Cash Now Introduces a Virtual Terminal

FL-based Cash Now has launched a “Virtual Terminal” Web-based platform for processing electronic payments for the payday loan industry. Virtual Terminal is by far the most advanced web-based platform for processing electronic payments available today. With its easy-to-use, yet powerful user interface, Virtual Terminal enables Cash Now licensees and system users to schedule a single transaction or a series of recurring transactions with a few simple keystrokes. Cash Now Corporation is developing the most comprehensive menu of services in the cash advance industry, all centered on the Cash Now brand.

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LG Card Creditors Select a Bidder

Shinhan Financial Group has reportedly been selected to be the preferred bidder for the controlling stake in the card firm. Shinhan is has also reportedly offered up to $7 billion for the credit card issuer.
Creditors are looking to unload 51% to 72% of LG Card. The winning bidder is to be officially announced on Wednesday. Korea Development Bank, which holds 82% of LG Card, is the lead manager of the sale. The deal would be the largest merger deal in Korean history.

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Advanta to Introduce PayPass Business Cards

The first contactless small business credit card is being introduced next month. Advanta, a business card specialist, and MasterCard have teamed to roll-out the new “PayPass”-enabled “Advanta MasterCard Small Business.” MasterCard reports that at mid-year there were nearly 10 million “PayPass” cards and devices in the market and approximately 32,000 merchant locations worldwide. Advanta says it will also work with MasterCard to identify the merchants that small business owners do business with in order to grow acceptance of contactless payment cards. At the end of the second quarter, Advanta had 978,517 gross business accounts. Transaction volume for the quarter was $3.0 billion and total outstandings were nearly $4.4 billion. (CF Library 7/27/06)

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VeriFone to Buy Trintech Payments Business

VeriFone has inked a deal to acquire Dublin-based Trintech’s payment systems business for $12.1 million in cash. The deal is expected to close this month following the formation of a new subsidiary which will hold substantially all of the assets and liabilities of the payment systems business of Trintech. Trintech says it is divesting its payment systems business to concentrate on its transaction reconciliation software products and services. VeriFone says the acquisition will enhance its ability to deliver self-service payment, vending, and pay-at-the-pump applications. Trintech reported first quarter revenues of $11.1 million, a 15% decline over 1Q/05 due to lower product and license revenues. The net loss for the quarter was $2.1 million, compared to net income of nearly $400,000 one-year ago.

TRINTECH REVENUE HISTORICAL
1Q/05: $13.1 million
2Q/05: $12.6 million
3Q/05: $11.4 million
4Q/05: $11.5 million
1Q/06: $11.1 million
Source: CardData (www.carddata.com)

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Corporate Cards Offer Three Savings Tiers

A new study concludes that corporate payment card can reduce transaction costs, cut maverick spending, and provide increased negotiated supplier discounts. The report by AberdeenGroup, sponsored by VISA and MasterCard, found that personal cards are still the predominant vehicle to pay for business expenses, as reported by 64% of the survey respondents. Purchasing cards follow closely, with 57% reporting usage, and only 53% using Travel cards to pay for business expenses. About 28% use Fleet cards. The research found that a company could save an average of $8 to $27 per transaction in processing costs when moving to P-card processing. For travel expenses, the estimated potential savings in expense report processing from moving spend under the Travel card can reach approximately $26 per expense report. As a result of moving eligible spend under the Travel card, a company can save approximately 1.2% in financial fees, reduce maverick spending by 6.4%, and reduce the supplier base by an average of 8.5%.

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Small Business Owners are Loan Ignorant

A just released semi-annual report found that 46% of small business owners believe incorrectly that banks commonly make loans to loyal customers who are in the midst of a cash flow crunch and 38% believe incorrectly that it’s a good idea to apply to as many lenders as possible when seeking a loan. The “OPEN from American Express 2006 Semi-Annual Monitor” also found that 49% of small business owners incorrectly believe a consumer loan can generally be used to help fund a business. Only 43% think that venture capital is hardly available to small business owners.

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New Wallets Introduced for Contactless Cards

CA-based Kena Kai has launched a new line of “DataSafe Wallets” which utilizes RF shielding material to protect contactless payment cards. The new DataSafe Wallet line will include bi-folds, tri-folds, credit card wallets, women’s wallets, and passport holders in full-grain Italian leather. Each style will incorporate a patent-pending design of RF shielding material that will block any attempt to access the credit card’s Smart Card chips. The DataSafe Wallets will begin shipping September 30th and will retail for $40-$120. With a distinctive combination of style and innovation, Kena Kai designs unique items for people that enjoy life with a passion and appreciate how technology can often make their lives better.

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Fee Income Props Up Credit Card Yield

After dipping below 18% in September, the yield on credit card portfolios jumped 50 basis points between January and June. Compared to one-year ago the yield on credit card-backed bonds is up 88 basis points. The healthy yield amidst a rising interest rate climate has been attributed largely to strong fee income. Variable interest rates also have propped-up the yield as issuers pass through any increases within one billing cycle. According to Moody’s Investor Services the yield for June among credit card-backed bonds was 18.51%, compared to 17.63% one-year ago.

ABS YIELD HISTORICAL
Jun 05: 17.63%
Jul 05: 18.33%
Sep 05: 17.78%
Dec 05: 18.28%
Jan 06: 18.01%
Jun 06: 18.51%
Source: Moody’s Investor Services

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