Debit Card Volume Growth Remains in Double Digits

Debit card EFT/POS volume rose nearly 11% year-on-year in March to its highest level for 2006. During March, Australian consumers used debit cards for A$7.3 billion in transactions, compared to A$6.6 billion for February and A$6.6 billion one-year ago. Over the past five years debit card volume has grown 135%. In December debit card volume hit a record A$8.7 billion. During March, Australians used debit cards for A$5.8 billion in purchases with 93.2 million transactions. Total EFT/POS transactions were 108.5 million for March according to the Reserve Bank of Australia. There were 25.5 million debit card accounts in the country at the end of March, compared to 25.0 million one-year ago.

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Cyphermint Adds Another PayCash Patent

Massachusetts-based Cyphermint has been awarded a patent for technology that creates a virtual coin to transfer funds from different accounts over the Internet secured by proprietary 1024-bit encryption. The U.S. Patent Office awarded Cyphermint the patent for the “Method used for making a blind RSA-signature and apparatus therefor” and relates to the cryptographic field, particularly to making an RSA-signature, and can be used in electronic systems in a global scope. Cyphermint is a provider of Global Electronic Cash Payment and e-commerce solutions.

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MC’s Chief Risk Officer to Retire

MasterCard’s Chief Risk Officer, Chris Thom, will retire from the company in October and a successor will be announced shortly. As Chief Risk Officer, Thom has overseen the Risk Management Group’s enterprise-wide risk management practices. Under his leadership, the group has been effective in reducing and preventing fraudulent use of MasterCard products, as well as expanding and enforcing compliance activities. Thom also chaired the MasterCard International Operations Committee and International Security Committee.

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FLEXI-RATE CARD

Barclaycard reports that its “Flexi-Rate” cardholders are repaying
credit card balances more quickly than ever. The “Flexi-Rate VISA,”
introduced in October, charges a lower interest rate to those customers
who pay off a higher proportion of their balance. Customers who pay more
than 10% of their monthly balance are charged an interest rate of 9.9%,
those who pay more than 5% are charged 12.9%. Customers who opt to pay
less than 5% (minimum 2%) are charged 16.9%. Barclaycard says it
recently introduced a new statement message to cardholders who have only
made the minimum payment in the previous six months, encouraging them to
lower their costs by paying more. Barclaycard has 11.2 million
cardholders in the UK.

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BofA Completes its SiteKey Program

Bank of America has completed the nationwide roll-out of its two-factor authentication service. This month, BofA launched the “SiteKey” service for online banking and credit card services in Washington and Idaho. The service is mandatory. With “SiteKey” customers pick one of thousands of images, write a brief phrase and select three challenge questions. The customer and the bank can pass that information securely back and forth to confirm each other’s identity. “SiteKey” is provided to BofA from PassMark Security.

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Lynch Takes the Helm at RightPath Payments

Dennis Lynch, former president and CEO of NYCE, has become CEO of RI-based start-up RightPath Payments. The Company announced this morning it has received a seed capital commitment from the Slater Technology Fund. RightPath’s “Business Payment Connection” is a patent-pending, Web-based software solution that automates and streamlines payment processes by replacing seller trade credit with a lender’s credit. RightPath is the business successor to Collaborative Financial Concepts of Waltham MA, the original developer of “BPC.” Lynch, formerly was chairman of the New England-wide “Yankee 24” ATM network, which merged into NYCE in 1994, and was also a SVP at Fleet Bank.

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Bogus Credit Card Draws a Big Fine

A federal judge has ordered Bad Credit B Gone to pay more than $322,000 in consumer redress for running a bogus credit repair operation. This action was a result of “Project Credit Despair,” a crackdown on 20 operations that deceptively claimed they could remove negative information from consumers’ credit reports – even if that information was accurate and timely. Under the court’s ruling, the defendants are permanently prohibited from misrepresenting that they can improve substantially most consumers’credit reports.

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Pipeline Data’s AIRCHARGE Service Expands

Pipeline Data’s AIRCHARGE subsidiary has been approved by the City of Philadelphia Water Department as its wireless payment solution provider. The “AIRCHECKZ” technology enables the City’s field representatives to securely accept checks from municipal customers over compatible mobile phones on the Sprint Nextel network. AIRCHARGE is also able to process wireless credit card payments over compatible Sprint Nextel mobile phones. After recently receiving software certification from Sprint Nextel, AIRCHARGE has released a BlackBerry solution for credit card processing complete with card swipe and printer device. To date, Pipeline Data services more than 25,000 accounts.

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Intersections Acquires Chartered Marketing

Virginia-based Intersections has acquired Chartered Marketing Services, a privately-held direct marketer of consumer-oriented insurance and membership products. CMSI distributes its products – primarily accidental death and membership programs for mortgage customers – through large financial institutions as well as directly to individuals. It has marketing relationships with the top 10 mortgage servicers nationwide and recently began offering its products to demand deposit account (DDA) and credit card account holders. In 2005 CMSI had revenues of $51 million.

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Monthly Payment Rates Retreat in April

Monthly payment rates for credit card-backed bonds began retreating in April after reaching historical highs early this year. The April figure was 250 basis points below March’s record of 22.1%. According to Standard & Poor’s Ratings Services, the average MPR for 2006 is 20.5%. The monthly payment rate over the past 12 months has averaged 19.5%. During this period only one month, last April, posted a rate lower than 18%. The higher payment rates have been primarily driven by higher minimum payments which were phased in during the fourth quarter of 2005 and the first quarter of this year.

ABS Monthly Payment Rates
Apr 05: 17.7%
May 05: 18.9%
Jun 05: 18.9%
Jul 05: 18.7%
Aug 05: 18.6%
Sep 05: 19.2%
Oct 05: 19.0%
Nov 05: 18.8%
Dec 05: 19.7%
Jan 06: 20.6%
Feb 06: 19.4%
Mar 06: 22.1%
Apr 06: 19.6%
Source: Standard & Poor’s

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