets. During the quarter, the Company’s new contactless reader was approved by MasterCard for the “EMV M/Chip v.1.3” and “Magnetic Stripe v3.2” contactless payment programs. The “Saturn 6000” terminal was also approved for MasterCard “PayPass ISO 14443 Implementation Specification v1.1.” Also, OTI launched its “EasyFuel” pay-at-the-pump contactless payment solution in North America. The Company already has received orders from an energy company in North America that calls for a roll-out at 130 gas stations. For more details on OTI’s 1Q/07 performance visit CardData (www.carddata.com). (CF Library 2/21/07; 3/20/07)

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MBNA Canada Bank to Acquire CUETS

BofA’s MBNA Canada Bank has signed an agreement to acquire CUETS, the largest MasterCard credit card issuer for credit unions in Canada. MBNA Canada Bank is the second largest MasterCard issuer in Canada based on loans outstanding. CUETS is currently jointly owned by Credit Union Central of Saskatchewan and Credit Union Central Alberta. CUETS has about 500 relationships with credit unions in Canada. The new MBNA Canada subsidiary housing the CUETS business will be led by Stan Kuss, currently CEO of CUETS. CUETS’ 400 person workforce will be combined with the current MBNA workforce in Ottawa. Terms of the deal were not disclosed.

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