Rates & Home Equity to Impact Earnings

A new analysis concludes that the combination of rising interest rates and declining home price appreciation will significantly impact bank earnings going forward since loans to consumers represent 53% of total U.S. bank loan portfolios. Overall, the annual loan growth rate in the consumer sector slowed from 16.1% in 2004 to 8.3% in 2005, with credit card balances growing by nearly 18% in 2004 but contracting by 1% in 2005. The special report by the A.M. Best Co. says that loan growth in the consumer sector was relatively benign in the fourth quarter at 1.1% and was markedly lower than in the fourth quarter of 2004, during which consumer borrowing grew by 3.8%. A.M Best noted that card balances at year-end 2005 were modestly lower at $395.2 billion compared with $399.2 billion at December 31, 2004.

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EFTPOS Ltd Becomes a Hypercom Partner

Hypercom has appointed EFTPOS as the distributor for its point-of-sale
terminals and peripherals in South Africa and Africa in general. The
relationship gives Hypercom a strong regional partner to support new and
underserved channels in the technologically advanced South African market,
as well as to expand Hypercom’s footprint to nearby countries with less
mature electronic card payment systems. Hypercom already has a
significant customer base among retailers, banks, restaurants, hotels and
service professionals in South Africa. EFTPOS will build on that base, as
well as pursue additional opportunities. Hypercom’s portfolio supports
all of those scenarios with products from stand-alone single terminals to
large multilane fully integrated systems. Hypercom products are also
compliant with the global EMV standard for chip-based debit and credit
cards as well as the PCI standard for hardware and software security.

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BofA Introduces the PetRewards VISA

Bank of America and Hill’s Pet Nutrition have launched a new credit card that will earn reward points for pet-related expenses and donations to participating animal shelters. “PetRewards VISA” cardholders are also able to add a picture of their pet on the new card. Cardholders receive two reward points for every dollar spent at participating veterinary clinics, major pet retailers, farm and feed stores and neighborhood pet specialty stores. They also receive one point for every dollar spent for other purchases. Cardholders receive 500 bonus points with their first purchase and can earn up to 100,000 points annually. For 1,000 points, cardholders can get a $20 rebate on veterinary clinic expenses or make a $10 donation to a needy animal shelter.

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HID & FARGO

Stockholm-based ASSA ABLOY’s HID Global Corporation has inked a definitive agreement to acquire Fargo Electronics. The companies said the acquisition is a result of a long-standing relationship and the decision to jointly pursue opportunities in the secure identification field. Fargo is a major provider in the development of secure technologies for identity card issuance systems, including secure
card printer/encoders, materials and software. The company has
sold more than 120,000 systems in the U.S. and over 80 other countries
worldwide. For the first quarter the Company had $20.1 million in sales, compared to $18.7 million for 1Q/05. HID is a top supplier of contactless access control cards and readers, and other security products for corporations and governments globally.

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Allegiant Group & Loyalty Lab Partner

Cincinnati-based The Allegiant Group has signed a deal to provide San Francisco-based Loyalty Lab with program development, management and marketing expertise in exchange for Loyalty Lab’s CRM platform. Allegiant reward certificates and stored value cards are accepted nationwide for purchases and experiences in categories such as retail, travel, dining, movies & entertainment, sports & leisure. Loyalty Lab provides on-demand retail loyalty and customer management solutions.

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HID Global to Acquire Fargo Electronics

Sweden’s ASSA ABLOY’s U.S.-based HID Global Corporation has inked a definitive agreement to acquire MN-based Fargo Electronics for cash. The companies said the acquisition is a result of a long-standing relationship and the decision to jointly pursue opportunities in the secure identification field. Fargo is a major provider in the development of secure technologies for identity card issuance systems, including secure card printer/encoders, materials and software. The company has sold more than 120,000 systems in the U.S. and over 80 other countries worldwide. For the first quarter the Company had $20.1 million in sales, compared to $18.7 million for 1Q/05. HID is a top supplier of contactless access control cards and readers and other security products for corporations and governments globally.

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AirPlus’ 2005 Transaction Volume Up 15%

AirPlus International reported a 14% increase in transaction volume for 2005 to nearly $15.5 billion. The main drivers of growth were international markets, where volume rose by 37 percent. AirPlus served over 30,000 corporate customers in 2005. Profit before taxes was USD 14 million. AirPlus International offers customized travel payment solutions, including central bill accounts, corporate cards and management information tools.

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Cards Help MT’s Corrections Collections

The Montana Department of Corrections reports that its online payment service has watched the number of credit or debit card transactions increase from 14 in the opening month to 135 in April and that monthly payments have nearly tripled in that time from about $5,900 to $16,600. Since the launch last fall, the Web site has provided Montana offenders with a convenient way to pay court-ordered restitution to the victims of their crimes and to pay a share of their community supervision costs. The department has been responsible for collecting restitution payments since October 2003 when a change in a law removed the duty from district courts. The department has thus far distributed $4.8 million directly to victims owed restitution and another $215,450 in supervision fees. The amount of restitution collected has grown by about 16 percent annually since the agency took over the job.

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IL AG Sues a Debt Collection Agency

The Illinois Attorney General has filed a lawsuit against Financial Credit Service, Inc. that allegedly used unfair pressure tactics and misrepresentations to convince consumers they had to make payments on often uncollectible debt. Madigan’s Consumer Protection Division has received 88 complaints against Financial Credit Service, alleging the collection agency used unfair and deceptive representations to obtain payments on uncollectible debt. In some cases, consumers alleged they were intimidated into making payments of between $100 and $5,000. In other reported instances, the defendants allegedly deducted money from the consumer’s bank account without the consumer’s permission.

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Citibank and AmEx Receive TV Ad Awards

The Financial Communications Society has awarded Citibank six “Gold” awards,including “Best In Show” in the “Consumer Retail” category for its “Train” television spot and awarded American Express six “Gold” awards, including “Best In Show” in the “Corporate Image” category for its “Winslet” television spot. This year’s Awards competition included 350 entries and was expanded to include Collateral for the first time. Winning entries were received from more than 30 financial services providers. The Financial Communications Society is a not-for-profit organization, is dedicated to improving professional standards in financial communications.

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