Debit MasterCard Links Up to Upromise

MasterCard has added a college savings program to its U.S. debit cards via an exclusive relationship with Upromise. BancorpSouth, BankAtlantic, BECU and Provident Bank will be the first four issuers to offer the new product. “Debit MasterCard” cardholders, who are enrolled in the “Upromise” program will automatically earn bonus college savings contributions via purchases at the more than 23,000 grocery and drug stores, 14,000 gas stations, 8,000 restaurants, and thousands of domestic retail store locations. The issuers will award bonus college savings on eligible debit card purchases made within the Upromise merchant network up to 3%. Upromise merchant partners will also fund additional contributions. The program will be exclusive to the four issuers for a period of one year, after which MasterCard and Upromise will evaluate if and how to expand the offering to additional customers.

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Carmen Electra MasterCards Launch Next Week

TX-based Payment Data Systems is launching its “Carmen Electra Prepaid MasterCard” and “Carmen Electra Gift MasterCard” next week in Hollywood, California. The Carmen Electra Prepaid MasterCard and the Carmen Electra Gift MasterCard are the first series in the company’s celebrity prepaid card portfolio. The Carmen Electra Prepaid MasterCard and the Carmen Electra Gift MasterCard are issued by MetaBank pursuant to license by MasterCard International and are marketed and administered by Payment Data Systems Inc. Payment Data Systems is an integrated payment solutions provider to merchants and billers. MetaBank serves banks, processors, and third party marketers by providing prepaid cards, credit cards, ACH origination, merchant acquiring, ATM sponsorship, and money transfer.

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TSYS Q3 Profits Rise 13% Year-on-Year

TSYS reported that third quarter profits rose 13%, hitting $54.3 million. Revenues topped $441 million, a 4.7% rise over 3Q/05. As a result, TSYS is now projecting 2006 earnings growth in the range of 26% to 28%, compared to previous guidance of 21% to 23%. Accounts on file increased to 400 million as of September 30th, including 334.8 million domestic accounts and 65.2 million international accounts. Recently, TSYS converted more than 42 million Capital One accounts onto its “TS2” platform. The Company also converted approximately 6 million accounts for The Toronto-Dominion Bank. Internationally, Toyota Finance Corporation was announced as TSYS first processing relationship in Japan. TSYS additionally announced a new relationship in Japan with United Cinemas Co. to process its new “Cinema Gift Card,” a prepaid product. Also in the Asia-Pacific region, TSYS increased its equity interest in China UnionPay Data Services to 44.56%. For complete details on TSYS third quarter performance, visit CardData ([www.carddata.com][1]).

TSYS REVENUE HISTORICAL
3Q/04: $305.0 million
4Q/04: $307.2 million
1Q/05: $350.0 million
2Q/05: $410.2 million
3Q/05: $422.0 million
4Q/05: $420.7 million
1Q/06: $412.3 million
2Q/06: $429.2 million
3Q/06: $441.8 million
Source: CardData (www.carddata.com)

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

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Debit Cards Capture Half of Grocery Sales

A new survey has found that 54% of U.S. respondents are paying for their groceries with a debit card or a debit/credit card combination. Second highest payment method was cash at 20%, followed by major credit card at 14% and check with 10.5%. The poll by Lightspeed Research also found that females favored using debit/credit card combination (29%) over males (25%), and that males tended to use cash more than females (23% vs. 18%). Seniors age 65 and over use a major credit card as their typical payment method (27%) followed by check (19%). The poll collected responses from 106,784 U.S. panelists.

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GE Money to Issue Boston College MasterCard

GE Money has signed a deal to launch an affinity MasterCard for Boston College on November 1st. Under the terms of the agreement, which is scheduled to launch November 1, GE will provide a MasterCard product featuring the Boston College brand. Cardholders will earn Boston College Rewards one point for every dollar spent. Points may be redeemed for merchandise, travel or cash, as well as unique and exciting Boston College experiences. Boston College is a coeducational university with an enrollment of 9,000 undergraduates and 4,700 graduate and professional students representing every state and more than 99 countries. GE Moneys Personal Finance business is an innovative, customer-centric lending organization that provides financial services such as personal loans, mortgages, bankcards and student loans both directly to consumers, as well as through partner-based channels.

