First Data to Acquire FundsXpress

First Data yesterday confirmed plans to acquire FundsXpress, a provider of online banking and bill payment services for consumers and small businesses. FundsXpress has more than 500 financial institution customers, consisting primarily of community financial institutions. FundsXpress♠products include retail and commercial Internet banking, cash management, automated lending, and dynamic Web sites. First Data says the deal will result in a broad and robust suite of products for secure electronic commerce and Internet Banking transactions. FundsXpress was advised on the transaction by the investment banking firm of Lane, Berry & Co.

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Credit Libanais Deploys SCTN’s Loyalty on EMV Cards

Credit Libanais will deploy the “selektpoints” loyalty program through
Smart Chip Technologies Loyalty Solution using Phoenix Technology.
Credit Libanais provides financial acquiring for more than
10,000 merchants and chose selektpoints because it is merchant-driven
and is a powerful solution. This partnership consists of the first
EMV Smart Card application to function in conjunction with a credit and
debit financial application. Credit Libanais operates through a network
of 58 branches in Lebanon, a branch in Cyprus, and a representative office
in Canada. Smart Chip Technologies’ turn-key customer retention loyalty
solution enables issuers, acquirers, and merchants to implement real-time
programs using their customer’s existing cards.

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PayPass Expands to More Sports Arenas

Mastercard PayPass will now be accepted at The American Airlines Center, United Center and XCel Energy Center at in-stadium concession stands. No signature or PIN is required to complete the transaction for purchases under $25. Ten football and 12 baseball stadiums have already adopted MasterCard PayPass and it was accepted at 14 PGA Tour events during the 2006 season. PayPass is currently accepted globally at 46,000 merchant locations, including participating 7-Eleven, CVS, McDonald’s, Regal Entertainment Group theaters and many others.

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INSIDE Contactless Appoints Executive

INSIDE Contactless has announced the appointment of Rajesh
Sharma to its Professional Services Organization as Technical Services
Director. Rajesh has more than 12 years’ experience in the smartcard
industry and was previously employed with Gemalto’s support team.
Rajesh is credited as an authority on Contactless, Financial and Security
technologies and standards. INSIDE has delivered over 15 million smart
card chips in the past two years and is growing rapidly.

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BECU Goes Exclusively MC PIN POS Debit

MasterCard has inked a contract extension and five-year “Debit MasterCard” and PIN brand exclusivity agreement with BECU (f/k/a Boeing Employees’ Credit Union), the largest credit union in Washington and one of the top five financial cooperatives in the country. As part of the multi-year agreement, BECU will exit other PIN POS network relationships and will participate exclusively in the MasterCard PIN POS Debit network and route ATM withdrawals and deposits primarily to the MasterCard ATM network. BECU currently operates in more than 39 locations including full-service branches and in-store centers in supermarkets, and manages more than 150 ATMs serving over 325,000 debit cardholders in Washington state, serving more than 485,000 members. BECU has $7.1 billion in assets.

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U.S. Bank Card Outstandings Rise 21% Y/Y

U.S. Bancorp reported that its first quarter merchant acquiring volume grew more than 17% over 1Q/06 to $57.8 billion, produced from 835,193 merchants. Average credit card loans were up more than 21% year-on-year to $8.6 billion. The increase in credit card balances was driven by organic growth initiatives and portfolios acquired from financial partners. However, net income for U.S. Bank’s Payment Services division was essentially flat at $229 million. Retail Payment Solutions volume for the quarter was $9.3 billion, up 8% over 1Q/06. Corporate Payment Services volume was $8.0 billion, compared to $7.3 billion for the year-ago quarter. For the quarter, U.S. Bancorp’s credit card charge-offs were 3.48% compared to 3.27% in the prior quarter, and 2.62% one-year ago. For complete details on U.S. Bancorp’s 1Q/07 performance, visit CardData ([www.carddata.com][1]).

MERCHANT ACQUIRING VOLUME HISTORICAL
1Q/05: $39,477,000,000
2Q/05: $43,231,000,000
3Q/05: $44,600,000,000
4Q/05: $43,640,000,000
1Q/06: $49,222,000,000
2Q/06: $56,056,000,000
3Q/06: $56,411,000,000
4Q/06: $56,007,000,000
1Q/07: $57,839,000,000
Source: CardData (www.carddata.com)

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

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Online Banking Population Matures in 06

A new report has found that the U.S. online banking population grew 9.5% last year, compared to 27% in 2005 and 47% in 2004. The report found that even though aggregate growth dropped into the single-digits, Citibank and Washington Mutual increasing their number of online banking customers by more than 20%. VA-based comScore says its research showed that 58% of online banking customers believe the Internet is more secure than one year ago, 68% believe online banking is more secure than one year ago. Among the top five banks, Wachovia customers were the most satisfied both in terms of their overall banking relationship and with the bank’s Web site, maintaining the lead for the third year in a row. Three-fourths of Wachovia customers responded that they were highly satisfied with their banking relationship, up from 73% in 2005. Of these highly satisfied customers, 96% were also highly satisfied with the Wachovia Web site. Washington Mutual ranked second on both measures. Interestingly, less than a quarter of those who currently bank online are interested in mobile bank account access.

