eFunds’ 4Q/06 Net Income Soars by 72%

AZ-based eFunds reports that fourth quarter net revenue increased 2% to $141 million, compared to the same quarter of 2005. Fourth quarter net income grew 72% to $20 million, compared to 4Q/05. However, the Company posted a 3% year-on-year decline in its U.S. Payments segment with $75.4 million in revenue. The International segment soared by 26% to $21.0 million but the U.S. Risk Management segment was flat at $44.6 million. eFunds also reported that it now expects full year 2007 net revenues to increase 7% to 11% over 2006 net revenues. For complete details on eFunds’ fourth quarter performance, visit CardData ([www.carddata.com][1]).

eFunds Revenue Historical
4Q/04: $130.5 million
1Q/05: $114.2 million
2Q/05: $116.3 million
3Q/05: $133.2 million
4Q/05: $138.0 million
1Q/06: $139.7 million
2Q/06: $132.4 million
3Q/06: $139.4 million
4Q/06: $140.9 million
Source: CardData (wwww.carddata.com)

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

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SATURN 6000

On Track Innovations’ new contactless reader has been approved by MasterCard for the “EMV M/Chip v.1.3” and “Magnetic Stripe v3.2” contactless payment programs. The “Saturn 6000” terminal has also been approved for MasterCard “PayPass ISO 14443 Implementation Specification v1.1.” Additionally, the new OTI terminal supports the “VISA Contactless” program, “ExpressPay” from American Express and “Discover Zip” as well as programs for mass transit ticketing, MIFARE, loyalty, third party applications, and more. The “Saturn 6000” offers developers a unique platform based on its comprehensive and modular firmware including sophisticated API and macros that allow for the fastest and most efficient contactless EMV transactions to be developed.

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Heartland Hires a New General Counsel

Heartland Payment Systems has named Charles Kallenbach general counsel and chief legal officer. Previously he served at SVP, legal and regulatory, for SunCom Wireless Holdings and created and managed internal legal, regulatory and corporate compliance functions; managed the company’s public reporting systems and intellectual property portfolio; and negotiated mergers and acquisitions. Kallenbach holds a juris doctor degree from New York University School of Law. Heartland Payment Systems, provides credit/debit card processing, payroll and payment solutions to small and mid-sized businesses.

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AA FCU Expands the CO-OP ATM Alliance

TX-based American Airlines Federal Credit Union (AA Credit Union) has added additional processing services with CO-OP Financial Services for driving their 131 ATM’s and processing their five million plus debit card program and has partnered with CO-OP on two programs to deploy ATMs at LAX Airport in Los Angeles and the Salt Lake City Airport in Utah. AA Credit Union has more than 207,000 members and assets of $4.2 billion.

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OTI Saturn 6000 Earns Contactless Credentials

NJ-based On Track Innovations’ new contactless reader has been approved by MasterCard for the “EMV M/Chip v.1.3” and “Magnetic Stripe v3.2” contactless payment programs. The “Saturn 6000” terminal has also been approved for MasterCard “PayPass ISO 14443 Implementation Specification v1.1.” Additionally, the new OTI terminal supports the “VISA Contactless” program, “ExpressPay” from American Express and “Discover Zip” as well as programs for mass transit ticketing, MIFARE, loyalty, third party applications, and more. The “Saturn 6000” offers developers a unique platform based on its comprehensive and modular firmware including sophisticated API and macros that allow for the fastest and most efficient contactless EMV transactions to be developed.