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ARM Index Moves Up Slightly in August

The indicator of economic conditions affecting the accounts receivable management industry increased slightly in August. The index continues to reflect excellent conditions for the ARM industry. However, it is partially affected by the market capitalization of public ARM companies. The “Kaulkin Ginsberg Index” for August increased to 1457.0 compared to 1454.2 for the prior month. During the second quarter the ARM index hovered around 1460. The KGI remains up 15.1% year over year. KGI says the “Index” should continue to gradually increase until after the completion of the NCO Group buyout. During July PA-based NCO Group inked a definitive agreement to be acquired by One Equity Partners and Michael Barrist, Chairman, President and CEO of the Company for $1.26 billion. The price represents a 44% stock premium. (CF Library 7/25/06)

KGI HISTORICAL
Jan 06: 1179.3
Feb 06: 1229.3
Mar 06: 1222.4
Apr 06: 1472.7
May 06: 1458.6
Jun 06: 1475.2
Jul 06: 1454.2
Aug 06: 1457.0
Source: Kaulkin Ginsberg

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Comdata Adds the Midas Touch to its Fuel Cards

Midas, with 1,600 automotive service shops in the U.S., has become an approved vendor partner of fleet card specialist, Comdata, to provide automotive repair and maintenance services to certain Comdata fuel card customers. Franchisees operating more than 90 percent of the U.S. shops have now signed their agreements enabling Midas to launch a consistent nationwide fleet program. Midas is one of the world’s largest providers of automotive service, with more than 2,600 franchised, licensed and company-owned Midas shops in 19 countries, including nearly 1,800 in the United States and Canada. Comdata Corporation, based in Brentwood, Tenn., is a leading business-to-business processor of payment cards, primarily in the retail and transportation industries.

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Chase Card Profits Up 31% Despite High MPR

J.P. Morgan Chase reported this morning that third quarter credit card profits rose 31% from one-year ago to $711 million, however the figure was $164 million lower than the prior quarter and $190 million lower than the first quarter’s record of $901 million. Managed card loans were up 4.5% to $143.8 billion year-on-year and up 3.2% sequentially. Compared with the prior year, both average managed and end-of-period managed loans continued to be affected negatively by higher customer payment rates. Chase says it believes that contributing to the higher payment rates are the new minimum payment rules and a higher proportion of customers in rewards-based programs. The managed net charge-off rate for the quarter was 3.58%, down from 4.70% in the prior year, but up from 3.28% in the prior quarter. The 30-day managed delinquency rate was 3.17%, down from 3.39% in the prior year, but up slightly from 3.14% in the prior quarter. During the quarter Chase opened 4.2 million new accounts. Charge volume was up 15% to $87.5 billion, compared to the year ago quarter. Merchant processing volume for the quarter rose 18% to $168.7 billion. For complete details on Chase’s third quarter performance, visit CardData ([www.carddata.com][1]).

JPM CHASE HISTORICAL ($billions)
3Q/05 4Q/05 1Q/06 2Q/06 3Q/06
EOP Outstandings: $137.6 142.3 134.3 139.3 143.8
Charge Volume: $ 76.4 79.6 74.3 84.4 87.5
Source: CardData (www.carddata.com)

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

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VISA Posts Interchange Schedules Online

A week after announcing plans to go public VISA USA has quietly posted interchange rates on its Web site. Last month MasterCard announced plans to make its pricing schedules public. MasterCard will publish its U.S. interchange rate schedule on its Web site on or before November 1st. More than 40 interchange lawsuits against VISA and MasterCard have been filed by merchants since 2004. The first major lawsuit by merchants to take on U.S. interchange fees was filed in October 2004, shortly after the U.S. Supreme Court refused to hear VISA and MasterCard appeals in the “Wal-Mart” debit card lawsuit. MasterCard was also the first in the industry to publish its merchant rules and procedures on its Web site. Last June MasterCard opened its rules free of charge or restrictions to any merchant who wants to access them. Member Service Providers previously only had access to abridged rules through their sponsoring acquirers, at a cost to the acquirer. (CF Library 6/03/05; 10/05/05; 11/05/05; 9/6/06)

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Pink All-Access VISA is Launched

NetSpend and ACE Cash Express have launched the “Pink All-Access VISA” prepaid card to support breast cancer research and education. The card will be issued by MetaBank. The pink All-Access Visa Prepaid Card can be used to make purchases or gain access to cash everywhere Visa debit cards are accepted worldwide. ACE Cash Express, Inc. is a leading retailer of financial services, including check cashing, short-term consumer loans, bill payment and prepaid debit card services, and the largest owner, operator and franchisor of check cashing stores in the United States. NetSpend Corporation is the leading provider of innovative, accessible prepaid debit cards that enable financial freedom and growth for self-banked consumers.

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INTERAC & FDC

First Data International has become a member of the Interac Association and will begin offering its services to the Canadian marketplace in the second quarter of next year. As an INTERAC member, FDC will have the ability to capture and process debit transactions in Canada enabling FDC merchant clients to accept the INTERAC branded card at the point of sale. Interac Association is a not-for-profit organization composed of 95 members which include: banks, trust companies, credit unions, caisses populaires, technology and payment-related companies. Interac runs two shared electronic financial services: “INTERAC Direct Payment,” Canada’s national debit card service, and “INTERAC Shared Cash Dispensing Service” for cash withdrawals at “Automated Banking Machines.” Last year Interac had C$137.4 billion in direct payment gross dollar volume compared to C$124.4 billion in 2004. There were more than 51,000 ABMs in the network last year.

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