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Henry Founder Dies at 71

Jack Henry & Associates founder, acting Vice Chairman and SVP, John W. Henry, died of natural causes last week. Henry was one of the early pioneers in community bank software. In 1976 after the bank in which he worked as the Data Processing Manager was acquired and his position was eliminated, Jack, along with business partner Jerry Hall, started Jack Henry & Associates. Jack and Jerry ran the company from a space rented in a small engine repair shop in Purdy, Missouri, and started with a handful of community banks as customers. Today the company provides software and services to more than 8,700 financial institutions. Jack Henry & Associates, Inc. is a provider of integrated technology solutions and data processing services for financial institutions.

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Online Households Write Less Checks in 06

For the first time Internet-connected households are paying more of their bills online than by paper check. An annual survey shows that online payments made up 39% of the total volume of bill payments among online households, while the volume of checks sent through the mail fell to 34% of the overall volume. The “2007 Consumer Bill Payment Survey,” conducted by Harris Interactive and the Marketing Workshop, for CheckFree, also found that nationwide, consumers paying at least one bill online per month rose to 74%, compared to 69% of respondents in the previous 2005 survey. Consumer adoption of online bill payment has more than doubled since January 2002, when only 37% of online households reported paying at least one bill online. The average survey respondent paid 11.5 bills in a typical month, with 4.5 bills, paid online, and 3.9 bills, paid by paper check. Some 85% of consumers surveyed said paying bills online saves the paper, stamps and the hassle of paying bills by check.

EBP/Month
2001: 13%
2002: 14%
2003: 22%
2004: 23%
2005: 25%
2006: 35%
2007: 39%
Source: CheckFree

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GE Money to Issue Sotheby MasterCards

Sotheby’s and GE Money have teamed to launch two invitation-only affluent MasterCards later this spring. The new “Sotheby’s World Elite MasterCard” and “Sotheby’s World MasterCard” will offer a suite of luxury experiential rewards not available on other MasterCard products. Cardholders for both “Sotheby’s MasterCards” will receive gratis admission for up to four visitors at participating museums such as the San Francisco Museum of Modern Art. Additionally, cardholders will earn one point for every dollar spent, which can be redeemed for benefits ranging from donations to partner museums; having Sotheby’s auctioneers or specialists assist in the cardholder’s private events; access to Sotheby’s special events; to a yacht or private jet charter. All cardholders will have the option of choosing either a standard issue card or a work of art depicted on their card from a selection of paintings by artists such as Claude Monet, Rene Magritte, Frida Kahlo and Canaletto.

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Citi Card Revenues Up 2%; Profits Down 3%

Citigroup reported that 1Q/07 profits for its U.S. Cards unit declined 3% year-on-year to $897 million due to the absence of an $89 million tax benefit recorded in 1Q/06. However, U.S. card revenues increased 2% to $3.29 billion, driven by growth in non-interest revenues and a $161 million pre-tax gain on the sale of MasterCard shares. Bank credit card outstandings for the U.S. were down 2% to $107.3 billion compared to one-year ago. However, private label card outstandings increased 15% to $30.2 billion, but down sequentially. Purchase volume for the first quarter rose 6% to $72.4 billion. Citi’s account base at the end of the first quarter rose 14% to 150.0 million accounts, but down more than 3 million accounts from 4Q/06. Citi’s charge-offs for bankcard and private label cards rose to 4.63% compared to 4.35% in the prior quarter and 3.90% one-year ago. Overall delinquency (90+ days) declined slightly from 1.62% for 4Q/06 to 1.57% for the first quarter 2007. For complete details on Citigroup’s 1Q/07 performance, visit CardData (www.carddata.com).

CITIGROUP
U.S. Credit Card Net Income
1Q/06: $ 926 million
2Q/06: $ 878 million
3Q/06: $1085 million
4Q/06: $1001 million
1Q/07: $ 897 million
Source: CardData (www.carddata.com)

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