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Sodexho Corporate Lunch Rooms Deploy PayPass

The nation’s leading provider of food and facilities management will now begin accepting “MasterCard PayPass” at its on-site restaurants across the USA. Sodexho has begun phase one of the implementation that includes 225 locations and will expand “PayPass” to 1,000 Sodexho-managed corporate sites by the end of this year. In addition to this new payment option, Sodexho will continue to accept traditional magnetic-stripe payment cards. There are currently nearly 13 million “PayPass” cards and devices in the marketplace, and “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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ROAA Stays Healthy Despite Portfolio Metrics

Despite the uptick in recent delinquency and charge-off figures, U.S. bank credit card issuers are realizing a solid period of returns on average assets. During January the ROAA hit 2.66%, the highest level in more than five years, according to CardData ([www.carddata.com][1]). Rising cardholder fees, interest rates that move within 30-days of the Fed short-term interest adjustments and building balances have been key drivers to the new age of profitability. CA-based R.K. Hammer recently reported that return-on-assets for credit card portfolios for 2006 is projected to rise to 4.6%, compared 4.3% for 2005, and 4.5% for 2004. “Return on Average Assets” (ROAA) (%) is determined by dividing the after-tax return ($) by the average managed card outstandings ($) and then annualizing.

Return on Average Assets
Jan 06: 1.11%
Feb 06: 1.98%
Mar 06: 2.46%
Apr 06: 2.40%
May 06: 2.37%
Jun 06: 2.34%
Jul 06: 2.41%
Aug 06: 2.44%
Sep 06: 2.51%
Oct 06: 2.53%
Nov 06: 2.59%
Dec 06: 2.62%
Jan 07: 2.66%
Note: Excludes American Express and Discover.
Source: CardData (www.carddata.com)

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

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DEC DEBT

Credit card debt soared to a new record, almost hitting A$39.0 billion in December. However, credit card volume inched up by only 5.6% year-on-year. Credit card limits reached a new high at A$103.7 billion, marking the fourth consecutive month of A$100+ billion. Card volume set a new record at A$17.1 billion during December, compared to a previous record of A$16.5 billion set in August, according to the Reserve Bank of Australia. During the past twelve months, credit card debt has increased 13.7% in Australia. For December, credit card balances increased about A$1.0 billion from the previous month. One-year ago credit card debt stood at A$34.3 billion. Gross dollar volume on credit card and charge cards was A$16.2 billion one-year ago. There are currently 13.3 million credit card and charge card accounts in Australia, compared to 12.6 million one-year ago.

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PG&E Offers Customers VISA Payment Options

Pacific Gas and Electric is now accepting VISA online to make automatic monthly payments or one-time payments using VISA-branded debit, credit or prepaid cards. Under the no-fee pilot program, PG&E residential customers can schedule monthly payments or make one-time payments for their utility bills online. PG&E is one of the country’s largest providers of natural gas and electric service and is the nation’s largest utility company to offer its residential customers the option of using a Visa card for their monthly payments. PG&E joins more than 3,500 utilities across the U.S. that participate in VISA’s bill pay program.

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Security Breach is Uncovered in RI & MA

New England’s Stop & Shop says there was possible fraudulent activity associated with credit and debit cards used at two of its stores in Rhode Island. The store says it discovered tampering of one checkout lane EFT in two stores. Immediately following this discovery, Stop & Shop began working with local police departments and the US Secret Service to determine the extent of the crime. Stop & Shop’s investigation also discovered evidence of tampering at three other stores in Rhode Island and one in Massachusetts. However, no fraudulent transactions relating to debit or credit cards used at these store locations have been reported to Stop & Shop.

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ALCU Offers Security Breach Response

The Alabama Credit Union League has implemented a new Security Breach Response program to 81 of its participating member credit unions at no cost. The ACUL has partnered with Identity Theft 911, a provider of identity theft resolution and educational services. Federally regulated credit unions are required to maintain written policies and procedures, all subject to audit, which outline their response to a security breach or database compromise. A participating member of the credit union will receive consulting services, identity theft resolution services, secure communications and media interface.

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First Data and TCF Expand Relationship

First Data and MN-based TCF National Bank have formed a new revenue sharing alliance. The alliance will allow TCF Bank to offer industry-leading merchant services to its business customers through an expanded portfolio of electronic payment products and services, including credit, debit, check and gift card programs. First Data will provide merchant payment processing services on behalf of TCF Bank. TCF Bank is a subsidiary of TCF Financial Corporation, a $14.3 billion national financial holding company.

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