CARD USAGE

A new study has found that more than half of urban Chinese consumers use credit or debit cards for shopping, and 84% of
those with credit cards expect their usage to increase or remain the same in the coming year. This is especially true in larger cities such as Beijing where 47% of urban Chinese consumers are increasing their credit card use. The UPS’s second annual survey of China’s growing class of urban consumers also found that 40% of urban Chinese Internet users having tried online shopping. Online purchases for fashion/accessories are up 10% over 2005. Books/music/video is the No. 1 category for online shopping, especially for higher-income households.

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MasterCard Honors Gemalto Combi Cards

Gemalto has won a “Best Vendor Partner Award” for its MasterCard “OneSmart PayPass EMV” contactless combi cards. Gemalto is delivering the cards to two Taiwan banks including Cathay United Bank, one of the top three credit card issuing banks in Taiwan; and Taipei Fubon Bank, Taiwan’s second-largest privately owned bank. The “PayPass EMV Contactless Combi Card” features both a built-in chip and a standard magnetic stripe.

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Triton Systems Names a New VAR Manager

MS-based ATM Manufacturer Triton Systems has promoted Mark Smith to Senior VAR Manager. In his new position Smith will manage Triton’s VAR (Value-Added Reseller) program, which focuses on products for financial institutions such as the FT7000, FT5000XP and RL5000XP. Triton is the largest provider of off-premise ATMs and ATM management software in North America, and has more than 145,000 installations in over 23 countries worldwide.

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NY Governor Vetoes Universal Default Ban

New York Governor George Pataki last week vetoed legislation that banned the use of “universal default” by credit card issuers. Assemblyman Peter Rivera (D-Bronx) said that Pataki abandoned the people of New York in his delusional quest for the White House. Credit card companies were among the largest contributors to the Bush Presidential campaign. In June the New York State legislature passed a bill to prohibit card companies from imposing universal default on cardholders. However, the law would have little effect on national banks and those based out-of-state. More than 90% of bank credit cards issued to New York residents are from out-of-state institutions.

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Monthly Payment Rates Head Higher in July

Monthly payment rates, the amount that cardholders pay on their credit card debt, continued its upward climb during July. Year-to-date, the monthly payment rate has averaged 19.93%, running about 250 basis points from one-year ago. Driven by higher minimum payments, payment rates hit 20.46% in July, an increase of 47 basis points from June and 216 basis points above year-ago levels. According to CardData, the payment rate averaged 19.97% during the first quarter and averaged 18.60% for 2005. Five years ago the monthly payment rate hovered around 15%.

Monthly Payment Rate
Feb 06: 19.40%
Mar 06: 19.89%
Apr 06: 20.11%
May 06: 19.68%
Jun 06: 19.99%
Jul 06: 20.46%
Source: CardData (www.carddata.com)

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pulvermedia Acquires Foreword Financial

MA-based pulvermedia has acquired Foreword Financial, a producer of events for the banking and financial services industry. Foreword Financial currently produces the “4th Annual Bank Card Conference” scheduled for Orlando in mid-October. The first event planned for the combined entity will be an event scheduled for the fall of 2007 that will feature six Foreword Financial conferences under one roof. These conferences are the “Bank Card Conference,” “Operations Conference,” “Bank Technology Convention,” “Outsourcing Forum” and the “Security Forum.” In addition to these five existing conferences, a new conference – called the “Securities Brokerage and Asset Management Operations & Technology Conference” – will augment the agenda with its own advisory committee, programming and networking functions.

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Interlink Volume Runs 40% Higher in 2006

VISA’s online domestic debit brand, “Interlink,” has topped 123 million cards this year, compared to 97 million one-year ago. Sales volume soared by more than 39% to nearly $36 billion for 2Q/06, compared to one-year ago. The number of “Interlink” merchants grew by 7% to 1.4 million according to CardData ([www.carddata.com][1]). The average “Interlink” sales transaction was $39.88 for 2Q/06. At the end of 2003, VISA had 70 million “Interlink” cards, which rose to 88.3 million by the end of 2004. Gross dollar volume (sales & cash) rose 40% in the second quarter 2006 to $38.9 billion.

INTERLINK HISTORICAL
Sales Volume Cards
2Q/04: $15.0 billion 87.0 million
3Q/04: $19.4 billion 88.3 million
4Q/04: $23.4 billion 88.3 million
1Q/05: $22.5 billion 91.0 million
2Q/05: $25.9 billion 97.4 million
3Q/05: $28.7 billion 97.4 million
4Q/05; $35.3 billion 97.4 million
1Q/06: $32.3 billion 123.1 million
2Q/06: $35.9 billion 123.1 million
Source: VISA USA

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

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Polytron Selects i2c for Processing

CA-based i2c has been chosen as a transaction processing partner by Polytron. Polytron Connections, Inc. (Polytron), a California Corporation, has provided award-winning Information and Communications Technologies (ICT) to virtually every segment of business and industry from large, medium, and small businesses to, state and federal government agencies, and K-12 education (Gov/Ed). i2c is a leading, global technology provider of electronic payment processing solutions. i2c’s stored value processing and card management platform is an end-to-end solution developed specifically for stored value products.

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Pemco Technologies Beefs-Up its Servers

Seattle-based Pemco Technologies is deploying four Stratus “ftServer 5700” systems for ATM and PIN debit card processing. The Stratus “ftServer 5700” system was unveiled in January and is the industry’s first fault-tolerant server to use “Dual-Core Intel Xeon” processor technology. With eight processing execution cores, the two-way server delivers exceptional transaction throughput for enterprise business processing and multitasking applications in a compact, rack-optimized and cost-effective package. Pemco specializes in pass-through processing for financial institutions that choose in-house credit, debit, and ATM processing.

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WESCO Stores Joins the Debitman Network

WESCO Stores has joined the Debitman Card payment network and is now issuing its own branded debit cards to customers at its 51 Michigan locations. Consumers who sign up for WESCO’s debit card experience savings on gas purchases at any WESCO store, as well as the convenience of using the card at more than 200,000 merchant locations in the U.S. that participate in The Retailer’s Network, including Wal-Mart, Sam’s Club, Barnes & Noble, and CVS. Credit card interchange fees function like a hidden tax on consumer purchases by forcing retailers to increase prices to offset costs; in 2005, MasterCard and Visa earned $30 billion from consumer card-based transactions. Debitman created and operates The Retailer’s Network, the only national, interoperable electronic payment network for retailer-issued debit cards.

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